|18-09-08, 08:49 AM||#1|
Join Date: May 2001
Location: New England
Peer-To-Peer News - The Week In Review - September 20th, '08
"Irony is too tame of a word to describe the [RIAA] motion against Ray [Beckerman]. Their whole 30,000-lawsuit scheme is founded on the purpose to run a PR campaign based on a fundamental starting place of an illegal investigation by unlicensed investigators and then a threatening letter. Ray is duty bound and ethically bound to zealously defend his client." – Lory Lybeck
"What doesn’t worry me is that leading experts will say I will write my own damn book and people will read it." – Frank Lyman
September 20th, 2008
A Jukebox on MySpace That Takes Aim at Apple
Just a few years ago, a Web site offering virtually every notable song ever recorded for free listening would have had music business executives speed-dialing their lawyers.
In the next two weeks, a battered music industry, facing slumping CD sales and a bleak future, will help to introduce just such a service, called MySpace Music.
The new site is the product of a joint venture among MySpace, the social network owned by the News Corporation, and the major music companies — the Warner Music Group; Sony BMG, a joint venture of Sony and Bertelsmann; and the Universal Music Group, a subsidiary of Vivendi. The venture plans to make money from selling advertising on the site and from selling digital downloads of music through a partnership with Amazon.com.
EMI, the fourth major label and the smallest, was not a participant when plans for the company were announced in April. But people familiar with the continuing talks between EMI, a British company, and MySpace say the label will probably join by the time the site starts, in exchange for a small equity stake in the venture.
MySpace Music, which will replace an existing area of MySpace at music.myspace.com, represents an effort to give music lovers the kind of comprehensive online jukebox they could once only dream of. But it is also an effort to solve some of the more pressing problems of the music business.
Music companies hope the service, which weaves music through the increasingly popular world of online social networking, will weaken Apple’s dominant grip on the digital music business while helping to recoup revenue lost in the last few years as CD sales have suffered annual declines of 10 to 20 percent.
Greg Scholl, chief executive of the Orchard, the largest distributor of digital music from independent labels, says a music business based on advertising “could well dwarf today’s $30 billion global recorded music industry.”
Mr. Scholl’s endorsement is something of a coup for the service. He questioned the effort in a public e-mail message to independent labels when it was first announced. But the Orchard is now set to make its catalog of more than a million songs available to the site.
After learning more about the venture, Mr. Scholl said, he decided that MySpace would compensate artists fairly and that free ad-supported music represented the industry’s only practical future. “MySpace Music represents the first credible, large-scale initiative in this direction,” he said.
When it is introduced, most likely by the end of the month, the service will have several million songs, all ready for instantaneous streaming. Users will be able to assemble private playlists of hundreds of songs, which they can string together to perk up a party or ease the monotony of their workday. They will also be able to post one of those playlists, with 10 songs, to their public MySpace profiles, where their friends can listen and save those songs to their own pages.
To transfer the music to another computer or a mobile device like an iPod, visitors will have to buy songs on the site through Amazon.com’s digital music store. Cellphone ring tones will be for sale through Jamster, another unit of the News Corporation.
Around five million artists use MySpace to interact with fans, and MySpace Music will change life for them as well. Now, those artists can post up to six songs on their pages. In the revamped site, they will be able to post their entire catalogs and share in the resulting advertising and download revenue. Sony Pictures, McDonald’s, State Farm and Toyota Motor will be among the first sponsors of the site.
“What we are really doing is creating an economy for all musical artists,” said Chris DeWolfe, MySpace’s chief executive.
Free online music streaming is not exactly new to the Web. Imeem, a four-year-old San Francisco start-up company, and Last.fm, owned by CBS Interactive, offer services with much of the same music from major labels and independent artists.
Dalton Caldwell, chief executive of Imeem, said that MySpace has struggled in the past to create services that can take on established leaders. The MySpaceTV site, for example, has failed to dethrone YouTube in online video. Even with its enormous traffic, he said, “they haven’t successfully created homegrown services that can beat competitive threats.”
But executives at the major labels say MySpace Music offers a larger stage and bigger financial opportunity than many existing music sites. Despite recent incursions by Facebook, which now has more members worldwide, MySpace still has 120 million users around the globe and a larger audience than Facebook in the United States, many of whom already use the site to discover and share new music.
The path to MySpace Music has been a painful one for the music industry. Five years ago, various labels and industry groups sued MP3.com, an early service that permitted people to stream any song free as long as they could demonstrate that they had a copy of the CD. MP3.com lost the lawsuit and closed its service.
But the music industry’s victory was pyrrhic. CD sales have plunged since then, and Apple has come to rule the world of digital music with its iTunes store and the iPod. And activity on file-sharing services continues to thrive.
“To the average consumer, music is already free,” said Rich Greenfield, an analyst at Pali Research. MySpace Music, he said, “is the labels now acquiescing to that fact.”
They are also trying to profit from it. People familiar with the arrangement between the News Corporation and the studios say that the labels own about a 40 percent stake in the new venture, with Universal Music, the largest label, owning the biggest share. That would give the music companies a direct interest in MySpace Music’s success. People briefed on the deals say they have given MySpace favorable terms — and waived the penny-a-play fee that is charged to other streaming music sites. MySpace would not comment on terms of the deals with the record labels.
MySpace says it eventually will let artists sell merchandise and concert tickets from their pages and keep a share in the profit. Over the longer term, label executives say, they will add exclusive content like new songs and videos to MySpace Music and offer deals to encourage customers to download albums and collections of music.
“This is something we should have done earlier,” said Rio Caraeff, executive vice president for the digital division at the Universal Music Group. “It’s kind of like a staging ground for us to experiment with new business models.”
There is one more hurdle the new venture must clear: finding a chief executive. Mr. DeWolfe and Amit Kapur, MySpace’s chief operating officer, have run the joint venture until now, but they are now searching for a chief executive. Mr. DeWolfe says the new company will have 70 employees and will soon move to separate offices near the MySpace headquarters in Beverly Hills, Calif.
Yahoo Adds Full-Length Music Tracks to Search Results
It's been a good seven months since Yahoo killed off its own music service in favor of teaming up with RealNetworks' Rhapsody. The evolution of this partnership finally surfaced on Yahoo's search results late Wednesday evening. Now any time you do a search for an artist or song name you'll be able to play up to four of their tracks, in full length, right from the results. Previously the system only allowed for 30-second previews.
The updated service allows for up to 25 full-length plays per month, although users who sign up to be a part of Rhapsody's $13-a-month subscription service can get unlimited streaming plays. The music plays from the built-in Yahoo Media Player the company is calling FoxyPlayer. It automatically keeps track of how many plays you've had and includes shortcuts to the source album, lyrics, and artist page. Once you move off the page the player disappears, so if you want to keep listening you have to leave that window or tab open.
In my testing I found the player to be excellent, however Yahoo's system is still fragmented. Using Yahoo's audio search still provides short samples that play without the benefit of the player, and the basic search does not always pick up your artists, despite them being in Yahoo Music's catalog.
In the case of a big band like Oasis the only full-length tracks available were karaoke samples; once played, they still counted toward the 25-song monthly cap. When I wanted to see other songs in the collection it hopped me over to the download page where you could only listen to 30-second samples, something that will be switching over to full-length tracks "soon" according to a post on Yahoo's search blog.
All of this jumping around is bound to be confusing to the average user unless they're looking for big-name bands. Going forward, the most powerful option is going to be a player that follows you from page to page and smarter recognition of band names that are pulled up when users are searching.
Is the Music Industry Trying to Kill Modern Internet Radio?
In exclusive interviews for his biweekly trends column, PM's senior tech editor finds out why the creator of Pandora might have to shut down if it wants to make a point to labels whose best interests are playing out in Washington—and whether Apple or Microsoft might have to bail out the Web's favorite personalized music service, even as they unveil their own.
In the past few weeks, it would seem as if Microsoft and Apple have simultaneously found the next big thing in music: computer-assisted music discovery. Random shuffling may be a decent method for navigating one's way through a music collection, but it is just as likely to follow up a Bach fugue with Fall Out Boy as with Beethoven. The new iTunes 8 software, which Steve Jobs unveiled at Apple's "Let's Rock" event last week, comes with a "Genius" feature that, when activated, sends information about its users' libraries to Apple servers. Once in Apple's cloud, a user's preferences are algorithmically analyzed alongside the information from other users, which helps offer suggestions from the Apple store (for purchase, of course) or automatically create a playlist of similar songs from a user's own library.
With the latest update to the software for its Zune players, meanwhile, Microsoft also allows for computerized music discovery based on customers' listening habits. Subscribers to Zune Marketplace get the most of this feature, as monthly subscriptions (which might still save the music business themselves) allow them to simply download most of the suggested songs that appeal to them without having to make a new purchase each time.
But just as this form of serendipitous music discovery is catching on, the company that popularized it may be headed for the technological trash bin. Pandora, the Internet radio station that creates a customized channel for each listener based on his or her musical taste, has to pay a royalty on every song it serves up—and song by song, it's putting them out of business. "The raw truth of it is that the [music royalty] rates that were published about a year ago aren't affordable for us, or for any other webcaster for that matter," Pandora founder Tim Westergren tells me. (Full disclosure: Popular Mechanics's parent company, Hearst Corporation, is an investor in Pandora.)
The technology for Pandora's site came from The Music Genome Project, which categorizes and selects music using both human and algorithmic analysis. The company has a team of musicologists who score each song according to 400 potential attributes—for instance, there is a sliding scale by which Pandora testers rate vocal vibrato. When a listener starts listening to Pandora, he or she offers up a sample song or artist, at which point the software compares what the listener selected to its database of rated songs, then starts playing a bunch of similar music. The process gets further refined as time goes on, since the Pandora interface allows each listener to give a thumbs up ("I like it") or thumbs down ("I don't like it") to songs as they stream. And unlike Apple's Genius system, Pandora is not designed to create a playlist from your existing music library; its purpose is to use the music you know and love as an introduction to artists you may like, but have never heard of.
Bizarrely, because of a quirk in the law (or a strong lobbying effort to Congress by the broadcast radio industry, depending on how you look at it), royalties only apply to digital music, meaning traditional analog broadcast radio can play music free of charge. In fact, broadcast radio is seen as such a powerful tool for introducing listeners to new music that the music industry has often been willing to pay for that exposure. In the early 1960s, the career of DJ Alan "The Moondog" Freed was destroyed in the notorious payola scandal. It was revealed that Freed was being bribed to play specific songs on the radio—airplay on Freed's show was virtually guaranteed to turn a song into a hit. The payola practice was deemed to be so unfair that a federal law was passed forbidding undisclosed payment for radio airplay. Yet even as recently as 2005, Sony BMG was caught paying radio stations to play its artists and had to pay millions of dollars in fines.
On the other hand, both satellite radio broadcasters and Web-based broadcasters must pay labels for every song heard by every listener. In March 2007, rates for Internet radio were increased for the period of 2006 to 2010. Internet radio stations had retroactive royalty increases for the two years before the decision, plus additional yearly increases that peak in 2010 at 0.0019 cents per user per song—more than double the 2005 rate. Two thousandths of a cent may not sound like much, but when millions of people listen to hundreds or thousands of songs, it adds up. Pandora even has to pay royalties for songs that users don't like and decide to skip—a sad truth for Pandora that may create an unintentional financial incentive toward accuracy.
Those new rates were set by a three-member Copyright Royalty Board, which is appointed by the Library of Congress. Why is the government determining royalty rates for the music industry? Because the music industry and Internet broadcasters were unable to come to any agreement on their own. "It was uninvited," says Richard Strasser, senior attorney for the Copyright Royalty Board. "I don't think anybody was jumping up and down with joy in the government that they have this responsibility, but the former systems just weren't working out." So the CRB operates very much like a court of law: Both sides lay out their cases with evidence and witnesses, and then a judgement is handed down that dictates the rates.
Payments are made to SoundExchange, a music industry organization that collects and distributes payments on behalf of labels and artists. According to Richard Ades, spokesperson for SoundExchange, the system is a benefit to Internet radio stations, since any digital service can play a song without permissions, so long as they pay the standard royalty fees. That arrangement has allowed services such as Pandora flexible and open access to the music they use.
Pandora's Westergren says that the system works, in theory: "The existence of a centralized license is great, because it makes things so much easier and it allows us to play all this music efficiently. What's flawed right now is that it applies a different rate-setting standard for different forms of radio. It makes the economics far worse for Internet radio than for satellite."
The discrepancies do seem to defy logic. Satellite radio stations pay royalties based on overall revenue—this year the rate is set at 6 percent and will increase to 8 percent by 2012. By contrast, a recent Washington Post article reported that royalty fees this year will eat up 70 percent of Pandora's projected revenue, and could amount to 100 to 300 percent of revenue for smaller Internet radio stations.
If those figures are accurate, then the business model of modern Internet radio is difficult to make profitable, and in some cases will be unsustainable. I asked Westergren if he thought the music industry wanted to see Web radio disappear. "It's difficult to get inside the minds of the labels," he said. "I think that there are people who don't want Internet radio around. And there are others that want a larger piece of the pie."
According to SoundExchange's Ades, the problem is that Pandora's user-friendly service isn't really designed to make the money it should. "They're giving away music for free. Who's not going to want that?" Ades says. "The question is: ‘What is Pandora doing to raise revenue?' They're attracting listeners with the music, but they're not requiring listeners to pay for the music. Pandora's failure to monetize their business is why they can't afford the rates."
Westergren points out that Pandora started as a pay service, but few people were interested in signing up. Now that it is free and ad-supported, the site has 16 million registered listeners. Ads provide some revenue, and Pandora also allows users a click-through route to purchase any of the music they hear from either iTunes or Amazon.com. Pandora takes a cut, but one would imagine that the system is a boon to the music industry.
The type of music discovery that Pandora pioneered won't popularize singles in the same way an influential broadcast-radio DJ can. But Pandora is one of the first truly original technologies to come along in the music space in years, one that changes the way people listen to music without enabling outright theft. I'd think that a business as starved for new ideas as the music industry would be clamoring for a way to make Pandora work profitably, not starving it out of existence in its nascence. I can't help wondering if large technology companies such as Apple and Microsoft could ride to the rescue and simply buy Pandora up and make it work within their music systems.
But that probably won't happen. Instead, webcasters will have to hope to find some middle ground with the industry. To that end, Rep. Howard L. Berman, D-Calif., is attempting to broker a compromise between Web radio stations and SoundExchange in the House of Representatives, but it's unlikely that an agreement will occur before the House adjourns at the end of September. Westergren told me that the company doesn't have a specific time line for how much longer Pandora can continue to operate under the current rules, saying only that the company's investors would continue funding the fight, but that at a certain point they may have to determine that it's fruitless.
I asked Westergren what he thought the reaction would be if the service had to shut down. "I think you'd see an unprecedented tidal wave of feedback," he replied. Might it be worth shutting down to make that point? I asked him. "The thought has occurred to us."
RADAR 98: Radio Reaches Over 235 Million A Week
Arbitron has released preliminary findings from RADAR 98. According to the newest data, 95 percent of adults age 18-49 with a college degree and an annual household income of $50,000 or above tune into radio over the course of a week. RADAR Network Affiliates (which account for over 50 percent of all radio stations) reach nearly 85 percent of this demographic. They also reach almost 85 percent of adults 25-54 in households with a college degree and an annual household income of $75,000 or above.
Network affiliated stations also reach adults 18-34, reaching nearly 85 percent of these listeners. All radio stations reach 93 percent of listeners in this same age group.
Radio reaches more than 235 million listeners over the course of a week, according to RADAR 98. This is up from last year’s RADAR 94 estimates of 232 million listeners. There are over 7,400 RADAR Network Affiliated stations, reaching 83 percent of all people 12+. RADAR Network affiliates also reach 85 percent of adults 18-49 and 85 percent of adults 25-54.
RADAR 98 also showed that 94 percent of Black Non-Hispanic persons and 95 percent of Hispanic persons, ages 12+, tune into radio over the course of a week. Radio also reaches 95 percent of Black Non-Hispanics and 96 percent of Hispanics age 25-54 during the week.
Radio also reaches 95 percent of college graduates age 18+, as well as 96 percent of adults 25-54 with a college degree and an annual income of $50,000 or more tune into radio over the course of a week.
On Tuesday, September 23, 2008, Arbitron will release the complete RADAR 98 Radio Network Audience Report results.
Best Buy to Acquire Napster for $54 Million
Best Buy Co. said Monday that it has signed a deal to acquire digital music provider Napster Inc. for $54 million, giving the retailer a means of taking on Wal-Mart in the increasingly important online-distribution channel.
Under the deal, Best Buy will pay Napster for $2.65 a share in cash, a premium of 95% over the value of the stock at the end of last week. The retailer also is paying about $67 million for cash and short-term investments on Napster's balance sheet as of June 30.
The deal will give Best Buy an online digital music retail outlet as well as a subscription streaming service that has about 700,000 subscribers. That could help Best Buy to compete against retail giant Wal-Mart which has its own online digital music offering.
"This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers," Brian Dunn, Best Buy's president and chief operating officer, said in a statement.
"Over time we hope to strengthen our offerings to consumers, who we believe will increasingly seek devices and solutions that enable them to access their content wherever, whenever and however they want."
In morning trading, shares of Napster jumped $1.19 to $2.55. Best Buy shares dipped 34 cents to $44.15.
The deal has already been approved by Napster's board of directors. Best Buy said it expects to close the deal in the fourth quarter.
7digital First to Sign Up Big Four to Unrestricted MP3
A UK start-up yesterday stole a march on digital music rivals such as Apple's iTunes and Amazon by becoming the first in Europe to offer the catalogues of all four of the big labels free of rights restrictions.
London-based 7digital, which launched in 2004, said the move to offer the majority of its 4m tracks in MP3 was a major step forward for the music industry.
It also vowed to boost download sales, which have been growing - but not fast enough to make up for a decline in CD sales - by slashing the price of album downloads. It will offer some new albums at £5 and back-catalogue titles at £2 and £3.
Co-founder Ben Drury said that as labels relaxed their pricing policies for digital music, albums sales had increased, contradicting the theory that digital downloads would kill off the format.
Labels have been moving away from the digital rights management (DRM) software they believed was essential to protect tracks from being copied once downloaded. It proved unpopular with consumers because it made difficult the process of transferring tracks from one digital music player or mobile phone to another and backing them up. In the face of continued piracy, the big labels have embraced the restriction-free, higher-quality MP3 format that can be played on most devices and copied to CD. Apple founder Steve Jobs said last year he wanted to drop rights restrictions for the iTunes Music Store, but has only agreed deals with EMI and some indie labels. Amazon has launched a DRM-free download service in the US and is expected to do so in Europe next month.
Drury said 7digital had become the first European service to sign a deal with Sony BMG, home to Bob Dylan, Kings of Leon and Glasvegas. He said the label had agreed to upgrade all previous purchases of DRM-protected tracks to the new format.
Yesterday, 7digital opened download stores aimed at Italy, Austria and Portugal to add to its UK, Irish, German, French and Spanish services. Drury said it would launch a US and Canadian store this year.
Metallica Interview Canceled after Pirate Bay Row
Metallica’s label Universal stepped in and canceled an interview with a Swedish newspaper last week after one of its writer reviewers said he got his copy of the album via BitTorrent. The writer, Jonn Jeppsson, who actually reviewed an edited version of ‘Death Magnetic’, admitted he downloaded it from The Pirate Bay.
It seems that no matter how hard they try, Metallica will continue to make anti-piracy headlines. After their bloody battle with Napster years ago, they were determined to keep calm when their latest album, ‘Death Magnetic’, inevitably hit the torrents.
This time, Metallica’s Lars Ulrich shocked everyone by saying: “If this thing leaks all over the world today or tomorrow, happy days. It’s 2008 and it’s part of how it is these days.”
Despite this effort, it hasn’t taken long for people to start a dispute over piracy. According to a report, Metallica’s label, Universal Music, canceled an interview the band had planned with the Swedish newspaper Sydsvenskan last week, after a writer there, Jonn Jeppsson, sparked off an anti-piracy row featuring him and The Pirate Bay.
Instead of reviewing the official version of the album, Jeppsson used an unauthorized cut called “Death Magnetic: Better, Shorter, Cut”, which contains the same songs as the original, but shortened. If reviewing an unofficial copy wasn’t enough, Mr Jeppson clearly enraged Universal when he admitted in his review that he downloaded his copy off The Pirate Bay.
Metallica’s label Universal was not pleased, to say the least. Talking with Dagens Media, Universal Sweden’s Per Sundin said: “The reviewer is referring to a torrent where someone has altered the original songs. The reviewer explains exactly where one should go in order to download the file that is totally infringing copyright. It’s not only an illegal file, but an altered file. The reviewer also writes that this is how the album should have sounded.”
Showing that Universal isn’t happy about piracy, even if Lars seems to have undergone a road-to-Damascus-style recovery, Sundin went on stating: “File-sharing of music is illegal. Period. There’s nothing to discuss. That fact that Sydsvenskan has a writer that has downloaded this music illegally and then makes mention of an illegal site in his review is totally unacceptable to us.â€
Hinting that Universal may stop sending promo material for Sydsvenskan to review he ends: “We live in symbiosis with each other and we send them our artists’ record for free for review. But if they download the albums illegally instead, then there’s no point in doing that.”
Meanwhile, ‘Death Magnetic’ entered the UK chart at #1.
Surprise! Universal Music Revenues Up 5% Thanks to Downloads
After having $10 billion wiped off its collective worldwide revenues this decade, the four major music labels haven't had much to crow about. Indie labels, which have banded together to negotiate as Merlin, together are as large as EMI, the smallest of the majors. And even though digital sales are way up across the board, the dramatic declines in more-lucrative CD revenues have led industry observers into Sartre-like levels of existential despair.
So why is Jean-Bernard Lévy, CEO of Vivendi and owner of largest label Universal, so upbeat?
In an interview with the Financial Times, Levy claimed that his label had already hit bottom and was now slogging uphill (its revenues increased by 5 percent on a constant currency basis in the first half of the year). He pointed out that Universal's revenues were now increasing at a decent clip, and he was bullish on new music outlets such as Nokia's Comes With Music plan.
"I think [in] the music business, there is a strong likelihood that we are getting close to the lowest part of the cycle and we are extremely active in developing new business models, new sources of revenues," he told the paper.
Our chart below shows the year-over-year change in revenue for the quarter ending June 30, 2008. EMI, the only private major label, is not included on the list. While revenues don't look so hot for Universal, the revenue change is misleading; when currency fluctuations are removed from the equation, the company actually increased its revenues by 3 percent in the quarter from the same period in 2007.
As for Warner, once the same calculation is applied, it actually lost 1 percent on a constant currency basis. (Sony does not report its Sony BMG numbers this way.)
Digital, of course, is the big driver of better economic performance. At Warner, for instance, it made up 20 percent of total revenues in the second quarter and generated 39 percent more income that it had a year before. Universal notes that its growth is fueled, in part, by "the momentum of digital sales growth."
The growth of digital isn't always enough to offset CD sales (and it doesn't help when your company's CDs were implicated in a major rootkit PR disaster a few years back). Sony BMG said that its decline in revenues was "primarily due to the continued decline in the physical music market worldwide not being fully offset by growth in digital product sales."
Such talk has fueled speculation that the wild hookers-and-blow days of the 1980s may never come again for an industry that could have to content itself with a much smaller global revenue pie. But as Universal's experience shows, growth is still possible for the majors.
One consumer benefit to the music industry's tribulations has been an increase in opportunities to acquire music. The industry had to loosen the reins as is looked like the horses might bolt and leave the stagecoach stranded in the ditch. First came the industry's own pathetic efforts like Pressplay, then the DRMed world of iTunes, then the DRM-free goodness of Amazon, then the Nokia Comes With Music model, then the Last.fm free music streaming model, and now the birth of MySpace Music (which has apparently had its launch pushed back from this week).
And, in another sign that music DRM is dying everywhere but on iTunes, 7 Digital just became the first music store in the UK to offer DRM-free access to the catalog of all four majors.
If the industry in general can recover as Universal has done so far this year, though, the question remains: will the major labels start taking up the slack on those reins, or will they decide that the wild, out-of-control ride they've been on for the past few years has actually produced new opportunities worth following up on as revenues ramp back up?
Sony Buy Out Of Sony BMG Approved
Sony has officially earned permission from the European Commission to buy out Bertelsmann's half of their joint music venture, Sony BMG. Sony agreed in August to buy Bertelsmann's 50 percent stake for around $900 million. The new music company will now be called Sony Music Entertainment and will become a wholly owned subsidiary of Sony Corporation of America.
In a statement, the European Commission said it had "concluded that the transaction would not significantly impede effective competition" in the European Union or any substantial part of it. As part of the transaction, the parties have also agreed to continue to share the company's manufacturing and distribution requirements between Sony's manufacturing subsidiary, Sony DADC, and Bertelsmann's services company, Arvato Digital Services. Bertelsmann also will be taking over select European music catalog assets from Sony BMG.
When the deal was first announced in August, Sony CEO Howard Stringer commented, "Music has been a vital and vibrant part of Sony's culture for over 20 years. This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and Sony's products, operating companies and affiliates. It enables us to offer a total entertainment experience to consumers. Over the past four years, Sony BMG has undertaken a very successful restructuring, streamlined operations and developed innovative digital partnerships that ensure it will continue to be a leader in the creation and distribution of music worldwide. It is an organization rich in talent, ideas and enthusiasm, and is a strong fit with our overall business strategy."
DVD Sales Flat, But Still Dwarf Downloads
DVD sales are flat but the drop doesn't have anything to do with movie downloads, according to the NPD Group.
The research group reported Tuesday that, on average, consumers spent 41 percent of the money budgeted for movies and other video content by purchasing DVDs of films. Movie rentals on DVD were the next biggest category with 29 percent. Consumers spent 11 percent purchasing TV shows on DVD. About 18 percent went to theater tickets, according to the report.
Here's the kicker for Internet video: only 0.5 percent was spent on renting or purchasing TV shows or movies off the Web.
This shouldn't surprise anybody. Digital video is still in its infancy. Narrow bandwidth in the United States, compared with much of the industrialized world, makes it time-consuming to download the enormous movie files.
Technology that compresses those files have improved but the quality and viewing experience is still far inferior to watching a DVD. Hollywood still doesn't allow digital downloads the same kind of portability as DVDs. A consumer can buy a movie on iTunes that may not play on a non-Apple device.
Then there is the problem with choice. Most of the services still have only a fraction of the films available as any corner video store.
Stats like those from NPD Group, while they may be accurate, don't tell the whole story. Hollywood believes digital media is the future as evidenced by the deals made with Microsoft's Xbox, iTunes, Roku's Netflix Player, and others. Let's see how much market share downloads account for in the next couple of years.
"Main street continues to line up behind Blockbuster and Best Buy," said Russ Crupnick, NPD's industry analyst. "I think the studios are smart to try different things and learn what they can. Eventually, we're going to see downloads start to get traction. But from a consumer point of view, there's just not any stickiness now."
Product Placement Still Huge as Advertisers Fight DVRs
Are TV product placements (see our feature on the practice) up or down? Well, both, according to Nielsen's new numbers.
American Idol has given us much to be thankful for: Simon Cowell, hilariously poor singing, tickets to Hollywood, the hard truth that so many US reality shows were actually birthed in other countries. But—and fans of the show will be shocked, shocked to hear this—the show has always been as much about marketing products to viewers as it has been about singing.
In the first half of 2008, American Idol was the single most product placement-laden show on major network television, with 4,636 product shots. And what was it selling? A fizzy, tooth-rotting, but oh-so-refreshing beverage known as Coca-Cola, for one, which turns out to have been the most-placed product on broadcast TV in the first half of the year.
Product placements have fallen overall in 2008, but broadcast TV actually saw significant growth in the practice. The major networks upped their use of product placements by 12 percent, a move that works best in reality TV shows (but is also present in shows like The Office with its rather-too-obvious HP logos throughout).
Product placements give networks a twin benefit: those weaselly DVR-loving ad-skippers in living room across American can't skip the placements, and customers who actually watch ads... well, they still see the placements, too! Extra money!
Below is the list of the top ten programs that engage in the practice; note that the first two (American Idol and Biggest Loser) each have more than double the number of placements of any other show on the list. Note also that nine of the 10 are reality or game shows, while only one is scripted drama.
The Nielsen survey looked at cable networks A&E, Bravo, HGTV, MTV, and TLC, and found that placements on these networks actually dropped by 20 percent. But "dropped" doesn't mean "no longer incredibly popular."
For example, take the single most-placed show on cable, American Chopper. American Idol only shilled for corporations 4,636 times between January and June of this year, but American Chopper featured an astonishing 26,794 placements. In fact, the nine top users of product placements on cable all featured more placements than American Idol.
Because of the larger percentage drop on cable, total placements are down almost 15 percent, but as the numbers make clear, product placement is still big business.
It's gotten egregious enough that even the Republican-dominated FCC decided to open an inquiry into the practice of product placements, and whether or not they were being adequately disclosed.
RIAA: Lobbyists or Law Enforcers?
When a story appears in the media involving piracy, it inevitably mentions how lobby groups like the RIAA get involved in helping establish evidence. Is this really needed, or does this compromise the cases? Should representatives for the victims really be used to form the basis of a criminal case, or should evidence be gathered by the police?
