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Old 27-06-07, 09:37 AM   #1
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Default Peer-To-Peer News - The Week In Review - June 30th, '07

Since 2002

In CONGRESS, July 4, 1776

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, -- That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. --Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For Quartering large bodies of armed troops among us:

For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us, in many cases, of the benefits of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.


New Hampshire: Josiah Bartlett, William Whipple, Matthew Thornton

Massachusetts: John Hancock, Samual Adams, John Adams, Robert Treat Paine, Elbridge Gerry

Rhode Island: Stephen Hopkins, William Ellery

Connecticut: Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott

New York: William Floyd, Philip Livingston, Francis Lewis, Lewis Morris

New Jersey: Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark

Pennsylvania: Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross

Delaware: Caesar Rodney, George Read, Thomas McKean

Maryland: Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton

Virginia: George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton

North Carolina: William Hooper, Joseph Hewes, John Penn

South Carolina: Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton

Georgia: Button Gwinnett, Lyman Hall, George Walton

June 30th, 2007

BitTorrent Sites Safe Haven Under Threat

Leaseweb, the ISP of some of the largest BitTorrent sites like Torrentspy, BTjunkie and Demonoid was forced to take down everlasting.nu, a relatively small BitTorrent site. The outcome of the lawsuit initiated by the Dutch anti-piracy outfit Brein could spell trouble for some of the key players in the BitTorrent landscape.

In response to this decision several BitTorrent admins, who prefer not to be named, already announced that they have plans to leave Leaseweb. Others are setting up backup locations in case their site s are targeted. An admin of one of the bigger BitTorrent sites said:

“It looks like we’re not going to be very safe anymore on Leaseweb, we are putting backups in place on another location, just in case.”

This Thursday, the Amsterdam court concluded that everlasting.nu structurally facilitated copyright infringement by allowing their users to download copyrighted content via torrents hosted on their site.

Leaseweb’s lawyers argued that there was no evidence that these torrents really pointed to copyrighted works. They referred to the fact that rights holders often upload fake files themselves and that the name of a .torrent file is not sufficient to prove that copyrighted works are being distributed. Brein responded to this argument by stating that everlasting.nu then would be a very customer unfriendly BitTorrent site if this was the case, and the judge agreed with this.

At the end of the hearing the court decided that Leaseweb has to take down everlasting.nu and hand over the name and address of the owner. Additionally, Leaseweb is obliged to take down everlasting.nu, in case the site returns in the near future.

It still remains unclear what made the judge decide that everlasting is facilitating copyright infringement and how this will affect the position of all the other BitTorrent sites hosted by Leaseweb. The fact that everlasting has their own BitTorrent tracker was not used as an argument in the decision. So does this mean that hosting .torrent files is illegal now?

Brein sure thinks so, they already announced another lawsuit against Leaseweb to take down another BitTorrent site. At this point it is not sure whether this is one of the big players like Torrentspy, BTjunkie and Demonoid, or yet again a smaller BitTorrent site.

TorrentSpy Begins Weeding Out Copyright Content
Greg Sandoval

TorrentSpy, the torrent-file search engine accused by Hollywood of aiding copyright violators, plans to remove links from its search results to pirated content using a new filtering system.

FileRights is an automated filtering system created by some of TorrentSpy's founders, including Justin Bunnell, according to a statement released Monday. The technology uses "hash" values to automatically remove links to infringing works from search engines that subscribe to the service.

The move comes as TorrentSpy fights a lawsuit brought against it last year by the major film studios. TorrentSpy suffered a legal blow earlier this month when the judge hearing the case ordered the company to begin tracking user activity.

The privately held company has appealed the decision. Should it lose, Ira Rothken, TorrentSpy's attorney, has said the company would likely shut down access in the U.S. before giving up information about users.

In an interview, Rothken acknowledged that using hash marks to identify copyright content is not foolproof. If a file is altered then the system may not recognize it.

Filtering doesn't necessarily mean an end to the hostilities between Hollywood and the torrent search engines. In 2001, file-sharing system, Napster, launched a filtering system that failed to thwart illegal file sharing enough to satisfy the music industry or the courts. U.S. District Judge Marilyn Hall Patel called their efforts, which according to some accounts only caught half of the illegal files being shared, "disgraceful." The judge eventually ordered Napster to stay shut down until it could block all infringing materials.

It should be noted that illegal file doesn't occur at TorrentSpy or the other torrent engines. People use these sites to locate torrent files that can be downloaded via the file-sharing program BitTorrent. In the lawsuit filed by the film industry in Feb. 2006, TorrentSpy is accused of being a powerful tool for those who pirate intellectual property.

FileRights works like most video filters. Copyright owners handover information about their films or TV shows and the system detects any files containing unauthorized copies. Links to those files are automatically removed.

Any copyright owner, Web site or search engine is welcome to subscribe to the service for free, according to the company's statement. According to Rothken, one of TorrentSpy's competitors, IsoHunt, has agreed to use the filtering system as well.

"With FileRights we used the community networking power of the Web to automate and aggregate the entire copyright filtration process," Bunnell said. "Torrentspy now uses the FileRights cooperative filtering process to filter search results on its popular search engine."

BitTorrent Survival: The Way of the Hydra

As more and more people hear about BitTorrent, each day the major sites get bigger, with more and more visitors, members, seeds and peers. Mainstream awareness of P2P is driving this new surge but with copyright and law enforcement agencies clamping down hard, some are considering tactics for survival.

The BitTorrent community is growing at an almost alarming rate, its popularity is surging and more people than ever before are discovering its wonders. The mighty Suprnova captured the imagination of millions around the world, giving huge momentum to this file-sharing phenomenon, collecting millions of daily hits before its demise.

Today, sites like Mininova and The Pirate Bay are enjoying unprecedented levels of interest. Mininova served up 1 billion torrents in their first 2 years of operations, then stormed to 2 billion in just a further 6 months whilst capturing almost double the daily traffic of Suprnova in its prime.

The Pirate Bay almost needs no introduction, such is its size and comparable infamy. A jaw-dropping BitTorrent behemoth, gathering thousands of visitors each day who between them download 4 million torrents. Its vistors make 86 searches per second, its servers handle 1150 requests in the same timeframe and it tracks 50% of the world’s torrents.

That’s 50% of ALL public torrents. That is a dangerously high number of eggs in a basket that’s frequently coming under an attack of one form or another.

With the authorities always looking to take the biggest scalps to grab the headlines, sites such as LokiTorrent and EliteTorrents stood no chance, especially considering the huge financial implications of residing in the USA. Major BitTorrent site admins realized this and mainly moved their operations to the Netherlands, a location which is now looking less of a safe haven. The Dutch situation is of particular concern - there are dozens of strategically important torrent sites hosted there.

So what is the solution? brokep of The Pirate Bay has some thoughts that I happen to completely agree with.

“There are too few sites and trackers right now” he said, “things have been to concentrated to the big sites and that really sucks!”

Although it’s great initially for the mainstream to have visible big ‘brands’ such as The Pirate Bay, Mininova and TorrentSpy, it’s a precarious situation to have such a top heavy structure to the BitTorrent community. It’s great having a ‘multi-headed hydra’ but not so great when just one of those heads carries half of all the public torrents. This situation must be addressed. Resources need to be spread around in a manner which ensures that a few ‘big bombs’ are unable to dismantle major parts of the infrastructure.

There is a solution, as brokep says, “I really love the small specialized sites, I hope to see more of them. I would love to help out with starting up more, but it’s also important that we who already run sites do not start more of them.”

He’s right. The more sites like The Pirate Bay provide what the BitTorrent community want, the less likely it is that people will venture out on their own to create their own sites. In the current environment, the hydra needs thousands of heads which are resource-hungry to target, not just a dozen juicy fat ones which stay nice and still, with the authorities just waiting for a subtle change in, or interpretation of, the law. A change which is inevitable, in both Sweden and the Netherlands.

TorrentFreak asked the admin of a US-based tracker how they manage to stay alive, despite having 20,000 members. “People are too hung up on MPAA and RIAA content. There’s an enormous library of material out there which you can track and no-one bothers you. We’ve got over 4000 torrents and we’ve had just two or three informal takedown requests in the last couple of years. If people want to start a tracker, indexing non-RIAA/MPAA content and specializing in something else is a great way to start building a community, even when you’re hosted in the States”

brokep gets the last words. Very wise words;

“So public message to people - start up your own torrent sites, make the internet the hydra it is and needs to be. If there’s hundreds of sites, they can’t all be shut down. And well, if they shut down the few that are today, there will be hundreds of sites, I’m sure, but let’s start them before so we can spread the word of them easier.”

File-Sharing 'Graveyard' Still Filling Up
Greg Sandoval

To some, these were corporate executions, death by litigation.

LokiTorrent, Scour, SuperNova.org, Aimster and the original Napster were just a few of those sued out of existence, the victims of the entertainment industry's fear of technology, say the companies' supporters. Media execs say justice was done. Those companies profited from illegal file sharing, they say, and enabled others to pick the pockets of actors, musicians and other copyright owners.

Now a new battle is heating up. The search engine TorrentSpy is accused in a lawsuit filed last year by the Motion Picture Association of America (MPAA) of allegedly helping users locate pirated movies online. As the site's parent company, Valence Media, tries to fend off a court order to hand over user information to the MPAA, TorrentSpy's operators say they would likely shut down in the U.S. before complying. In a move that is seen in some corners as a capitulation, TorrentSpy and competitor IsoHunt agreed this week to prevent their search engines from linking to copyrighted material.

Seven years after a judge ordered Napster to halt music swapping, online piracy continues to thrive. Some estimates hold that the large video and music files passing back and forth over the Internet chew up more than a third of the Web's bandwidth. Meanwhile, the movie industry is following in the footsteps of the record companies by waging prolonged legal battles.

The question is why?

"The Internet's graveyard is deep with companies that have been sued out of business by the entertainment industry," said Fred von Lohmann, an attorney with the Electronic Frontier Foundation, which advocates for the rights of Internet users. "I think the prevailing sense is that they are winning the battles but losing the war. Despite the lawsuits, there is more file sharing than ever."

Kori Bernards, an MPAA spokeswoman, said the organization doesn't reveal its strategy but she did outline the group's overall plan to deal with piracy.

"We are rooting out those who enable copyright infringement on the Internet," Bernards said. "We will continue to take such actions against sites that are profiting from the theft of other people's creative works...Our strategy is to go after people committing copyright theft on the Internet at all levels."

Copyright theft costs the film industry billions, according to the MPAA. In 2005, the top U.S. studios generated $23 billion in worldwide ticket sales but say they lost $2 billion, or 8 percent, to online piracy.

The lawsuits are little more than "scare tactics," declared Peter Sunde, one of the cofounders of The Pirate Bay, the Internet's largest trackers of BitTorrent files--the technology favored by many to transfer large amounts of data over the Web. Based in Sweden, The Pirate Bay's headquarters were raided by police last year after the U.S. government pressed Sweden to shut down the site. The efforts failed.

"The MPAA is using legal muscle to scare people but really they are the ones who are afraid," Sunde said. "They fear technology but technology always prevails."

Others suspect that the MPAA ambitions go beyond trying to frighten file sharers. Ira Rothken, TorrentSpy's attorney, who has argued numerous copyright cases against the entertainment industry, argues the MPAA appears to be attempting to extend its control over Internet copyright issues.

First they pursued Napster for hosting unauthorized music files on its servers but didn't stop there. They then went after Grokster and Streamcast, which produced software that was often used to pirate copyright content. (The courts ruled that the companies could not be held responsible for the criminal acts committed by users.) And now the studios are after TorrentSpy, which does not have any direct contact with copyright material.

"It's one thing for someone to be hosting illegal copyright works on their site," Rothken said, "but the MPAA is trying to hold TorrentSpy liable for search results that link to torrent files. Copyright files never even touch TorrentSpy--not in any way, shape or form."

Lawsuits can pay off
Regardless of the criticism, there are signs that litigation does pay dividends. The MPAA is winning important decisions in the courts. The most recent example came on May 29, when a U.S. magistrate judge ordered TorrentSpy to begin tracking user activity and then turn the data over to the MPAA.

TorrentSpy doesn't log such data, but the judge said because the information exists, even if for only a short while, on computer RAM, TorrentSpy was obligated to collect and then turn the information over to the MPAA as part of the discovery process--where parties in a lawsuit exchange information. TorrentSpy has appealed the decision.

This kind of court ruling could be a very useful tool for fighting piracy, according to Richard Charnley, an attorney who has represented Fox and ABC in copyright cases.

"I think being able to access the identities of end users will certainly go a long way to shutting down potential infringement," Charnley said.

And TorrentSpy's recent moves indicate that perhaps the scare tactics also work.

Pirate Bay's Sunde was highly critical of TorrentSpy and its co-founder Justin Bunnell for launching a filtering system. "First of all, Justin," wrote Sunde on his blog this week, "you know this is not going to work."
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He suggests that TorrentSpy is either trying to save itself by appeasing the film industry or attempting to dupe the MPAA and the courts into believing that filtering BitTorrent files can effectively stop illegal downloads. It can't, according to Sunde.

So where does this leave the film industry if TorrentSpy and its competitors can't come up with a technology fix and they can't be sued into submission?

EFF's von Lohmann urges the movie industry to exercise some patience. He points out that if the studios were successful in killing off the VCR back in the 1970s, they would never have reaped billions of dollars from movie rentals.

"Everybody forgets that when the VCR was first developed, most of the uses were infringing copyright," von Lohmann said. "There was no Blockbuster or legitimate way to rent movies back then. It's vital to leave room for innovation. You have to give technology a chance to develop into something."

Meanwhile, Charnley and von Lohmann agree the studios must offer a more attractive proposition than the one being dangled by file sharing. They essentially have to learn to compete with free downloads.

"Ironically, if the studios changed their business model, that would put Napster's progeny out of business," Charnley said. "If they offer something that's legal, easy to use and affordable…these sites are useless."

Buona Notte

WinMX Bites the Dust
p2pnet.net news

Frontcode Technologies' WinMX, one of the most popular of the original indie p2p file sharing applications, was doing so well that it caught the jaundiced eye of Warner Music, EMI, Vivendi Universal and Sony BMG's RIAA (Recording Industry Association of America).

Then, WinMX is down, p2pnet reported in September, 2005.

But not for long because a band of Italian enthusiasts came to the rescue and soon after, "Wrong," we said. "WinMX is back! And it's all thanks to Italy's P2PZone." WinMx in funzione. Ecco la soluzione !

Sadly, it's offline again and this time, it's unlikely there'll be a reprieve.

"Today I have closed down," posts King Macro, head of WinMXGroup Operations. He goes on >>>>

"This decision took a while to come to however eventually it was made to terminate operations as of today. Advanced notice was given to others to prepare for this however they chose not to act on this which has caused much panic, hence this announcement.

When frontcode decided to pull the plug on WinMX I took over operations from them and continued to keep WinMX running, and made some improvements along the way, however this has not been without hassle. At every step of the way there have been people constantly doing everything they can to work against me trying everything they can to make as much hassle as possible.

I have continued to put in my time and effort despite this because at the end of the day the winmx community was worth it. Lately however there has been nothing worth saving, the once great community has mostly fallen in to people arguing and fighting, and even the small pockets of the community I used to be able to go to for a bit of fun and to relax I now can't - if it's not someone complaining it's someone pestering for answers to something. It's quite simply not something I see any point in putting my effort in to saving any more.

In case anyone is wondering why I have come to this conclusion that it's not worth it, I suggest you read peoples reactions to this closedown. If you think it's selfish of me to want to spend my free time doing something I want to do instead of what you want me to do for you, and if you think it's selfish to want to spend what little spare money I have on myself instead of spending it all on you, then you are exactly the reason that this has happened. If however you think it's perfectly reasonable for me to do whatever I want to with my time, you are apparently in the minority."

Privatunes: a Software that Anonymizes iTunes Plus Files
Nicolas Jondet

Ratatium.com, a French website specialized in technology news and software downloads, has just launched Privatunes, a free software that anonymizes DRM-free files bought on iTunes Plus. Last month’s revelations that the DRM-free files on iTunes Plus came with user's full name and account e-mail embedded in them had raised serious privacy concerns. Ratatium.com explains (in French) that Privatunes is aimed at guaranteeing the privacy of users but also their rights as consumers to freely share and trade the songs they have purchased. However, the claim that this software is perfectly legal will surely be tested.

When Apple and EMI decided to release DRM-free files on iTunes Plus last month, their decision was hailed as a breakthrough in digital music distribution. Freeing music from the controversial Digital Rights Management (DRM) technology was seen by many music lovers and technology enthusiasts as the way forward. However, on the day of their launch, those files generated controversy. Reports from Ars Technica and TUAW revealed that these DRM-free music files came with user's full name and account e-mail embedded in them, thus allowing Apple to track who and how those files were shared.

Ratatium.com, a French online news outlet and software download website, and Matoumba, another information site, have decided to go beyond the mere condemnation of what they consider as a serious breach of users’ privacy and consumer rights: they have launched Privatunes, a free software that anonymizes files bought on iTunes Plus.

The free software, which is currently only available for Microsoft, allows consumers to erase their name and e-mail addresses from their iTunes Plus files. The software, which can only anonymize one file at a time, also offers to make a backup of the original file.

This tool is presented as a means to safeguard, not only the privacy rights but also the consumer rights of the user, which iTunes Plus’ policy allegedly breaches. For Ratatium, digital property, like any other kind of property, should be freely transferable by its rightful owner. The purchaser of a digital album should be able to transfer it as easily and anonymously as a CD bought in a shop.

Ratatium also raises the following issue: a user might be contractually and/or statutorily entitled to copy a song for a family member. However, the user has very few means to control whether this file will be further shared by his family member with friends and friends of theirs. Yet, the fact that his personal details are embedded in the file could mean that he may be held liable if the file ends up on P2P networks.

Privatunes aims to help consumers avoid these risks and enforce their rights by erasing their personal details form the files. However, the claim made by Ratatium that such a service is perfectly legal will surely be tested.

In the meantime, Ratatium has promised an updated version of Privatunes which will be able to anonymize several files at a time and will be available on Mac and Linux.

RIAA Wants Agreements to Stay Secret

The RIAA is opposing Ms. Lindor's request for discovery into the agreements among the record company competitors by which they have agreed to settle and prosecute their cases together, by which she seeks to support her Fourth Affirmative Defense alleging that "The plaintiffs, who are competitors, are a cartel acting collusively in violation of the antitrust laws and of public policy, by tying their copyrights to each other, collusively litigating and settling all cases together, and by entering into an unlawful agreement among themselves to prosecute and to dispose of all cases in accordance with a uniform agreement, and through common lawyers, thus overreaching the bounds and scope of whatever copyrights they might have. ...As such, they are guilty of misuse of their copyrights."

Major Labels Back File Sharing Service Qtrax

Brilliant Technologies will soon announce plans to spin out Qtrax, an online record label and file sharing service. What's more, the service is reportedly backed by all four major labels, and it will offer between 20 million and 30 million copyrighted songs at its launch in October, according to the New York Post. The deal is expected to be formally announced today.

The plan is that Qtrax will serve as an online-only record label that will offer its music for free. It will generate revenue only through advertising and sponsorships. Qtrax also will offer a full complement of songs from the major labels - EMI, Sony BMG, Universal Music Group and Warner Music Group - as well as live recordings and personal tracks stemming from users' own collections.

"Consumers clearly aren't willing to pay for music, but advertisers are the one group that still will," Brilliant Technologies CEO Allan Klepfisz told the Post, adding that Internet advertising is growing by 30 percent per year.

Qtrax's initial revenue projections range from a low of $20 million to a high of $175 million. Record labels will get an equal split of the advertising revenue in addition to royalty fees. The file sharing service also will be a publicly traded company, with shareholders in Brilliant Technologies owning 80 percent and 20 percent being offered to the public.

Hydra-Headed 'Storm' Attack Starts
Gregg Keizer

A new round of greeting-card spam that draws users to visit attack sites relies on a sophisticated multipronged, multiexploit strike force to infect machines, security professionals said late today.

Captured samples of the unsolicited e-mail have all borne the same subject line -- "You've received a postcard from a family member!" -- and contain links to a malicious Web site, where JavaScript determines whether the victim's browser has scripting enabled or turned off.

"If JavaScript is disabled, then they provide you a handy link to click on to exploit yourself," said an alert posted Thursday afternoon by SANS Institute's Internet Storm Center (ISC). Some users turn off scripting because it is a frequent attack vector; browsers with JavaScript enabled are simply fed a two-part package of downloader and malware.

The quick browser status exam in this attack is somewhat similar to one used in a different exploit tracked by Symantec Corp. since Tuesday, but the two are not connected, said Oliver Friedrichs, director of Symantec's security response group. "They're using two different tool kits, but they're both prime examples that exploits against browsers are more and more prevalent," he said.

Today's greeting-card gambit tries a trio of exploits, moving on to the second if the machine is not vulnerable to the first, then on to the third if necessary. The first is an exploit against a QuickTime vulnerability; the second is an attack on the popular WinZip compression utility; and the third, dubbed "the Hail Mary" by the ISC, is an exploit for the WebViewFolderIcon vulnerability in Windows that Microsoft Corp. patched last October.

The ISC said several antivirus vendors had tentatively pegged the executable file, which is offered to users whose browsers have JavaScript disabled, as a variation of the Storm Trojan horse, an aggressive piece of malware that has been hijacking computers to serve as attacker bots since early this year. According to the ISC's warning, computers already compromised by Storm -- a.k.a. Peacom -- are hosting the malware, and the attackers are rotating those machines' IP addresses in the spam they're sending.
"Every Storm-infected system is potentially capable of hosting the malware and sending the spam, but only a few will be used in any given run," said the alert, "depending on how many e-mails they want sent and how many Web hits they're expecting."

Hackers haven't abandoned the practice of attaching malware to e-mail, then counting on naive users to open the file, said Friedrichs. But malware-hosting sites are the trend. "It's much more difficult to send a full malicious file," he said, because of users' learned reluctance to open suspicious files and filtering and blocking tactics by security software.

"This is widespread, and leads the user to multiple IP addresses," said Shimon Gruper, vice president at Aladdin Knowledge Systems Inc., a security company known for its eSafe antivirus software. "There's not a single server, there are multiple exploits, [and the e-mail] has no attachments. This will be very difficult to detect."

Two days ago, a Symantec honeypot captured a similar Web site-hosted attack that had an arsenal of exploits at its disposal. That attack, however, featured an unusual, if rudimentary, browser detector that sniffed out whether the target computer is running Microsoft's Internet Explorer (IE) or Mozilla Corp.'s Firefox. If the attack detects IE, it feeds the machine a Windows animated cursor exploit. If it finds Firefox, however, the sites spit out a QuickTime exploit.

A Bit of History, Reborn in a Glass
Rob Willey

LAST October, John Deragon began tinkering with a recipe for Abbott’s bitters, a cocktail ingredient that has beguiled drinks fanatics for years. Over the next two months, Mr. Deragon, the chief technology officer of Waterfront Media, an online health and wellness company in Brooklyn, tweaked the formula drop by drop, using single-spice infusions known as tinctures. After about 18 test runs, he had a version he thought he could work with, and by March he was aging his second batch in a five-gallon rye whiskey barrel purchased from a distillery in upstate New York.

His plan now, he explained recently, is to extract a small portion every two weeks to track the evolving interplay of wood and spice. All told, he has amassed enough tasting notes and recipe adjustments to fill four medium-size Moleskine notebooks.

The only problem is that Mr. Deragon has never tasted real Abbott’s bitters. The brand dissolved in the early 1950s, the original recipe is lost, and securing bottles of it on eBay can require a level of attention at odds with productive membership in society. His effort is based largely on the kind of techniques and experimentation usually practiced in a laboratory, not a home bar.

While Mr. Deragon’s quest to recreate a historical footnote is extreme, it speaks to a heightened interest in bitters, the generic term for the concentrated infusions of roots, herbs, barks, spices and alcohol called for in too many classic drinks to name. (You can start with the martini, the Manhattan, the Old-Fashioned, the Sazerac, the Champagne cocktail, the Martinez ...)

“It’s almost like glue that holds a cocktail together,” said Philip Ward, the head bartender at Death & Co., in the East Village, where 17 of the 37 house drinks include bitters. “Add a dash, and the other three or four ingredients in the cocktail are in some way going to be able to relate with at least one or two things in the bitters.”

The challenge is figuring out which bitters form the strongest bond in a given drink. “I think that’s why bitters are so cool,” Mr. Ward said. “You don’t really know what they do. You just find out what they do by using them.”

As new brands and flavors of bitters emerge, the equation becomes more complicated. Last August, a German company called the Bitter Truth started a line of lemon, orange, and aromatic bitters. (Orange bitters are infused with orange peel and an assortment of spices. Aromatic bitters tend to be richer and more complex, with heavier doses of cinnamon, clove and anise.)

Earlier this year, Marlow & Sons, a restaurant and gourmet market in Williamsburg, Brooklyn, began selling house-made Abbott’s bitters (since sold out) and citrus bitters, and is now planning a run of peach bitters and another round of Abbott’s.

In March, Fee Brothers, a company in Rochester, N.Y., known for its extensive line of cocktail bitters, introduced a limited-edition aromatic bitters, aged for one year in old whiskey barrels. Last month Angostura Ltd. — better known as the company that makes the yellow-capped bitters found in seemingly every grocery store in America — unveiled its long-rumored orange bitters. And bitters aficionados can always browse the extensive selection, for $2 to $16, at LeNell’s, a wine and spirits shop in Red Hook, Brooklyn.

For some bartenders, the retail surge is not enough. Jim Meehan, a bartender at Gramercy Tavern and the beverage director at PDT, a new cocktail bar in the East Village, said he feels underserved by the current bitters market, which, depending on how hard one feels like looking, numbers more than a dozen products. He said he plans to age his own aromatic bitters in a used three-gallon bourbon barrel procured from Mr. Deragon.

At Vessel, in Seattle, the bar manager, Jamie Boudreau, starts his cherry bitters by combining separate bourbon- and rye-based infusions with a touch of honey-flavored vodka and the Italian digestif amaro. He then ages the bitters in an oak cask rinsed with shiraz, filters them, and packages them in small glass bottles bearing an old-fashioned-sounding word of caution: “Imbibing more than a few drops may cause man to see things as they are, rather than as they should be.”

The allure of antiquity might begin to explain the remarkable devotion that Abbott’s bitters inspire. Ted Haigh, a Los Angeles-based graphic designer and drinks writer and historian known to many as Dr. Cocktail, became intrigued with Abbott’s — which he describes as similar to Angostura but with a more pronounced flavor of clove, nutmeg and cinnamon, plus a hint of anise — in the early 1990s, when he lucked into several bottles from roughly 1933.

His curiosity led him to two descendants of the company’s founder; a copy of the first corporate minutes, circa 1907; a pilgrimage to the original Abbott’s production site in Baltimore; and a lengthy interview with the company’s final owner, who dissolved the brand in the early 1950s because of sagging popular interest in drinks with bitters. And yet: “To my knowledge,” he said in an e-mail, “not a soul has the original recipe anymore.”

Thanks in large part to the combined interest of Mr. Haigh and Robert Hess, a director at Microsoft in Seattle and the founder of drinkboy.com, a Web site devoted to cocktails, debate about the lost recipe has been simmering online for years. (Mr. Hess, who owns 10 original bottles of Abbott’s, and whose personal digital assistant contains upwards of 4,000 cocktail recipes, has made what he calls House Bitters since 2002.)

Last fall, the conversation vaulted ahead when Kevin J. Verspoor, a perfumer at Fragrance Resources in Clifton, N.J., and a relative newcomer to the drinkboy.com discussion boards, posted the results of a gas chromatograph test he conducted on an unopened, Prohibition-era bottle from Mr. Hess’s collection.

“He had things in there that I never would have guessed — like tonka beans,” said Mr. Deragon, who based his initial recipe largely on Mr. Verspoor’s findings. (Tonka beans, with a scent reminiscent of vanilla, contain the blood-thinning chemical coumarin, and were banned as an additive by the Food and Drug Administration in 1954.)

On a recent evening, Mr. Deragon was enjoying a cocktail at Death & Co. when Mr. Meehan dropped by with some Peruvian bitters that he’d heard were crucial for pisco sours. Mr. Deragon seemed skeptical.

“I don’t know,” he said, taking a deep whiff of the Peruvian bitters, which tasted like Kahlua. “I might be moving out of the bitters and on to the vermouths. I feel like the bitters market is already saturated in terms of people making their own. I’m going to move on to the next big thing.”

Takes legal action even though her design and recipe were lifted from others

Chef Sues Over Intellectual Property (the Menu)
Pete Wells

Sometimes, Rebecca Charles wishes she were a little less influential.

She was, she asserts, the first chef in New York who took lobster rolls, fried clams and other sturdy utility players of New England seafood cookery and lifted them to all-star status on her menu. Since opening Pearl Oyster Bar in the West Village 10 years ago, she has ruefully watched the arrival of a string of restaurants she considers “knockoffs” of her own.

Yesterday she filed suit in Federal District Court in Manhattan against the latest and, she said, the most brazen of her imitators: Ed McFarland, chef and co-owner of Ed’s Lobster Bar in SoHo and her sous-chef at Pearl for six years.

The suit, which seeks unspecified financial damages from Mr. McFarland and the restaurant itself, charges that Ed’s Lobster Bar copies “each and every element” of Pearl Oyster Bar, including the white marble bar, the gray paint on the wainscoting, the chairs and bar stools with their wheat-straw backs, the packets of oyster crackers placed at each table setting and the dressing on the Caesar salad.

Mr. McFarland would not comment on the complaint, saying that he had not seen it yet. But he said that Ed’s Lobster Bar, which opened in March, was no imitator.

“I would say it’s a similar restaurant,” he said, “I would not say it’s a copy.”

Lawyers for Ms. Charles, 53, said that what Ed’s Lobster Bar had done amounted to theft of her intellectual property — the kind of claim more often seen in publishing and entertainment, or among giant restaurant chains protecting their brand.

In recent years, a handful of chefs and restaurateurs have invoked intellectual property concepts, including trademarks, patents and trade dress — the distinctive look and feel of a business — to defend their restaurants, their techniques and even their recipes, but most have stopped short of a courtroom. The Pearl Oyster Bar suit may be the most aggressive use of those concepts by the owner of a small restaurant. Some legal experts believe the number of cases will grow as chefs begin to think more like chief executives.

Charles Valauskas, a lawyer in Chicago who represents a number of restaurants and chefs in intellectual property matters, called their discovery of intellectual property law “long overdue” and attributed it to greater competition as well as the high cost of opening a restaurant.

“Now the stakes are so high,” he said. “The average restaurant can be millions of dollars. If I were an investor I’d want to do something to make sure my investment is protected.”

Ms. Charles’s investment was modest. She built Pearl Oyster Bar for about $120,000 — a cost that in today’s market qualifies as an early-bird special.

She acknowledged that Pearl was itself inspired by another narrow, unassuming place, Swan Oyster Depot in San Francisco. But she said she had spent many months making hundreds of small decisions about her restaurant’s look, feel and menu.

Those decisions made the place her own, she said, and were colored by her history. The paint scheme, for instance, was meant to evoke the seascape along the Maine coast where she spent summers as a girl.

“My restaurant is a personal reflection of me, my experience, my family,” she said. “That restaurant is me.”

Mr. McFarland, she said, had unfairly profited from all the thought she had put into building Pearl. “To have that handed to you, so you don’t have to make those decisions — it’s unfair,” she said.

But the detail that seems to gnaw at her most is a $7 appetizer on Mr. McFarland’s menu: “Ed’s Caesar.”

She has never eaten it, but she and her lawyers claim it is made from her own Caesar salad recipe, which calls for a coddled egg and English muffin croutons.

She learned it from her mother, who extracted it decades ago from the chef at a long-gone Los Angeles restaurant. It became a kind of signature at Pearl. And although she taught Mr. McFarland how to make it, she said she had guarded the recipe more closely than some restaurateurs watch their wine cellars.

“When I taught him, I said, ‘You will never make this anywhere else,’ ” she insisted. According to lawyers for Ms. Charles, the Caesar salad recipe is a trade secret and Mr. McFarland had no more business taking it with him after he left than a Coca-Cola employee entrusted with the formula for Diet Coke.

Mr. McFarland called the allegation that he was a Caesar salad thief “a pretty ridiculous claim.”

“I have my own recipes for my items,” he said.

Asked to elaborate on the differences between his restaurant and Pearl, Mr. McFarland said: “I’d say it’s a lot more upscale than Pearl. A lot neater, a lot cleaner and a lot nicer looking.” Ed’s Lobster Bar incorporates novel features like a raw bar and a skylight, he said; as for the white marble bar, he said one could be seen in “every raw bar” in Boston, where he had done “additional homework in designing the dining room.”

Calling the lawsuit “a complete shock to me,” Mr. McFarland went on to say: “I just find it interesting that she’d want to draw attention to the fact that she’s bringing a lawsuit against me that’s just going to bring more business my way. I personally have nothing to be concerned about, in my opinion.”

Other chefs, however, are taking intellectual property rights seriously.

One of Mr. Valauskas’s clients, Homaro Cantu, has applied for patents on a number of his culinary inventions, like a method for printing pictures of food on flavored, edible paper. Mr. Cantu also makes his cooks sign a nondisclosure agreement before they so much as boil water at Moto, his restaurant in Chicago.

Tim Wu, a professor at Columbia Law School, said that this almost seemed an inevitable result of bringing lawyers into the kitchen. “The first thing a lawyer would say is have all your people sign nondisclosure agreements,” he said. “It’s a classic American marriage between food and law.”

Few chefs have followed Mr. Cantu’s footsteps all the way to the Patent and Trademark Office. One who did is David Burke, the chef at David Burke & Donatella, on the Upper East Side and other restaurants. He said he had trademarked a “swordfish chop” and “salmon pastrami” but no longer tried to defend those terms from copycats.

“You’ve got to chase people down if they use it. I got tired of it,” he said. But he said he still applied for trademarks on more recent innovations, like his bacon-flavored spray.

Many chefs are skeptical that intellectual property law conforms to their line of work. Tom Colicchio said that he had decided not to do anything about a sandwich shop that he considers a clone of his sandwich chain, ’Wichcraft. “There’s nothing you can do,” he said. “You can’t protect recipes, you can’t protect what a place looks like, it’s impossible.”

But Ms. Charles is willing to spend some time and money to prove her point. (She once sued the partner she opened Pearl with, Mary Redding, in an ownership dispute. Ms. Redding went on to open her own West Village seafood restaurant, Mary’s Fish Camp.)

Ms. Charles has come to think that if this case forces Ed’s Lobster Bar to change until it no longer resembles Pearl Oyster Bar, it could be the most influential thing she has ever done.