No matter where the story originates, be it the UK, USA, Italy, Asia, or Australia, it reads the same. A raid is carried out, assisted by members of the local anti-piracy lobby group. From Oink, to The Pirate Bay, these raids are consistently getting assistance and ‘evidence’ from those that claim to be losing out to the targets of these raids.
Some might think that this is acceptable - maybe police forces are not equipped to deal with highly technical cases like this, and so need to outsource to specialist agencies like these for help? This is certainly not the case, as many countries have specialist departments that are highly experienced and qualified in the forensic examination of computers and technology. The problem is more real. Interest groups that claim to be the victim - are allowed to participate in the prosecution of their targets.
In most police investigations, if a police officer is directly involved in a crime, he or she is usually unable to participate in the investigation as being involved reduces (or even eliminates) that person’s objectivity. Justice is meant to be blind, not fueled by thoughts of personal redemption or vengeance. However, time and time again we see ‘investigators’ for the MPAA or RIAA pop up in cases. Often they will state they (or their members) have had losses, thus making them the victim. If you believe that someone has caused you or your members a loss, are you going to act from that basis when gathering evidence, or will you work as hard to find the person innocent as you will to find them guilty?
While the problem is growing worse, it is doing so in only a limited way. It is only apparent in the gray area that is copyright infringement. Could you imaging the outcry in the UK, if anti-speed organization BRAKE was involved in investigating road traffic accidents? If they were, would a large percentage of accident investigations involving them find causes related to the organizations policy and positions? No police department anywhere in the world would consider requesting a Greenpeace investigator when looking into flytipping. So, why are media industry groups treated differently, when it comes to anything involving copyright?
The reason We’ve raised this is because of an incident in the US that caught our eye. A motorist driving in Park Forest, Il – a town some 30 miles south of Chicago – was pulled over for speeding. With an apparent suspended license he was arrested. The car was searched, and that’s where a few spindles of CDs and DVDs were found. The spindles had handwritten markings, labeling them as movies and music.
Surprisingly enough police called in the RIAA, a rather biased lobby group, to investigate the incident. As a result, the speeding motorist’s house was searched, and two of the 6 charges against him are relating to copyright. Whether the motorist turned out to be a commercial pirate or not is irrelevant, the fact that the police and the RIAA cooperate like this is what worries us. They might be searching iPods next.
Requests to Park Forest Police Chief Thomas Fleming have gone unanswered, and no trace of the RIAA investigator can be found either. It proves though, that no matter where you are, there is little chance of of a fair investigation if you’re accused of copyright infringement.
RIAA Decries Attorney-Blogger as 'Vexatious' Litigator
The Recording Industry Association of America is declaring attorney-blogger Ray Beckerman a "vexatious" litigator and is seeking unspecified monetary sanctions to punish him in his defense of a New York woman accused of making copyrighted music available on the Kazaa file sharing system.
The RIAA said Beckerman, one of the nation's few attorneys who defends accused file sharers, "has maintained an anti-recording industry blog during the course of this case and has consistently posted virtually every one of his baseless motions on his blog seeking to bolster his public relations campaign and embarrass plaintiffs," the RIAA wrote (.pdf) in court briefs. "Such vexatious conduct demeans the integrity of these judicial proceedings and warrants this imposition of sanctions."
Lory Lybeck, a Washington state defense attorney leading a proposed class-action lawsuit accusing the RIAA of allegedly engaging in "sham" litigation tactics, said the RIAA's motion comes from the same organization that has sued about 30,000 people over the last five years for file sharing, some of them falsely. It's the same organization, he said, that has sued dead people, the elderly and even children -- all while using unlicensed investigators.
"This is like irony and irony and irony," Lybeck said in a telephone interview. "That's what vexatious litigation is."
Beckerman, whose blog is Recording Industry vs The People, said in an interview the allegations were "frivolous and irresponsible."
Lybeck represented an Oregon woman, Tanya Andersen, and got the case dismissed last year. The RIAA fought paying his legal fees because it claimed she was still an infringer. He countersued. The case seeks to represent what he says are "thousands of people falsely sued" by the RIAA. The case is pending.
"Irony is too tame of a word to describe the motion against Ray," Lybeck said. "Their whole 30,000-lawsuit scheme is founded on the purpose to run a PR campaign based on a fundamental starting place of an illegal investigation by unlicensed investigators and then a threatening letter," Lybeck said. "Ray is duty bound and ethically bound to zealously defend his client."
In federal court documents filed in the Eastern District of New York, the RIAA accused Beckerman, in defending a 2004 case against a New York woman, "for providing false and misleading information and for unreasonably and vexatiously multiplying and prolonging this litigation."
The RIAA is also seeking sanctions against the defendant, Marie Lindor, because it accuses her of destroying evidence to prevent it from proving the allegations.
MediaDefender, One Year After the Email Leak
Exactly a year ago, the anti-piracy company MediaDefender was put to shame after a hacker gained access to their systems. Many of the deepest secrets of the company were published online, and now, twelve months on, the company is walking the plank to bankruptcy as its shares are worth less than one cent each.
For years, MediaDefender has been known for their notorious anti-piracy efforts, flooding torrent sites with fake files and decoys. It was therefore no surprise that the filesharing community was delighted when a hacker gained access to the company’s servers.
The hacker, a high-school student using the pseudonym Ethan still lived with his parents when he first accessed they company’s servers by exploiting a weakness in their firewall. This was at the end of 2006, at a time when business was still good for MediaDefender, with its revenue standing at nearly $16m.
Soon after that, Ethan got access to the company’s email, its networked resources and even its telephone system. Logging in a handful of times each month through the summer of 2007, he started to get bored with “Monkey Defenders” - his pet name for the anti-piracy outfit. Deciding to go out with a bang, he and the Media Defender-Defenders gathered thousands of the company’s internal emails and published them on web.
The rest is history. On September 15, 2007 the database containing thousands of emails was uploaded to several BitTorrent sites. In the release note Ethan and friends wrote: “By releasing these emails we hope to secure the privacy and personal integrity of all peer-to-peer users. The emails contain information about the various tactics and technical solutions for tracking p2p users, and disrupt p2p services,” and “A special thanks to Jay Mairs, for circumventing their entire email-security by forwarding all your emails to your gmail account.”
The emails contained a wide range of information including server passwords, social security numbers, spoofing strategies and vacation pictures. And it didn’t end there. In the days after the email leak, Ethan and friends released a private telephone conversation between MediaDefender and the New York attorney general’s office, a P2P tracking database, which was followed up a few days later by all of Media Defender’s anti-piracy tools. The effect on the company and its operations was dramatic.
In a SEC filing, the financial damage started to become clear. As a result of the hacking, by November 2007 MediaDefender had lost nearly $1,000,000, which affected the stock price of parent company ArtistDirect significantly. Before the email leak, stock was around the $2.25 mark. Three months later stock plummeted to $0.63. Now, a year after the leak the stock price has hit rock bottom, at less than $0.01 per share.
Meanwhile, BitTorrent sites witnessed a decrease in MediaDefender activity following the leak. The Pirate Bay’s Peter Sunde, who sued some key players in the entertainment business for using MediaDefender, told TorrentFreak that there has been a significant decrease in activity from BitTorrent spoofers and decoyers. “It’s strange that no one has given much regard to the fact that the way MediaDefender works is probably illegal in most countries. Even in the US. I might even say, especially in the US,” Sunde added.
Decrease in activity or not, this spring the company still managed to make the tech headlines by sabotaging the BitTorrent tracker of the popular Internet TV network Revision3. Revision3 lost thousands of dollar in revenue because of the DDoS attack, but decided not to take any legal action. Meanwhile, the stock price on MediaDefender’s parent company continued its freefall.
So what does the future hold for MediaDefender? Currently, they have decreased their anti-piracy efforts, and started to explore options to use filesharing networks for marketing purposes. Eric Pulier and Teymour Boutros-Ghali, two former members of ArtistDirect’s board of directors who resigned last month announced that they were interested in buying MediaDefender, but it’s not clear what path they intend to take.
Perhaps a more realistic option, is for the company to file for bankruptcy, as The Pirate Bay predicted they would, long before the emails leaked.
At last, a solution for copyright holders to fight piracy and collect revenue lost from illegal downloads. The GetAmnesty program provides a way for users who have illegally downloaded copyrighted files to “settle” with the copyright owner by paying a nominal fee each downloaded file. For copyright holders, GetAmnesty at last turns piracy into profits.
Copyright holders such as movie studios, record labels, musicians, software companies that have digital assets like movies, songs, or software.
“Fans” of music, movies and software who think there’s nothing wrong with illegally downloading movies, songs, games, eBooks or images.
How It Works
Nexicon monitors a variety of Internet protocols such as Ares, Limewire, Kazaa, BitTorrent, auctions and newsgroups, and tracks the identity of the computer that is illegally downloading different copyrighted files. Nexicon confirms that the files downloaded violate a copyright through its technology platforms’ artificial intelligence and Automated Human Visual Verification (AHVV) technology. Once the file is confirmed to be an illegally downloaded file, Nexicon sends a DMCA notice via email to the infringer’s ISP, who is legally required to forward the email to the infringer. After opening the email, the infringer clicks a link to visit GetAmnesty.com, where they can settle their infringement to avoid legal action and receive a legal release from the copyright owner.
GetAmnesty provides content owners with a new revenue stream by collecting settlement fees on their behalf from those who illegally download their copyrighted content. Further, violators are tagged with a complete history of their downloading activities, which is easily translated to create customer profiles for online marketing purposes.
The GetAmnesty program is driven by Nexicon’s MARC Anti-Piracy platform which monitors the Internet for illegal downloads, analyzes infringement data, reports on copyright infringements, and collects settlement fees from known copyright violators. MARC’s artificial intelligence, extensive algorithms, and Automated Human Visual Verification (AHVV) help ensure for an extremely high rate of accuracy.
IsoHunt Lawsuit Sends Message to CRIA, RIAA, MPAA & More - Linking is Legal
Should a site be held accountable for merely linking to pirated material? IsoHunt thinks not, and is taking its case to the courtroom.
IsoHunt does not want to go the way of Demonoid.
The issue of copyright is a hot one at the moment, with sites as diverse as YouTube and The Pirate Bay both having to deal with the subject on a daily basis. The two sites may be very different, but are facing similar gray areas in the law.
The main difference between those two sites is that one will immediately comply with a takedown notice over an alleged copyright claim while the other doesn’t care.
This compliance with media companies wishes hasn’t prevented YouTube from being sued however, with the $1 billion Viacom lawsuit still yet to be resolved. While this case drags on in the U.S, northwards in Canada a ‘potential infringer’ is taking a more aggressive stance.
IsoHunt Gets Aggressive
When IsoHunt, a popular torrent tracker, received a cease and desist letter from the CRIA (Canadian Recording Industry Association), instead of playing dead, the Internet company counter-sued the CRIAA, the Canadian version of the RIAA.
If IsoHunt is successful it will send a clear message to rights holders that copyright laws are there to benefit everyone.
Linking = Copyright Violation?
The CRIA cease and desist claims that IsoHunt is violating copyright by linking to torrents containing pirated material.
While IsoHunt has complied with CRIA and MPAA (Motion Picture Association of America) takedown notices in the past, exactly as YouTube does, it is now suing the CRIA to try and force a legal stance on the matter of BitTorrent technology, linking law and torrent trackers.
IsoHunt took this measure when the CRIA issued cease and desist letters to isoHunt.com and its sister sites (Torrentbox.com and Podtropolis.com) to have the entire sites taken offline.
Gary Fung, the President of IsoHunt, spells out the case for the defense in some detail in a forum post on IsoHunt.com. It’s an eloquent and decidedly intelligent discussion of the issues involved and deserves a read.
But does IsoHunt actually stand a chance of winning their lawsuit and countering the claims made by the CRIA?
The main argument is that IsoHunt, along with every other torrent tracker and search engine, serves the purpose of linking to content, be it pirated or not. Therefore it shouldn’t actually be liable for these kinds of copyright violation claims if it complies with individual take down requests to remove links to infringing content.
This seems fair enough from a layman’s point of view. Just as Google exists to link to web-pages, just as YouTube exists to host all sorts of videos, IsoHunt exists to link to torrent files and doesn’t exist purely to link to pirated material.
Repercussions of the Lawsuit
In the past we have seen pirate TV sites like PeekVid, MahTV, TVLinks and QuickSilverScreen be in a much weaker position against rights holders since they have existed almost solely to link to pirated videos.
Proving that IsoHunt exists to link to torrent files, and not just pirated torrents, will be key to its case as the CRIA appears to see IsoHunt as a den of thieves.
This will be the first case to test whether BitTorrent indexes such as IsoHunt are infringing copyright or not. If the court sides with the CRIA it could make see a rise of angry rights holders in Canada taking wrath on sites like Google and YouTube with an increased chance of success.
If on the other hand IsoHunt is successful it will send a clear message to the likes of Viacom, the MPAA, the RIAA, CRIA and others that copyright laws are there to benefit everyone, not just the rights holders.
This in turn could encourage rights holders to start waking up to the need to embrace new distribution models, rather than fighting them.
The Future of Copyright
How relevant is it to declare oneself to be “for” or “against” copyright? Neither the stabilization nor the abolition of the copyright system seems within reach. All we see is a seemingly endless assembly line of new extensions to the law being proposed and enacted. The most recent is the proposed “Anti-Counterfeiting Trade Agreement” (ACTA) , to be tabled at next month’s G8 meeting in Tokyo, including a clause known as the “Pirate Bay killer” that would force countries to criminalize services that may facilitate copyright infringement, even if not for profit. This is just one example of how copyright law is mutating into something qualitatively different than what it has been in previous centuries.
A very condensed version of copyright history could look like this: texts (1800), works (1900), tools (2000). Originally the law was designed to regulate the use of one machine only: the printing press. It concerned the reproduction of texts, printed matter, without interfering with their subsequent uses. Roughly around 1900, however, copyright law was drastically extended to cover works, independent of any specific medium. This opened up the field for collective rights management organizations, which since have been setting fixed prices on performance and broadcasting licenses. Under their direction, very specific copyright customs developed for each new medium: cinema, gramophone, radio, and so forth. This differentiation was undermined by the emergence of the Internet, and since about the year 2000 copyright law has been pushed in a new direction, regulating access to tools in a way much more arbitrary than anyone in the pre-digital age could have imagined.
This change has taken place because previously distinct media are now simulated within the singular medium of the Internet, and copyright law simply seems unable to cope with it. Consider radio broadcasting and record shops, which once were inherently different. Their online counterparts are known respectively as “streaming” and “downloading,” but the distinction is ultimately artificial, since the same data transfer takes place in each. The only essential difference lies in how the software is configured at the receiving end. If the software saves the music as a file for later use, it’s called a “download.” If the software immediately sends the music to the loudspeakers, it’s called “streaming.”
However, the receiver can always choose to transform a stream to a digital file. It’s simple, legal, and not very different from home taping. What now fills the record industry with fear is the possibility that users could “automatically identify and separate individual tracks from digital transmissions and store them for future playback in any order.” In other words, they fear that the distinction between streaming and downloading will be exposed as a big fake.
For example, Swedish company Chilirec provides a rapidly growing free online service assisting users in ripping digital audio streams. After choosing among hundreds of radio stations, you will soon have access to thousands of MP3 files in an online depository, neatly sorted and correctly tagged, available for download. The interface and functionality could be easily confused with a peer-to-peer application like Limewire. You connect, you get MP3s for free, and no one pays a penny to any rights holder. But it is fully legal, as all Chilirec does is automate a process that anyone could do manually.
Cutting a recorded radio stream into individual tracks and entering each correct song title is easy, but takes lots of time. The open source community is continuously coming up with free tools for simplifying it, such as a program called The Last Ripper that can turn the on-demand streaming service Last.fm into a library of MP3 files.
Record industry lobbyists smell the danger, and now they are urging governments to criminalize such practices. On their orders the so-called PERFORM Act (”Platform Equality and Remedies for Rights Holders in Music Act”) was introduced in the U.S. Senate last year.  The proposed law would force every Internet radio station to encrypt the transmission of file information, such as the name of the song. Yet anything visible on the screen can still be easily obtained by special software, encryption notwithstanding, and such restrictions would therefore be ridiculously easy to circumvent. Thus the PERFORM Act includes a follow-up clause banning the distribution of this class of software.
People with some programming skills, however, won’t need to do much more than combining a few readily available and otherwise perfectly legal code libraries to compile their own streamripping tool, one that would circumvent the PERFORM Act. For regulations like these to be effective, it is necessary also to censor the sharing of skills that potentially can be useful for coding illegal software. The circle of prohibition grows still larger: Acoustic fingerprinting technologies, which have nothing copyright-infringing to them, but which can be used for the same feared identification of individual tracks, must probably also be restricted.
This domino effect captures the essence of copyright maximalism: Every broken regulation brings a cry for at least one new regulation even more sweepingly worded than the last. Copyright law in the 21st century tends to be less concerned about concrete cases of infringement, and more about criminalizing entire technologies because of their potential uses. This development undermines the freedom of choice that Creative Commons licenses are meant to realize. It will also have seriously chilling effects on innovation, as the legal status of new technologies will always be uncertain under ever more invasive rules.
Anti-piracy agencies are today fiercely attacking different kinds of search engines, solely because they provide links to files which may be copyrighted. This includes the bizarre case against Swedish BitTorrent tracker The Pirate Bay, as well as recent lawsuits against Yahoo! China and Baidu. Only Google remains largely uncontested, although they operate in the same gray zone of copyright. For example, the business model of Google Books is to display millions of pages of copyrighted and uncopyrighted books as part of a business plan drawing its revenue from advertising.
Gray zones like these are omnipresent in 21st century copyright law. One reason for this development is the uncertain status of the very idea of “copying” today. Contrast today’s world with the golden age of copyright, roughly speaking between 1800 and 1950. Back then, enforcement was easy. The act of reading a book was far removed from the act of printing one. Record presses and gramophones were safely distinct machines. Since then, things have changed.
When American troops liberated the city of Luxembourg in 1944, they made a strange capture: a machine capable of recording sound on magnetic tapes. Shortly after the war, this German military invention made its appearance in private homes. Tape recorders integrated listening and reproduction in one device, but as separate functions. That’s no longer the case with digital technology. Today, to use digital information is to copy it.
Computers operate by copying. They couldn’t care less whether the physical distance between original and copy is measured in micrometers or in miles; both work equally well for them. Copyright law, on the other hand, must somehow draw a line between use and distribution. That means putting an imaginary grid over the chaotic myriad of network nodes, delineating clusters of devices that can be attributed to individuals or households.
Whatever happens inside such a cluster is defined as private use, while any trespassing of these borders is potentially criminal. But what can this strict division between private and public mean to someone with 400 “friends” on Facebook?
Another important consideration is that the digital is larger than the online. According to one recent study 95 percent of British youth engage in file sharing via burned CDs, instant messaging clients, mobile phones, USB sticks, e-mail, and portable hard drives. 
Such practices constitute the “darknet,” a term popularized by four Microsoft-affiliated researchers in a brilliant 2002 paper. Their thesis is simply that people who have information and want to exchange it with each other will do just that, forming spontaneous networks which may be large or small, online or offline. By being interconnected they can always keep the most popular material available. Attempts to curb open file-sharing infrastructure may only drive activity towards smaller and darker networks.
One early darknet has been termed the “sneakernet”: walking by foot to your friend carrying video cassettes or floppy discs. Nor is the sneakernet purely a technology of the past. The capacity of portable storage devices is increasing exponentially, much faster than Internet bandwidth, according to a principle known as “Kryder’s Law.”  The information in our pockets yesterday was measured in megabytes, today in gigabytes, tomorrow in terabytes and in a few years probably in petabytes (an incredible amount of data). Within 10-15 years a cheap pocket-size media player will probably be able to store all recorded music that has ever been released — ready for direct copying to another person’s device.
In other words: The sneakernet will come back if needed. “I believe this is a ‘wild card’ that most people in the music industry are not seeing at all,” writes Swedish filesharing researcher Daniel Johansson. “When music fans can say, ‘I have all the music from 1950-2010, do you want a copy?’ — what kind of business models will be viable in such a reality?” 
We already have access to more film, music, text and images than we can possibly incorporate into our lives. Retreating from this paradigm of abundance to the old paradigm of scarcity is simply not an alternative. Adding more “content” will strictly speaking produce no value — whether culturally or economically. What’s valuable is supplying a context where people can come together to create meaning out of abundance.
The digital world poses questions whose answers can’t remain within the digital sphere. A key challenge is to relate the digital to that which is not digital: time, space, human relationships, and so forth. Kevin Kelly, the founding executive editor of Wired magazine, has recently captured it well: When copies are superabundant, they become worthless, while things which can’t be copied become scarce and valuable. What counts in the end are “uncopyable values,” qualities which are “better than free.” 
The file-sharing explosion beginning around the year 2000 marked not only the start of a falling trend in sales of recorded music, but also of a drastic rise in spending on live music experiences. Only ten years ago, live music was widely conceived of as merely a way to market recordings. Today that strange equation seems to have been turned on its head.
Music is far from unique in demonstrating how the pendulum has swung. Kelly mentions how writers increasingly make their money from appearing in person, promoted by their books, which may well be available for free. The computer game industry has understood how to make big money not by selling software, but by selling access to online worlds.
Businesses that adopted the copyright industry’s old formula of selling “content without context” are meeting harder times. “Intellectual property is the oil of the 21st century,” was once the motto of Mark Getty, the businessman who used his family’s oil fortune to invest in one of the world’s largest copyright portfolios, controlling more than 60 million images.” Getty Images saw its stock price fall steadily since its peak in 2004, before the company earlier this year was sold out to private equity.
The failure of Getty Images can’t be blamed on piracy, but rather has to do with the spread of digital cameras. Editors increasingly tend to prefer on-the-spot pictures, regardless of image quality. Sitting on a large database of archived pictures becomes less relevant when newspapers want photography to produce a feeling of real-time presence — an uncopyable quality.
Faced with these new realities, copyright industries may instead go on the offensive. First out on the battlefield were the record industry’s watchdogs, the Recording Industry Association of America and its international counterpart, the International Federation of the Phonographic Industry. Together, the RIAA and IFPI have set the industry’s lobbying agenda. Topping their wishlist is legislation requiring “carriers of digital content” to intervene in the use of communications services, or what they call “ISP responsibility.”  The ACTA might soon deliver them such legislation, which basically encompasses measures of two kinds.
One is simply net censorship. In several European countries, the IFPI is already taking ISPs to court to make them block access to search engines like The Pirate Bay. The question arises: Which site would be next? That infringement hotbed called YouTube? Probably not, but such implicit threats are increasingly being used by copyright industries in their hunt for profitable but one-sided licensing deals.
Yet more alarming, the very existence of an Internet blacklist will constantly tempt politicians to expand that list’s uses to all kinds of morally or politically inconvenient sites. Franco Frattini, the EU Justice Commissioner, is already pushing to censor online information about bombmaking.  Censorship, however, can be circumvented, as demonstrated in Denmark, where more people started using The Pirate Bay after a court-ordered block was implemented.
As a second measure, the anti-piracy lobby demands authorization to order ISPs to disconnect users and to force ISPs to give out subscribers’ identities on request. Unfortunately, criticisms of such policies have hitherto been limited to concerns about the violation of privacy. While privacy is a valid concern, there are other reasons to mistrust this measure.
Consider first that the Internet is not a network of people; it is a network of computers. Any node in a network is not necessarily an endpoint, but a potential opening to a sub-network. Firms and neighborhoods routinely install one fiber connection and share it via a router. Only their local network administrator can then trace online activities to an actual user. In other words, anonymity will remain a possibility.
Yet in the name of ISP responsibility, virtually any Internet user might be called to account by the recording industry. Here’s why: In discussions about so-called ISP responsibility, it is crucial to remember that big telecom companies are far from the only existing “operators of electronic communications networks and services.” This is the actual definition of an ISP, used within the European Union bureaucracy, but by this definition, you may be one, too. The U.S. Digital Millennium Copyright Act is equally vague: It defines a “service provider” as a “provider of online services or network access, or the operator of facilities therefor,” leading many to wonder whether libraries, employers, or private individuals operating routers might also qualify as ISPs.
Given such a broad definition, any company or person sharing connectivity, as well as anyone hosting a blog or a web forum, could, in the name of “ISP responsibility,” be obligated to register the identities of users and to deliver them to copyright enforcers on request. The range of possible abuses is enormous. Attempts to save an already broken policy will mean an ever more absurd sequence of follow-up regulations.
Meanwhile, darknets will proliferate and demand for new anonymization techniques will remain high as a general side-effect of the hunt for small-scale copyright infringers. The most eager to take advantage of that situation will of course be the real criminals, including terrorists, while the legitimate Internet may grow fragmented and lose its open, freewheeling character.
Copyright enforcement weakens general law enforcement. And it’s expensive. The proposed ACTA treaty would create international legislation turning border guards into copyright police, charged with checking laptops, iPods, and other devices for possibly infringing content, and given the authority to confiscate and destroy equipment without even requiring a complaint from a rights-holder.
It’s characteristic of the dishonesty found in copyright law that the ACTA has been promoted as a treaty aimed to save people from dangerous fake medicine, which has very little to do with issues like “ISP responsibility.” While patents, trademarks, and copyright are significantly different in many respects, copyright industry lobbyists prefer to present their draconian enforcement strategies as a matter of “intellectual property” in general.
The real dispute, once again, is not between proponents and opponents of copyright as a whole. It is between believers and non-believers. Believers in copyright keep dreaming about building a digital simulation of a 20th-century copyright economy, based on scarcity and with distinct limits between broadcasting and unit sales. I don’t believe such a stabilization will ever occur, but I fear that this vision of copyright utopia is triggering an escalation of technology regulations running out of control and ruining civil liberties. Accepting a laissez-faire attitude regarding software development and communication infrastructure can prevent such an escalation.
Unauthorized sharing of files will prevail in darknets, online and offline. On the other hand, certain non-digital activities, like book publishing, continue to work relatively well under the terms of classical copyright law designed for printing presses. Still other fields, like software and music, are characterized by complex competition among different models, where some make money on selling copyable units, while others profit by delivering uncopyable services. A qualified guess is that we will have to live in this landscape of gray zones for quite a while, for good and bad.
Creative practices, with some exceptions, thrive in economies where digital abundance is connected to scarce qualities in space and time. But there can never be a question of finding one universal business model for a world without copyright. The more urgent question regards what price we will have to pay for upholding the phantasm of universal copyright.
Copyright Act Deeply Flawed, Unworkable: NZ ICT Industry
New Zealand's ICT industry has slammed new copyright legislation saying the confusing law could see schools, libraries and even families unplugged from the internet and will likely put smaller, innovative ISPs out of business.
In joint statement released today by six key industry groups, the Copyright (New Technologies) Amendment Act - passed 111 votes to 10 in April - is described as "A deeply flawed law that undermines fundamental rights and simply will not work."
The joint statement - signed by Telecommunications Carriers' Forum, InternetNZ, the Internet Service Providers Association of New Zealand, the Telecommunications Users Association of New Zealand, the New Zealand Computer Society, and Women in Technology - is an unprecedented show of unity for the industry. A spokesman for one group said it proves just how seriously the sector views the new Act.
Singled out for concern is Section 92A of the Amendment, which requires ISPs to disconnect "in appropriate circumstances" the internet services of users who repeatedly infringe copyright by downloading or uploading music, movies, games and other copyrighted material.
"Section 92A has achieved one thing and one thing only," TCF CEO Ralph Chivers says, "uniting the ICT sector and others who will be affected in an unprecedented show of solidarity against it."
He says that "hastily inserted last-minute changes" could significantly undermine the legal rights of internet users. "The Act gives no guidance on what ‘reasonably implement' or ‘in appropriate circumstances' mean. This leaves the door wide open to those who seek disconnection of an alleged repeat infringer based on flimsy evidence, or worse, allegations alone."
Identifying repeat offenders will not be easy, he says, particularly when an internet account is used by a family, business or school.
"Businesses support the need to protect intellectual property, and we are sympathetic to the significant problems the music, movie and gaming industries face. However, balance is the key. Protecting one person's interests at the expense of others is completely inappropriate," Chivers says.
InternetNZ executive director Keith Davidson agrees: "The potential for infringement of human rights is a significant concern to us. However, this law change has the potential for internet users to have their service disconnected on very weak grounds, undermining the fundamental right of ‘innocent until proven guilty'.
"Rights holders and the industry need to work together to find more pragmatic solutions. We need to preserve the service providers' obligations to offer unencumbered access to the internet for their customers, but at the same time find ways to adequately protect copyright," said Davidson.
And according to Internet Service Providers Association president, Jamie Baddeley, the law leaves ISPs wide open to financial ruin. "They are exposed to legal risk from their customers if they act and legal risk from copyright holders if they do not. They are caught in the middle without any form of legal protection and will be required to go through a costly and complex process to solve a problem that is not of their making. This has the potential to put some of our smaller innovative members out of business."
Meanwhile, TUANZ CEO Ernie Newman says Parliament has unfairly placed the burden of sorting out the mess on ISPs: "... it's not their job to interpret and enforce vague laws, particularly when they interfere with their customers' rights. Worse still, the definition of ISP in the Act captures schools, universities and libraries - in fact just about anyone who provides internet access to someone else. The loose language Parliament has included in the legislation will require an army of lawyers to interpret, at the expense of ISPs and ultimately their customers."