“I thought if I could have success with this lawsuit, that could be an important contribution,” she said. “If some guy in California is having problems, he could go to his lawyer and look at this case and say, ‘Maybe we can do something about it.’ ”

Voilà! A Rat for All Seasonings
A. O. Scott

The moral of “Ratatouille” is delivered by a critic: a gaunt, unsmiling fellow named Anton Ego who composes his acidic notices in a coffin-shaped room and who speaks in the parched baritone of Peter O’Toole. “Not everyone can be a great artist,” Mr. Ego muses. “But a great artist can come from anywhere.”

Quite so. Written and directed by Brad Bird and displaying the usual meticulousness associated with the Pixar brand, “Ratatouille” is a nearly flawless piece of popular art, as well as one of the most persuasive portraits of an artist ever committed to film. It provides the kind of deep, transporting pleasure, at once simple and sophisticated, that movies at their best have always promised.

Its sensibility, implicit in Mr. Ego’s aphorism, is both exuberantly democratic and unabashedly elitist, defending good taste and aesthetic accomplishment not as snobbish entitlements but as universal ideals. Like “The Incredibles,” Mr. Bird’s earlier film for Pixar, “Ratatouille” celebrates the passionate, sometimes aggressive pursuit of excellence, an impulse it also exemplifies.

The hero (and perhaps Mr. Bird’s alter ego) is Remy (Patton Oswalt), a young rat who lives somewhere in the French countryside and conceives a passion for fine cooking. Raised by garbage-eaters, he is drawn toward a more exalted notion of food by the sensitivity of his own palate and by the example of Auguste Gusteau (Brad Garrett), a famous chef who insists — more in the manner of Julia Child than of his real-life haute cuisine counterparts — that “anyone can cook.”

What Remy discovers is that anyone, including his uncultured brother, can be taught to appreciate intense and unusual flavors. (How to translate the reactions of the nose and tongue by means of sound and image is a more daunting challenge, one that the filmmakers, including Michael Giacchino, author of the marvelous musical score, meet with effortless ingenuity.) Remy’s budding culinary vocation sets him on a lonely course, separating him from his clannish, philistine family and sending him off, like so many young men from the provinces before him, to seek his fortune in Paris. That city, from cobblestones to rooftops, is brilliantly imagined by the animators.

And, as usual in a Pixar movie, a whole new realm of physical texture and sensory detail has been conquered for animation. “Finding Nemo” found warmth in the cold-blooded, scaly creatures of the deep; “Cars” brought inert metal to life. At first glance, “Ratatouille” may look less groundbreaking, since talking furry rodents are hardly a novelty in cartoons. But the innovations are nonetheless there, in the fine grain of every image: in the matted look of wet rat fur and the bright scratches in the patina of well-used copper pots, in the beads of moisture on the surface of cut vegetables and the sauce-stained fabric of cooks’ aprons.

Individually, the rats are appealing enough, but the sight of dozens of them swarming through pantries and kitchens is appropriately icky, and Mr. Bird acknowledges that interspecies understanding may have its limits.

Perhaps because animation, especially the modern computer-assisted variety, is the work of so many hands and the product of so much invested capital, we are used to identifying animated movies with their corporate authors: Disney, DreamWorks, Pixar and so on. But while the visual effects in “Ratatouille” show a recognizable company stamp, the sensibility that governs the story is unmistakably Mr. Bird’s. A veteran of “The Simpsons” and a journeyman writer for movies and television, he has emerged as an original and provocative voice in American filmmaking.

He is also, at least implicitly, a severe critic of the laziness and mediocrity that characterize so much popular culture. He criticizes partly by example, by avoiding the usual kid-movie clichés and demonstrating that a clear, accessible story can also be thoughtful and unpredictable. “Ratatouille” features no annoying sidekick and no obtrusive celebrity voice-work, and while Remy is cute, he can also be prickly, demanding and insecure.

Moreover, his basic moral conflict — between family obligation and individual ambition — is handled with unusual subtlety and complexity, so that the reassurances and resolutions of the movie’s end feel earned rather than predetermined.

And while the film buzzes with eye-pleasing action and incident — wild chases, hairbreadth escapes, the frenzied choreography of a busy kitchen — it does not try to overwhelm its audience with excessive noise and sensation. Instead Mr. Bird integrates story and spectacle with the light, sure touch that Vincente Minnelli brought to his best musicals and interweaves the tale of Remy’s career with beguiling subplots and curious characters.

Since no Parisian restaurant will let a rat work in its kitchen, Remy strikes a deal with a hapless low-level worker named Linguini (Lou Romano), who executes Remy’s recipes by means of an ingenious (and hilarious) form of under-the-toque puppetry. Linguini’s second mentor is Colette (Janeane Garofalo), a tough sous-chef who unwittingly becomes the rodent’s rival for Linguini’s allegiance. Even minor figures — assistant cooks, waiters, a hapless health inspector — show remarkable individuality.

At stake in “Ratatouille” is not only Remy’s ambition but also the hallowed legacy of Gusteau, whose ghost occasionally floats before Remy’s eyes and whose restaurant is in decline. Part of the problem is Gusteau’s successor, Skinner (Ian Holm), who is using the master’s name and reputation to market a line of mass-produced frozen dinners.

Against him, Remy and Mr. Bird take a stand in defense of an artisanal approach that values both tradition and individual talent: classic recipes renewed by bold, creative execution. The movie’s grand climax, and the source of its title, is the preparation of a rustic dish made of common vegetables — a dish made with ardor and inspiration and placed, as it happens, before a critic.

And what, faced with such a ratatouille, is a critic supposed to say? Sometimes the best response is the simplest. Sometimes “thank you” is enough.


Opens today nationwide.

Directed by Brad Bird; written by Mr. Bird, based on a story by Jan Pinkava, Jim Capobianco and Mr. Bird; director of photography/lighting, Sharon Calahan; director of photography/camera, Robert Anderson; supervising animators, Dylan Brown and Mark Walsh; edited by Darren Holmes; music by Michael Giacchino; production designer, Harley Jessup; produced by Brad Lewis; released by Walt Disney Pictures and Pixar Animation Studios. Running time: 110 minutes. This film is rated G.

WITH THE VOICES OF: Patton Oswalt (Remy), Ian Holm (Skinner), Lou Romano (Linguini), Brian Dennehy (Django), Peter Sohn (Emile), Brad Garrett (Auguste Gusteau), Janeane Garofalo (Colette) and Peter O’Toole (Anton Ego).

From December

FILM; For Disney, Something Old (and Short) Is New Again
Charles Solomon

MOVIEGOERS who have become inured to pre-show car ads and trivia quizzes may soon get something old enough to seem new: cartoon shorts.

After a hiatus of nearly 50 years, Walt Disney Studios is getting back into the business of producing short cartoons, starting with a Goofy vehicle next year. The studio has released a few shorts in recent years -- ''Destino,'' ''Lorenzo'' and ''The Little Match Girl'' -- but those were more artistic exercise than commercial endeavor. The new cartoons, by contrast, are an effort by a new leadership team from Pixar Animation Studios, now a Disney unit, to put the Burbank company back at the forefront of animation with a form it once pioneered.

''The impetus comes from John Lasseter, who takes the idea from Walt Disney and 100 years of film history,'' said Don Hahn, producer of ''The Lion King'' and ''The Little Match Girl,'' in a recent interview at his studio office. ''Shorts have always been a wellspring of techniques, ideas and young talent. It's exactly what Walt did, because it's a new studio now, with new talent coming up -- as it should. I think the shorts program can really grow this studio as it grew Pixar, as it grew Walt's studio.''

Although audiences today are more familiar with his feature films, Walt Disney's reputation was originally built on shorts. In the 1930s ''A Mickey Mouse Cartoon'' appeared on theater marquees with the titles of the features, and Disney won 10 Oscars for cartoon shorts between 1932 and 1942. He used the ''Silly Symphonies'' to train his artists as they geared up to create ''Snow White and the Seven Dwarfs.'' But after World War II Disney phased out short cartoons because of rising production costs and the minimal amount theater owners would pay for them.

Mr. Hahn said the new shorts would be screened in theaters along with Disney films. ''You pay your 10 bucks to see a movie,'' he said, ''and you get a surprise you hadn't counted on.'' The new shorts will be done in traditional 2-D animation, computer graphics or a combination of the two media, depending on the story and the visual style.

This is not the first attempt at such a revival. Warner Brothers, for example, tried to bring back the classic Looney Tunes characters in new shorts in 2003, but they proved unsuccessful and most of them were never screened theatrically.

Chuck Williams, a veteran story artist who will produce the new films for Disney, said they do not have to become a profit center in order to perform a real commercial function.

''They allow you to develop new talent,'' Mr. Williams said in an interview at the Disney studios. ''Shorts are your farm team, where the new directors and art directors are going to come from. Instead of taking a chance on an $80 million feature with a first-time director, art director or head of story, you can spend a fraction of that on a short and see what they can do.''

It is not surprising that Mr. Lasseter is using short films to train and test the artists: he and his fellow Pixar animators spent almost 10 years making shorts, learning how to use computer graphics effectively before they made ''Toy Story'' and the string of hits that followed. Pixar continues to produce a cartoon short every year, and has won Oscars for the shorts ''Tin Toy,'' ''Geri's Game'' and ''For the Birds.''

Four new shorts are in development at Disney: ''The Ballad of Nessie,'' a stylized account of the origin of the Loch Ness monster; ''Golgo's Guest,'' about a meeting between a Russian frontier guard and an extraterrestrial; ''Prep and Landing,'' in which two inept elves ready a house for Santa's visit; and ''How to Install Your Home Theater,'' the return of Goofy's popular ''How to'' shorts of the '40s and '50s, in which a deadpan narrator explains how to play a sport or execute a task, while Goofy attempts to demonstrate -- with disastrous results. The new Goofy short is slated to go into production early next year.

The idea for ''Home Theater'' came from the experience Kevin Deters, one of its two directors, had buying a large-screen TV. ''For years I've been saying to my wife, let's get a nice, large TV, because I've been suffering with a 30-inch screen,'' he said. ''She finally acquiesced around the time of the Super Bowl. When we went shopping, we discovered the stores had 'Delivery in Time for the Big Game!' and similar promotions, some of which appear in the film.''

Over the years the studio has tried unsuccessfully to update the classic characters. Mr. Deters and his co-director, Stevie Wermers, for instance, unhappily recalled ''Disco Mickey,'' the 1979 album that suggested the trademark mouse could boogie like John Travolta. The cover featured Mickey in a white suit and open shirt, swinging his hips.

''You don't want to put Goofy on a skateboard,'' Mr. Deters said. ''There's no reason to attempt to make him hip and cool. Goofy isn't cool. He's the ultimate domesticated man, as the 'How to' shorts showed. I relate very well to him as the guy who's sort of a schlub on his couch.''

''How to Install Your Home Theater'' will be made with a fairly small crew: despite the triumph of computer animation, Disney still has a number of talented traditional animators who are eager to draw again.

''The Goofy short will be very funny, but we won't have to spend a lot of money and time on it, which won't diminish it one bit,'' Mr. Hahn said. ''Obviously there's a financial component to these films. We have to make them responsibly. But the big investment is for the long haul. We're saying we believe in new talent and new techniques, and they'll pay dividends in 10 to 20 years, just as we're reaping the benefits now from the investment we made 25 years ago, training John Lasseter and Andrew Stanton and Tim Burton and John Musker and Ron Clemmons.''

Disney also intends the new talent to reflect an increasingly diverse work force. For most of its 100-year history American animation has been the creation of male artists, a situation that is slowly changing.

''It's kind of shocking to realize that once the Goofy short gets made, I'll officially be the first woman director at Disney Feature Animation,'' Ms. Wermers said. ''Considering that probably more than 50 percent of the audience for the short will be female, because of moms taking the kids, there should be more female voices out there.''

Ms. Wermers is not alone in her sense that Mr. Lasseter and his fellow Pixar alumni are already having an impact.

''I feel Disney is a very different place than it was a year ago,'' said Chris Williams, a story artist who is developing ''Golgo's Guest'' and ''Prep and Landing,'' ''and the shorts program is just part of that. It's become a very exciting place to work.''

Correction: December 24, 2006, Sunday An article on Dec. 3 about new animated shorts from Walt Disney Studios referred incorrectly to the last time the studio produced such films. The company has made short cartoons in recent decades; it has not been nearly 50 years since the last one.

In Pursuit of Perfect TV Color, With L.E.D.’s and Lasers
Anne Eisenberg

HIGH-DEFINITION television sets grow ever more sophisticated, but the colors on many of the screens are still created the old-time way: with tubes or bulbs that give off white light that is filtered into primary colors and remixed.

Now, several manufacturers are replacing these bulbs with lasers and light-emitting diodes, or L.E.D.’s. These lasers and L.E.D.’s do not beam white light, but rather its three basic building blocks: red, green and blue. Beams are emitted in a narrow band of wavelengths very close to those of single, pure colors, giving off the brilliant, saturated red of a blazing sunset or the shimmering, luminous blue of a rainbow.

Beam these three primary colors in varying intensities at the same spot on a television screen, and a palette of hues can be created in a wider range than in TVs without this technology.

The new lighting is already built into a handful of commercial TV sets. Last year, Samsung Electronics America, of Ridgefield Park, N.J., introduced its first TV with L.E.D.’s. This year, the company has added six more, all large-screen, high-definition models.

The L.E.D.’s within the sets, which are all rear-projection models, are made by Luminus Devices, of Woburn, Mass. They emit beams of red, green or blue light when current is passed through the semiconductor chips that house them. The L.E.D.’s are expected to last the lifetime of the TV, unlike the bulbs typically used in these rear-projection TVs, which must typically be replaced every few years at a cost of about $200 to $350.

Laser TVs, unlike L.E.D. models, are not yet on the commercial market, but several manufacturers have demonstrated them at trade shows. Frank DeMartin, vice president for marketing and product development at Mitsubishi Digital Electronics America in Irvine, Calif., said the company would show a large-screen laser TV at the Consumer Electronics Show in Las Vegas next January. “It will spawn a new category for the premium end of the market,” he said.

The distinctive range of colors produced by lasers and L.E.D.’s may provide a competitive edge for rear-projection TVs, which have steadily lost market share to plasma and liquid crystal display models, said Paul Semenza, vice president for display research at iSuppli, a market research firm based in El Segundo, Calif.

ISuppli expects that 5.3 million rear-projection sets will be sold worldwide this year, making them the smallest segment of the TV market. In contrast, 74 million L.C.D. sets and 11 million plasma sets are projected to be sold, Mr. Semenza said.

Large-screen rear-projection TVs traditionally cost less than L.C.D. or plasma models with similar sizes of screens, but the rear-projection TVs are as much as 10 inches deeper.

“Consumers like thin,” Mr. Semenza said. “But innovation in color could stave off the competition.”

Consumers may also appreciate the longevity of L.E.D.’s and lasers in rear-projection TVs, compared with the bulbs they are replacing. Rear-projection sets are typically lit by high-pressure white-light mercury lamps. “After a year or two, the lamp goes out,” Mr. Semenza said. “You spend $3,000 on the TV and then have to buy a light bulb for $300.”

L.E.D.’s and lasers offer a more efficient design. “With light bulbs, you have violent high-voltage arcs across the metal electrodes,” he said. “Eventually the bulb fails because metal from the electrodes is knocked off.”

For the first Samsung model with L.E.D.’s, viewers paid a premium of $1,200 above the price of a similar model with standard lighting, said Dan Schinasi, senior marketing manager for HDTV product planning at Samsung. “This year the premium dropped to $300,” he said, “and as the year goes on, we’re hopeful the premiums will shrink even more.”

The L.E.D.’s are in sets with screens of 50 inches (Model HL-T5087S, $2,299); 56 inches (HL-T5687S, $2,599), and 61 inches (HL-T6187S, $2,999), among others.

The sets use Luminus PhlatLight-brand L.E.D.’s. The red, blue, and green beams illuminate a Texas Instruments digital light processing chip where the image is created. This is a more direct method than starting with a white light source and filtering it into primary colors for recombination, said Chris Chinnock, president of Insight Media, a market research firm in Norwalk, Conn.

“You start with pure spectral colors and mix them very efficiently,” he said.

Lasers promise an even wider range of colors than L.E.D.’s, Mr. Chinnock said. “The lasers produce extremely saturated colors — the red is very red.” In contrast, he said, the red in many displays has a lot of orange in it. Because of that limitation, it is harder to show the range of shades that the eye can see, for example, between red and orange.

LASER light may also help rear-projection sets become thinner. “You can create some different architectures in how the light is folded and managed inside the TV,” Mr. Chinnock said, “so that you could potentially get a rear-projection laser TV that’s 6 to 8 inches deep.”

One of the lasers widely demonstrated at trade shows is made by Novalux, based in Sunnyvale, Calif. “The lasers will be able to give more than 90 percent of the color range that our eyes can see,” said Jean-Michel Pelaprat, chief executive of Novalux. “That’s not available from plasma displays and L.C.D.’s, whose color gamut reaches only 40 percent and 35 percent, respectively.”

L.C.D. televisions, too, may soon be affected by the new light sources, Mr. Chinnock of Insight Media said. The next step may be to eliminate the cold cathode fluorescent lamps that illuminate the sets from the back.

“The idea is to replace these lamps with a laser or L.E.D. light source in the back, and get much better color saturation,” he said.