"The New Zealand Computer Society strongly supports protection of Intellectual Property, but this isn't the way to do it," added NZCS chief executive Paul Matthews. "Yes, copyright infringement is wrong, but it needs to be proven first and the penalty kept in proportion. Termination of all internet access in this day and age of online education, social networking and electronic services is a huge penalty."
Finally, Cheryl Horo from Women in Technology pointed a way out of the impasse: "New Zealand's film, music and gaming industries are increasingly dependent on advanced information technology - it is in all of our interests to help these sectors grow and develop. Education will play an important role in progressing this issue."
To that end, the TCF is creating a Code of Practice for ISPs and internet users to provide a consistent and workable approach to meeting the requirements of the Act. In order to create that Code, Ralph Chivers has asked that introduction of section 92A be delayed.
Anti-Counterfeiting Trade Agreement: Fact or Fiction?
There's been speculation for months concerning the Anti-Counterfeiting Trade Agreement. If ratified, many suggest it would criminalize peer-to-peer file sharing, subject iPods to border searches and allow internet service providers to monitor their customers' communications.
Yet all we know for certain is it's a treaty about beefing up intellectual property protections being negotiated in secret by the European Union, the United Sates, Japan, South Korea, Canada, Mexico, Australia, Switzerland and New Zealand.
Dozens of special-interests groups on Monday urged the trade representatives from those nations to disclose the language of the evolving agreement in a bid to end speculation on its contents and to assist in crafting its language.
"Because the text of the treaty and relevant discussion documents remain secret, the public has no way of assessing whether and to what extent these and related concerns are merited," the groups said in a letter to trade representatives from the participating nations.
The groups include Consumers Union, Electronic Frontier Foundation, Essential Action, IP Justice, Knowledge Ecology International, Public Knowledge, Global Trade Watch, U.S. Public Interest Research Group, IP Left (Korea), Australian Digital Alliance, The Canadian Library Association, Consumers Union of Japan, National Consumer Council (UK) and Doctors without Borders' Campaign for Essential Medicines.
Robert Weissman, director of the public interest group, Essential Action of Washington, D.C., said, "Intentionally or not, a treaty to prevent unauthorized copying may easily go too far, and undermine important consumer interests. That's why it is so important that this deal be negotiated in the light of day."
The rampant speculation concerning the treaty's contents is based largely on a leaked document posted on WikiLeaks, and from comments from copyright and patent holders.
Among other things, according to the comments and leaked document, the special interest groups speculate the treaty would:
100 Groups Demand to See Secret Anticounterfeiting Treaty
The Anti-Counterfeiting Trade Agreement (ACTA) is on a fast-track process as rich nations hope to wrap it up by the end of the year. Unfortunately for everyone who cares about the outcome, it's midway through September, and no draft text has yet emerged. The secrecy and the delay have inspired many conspiracy theories, none helped by leaked sets of corporate "wish lists" and public comments making outrageous demands. A worldwide group of public interest organizations has now banded together to call on ACTA negotiators to open the process up to scrutiny and public comment.
The letter, signed by more than 100 groups, has tough words for ACTA negotiators. "The lack of transparency in negotiations of an agreement that will affect the fundamental rights of citizens of the world is fundamentally undemocratic," it says. "It is made worse by the public perception that lobbyists from the music, film, software, video games, luxury goods and pharmaceutical industries have had ready access to the ACTA text and pre-text discussion documents through long-standing communication channels."
Seven specific concerns are cited, all based on leaked documents or public comments from various trade groups, many of which seem bent on turning an anti-counterfeiting agreement into something more wide-ranging. It's unclear what the negotiators themselves think of most such requests, but that's part of the problem.
According to the letter, ACTA might:
• Require Internet Service Providers to monitor all consumers' Internet communications, terminate their customers' Internet connections based on rights-holders' repeated allegation of copyright infringement, and divulge the identity of alleged copyright infringers possibly without judicial process
• Interfere with fair use of copyrighted materials
• Criminalize peer-to-peer file sharing
• Interfere with legitimate parallel trade in goods, including the resale of brand-name pharmaceutical products
• Impose liability on manufacturers of active pharmaceutical ingredients (APIs), if those APIs are used to make counterfeits
• Improperly criminalize acts not done for commercial purpose and with no public health consequences
• Improperly divert public resources into enforcement of private rights
Signatories of the letter include everyone from the EFF to the Australian National University to the Canadian Internet Policy & Public Interest Clinic to Korea's Christian Media Network to the Dutch Consumentenbond to Thailand's Drug Study Group (DSG) to the Ecologist Collective from Guadalajara, México to the Egyptian Initiative for Personal Rights. It's a dizzying list with worldwide backing, but the more important question is whether it will have any effect.
To date, ACTA negotiators have proved themselves supremely resistant to involving stakeholders in the process, and many of these groups are from countries not even involved in the negotiations. Different national negotiators have followed different strategies, though, and credit has to be given to the office of the US Trade Representative, which requested (and then published) a lengthy series of public commentary on the treaty.
Without much to go on apart from some leaked documents, though, the comments became a set of "we like/we hate" lists. Because of the secrecy, it remains unclear which of the suggestions USTR is pushing in its negotiating sessions. However, up in Canada, news over the summer suggested that the recording business, movie studios, and video game makers were welcome to advise ACTA negotiators in private. Meanwhile, privacy groups, NGOs, and other stakeholders are forced to wait in the hallway.
EFF, Public Knowledge Sue US Gov't Over Secret IP Pact
Digital rights advocacy groups oppose secret international treaty to step up cross-border enforcement of copyright and piracy laws.
Two digital rights advocacy groups have filed a lawsuit against the Office of the US Trade Representative (USTR) in an attempt to get the office to turn over information about a secret international treaty being negotiated to step up cross-border enforcement of copyright and piracy laws.
The Electronic Frontier Foundation (EFF) and Public Knowledge filed the lawsuit Wednesday after USTR ignored their repeated requests to turn over information about the proposed Anti-Counterfeiting Trade Agreement (ACTA).
ACTA could include an agreement for the US, Canada, the European Commission and other nations that are part of the talks to enforce each other's intellectual-property (IP) laws, with residents of each country subject to criminal charges when violating the IP laws of another country, according to a supposed ACTA discussion paper posted on Wikileaks.org in May.
The document posted on Wikileaks also talks about increasing border searches in an effort to find counterfeit goods, encouraging ISPs (Internet service providers) to remove online material that infringes copyrights and increased cooperation in destroying infringing goods and the equipment used to make them. The full text of the ACTA has not been released, despite requests by EFF and Public Knowledge, as well as Canadian groups. Wikileaks is a site that posts anonymous submissions of sensitive documents.
"ACTA raises serious concerns for citizens' civil liberties and privacy rights," EFF international policy director Gwen Hinze said in a statement. "This treaty could potentially change the way your computer is searched at the border or spark new invasive monitoring from your ISP. People need to see the full text of ACTA now, so that they can evaluate its impact on their lives and express that opinion to their political leaders. Instead, the USTR is keeping us in the dark while talks go on behind closed doors."
A USTR spokesman said the office is "working hard to keep the public informed" about all of its efforts to fight counterfeiting and piracy, including the trade agreement. USTR will host a public meeting on ACTA on Monday, and the office has made its officials available to brief groups interested in the trade pact, said spokesman Scott Elmore.
"We will continue to engage with stakeholders as we work with our trading partners to fight the scourge of counterfeiting and piracy," Elmore said.
In the lawsuit, filed in US District Court for the District of Columbia, Public Knowledge and EFF say the trade agreement's documents are subject to the US Freedom of Information Act. FOIA requires US agencies to turn over most documents, with some exceptions, when a US resident requests them.
The two groups filed an FOIA request in June, then clarified the request two weeks later. USTR did not respond after that, and in August, a lawyer for the two groups tried to reach a USTR official dealing with the FOIA request, but a voice message was not returned.
USTR is "working diligently" to answer the FOIA request by EFF and Public Knowledge, but their request was one of nine FOIA requests related to IP filed in June with the office, Elmore said.
ACTA is being negotiated as an executive agreement, not a treaty, meaning it wouldn't be subject to congressional scrutiny and approval, said Art Brodsky, Public Knowledge's communications director.
"This is an unusual situation," he said. "At this point, we're trying to figure out what's going on. The other side is clearly working with USTR. USTR will have public meetings and listen to us, but won't show us what's going on."
US Trade Representative Susan Schwab announced plans last October to negotiate the trade agreement. USTR posted a notice asking for public comments on ACTA in February, but the only documentation included in that request was a one-and-a-half page fact sheet.
Nevertheless, several groups filed comments about ACTA. The Business Software Alliance, a trade group representing large software vendors, said it "strongly supports USTR's efforts to address counterfeiting and piracy through a plurilateral trade agreement."
The Recording Industry Association of America (RIAA) filed comments offering suggestions for the trade agreement. Among its recommendations: Countries should allow investigators to treat piracy like organized crime, giving IP enforcement efforts additional resources used to fight organized crime. The RIAA also wants laws requiring ISPs to remove infringing materials posted by subscribers, the trade group said in its comments.
The Motion Picture Association of America also filed comments supporting ACTA and offering suggestions.
Other countries involved in the ACTA talks are Switzerland, Japan, South Korea, Singapore, Australia, New Zealand, Mexico, Jordan, Morocco and the United Arab Emirates.
Congress's Copyright Fight Puts Open Access Science in Peril
Backlash against open access
In recent years, scientific publishing has changed profoundly as the Internet simplified access to the scientific journals that once required a trip to a university library. That ease of access has caused many to question why commercial publishers are able to dictate the terms by which publicly funded research is made available to the public that paid for it.
Open access proponents won a big victory when Congress voted to compel the National Institutes of Health to set a policy of hosting copies of the text of all publications produced by research it funds, a policy that has taken effect this year. Now, it appears that the publishing industry may be trying to get Congress to introduce legislation that will reverse its earlier decision under the guise of strengthening copyright protections.
Under existing law, the products of federally funded research belong to the scientists that perform it and institutions that host them. Academic journals have traditionally had researchers transfer the copyright of publications resulting from this research to the journals. The current NIH policy requires that authors they fund reserve the right to place the text and images of their publication in an NIH database hosted at PubMed Central (PMC).
To protect commercial publishers, papers submitted to PMC are not made accessible until a year after publication, and are not required to include the formatting and integration of images performed by the publisher. This one-year limit is shorter than that required by other governments and private funding bodies such as the Howard Hughes Medical Institute and the Wellcome Trust. Many publishers have embraced this policy, and allow the fully formatted paper to be made available, sometimes after a shorter embargo.
Open Access meets resistance
Not all publishers have embraced it, however, and some have tried to exact exorbitant fees for allowing manuscripts to be transferred to PMC. Others have engaged in aggressive lobbying against open access efforts.
Those efforts may be paying off. The House of Representatives has seen the introduction of legislation, HR 6845 that, depending on its final format, may significantly curtail or eliminate the NIH's ability to continue its open access policy. The current bill would prevent any arm of the federal government from making research funding contingent upon "the transfer or license to or for a Federal agency of... any right provided under paragraph (1) or (2) of section 106 in an extrinsic work, to the extent that, solely for purposes of this subsection, such right involves the availability to the public of that work." Those Section 106 rights include the reproduction of the work.
Although that would seem to rule out the existing NIH policy, there is a certain amount of legal wiggle room there. For example, the NIH could fund a private entity to maintain PMC, and thus have the right to reproduction transferred to an independent entity. Nevertheless, the bill would appear to directly target the prior legislation that put the NIH in the business of mandating public access in the first place.
The Intellectual Property Subcommittee comes up to speed
Last week, the Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property held a hearing on the proposed legislation. If anyone was thinking that policies related to publicly funded scientific research were free of politicking and rampant self-interest so frequently involved in the copyright and intellectual property battles, the hearings would have erased them. Legislators questioned whether it made sense to mandate the transfer of copyrights at a time when the US government was pushing for other governments to respect those rights. At one point, hearing chair Howard Berman (D-CA) noted that the N in NIH shouldn't stand for Napster.
It also became apparent that there was a bit of a turf battle going on. The Intellectual Property Subcommittee clearly felt that it had been ignored during the original passage of the bill that compelled the NIH's open access policy, and several members expressed displeasure at having been bypassed, and suggested the bill was useful simply for allowing them to have a voice on the matter.
That said, many of the representatives were clearly in need of a primer in academic publishing. Different members of the Subcommittee expressed surprise at various aspects of the current system, such as the fact that peer reviewers perform the function free (although, as noted, the process of arranging for peer review can be expensive). Also eliciting surprise was the revelation that authors are not paid by publishers for the transfer of copyright.
In fact, many publishers charge money for the publication of scientific research, even those that obtain copyright to the work in the process. Dr. Elias Zerhouni, director of the NIH, shocked Berman when he mentioned that the NIH hands out $100 million a year to grant recipients specifically to cover the cost of publishing their results. It would certainly have been possible for those testifying in favor of the open access policy to argue that the public pays part of the cost of nearly every stage of the publishing process, and might expect to have some access to the end product.
Public good or publishing apocalypse?
For the most part, however, the witnesses in favor of open access declined to make arguments based simply on the fact that the public had paid for the work. Zerhouni spent much of his time emphasizing how PMC represented the next step in medical research databases. Earlier information repositories were discontiguous and fragmentary; now, researchers can use a single web interface to hop among data sources, instantly moving from the genome to protein structures. Without the bodies of papers, researchers will be inhibited by the lack of information, and data-mining efforts will necessarily be limited.
Zerhouni also presented the NIH policy as a carefully considered balancing act. The year-long delay before the release of the papers and lack of full press formatting will necessarily make PMC an alternative of last resort for most researchers. That point was echoed by Heather Dalterio Joseph, who represented a number of groups, including an association of research libraries, which favored open access. Joseph discussed the results of surveys that indicated almost no librarians would cancel subscriptions to journals as a result of the NIH program, simply because their users don't find waiting a year for access to a paper. She also pointed out that many journals also publish work that would not going to appear in PMC because it wasn't the result of federal funding, making a subscription the only way to get at that information.
Joseph also added the only personal appeal during the proceedings when she spoke about her son's diabetes diagnosis. She testified that the event solidified her desire to see everyone—parents, doctors, medical researchers—have access to the research on conditions such as diabetes.
The witnesses testifying against the open access policy were a bit of a mixed bag. Dr. Martin Frank is the executive director of the American Physiological Society, which publishes about a dozen academic journals. Those journals make their papers open access after 12 months, and agreed to do so in advance of the NIH policy, simply because the APS' membership demanded it. Although this appeared to be working for the APS, he felt that the NIH's policy eliminated the group's ability to change its policy if it ever started becoming problematic.
Dr. Frank also pointed out that some fields that receive NIH support move more slowly than biomedical research, and so the one-year delay on release isn't a one-size-fits-all solution when it comes to protecting publishers' value. He also came armed with his own survey results that suggested the number of subscriptions would drop significantly as a result of the open access policy; the difference with the earlier surveys presumably being the product of how questions were phrased. His take-home is that peer review and publishing costs money, and the open access policy makes it harder for journals to earn that money, and some will undoubtedly go out of business as a result.
If Frank was putting an aggressive spin on a reasonable position, George Washington University Law professor Ralph Oman pushed it so aggressively that it appeared absurd. The NIH policy, in his presentation, "will destroy the commercial market" and leave science without a peer-review system. When asked if the NIH could manage peer reviewing, something it already does with grants, Oman had a reasonable answer—not without increasing its budget to cover the cost—but buried it in rhetoric about "a healthy distrust for the hairy snout of government," and his "great confidence in the private sector." Apparently, he does not own stock in Shearson Lehman or AIG.
Business or policy
Still, at least a few of the Representatives appeared to have caught on to the key issues. Rep. Bob Goodlatte (R-VA) asked Oman whether the NIH's policy was simply a matter of using "previous liens" that have long been used in contracts that involved copyrights. Oman managed to admit that, "under a technical reading of the copyright law, that would be true," before launching into a diatribe on an unrelated topic. Rep. Zoe Lofgren of California (D) accordingly concluded, "this isn't about copyright at all; it's about science policy."
Realistically, it's a bit of both. Government policy, primarily in the form of Congressional action, has set the policy for what can be done with the results of publicly-funded research. In general, those results have either stayed in the lab or been left for others to commercialize, but nearly every aspect of that has been a bit contentious, from demands for the release of bacterial strains to the calls for the reform of the system that universities have used to grant biotech patents. The public consistently wants to see more access to the fruits of its tax dollars, even though it's never quite clear that it will be able to do anything with that access.
Although open access to publications is a symptom of that tension, layered on top of it is a bit of confusion caused by changes to the publishing economy brought by the Internet. By easing access and setting a model where most content is available without cost to the readers, the web is changing the business model for all of publishing, academic and otherwise; the open access movement existed well in advance of the NIH policy. If some scientific journals go out of business, they'd join a large list of other print publications that met that fate in fields where the NIH does not set policy.
Currently, the disruptions wrought by the Internet and expectations of open access are too new for a viable alternative to traditional publishing to have emerged. But it doesn't appear that the NIH policy is making a significant contribution to that disruption, and the benefits of the policy appear likely to be significant. If Congress rolls back that policy in response to disagreements with other countries over film piracy, then it could really be throwing the baby out with the bathwater.
Data on Display
Two researchers explain why they're posting their experimental results online.
Risking being scooped and having patents refused, some scientists are posting their data online as they produce them. Organic chemist Jean-Claude Bradley of Drexel University in Philadelphia, Pennsylvania, and biochemist Cameron Neylon of the University of Southampton, UK, describe this 'open notebook' approach.
What is an 'open notebook'?
Bradley: The basic philosophy of open-notebook science is to have no insider information. Essentially all the information that is available to the [research] group is available to the rest of the world. You have an objective, a procedure and a log section, in which you report what you actually do. Then you've got your raw data files, and you link to those. That is all the information that any scientist needs to be able to figure out what you did and to analyse it. I use a wiki space that gives me a time stamp on the entries.
Neylon: We're aiming to improve scientific communication. The ultimate form would be if everything were available as it happened. That's never going to be for everybody. You still have issues such as patient privacy, the safety of people doing animal experimentation and so on. So in some cases, data shouldn't be made fully or immediately available.
What are the main concerns?
Neylon: The main issue is the fear of rivals stealing data. The second one is: will I be able to publish? And that depends on the publisher. Most publishers regard what we do as the equivalent of presenting at a conference, or a preprint. That hasn't been tested across a wide range of publishers, and there's at least one — the American Chemical Society — that doesn't allow prepublication in any form whatsoever. There's also a legitimate concern that a lot of people will put out a lot of rubbish.
Is this going to make traditional publishing obsolete?
Bradley: No. I'm publishing a paper [based on work that is openly available on my online notebook]. The notebook is about publishing data as quickly as possible. The paper is about synthesizing knowledge from all those results. But we want the best of both worlds, so we want to publish using traditional channels and we want to link back to the notebook.
Are scientists working in industry interested in the idea?
Neylon: The people within companies who are trying to do this are finding it a very hard sell to the board but it is being talked about.
Bradley: If patenting is important to you, you cannot do open-notebook science, it's that simple. But in big pharma, there's an awful lot of background data, which they call precompetitive work, which are really valuable to other people but end up not being as valuable to the company.
Has your open notebook ever been used to claim priority over a discovery?
Neylon: On our blog we had a statement with evidence that a piece of research worked before a paper from another group came out, although probably after the paper was submitted. I'm interested in putting the statement "we were the first to report it" in our paper when we publish the work and seeing what the response is. People's views differ about whether that would be reasonable.
When will the idea become more popular?
Neylon: Open notebooks are practical but tough at the moment. My feeling is that the tools are not yet easy enough to use. But I would say that a larger proportion of people will be publishing electronically and openly in ten years.
Bradley: There are different ways to do this. If you use a wiki-based approach, that's something you could do overnight. But the whole lab needs to realize that it's something they need to do.
Neylon: An important point that sometimes get missed about electronic systems is that other people might be looking at them, so they tend to force much higher standards of record-keeping. The record becomes much better and more flexible, but it involves a lot more work to keep it up to date.
Don’t Buy That Textbook, Download It Free
SQUINT hard, and textbook publishers can look a lot like drug makers. They both make money from doing obvious good — healing, educating — and they both have customers who may be willing to sacrifice their last pennies to buy what these companies are selling.
It is that fact that can suddenly turn the good guys into bad guys, especially when the prices they charge are compared with generic drugs or ordinary books. A final similarity, in the words of R. Preston McAfee, an economics professor at Cal Tech, is that both textbook publishers and drug makers benefit from the problem of “moral hazards” — that is, the doctor who prescribes medication and the professor who requires a textbook don’t have to bear the cost and thus usually don’t think twice about it.
“The person who pays for the book, the parent or the student, doesn’t choose it,” he said. “There is this sort of creep. It’s always O.K. to add $5.”
In protest of what he says are textbooks’ intolerably high prices — and the dumbing down of their content to appeal to the widest possible market — Professor McAfee has put his introductory economics textbook online free. He says he most likely could have earned a $100,000 advance on the book had he gone the traditional publishing route, and it would have had a list price approaching $200.
“This market is not working very well — except for the shareholders in the textbook publishers,” he said. “We have lots of knowledge, but we are not getting it out.”
While still on the periphery of the academic world, his volume, “Introduction to Economic Analysis,” is being used at some colleges, including Harvard and Claremont-McKenna, a private liberal arts college in Claremont, Calif..
And that, in a nutshell, is a big difference between textbook publishers and the drug makers. Sure, there have been scientists with Professor McAfee’s attitude — Jonas Salk was asked who owned the patent to the polio vaccine and scoffed: “Could you patent the sun?”
For the textbook makers, however, it is a different story. Professor McAfee allows anyone to download a Word file or PDF of his book, while also taking advantage of the growing marketplace for print on demand.
In true economist fashion, he has allowed two companies, Lulu and Flat World Knowledge, to sell print versions of his textbook, with Lulu charging $11 and Flat World anywhere from $19.95 to $59.95. As he said on his Web site, he is keeping the multiple options to “further constrain their ability to engage in monopoly pricing.”
A broader effort to publish free textbooks is called Connexions, which was the brainchild of Richard G. Baraniuk, an engineering professor at Rice University, which has received $6 million from the William and Flora Hewlett Foundation. In addition to being a repository for textbooks covering a wide range of subjects and educational levels, its ethic is taken from the digital music world, he said — rip, burn and mash.
Unlike other projects that share course materials, notably OpenCourseWare at M.I.T., Connexions uses broader Creative Commons license allowing students and teachers to rewrite and edit material as long as the originator is credited. Teachers put up material, called “modules,” and then mix and match their work with others’ to create a collection of material for students. “We are changing textbook publishing from a pipeline to an ecosystem,” he said.
Like Professor McAfee, Professor Baraniuk says he decided to share his material while writing a textbook.
“If I had finished my own book, I would have finished a couple years ago,” he said. “It would have taken five years. It would have spent five years in print and sold 2,000 copies.” Instead, he said, he posted it on the Web site and there have been 2.8 million page views of his textbook, “Signals and Systems,” including a translation into Spanish.
Connexions is strongest in statistics and electrical engineering — areas with technologically advanced students and a greater need to update material than, say, works on medieval history. He said there were 850,000 unique users a month, with more than 50 percent of the traffic originating from outside the United States.
“It’s anyone’s guess as to when we will break through,” he said.
One of the most popular Connexions contributors is Sunil Kumar Singh, a production engineer from New Delhi who works for the Oil and Natural Gas Corporation of India. He explains physics for precollege students, using the feedback from readers who e-mail from all over the world.
“It is a two-way process,” he wrote in an e-mail message. “I, for one, have experienced difficulty during my formal study years with the best of textbooks around.” He said the new system “gives me opportunity to respond to the editing needs all the time.”
While these open-source projects slowly grow, the textbook publishers have entered the online publishing field with CourseSmart, a service owned by five publishers. In service for only a year, CourseSmart allows students to subscribe to a textbook and read it online, with the option of highlighting and printing out portions of it at a time.
The price is generally half of what a print book costs, a sum that can still appear staggering — an introductory economics textbook costs around $90 online. (This semester, a student has the option of downloading a book as well — but it is an either-or choice: read online or download to a computer.)
Frank Lyman, executive vice president at CourseSmart, said that the company was created in response to changing times. “There wasn’t a lot of content and it was in a bunch of formats,” he said of past efforts by publishers. “There never was any momentum.”
There are 4,000 textbooks currently available — about a third of the market — but the goal is to cover “50 percent of the backpack.” Without being specific, he said that tens of thousands of textbooks have been read online and that 1,240 separate institutions have a student who has made at least one e-textbook purchase.
While conceding that open-source textbooks would take hold in a few subject areas, Mr. Lyman stressed that the current system would still prevail and that collaborative works online would have a hard time winning an audience.
“Of all the things that are changing, one thing is consistent — the authorship model,” he said.
“What doesn’t worry me is that leading experts will say I will write my own damn book and people will read it.”
Amazon Does the Obvious, Finally: Adds Video on IMDb
Amazon has finally done what many have been asking it since the time the company bought IMDB: it has enabled video on the film and TV database/info site. The company says users can now watch 6,000 full-length feature films and TV episodes for free on IMDb.com’s video section. Would be interesting to figure out how many of the videos from Amazon VOD service on being ported over to IMDB...guess would be a low figure, as it is likely IMDB video would be used more as a promotional tool. It even says so in the release: The rotating video content is provided by CBS, Hulu, Sony Pictures Television and about 500 indie filmmakers. The content includes shows like “24”, “The Office” (both from Hulu), “Beverly Hills 90210”, “Star Trek”, and movies such as “Fever Pitch”, “Bring it On” and others.
Just last week the news came out that Amazon hired away Microsoft ad vet Lisa Utzschneider to head its online ad sales, and IMDB video will be a part of that effort as well. Earlier this year Amazon bought indie movie distribution site Withoutabox, with the plans of integrating it with IMDB. As part of that, the database site now says it is opening its platform to filmmakers and rights owners worldwide, and asking them to upload their movies/shows on it.
Report: Apple Now Sixth Among Worldwide PC Manufacturers
Riding the wave of good news about Apple's explosive growth over the past years, market research firm Gartner now says that Apple is the sixth largest PC manufacturer in the world.
Apple has been making significant inroads in the US with both the Mac and Safari browser, enjoying 50 to 60 percent year-over-year growth in Q3 and Q1 2008, respectively. While Apple became the fourth largest PC vendor in the US in Q1 2008, it still doesn't have much of a worldwide market share to speak of when compared to the big hitters like HP, Dell, and Acer who are increasingly competing in low-cost and budget-friendly desktops and notebooks. Nevertheless, after tallying the numbers from PC manufacturers' 2007 sales, Apple is now in 6th place worldwide according to Gartner's numbers, right behind Toshiba who is hovering just under 20 percent.
While this is good news for Apple and its shareholders, Gartner echoes other assessments that Apple may have a tough road ahead considering that PC manufacturers have brought the budget battle to ultra-portable, ultra-cheap notebooks. Asus' Eee PC and its many competitors are ushering in a new era of $400 notebooks and cheap desktops which, as we noted back April, are very appealing to areas like Asia and South America where markets aren't as saturated.
A New Zune for Serious Music Fans
This might sound kind of weird, but here it is: the iPod and the Zune aren’t rivals anymore.
And not just because the iPod outsells the Zune about a gazillion to one, either. No, it’s because the iPod and the Zune no longer serve the same audience.
That’s a surprising development. After all, when the Zune had its debut in 2006, it couldn’t have been more iPoddy if you ran it through a Xerox machine. Same layout, capacities, prices and product line (a big one and a Nano).
But in the last few days, Apple and Microsoft both unveiled new music-player lineups (what a coincidence — just in time for the holiday shopping season!). And Microsoft, it turns out, has added something truly new to the Zune: differentiation. The Zune has become a sensational music-discovery machine.
Over all, the players themselves haven’t changed much except for colors, capacities and prices.
The huge exception is the iPod Nano, which has undergone its fourth redesign in four years (8 or 16 gigabytes, $150 or $200). It’s now a truly gorgeous, incredibly thin aluminum stick, in your choice of nine vivid, reflective colors. It maintains Apple’s design theme for 2008: tapered edges, as seen on the MacBook Air and the iPhone.
The front and back are gracefully curved, including the glass screen. But even at its thickest point — in the middle — the 1.3-ounce Nano is the thinnest iPod ever.
Apple also rotated the screen 90 degrees, so menus and song lists fit better. And thanks to a tilt sensor like the iPhone’s, the Nano’s screen image rotates when you turn the player — great when you’re looking through photos. That sensor also permits a bit of whimsy: when you shake the Nano hard, it skips to a random song.
The Nano can now speak its menus, song names and on-screen messages as you navigate. That should assist anyone who’s blind and anyone who insists on fiddling while driving.
In short, this Nano is yet another a home run.
The iPod Touch (8 to 32 gigs, $230 to $400) gains a metal back, tapered like the iPhone’s, and a small, feeble speaker and volume keys on the left edge. (What was Apple thinking when it designed the original Touch without volume keys? Sheesh.)
The tiny, screenless iPod Shuffle (1 or 2 gigabytes, $50 and $70) comes in brighter colors, and the iPod Classic — the big one, with a hard drive inside ($250) — goes from 80 gigabytes to 120. The 160-gig version has been discontinued.