Mr. Schinasi of Samsung said the company was interested in lasers as a light source but was sticking with L.E.D.’s for now. “The L.E.D.’s are getting at least 30 percent brightness boosts every year,” he said. “If that continues, we might not need lasers even for the 67-inch and 72-inch screens.”

Mr. DeMartin of Mitsubishi said he was holding out for lasers. “The bottom line is that the L.E.D.’s can’t reproduce some of the truly deep greens and reds as well as the laser,” he said. “The laser can do this better.”

A Brave New World for TV? Virtually
Dave Itzkoff

IF you can find him, Vincent Tibbett is precisely the sort of well-connected cultural liaison any emerging filmmaker should want to know. An employee of the Sundance Channel, he is as easily recognizable for his shaggy haircut and assertively casual attire as he is for the crowds of aspiring artists who follow him around, hoping to chat him up about cinematic trends, get him to evaluate their movies or simply score his e-mail address.

But if Mr. Tibbett seems a bit harder to pin down for a lunch date than the average in-demand tastemaker, that’s because he doesn’t exist on our plane of reality. He is an electronic avatar found only in Second Life, the popular online virtual community.
Just six months old, Mr. Tibbett is one experiment in the Sundance Channel’s larger exploration of Internet-based virtual reality, a sort of canary down the mine shaft of a new technology that may or may not take hold among mainstream audiences.

And he is not alone. In the last year broadcast networks, cable channels and television content providers have all set up camp in virtual communities, where they hope that viewers who have forsaken television for computer screens might rediscover their programming online. Some outlets, like Showtime and Sundance, are establishing themselves in existing worlds; others, like MTV, are creating their own. Either way, if the wildest dreams of some very excited technology developers come true, virtual reality might finally be the medium that unites the passive experience of watching television with the interactive potential of the Web.

If that happens, the television industry — which has not been particularly speedy in adapting to the Internet revolution — sees an opportunity not only to recover lost ground from online competitors but also to take a lead, and in so doing create an entirely new environment in which to influence and sell to its audience.

“You want to be in this because you know, as a content provider, that this is where the future is going,” said Quincy Smith, the president of CBS Interactive. “I don’t look at it as science fiction. I look at it as the future of communication.”

For decades ambitious programmers and designers have sought to establish virtual worlds like the one put forth in Neal Stephenson’s influential 1992 novel, “Snow Crash,” which imagines computer users interacting in a simulated three-dimensional world called the Metaverse. But only in recent years, as graphics-accelerator cards and broadband Internet connections have grown more affordable and ubiquitous, has it become possible even to approximate such an experience.

IN Second Life (secondlife.com), visitors to the Sundance Channel area can watch full-length feature films in a three-dimensional screening room or take part in an environmental forum; fans of Showtime’s drama “The L Word” can meet the avatars of the show’s stars and design their own floats for a virtual gay pride parade. In MTV’s Virtual Laguna Beach (at vmtv.com) inhabitants can shop at digital versions of Emporio Optic and Laguna Surf and Sport or, at the click of a mouse, arrive in a virtual version of “The Hills,” where they can then join the party at an electronic replica of the Los Angeles nightclub Area.

Pre-teenage viewers have a virtual playground to call their own too: Nicktropolis (nick.com/nicktropolis). Nickelodeon’s two-dimensional community allows children (with parents’ permission) to play virtual basketball, watch Nickelodeon shows, douse themselves in digital green slime and chat with SpongeBob SquarePants.

To a generation that has grown up with multiplayer online role-playing games like EverQuest and World of Warcraft, the interfaces of environments like Second Life and Virtual Laguna Beach will seem familiar: Users create for themselves a personalized three-dimensional representative called an avatar and are then set loose to explore the world and connect with other avatars.

But it’s not just video game players who are signing up for virtual communities. Virtual Laguna Beach, introduced in the fall of 2006, claims nearly 890,000 registered users, primarily in the their teens or early 20s; Nicktropolis, which started in January, claims almost four million registered users, with a core audience between 6 and 14 years old; and the Sundance Channel’s Second Life content attracts users between 25 and 54. (The average age of the more than 6.9 million inhabitants on Second Life is 32.)

As broadcasters and media companies have entered virtual spaces, among the earliest content they have provided residents has been, not surprisingly, television programming, which inhabitants can watch on two-dimensional movie and television screens that appear throughout the world. “It’s obvious, but it gets fun,” said Sibley Verbeck, the chief executive of the Electric Sheep Company, which creates programs and content for virtual worlds. “It starts being a more social experience.”

As an example Mr. Verbeck pointed to a Second Life island his company created for Major League Baseball last summer where users could mingle during the All-Star Game and watch the home run derby. “People who came to mlb.com and watched online stayed for about, on average, 19 minutes,” Mr. Verbeck said. “Whereas the people who came into Second Life, mainly to talk to each other and be in a crowd, they stayed for an average of two hours.”

At minimum broadcasters want a presence in these virtual worlds because they know that significant numbers of their viewers are already visiting them. “We have to take our content to the community,” Mr. Smith of CBS said. “We have to take it where the users are already.”

Additionally television programmers see the games and social activities within their online communities as an opportunity for viewers — whether they are designing and selling their own fashion lines on Virtual Laguna Beach or building and wrecking cars on Virtual Pimp My Ride — to continue to engage with their brands long after the shows themselves are over.

But the television companies aren’t the only entities creating content for these worlds. In open virtual communities like Second Life, which allow users access to the underlying computer code from which their universe is built, anyone who is sufficiently handy with 3-D graphics programs is free to design amusement park rides, pirate galleons or anything else that can be dreamed up, and to incorporate them into the environment.

The proprietors of these worlds say this freedom has profoundly altered the way their users experience the medium of television. “Television has created a public opinion that we are mostly consumers and not very creative,” said Philip Rosedale, the founder and chief executive of Linden Lab, whose company started Second Life in 2003. “But that’s simply an artifact of the technology of television. If people are given the ability to co-create, to make something using the pieces and parts of media, they will do it.”

Already philosophical fissures have developed between the start-up companies offering open and unrestricted virtual worlds and the media giants that provide more closely moderated experiences.

Naturally, the people behind Second Life maintain that there is no such thing as too much autonomy. “We’re free and crazy and chaotic,” Mr. Rosedale said. “They’re too controlled.”

And the designers of MTV’s virtual spaces say that people prefer some rules and some guidance. “You just need to have the right blend,” said Michael K. Wilson, the chief executive officer of Makena Technologies, which helped to create MTV’s virtual properties and operates There, an independent virtual community (there.com). “You can’t make a comfortable world if at any time you could be accosted by somebody that was naked.”

There is at least one additional benefit that the media companies derive from their controlled environment. Just as real-world corporations like Reebok and American Apparel have established virtual stores in Second Life, so too has MTV courted advertisers to its online universe. PepsiCo, for example, set up soda machines in Virtual Laguna Beach from which avatars could purchase and drink cans of digital cola.

And in return MTV can provide its sponsors with excruciatingly precise measurements of advertising data. For example, if a real-world athletics company builds a simulated shoe store in Virtual Laguna Beach, MTV can measure how many users stopped to look at the store, how many of those users went inside the store, how many users bought a particular pair of virtual sneakers, and then how many of those users ordered the same sneakers for themselves in real life.

“It’s scary actually,” said Jeff Yapp, an executive vice president of program enterprises for MTV Networks’ music group. “It’s almost Google on steroids.”

FOR the media giants who missed out on the benefits of landscape-shifting online properties like MySpace and YouTube, virtual reality may be most valuable as a medium that can offer the combined benefits of a social-networking Web site and a video-sharing Web site, and might one day surpass both those technologies. (Tellingly, MTV developed its virtual worlds in a project code-named Leapfrog.)

“Suddenly, more than ever, these media companies are ready to innovate,” Mr. Verbeck said. “They’re trying to transform themselves into companies that can evolve with new technology.”

And some particularly evangelical advocates of virtual reality foresee major evolutions occurring in less than a decade. “The entertainment experience that people have in 10 years will be substantially interactive,” Mr. Rosedale said. “The argument that television will remain the dominant way we all use discretionary time, that is nonsense. That is over.”

But other veterans of virtual-reality development are skeptical about the technology’s potential for mass appeal. For more than 20 years F. Randall Farmer, a strategic analyst at Yahoo, has worked on numerous online communities, from Lucasfilm’s Habitat, a rudimentary 1980s-era attempt at virtual reality, to current offerings like Second Life and The Sims Online. He also contributes to a blog called Habitat Chronicles (fudco.com/habitat), where he frequently airs his doubts about virtual reality’s suitability to replace the existing World Wide Web.

“It’s not going to change the fact that the best way for me to interact with my bank today is a Web site where it tells me my balance, and I push this button called transfer, and type in a number, and it moves between the two accounts,” Mr. Farmer said in a telephone interview.

Still, Mr. Farmer said virtual reality could help programmers strengthen viewer loyalty to their shows through more limited interactive experiences. “I’m thinking more like an adjunct episode to a mystery-detective show,” he said, “where you and your friends can go in and play the major characters in ‘CSI,’ and you solve the mystery together. But those are very constrained experiences.”

Before that can happen, the virtual-world-building business has some real-life obstacles to confront. Its creators acknowledge that they need to make their worlds more user-friendly and their avatars easier to design.

And they expect to see a boom-and-bust cycle, much like in the earliest days of the Web, after which only a few providers of virtual-reality communities will survive. MTV Networks is already building another virtual community of interconnected music clubs modeled on downtown Manhattan, called Virtual Lower East Side (vles.com). CBS has contemplated the idea of creating a virtual world based on the “Star Trek” franchise.

In theory there is no reason that monolithic corporations with the resources and the technological know-how — a Time Warner or an NBC Universal — could not be among those left standing. But as the past history of the Internet suggests, it is rarely the company with the most money that rises to become the leader in an emerging field.

“There is no chance that a traditional media company can build this,” said Mr. Smith of CBS, whose network recently participated in a $7 million dollar investment in Electric Sheep. “It’s just as much about technology as it is about understanding a mass audience, and it’s naïve to assume we can just go out and build it.”

In the meantime some optimistic players in the virtual arena say that broadcast television and virtual reality need not cannibalize each other, and might someday learn to work together.

“Virtual worlds, when they’re done well, they’re taking people who watch 20 hours of television a week and turning them into people who spend 30 hours a week in the virtual world,” Mr. Verbeck said. “I’ve never been involved with a technology where you can make people say ‘Aha!’ so consistently.”

Neuros’ Open Set-Top-Box
Steve O'Hear

Media streaming boxes such as the AppleTV, XBox 360, PS3, and products from Netgear, do a varying job of bridging the gap between the PC and television, as well as in some cases, delivering Internet content directly into the living room. But all are closed systems. The result of which is that users are left trying to hack these devices against the wishes of manufacturers (see our post ‘When will Steve Jobs open up the AppleTV?‘) or have to make-do with whatever official features are implemented. Bucking this trend, Neuros is taking a wholly different approach, and has open-sourced the firmware for it’s Neuros OSD media-center, meaning that anybody is free to write add-ons that extend the device’s functionality.

The Neuros OSD is a versatile box that can act as a Digital Video Recorder capable of recording from virtually any source (cable or satellite TV, DVD, DVR/TiVoTM, VCR, game console, camcorder, etc), as well as stream and share video, music and photos between various devices including home entertainment centers, PCs and portables such as laptops, iPods, smartphones, and the PSP.

Open letter to developers

As already stated, the key differentiator of Neuros’ strategy is that the company actively supports developers who want to ‘hack’ the device to create new features. Last April, in an effort to cash in on publicity surrounding the AppleTV, Neuros wrote an open letter to those that had already begun hacking Apple’s set-top-box.

“We have watched with great interest as you have begun to hack the AppleTV, and we applaud your skill and willingness to make your CE devices play new formats, adopt new functionality, and have more capacity. With the quality of the people in your group, there is no doubt you will accomplish a great deal with this device – whether its creator wants you to or not…

Unlike other manufacturers who typically ignore or may even try to suppress or undermine your contributions, we at Neuros rely on them. Your contributions can get quickly incorporated in our official releases, and you will have a say in the creation of future generations of our devices and the ability to work side by side with our internal engineering team.”

YouTube access — the first of many open-source efforts

The big news this week from Neuros HQ was that — thanks to the open-source community’s efforts — users are now able to search and browse the entire YouTube catalog directly from the device. The first version of YouTube support is, understandably, a bit rough around the edges, and has been released early in an effort to get feedback from users. Improvements in the pipeline include a better interface, and added functionality such as sharing and subscriptions.

Neuros says that this is the first of many new features we can expect to be added to the device, thanks to the way in which the company is working in conjunction with the open-source community.

Activist Organization Responsible for 99% of FCC Complaints
Ken Fisher

Yesterday, Gene Jockey let the Ars Soap Box know about a report that I think many of you will find interesting. You may recall that the past few years have been banner years for the FCC, at least in terms of censorship, imposing fines, and warning networks about their proposed television content. You may have also heard that in recent years complaints about TV have gone through the roof, from a mere 350 complaints in 2000 to a whopping 240,000 in 2003, and potentially even more this year. It has long been through that the advent of reality TV and the onset of "loose morals" in TV have pushed conservatives over the edge. And you know what, it's true. The problem is that, unfortunately, these massive numbers all boil down to one politically motivated group with an axe to grind. Hold on to your hat, folks.

According to a new FCC estimate obtained by Mediaweek, nearly all indecency complaints in 2003—99.8 percent—were filed by the Parents Television Council, an activist group. This year, the trend has continued, and perhaps intensified. Through early October, 99.9 percent of indecency complaints—aside from those concerning the Janet Jackson “wardrobe malfunction” during the Super Bowl halftime show broadcast on CBS— were brought by the PTC, according to the FCC analysis dated Oct. 1.

The FCC has insisted that the quantity of reports is not weighed when addressing complaints, but this is somewhat contradicted by the fact that the FCC only responds to complaints, as they do not actively monitor what's on TV. As such, the quantity of reports is key, because things are being reported that normally were not, and that puts the FCC on the trail of investigation.

Of course, the FCC still argues that if there has been no foul, then there's nothing to worry about. The problem, of course, is that the the number of complaints has been used to calculate and justify fines for borderline issues, as with Fox's doomed (and idiotic) Married by America.

For example, the agency on Oct. 12, in proposing fines of nearly $1.2 million against Fox Broadcasting and its affiliates, said it received 159 complaints against Married by America, which featured strippers partly obscured by pixilation. But when asked, the FCC’s Enforcement Bureau said it could find only 90 complaints from 23 individuals... And Fox, in a filing last Friday, told the FCC that it should rescind the proposed fines, in part because the low number of complaints fell far short of indicating that community standards had been violated. “All but four of the complaints were identical…and only one complainant professed even to have watched the program,” Fox said.

So, the number clearly does matter, because it is used a as justification for fines, they are used to determine which issues to pursue, and they are centrally coordinated to the extent that many of the complainants have not actually even viewed the material in question.

What's clear is that the FCC needs to account for this centrally organized spamming of complaints. The Parents Television Council takes as one of its aims the generation of fake complaints, and this must be addressed. For example, the PTC maintains a list of the worst shows on TV each week, replete with reports on the shows' content that's hardly objective. Is it a surprise that people then complain about a show they've never even watched? The FCC has responded, in part, by counting identical complaints as just one set of complaints. This doesn't make make the activists happy, however.

The PTC today called for a Congressional investigation of the FCC because they, oh the horror!, don't accept automatically generated spam complaints as totally legit, trustworthy complaints.

"We are calling for a Congressional investigation of the FCC over its accounting practices. While we're pleased that the FCC has calculated that PTC members have filed an overwhelming majority of indecency complaints in the last two years, the FCC's count is utterly deceptive," said L. Brent Bozell, president of the PTC.

The deception they charge, in part, is relating to the FCC's claim that the majority of these complaints come from the PTC rather than other "family-oriented" groups. They would like more groups to get credit also, which I suppose qualifies as deception only if you want to avoid the appearance of not actually representing grassroots efforts.

The Human Touch That May Loosen Google’s Grip
Randall Stross

ONCE upon a time, the most valuable secret formula in American business was Coca-Cola’s. Today, it’s Google’s master algorithm.

In the search business, however, there’s no rival to play the role of Pepsi. Yahoo is the closest but still a distant No. 2, and Google earns more profits in a single quarter than Yahoo does in a year. This may have had a bearing on the recent departure of Yahoo’s chief technology officer, its chief operating officer and, last week, its chief executive. Microsoft, an even more distant No. 3 in the search competition, can’t keep up with Google, even with $28 billion of cash in its pockets at the end of March.

The fumbling of Google’s largest challengers, however, has not dampened the enthusiasm of entrepreneurs and venture capitalists for entering the search game. The combination of low start-up costs and potentially huge profit makes it seem a reasonable bet.

Developing a search algorithm can be accomplished by very small teams. It was a team of two — Larry Page and Sergey Brin, the founders of Google — who developed a new and improved search algorithm. They beat out Alta Vista, whose search engine was developed by seven people at the Digital Equipment Corporation.

Profit margins in the search business are mind-boggling, and cannot be obtained in other segments of the technology world. Google’s net profit margin last year was 29 percent. Amazon’s was 1.8 percent — yes, that is a “1” followed by a decimal point. Which business would you rather be in?

Even gathering the crumbs of business left behind by Google could generate a lofty market capitalization. Don Dodge, a Microsoft manager who works outside of the company’s search group, made this argument in a post on his personal blog last month: “Why 1% of Search Market Share Is Worth Over $1 Billion.” Mr. Dodge reasoned that 1 percent of the 7.3 billion searches performed in the United States in March, multiplied by 12 cents in advertising revenue per search, would yield annualized revenue of $105 million. Assuming a market cap that is 10 times revenue, his arithmetic leads to a billion-dollar company.

Here is another attraction: Any company that offers a superior search service would be able to poach the customers of everyone else. No long-term contracts keep Google users in place. In addition, even though each search engine conducts a search in its own way, users do the same thing — typing in a word or a phrase — no matter which service they are using. Therefore, no daunting learning curve will frighten customers who are considering moving to another search engine.

Engines like Hakia, Accoona and Powerset are trying to grab market share by writing a more sophisticated algorithm. A growing number of entrepreneurs are placing their bets, however, on a hybrid system that puts humans back into the search equation. They are grouped under a newly coined rubric, “social search,” and it is becoming a crowded field.

Newcomers like Squidoo, Sproose and NosyJoe offer search results based on submissions or votes by users. Bessed also relies on users to suggest the best Web pages for a topic, but then has editors refine them. ChaCha gives customers the opportunity to have an online chat with a human being who can provide search assistance.

Sometimes a small variation on an existing idea is enough to make it stand out. In October 2006, when Bessed began its search service with the manually edited results pages, it had only two editors and covered just a few hundred search terms suggested randomly by users.

Last month, another company, Mahalo (Hawaiian for “thank you”), inaugurated a search service with manually edited results. It started with several advantages: venture capital backing, 30 editors, systematic focus on the most commonly requested search terms, and the added idea of supplying Google’s search results for any search not covered by its own best-of-the-best lists.

Mahalo now has pre-prepared pages for 5,000 terms related to entertainment, travel, health, technology and other subject areas. The company plans to expand its coverage to 10,000 terms by year-end, and eventually to provide results for one-third of the most common search terms.

The company is financed by Sequoia Capital, which knows something about the search business: It was an early backer of both Yahoo and Google. Sequoia, like other Silicon Valley venture capital firms, offers experienced entrepreneurs an office and salary to figure out an idea for a new start-up. It was while he was an entrepreneur in residence that Jason Calacanis had the inspiration for Mahalo. Mr. Calacanis, 36, published The Silicon Alley Reporter in the mid-1990s and went on to be a co-founder of Weblogs, a federation of blogging sites that was sold to AOL in 2005 for about $25 million. He took up residence at Sequoia in December 2006, founded Mahalo and gathered two rounds of financing, including backing from the News Corporation.

At the end of May, Mr. Calacanis unveiled Mahalo at the D: All Things Digital conference sponsored by The Wall Street Journal. Mr. Calacanis said he has enough financing to provide five years of experimentation and refinements, but he has not disclosed the amounts.

A hand-built Mahalo search-results page has one conspicuous advantage over Google’s: grouping into subthemes, which make a page of links much easier to scan and to find items of particular interest. For example, Mahalo’s page about Paris Hilton, the site’s top search subject last week, arranges the recommended links into clusters including news, photos, gossip, satire and humor. The use of subject categories also eliminates the need to provide, as Google does, two-line text excerpts from the listed sites to provide clues about the site’s contents.

The Mahalo page about Ms. Hilton lists more than 80 sites. Each takes up only one line; grouped by subtheme, they are easier to skim than the 12 sites that fill the entire first page of Google’s search results.

All of the links listed in Mahalo send the user to Web pages that contain genuine content, not sales pitches in disguise. By using its own editors as the final arbiters of what goes in, Mahalo cuts off access in its listings to Web sites that confuse a search engine’s algorithm with advertorials that commingle advertisements with noncommercial information. To those in the trade, outsmarting the algorithm is called “search engine optimization.” For the rest of us, it produces Web pages littered with spam.

Last week, Mr. Calacanis tried to illustrate how spam has infested some top results on Google. After running searches for “low-carb diets,” “Lasik” and “lingerie” at Google and at Mahalo, he compared the results. The exercise succeeded in exposing a few examples of Web sites ranked highly in Google’s results that contained advertorials or content apparently scraped from higher-quality sites.

Google contends that its search engine relies on humans and machines. Matt Cutts, a software engineer who heads Google’s Webspam team, said users who place links on their own Web pages pointing to other sites provide the raw information about valued sites that is incorporated into Google’s PageRank algorithm. How best to utilize that information requires continuing work by human engineers. “Algorithms don’t leap out of Google like Athena from the head of Zeus,” Mr. Cutts said.

True, but one could argue that at Google the machine has the final say. Once the query is fed into the “engine,” the results are presented without manual adjustment. At Mahalo and other “human powered” sites, the machine performs a first cut at the search in advance of a user’s request, and the results are then winnowed and shaped by human editors, then stored, a process that Mr. Calacanis terms “editorialized search.”

HUMAN-POWERED search may be able to cover a wide swath of queries if it can draw on the enthusiasm of contributors who have made Wikipedia a phenomenon of huge scale. Mahalo just began a “Mahalo Greenhouse” service that enlists users who are passionate about a particular subject to write a page of search results for $10 to $15. Submissions must pass the scrutiny of the site’s full-time editors before posting.

Even Google is interested in exploring “human powered” search. “I don’t think we’re ideologically bound to only computers, only algorithms,” Mr. Cutts said. In fact, he said, Google has combed through its own Web pages to remove all references to “automatic ranking” to prepare for the possibility of relying on user feedback to improve search results or other approaches that are more directly “human powered” than the algorithm.

Mr. Calacanis says Mahalo is not engaged in a battle of humans versus machines. He described his company as the embodiment of humans with machines, “John Henry and the steam hammer versus the steam hammer alone.”

When Computers Attack
John Schwartz

ANYONE who follows technology or military affairs has heard the predictions for more than a decade. Cyberwar is coming. Although the long-announced, long-awaited computer-based conflict has yet to occur, the forecast grows more ominous with every telling: an onslaught is brought by a warring nation, backed by its brains and computing resources; banks and other businesses in the enemy states are destroyed; governments grind to a halt; telephones disconnect; the microchip-controlled Tickle Me Elmos will be transformed into unstoppable killing machines.

No, that last item is not part of the scenario, mostly because those microprocessor-controlled toys aren’t connected to the Internet through the industrial remote-control technologies known as Scada systems, for Supervisory Control and Data Acquisition. The technology allows remote monitoring and control of operations like manufacturing production lines and civil works projects like dams. So security experts envision terrorists at a keyboard remotely shutting down factory floors or opening a dam’s floodgates to devastate cities downstream.

But how bad would a cyberwar really be — especially when compared with the blood-and-guts genuine article? And is there really a chance it would happen at all?

Whatever the answer, governments are readying themselves for the Big One.

China, security experts believe, has long probed United States networks. According to a 2007 Defense Department annual report to Congress, China’s military has invested heavily in electronic countermeasures and defenses against attack, and concepts like “computer network attack, computer network defense and computer network exploitation.”

According to the report, the Chinese Army sees computer network operations “as critical to achieving ‘electromagnetic dominance’ ” — whatever that is — early in a conflict.

The United States is arming up, as well. Robert Elder, commander of the Air Force Cyberspace Command, told reporters in Washington at a recent breakfast that his newly formed command, which defends military data, communications and control networks, is learning how to disable an opponent’s computer networks and crash its databases.

“We want to go in and knock them out in the first round,” he said, as reported on Military.com.

An all-out cyberconflict could “could have huge impacts,” said Danny McPherson, an expert with Arbor Networks. Hacking into industrial control systems, he said, could be “a very real threat.”

Attacks on the Internet itself, say, through what are known as root-name servers, which play a role in connecting Internet users with Web sites, could cause widespread problems, said Paul Kurtz, the chief operating officer of Safe Harbor, a security consultancy. And having so many nations with a finger on the digital button, of course, raises the prospect of a cyberconflict caused by a misidentified attacker or a simple glitch.

Still, instead of thinking in terms of the industry’s repeated warnings of a “digital Pearl Harbor,” Mr. McPherson said, “I think cyberwarfare will be far more subtle,” in that “certain parts of the system won’t work, or it will be that we can’t trust information we’re looking at.”

Whatever form cyberwar might take, most experts have concluded that what happened in Estonia earlier this month was not an example.

The cyberattacks in Estonia were apparently sparked by tensions over the country’s plan to remove Soviet-era war memorials. Estonian officials initially blamed Russia for the attacks, suggesting that its state-run computer networks blocked online access to banks and government offices.

The Kremlin denied the accusations. And Estonian officials ultimately accepted the idea that perhaps this attack was the work of tech-savvy activists, or “hactivists,” who have been mounting similar attacks against just about everyone for several years.

Still, many in the security community and the news media initially treated the digital attacks against Estonia’s computer networks as the coming of a long-anticipated new chapter in the history of conflict — when, in fact, the technologies and techniques used in the attacks were hardly new, nor were they the kind of thing that only a powerful government would have in its digital armamentarium.

The force of the attack appears to have come from armies of “zombie” computers infected with software that makes them available for manipulation and remote command. These “bot-nets” are more commonly used for illicit activities like committing online fraud and sending spam, said James Andrew Lewis, director of the Technology and Public Policy Program at the Center for Strategic and International Studies.

The main method of attack in Estonia — through what is known as a digital denial of service — doesn’t disable computers from within, but simply stacks up so much digital debris at the entryway that legitimate visitors, like bank customers, can’t get in.

That is not the same as disabling a computer from the inside, Mr. Lewis stressed. “The idea that Estonia was brought to its knees — that’s when we have to stop sniffing glue,” he said.

In fact, an attack would have borne real risks for Russia, or any aggressor nation, said Ross Stapleton-Gray, a security consultant in Berkeley, Calif. “The downside consequence of getting caught doing something more could well be a military escalation,” he said.

That’s too great a risk for a government to want to engage in what amounts to high-tech harassment, Mr. Lewis said. “The Russians are not dumb,” he said.

Even if an Internet-based conflict does eventually break out, and the dueling microchips do their worst, it would have a fundamentally different effect from flesh-and-blood fighting, said Andrew MacPherson, research assistant professor of justice studies at the University of New Hampshire. “If you have a porcelain vase and drop it — it’s very difficult to put it back together,” he said. “A cyberattack, maybe it’s more like a sheet that can be torn and it can be sewed back together.”

That is why Kevin Poulsen, a writer on security issues at Wired News, said that he had difficulty envisioning the threat that others see from an overseas attack by electrons and photons alone. “They unleash their deadly viruses and then they land on the beaches and sweep across our country without resistance because we’re rebooting our P.C.’s?” he asked.

In fact, the United States has prepared for cyberattacks incidentally, through our day-to-day exposure to crashes, glitches, viruses and meltdowns. There are very few places where a computer is so central that everything crashes to a halt if the machine goes on the blink.

Russian space engineers struggled to fix crashing computers aboard the International Space Station that help keep the orbiting laboratory oriented properly in space — if they hadn’t been fixed, the station might have had to be abandoned, at least temporarily.

Down on earth, by comparison, this correspondent found himself near the Kennedy Space Center in a convenience store without cash and with the credit card network unavailable. “The satellite’s down,” the clerk said. “It’s the rain.” And so the purchase of jerky and soda had to wait. At the center’s visitor complex, a sales clerk dealt with the same problem by pulling out paper sales slips.

People, after all, are not computers. When something goes wrong, we do not crash. Instead, we find another way: we improvise; we fix. We pull out the slips.

As Street Art Goes Commercial, a Resistance Raises a Real Stink
Colin Moynihan

The covert campaign targeting street art began about seven months ago, with blobs of paint that appeared overnight, obscuring murals and wheat-pasted art on walls in Brooklyn and Lower Manhattan. Arcane messages were pasted at the sites, but it was difficult to ask for an explanation. The author was never identified.

Then in November, during a panel discussion on women and graffiti that included a street artist called Swoon, a figure wearing a hooded sweatshirt flung a sheaf of fliers using similar language from a balcony overlooking an auditorium at the Brooklyn Museum. Swoon was among those whose work had previously been struck by paint, and some couldn’t help wondering whether the person who threw the fliers was also the Splasher, as the perpetrator of the paint attacks had come to be known.

Web sites, magazines and newspaper articles reported about the splatterings. Some wondered about the motivation and identity of those responsible, but the Splasher — or Splashers — remained anonymous.

The most recent episodes came this month, in two incidents involving what seemed to be stink bombs lobbed at shows of street artists on the Lower East Side and Dumbo. And some in the art world believe the identify of the Splasher may have been revealed. Last Thursday night James Cooper, 24, was arrested at the Dumbo show after witnesses accused him of attempting to ignite a homemade incendiary device in a metal coffee canister.

Mr. Cooper was charged with third-degree arson, reckless endangerment, placing a false bomb, criminal possession of a weapon, harassment and disorderly conduct. He was arraigned and released on his own recognizance, a spokesman for the Brooklyn District Attorney’s Office said.

That show featured works by Shepard Fairey, who had been one of the prominent targets of the street splatterings. Mr. Fairey said there wasn’t yet enough evidence to tie Mr. Cooper definitively to the paint blobs, but acknowledged apparent parallels.“Maybe the stink bomb thing was their way of being disruptive without using paint and while penetrating a more controlled atmosphere,” he said.

Two days after Mr. Cooper’s arrest, a group of people showed up at the Jonathan LeVine Gallery in Chelsea, where a reception was being held for Mr. Fairey. Without identifying themselves, they distributed copies of a 16-page tabloid with the title “If we did it this is how it would’ve happened,” with a cover photograph of an image created by Mr. Fairey defaced with paint.

Inside were reproductions of the communiqués that were pasted next to the sites of many paint attacks and appeared to draw inspiration from the writings by the Situationists, a group of political and artistic agitators formed in the 1950s, and a 1960s anarchist group called Black Mask.

In often bombastic language those fliers condemned the commercialization of art and included statements saying that the wheat paste used to affix the fliers had been mixed with shards of glass. An essay in the paper given out at the gallery scoffed at those who had difficulty understanding the fliers and added footnotes clarifying parts of them. One footnote stated that the tabloids had been dusted with anthrax.

In a series of essays and in text that appeared under the headline “Interview With Myself” the anonymous authors said that the splashings were committed not by an individual but by a group of men and women, and offered some explanation of their motives.

The authors wrote that street art was “a bourgeoisie-sponsored rebellion” that helped pave the way for gentrification, and called it “utterly impotent politically and fantastically lucrative for everyone involved.”

The writings also criticized people prominent in the world of street art, including Mr. Fairey and Swoon, the art collectives Faile and Visual Resistance, and Marc and Sara Schiller, who run a Web site about street art called the Wooster collective (woostercollective.com).

“There is a very strong viewpoint there, and there’s an element of interest I can’t deny,” Mr. Schiller said. Still, he said, “I don’t agree with the perspective and I don’t think the assumptions are accurate.”

Previous incidents of agitprop were described, and the authors claimed responsibility for assailing a mural in Williamsburg by the reclusive British artist known as Banksy, and for hurling paint at a billboard advertising sneakers on Lafayette Street made by an artist called Neckface. Because the authors are unidentified, it isn’t known for sure whether they are indeed the Splashers. An e-mail address was published in the paper but a message sent by a reporter to that address on Tuesday night went unanswered.

The distribution of the paper at the gallery and its mailing to two Web sites that write about street art has stirred speculation, but many artists remain focused on Mr. Cooper, who so far is the only person who has been publicly identified as having a possible connection to the art attacks.

In a brief interview on Tuesday morning conducted near his home in Bushwick, Brooklyn, Mr. Cooper declined to discuss details of his case but said that he was not guilty of wrongdoing and that he was not the Splasher.

Still, Jonathan LeVine, a gallery owner who was at the Dumbo show, insisted that Mr. Cooper was one of two men seen trying to light a device and who fled when approached.

“One of the two people came back and guys I know grabbed him,” Mr. LeVine said. “The two people were together by all accounts.”

The man who was grabbed was Mr. Cooper. He waited, crouched in a corner of the 6,600 square-foot space, as some of the 14 security guards hired for the event stood nearby. Then the police arrived and arrested him.

The man who was said by witnesses to be with Mr. Cooper made it out of the show. But people involved in street art said that detectives are searching for a second suspect and are also inquiring about the newspaper.

Although the paint splashings have been viewed with a mixture of aggravation and amusement, Mr. LeVine said that the attempt to light an incendiary device during a crowded art show was foolish and reckless.

“They could’ve killed someone,” he said. “It’s not O.K. to jeopardize people’s lives.”

The earlier suspected stink bomb attack took place June 7 when a show in an exhibition space on Chrystie Street displaying work by a two-man street art collective called Faile was disrupted by a noxious odor that witnesses said smelled like sulphur. Firefighters arrived, said a member of Faile, and said that somebody had called in a report of a gas leak.

“This kind of thing is silly,” said the Faile member, who declined to give his name. “They’re hiding themselves so you can’t have a discussion with them.”

Perhaps the street artists will eventually have a chance to confront their antagonists directly. One of the last pages of the newspaper published by the self-proclaimed Splashers sounded a note that could be interpreted as ominous, or optimistic, depending on your point of view.

“Don’t worry,” it read. “You’ll be hearing from us again.”

Al Baker contributed reporting.

Stax Turns 50 With Plenty of Soul to Spare
Tamara Conniff

Would-be stars come out in droves to audition for "American Idol" in hopes that they can be molded and helped into fame -- taught how to sing better, how to dress, how to perform. Thankfully, nonfabricated artistry is alive and well in Memphis. Stax's 50th anniversary celebration last weekend proved that soul music of the past, present and future will remain authentic and above all true to the gritty Memphis sound.