The new Zunes haven’t changed at all except in color: blue, pink, red or black for the Nano-like model (4 to 16 gigs, $130 to $200 ) and black for the 120-gigabyte model ($250). But next to the sleek, shiny iPods, Zunes still look like dark, Soviet-made bricks.
Clearly, what Microsoft spent the year working on was software. Generously enough, it’s giving a free upgrade to owners of earlier Zune models — all six of you. (Was that too mean?)
Once the time-consuming upgrade is over, the player’s new software offers better looks (also, at last, a clock and a couple of games), and the new Zune jukebox software for Windows is clean and focused.
Microsoft hasn’t made much effort to match the iPod’s universe of functions. The Zune store still lacks movies, downloadable programs, gift certificates, monthly allowances or any way to rate podcasts to guide fellow visitors. And the player still has no stopwatch, alarm clock, volume limiter, calendar, address book, note pad or external-hard-drive mode.
Yet for hard-core music lovers, it’s a gem. The Zune blows the iPod off the map in music discovery and downloading.
Now, Microsoft’s shift in direction isn’t totally altruistic. Many of the Zune’s new talents don’t make sense unless you subscribe to ZunePass, Microsoft’s $15-a-month music-download service.
I’ve always hated subscription music services. Sure, they let you download all the music you want for a flat fee — but the day you stop paying, it all vanishes. You’ve spent all that money, and you’re left with nothing.
(You can also buy Zune songs individually, as on iTunes. But you have to pay in Microsoft’s own bizarre currency — “points,” not dollars — a cheesy effort to mask how much you’re actually spending. You also waste money, because points are sold only in quantities that aren’t evenly divisible by a song’s price.)
But if anything can make subscriptions look enticing, it’s the new Zune software.
For example, every Zune has a built-in FM radio. When you hear a good song, you can click the center button to capture it, provided it’s a station that broadcasts song-title data. In a Wi-Fi hot spot, the Zune downloads the song from the Zune store immediately. When you get home, the downloaded song gets copied back to your PC. (Even wirelessly, if you like, because the Zune can sync over Wi-Fi.)
It’s addictive, awesome and completely natural. What better way to discover new performers and songs than listening to the radio?
The Zune software also offers more than 100 “channels”— themed, weekly playlists like Billboard Top 40, hip-hop, children’s music, opera and so on, and self-creating channels based on your listening habits. And when you’re in a wireless hot spot, you can listen to these channels streaming endlessly, commercial-free, exactly like satellite radio.
Even better, these playlists can also auto-download to your player. You gain two things satellite radio lacks: the freedom to listen anywhere, even underground or indoors — and a Skip button.
These days, Microsoft barely mentions what was once the Zune’s killer feature: beaming complete songs to other Zunes nearby. (You can play a beamed song three times before it self-destructs.) Evidently, the company realized the same thing Zune owners did: outside of Microsoft, there aren’t any other Zunes nearby.
On the Internet, however, everyone’s nearby. So Microsoft has beefed up its own Zune social network. Here, you can make friends and listen to their playlists — great if you have a ZunePass.
The Zune software offers myriad ways to suggest new music that you might like, based upon what you’re listening to, or what people with your tastes have in their own libraries. Again, it’s ZunePass gold.
A similar feature, called Genius playlists, appears in the iPod’s new iTunes 8. It automatically builds a playlist of songs (either ones you already own, or suggested store offerings) that Apple says “sound great together,” whatever that means. (Basically, it seems to clump songs by their degree of rockiness: soft-rock songs, harder-rock and so on.)
Both companies say that this feature is optional and anonymous, and that they’re analyzing only data like the song titles and how often you’ve listened to them. That is, they’re not studying musical elements like tempo and instrumentation, as the Internet radio station Pandora.com does.
In short, the Zune has become almost a cross between music player and satellite radio. Wireless streaming, capturing from the radio, channel subscriptions, recommendations — if you’re a heavy music consumer and you’re willing to pay $15 a month forever, it’s just the best.
But what if you’re not?
In that case, the iPod still wins. The Zune’s features offer musical depth, but not breadth. The Zune software looks cleaner than the increasingly cluttered iTunes, but it’s just as confusing. And the Zune store offers less than half as many songs as iTunes, one-15th as many TV episodes and no movies at all.
Finally, buying an iPod means that you join an immense ecosystem of accessories, cases, Web sites — and people. Those 150 million existing iPod owners won’t look at you as if you’re some kind of weirdo.
Funny, isn’t it? In the music world, Apple and Microsoft have now completely switched roles. You buy Apple if you want to play it safe — and you buy Microsoft if you think different.
5 Great iTunes Replacements for Managing iPod in Linux
We all love the iPod, but sadly, Apple is still not kind enough to provide an iPod manager for those of us who use Linux. However, this is not really a big issue nowadays as there are other means to manage your iPod under Linux. Thanks to these excellent free and open source media players that are certified to handle your iPod the way iTunes can.
Banshee is built upon Mono and Gtk# and uses the GStreamer multimedia platform for encoding, and decoding various media formats, including Ogg Vorbis, MP3 and FLAC. Banshee can play, import, and burn audio CDs, and supports many portable media players, including Apple's iPod. Music stored on the iPod can be played without synchronization, and album art stored in the Banshee library is transferred to the iPod.
Banshee is highly extensible and customizable. Current stable plugins include:
* Audioscrobbler: Adds the capability of reporting played songs to a user's Last.fm playlist.
* Podcasting: Enables Banshee to subscribe to podcast feeds, which are updated on a regular basis. There is also a "Find new podcasts" feature which utilises Podcast Alley.
* DAAP music sharing: Allows sharing of music libraries with iTunes and other DAAP-compatible music software. The current version of Banshee is only partially compatible with iTunes 7, allowing iTunes to open a Banshee library, but not vice-versa.
* Metadata searcher using Musicbrainz: Automatically retrieves missing and supplementary metadata for library items, including album art.
* Music Recommendations using Last.fm: Recommends music based on the currently playing song.
* Mini-Mode plugin: Provides a small window with minimal playback controls and song information.
* Multimedia keys support in GNOME: Banshee can be controlled via multimedia keys as configured through GNOME.
* Radio: Provides support for streaming internet radio stations.
Amarok makes use of core components from the K Desktop Environment. Aside from playing music files, it serves many functions. Here are some of Amarok's main features:
* Playing media files in various formats including but not limited to (depending on the setup) FLAC, Ogg, MP3, AAC, WAV, Windows Media Audio, Apple Lossless, WavPack, TTA and Musepack. Amarok does not play digital music files embedded with DRM.
* Tagging digital music files (currently FLAC, Ogg, WMA, AAC, MP3, and RealMedia).
* Associating cover art with a particular album, and retrieving the cover art from Amazon
* Creating and editing playlists, including smart and dynamic playlists. The dynamic playlists can use such information as the "score" given to a song by an Amarok script, and the playcount which is stored with the song.
* Synchronizing, retrieving, playing, or uploading music to the following digital music players: iPod, iriver iFP, Creative NOMAD, Creative ZEN, MTP, Rio Karma and USB devices with VFAT (generic MP3 players) support.
* Displaying artist information from Wikipedia and retrieving song lyrics.
* Last.fm support, including submitting played tracks (including those played on some digital music players) to Last.fm, retrieving similar artists, and playing Last.fm streams.
Rhythmbox is originally inspired by Apple's iTunes and is designed to work well under the GNOME Desktop using the GStreamer media framework. Rhythmbox offers a growing number of features which include:
* Playback from a variety of digital music sources;
* Searching and sorting of music in the library;
* Track ratings;
* Audio CD ripping and burning;
* Comprehensive audio format support through GStreamer;
* iPod support;
* Album Cover display;
* Song Lyrics display;
* Last.fm Support;
* Jamendo Support;
* Rhythmbox has been extensively integrated with a number of external programs, services, and devices;
Songbird is a media player and a web browser developed by a group known as Pioneers of the Inevitable (with members who previously developed for both Winamp and the Yahoo! Music Engine). Here are some of Songbird's primary features:
* Ability to play multiple audio formats, such as MP3, AAC, Ogg Vorbis, FLAC and WMA
* Able to play Windows Media DRM audio on Windows platform
* A skinnable interface, via feathers
* Media files stored on pages viewed in the browser show up as playable files in Songbird
* Built-in RSS subscription and MP3 file download
* The ability to subscribe to MP3 blogs as playlists
* User-created bookmarks
* Ability to build custom mixes
* Ability to scan the user's computer for all audio files and add them to a local library
* A configurable and collapsible graphical user interface similar to iTunes, and miniplayer mode
* Automatic updates
* eMusic integration using the eMusic Integration plugin
* Insound.com and HypeMachine integration
* Microsoft MTP compatible device support
* The ability to edit metadata tags and save back to file
Though gtkpod does not support some of the more advanced features of iTunes, it still tries to perform the role of an iTunes for Linux. Album art and videos are now supported, and preliminary support for the iPhone and iPod touch is available if jailbreaking of the device is performed.
Gtkpod will let you:
* Read your existing iTunesDB (i.e. import the existing contents of your iPod including playcounts, ratings and on-the-go playlists).
* Add MP3, WAV, M4A (non-protected AAC), M4B (audio book), podcasts, and various video files (single files, directories or existing playlists) to the iPod. You need a third party product to download podcasts, like 'bashpodder' or 'gpodder'
* View, add and modify Cover Art
* Browse the contents of your local harddisk by album/artist/genre by adding all your songs to the 'local' database. From there the tracks can be dragged over to the iPod/Shuffle easily.
* Create and modify playlists, including smart playlists.
* Detect duplicates when adding songs (optional).
* Remove and export tracks from your iPod.
* Modify ID3 tags -- changes are also updated in the original file (optional).
* Refresh ID3 tags from file (if you have changed the tags in the original file).
* Sync directories.
* Normalize the volume of your tracks (uses mp3gain or the replay-gain tag)
* Write the updated iTunesDB and added songs to your iPod.
* Work offline and synchronize your new playlists / songs with the iPod at a later time.
* Export your korganizer/kaddressbook/thunderbird/evocalendar/evolution/webcalendar... data to the iPod (scripts for other programs can be added).
* and more
If you want to copy songs directly to your iPod by simply copying and pasting, and without the need for any of these iTunes replacements, you may want to check out Rockbox.
In late August, John McCain’s Facebook page featured a martial semi-profile of the candidate emblazoned with the slogan, “Country First: The Official Home of John McCain on Facebook.” In early September, the slogan was replaced by “The Ticket for America.” A new image showed McCain and Sarah Palin companionably joined by Photoshop, apparently, given how inorganic the pose seemed.
The candidates now pose before a half-moon of convention bunting featuring a red-heavy configuration of stars and stripes. The bunting looks ragged. The “America First” picture was better. I know presidential candidates have to pose with running mates as if with brides or newborns, but they look more dignified when photographed alone.
Where my own page on Facebook, the social-networking site, lists my “friends,” the pages of McCain and other politicians and celebrities show “supporters” or “fans.” McCain had fully 269,709 when I last looked. He seems to have picked up about 45,000 between the Democratic National Convention and the start of the Republican one. The day that McCain named Palin as his V.P. candidate, I notice idly from McCain’s Facebook résumé, was also the candidate’s 72nd birthday: Aug. 29. His political views are listed right after his birthday: conservative.
Facebook appears to have supplied a job-seeking template for aspiring free-world leaders, and blanks have been informatively filled in.
Country: United States
Currently Running for Office: President
Party: Republican Party
Current Office: Senate
People reveal themselves on Facebook by making unmistakable just what kind of cyberfigure they hope to cut. The software seems to compel it. While no information is mandatory on a Facebook page, McCain supplies a phone number, as well as his favorite movies, book and television shows, including “Viva Zapata!” “Letters From Iwo Jima,” “Some Like It Hot,” “For Whom the Bell Tolls,” “24” and “Seinfeld.” We also get McCain’s “work info,” a cutesy if serviceable heading for jobs at, say, Forever 21 or Gold’s Gym. It works less well for heavily decorated positions in the U.S. Navy.
McCain’s page has a message for the young. A campaign video in which McCain fields a student’s question about whether he’s too old to be president permits him one of the longest stretches of dialogue on a site that’s curiously quiet when it comes to McCain’s own voice. (By contrast, Barack Obama’s Facebook page resounds with audio of the candidate.) “I’ve out-campaigned all of my opponents, and I’m confident that I will,” McCain says in the video, adding, “Thanks for the question, you little jerk.” The song “Johnny B. Goode” then comes up — Go Johnny, go, go! — and the implication is clear: the Facebook McCain is a 72-year-old whippersnapper.
Another video, in which the candidate is equally reticent, presents McCain’s middle-way stance on global warming. Yet another shows his radical opposition to Congressional profligacy: a $3 million study of bear DNA and a $1 million Woodstock museum strike his campaign as especially galling. This video occasions a sincere discussion in the comments section of what qualifies as waste. At the round table are Facebook users affiliated variously with Georgetown University, International School Bangkok, the Carlton J. Kell High School, Thomas Jefferson High School and the Berkeley Carroll School. (There’s not much incentive to fake your identity or bona fides on Facebook, and it’s difficult, too. Still, people do it.)
Someone called Anthony points out early on that while the Woodstock museum is “a stupid way to spend a million bucks,” the war in Iraq costs much more. Others on the site roundly deride him as a moron. “Matt Mongeau (Xaverian Brothers High School),” whose avatar shows a shirtless bronzed glamour boy, scolds: “cmon anthony war is expensive. it always has been it always will be. so stop bitching about it the reason the Iraqis want us gone is becasue they have a sense of pride and want to do things themselves they dont want help.”
If you click on a photo showing McCain with his wife, Cindy, greeting Palin under a tree, you arrive at Palin’s Facebook page, which reveals that she has (at the time of this writing) 51,847 supporters. The “Ticket for America” picture appears. Palin’s page features a Facebook “mini-feed” — bullet-point notes that record her every move on the site. On Friday, Aug. 29, at 1:49 p.m., evidently: “Sarah Palin updated their profile. They changed the following: Country and Current Office.” I can’t find evidence of these changes on the page, as Palin’s country and current office are not listed anywhere. There is, however, a Facebook “wall” on which people have written, “I would like to congratulate Ms. Palin on her upcoming new job as a Grandmother!” and “Am I the only one who thinks Palin’s kinda hot?”
Back to McCain, and the most tempting part of his page: a videogame called Pork Invaders. By hitting my space bar, I’m firing vetoes at pudgy pink pigs who stand for wasteful government spending. It’s a forgiving game: the pigs don’t fire back often. My veto-bullets will also take slightly curved paths, if necessary, to hit their targets. I’m pleased to kill all the pork invaders. My reward is a fact sheet that says Barack Obama has requested $740 million in earmarks — tax money for his “pet projects” — where McCain has $0 in earmarks. Hunh. Within a few more levels, I’ve saved the American people — says the ticker — some $4 billion. Game over. You can thank me later.
McCain’s wall has more than 60,000 posts. The posts, which started trickling in on Feb. 17, 2007, were mostly notes to McCain himself. That’s how people generally use Facebook Walls. More than a year later, a group of canny commenters dominate the wall and talk almost entirely to one another. They use first names, favor a tone of highhanded tolerance for competing views and dismiss as jargon or illiteracy even seemingly innocuous message-board conventions like “lol.” The opinions on the site are unpredictable, and conversation flips this way and that like a cat in a bag. Someone suggested that McCain should be ashamed for calling Palin away from her work as mother of five to run with him. Others stump tirelessly for Obama. Still others seem to be hunting, in vain, for white supremacists among the McCain supporters.
Abortion comes up, though the discussion is not as heated as might be expected. Poverty gets people going, as do assertions of who — if anyone — deserves handouts and tax breaks. The question of whether America is a meritocracy is especially pressing for these posters, many of whom appear to be college students.
An anti-McCain poster named Rachida Shapi, who gives her location as France and is accepted by the crowd as French, tends to get hazed for posting news that is both late and wrong (“Know you that Palin has a 17-year-old girl who has an illegitimate child?”). Nonetheless, she persists, and the (presumably) American posters take great pleasure in teaching her the ropes of speedy American political debate, even as they wonder what she’s doing on this particular wall.
In fact, that question seems to haunt the whole crowd. What are we doing here? Clearly, it could go either way. What they’re doing on John McCain’s Facebook page — debating, joking, cooking up homemade propaganda about war, poverty, taxation, sexuality, immigration, religion — is, depending on who’s talking and what day it is, either just another online waste of time or the most important thing they’ve ever done in their lives.
Pirate Party Official Raided after Uncovering State Trojan
The spokesperson of the German Pirate Party saw his house raided after the party published a leaked document which showed that the government uses a homemade “trojan” to wiretap Skype conversations. In addition, a server from another party member was seized.
The Pirate Party is known for it’s battle against the ever increasing government surveillance on the public. So, when an anonymous whistleblower sent them a internal document which showed that the government went as far as installing trojans on computers, they didn’t hesitate to publish it.
German authorities weren’t too happy about the leak, which might be illegal according to a criminal law specialist, and went after the source. Earlier this week police searched the home of the Pirate Party spokesperson where they hoped to find more information. In addition to the home search, a server from another party member was seized. The server, however, was fully encrypted, so chances are low that it will uncover the whistleblower.
In a response, Andreas Popp, Chairman of the Bavarian Pirate Party said: “A brave person leaks documents to the Pirate Party, to inform the public about a procedure of the Bavarian Government, which is highly likely to violate the constitution. Now this persons is hunted like a criminal. Private rooms are raided, servers get seized.”
Pirate Parties around the world will continue to speak out against these, and other privacy threats. The trojan in question (German) was able to tap into Skype calls and intercept traffic to encrypted websites.
Hacker Impersonated Palin, Stole E - Mail Password
Details emerged Thursday behind the break-in of Republican vice presidential candidate Sarah Palin's e-mail account, including a first-hand account suggesting it was vulnerable because a hacker was able to impersonate her online to obtain her password.
The hacker guessed that Alaska's governor had met her husband in high school, and knew Palin's date of birth and home Zip code. Using those details, the hacker tricked Yahoo Inc.'s service into assigning a new password, ''popcorn,'' for Palin's e-mail account, according to a chronology of the crime published on the Web site where the hacking was first revealed.
The FBI and Secret Service launched a formal investigation Wednesday. Yahoo declined to comment Thursday on details of the investigation, citing Palin's privacy and the sensitivity of such investigations.
The person who claimed responsibility for the break-in did not respond Thursday to an e-mail inquiry from The Associated Press.
''i am the lurker who did it, and i would like to tell the story,'' the person wrote in the account, which circulated on the Internet. What started as a prank was cut short because of panic over the possibility the FBI might investigate, the hacker wrote.
Investigators were waiting to speak with Gabriel Ramuglia of Athens, Ga., who operates an Internet anonymity service used by the hacker. Ramuglia told the AP on Thursday he was reviewing his own logs and promised to turn over any helpful information to authorities because the hacker violated rules against using the anonymity service for illegal activities.
''If you're doing something illegal and causing me issues by doing this, I'm willing to cooperate,'' Ramuglia said. ''Obviously this is the most high profile situation I've dealt with.''
The break-in of Palin's private account is especially significant because Palin sometimes uses non-government e-mail to conduct state business. Previously disclosed e-mails indicate her administration embraced Yahoo accounts as an alternative to government e-mail, which could possibly be released to the public under Alaska's Open Records Act.
At the time, critics of Palin's administration were poring over official e-mails they had obtained from the governor's office looking for evidence of improper political activity.
Details of this week's break-in, if authentic, were consistent with speculation by computer security experts who said Yahoo's ''forgot-my-password'' service almost certainly was exploited. The mechanism allows customers to retrieve or change their password if they can verify their identity by confirming personal information such as birthdate, zip code and the answer to a ''secret question,'' such as a childhood pet's name or school mascot.
Palin's hacker was challenged to guess where Alaska's governor met her husband, Todd. Palin herself recounted in her speech at the Republican National Convention that the pair began dating two decades ago in high school in Wasilla, a town near Anchorage.
''I found out later though (sic) more research that they met at high school, so I did variations of that, high, high school, eventually hit on 'Wasilla high','' the person wrote.
The McCain campaign issued a statement describing the hacking as an invasion of Palin's privacy.
Norbits Hackers Threaten to Release User Info
Norbits, the largest Norwegian BitTorrent tracker is going through some rough times. For several days now, the site has been offline due to a DDoS attack. The site has allegedly been hacked by a group called MORRADi, which is threatening to publish all IPs and more information on the users, unless the tracker is closed.
DDoS attacks are not an unusual event for many private BitTorrent trackers. Although they are sometimes used as an excuse for server issues, most of the larger trackers have been subject to such attacks at least once.
Norbits is one of these trackers, a medium sized community with over 10,000 members, most of them from Norway. Norbits has suffered downtime because of DDoS attacks before, but this time the threat may be more serious than that.
In an NFO file obtained by by IT-Avisen, a group called MORRADi takes responsibility for the attack on Norbits. “Once again we show our power! Once again we show your foolishness! This is not the first time we have done it, and it won’t be the last,” they write (translated).
“Enough is enough, you are becoming a real nuisance, and you are also a bunch of idiots that try to hide, so it’s high time we punish you! P2P is not something we want, when will you understand that? Do we have to take it as far as publishing your user database online?”
The message seems to suggest that “sceners” are behind the hack and the attacks, since they don’t want their releases shared on BitTorrent trackers. IT-Avisen journalist Trond Bie thinks this is plausible, as he told Dagbladet: “I know that there are people on the FTP scene that don’t like Norbits. It’s not improbable that such a group wanted to attack the servers. It’s happened before.” Whether the group actually has access to all the IPs, usernames and transfer logs of Norbits users remains unclear.
This would not be the first time that a private BitTorrent tracker has been hacked. Earlier this year the IP-addresses of seedboxes and of top-users on some of the larger private trackers leaked to BitTorrent. Nevertheless, this kind of information is useless to anti-piracy organizations, as it is impossible to verify whether it is legit or not.
Hackers Shut Down Iranian Clerics' Web Sites
Iranian media reports say hackers have shut down the Web sites of several hundred Shiite clerics and seminary schools.
Iran's state TV says the hackers were Sunni Muslims based outside Shiite Iran, suggesting a sectarian motive, though it did not say how it knew that.
The semiofficial Fars news agency said the hackers were based in the United Arab Emirates and blocked access to 300 sites. The Emirates is home to a large Iranian community, some of whom oppose Iran's clerical rule.
Thursday's Fars report called it the most serious cyber attack of its kind in the past few years.
Turkish Court Bans Richard Dawkins Website
A Turkish court has banned internet users from viewing the official Richard Dawkins website after a Muslim creationist claimed its contents were defamatory and blasphemous.
Adnan Oktar, who writes under the pen name of Harun Yahya, complained that Dawkins, a fierce critic of creationism and intelligent design, had insulted him in comments made on forums and blogs.
According to Oktar's office, Istanbul's second criminal court of peace banned the site earlier this month on the grounds that it "violated" Oktar's personality.
His press assistant, Seda Aral, said: "We are not against freedom of speech or expression but you cannot insult people.
"We found the comments hurtful. It was not a scientific discussion. There was a line and the limit has been passed.
"We have used all the legal means to stop this site. We asked them to remove the comments but they did not."
Oktar, a household name in Turkey, has used hundreds of books, pamphlets and DVDS to contest Darwin's theory of evolution.
In 2006 his publishers sent out 10,000 copies of the Atlas of Creation, a lavish 800-page rejection of evolution.
Dawkins, one of the recipients, described the book as "preposterous". On his website the British biologist and popular science writer said he was at "a loss to reconcile the expensive and glossy production values of this book with the 'breathtaking inanity' of the content."
It is the third time Oktar and his associates have succeeded in blocking sites in Turkey.
In August 2007 Oktar persuaded a court to block access to WordPress.com. His lawyers argued that blogs on WordPress.com contained libelous material that the company was unwilling to remove.
Last April, he made a libel complaint about Google Groups, which was subsequently blocked.
He failed to ban Dawkins' book the God Delusion in Turkey after a court rejected his claims that it insulted religion.
Google to Display Religious Groups' Anti-Abortion Ads
Google has agreed to display ads for anti-abortion messages from religious groups on its search site as part of an out-of-court settlement with a British Christian organization, the group said Wednesday.
The Christian Institute filed a legal action against Google in April, after the search giant rejected an anti-abortion ad from the group, citing its policy of not accepting ads that contain "abortion and religion-related content."
Lawyers for The Christian Institute alleged that Google's policy violated the United Kingdom's Equality Act of 2006, which prohibits religious discrimination in providing services.
In a statement, Google said: "The issue of abortion is an emotive subject and Google does not take a particular side. Over the last few months, we have been reviewing our abortion ads policy in order to make sure it was fair, up-to-date, and consistent with local customs and practices. Following the review, we have decided to amend our policy, creating a level playing field and enabling religious associations to place ads on abortion in a factual way."
Government Clampdown on 'Suicide Websites'
The law on suicide is to be clarified as part of an attempt to curb so called “suicide websites”, but the government was unable to say how it would be enforced.
The move is an attempt to reassure the public that the existing law applies to the internet following alarm at websites which carry details of how youngsters have killed themselves.
It is illegal under the Suicide Act of 1961 to promote suicide, but no website operator has been prosecuted under the Act.
Maria Eagle, a junior justice department minister, said the Government intended to amend the law to make it clear that it applied online as well as offline.
“There is no magic solution to protecting vulnerable people online," Ms Eagle said.
“Updating the language of the Suicide Act, however, should help to reassure people that the internet is not a lawless environment and that we can meet the challenges of the digital world.
“It is important, particularly in an area of such wide public interest and concern, for the law to be expressed in terms that everyone can understand."
However, the Ministry of Justice was unable to answer any detailed questions on its announcement, including the proposed new wording - or how the measure could be policed.
A spokesman said that these were part of ongoing discussions with stakeholders.
He said it was hoped that the updated wording for the Suicide Act could form part of a Bill in the next session of Parliament, beginning in December.
Under the 1961 Suicide Act, it is an offence to “aid, abet, counsel or procure” a suicide or attempted suicide attempt.
The Law Commission recommended two years ago the Act would be more easily understood if it used the words “assists or encourages” suicide, or attempted suicide.
The Ministry of Justice was unable to say if it would adopt the Law Commission’s proposed wording.
A series of suicides in Bridgend, South Wales, led to fears that teenagers were using the web to plan and discuss killing themselves.
A study has found that people searching the internet for information on ways to commit suicide are more likely to come across sites encouraging it than those offering to help them.
Paul Kelly, trustee of Papyrus, a charity tackling youth suicide, welcomed today’s statement of intent to modernise the wording of the Act.
He said it would encourage Internet Service Providers to be more active in taking down illegal content.
Mr Kelly added, however, that it was “highly unlikely” anyone would be prosecuted, and urged ministers to tighten the law so it was much harder for websites to publish material “promoting” suicide.
“In practice it’s very easy to encourage others to take their own lives and it’s very unlikely they are going to be prosecuted in a court of law,” he said.
France Drops Plan for Political Database After Row
The French government will scrap a decree that would have allowed police to store private information on politicians and unionists, the prime minister's office said on Thursday after the text caused an outcry.
The Edvige electronic database will still go ahead, but the government will come up with a new decree that significantly tightens the rules so that only people considered a security threat can be included.
"The decree will explicitly rule out the collection of any data on people's sexual orientation or health," the prime minister's office said in a statement. The first decree had made it possible to store such data, drawing widespread criticism.
The statement also noted that the new decree will no longer allow police to collect data on politicians, union activists or religious figures simply because of their activities.
The criteria for being included will now be related to perceived security threats.
However, the new text will still allow police to store data on minors as young as 13 if they are considered a threat to public safety.
The original decree allowed police to collect data on people aged 13 or above who are active in politics or labor unions, who play a significant institutional, economic, social or religious role, or who are "likely to breach public order."
The government will present the new decree on Friday to a consultative body that will give an opinion on whether it respects privacy rights.
The main labor unions said in a joint statement they were not satisfied. They reiterated that it was unacceptable for the database to include minors and called for stronger guarantees that citizens' rights and freedoms would be respected.
Opponents to the Edvige database have called for a day of demonstrations on October 16, which is Saint Edwige's day in the Roman Catholic calendar used in France. Edvige is an acronym that is pronounced the same way as the woman's name Edwige.
The first decree drew criticism from civil rights groups, workers' unions, gay rights organizations and even from within the government, with one minister publicly voicing concerns.
(Writing by Estelle Shirbon; Editing by Mariam Karouny)
Morocco Scraps Blogger's Two-Year Jail Sentence
A Moroccan appeals court on Thursday cancelled a two-year jail sentence given to a local blogger for disparaging King Mohammed and the royal family, court officials and lawyers said.
Last week, Mohamed Erraji was jailed and fined 5,000 dirhams ($626). He was later released on bail pending the appeals court ruling.
"The case is not acceptable and the case was abandoned and thrown out of court," said Ahmed Belouch, presiding judge at the appeals court in the southern city of Agadir.
Erraji wrote in online newspaper Hespress that Morocco had been destroyed by the practice of handing out charity or gifts such as taxi licenses to a lucky few, which encouraged people to beg.
"This has made the Moroccans a people without dignity, who live by donations and gifts," he wrote in reference to the King's charity work.
Judge Belouch cited flaws in prosecuting the case of the 29-year-old blogger, including the failure to summon him to attend trial 15 days before he actually appeared in court and his unlawful detention ahead of the trial.
Family members and human rights groups said police arrested Erraji on September 5 and his trial last 10 minutes. He had no defense lawyer.
"The ruling today showed the situation of human rights has changed in Morocco and there is improvement in court dealings with cases related to rights of opinion and free press," said Abdellatif Ouammou, who was Erraji lawyer. (Reporting by Lamine Ghanmi; Editing by Matthew Tostevin)
U.N. Agency Eyes Curbs on Internet Anonymity
A United Nations agency is quietly drafting technical standards, proposed by the Chinese government, to define methods of tracing the original source of Internet communications and potentially curbing the ability of users to remain anonymous.
The U.S. National Security Agency is also participating in the "IP Traceback" drafting group, named Q6/17, which is meeting next week in Geneva to work on the traceback proposal. Members of Q6/17 have declined to release key documents, and meetings are closed to the public.
The potential for eroding Internet users' right to remain anonymous, which is protected by law in the United States and recognized in international law by groups such as the Council of Europe, has alarmed some technologists and privacy advocates. Also affected may be services such as the Tor anonymizing network.
"What's distressing is that it doesn't appear that there's been any real consideration of how this type of capability could be misused," said Marc Rotenberg, director of the Electronic Privacy Information Center in Washington, D.C. "That's really a human rights concern."
Nearly everyone agrees that there are, at least in some circumstances, legitimate security reasons to uncover the source of Internet communications. The most common justification for tracebacks is to counter distributed denial of service, or DDoS, attacks.
But implementation details are important, and governments participating in the process -- organized by the International Telecommunication Union, a U.N. agency -- may have their own agendas. A document submitted by China this spring and obtained by CNET News said the "IP traceback mechanism is required to be adapted to various network environments, such as different addressing (IPv4 and IPv6), different access methods (wire and wireless) and different access technologies (ADSL, cable, Ethernet) and etc." It adds: "To ensure traceability, essential information of the originator should be logged."
The Chinese author of the document, Huirong Tian, did not respond to repeated interview requests. Neither did Jiayong Chen of China's state-owned ZTE Corporation, the vice chairman of the Q6/17's parent group who suggested in an April 2007 meeting that it address IP traceback.
A second, apparently leaked ITU document offers surveillance and monitoring justifications that seem well-suited to repressive regimes:
A political opponent to a government publishes articles putting the government in an unfavorable light. The government, having a law against any opposition, tries to identify the source of the negative articles but the articles having been published via a proxy server, is unable to do so protecting the anonymity of the author.
That document was provided to Steve Bellovin, a well-known Columbia University computer scientist, Internet Engineering Steering Group member, and Internet Engineering Task Force participant who wrote a traceback proposal eight years ago. Bellovin says he received the ITU document as part of a ZIP file from someone he knows and trusts, and subsequently confirmed its authenticity through a second source. (An ITU representative disputed its authenticity but refused to make public the Q6/17 documents, including a ZIP file describing traceback requirements posted on the agency's password-protected Web site.)
Bellovin said in a blog post this week that "institutionalizing a means for governments to quash their opposition is in direct contravention" of the U.N.'s own Universal Declaration of Human Rights. He said that traceback is no longer that useful a concept, on the grounds that few attacks use spoofed addresses, there are too many sources in a DDoS attack to be useful, and the source computer inevitably would prove to be hacked into anyway.
Another technologist, Jacob Appelbaum, one of the developers of the Tor anonymity system, also was alarmed. "The technical nature of this 'feature' is such a beast that it cannot and will not see the light of day on the Internet," Appelbaum said. "If such a system was deployed, it would be heavily abused by precisely those people that it would supposedly trace. No blackhat would ever be caught by this."
Adding to speculation about where the U.N. agency is heading are indications that some members would like to curb Internet anonymity more broadly:
• An ITU network security meeting a few years ago concluded that anonymity should not be permitted. The summary said: "Anonymity was considered as an important problem on the Internet (may lead to criminality). Privacy is required but we should make sure that it is provided by pseudonymity rather than anonymity."
• A presentation in July from Korea's Heung-youl Youm said that groups such as the IETF should be "required to develop standards or guidelines" that could "facilitate tracing the source of an attacker including IP-level traceback, application-level traceback, user-level traceback." Another Korean proposal -- which has not been made public -- says all Internet providers "should have procedures to assist in the lawful traceback of security incidents."
• An early ITU proposal from RAD Data Communications in Israel said: "Traceability means that all future networks should enable source trace-back, while accountability signifies the responsibility of account providers to demand some reasonable form of identification before granting access to network resources (similar to what banks do before opening a bank accounts)."
Multinational push to curb anonymous speech
By itself, of course, the U.N. has no power to impose Internet standards on anyone. But U.N. and ITU officials have been lobbying for more influence over the way the Internet is managed, most prominently through the World Summit on the Information Society in Tunisia and a followup series of meetings.
The official charter of the ITU's Q6/17 group says that it will work "in collaboration" with the IETF and the U.S. Computer Emergency Response Team Coordination Center, which could provide a path toward widespread adoption -- especially if national governments end up embracing the idea.
Patrick Bomgardner, the NSA's chief of public and media affairs, told CNET News on Thursday that "we have no information to provide on this issue." He would not say why the NSA was participating in the process (and whether it was trying to fulfill its intelligence-gathering mission or its other role of advancing information security).
Toby Johnson, a communications officer with the ITU's Telecommunication Standardization Bureau in Geneva, also refused to discuss Q6/17. "It may be difficult for experts to comment on what state deliberations are in for fear of prejudicing the outcome," he said in an e-mail message on Thursday.
U.N. "IP traceback" documents
China's proposal obtained by CNET News says "to ensure traceability, essential information of the originator should be logged."
Leaked requirements document says governments may need "to identify the source of the negative articles" posted by political adversaries.
Korean presentation says standards bodies should be "required to develop standards or guidelines" to facilitate unmasking users.
Verisign executive's summary summarizes presentation saying protocols must have "a strong traceback capability, and establishing traceback considerations in developing any new standards."
When asked about the impact on Internet anonymity, Johnson replied: "I am not fully acquainted with this topic and therefore not qualified to provide an answer." He said that he expects that any final ITU standard would comport with the U.N.'s Universal Declaration of Human Rights.
It's unclear what happens next. For one thing, the traceback proposal isn't scheduled to be finished until 2009, and one industry source stressed that not all members of Q6/17 are in favor of it. The five "editors" are: NSA's Richard Brackney; Tian Huirong from China's telecommunications ministry; Korea's Youm Heung-Youl; Cisco's Gregg Schudel; and Craig Schultz, who works for a Japan-based network security provider. (In keeping with the NSA's penchant for secrecy, Brackney was the lone ITU participant in a 2006 working group who failed to provide biographical information.)
In response to a question about the eventual result, Schultz, one of the editors, replied: "The long answer is, as you can probably imagine, this subject can get a little 'tense.' The main issue is the protection of privacy as well as not having to rely on 'policy' as part of a process. A secondary issue is feasibility and cost versus benefit." He said a final recommendation is at least a year off.
Another participant is Tony Rutkowski, Verisign's vice president for regulatory affairs and longtime ITU attendee, who wrote a three-page summary for IP traceback and a related concept called "International Caller-ID Capability."
In a series of e-mail messages, Rutkowski defended the creation of the IP traceback "work item" at a meeting in April, and disputed the legitimacy of the document posted by Bellovin. "The political motivation text was not part of any known ITU-T proposal and certainly not the one which I helped facilitate," he wrote.
Rutkowski added in a separate message: "In public networks, the capability of knowing the source of traffic has been built into protocols and administration since 1850! It's widely viewed as essential for settlements, network management, and infrastructure protection purposes. The motivations are the same here. The OSI Internet protocols (IPv5) had the capabilities built-in. The ARPA Internet left them out because the infrastructure was a private DOD infrastructure."
Because the Internet Protocol was not designed to be traceable, it's possible to spoof addresses -- both for legitimate reasons, such as sharing a single address on a home network, and for malicious ones as well. In the early part of the decade, a flurry of academic research focused on ways to perform IP tracebacks, perhaps by embedding origin information in Internet communications, or Bellovin's suggestion of occasionally automatically forwarding those data in a separate message.
If network providers and the IETF adopted IP traceback on their own, perhaps on the grounds that security justifications outweighed the harm to privacy and anonymity, that would be one thing.
But in the United States, a formal legal requirement to adopt IP traceback would run up against the First Amendment. A series of court cases, including the 1995 decision in McIntyre v. Ohio Elections Commission, provides a powerful shield protecting the right to remain anonymous. In that case, the majority ruled: "Under our Constitution, anonymous pamphleteering is not a pernicious, fraudulent practice, but an honorable tradition of advocacy and of dissent. Anonymity is a shield from the tyranny of the majority."
More broadly, the ITU's own constitution talks about "ensuring the secrecy of international correspondence." And the Council of Europe's Declaration on Freedom of Communication on the Internet adopted in 2003 says nations "should respect the will of users of the Internet not to disclose their identity," while acknowledging law enforcement-related tracing is sometimes necessary.
"When NSA takes the lead on standard-setting, you have to ask yourself how much is about security and how much is about surveillance," said the Electronic Privacy Information Center's Rotenberg. "You would think (the ITU) would be a little more sensitive to spying on Internet users with the cooperation of the NSA and the Chinese government."
Did 'Spore' Copy Protections Backfire on EA?
After years of anticipation, the coming out party for Electronic Arts' new evolution game Spore seems to be getting rained out.
Spore was one of the most highly-anticipated games in recent years, in part because it's the brainchild of Will Wright who, with The Sims, turned simple tasks like taking virtual trips to the bathroom into the best-selling PC game ever. Fans and EA alike had high hopes for Spore, a similarly quirky game that's based on evolutionary biology and individuals' own creature creations.
By most accounts, Spore is a great game. But in the first week since its debut, many of the people perhaps most excited for its release have turned against it.
Enraged by what they call "draconian" copyright protections, thousands of people flooded Amazon.com to give the game a one-star rating. And now there seems to be another movement afoot, one that is far more likely to hit EA where it counts.
What's the fuss about? Electronic Arts imposed copyright protections that limited the number of times a user can install the game to three. EA has likened the system to the limits imposed on songs bought through Apple's iTunes store (though in the case of iTunes, users can easily manage their libraries by specifying which computers are authorized to play their purchased content).
Such digital rights management technology is intended to keep piracy to a minimum. But in this case, it seems to have had the opposite effect, angering would-be buyers and DRM opponents to such a degree that they are illegally downloading it en masse, apparently to make a statement as much as to get their hands on the game.
On Saturday, TorrentFreak wrote that the game had already been downloaded more than 500,000 times on BitTorrent sites.
Though it didn't appear to have broken any overall download records at the time this story was published, peer-to-peer research company Big Champagne told Forbes on Friday that the rate at which it was being downloaded was "extraordinary."
So will EA consider the DRM move a mistake? PR representatives didn't immediately respond to a request for comment, but that will likely depend on how well it sells. In its first week, it seemed to do pretty well--at least anecdotally, with stores around the country reporting they'd sold out of their stock.
Amazon.com Removes, Reinstates Reviews for 'Spore'
More than 2,200 one-star reviews of the new Electronic Arts game Spore, left on Amazon.com as part of a well-publicized and coordinated user revolt against the game's digital rights management restrictions, disappeared Friday.
And while Amazon customers reacted angrily to what they said was obviously Amazon's caving in on a bad situation, the retailer itself said that the take-down was the result of nothing more onerous than a glitch.
Users have been angry at EA because the game's DRM system appears to limit the number of activations per copy of the game to three.
And as a way of striking back, some users had coordinated their efforts by leaving the more than 2,200 one-star reviews on Amazon.
On Friday, every single review for Spore for the game was gone.
But Amazon says there was no foul play at work.
"There's just a glitch on the site that ended up wiping those reviews clean," said Amazon.com spokesperson Tammy Hovey. "So we're working on putting them back up. I don't have any details (on what happened). But we're working on it so all the customer reviews will be back up on the site."
Asked if perhaps Amazon had decided to put the reviews back up in anticipation of bad PR for taking them down, Hovey said, "Customers always have their opinions about all the products on our site, and we don't censor them, whether they're favorable or unfavorable."
By 2:10 p.m. PDT, the reviews were back up on the site.
For its part, EA said it was looking into the situation.
Although the actual reviews were removed, Amazon did leave up a discussion thread on the Spore page. And during the period while the reviews were down, some users angrily employed the thread to paste in reviews that had originally been left for the game.
For example, "1.0 out of 5 stars Dumbed down experience and draconian DRM, September 7, 2008," Amazon user Keri Gibson-tutt posted.
"Utterly disgraceful," wrote Amazon user Paul Tinsley. "This means that the Amazon review system has not value at all to its customers. Sad days indeed."
It's not clear how users will respond now that the reviews are back.
Ars Puts Spore DRM to the Test—with a Surprising Result
Ben Kuchera, Mark DeSanto
EA and Maxis released Spore to the world last week, and while we still don't have sales information for the title, the big news wasn't the game play. In fact, we found the game itself rather lackluster in most ways. The issue that set the Internet on fire was the DRM, and gamers quickly let the world know of their anger. As Ars digs deeper into how EA actually handles the DRM, we have to wonder: was the controversy worth it?
Masses of gamers bombed Amazon with one-star reviews for the title, protesting the three-install limit the game claimed to enforce. For a short time it looked like Amazon had pulled the reviews, but then the online retailer put them back up when the outcry became even louder. EA also came under fire when the company announced it was making the DRM for Red Alert 3 more "lenient" by upping the install-limit to five instead of three. To a populace already upset at the very idea of an install limit, this didn't seem to be much of an improvement.
Dealing with the EA DRM juggernaut
With all the sound and the fury, we wondered if anyone had even yet dealt with this install limit? Mark DeSanto, who reviewed the game, installed his review copy of Spore on his main gaming PC twice, once on his laptop, and then again on the gaming PC. Four installs, across two systems. The fourth installation received an authentication error when he tried to log into the game. A quick call to EA's customer support brought an oddly-happy voice on the line, and once informed of the issue, he quickly determined that there was a network issue on their side; Spore's authentication servers were down. So it was DRM in general that was causing the problem, not an issue specific to EA or Spore.
We hung up the phone and waited roughly fifteen minutes to call EA tech support once more; we were hoping to get someone else to get a different opinion, as we were sure we had used up all our installation attempts. Calling back, another happy voice—female this time—checked into the account and determined that we had only registered the game twice—not four times. Spore was only registering installs on new machines. The game booted with no issue soon after; it seems to have truly been a network issue.
With installing the game four times between two machines, and still no issues, we decided to remove the game and installed it a fifth time on the gaming PC, and still had no issues with playing the game. Next we decided to move over to a completely different, so far unused, machine, installing it on an antiquated test system... no issues. Finally, the game was installed onto a Mac Pro, and we struck gold with the pictured error message.
A call to EA brought us to the same help person as the first call. We informed him of the error message and gave him his Spore account information as well as the product key. A few minutes later the rep determined that we had, in fact, used up all our "key activations." As friendly as can be, our EA employee inferred that it was probably some kind of printing error on the manual. Here's the catch: we decided to tell him that we had rented the game. He assured us he could resolve the situation and did—issuing me another CD key for the game. We wanted to make it clear we understood the DRM restrictions and asked about the install limitations and he informed me that "you could install the game all day long on the same machine—it was limited to installations on three separate machines." The only catch: the game had to be reinstalled after the new key was issued.
While the issue of the install limit is a touchy one, it doesn't look like a normal install will do much to use up your limit, and in fact we surpassed the install limit by a few times before running into an issue. Even after being told that we were "renting" the game, EA was happy to give us a new key to run the game. In this case, customer service wins, and we left wondering if the DRM controversy might be more philosophical in nature than rooted in any real-world inconveniences.
we left wondering if the DRM controversy might be more philosophical in nature than rooted in any real-world inconveniences.
But in fact, you had to call EA to get a game you paid for to install, and at one point their "DRM servers" were down, so it failed. Aren't those both real, not just philosophical inconveniences?
Studio Group to Ease Digital-Movie Access
A consortium of studios and consumer-electronics companies is trying to kickstart the market for digital movies and other content by making it more convenient for consumers to use.
The initiative, tentatively called the Digital Entertainment Content Ecosystem, will allow consumers to use their online entertainment files much like email -- buy it once and access it anywhere. The goal is to also ensure that digital-entertainment files play on any device.
The group plans to create digital rights "lockers" on the Web that will let consumers tap into their libraries of entertainment wherever they go. Consumers also will get the right to make digital copies of movies or other entertainment files for an unlimited number of household devices such as computers and video players, as long as the machines are registered to that consumer. They also will be able to burn onto DVDs copies of movies they buy.
Studios participating include Time Warner Inc.'s Warner Bros.; Viacom Inc.'s Paramount Pictures; General Electric Co.'s Universal; and Sony Corp.'s Sony Pictures. Other companies on board include Comcast Corp., Hewlett-Packard Co., Intel Corp., Microsoft Corp., and Toshiba Corp.
The group faces obstacles. Several companies popular with consumers are absent from the group -- most notably Walt Disney Co. and Apple Inc. Apple may be especially important, given that it makes the popular iPod line of devices.
Mitch Singer, president of DECE and Sony Pictures chief technology officer, said the group is in talks with myriad companies about participating.
Timing is also uncertain. The consortium declined to say when it will introduce its first products to consumers, but it plans to disclose more details in January at the Consumer Electronics Show in Las Vegas.
The move indicates Hollywood's growing tolerance for flexibility when it comes to how consumers use their movies. Just a few years ago, many studios were reluctant to let a legally purchased digital copy of a movie play anywhere other than on the computer where it was downloaded.
The idea is to "more than jump-start digital distribution," said Mr. Singer, who added he hoped to give consumers a higher comfort level with digital media.
Most consumers have stuck to physical DVDs, which are cheap and easy to use. Downloading movies online is often slow, and then it can be tricky or impossible to move the digital files around the house. But, as the physical DVD market slows, studios have been eager to rev up the online market, which has the potential to drastically lower their costs.
Fashion Plays Peekaboo, Once Again
NO one blinked at the Marc Jacobs fashion show last week when the model Freja Beha Erichsen appeared in a sheer black top that revealed that she was wearing a nipple ring. No one blushed at the Chris Benz show when Sasha Luss and Ekat Kiseleva posed in see-through camisoles. No one seemed particularly hot or bothered that Ali Stephens’s breasts were clearly visible through her dress when she walked for Derek Lam. No one was outraged that Francisco Costa showed a transparent raincoat at Calvin Klein with nothing but a thong underneath.
Peek-a-boo was the biggest trend at the New York Fashion Week that ended on Friday, though you would have thought the shows were taking place on the Riviera given the blasé response of most editors and retailers. Blouses that reveal? Yves Saint Laurent was doing that in the 1970s. Yawn.
It is a paradox of the times that during a presidential election that has been shaped in large measure by women, when a female candidate was ridiculed for wearing pantsuits and the mere mention of lipstick takes on a sexist connotation, the political implications of the public display of breasts went by largely unnoticed as the fashion world was deciding what women will be wearing at the beginning of the next administration.
In 1968 (and not incidentally just after the Democratic National Convention that year), a feminist group called the New York Radical Women disavowed the traditional trappings of femininity at a protest of the Miss America pageant in Atlantic City. News media coverage of the event gave rise to the term “bra burning,” though no bras were actually burned.
In 2008, it is fashion designers who are jettisoning the undergarments. And some of those whose models were unburdened of their bras said they were consciously doing so to make a political statement.
“Don’t you feel that we as a society are almost at war about which way we choose to go?” asked Alexa Adams, a designer of an edgy new label called Ohne Titel, and one of the minority of women’s wear designers who happens to be a woman. “There is this question hanging over us: Are we going to remain in this conservative period, or are we going to choose to be more liberated.”
Judging by the sheer number of sheer fabrics shown at collections last week, it was not difficult to gauge which side the designers were on. Ms. Adams and her partner, Flora Gill, showed transparent bodysuits and leggings covered with sequins that made the models look as if they were tattooed. There were breast-revealing outfits at Preen and Jeremy Laing, and sheer looks that covered only the parts of interest to Playboy readers at Vera Wang, Thakoon and Proenza Schouler, making it difficult at times to find photographs suitable for publication in this newspaper. It was like watching Fashion Week through one of those new airport screening machines that can see through clothes.
“This was a reaction to conservative ideas,” Ms. Adams said. “We felt we had been surrounded by something so restrictive for the last few years, and we wanted to start with the idea of lightness this season.”
Mr. Benz, similarly, was thinking about transparency after spending the summer in Greece around women who were comfortable with that sort of exposure. He was surprised when the models arrived for his fittings and told him that sheer was the biggest trend of the season. None of them complained about the outfits, either.
“I feel that living in New York and being in this blue state bubble, we’re saying ‘This is us, and this is what we’re standing for,’ ” he said. “Maybe that’s the direction.”
But nudity, like fashion, has lost much of its power to shock.
We have become so desensitized to images of naked celebrities, sex tapes and Internet pornography that designers are hard-pressed to create anything that seems really transgressive. Even a strong undercurrent of bondage in the spring collections, with harnesses at Proenza Schouler and Rodarte, caging stripes at Narciso Rodriguez and Thakoon and blackout bars across the breasts of a sheer top from Cushnie et Ochs, a new label by recent fashion school graduates Carly Cushnie and Michelle Ochs, failed to whip up a frenzy.
One could argue that American tastes have become less puritanical, but it seems more likely that they have simply become dulled.
“I hadn’t even noticed,” said Julie Gilhart, the fashion director of Barneys New York.
“It’s almost expected at a fashion show today,” said Ken Downing, her counterpart at Neiman Marcus.
“It’s a cliché that American women are covering up,” said Roopal Patel, the women’s fashion director at Bergdorf Goodman.
Actually, Ms. Patel hastened to add, the sheer look might just be a boon to lingerie sales, since actual customers not walking a 100-foot catwalk would be likely to buy a slip or at least a bra to wear underneath.
It would seem that if it was the designers’ intention to provoke the sort of social reaction that led to women’s liberation four decades ago, they might have done better trying to put lipstick on a pig.
Wikileaks Obtains 10 Years of Messages, Interviews from Osama bin Laden Translated by CIA
From Wikinews, the free news source you can write!
Wikileaks.org, the website dedicated to leaking previously unreleased documents, has published 10 years of messages and interviews by Osama bin Laden, the leader of al-Qaeda. The documents were translated by the Central Intelligence Agency (CIA) in the United States, and were first released by the Secrecy News blog on September 12.
The nearly three hundred page, 'official use only' packet from 2004, translated by the Foreign Broadcast Information Service (FBIS), a division of the CIA, includes interviews with bin Laden from various news agencies and also includes messages he sent directly to the U.S. from the periods of 1994 to 2004.
One message includes bin Laden's denial of having anything to do with the September 11, 2001 attacks in New York City, Washington, D.C. and Pennsylvania.
"Following the latest explosions in the United States, some Americans are pointing the finger at me, but I deny that because I have not done it. The United States has always accused me of these incidents which have been caused by its enemies. Reiterating once again, I say that I have not done it, and the perpetrators have carried this out because of their own interest," said bin Laden on September 16, 2001, just five days after the attacks.
Bin Laden also states that he was living in Afghanistan at the time of the attacks and that "I have held talks with His Eminence Amir ol-Momenin [Taleban leader Mola Mohammad Omar Mojahed], who does not allow such acts to be carried out from Afghanistan's territory." Again on September 28, 2001 in an interview with Karachi Ummat, bin Laden denies any involvement with the attacks and further denied that al-Qaeda had anything to do with plotting and carrying out the attacks.
However, in May, just four months prior to the September 11 attacks, bin Laden reportedly says that if the Taliban allows him, he can make life for Americans very difficult.
"If the Taleban allowed, [i] could make life miserable for the United States. The United States [is] imposing unjust sanctions on Muslims. Imposing such sanctions and boasting of power [is] a US hobby. The U.S. will fall to pieces," stated bin Laden which was quoted by ANN on May 17, 2001. Five years before, bin Laden declared a "jihad" on the U.S..
In April of 2002, the television station London MBC said it obtained a video reportedly showing bin Laden and an al-Qaeda spokesman praising the 9/11 attacks. It also allegedly showed, for the first time, images of some of the members of al-Qaeda responsible for hijacking the aircraft used in the attacks.
The U.S has never charged or indicted bin Laden for the 9/11 attacks, but has indicted him on charges for allegedly being behind the bombings of U.S. embassies in Kenya, Nairobi and Dar es Salaam, Tanzania, in 1998.
Bin Laden also blames the U.S. for the bombings in China in 1997 saying that the U.S. was trying to "to sabotage relations between China and the Muslim world through the CIA." He then goes on to say that he would "promise" to bring "action in the understanding between Pakistan, Iran and China."
The current whereabouts of bin Laden are not known.
IE8 records 'pretty innocuous' information, gets user permission, argues manager
Microsoft Corp. today defended the Internet Explorer 8 (IE8) tool that suggests sites based on the URLs typed into its address bar, saying that the browser "phones home" only a limited amount of information to Microsoft and that the company discards all user IP addresses almost immediately.
Company managers also contrasted IE8 Beta 2's "Suggested Sites" feature with the "Suggest" feature used by rival Google Inc. in its Chrome browser, saying that Microsoft's browser requires the user's explicit permission before it's used. They did, however, acknowledge a bug that prevents the request from reappearing when users reinstalled the browser.
"We capture as little uniquely identifiable information as possible," said Cyra Richardson, a Microsoft principal program manager on the IE team. "We capture the URL that the user is visiting, the version of the browser and general locale information."
To determine the latter, and to know where to send the suggested site results, Microsoft also captures the IP address of the user, said Richardson. But unlike Google, Microsoft tosses the IP address as soon as it delivers the recommendations. "We take the IP address, get all the information that we need from it and then throw out the address," said Andy Zeigler, a program manager with the IE group. Richardson confirmed that the Suggested Sites database contained no user IP addresses.
That's in contrast to Google, which keeps the data associated with about 2% of the entries in Chrome's OmniBox, a combination address and search box that logs all keystrokes and sends them to Google so that the search company can return a list of related search queries and Web sites.
Earlier this week, Google announced it would "anonymize" all information, including the IP addresses, of the 2% of the Suggest requests that originate in Chrome and other software. Google made the change in response to criticism from consumers, European Union officials and others who were concerned over the possible privacy implications of Google recording each keystroke entered into the browser.
Richardson also said that Microsoft's Suggested Sites should not be equated with its rival's Suggest feature, because IE8 doesn't record every keystroke. Rather than transmit each character as it's typed, including partial URLs that are abandoned by the user, Suggested Sites logs and transmits only the final URL.
She used that to argue there was a difference between what Microsoft and Google logged in their browsers. "Suggested Sites is connected to the browser's history, and it's not looking at each of the keystrokes," she said. "IE only captures the URL as it is navigated [to], when that URL goes into your history." Nor does Suggested Sites log and transmit cookies to Microsoft's servers, as does Google Suggest. "The data we log is actually pretty innocuous," Richardson said.
The data Microsoft does collect and record, however, is kept intact for 18 months, twice as long as Google will retain search logs under a new policy announced this week. At the end of the year-and-a-half-long period, Microsoft strips some information, particularly the query string, from the URLs it's obtained from IE8 users. The query string is the part of a URL that's passed to Web applications, and often includes a username and password, or other confidential information.
Zeigler also compared IE8's approach with Chrome's. "It's all about user control," he said. "Users decide what information they want to share, and we do that by getting consent via the UI in the opt-in page."
He was referring to a screen that is displayed the first time IE8 Beta 2 is run, when the browser asks: "Do you want to discover Web sites you might like based on Web sites you've visited?" Neither the first option -- "Yes, turn on Suggested Sites" -- or the second, "No, don't turn on," is enabled by default. Choosing neither keeps the feature switched off.
But Zeigler also admitted that IE8 has a bug that blocks IE8 from asking the Suggested Sites on-off question a second time. If a user uninstalls IE8 Beta 2, then later reinstalls it, the browser simply uses the original preference. Microsoft is working on a fix, Zeigler said.
Chrome, on the other hand, defaults to using "Google Suggest" in the browser's OmniBox. Users can disable the feature manually, however.
But the company is open to changes. "Beta 2 is an opportunity to collect feedback and change the product accordingly," Richardson said, stopping short of making any promises. "We will re-examine the policy and if need be revise it."
China's Internet Culture Goes Unchecked, for Now
Sky Canaves in Beijing and Juliet Ye in Hong Kong
While the Chinese government keeps a tight grip on Internet news and political discussion here, it has done little to prevent online defamation and invasions of personal privacy. Now, as the national legislature looks to tighten privacy laws, a Beijing lawsuit has focused the question of whether China's freewheeling online culture has gone too far.
The suit was prompted by the suicide in December of a woman who had been blogging about her husband's alleged affair. Her death prompted an outpouring of vitriol against the husband, Wang Fei, who has sued two Chinese online companies and an individual for defamation and privacy violations.
The allegations, which the defendants deny, have been studied by a group of more than 50 senior judges as a test case for resolving issues of privacy rights, the liability of Internet companies and public morality. The case, now under consideration by a panel of three Beijing judges, comes as national lawmakers look to tighten privacy laws.