Concord Music Group, which has revived and recently relaunched the label, paid homage to Stax's history during a celebration at the Orpheum in downtown Memphis that was chock-full of stellar performances. Isaac Hayes was greeted with a standing ovation, and some women wept when he performed the theme from "Shaft." In honor of Stax icon Otis Redding, his sons, Dexter and Otis III, carried on the legacy: Dexter's rendition of "Try a Little Tenderness" evoked the spirit of his father, as did Otis III's performance of "Hard to Handle." Also on hand to perform were Stax hitmakers Booker T. & the MGs, Eddie Floyd, William Bell, Mavis Staples, Mable John and the Soul Children. Also impressive were performances by new Stax artists intent on carrying on the tradition, including neo-soul diva Angie Stone and Dallas newcomer N'dambi.

The event was hosted by "Idol" judge Randy Jackson and rap legend Chuck D. When Jackson was asked whether the next "Idol" season would have more of a soul flavor, Jackson could not help but gush that he hoped so, adding of the music, "This is amazing."

Is the CD Becoming Obsolete?
Clint DeBoer

Can the CD Situation be Fixed?

Glancing at a report on Forbes.com this morning, there was an article showing that CD sales are expected to be down 20% 2008 (slightly higher than the 15% drop initially predicted). Why such a drop? Well, there has been a recorded drop of 18% so far in 2007 and the trend seems to be steady and indicative of future trending.

But what's really happening?

A couple things are to "blame". For one, there seems to be a case of shrinking floor space as sales decline. This will likely get worse as stores heavily monitor what items are making money and carefully guard real-estate in their stores, making adjustments to compensate for industry trends and swings. If sales continue to shift online, look for the physical presence of CDs to drop. This will also have an interesting chicken -and-egg effect that extends beyond shrinking sales and reduced floor space... Music Studios will be even MORE inclined to stick with their bubble-gum and "sure thing" artists, reducing the choice in music and furthering the stale choices already proliferating the industry. As a result, independent labels will likely continue to thrive (moreso perhaps) and pick up steam, though much of this in online music sales.

Compare this with new information released by Apple on Friday stating that iTunes is now the third largest music retailer in the country - this according to stats from the first quarter of 2007. iTunes has 9.8% of the retail music marketshare with Wal-mart taking 15.8% and Best Buy 13.8%. That's a LOT of music sales.

In contrast, and to give you a perspective of the change, Amazon.com has a 6.7% share while Target has around 6.6%. iTunes compared its sales to physical store purchases by converting every 12 single downloads as a single album sale. That seems more than fair and gives you an idea of how effective online music is becoming as a compelling alternative to physical sales - at least for people who listen to their music more on the go than in the home. And that's a majority of consumers these days. As automakers respond to the iPod revolution with MP3-compatible players and external docks and connections for MP3 players, even the CD's largest consumer - the commuter - is looking at different options. The market is getting very very competitive and the face of the industry is in the middle of a clear change.

While overall music sales is expected to drop by about 9% in both 2007 and 2008, what's truly happening (according to this report) is a gradual shift away from physical media to downloadable formats. What this indicates, so far, is that US sales of digital music will be growing at an estimated rate of 28% in 2008, however physical sales will drop even further, resulting in a net overall decline.

An iPod Has Global Value. Ask the (Many) Countries That Make It.
Hal R. Varian

Who makes the Apple iPod? Here’s a hint: It is not Apple. The company outsources the entire manufacture of the device to a number of Asian enterprises, among them Asustek, Inventec Appliances and Foxconn.

But this list of companies isn’t a satisfactory answer either: They only do final assembly. What about the 451 parts that go into the iPod? Where are they made and by whom?

Three researchers at the University of California, Irvine — Greg Linden, Kenneth L. Kraemer and Jason Dedrick — applied some investigative cost accounting to this question, using a report from Portelligent Inc. that examined all the parts that went into the iPod.

Their study, sponsored by the Sloan Foundation, offers a fascinating illustration of the complexity of the global economy, and how difficult it is to understand that complexity by using only conventional trade statistics.

The retail value of the 30-gigabyte video iPod that the authors examined was $299. The most expensive component in it was the hard drive, which was manufactured by Toshiba and costs about $73. The next most costly components were the display module (about $20), the video/multimedia processor chip ($8) and the controller chip ($5). They estimated that the final assembly, done in China, cost only about $4 a unit.

One approach to tracing supply chain geography might be to attribute the cost of each component to the country of origin of its maker. So $73 of the cost of the iPod would be attributed to Japan since Toshiba is a Japanese company, and the $13 cost of the two chips would be attributed to the United States, since the suppliers, Broadcom and PortalPlayer, are American companies, and so on.

But this method hides some of the most important details. Toshiba may be a Japanese company, but it makes most of its hard drives in the Philippines and China. So perhaps we should also allocate part of the cost of that hard drive to one of those countries. The same problem arises regarding the Broadcom chips, with most of them manufactured in Taiwan. So how can one distribute the costs of the iPod components across the countries where they are manufactured in a meaningful way?

To answer this question, let us look at the production process as a sequence of steps, each possibly performed by a different company operating in a different country. At each step, inputs like computer chips and a bare circuit board are converted into outputs like an assembled circuit board. The difference between the cost of the inputs and the value of the outputs is the “value added” at that step, which can then be attributed to the country where that value was added.

The profit margin on generic parts like nuts and bolts is very low, since these items are produced in intensely competitive industries and can be manufactured anywhere. Hence, they add little to the final value of the iPod. More specialized parts, like the hard drives and controller chips, have much higher value added.

According to the authors’ estimates, the $73 Toshiba hard drive in the iPod contains about $54 in parts and labor. So the value that Toshiba added to the hard drive was $19 plus its own direct labor costs. This $19 is attributed to Japan since Toshiba is a Japanese company.

Continuing in this way, the researchers examined the major components of the iPod and tried to calculate the value added at different stages of the production process and then assigned that value added to the country where the value was created. This isn’t an easy task, but even based on their initial examination, it is quite clear that the largest share of the value added in the iPod goes to enterprises in the United States, particularly for units sold here.

The researchers estimated that $163 of the iPod’s $299 retail value in the United States was captured by American companies and workers, breaking it down to $75 for distribution and retail costs, $80 to Apple, and $8 to various domestic component makers. Japan contributed about $26 to the value added (mostly via the Toshiba disk drive), while Korea contributed less than $1.

The unaccounted-for parts and labor costs involved in making the iPod came to about $110. The authors hope to assign those labor costs to the appropriate countries, but as the hard drive example illustrates, that’s not so easy to do.

This value added calculation illustrates the futility of summarizing such a complex manufacturing process by using conventional trade statistics. Even though Chinese workers contribute only about 1 percent of the value of the iPod, the export of a finished iPod to the United States directly contributes about $150 to our bilateral trade deficit with the Chinese.

Ultimately, there is no simple answer to who makes the iPod or where it is made. The iPod, like many other products, is made in several countries by dozens of companies, with each stage of production contributing a different amount to the final value.

The real value of the iPod doesn’t lie in its parts or even in putting those parts together. The bulk of the iPod’s value is in the conception and design of the iPod. That is why Apple gets $80 for each of these video iPods it sells, which is by far the largest piece of value added in the entire supply chain.

Those clever folks at Apple figured out how to combine 451 mostly generic parts into a valuable product. They may not make the iPod, but they created it. In the end, that’s what really matters.

Blockbuster to Shutter 282 Stores This Year
Paul Bond

Blockbuster, which closed 290 stores in the U.S. last year, said Thursday that it will shutter another 282 this year.

The news comes in the same week that Blockbuster ended its legal dispute with Netflix, settling their lawsuit without going to trial and without disclosing any details.

Blockbuster has been waging a successful war against Netflix, recently growing its online service faster than Netflix has been able to grow, though the latter still is the larger with 6.8 million subscribers, more than twice Blockbuster's count.

The latest battle had Blockbuster cutting the price of its two-at-a-time DVD service to $13.99 three weeks ago; Netflix mirrored that move Thursday.

Blockbuster also said this week that it plans to better balance subscriber growth with profitability, which analysts take to mean that a price increase for its flagship three-at-a-time Total Access DVD service is on the way, which could boost Netflix as well. For its comparable service, Netflix charges $17.99, a buck more than Blockbuster, though Blockbuster subscribers may exchange DVDs at stores, an option Netflix cannot match on its own because it owns no stores.

"While Netflix still lacks short-term catalysts, given the lack of visibility into the timing and magnitude of a price hike for Total Access, we expect the competitive environment to improve by year end, which should allow subscriber growth to reaccelerate," Jefferies & Co. analyst Youssef Squali said.

The flurry of activity at the companies this week has so far been interpreted as a small plus for Netflix and a negative for Blockbuster. Netflix shares are up fractionally on the week, while Blockbuster has fallen 6.1%. But shares of Movie Gallery -- second to Blockbuster in the number of stores it operates but with no online service -- have so far fallen 10.2% this week.

Blockbuster has about 5,000 stores in the U.S. and 3,000 outside of the country. Spokesman Randy Hargrove said that when 290 stores closed last year, 25% of the revenue from those was transferred to nearby Blockbuster stores, and he expects similar numbers this time.

"We've always closed and opened stores, we're just closing more and not opening new ones," he said. "We have always predicted consolidation in the industry."

Hargrove said that even while stepping up store closures, 70% of the nation is no more than a 10-minute drive from a Blockbuster. He also said the company expects not to lose many of its 47,000 U.S. employees because of the closures.

Hargrove said the company is shooting for profitability with its online service sometime next year, and soon-to-come moderations to Total Access "won't just focus on price."

Blockbuster and Netflix did not disclose the terms of their legal settlement this week, except for Blockbuster saying that it would not impact its financial performance. Netflix sued Blockbuster 14 months ago for patent infringement, and Blockbuster had countersued claiming that Netflix was trying to stifle competition.

Congress Set to Issue Virtual Taxation Report in August
Daniel Terdiman

For months, the community of virtual world publishers, players and economists has been holding its breath, waiting for the U.S. Congress to issue its report on the potential taxation of virtual goods.

Well, we don't have to wait much longer.

Dan Miller, a senior economist with the Congress' Joint Economic Committee, told CNET News.com on Friday that he expects the committee to issue its report during the upcoming Congressional recess next month.

What that report will say is unknown, as the committee has kept entirely quiet about its thoughts.

However, it's clear that something will happen.

"Given growth rates of 10 to 15 percent a month, the question is when, not if, Congress and IRS start paying attention to these issues," Miller, who is a fan of virtual worlds and economies, told CNET News.com in December. "So it is incumbent on us to set the terms and the debate so we have a shaped tax policy toward virtual worlds and virtual economies in a favorable way."

Meanwhile, a lot is riding on the outcome. If Congress signals it intends to start taxing in-world commerce, that could create huge problems for publishers who may have to figure out efficient ways to track all such trades. If Congress goes the other way, many people will feel that it is just punting and that it will still only be a matter of time before some major government decides to step in.

Analysis: DRM May be Why Microsoft Flip-Flopped on Vista Virtualization
Eric Lai

Conspiracy theorists may link Microsoft Corp.'s abrupt decision late Tuesday not to remove restrictions on consumers virtualizing its Vista operating system to a Department of Justice agreement announced the same day or to a desire to jerk Intel Mac users around.

But the actual reason may be found in three little letters: DRM.

Vista's new digital rights management features enable movies or music files to be password-protected or made accessible only to authorized users for opening, viewing or changing.

Whether most users would call DRM a feature, however, is questionable. A close cousin to DRM technology, known as Windows Rights Management Services (which in turn is part of a larger category of technologies called Enterprise Digital Rights Management, or ERM), can help business users password-protect key documents and files, or assign the ability to open them only to trusted co-workers. But DRM's main purpose seems to be to help the Warner Bros. and Sony Musics of the world keep consumers from sharing movies and music. The entertainment industry claims that almost all blocked sharing is illegal; digital rights watchdogs argue that legitimate consumer uses are also blocked by such technology.

DRM is capable of blocking both overt piracy -- distributing movies via BitTorrent and other peer-to-peer networks -- as well as other common scenarios that most consumers do not consider piracy, such as moving legally acquired music files from their desktop PCs to their notebook computers.

"It's like when you batten down the hatches on a ship in a storm," said Aram Sinnreich, an analyst at Radar Research in Los Angeles. "Vista wants to batten down every software or multimedia bit so that they don't go somewhere the creator doesn't want it to go."

Versions out of control?

The problem is that virtualization, by accident, appears to break most of Vista's DRM and antipiracy schemes.

Virtualization software -- think VMware Inc.'s VMplayer, Microsoft's Virtual PC or Parallels Inc.'s Parallels Desktop -- allow computer users to boot one operating system but run a second one as a "guest" at the same time.

That can allow a user who has booted Windows Vista to load XP-only applications in a guest XP operating system, also known as a virtual machine (VM). Or it can let a user with an Intel Mac boot up the OS X operating system but also run Windows Vista or XP applications at the same time.

Microsoft's original plan was to announce on Tuesday changes to the contracts, known as end-user licensing agreements (EULA), for its Vista Home Basic and Home Premium editions. Those changes would permit buyers who use those editions to create VMs. The change was purely to the EULA; there is no technical limitation preventing knowledgeable users from virtualizing retail versions of Home Basic or Home Premium.

Microsoft allows only full retail versions of Vista Business or Vista Ultimate (as well as Vista Enterprise for big corporations) to run as virtual guests of a host PC. Vista Business and Ultimate cost $299 and $399, respectively. The simple change in Microsoft's license for the two cheaper editions -- Home Basic Edition and Home Premium Edition cost $199 and $239, respectively -- would have saved customers at least $60 and up to $200.

In addition, Microsoft planned to permit the use of DRM, IRM (Information Rights Management) and Vista's storage encryption technology, BitLocker, in a VM for any version of Vista.

Besides boosting flagging perceptions of Microsoft's overall virtualization strategy, the move would have made Vista virtualization much more attractive to a key and growing segment -- Intel Mac owners who want to run Windows software.

But at the last moment, Microsoft did a 360. Its explanation was terse: "Microsoft has reassessed the Windows virtualization policy and decided that we will maintain the original policy announced last Fall," said a spokesman in an e-mailed statement.

A perfect picture (of cross-purposes)

When a user creates a VM, the virtualization software takes a snapshot of the PC's hardware and then creates an exact copy of how that works in memory, according to DeGroot.

This ability to perfectly simulate the way the original PC ran (albeit more slowly than the original) is why VMs are such a useful tool. But a VM, once created, can be copied hundreds or thousands of times and ported over to radically different PCs without triggering the antipiracy and DRM schemes of most software or multimedia files, including Vista's. Those schemes raise red flags only if they realize they've been moved to another computer, DeGroot said.

Analysts say what probably happened behind the scenes is that Microsoft or one of its media partners decided at the last moment that encouraging consumers to use virtualization would, at least symbolically, be at odds with its attempts to enforce DRM.

"Microsoft doesn't want the music labels, TV networks and movie studios to come back to them and say that you are enabling this ability to move content around," said Mike McGuire, an analyst at Gartner Inc.

Microsoft has more at stake than other high-tech firms, McGuire said, what with its partnerships with NBC, its Xbox gaming platform, its Media Center PCs and even its Zune music player.

"It's a very fine line that Redmond has to walk," McGuire said. "They have to answer to these companies if they want to have any hope of making the PC and their software the de facto usage model for multimedia."

The problem is that even if Microsoft -- and U.S. law -- insist it is still illegal to use virtualization to enable the sharing of software or movies or music, its antipiracy technology is powerless to stop it.

"It's absurd to expect that something demanded by a EULA is followed when technology and common practice permit otherwise," Sinnreich said. "Microsoft is banking on ongoing consumer naivete and goodwill. There will be a backlash against DRM in some not-so-distant future."

Would anyone have bothered?

Will encouraging consumer virtualization result in a major uptick in piracy? Not anytime soon, say analysts.

One of the main obstacles is the massive size of VMs. Because they include the operating system, the simulated hardware, as well as the software and/or multimedia files, VMs can easily run in the tens of gigabytes, making them hard to exchange over the Internet. But DeGroot says that problem can be partly overcome with .zip and compression tools -- some, ironically, even supplied by Microsoft itself.

"It's the kind of idea that is out there among the enthusiast community for file sharing and remixing, but it's not part of the standard arsenal for the average college student," Sinnreich said.

Gartner's McGuire agrees: "Unless virtualization is more convenient and reliable than P2P, then no one is going to go to the trouble."
http://www.computerworld.com/action/...pageNu mber=1


Violence in Video Games

A friend pushed me in the direction of a couple of interesting statistics. Since Doom was released in 1993, violent crimes in the United States have to 40% of what they used to be. Coincidence? Possibly, yes. However, the year Quake and Duke Nukem 3D were released, violent crimes fell by 4%, and a further 2% when Grand Theft Auto was released.

I don’t take that as mere coincidence. A simple Google search brings up countless articles citing experiments and analysis on how a child’s mind gets affected by the violence and gore in video games. Here’s an excerpt from one I particularly liked:

Studies measuring emotional responses to playing violent video games (compared with emotional responses to non-violent games) have shown that violent games increase aggressive emotions. Adolescents themselves often seem to recognize this. When asked to name the “bad things” about computer games, many students reported that they make people more moody and aggressive (Griffiths & Hunt, 1998). In this study, students who were more “addicted” to video games were significantly more likely to be in a bad mood before, during, and after play than were non-addicted students.

Is this the critics of the video game industry’s dirty little secret? An interesting analogy is the United States national drinking age, known to be higher than most countries in the world. Why? It’s easy to justify based on the fairly blatant statistics: in 2005, the total of people killed in alcohol related car accidents has fallen 32% since 1984 (the year the National Minimum Drinking Age Act was passed). While I realize the opposition to the act is strong and convincing (I believe it should be 18), it is difficult for the government to argue against such strong statistics. If Jack Thompson were to provide me with such strong statistics, maybe I would be inclined to agree with him a little more.

Understand that I do take all statistics with a grain of salt–I haven’t looked into the methods of collecting data, the reliability of my sources’ source etc., but it raises interesting questions nonetheless. Why do critics of video game violence focus on this so much? The devastation of a child’s mind is one of the major talking points of most of these studies. I personally feel the authors who write the reports should be working somewhere else: there seems to be a great use of emotive language to compel mothers and people like Jack Thompson to stop people from having fun.

Let’s talk about the kids for a moment. Or not: the average game player is 33 years old, and the average game buyer is 40 years old. In computer games, 93% of gamers are over the age of 18. Console gamers follow closely at 83%. The source has a great list of interesting statistics–I don’t want to list every one–which are well worth a read.

I’m not saying that the 7% of gamers under the age of 18 (87% of whom get their parents’ permission to play those games anyway) aren’t important enough that they don’t deserve the respect of being looked after, but it seems to be that the whole critics movement is based around blowing their analyzes way out of proportion. Social critic J. C. Herz puts it brilliantly:

That’s what we do in America: glorify autonomous individualists. What else would we possibly glorify? The autonomous collective? One can only imagine the kind of arcade game that would pass muster with the leather-elbow-patch set (leap over the running dogs of capitalism, liberate the oppressed proletariat, and accumulate enough petition power to defeat the evil Murdoch). (Herz, Joystick Nation, 1997).

At the end of the day, (as the Virginia Tech. shootings taught us), some people are just messed up in the head. I think it’s a bigger leap to say that a criminal’s behavior is the cause of playing violent video games than to say that Doom started a shift in the climate of the United States (and probably the world over) in reducing violent crimes.

What do you think?

Report: Video Game Spending to Surpass Music Spending This Year
Jacqui Cheng

The video gaming industry is poised to overtake the music industry in the US, with global spending on video games surpassing music spending as soon as this year, according to consulting firm Pricewaterhouse Coopers. PwC released the data in its annual "Global Entertainment and Media Outlook" report covering 2007 through 2011, which outlines expected growth in the entertainment, film, music, and video game industries, among others.

The information not only reflects the gaming industry's strong trajectory, but also serves as a painful reminder that the music industry continues to suffer. EMI recently reported, however, that sales of its DRM-free songs and albums have been good since the launch of iTunes Plus, with CD sales of those same albums dropping during that time. If the gains made by selling DRM-free music online outpace the losses from CD sales, EMI's decision to go DRM-free will prove to be a good one and the rest of the industry may follow suit.

The rising penetration of broadband combined with consoles with online capabilities, wireless phones capable of downloading games, and technologically advanced consoles are credited with driving the video game industry's strong growth. PwC says that the gaming industry will see a compound annual growth rate of 9.1 percent between 2007 and 2011, resulting in a $48.9 billion global video game market in 2011, up from $37.5 billion this year.

The US market will grow much more slowly than that, though, going from $10.4 billion to $12.5 billion over the same period (a 6.7 percent CAGR). PwC says that Asia will see the greatest growth during that time and see the largest amount of spending, topping out at $18.8 billion in 2011 with a CAGR of 10 percent.T he report also makes note that global spending on console and handheld games will go up from $6.5 billion in 2006 to $7.9 in 2011.

PwC sees in-game advertising as a prime area for growth. While in-game advertising generated $80 million in 2006, the firm estimates that it could grow as high as $950 million in 2011. PwC's Marcel Fenez noted, however, that the $950 million estimate could in fact be a conservative one and that growth in the area could produce even larger revenues in the future due to the changing audience of the gaming industry.

Reviled Broadcast Treaty Dies at WIPO
Nate Anderson

After a long and bloody struggle, the WIPO Broadcast Treaty appears to be dead.

Delegates from around the world have been meeting this week at WIPO headquarters in Geneva, Switzerland for their second (and supposedly last) round of consultations on the treaty since last year's General Assembly meeting. The plan was to hold two sessions in order to iron out differences between countries and then proceed to a Diplomatic Conference late in 2007 if consensus could be reached. But consensus was nowhere in sight, and negotiations now appear to be at an end. There will be no treaty.

The Broadcast Treaty was an attempt to give global broadcasters the tools they needed to stop the theft of their signals, but initial versions of the treaty (which has been under discussion for a decade) adopted a controversial "rights-based" approach. Under a rights-based treaty, broadcasters would receive new intellectual property rights over their signals, and consumer advocates worried that this could put an end to some things currently allowed under "fair use." Even the US Senate had reservations about the plan.

Here's the issue: if NBC broadcasts a Creative Commons-licensed video, it could be illegal for users to record and redistribute that particular broadcast because NBC would own the rights to the signal. The video could still be gleaned from online sources or directly from the producer, of course, but it could make the situation more difficult than it is now (NBC currently has rights only to content that it owns, not to its signal). Some of the wilder claims made by opponents of the treaty suggested that broadcasters could somehow "lock up" public domain content simply by showing it, but this wasn't accurate.

This rights-based approach generated plenty of legitimate controversy, though, and last year's WIPO General Assembly meeting chose to adopt a "signal theft" approach that would not create any new intellectual property rights. Despite that endorsement, debate over what form the treaty should take has been raging in the committee charged with drafting it, and last night, the US and others threw in the towel.

Public Knowledge, Intellectual Property Watch, and the Associated Press all have coverage of the breakdown. Unless something dramatic happens today, the planned Diplomatic Conference will not take place and no treaty will be signed.

That should come as welcome news to the consumer advocates who signed a letter this week urging countries to kill the treaty. The EFF, Public Knowledge, the International Federation of Library Associations, and others said that "WIPO should not be creating new economic rights for broadcasters and they should certainly not be creating such new economic rights for cable companies or the companies that aggregate content on cable channels, since the public already has to pay to receive such information through subscription services. There is no shortage of existing laws that make cable piracy illegal."

Further discussions will be held today on the future of the treaty, though it appears that countries are simply too far apart to come to any agreement.

New Blu-Ray Discs to Expand Copy Protection, Bypass AACS Troubles
Scott M. Fulton, III

With a minimum of fanfare, the licensing body for the developers of a supplemental copy protection technology exclusively for Blu-ray Disc announced its initial specification for BD+ - which supporters had hoped would be available early last year - is finally ready for licensing to developers. 20th Century-Fox appears to be the first to board the bandwagon, having obtained a license for its developers to write for a virtual machine that will be embedded in future BD-ROM player devices.

One of the original sticking points between studios and technologists over high-definition disc formats concerned a provision of Advanced Access Copy System (AACS) copy protection that enables content providers to revoke a player's ability to decrypt new discs' content if the integrity of that content is found to be compromised for that player - in other words, if someone has hacked into the access keys and has posted them online, enabling others to copy the content.

While most everyone involved in the original high-def negotiations agreed that AACS' concepts of the "clearing house" for online activation of content and its media key distribution structure were necessary, its revocation ability was a key bone of contention. So the group that would eventually form the Blu-ray Disc Association presented a three-part alternative to AACS copy protection alone - the scheme backed by the DVD Forum, which supports HD DVD.

This scheme would buffer AACS by adding BD-ROM Mark technology, which stores access keys using a secret physical location scheme rather than within a logical file (that technology is already ready to go), and something called BD+. Once studied as an alternative to AACS altogether, BD+ relies on an embedded, programmable virtual machine that gives studios the option of creating title-specific security functions - mechanisms specific maybe even to just one movie.

Because BD+ could have been an alternative to AACS, studios and technology companies including Hewlett-Packard were told that it could override certain unwanted provisions. For example, it could enable a BD-ROM player whose rights were officially and technically revoked through the AACS system, to play a specific movie anyway.

It's part of what Blu-ray proponents call renewability, and they describe it in either of two ways: One way enables a movie disc whose PC-based media player or whose playback console has been compromised, perhaps maliciously, to deploy code that will actually patch the media player, undoing a hack.

The second way involves what HP described last year as a "repair sequence" that could not only undo the revocation of privileges for one movie, but perhaps repair a revoked player with patches that enable it to qualify for re-emergence into the community of accepted BD decoders.

Whether that feature remains in the final specification, however, may have been thrown in doubt by this statement from a technology licensing firm that contributes to Blu-ray: "BD+ Content Code is 'non-persistent,' meaning it secures only the playback of the content contained on its disc and is deleted when the disc is ejected. The player is then returned to the state it was in prior to the disc being inserted."

The ability for a player to crawl back from revocation might have been a feature that would have tipped the scales in Blu-ray's favor in 2006. BD+ was obviously delayed by an extraordinary length of time, but then again, so was AACS' own revocation ability anyway, so the damage to Blu-ray's reputation may not be that great. Advocates and supporters of the format have admitted holding off on excessive initial purchases of Blu-ray content, knowing that more capable BD+ endowed versions would eventually be in the works.

But the Web site of BD+'s official licensing arm isn't saying much about what was and what was not retained in the final specification - its FAQ page is actually empty, leading to an even more frequently asked question, "Is this format actually ready?"

Blockbuster's decision Monday to expand its selections in many of its retail outlets to feature Blu-ray titles and not HD DVD may have given Blu-ray the edge, at least for now, in its standing among consumers. BD+ could potentially give Blu-ray a similar edge over HD DVD technologically, if its supporting studios and manufacturers play their hand properly. On the other hand, BD+'s unique copy protection capability could make Blu-ray a unique target for engineers seeking to crack its codes; and if they succeed, HD DVD advocates may be waiting with thumbs in their ears and tongues extended.

Online Video Recorders Stoke New Piracy Concerns
Daisuke Wakabayashi

It took Brian Baker only five minutes to persuade a major U.S. television network that it needed his company's technology to protect their programs from Web pirates.

Using software easily found on the Internet, Baker, chief executive of Widevine Technologies, recorded a video clip stream from that network's Web site, stripped out the commercials and sent the company back the altered video.

The network executive's reaction? "Wow, we need protection now!" Baker recalled. "Major television operators are seeing their offerings re-posted on the Internet, often times with the advertising stripped out."

Media companies fear that video recording software will facilitate piracy and rob them of lucrative advertising revenue just as they are making more TV shows, movies and video available online.

Stream rippers, or software that records any online video and downloads it onto a computer hard drive, can be bought on the Internet these days for under $100. The technology is expected to move into the mainstream with the introduction of several new video players in the coming months.

"This is an application and development of great concern," said a major U.S. network executive, who declined to be identified. "This is a dramatic move in the wrong direction."

Media conglomerate Viacom's $1 billion lawsuit against Google and its video sharing site YouTube demonstrates the lengths copyright owners will go to maintain ultimate control over where their entertainment ends up.

Three new recording video players are expected out before the end of 2007, with each company pursuing a different strategy.

RealNetworks' new media player, which will be available for public testing next week, allows users to record video streams with one click. It prevents a user from downloading video embedded with digital rights management, but it does not prevent the recording of all copyrighted content.

"The technology we built is a utility, it's a tool. The VCR or TiVo doesn't really understand where the stuff is coming from," said Jeff Chasen, a vice president at RealNetworks. "It's really up to the consumer."

RealNetworks and other media player makers see the software as a way for consumers to create a library of content they can view at a time that is convenient for them.

But media companies fear it could become a tool for pirates to widely distribute their entertainment and make money from it at their expense.

TiVo for the Internet

Internet video start-up Veoh Networks unveiled a new product called VeohTV, a digital video recorder (DVR) for the Internet that can find and store material from nearly every site on the Web including the major networks.

Veoh contends that it does not violate copyright laws and records videos with commercials contained. Analysts said major networks may take legal action to prevent the company from showing their copyrighted content next to ads sold by Veoh.

Adobe Systems' new media player downloads video for offline viewing. Adobe, a leader with its flash video format, wants to hand over more control to media companies, allowing firms to serve ads and track video usage.

Forrester Research analyst James McQuivey said the media companies' reservations about the streaming video recorders demonstrates a lack of understanding. Smart companies will embrace, not shun, the technology, he said.

"Ad-supported video is the way that the Internet video world is going to explode. The question is how far will you let your content go in order to increase your advertising revenue," said McQuivey.

Seattle-based Widevine, which has or is close to deals with all the major U.S. networks, said its video protection technology is the answer for media companies.

Widevine, a survivor of the dot-com bust, encrypts digital content so that if the company's algorithm detects a user recording the material off the portal, it will stop the video stream.

The key, according to Widevine's Baker, is that the company's digital rights management technology ensures that commercials will not be tampered with.

"Without the protection, you can bypass the advertisers," said Baker. "From a business perspective, preserving the integrity of the advertising is crucial."

USA Today: Internet Hurting Adult DVD Sales
Eddie Adams

A USA Today story published Wednesday reported that a downturn in adult DVD sales primarily is due to a proliferation of cheaper, more immediately accessible adult material on the Internet.

"The exodus to porn viewing online has been accelerated by more broadband users shunning DVDs and pay-per-view TV in favor of PC screens. Changes in viewing habits have forced industry heavyweights to dramatically alter how they deliver content," the article noted, based on comments made by Dennis McAlpine, managing director of media researcher McAlpine Associates.

Comments from adult studios such as Vivid Entertainment, SexZ Pictures, Hustler, and Extreme Associates are included in the report. Vivid, Hustler, and Extreme all are "rushing to offer movies on the Internet before they are available on DVD," according to USA Today writer Jon Swartz.

Steven Hirsch, co-chairman of Vivid, told the paper he believes – based on his company's sales experiences – DVDs largely will be replaced by Internet content. "Three years ago, 80 percent of [Vivid's] revenue came from DVD sales. Now, it's 40 percent," the article noted.

Echoing a comment reported May 21at AVNOnline.com, Extreme Chief Executive Officer Rob Black told USA Today, "DVDs are dead. The Web is where things are happening."

The USA Today report follows a similar June 2 article in the New York Times.

Waxman Probes P2P Services
Brooks Boliek

One of Congress' most dogged investigators and chairman of the House Committee on Oversight and Government Reform is training his sights on peer-to-peer services.

Industry sources said Rep. Henry Waxman, D-Calif., has grown concerned over government, personal and corporate data that has become available to hackers as consumers use P2P services to get such content as music and movies.

"What drives people to these sites are the movies and music," one entertainment industry source said. "But when they get there, they open up their computers to lots of inadvertent sharing of government and personal data."

Waxman sent letters to LimeWire CEO Mark Gorton and StreamCast Networks CEO Michael Weiss asking them to explain what steps they've taken to ensure that users of the P2P services don't open up their computers to abuse.

The letters, the first steps in the investigation by Waxman's committee, come two years after copyright holders won a victory in the U.S. Supreme Court that found the Grokster P2P service illegally induced people to violate copyright laws.

While P2P services have faded from the news and congressional scrutiny, LimeWire and StreamCast are being sued for copyright infringement by the record labels.

Waxman appears to want to delve into reports that such sensitive data as loan applications, bank statements, credit reporting agency records, user ID and password lists and tax returns get inadvertently "shared" with millions of people. There also have been reports of sensitive government information being distributed through P2P.

While the trade group P2P United adopted a code of conduct designed to prevent inadvertent file-sharing, the lawmaker seems to be concerned about its effectiveness.

"Inadvertent file-sharing may still be a significant problem," Waxman wrote. "On March 5, 2007, the United States Patent and Trademark Office released a report indicating that inadvertent file-sharing continued to threaten individual privacy and national security."

A committee aide said that Waxman's interest goes back at least to 2003, when a staff report on the issue was released. "It's really remarkable, the potential risks posed by these kinds of things," the aide said.

LimeWire said the company is ready to help explain what is going on with P2P.

"We have the greatest respect for Congressman Waxman and we look at the letter as an invitation to speak," the company said. "There is a lot of misconceptions about P2P networks that needs to be cleared up."

StreamCast declined comment.

Tanya Andersen Sues RIAA and SafeNet (f/k/a MediaSentry) for Malicious Prosecution

You probably want to read this complaint just posted on Recording Industry vs. the People, Andersen v. Atlantic et al. I think we may be watching history being made before our eyes. The worm is turning.

Tanya Andersen, the plaintiff here, is the single mother in Oregon that the RIAA prosecuted for the last couple of years and then "on the eve of summary judgment" dropped the lawsuit with prejudice. Her counterclaims remain and are restated here and supplemented. It will soon be joined into a single case. So, what started as Atlantic v. Andersen has now turned around, and it is now Andersen v. Atlantic and the defendants are the music companies making up the RIAA -- Atlantic, Priority Records, Capitol Records, UMG and BMG -- the RIAA itself, the Settlement Support Center, and SafeNet, formerly known as MediaSentry. She is asserting claims under the Computer Fraud and Abuse Act and the RICO Act, the Racketeer Influenced and Corrupt Organization Act.