The case is among a number of recent incidents that highlight the contradictions in the online culture in China, where there are more than 250 million Internet users, according to government statistics. The government restricts foreign news sources and suppresses discussion of politics and other subjects. But outside those limits, China's legal system has few checks and few privacy protections. That leaves room for a variety of abuses, such as groups of online sleuths known here as "human flesh search engines" who seek out and expose the personal details of private citizens who they see as violating public morals.
"The use of the Internet to achieve social shaming, monitoring and ostracism, or for private revenge by private citizens, has become prevalent in Chinese society," says Anne Cheung, a law professor at the University of Hong Kong.
The push to curb abuses worries those who see China's activist Internet users as a strong force for change. Internet public pressure was a factor in Beijing's relative openness during events such as the Sichuan earthquake and June riots in a southern province over the death of a high-school student.
"The law has to be very precise and clear to offset any possible 'chilling effect,' " Ms. Cheung says.
In the U.S. this year, a Chinese student at Duke University and a Tibetan man in Utah became targets of angry online comments about Tibet and the Olympic torch relay. The responses, originating in China, spilled over into nasty phone calls, emails and death threats. And in separate cases, two young women who showed insensitivity in Web postings to victims of the Sichuan earthquake were taken into police custody after their identities were revealed online, though it is unclear whether the police intended to punish or protect them.
Countries with more mature legal systems have some experience with new technologies. In the U.K., victims of online defamation can request that Internet service providers take down offending posts or risk being held liable as publishers. In the U.S., subpoenas can force the disclosure of online identities.
In China, the practice of obtaining court subpoenas to force disclosure of identities in civil cases is unknown, and the concept of privacy is still relatively new. In Mr. Wang's case, the defendants argued that there were no privacy violations since his personal information was already available elsewhere.
Mr. Wang's attorney says the online uproar led to death threats, and graffiti on Mr. Wang's front door, and forced him to resign from his job after "netizens" harassed his employer, ad agency Saatchi & Saatchi. Saatchi's office in Beijing didn't respond to a request for comment.
Through his lawyer, Zhang Yanfeng of the Beijing firm King & Capital, Mr. Wang declined to be interviewed, citing a desire to avoid further media attention. "What he really wants is an apology and for the unlawful materials to be removed from the Web sites," says Mr. Zhang.
A spokesman for Daqi.com, one of the defendants in Mr. Wang's lawsuit, said the company, which posted excerpts from the diary of Mr. Wang's wife, was blameless because it had posted information from both sides of the debate. The other two defendants, Tianya.com and Zhang Leyi, a friend of the deceased woman who set up a Web site about her called "The Migratory Bird Flies North," didn't reply to questions.
According to a November survey conducted by the Chinese Academy of Social Sciences on attitudes toward the Internet in China, almost 84% of respondents said the Internet should be managed or controlled; of those, 85% said they think the government should be responsible for doing it.
A move is under way to ensure greater protection of individual privacy. In late August, a draft amendment of the Criminal Law was released that would require companies, organizations and individuals to safeguard whatever personal information they have access to -- with the threat of three years' imprisonment for violators.
The draft's author, Zhu Zhigang, a member of the Standing Committee of the National People's Congress, has been critical of human flesh search engines.
Meanwhile, major Chinese Web sites have started preparing for changes. Tencent Inc., which runs the popular online network QQ.com, recently hired 3,000 workers to run its search software -- and part of their jobs involves watching for online conduct that goes too far.
Reports: TypePad Unblocked in China
Various TypePad-hosted bloggers are rejoicing as their blogs become visible again in China.
As with any such event, we're not sure how long this will last, and we're not sure why it happened. Tim Johnson, a McClatchy Newspapers correspondent based in China, writes:
I'm celebrating, of sorts. For the first time in maybe a year, this blog and others on the typepad.com host can now be seen within China. They are no longer blocked.
Why did the blocking suddenly end? I have no idea. Someone just flicked a switch.
The last sentence gave me an idea. What are the odds that, literally, somewhere, someone used their finger to, say, remove a fly who was sitting atop one of the routers or switches that make up the Chinese internet blocking infrastructure. And what if that caused a defect in stored data, erased some buffer, anyway just sort of fudged things up in the right way to let loose TypePad for the masses.
Just a thought.
AT & T Buries Customer Rights in 2,500-Page 'Guidebook'
Judging from the phone company's voluminous new online customer manual, if you have a problem with your bill, too bad.
AT&T has sent customers an 8,000-word service agreement that, among other things, says people will be given 30-day notice of price increases only when "commercially reasonable" and that you can't sue the company.
Oh, and if you don't like AT&T's terms -- providing you can make your way through the company's 2,500-page "guidebook" -- your only recourse is to cancel service.
State regulators aren't happy about this and are looking into whether the AT&T service agreement violates the law and unfairly limits the rights of customers.
Meanwhile, the California Public Utilities Commission's Division of Ratepayer Advocates is preparing to protest an attempt by AT&T to remove numerous services from regulatory scrutiny before they're offered to customers.
The developments are contained in commission documents and e-mails that made their way to my hands.
Chris Witteman, a staff attorney for the PUC who also represents the Division of Ratepayer Advocates, confirmed that staffers recently reviewed AT&T's service agreement and that some believe regulatory action is needed to protect consumers.
"We want AT&T to be required to revisit and reformulate the agreement so it doesn't violate the law," he said.
H. Gordon Diamond, an AT&T spokesman, defended the agreement, saying it "provides customers with more direct information on their rights and . . . information on the services they purchase from us."
However, because the agreement serves as a contract between the firm and its customers, he acknowledged that "it was unavoidable to include some legal terminology."
Two years ago, regulators voted to give phone companies more freedom in pricing and marketing decisions -- thus opening the door to AT&T's new agreement. The rationale was that this would create a more competitive marketplace, which would benefit consumers.
However, the Division of Ratepayer Advocates concluded in a recent report that "significant rate increases" have occurred since the market was deregulated.
Witteman said a key problem with AT&T's service agreement is that the company doesn't list all the terms and conditions that apply to customers. Rather, AT&T says customers must review a separate "guidebook."
That guidebook is available only online, Witteman said, and runs about 2,500 pages. "What consumer is going to slog through that?" he asked.
Moreover, the service agreement says AT&T will "generally" provide written notice of price increases at least 30 days in advance, except when such notice isn't "commercially reasonable."
Witteman said the online guidebook and ambiguous notification policy appear to violate a California statute requiring that consumers "be given sufficient information to make informed choices."
AT&T's service agreement is written in dense legalese and essentially gives the company as much latitude as possible -- while limiting customers' ability to seek redress.
"If you do not agree with the provisions of this agreement, your sole option is to cancel your services . . . within 30 days after receipt of this agreement," it says.
An analysis of the agreement prepared for PUC staffers found fault with a variety of AT&T's provisions, including this one: "You also agree to pay for all charges for services provided under this agreement even if such calls were not authorized by you."
The analysis said this "is in direct violation to cramming laws," which protect consumers from having unauthorized charges placed on their bills.
Under the provision, the analysis concluded, "AT&T, or any other billing agents, could impose unauthorized phone calls on a consumer's bill." It said consumers would have "little chance in both avoiding and fighting against this type of fraud."
AT&T's Diamond said that the company complies with state cramming laws and that "customers have always been responsible for paying the charges that appear on their bills." He added, though, that "if customers believe they are not liable for the charges, we will be happy to discuss that with them."
The analysis was prepared by a PUC intern but was regarded by senior staffers as an accurate overview of problems with the AT&T document.
Verizon Communications Inc. is also preparing to inform regulators of services it wants to remove from regulatory oversight before offering them to customers. The company started mailing out its own service agreement last week.
That agreement is much easier to understand than AT&T's, although it too steers customers to an online "product guide" that runs hundreds of pages. According to Jon Davies, a Verizon spokesman, the guidebook will be posted sometime next month.
One of the biggest differences between the AT&T and Verizon agreements is that AT&T's includes a provision that says customers are "waiving the right to a trial by jury and to participate in a class action" and may resolve grievances only by arbitration.
Davies said the company made a "business decision" not to include an arbitration requirement in its agreement. "If consumers have a grievance, they can work it out with us, take it to the commission or take it to the courts," he said.
AT&T's agreement says its arbitration requirement doesn't apply where "it has been deemed unenforceable by the highest court in the state."
The California Supreme Court ruled in 2005 that many such provisions are "unconscionable" because they deny basic legal rights to consumers. But the court left the door open to some arbitration clauses' being permitted under certain circumstances.
AT&T's Diamond said the company believes that its arbitration provision "is valid under California law" and that arbitration is more "consumer-friendly" than litigation.
But Michele Van Gelderen, a deputy state attorney general, said it was not clear whether AT&T's class-action waiver was enforceable in California.
"This is a cutting-edge area of law," she said. "The company is pushing the boundaries, and consumers need to push back."
Consumers who want to comment on the AT&T or Verizon service agreements can e-mail the PUC at firstname.lastname@example.org call (866) 849-8390.
Judge Strikes Down Bell Late Fees
An Ontario judge has ruled that Bell Canada Inc. has improperly collected millions each year from satellite television customers who are late paying their monthly bills.
In a decision handed down late yesterday, the Ontario Superior Court of Justice sided with a class action suit that claimed a $25 “administrative” fee charged to Bell ExpressVu customers who were more than two months late paying their bills amounted to a criminal rate of interest.
The law in question prohibits annual interest rates in excess of 60 per cent and was originally intended to target loan sharks.
“This goes beyond Bell,” said Paul DeWolf, the suit’s representative plaintiff, in an interview today.
“If this ruling holds, a lot of companies are going to have to reassess their positions.”
DeWolf lives in Braeside, Ont., near Ottawa, and works for Metroland Media Group, a company owned by the Toronto Star’s parent, Torstar Corp.
The class action was launched on behalf of some 33,000 current and former ExpressVu customers that pay the late charge each month. The satellite TV service has about 1.7 million subscribers in total.
Bell, which is expected to appeal the ruling, had unsuccessfully argued that the administration fee reflected the costs it incurred when a customer’s account remained unpaid for two months.
The fee is on top of a monthly interest rate of 2 per cent charged by Bell on overdue amounts.
The next stage of the class action will be to determine damages.
The original suit demanded ExpressVu cease the practice and repay the money collected since 2003 or, alternatively, pay $100 million in damages and another $10 million in punitive damages. However, most class action suits are settled for far less than the damages originally claimed.
DeWolf said he still expected damages to be in the “tens of millions.”
According to court documents, De Wolf failed to pay his bill by the due date on 47 occasions between January 2001 and May 2006, racking up $226 in “administration” fees.
That means De Wolf failed to pay his bill by the due date nearly 80 per cent of the time, a dismal track record he attributed to poor postal service to his small community and Bell’s billing cycle.
The ExpressVu ruling comes amid other class actions targetting the Canadian telecommunications industry, including one that focuses on the so-called “system access” fees charged by the country’s wireless carriers, including Bell. A Saskatchewan court certified the class action last year.
Another class action, which has yet to be certified, targets the emergency 911 fees charged to wireless subscribers.
Telecoms Told to End Broadband Monopoly
Tony Barber and Andrew Parker
Leading European telecoms companies should give rivals access to their superfast broadband networks, the European Commission said on Thursday.
In a draft recommendation for national telecoms regulators, the Commission also highlighted the importance of ensuring that Europe’s former fixed-line phone monopolies are able to secure appropriate returns on their high-speed broadband investments.
BT, the UK’s leading fixed-line company, welcomed the intervention but Deutsche Telekom, Germany’s former monopoly, rejected the recommendation.
Investments in broadband networks based on optical fibre are the largest capital spending projects confronting Europe’s fixed-line telecoms companies.
Viviane Reding, European telecoms commissioner, and Neelie Kroes, competition commissioner, on Thursday expressed concern that the EU was lagging behind leading industrialised countries, such as Japan and the US, in the rollout of high speed broadband networks.
“We want national rules that will not only encourage the necessary substantial investments in fibre but also strengthen broadband competition,” said Ms Kroes.
To encourage fibre networks, the Commission said telecoms companies should be able to achieve returns of their investments in excess of their 8-12 per cent average cost of capital. Europe’s former fixed-line monopolies are nervous about making fibre investments because of uncertainty over returns.
For example, BT said in July that it would only build a £1.5bn (€1.9bn, $2.7bn) fibre network if the UK telecoms regulator allowed appropriate returns.
The returns will be partly determined by the prices that the regulator lets BT charge smaller rivals for gaining access to the fibre network so as to provide broadband services.
In Germany, the government last year finalised a law that means the telecoms regulator does not set the prices at which Deutsche Telekom’s rivals get access to its fibre network.
On Thursday, Deutsche Telekom claimed the German law was spurring its rivals to build their own fibre networks.
Pink Floyd’s Richard Wright Dies at 65
Richard Wright, a founding member of Pink Floyd, died Monday. He was 65.
The rock group's spokesman, Doug Wright, who's unrelated, said Wright died after a battle with cancer at his home in Britain. He said the band member's family did not want to give more details about his death.
Wright met Pink Floyd members Roger Waters and Nick Mason in college and joined their early band, Sigma 6. Along with the late Syd Barrett, the four formed Pink Floyd in 1965.
The group's jazz-infused rock and drug-laced multimedia ''happenings'' made them darlings of the London psychedelic scene, and their 1967 album, ''The Piper at the Gates of Dawn,'' was a hit.
In the early days of Pink Floyd, Wright, along with Barrett, was seen as the group's dominant musical force. The London-born musician and son of a biochemist wrote songs and played the keyboard.
''Rick's keyboards were an integral part of the Pink Floyd sound,'' said Joe Boyd, a prominent record producer who worked with Pink Floyd early in its career.
The band released a series of commercially and critically successful albums including 1973's ''The Dark Side of the Moon,'' which has sold more than 40 million copies. Wright wrote ''The Great Gig in the Sky'' and ''Us and Them'' for that album, and worked on the group's epic compositions such as ''Atom Heart Mother,'' ''Echoes'' and ''Shine on You Crazy Diamond.''
But tensions grew among Waters, Wright and fellow band member David Gilmour. The tensions came to a head during the making of ''The Wall'' when Waters insisted Wright be fired. As a result, Wright was relegated to the status of session musician on the tour of ''The Wall,'' and did not perform on Pink Floyd's 1983 album, ''The Final Cut.''
Wright formed a new band Zee with Dave Harris from the band Fashion, and released one album, ''Identity,'' with Atlantic Records.
Waters left Pink Floyd in 1985 and Wright began recording with Mason and Gilmour again, releasing the albums ''The Division Bell'' and ''A Momentary Lapse of Reason'' as Pink Floyd. Wright also released the solo albums ''Wet Dream'' (1978) and ''Broken China'' (1996).
In July 2005, Wright, Waters, Mason and Gilmour reunited to perform at the ''Live 8'' charity concert in London -- the first time in 25 years they had been onstage together.
Wright also worked on Gilmour's solo projects, most recently playing on the 2006 album ''On an Island'' and the accompanying world tour.
Gilmour paid tribute to Wright on Monday, saying his input was often forgotten.
''He was gentle, unassuming and private but his soulful voice and playing were vital, magical components of our most recognized Pink Floyd sound,'' he said. ''I have never played with anyone quite like him.''
OCD and the WWW
Are all your iTunes assigned to their correct musical genres? Do you scan DVD cover art? It's time to get your digital assets in order
Back in the good old days, before the PC, a common-or-garden borderline Asperger's syndrome male obsessive faced some concrete physical limits around the palette of things he could obsessively sort and collect. Stamp collectors could only physically store so many neatly bound books of stamps. Train spotters could only stand on a finite number of train platforms each day. Shelves could only contain a certain number of serried ranks of album spines before they collapsed.
Luckily these physical limits go pretty much out of the window when culture goes digital. For 500 quid you can walk your mouse to Amazon.co.uk and order with one click a Buffalo Terastation 1.0 with one terabyte of digital storage. Who on earth can get by on a measly terabyte of storage? Don't panic, because according to CNET IBM is currently researching four-terabyte solid-state (that's diskless to you and me) drives. Admittedly the initial target for this research is the large enterprise rather than the consumer, but I'm pretty sure that you'll be able to get a stonking beast like this for your living room all too soon.
Just as work expands to fill the time you have to do it, digital media flows into your life itself in direct proportion to the amount of easily available storage you procure. You start of with the little stuff, ripping a few CDs – a typical gateway drug to bad digital storage habits. Then you get a bigger PC and in one caffeine fuelled night you 'do' your whole music collection. However, now you've got a taste, and it becomes hard to stop. You try other media. You rip a couple of legally purchased DVDs for backup and storage purposes, but fall into depression when you realise that you've choked your current storage capacity.
You need more. External storage. Network arrays. RAID systems. Here is where you should stop, but you don't. You think, “Wouldn't it be cool to have all my photos, CDs, DVDs and games backed up safely and legally for storage purposes?” Then you get a huge external hard drive and rip the lot in an orgy of digital photocopying. Now you're really in trouble. The file names need to be cleaned up, cover art for CDs and DVDs must be procured, and you may even need to get hold of an application like Griffith Media Collection Manager or Ant Movie Catalogue to pull in third-party movie database information.
If you're an ordinary, non-geek digital obsessive civilian, you may well be wondering: what on earth is happening to these people? If your film collection (Love, Actually, The Italian Job, and Dumbo) could easily be lost down the back of the sofa, this weird hoarding behaviour probably makes no sense at all. A standard geek critique would say that collectors such as myself are simply the comic book guy from The Simpsons, - physically unattractive, male nerdy introverts with no lives and nothing better to do with their time. While true, this is of course unhelpful and unkind – and it's wise to remember that Matt Groening, creator of the The Simpsons, famously said that he considers the comic book guy to be the character in the series that most closely resembles him. The obsessively well-managed collection is an act of defiance, a celebration of identity and imaginative escape – why, a work of art, much like The Simpsons itself. It's a lovingly created virtual world – a personal Second Life of private images, thoughts and ideas, a carefully cultivated garden of the self which requires careful protection, tending, and massive amounts of expensive storage hardware.
And there are some benefits to the digitisation of this virtual self. The hero of Nick Hornby's novel High Fidelity had to have the physical space to rack all those albums of much loved music, with disastrous implications for the décor of his bachelor pad. The modern digital obsessive can hide the whole Alice in Wonderland craziness of his obsessions behind the looking glass of his laptop. In a world in which a Swedish flat-pack furniture company has conquered the globe by providing cost-effective storage solutions for people living in tiny urban apartments, it's good to know that we're going to have unlimited storage space for this madness.
For Sale by Owner
100gig External Harddrive with all the Fixins> - $500
Reply to: email@example.com [?]
Date: 2008-09-14, 9:37PM EDT
almost 100 gigabites of music ready to go.
-the allman brothers band dreams boxset
-anthrax complete discography
-crosby,stills and nash greatest hits
-the best of david bowie
-david gray greatest hits and life in slow motion
-foo fighters complete discography
-the grateful dead complete discography,complete with boxsets,the complete download series and disckspicks1-36(approx29 gigabites)
-medeski,martin and wood discography
-phish complete discography,plus livephish1-20 and many other live soundboards
-pink floyd complete discography,including many extras
-primus complete discography
-slayer complete discography
-steely dan complete discography plus the citizen 4disc boxset
-sublime complete discography plus many extras
-system of a down complete discography
-the beatles complete discography
-ween complete discography
-weezer complete discography
-wilco complete discography
-bob marley and the wailers complete discography
-public enemy complete discography
-wutang clan complete discography,along with all solo efforts.
-various rock,hiphop,and jazz albums.
it's NOT ok to contact this poster with services or other commercial interests
500 GB External Hard Drive Music Lover / D.J.'s - $250
Reply to: firstname.lastname@example.org [?]
Date: 2008-09-16, 8:00AM EDT
brand new western digital drive for 250 and you get music collection free
mp3's high bit rate totally free
Location: will deliver
it's NOT ok to contact this poster with services or other commercial interests
Ebay Calls on EU to Probe Sales Curbs
Ebay, the online auctioneer, has asked the European Union’s antitrust chief to investigate companies that prevent retailers or sellers from offering their goods on Ebay or other online commerce platforms.
Tod Cohen, Ebay deputy general counsel, said he had raised concerns with Neelie Kroes over distributors of perfumes in France, sports goods in Spain, schoolbags in Germany and pushchairs in Britain, among others.
“We think there may be a number of anti-competitive and abusive distribution agreements that are prohibiting sellers in the EU from offering goods online. They are manipulating and controlling the markets beyond EU market rules,” he said.
The company has been locked in legal battles over distribution policies with a number of large brand manufacturers – from Tiffany in the US to Louis Vuitton in France – although they, in turn, have complained about online sales of counterfeit items. Results in national courts have been mixed.
Ebay’s call came after Ms Kroes said she would consider an investigation into whether manufacturers and service providers were using illegal practices to prevent online sales.
“There are a number of practices which are being used to restrict cross-border sales which I think require a closer look,” she said.
“I intend to look very carefully at these practices, and any others brought to our attention,” the commissioner said, as she called for views to be submitted.
The investigation is not formal at this stage, but a preliminary exercise to explore whether there are issues that need to be addressed. But Ms Kroes made clear she was ready to take further action if required.
“Consumers often find that the products they are looking for are not available to them ... If this is because competition rules are not clear enough, I will clarify them. If it is because the competition rules are not up to date, I will update them.
“And of course, if this is because the competition rules are not being respected, consumers and companies should know I will enforce them” she said.
Ms Kroes was speaking at the end of a high-level roundtable discussion by online commerce participants including Apple’s Steve Jobs, LVMH’s Bernard Arnault, John Donahue, chief executive of Ebay, Roger Faxon from EMI, and Sir Mick Jagger. The roundtable will publish a short report later this year, and invite further comments from third parties.
Brussels sees online commerce as a means of driving a borderless market and eroding local competition barriers.
According to recent studies, total e-commerce sales in the EU could reach 5-10 per cent of total sales by 2010. Ebay claims consumers in the UK, Germany and France can achieve price savings of about 17 per cent for a range of new products by buying online.
P2P Is Coming To YouTube
It looks like the idea of a P2P-powered YouTube is finally becoming reality, albeit without any contribution from Google. Singapore Shanghai-based P2P start-up PPLive, which we previously covered for its hugely successful P2P video platform, is experimenting with a P2P accelerator for Flash video streams. The application, which is dubbed PPVA, essentially distributes the stream of any popular Flash video from sites like YouTube via P2P without any involvement of the hosting server.
PPLive began a Chinese-language only beta test of PPVA in June, and says it already clocked more than 10 million downloads, with the maximum number of simultaneous users being as high as 500,000. We tested PPVA with some popular YouTube videos, and the results are intriguing — especially if you consider what this could mean for online video hosters and content delivery networks alike.
PPVA, which is so far only available for Windows, is essentially a small plug-in that just sits in your task bar until it detects a Flash video stream. The app then finds out whether other PPVA users have accessed and cached the same clip; if that’s the case, it will request some of the data from them. A small status window shows where the data for each clip comes from, as well as other details.
So how well does it work? That really depends on the popularity of the clip in question. Access one of YouTube’s most popular videos, and only the first few bytes are requested from the server. After that, P2P distribution kicks in and that number quickly rises to 100 percent. Other popular videos show P2P distribution rates of around 30 percent, whereas more obscure stuff comes straight from YouTube’s servers.
PPVA also seems to work quite well with popular CollegeHumor videos, but there was no P2P distribution available on Vimeo or Blip. In fact, in some cases the plug-in seemed to make things worse, causing noticeable stuttering during playback of some clips, while crashing with others.
Those beta woes aside, the potential implications of something like PPVA are huge. Google could save a whole bunch of money on YouTube traffic without actually doing a thing, and smaller hosters could avoid embarrassing server downtime that so commonly occurs when a clip suddenly becomes popular. PPVA could also make P2P CDN offerings like BitTorrent’s DNA obsolete. After all, why would anyone pay for P2P content distribution if users can do it for free?
Of course, some content providers might be uneasy about not being asked whether they want their videos distributed via P2P. This becomes an even bigger issue when advertisers start requesting more detailed statistics about online video usage. PPLive told us that every video gets an initial request from the hosting server, which should allow video hosters to keep a tally of requests and viewers. But Google is reportedly moving towards a more detailed statistical analysis that looks at which parts of a video are being watched and which are skipped. PPVA could seriously distort these statistics.
Does that mean Google will get upset about PPLive’s experiment? Only if they’re hypocrites: Google invested $5 million in a Chinese P2P startup called Xunlei in late 2006. And guess what? Xunlei’s download manager is doing for files pretty much the same thing PPVA is doing for video streams, speeding up http downloads through P2P without consent of the original hosting provider.
PPLive has told me that an English-language version of the plug-in will be available in about a month. Asked about ways to monetize PPVA, PPLive’s James Seng had this to say: “It’s new. It’s cool. We will figure out the rest later.”
Software Spots the Spin in Political Speeches
BLINK and you would have missed it. The expression of disgust on former US president Bill Clinton's face during his speech to the Democratic National Convention as he says "Obama" lasts for just a fraction of a second. But to Paul Ekman it was glaringly obvious.
"Given that he probably feels jilted that his wife Hillary didn't get the nomination, I would have to say that the entire speech was actually given very gracefully," says Ekman, who has studied people's facial expressions and how they relate to what they are thinking for over 40 years.
It seems that Clinton's micro-expression gave away more about his true feelings than he intended. Politicians do not usually give themselves away so tellingly, and many of us would like to know whether they mean what they are saying. So how are we to know when they are lying?
Technology is here to help. Software programs that analyse a person's speech, voice or facial expressions are building upon the work of researchers like Ekman to help us discover when the truth is being stretched, and even by how much. "The important thing to recognise is that politicians aren't typically good at out-and-out lies, but they are very adept at dancing around the truth," says David Skillicorn, a mathematics and computer science researcher at Queen's University in Kingston, Ontario, Canada. "The 2008 election has so far given us plenty of chances to see them in action."
Skillicorn has been watching out for verbal "spin". He has developed an algorithm that evaluates word usage within the text of a conversation or speech to determine when a person "presents themselves or their content in a way that does not necessarily reflect what they know to be true".
The algorithm counts usage of first person nouns - "I" tends to indicate less spin than "we", for example. It also searches out phrases that offer qualifications or clarifications of more general statements, since speeches that contain few such amendments tend to be high on spin. Finally, increased rates of action verbs such as "go" and "going", and negatively charged words, such as "hate" and "enemy", also indicate greater levels of spin. Skillicorn had his software tackle a database of 150 speeches from politicians involved in the 2008 US election race (see diagram).
When he analysed the speeches of John McCain, Barack Obama and Hillary Clinton, he found that even though the speeches were rehearsed, written by professionals and delivered by trained speakers, there were discernable differences between them. "It's clear that the speeches are still highly individualised," says Skillicorn. "This makes sense as the speeches have to, in some manner, reflect the speaker's own voice and opinions. Otherwise, they wouldn't be able to deliver them convincingly."
Additionally, he says, little details count: pronouns such as "we" and "I" are often substituted subconsciously, no matter what is written in the script.
Each of the candidates had made speeches containing very high and very low levels of spin, according to Skillicorn's program, depending on the occasion. In general though, Obama's speeches contain considerably higher spin than either McCain or Clinton. For example, for their speeches accepting their party's nomination for president, Obama's speech scored a spin value of 6.7 - where 0 is the average level of spin within all the political speeches analysed, and positive values represent higher spin. In contrast, McCain's speech scored -7.58, while Hillary Clinton's speech at the Democratic National Convention scored 0.15. Skillicorn also found that Sarah Palin's speeches contain slightly more spin than average.
So the analysis appears to back up McCain's claim that he is a "straight talker". However, for the purposes of political speech-making this may not be an entirely good thing for him. "Obama uses spin in his speeches very well," says Skillicorn. For example, Obama's spin level skyrockets when facing problems in the press, such as when Jeremiah Wright, the reverend of his former church, made controversial comments to the press.
"When you see these crises come along, the spin goes up," Skillicorn says. "Obama is very good at using stirring rhetoric to deal with the issues. And it seems to work if you look at what happens in the polls afterwards."
McCain does not seem as adept at using spin to his advantage, and his "straight talk" can make his speeches fall flat from a motivational point of view, according to Branka Zei Pollermann, founder of the Vox Institute in Geneva, Switzerland, who has analysed the candidates' voices for communication consultants Clearwater Advisors, based in London.
"The voice analysis profile for McCain looks very much like someone who is clinically depressed," says Pollermann, a psychologist who uses voice analysis software in her work with patients. Previous research on mirror neurons has shown that listening to depressed voices can make others feel depressed themselves, she says.
"John McCain's voice analysis profile looks like that of someone who is clinically depressed"
Pollermann uses auditory analysis software to map seven parameters of a person's speech, including pitch modulation, volume and fluency, to create a voice profile. She then compares that profile with the speaker's facial expressions, using as a guide a set of facial expressions mapped out by Ekman, called the Facial Action Coding System, to develop an overall picture of how they express themselves.
Her analysis shows that McCain's voice changes little in pitch as he speaks, and so conveys very little emotion or impact. Whether he is addressing positive prospects or discussing sad facts, his voice always sounds the same.
Additionally, McCain's voice and facial movements often do not match up, says Pollermann, and he often smiles in a manner that commonly conveys sarcasm when addressing controversial statements. "That might lead to what I would call a lack of credibility."
People are unlikely to trust statements made in a flat tone, particularly when they do not match the person's facial expressions. According to Pollermann's analysis, it may not make any difference that McCain does not pepper his speeches with spin, if the way he talks does not strike people as believable.
Obama, by comparison, speaks with greater pitch modulation, and his facial expressions correlate very well with what he is saying. His one facial foible may be a tendency to furrow his brow, she says, conveying constant concern. This is similar to the UK prime minister Gordon Brown, whose expressions tend to be limited to sadness, anger and disgust, according to the Vox Institute's analysis. But Obama's fluency, high speech rate and good use of pitch make him a dynamic speaker.
So what does all of this actually say about the honesty of politicians? "Our society treats political candidates like used-car salesmen," Ekman says. "The fact is that the candidates almost certainly believe what they are saying, even if they are giving some facts a much lighter treatment than others. In that way, actually catching someone in a blatant lie is relatively rare."
Indeed, Bill Clinton's fleeting facial slip was the only clear example that Ekman could recount of a politician saying something that they did not mean during both the Republican and Democratic national conventions.
However, facial recognition technology may one day be able to pick up on telltale signs that humans would have trouble spotting. For example, Yoshimasa Ohmoto and colleagues at the University of Tokyo in Japan are developing a facial recognition system for robots and artificial intelligence agents that analyses basic eye, nose and mouth movements, such as a slightly averted gaze when talking to someone, to detect if a person is telling a lie. In trials in which people played the bluffing game Indian poker, the system has already proved to be as reliable as humans trained to detect lies (AI & Society, vol 23, p 187).
"Technology is quickly catching up with psychology," says Pawan Sinha, who leads a team at the Massachusetts Institute of Technology that specialises in computerised facial-recognition technology. "It's not quite there yet, because the visualisation systems just can't work fast enough to replace the human eye and mind. But computer processing is getting faster and our recognition systems are getting better," he says. "Someday soon, computers may be able read us better than any psychologist. I imagine that will be a pretty scary day for politicians."
Former FCC Chairman Blasts Claim That McCain Invented The Blackberry: He Is ‘So Out Of Touch’
Speaking to reporters today, McCain campaign adviser Douglas Holtz-Eakin claimed that Sen. John McCain (R-AZ) is responsible for the “miracle” of PDAs. Waving around his Blackberry, Holtz-Eakin said:
This is not the first time that McCain has tried to take credit for a technological innovation he actively opposed. In a 2000 GOP presidential debate, he took credit for E-Rate, a program designed to wire schools:
As Matt Yglesias points out, McCain was one of just five senators to vote against the Telecommunications Act of 1996.
New Bill Would Tighten Rules for DHS Border Laptop Searches
Customs and Border Patrol agents can grab your laptop, BlackBerry, or external hard drive without needing so much as a reason, but a new bill introduced last week to Congress would at least put some limits on how border searches could be done.
"I was deeply concerned to learn about the lack of protections individuals' have when their electronic equipment is randomly seized," said Rep. Loretta Sanchez (D-CA), who introduced the bill. "With the passage of the Border Search Accountability Act of 2008, Americans will be able to travel with more peace of mind knowing that their data will be further protected and that there are stringent accountability measures in place for safeguarding their personal information."
Note what her bill will not do—make searches more difficult. Earlier this year, the Ninth Circuit Court of Appeals found that border searches of electronic devices (even those without any probably cause) did not run afoul of the Fourth Amendment's unreasonable search and seizure clause. Judges noted that precedent already allows searches of 1) briefcases and luggage, 2) a purse, wallet, or pocket, 3) papers found in pockets, and 4) pictures, films, and other graphic material. So why not laptops?
While such searches would not appear to be legal within the country, courts have long recognized the government's right to "protect its territorial integrity" by controlling the material passing across its borders.
Sanchez's bill would bring more routine to the search process. The bill requires the government to draft additional rules regarding information security, the number of days a device can be retained, receipts that must be issued when devices are taken, ways to report abuses, and it requires the completion of both a privacy impact study and a civil liberties impact study. Travelers would also have the explicit right to watch as the search is conducted.
Sanchez also wants data about the searches, which would have to be turned over to Congress once per quarter. Specifically, she wants to know how many searches are being done, where they take place, and the race and nationality of those being searched.
The Department of Homeland Security actually issued search rules over the summer; while they were the first rules made public on the process, which had started to look quite ad-hoc, they still came in for criticism from groups like the Association of Corporate Travel Executives. ACTE, which doesn't like have executive laptops pinched whenever someone travels overseas, complained in early August that devices could basically be kept indefinitely, the data could be shared with foreign governments, and no data destruction procedures were spelled out.
Coming so close to the end of this Congressional session, Sanchez's bill is unlikely to see action this year. It currently sits in the House Committee on Homeland Security, where it will likely expire when Congress adjourns.
Given the tremendous uncertainty the electronic search process creates for travelers, 40 civil liberties groups asked Congress back in May to hold hearings on the issue; so far, that has yet to happen, but Ars has spoken with several frequent travelers who already that precautions with sensitive corporate and personal data before going on international trips.
Perhaps the laptop search program will turn out to be as much of a boon for online data repositories as it will for the federal government.
ATF Lost Guns, Computers
418 laptops vanished in 5 years; contents largely unknown
Over a five-year period, the Bureau of Alcohol, Tobacco, Firearms and Explosives lost dozens of weapons and hundreds of laptops that contained sensitive information, according to a scathing report issued yesterday by the Justice Department.
Inspector General Glenn A. Fine identified "serious deficiencies" in ATF's response to lost or stolen items and called the agency's control of classified data "inadequate."
From 2002 to 2007, ATF lost 418 laptop computers and 76 weapons, according to the report. Two weapons were subsequently used to commit crimes. In one incident, a gun stolen from the home of a special agent was fired through the window of another home.
Ten firearms were "left in a public place." One of them was left on an airplane, three in bathrooms, one in a shopping cart and two on the top of cars as ATF employees drove away. A laptop also fell off the top of a car as an agent drove off.
Another weapon "fell into the water while an agent was fishing," according to the report.
"This seems like deja vu when you look back at previous reports outlining the same missteps by DOJ law enforcement agencies in 2001," said Sen. Charles E. Grassley (R-Iowa), who has criticized federal law enforcement agencies for failing to account for weapons and laptops. "Keeping track of government property may seem like housekeeping to some, but when it comes to guns and computers with sensitive information, it's critical to public safety, national security and the credibility of the ATF."
A regular audit of weapons and other sensitive items has been conducted since a study in 2001 revealed that the FBI and other agencies had misplaced hundreds of firearms.
Yesterday's report showed that ATF, a much smaller agency than the FBI, had lost proportionately many more firearms and laptops.
"It is especially troubling that that ATF's rate of loss for weapons was nearly double that of the FBI and [Drug Enforcement Administration], and that ATF did not even know whether most of its lost, stolen, or missing laptop computers contained sensitive or classified information," Fine wrote.
W. Larry Ford, assistant director of ATF's Office of Public and Governmental Affairs, said the agency "is committed to strengthening controls over weapons, laptops and ammunition by more strictly enforcing agency policies and by developing new procedures outlined in our response to the OIG."
Many of the missing laptops contained sensitive or classified material, according to the report. ATF began installing encryption software only in May 2007.
ATF did not know what information was on 398 of the 418 lost or stolen laptops. The report called the lack of such knowledge a "significant deficiency."
Of the 20 missing laptops for which information was available, ATF indicated that seven -- 35 percent -- held sensitive information.
One missing laptop, for example, held "300-500 names with dates of birth and Social Security numbers of targets of criminal investigations, including their bank records with financial transactions." Another held "employee evaluations, including Social Security numbers and other [personal information]." Neither laptop was encrypted.
ATF employees did not report the loss of 365 of the 418 laptops.
The report was less critical of ATF's control of explosives, but when the inspector general reviewed inventory records, he found that amounts "on hand did not correspond with the amounts recorded" in records at eight of 16 locations.
ATF investigates crime involving firearms and explosives, arson and trafficking of alcohol and tobacco. It was transferred to the Justice Department from the Treasury Department in 2003, and the report contained implicit criticism of earlier auditing of the sensitive materials. ATF held "inaccurate data accumulated over several years," it said.
EFF to Sue Bush, Cheney, NSA and Others Over Telecom Spying
The government has decreed that they can't sue the phone companies over illegal spying on Americans, so instead they're about sue the government.
From an Electronic Frontier Foundation press alert just received here:
The ACLU filed its own challenge shortly after Congress voted to grant retroactive immunity to carriers who were being sued for their roles in the illegal spying. President Bush signed the Foreign Intelligence Surveillance Act (FISA) Amendments Act in July, although cases predating that legislation have continued to wind their way through the courts.
From an Ars Technica story earlier this week:
Fears Over Privacy as Police Expand Surveillance Project
Database to hold details of millions of journeys for five years
The police are to expand a car surveillance operation that will allow them to record and store details of millions of daily journeys for up to five years, the Guardian has learned.
Paul Lewis on police plans to store car surveillance records Link to this audio
A national network of roadside cameras will be able to "read" 50m licence plates a day, enabling officers to reconstruct the journeys of motorists.
Police have been encouraged to "fully and strategically exploit" the database, which is already recording the whereabouts of 10 million drivers a day, during investigations ranging from counter-terrorism to low-level crime.
But it has raised concerns from civil rights campaigners, who question whether the details should be kept for so long, and want clearer guidance on who might have access to the material.
The project relies on automatic number plate recognition (ANPR) cameras to pinpoint the precise time and location of all vehicles on the road. Senior officers had promised the data would be stored for two years. But responding to inquiries under the Freedom of Information Act, the Home Office has admitted the data is now being kept for five years.
Thousands of CCTV cameras across the country have been converted to read ANPR data, capturing people's movements in cars on motorways, main roads, airports and town centres.
Local authorities have since adapted their own CCTV systems to capture licence plates on behalf of police, massively expanding the network of available cameras. Mobile cameras have been installed in patrol cars and unmarked vehicles parked by the side of roads.
Police helicopters have been equipped with infrared cameras that can read licence plates from 610 metres (2,000ft).
In four months' time, when a nationwide network of cameras is fully operational, the National ANPR Data Centre in Hendon, north London, will record up to 50m licence plates a day.
The Home Office said in a letter that the Hendon database would "store all ANPR captured data for five years". The photograph of a person's licence plate will, in most cases, be stored for one year.
Human rights group Privacy International last night described the five-year record of people's car journeys "unnecessary and disproportionate", and said it had lodged an official complaint with the Information Commissioner's Office (ICO), the government's data watchdog.
In a statement, the ICO said it would take the complaint "seriously" and would be contacting police "to discuss proposed data retention periods". "Prolonged retention would need to be clearly justified based on continuing value not on the mere chance it may come in useful," it said.
In 2005 the government invested £32m to develop the ANPR data-sharing programme after police concluded that road traffic cameras could be used for counter-terrorism and everyday criminal investigations. Senior police officers have said they intend the database to be integrated into "mainstream policing".
Half of all police forces in England and Wales have now been connected to the network, reading between 8 and 10m licence plates a day. The Association of Chief Police Officers (Acpo) said the database would be linked to ANPR systems run by all but two police forces by the end of the year. The database will be able to store as many as 18 bn licence plate sightings in 2009.
The Acpo ANPR strategy document, obtained under the Freedom of Information Act, envisages the database will be used at all levels of policing. The document, which sets policy up until 2010, states that police forces should "fully and strategically exploit" the database.
Officers can access the database to find uninsured cars, locate illegal "duplicate" licence plates and track the movements of criminals. The Acpo adds that the database will "deter criminals through increased likelihood of detection".
"Experience has shown there are very strong links between illegal use of motor vehicles on the road and other types of serious crime," said Merseyside Police's Assistant Chief Constable, Simon Byrne, who leads Acpo's ANPR policy.
The director of Privacy International, Simon Davies, said last night the database would give police "extraordinary powers of surveillance". "This would never be allowed in any other democratic country," he said. "This is possibly one of the most valuable reserves of data imaginable."
Peter Fry, of the CCTV User group, said that licence plate images captured by CCTV are generally retained for 31 days. "There's not a great deal of logic to explain keeping the same images for five years," he said.
Photo Ticket Cameras to Track Drivers Nationwide
Vendors plan to add spy technology to existing red light camera and speed camera installations.
Private companies in the US are hoping to use red light cameras and speed cameras as the basis for a nationwide surveillance network similar to one that will be active next year in the UK. Redflex and American Traffic Solutions (ATS), the top two photo enforcement providers in the US, are quietly shopping new motorist tracking options to prospective state and local government clients. Redflex explained the company's latest developments in an August 7 meeting with Homestead, Florida officials.
"We are moving into areas such as homeland security on a national level and on a local level," Redflex regional director Cherif Elsadek said. "Optical character recognition is our next roll out which will be coming out in a few months -- probably about five months or so."
The technology would be integrated with the Australian company's existing red light camera and speed camera systems. It allows officials to keep full video records of passing motorists and their passengers, limited only by available hard drive space and the types of cameras installed. To gain public acceptance, the surveillance program is being initially sold as an aid for police looking to solve Amber Alert cases and locate stolen cars.
"Imagine if you had 1500 or 2000 cameras out there that could look out for the partial plate or full plate number across the 21 states where we do business today," Elsadek said. "This is the next step for our technology."
ATS likewise is promoting motorist tracking technologies. In a recent proposal to operate 200 speed cameras for the Arizona state police, the company explained that its ticketing cameras could be integrated into a national vehicle tracking database. This would allow a police officer to simply enter a license plate number into a laptop computer and receive an email as soon as a speed camera anywhere in the state recognized that plate.
Such programs would be fully consistent with existing law on searches and seizures. In the 2003 case Washington v. William Bradley Jackson, the Washington State Supreme Court ruled that police could not use a physical GPS tracking device to monitor a suspect's movements without first obtaining a warrant. No warrant would be needed or restrictions applied to license plate tracking systems which do not require any physical contact. Instead, individual police officers could monitor the movements of suspected criminals or even their wives and neighbors at any time.
In the past, police databases have been used to intimidate innocent motorists. An Edmonton, Canada police sergeant, for example, found himself outraged after he read columnist Kerry Diotte criticize his city's photo radar operation in the Edmonton Sun newspaper. The sergeant looked up Diotte's personal information, and, without the assistance of electronic scanners, ordered his subordinates to "be on the lookout" for Diotte's BMW. Eventually a team of officers followed Diotte to a local bar where they hoped to trap the journalist and accuse him of driving under the influence of alcohol. Diotte took a cab home and the officers' plan was exposed after tapes of radio traffic were leaked to the press. Police later cleared themselves of any serious wrong-doing following an extensive investigation.
In the UK, officials are planning to dramatically expand the use of average speed cameras that track cars over distances as great as six miles. Records on all vehicle movements taken from a nationwide network of cameras will be stored for five years in a central government Automated Number Plate Recognition (ANPR) server, allowing police to keep tabs on criminals and political opponents. Work on the data center in north London began in 2005 and officials expect real-time, nationwide tracking capability to be available by January.
TRAI Plans to Prevent WiFi Abuse
With terrorists using unsecured wireless fidelity (WiFi) networks to shoot off emails every time they carry out bomb blasts, TRAI is examining a series of measures to have security processes in place to protect such networks.
According to sources, TRAI began studying open WiFi networks after the Ahmedabad blasts and will soon issue recommendations for proper authentication and maintenance of such networks.
Importantly, following the 21 blasts in Ahmedabad on July 26 which killed 55 and injured 100, TRAI had asked the government to direct all Internet Service Providers (ISPs) to instruct their customers to have ‘proper authentication measures’ so that this facility is not misused. “All ISPs may be instructed to ensure that their subscribers using wireless devices must use effective authentication mechanisms and permit access to internet to only authorised persons using wireless devices,” the regulator said in its earlier communication to the DoT. The DoT appears not to have acted on the regulator’s suggestion. The Internet Service Providers of India, the industry body representing all ISPs, said that so far the government had not issued any directives to act towards securing open WiFi networks.
ET reported earlier this week that the government is examining the possibility of issuing new norms which will unsecured WiFi connections illegal. Sources also said the new norms may put the onus of educating consumers on telcos and ISPs. Besides, the ISPs will also be asked to ensure that customers access the internet over a WiFi connection only through a password. WiFi networking companies may also be asked to limit WiFi signal right down to a defined radius by installing access points around the signal. The Week in Review is edited and published by Jack Spratts. The department of telecom and the department of information technology will work with the home ministry and intelligence agencies on this issue. Sources said the Computer Emergency Response Team (CERTC-in) is also helping the government issue new norms on WiFi security. It is not clear if these agencies will await the recommendations of TRAI.
Security agencies have asked the government to ask all ISPs to make password protection mandatory for every customer using a WiFi network. This has also been endorsed by the home ministry.
ISPs say that it is the customer who is to be blamed. “Internet service providers are taking steps on their own to secure WiFi connections. All ISPs are installing AAA servers and firewalls. But, if you look at the terror mails, they were sent from hacked or open WiFi accounts – there is nothing we can do about this. When people take a broadband connection and routers to make their homes and offices WiFi enabled and then leave it open when they are not in use, there is nothing ISPs can do about it,” Internet Service Providers Association of India president Rajesh Chharia had told ET.
World’s Smallest UWB Antenna Introduced
Virginia Tech researchers have developed an efficient compact ultra-wideband antenna (CUA) for a range of home, automotive, medical, and military applications. The antenna has achieved a near optimal performance for size and bandwidth, according to Inventor Taeyoung Yang.
Yang, an electrical and computer engineering (ECE) Ph.D. student with the Wireless@Virginia Tech group, presented the theory for making an ultra-wideband antenna as close as possible to the theoretical limit on antenna size and performance, plus the design for one such antenna, at the XXIX General Assembly of the International Union of Radio Science in Chicago in mid August. The project is part of his dissertation. Co-inventors are ECE professors W. A. Davis and W. L. Stutzman.
Ultra-wideband (UWB) antennas are designed for low energy, short-range transmission of lots of data. Wireless transmission of data from a cell phone or digital camcorder to one’s computer is one potential use. A smaller antenna that can send large movies is easily appreciated. Wireless transmission from a DVD to an HDTV is offers a boon to room décor.
There are also complex and critical applications for such technology, said Yang. Examples are pulsed radar systems to prevent collisions between cars; medical imaging systems to detect tumors; and military applications, such as unmanned aircraft.
“To our best knowledge, our invented antenna is the world’s smallest with more than a 10:1 bandwidth. It has more than 95 percent efficiency for signal transmission, and a fairly constant omni-directional radiation pattern,” said Yang.
The inventors’ strategy to reduce the size and increase the adaptability of the antenna was to configure it as a structure that can be printed on the inner side of the protective housing, which can be light plastic.
The design also makes it cheap and simple to produce. “The required material expense is low, the fabrication process is simple, and it is versatile for mounting on curved surfaces,” said Yang. “It is convenient to install and disassemble.”
Yang received the best paper award from Commission B (fields and waves) at the 2008 General Assembly of the International Union of Radio Science. He has received a number of awards for his research and is a 2008 Torgersen Graduate Student Research Excellence Award Recipient at Virginia Tech.
'Cognitive Radios' to Improve Wireless Devices
Researchers are developing intelligent radios that can sense their surroundings and adjust their mode of operation accordingly.
Dubbed ‘cognitive radios’, the technology is expected to reach the market within five years, finding uses in public safety devices and wireless networks.
Cognitive radios build on the concept of ‘software defined radio’, in which most functions in a radio device are performed by software-controlled digital electronic circuits.
Similar to how a modern day cell phone signs on to different networks while roaming, cognitive radios are designed to be adaptive to its situation.
“A cognitive radio is aware of its environment, its own capabilities, the rules within which it can operate, and its operator’s needs and privileges,” explained Charles W. Bostian, an Alumni Distinguished Professor of Electrical and Computer Engineering at Virginia Tech.
“It is capable of changing its operating modes in ways that maximise things that the user wants while staying within the rules ... is capable of learning in the process and of developing configurations that its designer never anticipated.”
Adaptive, cognitive radios could enable techniques such as dynamic frequency sharing, in which radios automatically locate unused frequencies, or share channels based on a priority system.
In public safety, cognitive radios also could be used to provide interoperability between various signals and automatically adjust radio performance.
“For example, if its user is inside a building where there is little or no public safety radio coverage, the radio may automatically switch to a VoIP mode and reach the dispatcher through a WiFi access point and a telephone line,” Bostian said.
“These ideas are research topics now, and some of them will soon reach the market,” he said.
“It will mean more business and more equipment to sell for the wireless infrastructure manufacturers. They have nothing to lose and a lot to gain.”
Microsoft is researching the technology’s potential to alleviate bandwidth scarcity in wireless networking through its Kognitiv Networking Over White Spaces (KNOWS) research project.
The project works towards opportunistically accessing unused portions of the TV spectrum, and already has birthed a prototype that scans for unused frequencies by sensing the TV spectrum.
When an open frequency band is located, the device is designed to dynamically switch to it in a way that does not hurt incumbent TV receivers.
“I think dynamic spectrum access will be the first application for commercial wireless services like WiFi and WiMax,” Bostian told iTnews. “There is movement toward doing this in vacant U.S. TV channels.”
According to Bostian, current challenges in the development of cognitive radio are reducing cost and improving battery life.
While the technology is expected to reach the market within five years, it will take twice as long to become commonplace, Virginia Tech researchers predict.
Samsung Offers $5.85 Billion for SanDisk
Samsung Electronics, the South Korean consumer electronics giant, has made an unsolicited $5.85 billion cash offer for SanDisk, a Silicon Valley maker of flash memory cards that are critical components of popular devices like MP3 music players and digital cameras.
In a proposal first made in August and revealed to investors after the American markets closed Tuesday, Samsung offered to pay $26 a share for SanDisk, more than 90 percent over its closing price of $15.04. SanDisk shares shot up nearly 50 percent to almost $23 in after-hours trading as investors reacted to the unsolicited bid.
SanDisk’s founder and chief executive, Eli Harari, rejected the proposal in a letter made public Tuesday, saying that Samsung was significantly undervaluing the 20-year-old company. “We believe Samsung’s proposal does not provide appropriate value to our stockholders and is opportunistically timed at the trough of an industrywide downturn,” Mr. Harari wrote.
The public fracas between Samsung and SanDisk calls to mind another highly publicized technology drama this year, between Microsoft and Yahoo. Like Microsoft, Samsung made its acquisition bid public only after what it says were months of private and unproductive discussions between the companies.
There is also a similar debate over the value of the company. SanDisk’s stock has lost more than half its value over the last year as the $14 billion-a-year flash memory market suffers from a glut of inventory and becomes increasingly dominated by two large players: Samsung and its Japanese archrival, Toshiba.
SanDisk, however, has something that Samsung needs: intellectual property. Mr. Harari, a former Intel engineer, recognized the value of patents early on. The company has some 860 patents in the United States and 550 overseas. Samsung pays SanDisk $440 million a year to license those patents.
The companies were in negotiations to renew the agreement, which expires next August. SanDisk has complained that the uncertainty over that deal depressed its stock price, which Samsung is now exploiting.
One option for SanDisk is to find another company to swoop in with a better offer. But one potential suitor thought to be interested — Seagate Technology, a leading maker of computer hard drives and former investor in SanDisk — said it was not.
In an interview Tuesday, William D. Watkins, Seagate’s chief executive, said the flash market was unattractive because Korean companies like Samsung benefit from government policies that give them access to cheap capital in a business that requires huge investments.
Mr. Watkins said that Mr. Harari is a friend but “Seagate can’t come in and save SanDisk.” Seagate will work with the surviving flash makers, he said.
Vindu Goel contributed reporting from New York.
Asus Ships Software Cracker on Recovery
Asus is accidentally shipping software crackers and confidential documents on the recovery DVDs that come with its laptops.
The startling discovery was made by a PC Pro reader whose antivirus software was triggered by a key cracker for the WinRAR compression software, which was located on the recovery DVD for his Asus laptop.
He discovered a number of other suspicious files, including:
* A directory called "Crack" that appears to contain serial numbers for other software packages
* A directory containing a large number of confidential Microsoft documents for PC manufacturers, including associated keys and program files
* Various internal Asus documents and source code for Asus software
The reader sent the disc to PC Pro, and we can confirm the existence of such files.
The key cracker is found in the WinRAR application folder on the recovery disc and is credited to "Freddy Cruger".
One of the confidential Asus documents includes a PowerPoint presentation that details "major problems" identified by the company, including application compatibility issues.
Our reader isn't the only one to discover strange files on Asus recovery discs. A US poster on the Asus forums reports finding files including CVs on his recovery disc - click here to see a screengrab of the files.
A contributor to the forums at the Australian APC magazine also reports finding the same software cracker as our reader.
An Asus spokesman has apologised to the customers who found the files. "We will be investigating this at quite a high level," he told PC Pro. "Once the investigation is complete, we will ensure it doesn't happen again."
He was unable comment on how the files got on the disc.
End of brief era
Peru to be First with New OLPC Laptop with Windows
Peru will become the first country ever to run a trial of OLPC laptops running on Windows XP.
The government of Peru will run the first ever trial of the One Laptop Per Child (OLPC) association's low-cost XO laptop running on Microsoft's Windows XP operating system, putting the nation at the heart of a software controversy.
The little green laptop, which OLPC is trying to reduce to just US$100 per device, will be given out to school children throughout Peru for use over the next nine months as part of the trial. Currently, the XO costs around US$200 each to build.
Kids and their teachers in the country will use the laptops as part of efforts to introduce more technology into classrooms in Peru, including Microsoft's Student Innovation Suite of software, which includes Microsoft Office 2003 as well as Learning Essentials 1.0 for Microsoft Office.
The groups did not say how many laptops would be handed out as part of the trial nor when it would start.
The program puts Peru at the heart of a software controversy that has been raging for years between those who advocate making software and its source code free, such as Linux OS developers, and those who charge for software and keep the development recipes secret, such as Microsoft.
OLPC started out offering the XO with Linux because the OS cost nothing and organizers believed it made the device run more efficiently. Some open-source software advocates hoped the XO would spread the use of Linux and the open source philosophy to the 5 billion people living without computers in the developing world.
Microsoft also wants to capture the next 5 billion people for its future market potential.
The decision to put Windows on the laptops came about because officials in some countries, such as Egypt, feared a non-Windows laptop would ill prepare students for the real world, in which Microsoft software dominates.
OLPC ultimately decided to ignore the controversy and follow its mission of delivering laptops to kids in developing nations to help ensure they don't get left out of the global computing revolution.
The group now offers XO laptops with either Linux or Windows XP. Within the next few months, laptops armed with both operating systems will be available.
OLPC was started by professors from the Massachusetts Institute of Technology (MIT) and is led by Nicholas Negroponte.
Microsoft launched a company program a few years ago called Unlimited Potential, with a similar goal of spreading computing throughout the developing world. Microsoft hopes to introduce technology to one billion more people by 2015.
Can Games Make Your Kid a Better Citizen?
Study: Game experiences can provide hands-on learning opportunities Can playing "Madden" or "World of Warcraft" encourage your kid to be more engaged in public life? Believe it or not, yes.
Parents of video-gaming children, take heart: Your kid is not destined to become an anti-social hermit who lives at home until he’s 35. In fact, a new study shows that all that game time could actually be making him a better citizen.
No, this isn’t a study funded by the video-game association. It’s from the respectable folks at the Pew Internet & American Life Project. And it’s the first, says study co-author Joe Kahne, to track the sorts of things kids do when playing — not just how much time they spend playing. “It’s really valuable to focus heavily on the quality of those experiences,” he says.
Kahne, a professor at Mills College in Oakland, Calif., worked with Pew to conduct this particular survey, which focused specifically on the relationship between gaming and civic experiences among teens. It was part of a larger, $50 million initiative by the John D. and Catherine T. MacArthur Foundation aimed at assessing how digital media is affecting how kids learn, play and participate in civic activities.
If high-school social studies are but a distant memory, a quick refresher: Anything that has to do with engaging in public life qualifies as a civic activity. Reading up on current affairs is one way to be civically involved; so is raising money for a walk-a-thon, or showing up at a protest.
So, how can playing “Madden” or “World of Warcraft” influence your teenager to get psyched about the three branches of government? It’s not as incongruous as it might sound, says Kahne. Game experiences “can be quite valuable from the standpoint of civic and political engagement.”
Americans have been pulling away from civic engagement for decades — Robert Putnam wrote about the phenomenon in his 1995 essay “Bowling Alone: America’s Declining Social Capital.” Some academics tie this to increased distractions such as television, the Internet and video games — others, like Putnam, cite our lack of trust in government and the political process. Either way, participating in elections and public discourse has long been considered necessary for a healthy democracy.
Video games can provide hands-on learning opportunities for kids that can be much more meaningful than reading a textbook. For instance, you can play a mayor in “SimCity,” and get a close-up look at what it takes to build and maintain a community. Helping a newbie get his sea legs in a game simulates the real-world experience of volunteering. And playing games online can expose kids to people with worldviews that differ from their own — in positive and negative ways.
Many of the of the 1,102 teenagers polled said they’d encountered hostility, racism and sexism while playing online — stuff that can certainly happen offline too, says Kahne. “Just as some playground experiences are enriching and some are unpleasant for young people, one can imagine that that would be true in the game world.”
The fact is, video games are ubiquitous among today’s generation of kids, for both girls and boys. with girls and boys both. Virtually all of the teenagers polled — 97 percent — report playing games. So it’s important, says study co-author and Pew researcher Amanda Lenhart, for us to understand that games are “sitting at the table with all the rest of the media that children and teenagers are being exposed to.”
One commonly held stereotype paints teenage gamers as solitary, anti-social basement dwellers that can't socialize their way out of a paper bag. But Lenhart says their research ran counter to this notion. For the vast majority of the kids polled, games are a social experience, where they get to interact with their friends. Some kids play with other people in the room, and some play online. But regardless, teenagers view games as something they do with other people, and not just something they do when they’re alone.
It might also surprise you to learn that teenagers aren’t just into violent shoot-em-up games. In fact, 74 percent of the teenagers polled reported that racing games were their favorite, followed closely by puzzle games such as “Bejeweled,” “Tetris” and “Solitaire.” Sports titles such as the “Madden” and “FIFA” series were also cited as favorites.
That’s not to say that first-person shooters such as “Halo” or violent-themed action games such as “Grand Theft Auto” aren’t sought after — they definitely are. But daily gamers are more likely to play a wider range of game genres, according to the Pew study.
The fact that teens are interested in a diverse swath of game types presents an opportunity for parents — and educators, says Kahne. Most kids report learning about social studies through worksheets and classroom activities. But games provide a “whole new and potentially powerful way” to not only teach kids about civic issues, but get them thinking about them, too, he says.
“If we’re careful, we can harness young people’s interest in video games, and use them to connect them to a range of valuable experiences.”
Everything You Need to Know about Nvidia’s 3D Goggle Gamble
Take note, Rainier Wolfcastle, because these goggles may actually do something. Nvidia’s latest visual computing venture is a serious foray into stereoscopic 3D, a technology that has not found success among mainstream consumers (or even enthusiasts) in recent history. 3D movies and gaming at home have always been seen as gimmicky, a perception that can largely be attributed to the fact that you have to wear some pretty goofy glasses to experience the effect. In fact, past iterations of 3D stereographic technology (including efforts by the now-defunct company ELSA) have been especially troublesome because they required bulky headgear (that had to be tethered to your PC) that had a tendency to give gamers headaches after just a few minutes of use. Nvidia wants to reinvigorate the 3D stereoscopic market by developing its own glasses hardware and driver software, which they hope will avoid the pitfalls of previous efforts.
Do we have the technology to make stereoscopic 3D tech practical? And more importantly, is this something that, as a gamer, you’d be open to embrace?
You’re not going to be convinced unless you try these in person, which we did at last month’s NVISION festival. Nvidia gave us several opportunities to try out the tech, once during their CEO’s keynote address (on a cinema-size screen), on a 73” Mitsubishi DLP television, and also on a new 120Hz Viewsonic LCD display. The three-dimensional effect is definitely incredible, especially with the larger displays. We saw Call of Duty 4, Age of Empires III, and the racing game GRID demoed on these units, and each game was significantly enhanced with the use of 3D.
The illusion was most convincing in Call of Duty 4, which uses depth-of-field blurring for objects in the distance (especially when we aimed down the ironsights of a rifle). In the real-time strategy game, the HUD controls popped out of the screen, making us feel like we were looking through a window onto the battlefield. And in GRID, when cars spun out of control, they weren’t tossed off-screen, but at us. The point is, if a game is rendered with 3D graphics, it can take probably advantage of 3D stereoscopic technology. And with Nvidia’s new hardware solution, 350 new and existing games will work out of the box, with no game-specific drivers required.
We talked to Andrew Fear, the product manager of GeForce Stereoscopic 3D, to get the full scoop on why this isn’t going to be just another fad.
Q: How would you summarize 3D stereoscopic technology for someone who's never used it?
Andrew Fear: NVIDIA GeForce 3D stereoscopic 3D technology is an NVIDIA software and hardware solution which takes standard Microsoft DirectX games and converts them to stereoscopic 3D for an incredibly immersive gaming experience. Now all of your games are have depth information that goes into and comes out of your monitor. One of the best things about this from a gamer’s standpoint is that we are using the standard 3D games they are playing -- we are not requiring special versions of games to get this experience.
Q: How does it work?
AF: The NVIDIA GeForce Stereoscopic 3D driver works at the lowest level by taking 3D game data and rendering each scene twice – once for the left eye and once for the right eye. Each eye image is offset from each other for the correct viewing. The GPU then sends this data to a 3D Ready display. These displays show the left eye view for even frames (0, 2, 4, etc) and the right eye view for odd frames (1, 3, 5, etc). NVIDIA 3D glasses then synchronize back to the 3D Ready display and present slightly different images to each eye resulting in the illusion of depth and an incredibly immersive experience for games.
Q: What software and hardware is needed?
AF: You’ll need a PC with the following:
• An NVIDIA GeForce 8800 GT GPU or better
• Windows Vista 32-bit (64-bit support coming soon)
• Standard Microsoft DirectX game that NVIDIA has preconfigured in our driver (to date NVIDIA has preconfigured over 350+ games).
• A supported 3D Ready display. To date we have announced support for ViewSonic® pure 120 Hz LCDs and Mitsubishi DLP® HDTVs.
• NVIDIA stereoscopic 3D active shutter glasses (coming soon)
Q: How does the current generation of stereoscopic 3D tech differ from what gamers saw 5 years ago?
AF: You no longer have to crank that little handle on the glasses. Just kidding. The new software technology we are working on has come a long way. Today our driver supports NVIDIA SLI, GeForce 8 series, Windows Vista, and DirectX 10. So it’s a cutting edge, terrific gaming platform to start with.
Our driver now supports the latest Zalman Trimon 3D Ready displays and will add support for new 3D Ready displays (ViewSonic and Mitsubishi) working with our new 3D glasses laster this year. The underlying technology works the same, but the experience has improved with support for more games, more graphics cards, and new hardware.
Q: How does game integration work? Will patches or special game profiles be required? Is it compatible with both Direct3D and OpenGL?
AF: NVIDIA GeForce stereoscopic 3D technology was designed to work with virtually all DirectX 7, 8, 9, and 10 games. The driver automatically converts standard 3D games to work with 3D Ready displays. There is no need for patches. In fact, more than 350 games work well with our technology out of the box. NVIDIA is also working with game developers to ensure that new titles work properly with our stereoscopic 3D technology out of the box. Right now, we do not have OpenGL support but will be working to release it soon.
Q: We saw demos of the technology running in a real-time strategy, shooter, and racing game. How does the technology know how to differentiate between game genres to ensure that 3D looks right?
AF: NVIDIA’s software team analyzes games and correctly configures the settings based upon the type of game you are using. So the great thing for consumers is that we’ve done all the work for you, so you can get gaming in minutes.
Q: How will users be able to calibrate 3D?
AF: One of the biggest limiting factors in previous solutions for gamers was that they required meticulous calibrating when setting up your display and glasses. With many advances in technology, a lot of that setup can be done automatically now since we can detect the displays, glasses, and games. That being said, end users still have full control over the amount of 3D depth (sometimes called eye separation) for all of their games. So end users can configure these settings directly in a software control panel. In our new solution launching later this year, we will also provide a scroll wheel on the back of the wireless emitter that lets you quickly “dial in” the level of 3D depth to your taste.
Q: Will this work with someone who wears glasses or contact lenses?
Users who wear glasses and contact lens should have no problems with our 3D glasses. In fact, our glasses were designed from day one to be easily worn over most types of glasses frames, so you can comfortably wear both. In addition, we will provide different nose piece attachments when the glasses ship so you can select the nose piece that’s most comfortable for you. We tested our design among scores of eyeglass users leading up to and including NVISION, and every glasses wearer had no trouble wearing our 3D glasses over their prescription ones. Contact lens users won’t be affected and can wear our 3D glasses with no problems.
Q: Is the effect nauseating after prolonged usage?
AF: Only if you’re looking at a nauseating image :). The experience of playing a game in 3D can be so convincing that those new to it may feel slightly disoriented at first. This varies considerably, because everyone is different. Some people get car sickness and others don’t. It’s the same thing with 3D – some people can feel disoriented while others aren’t affected. Typically most people have a negative experience with stereoscopic 3D gaming for two reasons: low refresh and too much 3D depth.
Our new 3D glasses solve the problem of low refresh rate because they are designed to work with LCDs and DLP HDTVs which operate at a higher refresh rate. Most gamers are extremely comfortable at these settings.
Too much 3D depth can also cause eyestrain since your brain needs time to adjust to dimensionalized data on your monitor. If you think about it, all of your life your brain has been trained that it only has to focus at the depth of your monitor, even when you are playing 3D games. However in the real-world, your brain in trained to change its focus on objects at different depths all of the time and you do not experience any problems.
So if you think about it, we are just retraining your brain to now be able to focus on your monitor knowing that objects go into and come out of the screen. To help ease this transition for users, our software always starts off with a lower depth amount. We tested this level with end users and found it was a good value for people experiencing stereoscopic 3D for the first time. We also found that most people’s eyes adjust fairly quickly after about fifteen minutes and generally want to turn up the 3D depth after that.
We’ve done extensive testing with our new glasses and 3D Ready displays, and we’ve found that experienced users can easily play a game for 4 hours or more without feeling eyestrain or disorientation.
Q: What are the technological limitations of stereoscopic tech? Will more than one person be able to see the game in 3D at once?
AF: Absolutely, that’s one of the things that’s so cool about it. If you’ve gone to a 3D movie recently, you’ve seen how the audience reacts when characters and objects appear to jump out of the screen. You can also enjoy the same sense of amazement playing games with your friends or family. It definitely makes games more interesting to watch. At NVISION, we demonstrated stereoscopic 3D gaming on Mitsubishi DLP HDTVs and we had more than eight people using our 3D glasses at once, all watching the same game. Our 3D glasses use a wirelress IR receive to synchronize back to the monitor and PC, so the amount of users that can game at once is literally how many people can you fit in your living room!
Q: What kind of GPU processing power is required to render stereoscopic images? How are framerates affected?
AF: We recommend a GeForce 8800 GT-level GPU or faster for a good stereoscopic 3D experience because our 3D technology must calculate two versions of each frame to render it correctly. For this reason, there will be some performance impact running in a game in stereoscopic 3D mode. With a suitable GPU, the gameplay experience is still fast and immersive.
Q: Can you talk about the shutter glasses hardware that NVIDIA is working on and planning to bring to market? Release date and price range?
AF: These glasses are a new design from NVIDIA: they operate wirelessly to an IR transmitter that connects to the back of your PC via USB. They have a rechargeable battery that lasts about 40 hours on a single charge, and they turn off after 10 minutes of non-use to save battery charge. A small indicator light will blink red when the battery needs to be recharged. Simply connect it to the (included) USB cable to recharge.
We expect to release the glasses in a package with the emitter by the end of this year. The retail price hasn’t been set yet.
Q: Is NVIDIA working with any publishers or developers to promote 3D stereoscopic technology?
AF: Absolutely. We have shown the glasses to the majority of PC game publishers and developers. They love the effect, and they like the fact that they don’t need to do anything special to support it. Most developers just say “When can I get one?” That being said, game developers can always work with us to ensure that game is optimized out of the box and delivers an even more immersive experience.
Q: Is this a technology that’s being targeted for the living room or more for desktop gaming?
AF: That’s a good question. From our standpoint, we’ll feel we succeeded if users can have a great 3D experience at their PC or in the living room. It probably depends on the room and the monitor, because we’ve noticed that people like to be fairly close to the ViewSonic 22-inch desktop LCD, and they like to be about 8 feet away from the Mitsubishi 73-inch Diamond Vision DLP.
Q: What are some other applications of 3D stereoscopic tech outside of games?
AF: Simulations are an obvious area of great potential. At NVISION an engineer told us how he developed astronaut training simulations for NASA which cost hundreds of thousands of dollars and produced a similar effect. Good stereoscopic 3D technology can be used for training pilots, doctors, technicians, and soldiers.
One of the other areas we are looking at for consumers is that wide array of 3D applications are out, such as Google Earth, Piclens, and Microsoft Photosynth. All of these applications utilize the processing power of a GPU to render their effects in 3D. Since our GPU can access that data, we can create a stereoscopic view of it and completely immerse you in it.
Home movies are also moving towards 3D. Consumers are eager to enjoy high-fidelity, immersive experiences in their home after experiencing it in the theater. If they can have immersive experiences at an affordable price, you’ll see nothing but smiles under those 3D glasses. 3D movies for the home is not quite ready yet, but we are working with the industry to help enable a new standard for the home.
We also chatted with Duane Brozek of Viewsonic to get a panel-maker’s perspective of 3D Stereoscopic tech.
Q: What technologies do display panels need to have for 3D to be supported?
Duane Brozek: There are currently several types of 3D technologies available in the market. The two most common types being Stereoscopic with active shutter glasses, and Autostereoscopic type without glasses. The Autostereoscopic technologies include Barrier Type, Directional BLU, and Lenticular type LCD panels.
ViewSonic feels that clearly the best available solution in terms of performance, manufacturing complexity, and cost is the Stereoscopic technology which we recently announced in conjunction with NVIDIA. In terms of panel design, the only requirements are the ability to run in native mode with 120 Hz data content input, and the ability to support a fast gray-to-gray response time in less than 1/120 of a frame (this equates to a gray-to-gray response time below 8ms).
While Autostereoscopic technologies are improving, they are panel structure dependent and have a high cost of manufacturing and software development. Additionally, they can demonstrate a number of limitations in terms of performance criteria such as brightness, resolution, and viewing position. We don’t believe that a good quality stereoscopic technology without glasses is cost effective either now or in the foreseeable future.
Q: Are there additional benefits to 120 Hz LCD panels?
DB: There are three additional benefits of 120 Hz LCD technology for consumers:
- enables full resolution stereoscopic viewing with active shutter glasses technology.
- enables a wider viewing angle than current autostereoscopic solutions with active shutter glasses.
- 120 Hz LCDs are also terrific for gamers when not playing stereoscopic 3D games, because the higher refresh rate means you can display more frames per second running on NVIDIA GeForce GPUs.
Q: How much more expensive will 3D-supported panels cost over regular displays?
DB: Depending on the type of 3D implementation chosen, the additional cost on the monitor side could range anywhere from $100 to well over a thousand dollars. ViewSonic is targeting to launch our first “pure” 120Hz / 3D desktop product at an end user price range reflecting a premium at the lower end of that scale. For the performance improvement we will deliver, we believe that gamers, graphics professionals and enthusiasts will be excited to put one on their desktop. The Controller and Glasses will be sold separately.
Q: What kind of market penetration and adoption rate do you expect for 3D-capable panels in the next couple years? What will be the biggest determining factor for consumers to get on board with this tech?
DB: We believe that 3D-capable LCD monitors will certainly be one of the fastest growing segments over the next several years. We are essentially starting from a base of zero though, and do not expect to see market share greater than 5 percent within the period. However, the products that we introduce now will be laying the groundwork for the next generation of 3D displays, and providing a framework for the continued development of new 3D content. These new “pure 120Hz” monitors not only provide a crisp, blur-free 2D experience for a myriad of consumer and business applications, but also a truly immersive gaming experience that we believe will revolutionize the desktop and generate considerable demand and sales.
Japan: Nintendo’s Patents Challenged
The International Trade Commission has agreed to look into allegations made by Hillcrest Laboratories that the Nintendo Company infringed on patents in making its Wii video game console, the commission said. Hillcrest has accused Nintendo of infringing on four patents. The commission has the power to ban products from the United States if they are made with infringed technology. Hillcrest, based in Rockville, Md., has motion-detecting technology allowing users to select items on a screen by waving a hand-held device. The Wii has a motion-sensing controller that lets users direct on-screen play by swinging it like a bat or a tennis racket. Hillcrest had no immediate comment, and Nintendo, based in Kyoto, Japan, could not immediately be reached for comment.
Wall St. Havoc Deals Blow to Mobile Phone Makers
Mobile phone makers and operators risk losing thousands of their most profitable customers as financial havoc whacks the global banking industry.
Analysts said the success of Blackberry-maker RIM is the most dependent on Wall Street's future.
In worst case scenario 40,000 workers may lose their jobs in finance following Lehman's collapse and problems at other big financial firms, New York Governor David Paterson said earlier this week.
"RIM probably looks most exposed to any downside risk in this segment," said analyst Neil Mawston from research firm Strategy Analytics, adding that also Palm, HTC and HP could feel the pinch.
Handset makers already face an increasingly fierce battle for market share as demand slows in the United States and Europe, where economies are under pressure from the global credit crunch.
Operators have started to answer the growing problem by shifting their subsidy dollars to more expensive phone models -- hoping to attract clients who spend more money by surfing on the Internet and checking their e-mail.
"In North America they have been targeting especially higher-data devices," said Carolina Milanesi, analyst at research firm Gartner.
The global mobile phone market is expected to grow around 10 percent this year, boosted by the continuing surge in demand for cheap phones in emerging markets like India.
At the same time, mature handset markets in the developed world have grown marginally at best. In Western Europe handset sales fell sharply in the first half of 2008, Gartner says.
Operator subsidies -- key for phone sales in most mature markets -- in Western Europe show a moderate decline, while subsidies in North America are slowly rising, Credit Suisse said in a research note.
"However a substantial reallocation is underway in that 45 percent of subsidies in these markets now go towards smartphones, some 20 percentage-points higher than 18 months ago -- a trend which we believe will continue," Credit Suisse said, adding this was likely to hurt sales volumes of cheaper phones.
RIM, which sold 5.6 million Blackberries last quarter, has been able to successfully expand its customer base beyond Wall Street bankers in the last few years, but 40 percent of its new subscribers were still from large corporations in the last fiscal quarter.
"No matter how much economic challenge there is, how many people do you know that have given up their mobile?" RIM's co-chief executive Jim Balsille said on Thursday in Mumbai at the launch of the BlackBerry Bold smartphone in India.
"But there's clearly got to be a point where there is an impact. Macroeconomic factors have gotten all the more turbulent in the last week, and maybe it will come to that tipping point," he said, declining to say if the company stood by its guidance for the second quarter and for the rest of the year.
Among the large mobile phone makers Nokia has been pushing for bigger share of the mobile e-mail market for years, but sold just 2 million E-series business phones in the second quarter, less than 2 percent of its total volumes.
"Nokia's E-series handsets have been struggling to gain traction over the past year, so the current financial-industry wobbles may not help them," said Strategy Analytics' Mawston.
(Additional reporting by Rina Chandran; Editing by Louise Ireland)
How Wall Street Lied to Its Computers
So where were the quants?
That’s what has been running through my head as I watch some of the oldest and seemingly best-run firms on Wall Street implode because of what turned out to be really bad bets on mortgage securities.
Before I started covering the Internet in 1997, I spent 13 years covering trading and finance. I covered my share of trading disasters from junk bonds, mortgage securities and the financial blank canvas known as derivatives. And I got to know bunch of quantitative analysts (”quants”): mathematicians, computer scientists and economists who were working on Wall Street to develop the art and science of risk management.
They were developing systems that would comb through all of a firm’s positions, analyze everything that might go wrong and estimate how much it might lose on a really bad day.
We’ve had some bad days lately, and it turns out Bear Stearns, Lehman Brothers and maybe some others bet far too much. Their quants didn’t save them.
I called some old timers in the risk-management world to see what went wrong.
I fully expected them to tell me that the problem was that the alarms were blaring and red lights were flashing on the risk machines and greedy Wall Street bosses ignored the warnings to keep the profits flowing.
Ultimately, the people who ran the firms must take responsibility, but it wasn’t quite that simple.
In fact, most Wall Street computer models radically underestimated the risk of the complex mortgage securities, they said. That is partly because the level of financial distress is “the equivalent of the 100 year flood,” in the words of Leslie Rawl, the president of Capital Market Risk Advisors, a consulting firm.
But she and others say there is more to it: The people who ran the financial firms chose to program their risk-management systems with over-optimistic assumptions and to feed them oversimplified data. This kept them from sounding the alarm early enough.
Top bankers couldn’t simply ignore the computer models, because after the last round of big financial losses, regulators now require them to monitor their risk positions. Indeed, if the models say a firm’s risk has increased, the firm must either reduce its bets or set aside more capital as a cushion in case things go wrong.
In other words, the computer is supposed to monitor the temperature of the party and drain the punch bowl as things get hot. And just as drunken revelers may want to put the thermostat in the freezer, Wall Street executives had lots of incentives to make sure their risk systems didn’t see much risk.
“There was a willful designing of the systems to measure the risks in a certain way that would not necessarily pick up all the right risks,” said Gregg Berman, the co-head of the risk-management group at RiskMetrics, a software company spun out of J.P. Morgan. “They wanted to keep their capital base as stable as possible so that the limits they imposed on their trading desks and portfolio managers would be stable.”
One way they did this, Mr. Berman said, was to make sure the computer models looked at several years of trading history instead of just the last few months. The most important models calculate a measure known as Value at Risk—the amount of money you might lose in the worst plausible situation. They try to figure out what that worst case is by looking at how volatile markets have been in the past.
But since the markets were placid for several years (as mortgage bankers busily lent money to anyone with a pulse), the computers were slow to say that risk had increased as defaults started to rise.
It was like a weather forecaster in Houston last weekend talking about the onset of Hurricane Ike by giving the average wind speed for the previous month.
But many on Wall Street did even worse, as Mr. Berman describes it. They continued to trade very complex securities concocted by their most creative bankers even though their risk management systems weren’t able to understand the details of what they owned.
“There were a lot of deals that were non-standard [in many] ways, so you really had to go through the entire prospectus and read every single line to pick up all the nuances,” Mr. Berman said. “And that slows down the process when mortgage yields looked very attractive.”
So some trading desks took the most arcane security, made of slices of mortgages, and entered it into the computer if it was a simple bond with a set interest rate and duration. This seemed only like a tiny bit of corner cutting because the credit-rating agencies declared that some of these securities were triple-A. (20/20 hindsight: not!) But once the mortgage market started to deteriorate, the computers were not able to identify all the parts of the portfolio that might be hurt.
Lying to your risk management computer is like lying to your doctor. You just aren’t going to get the help you really need.
All this is not to say that the models would have gotten things right if only they were fed the most accurate information. Ms. Rawl said that it is now clear that the computers need to assume that there is extra risk in owning a newfangled security that has never been seen before.
“New products, by definition, carry more risk,” she said. The models should penalize investments that are complex, hard to understand and infrequently traded, she said. They didn’t.
“One of the things that has caused great pain is complex products,” Ms. Rawl said.
That made me think back to some of the great trading debacles of the last century, such as the collapse of Askin Capital Management, a hedge fund that collapsed from complex mortgage security investments gone bad. Wasn’t the moral of those stories that you shouldn’t put your money (or your client’s money) in something you don’t understand? Furthermore, even if you are convinced you do understand it, if no one else does, you’re not going to be able to sell it when you need the money.
“In some ways there is nothing new,” said Ms. Rawl, who helped investigate what went wrong at Askin. “The big deals are front page-news, then they go into the recesses of people’s memories.”
And, ultimately, the most important risk-management systems are the ones that have gray hair. “It’s not just the Ph.D’s who must run risk management,” Ms. Rawl said. “It is the people who know the markets and have lifelong perspective.” And at too many firms it is those people who failed to make sure the quants really did their jobs.
Google and General Electric Team Up on Energy Initiatives
Google and General Electric said Wednesday that they would work together on technology and policy initiatives to promote the development of additional capacity in the electricity grid and of “smart grid” technologies to enable plug-in hybrids and to manage energy more efficiently. The companies said their goal is to make renewable energy more accessible and useful.
Google’s chief executive, Eric Schmidt, and G.E.’s chief executive, Jeffrey Immelt, alluded briefly to the partnership during a joint appearance at Google’s Zeitgeist conference, which is taking place at the company’s headquarters in Mountain View, Calif.
The two executives gave few details of their planned collaboration. In an interview following their presentation, Dan Reicher, director of climate change and energy initiatives at Google.org, an operating unit of Google, said the effort was in its planning stages and did not have a set budget.
“All this talk about renewable energy will not be realized if we do not build substantial additional transmission capacity,” Mr. Reicher said.
Without additional capacity, Mr. Reicher said, it would not be possible, for example, to get power from a solar plant in the Mojave Desert to Los Angeles, or from a wind farm in the Dakotas to Chicago. Mr. Reicher said that environmental standards, overlapping state and federal regulations and other policy issues are among the biggest impediments to building additional transmission capacity.
Google and G.E. are also discussing how to combine their respective software and hardware expertise to enable technologies like plug-in hybrids on a large scale and to accelerate the development of geothermal energy.
For Google, the partnership with G.E. is part of larger set of energy initiatives, including direct investments in green technology to help develop renewable energy that is cheaper to produce than coal-generated power. For its part, G.E. has made a large bet on green energy technologies, an initiative the company calls “Ecomagination.”
GAO Report Torches US for Dumping Electronic Waste in Foreign Countries
In what may be the least astonishing news of the day, some major US companies who say they are environmentally recycling electronic waste - aren't. Rather more startling -- they are dumping everything from cell phones and old computers to televisions in countries such as China and India where disposal practices are unsafe to people and dangerous to the environment. Controlling the exportation of all of the e-waste plops on the doorstep of the US Environmental Protection Agency which is doing a woeful job, according to a scathing 67-page report issued by the Government Accountability Office today.
US hazardous waste regulations have not deterred exports of potentially hazardous used electronics, primarily for the following reasons, the GAO stated:
• Short-sightedness: Existing EPA regulations focus only on cathode-ray tubes (CRTs). Other exported used electronics flow virtually unrestricted-even to countries where they can be mismanaged-in large part because relevant US hazardous waste regulations assess only how products will react in unlined US landfills. Since July 2006 the EPA has required any exporter of CRTs for recycling must notify EPA at least 60 days prior to the intended shipment, and that the shipment be accompanied by and conform with an acknowledgment of consent, provided by EPA, that documents the importing country's consent. Under this CRT Rule, if these conditions are not met, CRTs, which would likely fail EPA tests for toxicity, would be considered hazardous waste, the GAO stated.
• The old end-around: Companies easily circumvent the CRT rule. GAO workers posed as foreign buyers of broken CRTs in Hong Kong, India, Pakistan, and other countries, and 43 US companies expressed willingness to export these items. Some of the companies, including ones that publicly tout their exemplary environmental practices, were willing to export CRTs in apparent violation of the CRT rule. GAO provided EPA with the names of these companies at EPA's request. Items with CRT are particularly harmful because they can contain 4 pounds of lead, a known toxin.
• No guts, no glory: EPA's enforcement is lacking. Since the CRT rule took effect in January 2007, Hong Kong officials intercepted and returned to US ports 26 containers of illegally exported CRTs. EPA has since penalized one violator, and then only long after the shipment had been identified by GAO. EPA officials acknowledged compliance problems with its CRT rule but said that given the rule's relative newness, their focus was on educating the regulated community. This reasoning appears misplaced, however, given the GAO's observation of exporters willing to engage in apparent violations of the CRT rule, including some who are aware of the rule. Finally, EPA has done little to ascertain the extent of noncompliance, and EPA officials said they have neither plans nor a timetable to develop an enforcement program, the GAO said.
The GAO went on to say recent surveys made on behalf of the United Nations found that used electronics exported from the United States to many Asian countries are dismantled under unsafe conditions, using methods like open-air incineration and acid baths to extract metals such as copper and gold. GAO observed thousands of requests for these items on e-commerce Web sites during a 3-month period--mostly from Asian countries such as China and India but also from some in Africa, the GAO stated.
Some US recyclers mix broken units with working units in shipments to Africa, and the nonworking units are often dumped and left for scavengers, the GAO said. Accepting such "junk" equipment is often part of the "arrangement" US recyclers make with African importers, according to a used computer importer in Senegal, the GAO said. Negotiating the amount of working versus broken equipment is routinely part of the agreement, and this importer told the GAO that even if he receives a shipment of up to 40% "junk," he can still make a profit. Often, the "junk" computers are dumped in the countryside and burned, he explained. In addition, in 2007, an official with the Basel Convention Regional Centre for Africa for Training and Technology Transfer noted, on the basis of his experience that a high proportion of the units that arrive in Nigeria are unusable, that used electronics are rarely tested for functionality before export to developing countries like those in Africa.
So what can be done? Perhaps little in the near term. The GAO said beyond actually enforcing the CRT rule, EPA should take steps to ensure that the larger universe of potentially harmful electronic devices--such as computers, printers, and cell phones--are exported in a manner that does not harm health or the environment. Among the options raised by GAO are:
• Expand hazardous waste regulations to cover other exported used electronics.
• Submit a legislative package to Congress for ratifying the Basel Convention, an international regime governing the import and export of hazardous wastes.
• Work with Customs and Border Protection and other agencies to improve identification and tracking of exported used electronics. Options such as these could help make US export controls more consistent with those of other industrialized countries.
For its part the EPA said in a six-page response the GAO report may not offer a "complete and balanced picture of the agency's electronic waste program." The agency said it does in fact enforce the CRT rule for example, and has 10 cases currently pending against offenders.
Until next week,
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|20-09-08, 01:21 PM||#2|
Join Date: Mar 2001
much respect for this.
Ive been a little down because today my doctor diagnosed me with John Travolta Syndrome. Its a condition where your face or head grows laterally, getting wider year by year. Its not so much of a problem and its nothing to be ashamed of, its just a condition. In fact mine is good because it means my brain is getting bigger too. But not that Travolta guy, his head is mostly fat. The doctors said I am much smarter than John Travolta and I believe them.
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