Update: So many of you asked about copyright misuse, and what the consequences can be, I found a paper for you to read, "Competition Law and Copyright Misuse" by John Cross and Peter Yu. Here's the paragraph I think you are looking for:
The independent doctrine of copyright misuse ... focuses on whether the owner attempts to avoid some limit imposed by copyright law.... Rather than criminal penalties or treble damages under U.S. antitrust law, the sole “penalty” for copyright misuse is the inability to sue the affected party for infringement. That penalty applies only with respect to the particular licensee bound by the provision, and exists only for so long as the misuse continues.

Her complaint states the following, in part:
1.2 On August 26, 2005, while Tanya Andersen and her 8 year-old daughter were sitting down to dinner a legal process server knocked on her door. When she answered the door, she was served with a lawsuit filed by RIAA-controlled music distribution companies in a federal court. Ms. Andersen was shocked, afraid, and very distressed. The lawsuit falsely claimed that she owed hundreds of thousands of dollars to these companies as penalties for copyright infringement. Ms. Andersen knew that she was completely innocent of the charges against her. She answered the false claims and asserted counterclaims seeking damages. During discovery, Ms. Andersen learned that the lawsuit filed against her was based solely upon an illegal, flawed and negligent investigation. Almost two years later, on the even of summary judgment, the lawsuit was dismissed with prejudice. Ms. Andersen's counterclaims continue in that case. Those counterclaims are restated here as direct claims. New claims are also set forth here against the former plaintiffs in that action and against new additional parties....

2.1 Tanya Andersen pursues this action to recover compensation for the significant damages these defendants directly caused her. She also seeks punitive damages, statutory penalties, litigation fees and expenses, and declaratory relief....

5.2 Defendant MediaSentry is in the business of conducting personally invasive private investigations of private citizens in many states in the U.S. for the RIAA and its controlled member companies. ...

5.3 Pursuant to a secret agreement, the RIAA, its controlled member companies and MediaSentry conspired to develop a massive threat and litigation enterprise targeting private citizens across the United States....

That's just up to page 5 of the 34 pages. When the defendants answer, I'll post that as well, so you can hear both sides. But I knew you would be interested, because when the SCO saga began, SCO executives pointed to the RIAA as a model they felt worthy of imitation, IIRC. Why yes, yes they did. Here's one example, Darl McBride at the SCO 1Q conference call on March 3, 2004, the day SCO announced it was going after Linux end users like the RIAA was going after P2P downloaders. The analogy was not apt, but it's what he chose, because he saw similarities, he said:
Use of copyrighted material without permission is prohibited under copyright law and can carry significant monetary damages. I reference these actions as elements of SCO's enforcement initiatives and to underscore SCO's commitment to vigorously protect and enforce our intellectual property, our System V code, our contract rights, and our copyrights. With representation of Boies, Schiller & Flexner and their associated firms, we have now taken the significant next step in the process of enforcing our contract rights and copyrights through legal action against end users.

We believe that there are important similarities between our recently legal actions against end users and those actions that have taken place in the recording industry. It wasn't until RIAA ultimately launched a series of lawsuits against end user copyright violators that the community-at-large became fully educated regarding the liabilities associated with using copyrighted materials without providing remuneration to the copyright owner. We believe that the legal actions we have taken and will continue to take will have a similar impact on end users of UNIX and Linux. We anticipate that there are many end users who have not considered the ramifications of the unlicensed use of SCO copyrighted technology and that an increasing number of companies will now take appropriate action to license SCO's intellectual property.

His prediction didn't come true, of course. His mean dream either. And recently, SCO told the court in the Novell case that even if they win against Novell as to copyright ownership, SCOsource is dead. One difference between SCO and the RIAA is that the RIAA at least really owns the copyrights.

The thing about litigation is this: both sides need to "consider the ramifications" before they leap off the diving board into the pool. I never support copyright infringement, as you know. But as it turned out in the case of SCO, there wasn't any that I've seen on the horizon for as far as the eye can see, and I climbed as high up the main mast as I could get for the very best view. I see nothing. I never will say you should go against the law or violate anyone's copyright. But the copyright owners have laws to obey as well, and now we will see how that side of the coin looks in a court of law.

The Record Industry's Decline

Record Sales are Tanking, and There's no Hope in Sight: How it all Went Wrong
Brian Hiatt and Evan Serpick

For the music industry, it was a rare bit of good news: Linkin Park's new album sold 623,000 copies in its first week this May -- the strongest debut of the year. But it wasn't nearly enough. That same month, the band's record company, Warner Music Group, announced that it would lay off 400 people, and its stock price lingered at fifty-eight percent of its peak from last June.

Overall CD sales have plummeted sixteen percent for the year so far -- and that's after seven years of near-constant erosion. In the face of widespread piracy, consumers' growing preference for low-profit-margin digital singles over albums, and other woes, the record business has plunged into a historic decline.

The major labels are struggling to reinvent their business models, even as some wonder whether it's too late. "The record business is over," says music attorney Peter Paterno, who represents Metallica and Dr. Dre. "The labels have wonderful assets -- they just can't make any money off them." One senior music-industry source who requested anonymity went further: "Here we have a business that's dying. There won't be any major labels pretty soon."

In 2000, U.S. consumers bought 785.1 million albums; last year, they bought 588.2 million (a figure that includes both CDs and downloaded albums), according to Nielsen SoundScan. In 2000, the ten top-selling albums in the U.S. sold a combined 60 million copies; in 2006, the top ten sold just 25 million. Digital sales are growing -- fans bought 582 million digital singles last year, up sixty-five percent from 2005, and purchased $600 million worth of ringtones -- but the new revenue sources aren't making up for the shortfall.

More than 5,000 record-company employees have been laid off since 2000. The number of major labels dropped from five to four when Sony Music Entertainment and BMG Entertainment merged in 2004 -- and two of the remaining companies, EMI and Warner, have flirted with their own merger for years.

About 2,700 record stores have closed across the country since 2003, according to the research group Almighty Institute of Music Retail. Last year the eighty-nine-store Tower Records chain, which represented 2.5 percent of overall retail sales, went out of business, and Musicland, which operated more than 800 stores under the Sam Goody brand, among others, filed for bankruptcy. Around sixty-five percent of all music sales now take place in big-box stores such as Wal-Mart and Best Buy, which carry fewer titles than specialty stores and put less effort behind promoting new artists.

Just a few years ago, many industry executives thought their problems could be solved by bigger hits. "There wasn't anything a good hit couldn't fix for these guys," says a source who worked closely with top executives earlier this decade. "They felt like things were bad and getting worse, but I'm not sure they had the bandwidth to figure out how to fix it. Now, very few of those people are still heads of the companies."

More record executives now seem to understand that their problems are structural: The Internet appears to be the most consequential technological shift for the business of selling music since the 1920s, when phonograph records replaced sheet music as the industry's profit center. "We have to collectively understand that times have changed," says Lyor Cohen, CEO of Warner Music Group USA. In June, Warner announced a deal with the Web site Lala.com that will allow consumers to stream much of its catalog for free, in hopes that they will then pay for downloads. It's the latest of recent major-label moves that would have been unthinkable a few years back:

In May, one of the four majors, EMI, began allowing the iTunes Music Store to sell its catalog without the copy protection that labels have insisted upon for years.

When YouTube started showing music videos without permission, all four of the labels made licensing deals instead of suing for copyright violations.

To the dismay of some artists and managers, labels are insisting on deals for many artists in which the companies get a portion of touring, merchandising, product sponsorships and other non-recorded-music sources of income.

So who killed the record industry as we knew it? "The record companies have created this situation themselves," says Simon Wright, CEO of Virgin Entertainment Group, which operates Virgin Megastores. While there are factors outside of the labels' control -- from the rise of the Internet to the popularity of video games and DVDs -- many in the industry see the last seven years as a series of botched opportunities. And among the biggest, they say, was the labels' failure to address online piracy at the beginning by making peace with the first file-sharing service, Napster. "They left billions and billions of dollars on the table by suing Napster -- that was the moment that the labels killed themselves," says Jeff Kwatinetz, CEO of management company the Firm. "The record business had an unbelievable opportunity there. They were all using the same service. It was as if everybody was listening to the same radio station. Then Napster shut down, and all those 30 or 40 million people went to other [file-sharing services]."

It all could have been different: Seven years ago, the music industry's top executives gathered for secret talks with Napster CEO Hank Barry. At a July 15th, 2000, meeting, the execs -- including the CEO of Universal's parent company, Edgar Bronfman Jr.; Sony Corp. head Nobuyuki Idei; and Bertelsmann chief Thomas Middelhof -- sat in a hotel in Sun Valley, Idaho, with Barry and told him that they wanted to strike licensing deals with Napster. "Mr. Idei started the meeting," recalls Barry, now a director in the law firm Howard Rice. "He was talking about how Napster was something the customers wanted."

The idea was to let Napster's 38 million users keep downloading for a monthly subscription fee -- roughly $10 -- with revenues split between the service and the labels. But ultimately, despite a public offer of $1 billion from Napster, the companies never reached a settlement. "The record companies needed to jump off a cliff, and they couldn't bring themselves to jump," says Hilary Rosen, who was then CEO of the Recording Industry Association of America. "A lot of people say, 'The labels were dinosaurs and idiots, and what was the matter with them?' But they had retailers telling them, 'You better not sell anything online cheaper than in a store,' and they had artists saying, 'Don't screw up my Wal-Mart sales.' " Adds Jim Guerinot, who manages Nine Inch Nails and Gwen Stefani, "Innovation meant cannibalizing their core business."

Even worse, the record companies waited almost two years after Napster's July 2nd, 2001, shutdown before licensing a user-friendly legal alternative to unauthorized file-sharing services: Apple's iTunes Music Store, which launched in the spring of 2003. Before that, labels started their own subscription services: PressPlay, which initially offered only Sony, Universal and EMI music, and MusicNet, which had only EMI, Warner and BMG music. The services failed. They were expensive, allowed little or no CD burning and didn't work with many MP3 players then on the market.

Rosen and others see that 2001-03 period as disastrous for the business. "That's when we lost the users," Rosen says. "Peer-to-peer took hold. That's when we went from music having real value in people's minds to music having no economic value, just emotional value."

In the fall of 2003, the RIAA filed its first copyright-infringement lawsuits against file sharers. They've since sued more than 20,000 music fans. The RIAA maintains that the lawsuits are meant to spread the word that unauthorized downloading can have consequences. "It isn't being done on a punitive basis," says RIAA CEO Mitch Bainwol. But file-sharing isn't going away -- there was a 4.4 percent increase in the number of peer-to-peer users in 2006, with about a billion tracks downloaded illegally per month, according to research group BigChampagne.

Despite the industry's woes, people are listening to at least as much music as ever. Consumers have bought more than 100 million iPods since their November 2001 introduction, and the touring business is thriving, earning a record $437 million last year. And according to research organization NPD Group, listenership to recorded music -- whether from CDs, downloads, video games, satellite radio, terrestrial radio, online streams or other sources -- has increased since 2002. The problem the business faces is how to turn that interest into money. "How is it that the people that make the product of music are going bankrupt, while the use of the product is skyrocketing?" asks the Firm's Kwatinetz. "The model is wrong."

Kwatinetz sees other, leaner kinds of companies -- from management firms like his own, which now doubles as a record label, to outsiders such as Starbucks -- stepping in. Paul McCartney recently abandoned his longtime relationship with EMI Records to sign with Starbucks' fledgling Hear Music. Video-game giant Electronic Arts also started a label, exploiting the promotional value of its games, and the newly revived CBS Records will sell music featured in CBS TV shows.

Licensing music to video games, movies, TV shows and online subscription services is becoming an increasing source of revenue."We expect to be a brand licensing organization," says Cohen of Warner, which in May started a new division, Den of Thieves, devoted to producing TV shows and other video content from its music properties. And the record companies are looking to increase their takes in the booming music publishing business, which collects songwriting royalties from radio play and other sources. The performance-rights organization ASCAP reported a record $785 million in revenue in 2006, a five percent increase from 2005. Revenues are up "across the board," according to Martin Bandier, CEO of Sony/ATV Music Publishing, which controls the Beatles' publishing. "Music publishing will become a more important part of the business," he says. "If I worked for a record company, I'd be pulling my hair out. The recorded-music business is in total confusion, looking for a way out."

Nearly every corner of the record industry is feeling the pain. "A great American sector has been damaged enormously," says the RIAA's Bainwol, who blames piracy, "from songwriters to backup musicians to people who work at labels. The number of bands signed to labels has been compromised in a pretty severe fashion, roughly a third."

Times are hard for record-company employees. "People feel threatened," says Rosen. "Their friends are getting laid off left and right." Adam Shore, general manager of the then-Atlantic Records-affiliated Vice Records, told Rolling Stone in January that his colleagues are having an "existential crisis." "We have great records, but we're less sure than ever that people are going to buy them," he says. "There's a sense around here of losing faith."

Additional reporting by Steve Knopper and Nicole Frehsée

The Fall of the Record Business: What Next?
Evan Serpick

Theory 1: Ad-Supported Music
Yahoo! Music General Manager Ian Rogers says all music will be free - paid for by ads - and any song by any artist will be accessible from anywhere in the world.

"I can imagine a future where you just consume a hell of a lot of music - just hit 'play' on any player, and hear music. There's an ad experience there, and we'll pay the labels a percentage of that ad revenue. All devices will be connected to a network and we can find anything we want and hit 'play' without connecting our device to our computer and dragging a physical file over. People are going to have the expectation that they can get to anything whenever they want to."

Theory 2: Peer-to-Peer Goes Legit
Eric Garland, CEO of digital-music research firm Big Champagne, says people will pay a monthly surcharge on their cable bill to download an unlimited supply of tunes.

"Tens of billions of songs are downloaded for free by people all over the world, representing a huge market - not in changing their behavior, but in creating businesses around that fact. People that provide access to networks are the logical place for payments to be administered: Today you pay your cable company, not only for bits and bites, but for services like HBO or a tier of basic cable. It's in everyone's interest to administer payment there, with royalty payments made from pools of money collected based on stat rates or voluntary rates. You'll have Time Warners and Comcasts and Verizons working with content companies to convert these marketplaces without trying to change customer behavior."

Theory 3: Endless Access Points for Music
David Pakman, President and CEO of the indie-minded download site eMusic, says the more outlets there are to buy music, the fewer people will turn to piracy.

"The future of the music industry is bright. The old way, you'd buy a CD because you heard it on the radio. Now we have 20 different ways to go out and sample new music, whether it's blogs, downloads, ring tones, full-length mobile downloads, Internet radio, personalized subscription radio, or on-demand on your cable box. Those will continue to proliferate. It's important to offer music for sale everywhere. Selling more music is the way to monetize it and compete with piracy."

Theory 4: Labels Change Their Stripes
Rob Glaser, the head of Real Networks and Rhapsody, predicts that labels will operate more as managers, earning most of their profits from licensing, touring, and merchandise.

"The notion of a company that is only in the business of selling recorded music is an artifact of the physical world. In the next year or two, as physical growth continues to lag, the labels' pain will just get so great, they'll move to a more rational approach: The smarter way for music companies to work as venture capitalists, where they help to support bands through recording contracts, tour support, licensing, helping them artistically, essentially as business partners. If the artists succeed, the labels succeed. In a digital world that's the only way to align the interest between the label and the artists and it's been surprising to me how slowly the industry has been to embrace it."

Theory 5: Consumers Become Retailers
Terry McBride, founder and CEO of Nettwerk Music Group, says social networking will be integrated with commerce.

"We'll be looking at a space where the consumer is the retailer. Within a text message, an email or an IM, I can say, 'Listen to the new Avril single,' you click on her name, you hear it, you like it, you hit pound-four, and you instantly bought it, but you bought it from me. And maybe it's for twenty-five cents, and maybe five of that twenty-five cents goes in my PayPal account, the rest of it goes through a payment system to the copyright holders. You've got your price point down to where it's not worth the effort of going online to find it, and you really tap into the social nature of how social groups work."

Music Industry Attacks Sunday Newspaper's Free Prince CD
Katie Allen

The eagerly awaited new album by Prince is being launched as a free CD with a national Sunday newspaper in a move that has drawn widespread criticism from music retailers.

The Mail on Sunday revealed yesterday that the 10-track Planet Earth CD will be available with an "imminent" edition, making it the first place in the world to get the album. Planet Earth will go on sale on July 24.

"It's all about giving music for the masses and he believes in spreading the music he produces to as many people as possible," said Mail on Sunday managing director Stephen Miron. "This is the biggest innovation in newspaper promotions in recent times."

The paper, which sells more than 2m copies a week, will be ramping up its print run in anticipation of a huge spike in circulation but would not reveal how much the deal with Prince would cost.

One music store executive described the plan as "madness" while others said it was a huge insult to an industry battling fierce competition from supermarkets and online stores. Prince's label has cut its ties with the album in the UK to try to appease music stores.

The Entertainment Retailers Association said the giveaway "beggars belief". "It would be an insult to all those record stores who have supported Prince throughout his career," ERA co-chairman Paul Quirk told a music conference. "It would be yet another example of the damaging covermount culture which is destroying any perception of value around recorded music.

"The Artist Formerly Known as Prince should know that with behaviour like this he will soon be the Artist Formerly Available in Record Stores. And I say that to all the other artists who may be tempted to dally with the Mail on Sunday."

High street music giant HMV was similarly scathing about the plans. Speaking before rumours of a giveaway were confirmed, HMV chief executive Simon Fox said: "I think it would be absolutely nuts. I can't believe the music industry would do it to itself. I simply can't believe it would happen; it would be absolute madness."

Prince, whose Purple Rain sold more than 11m copies, also plans to give away a free copy of his latest album with tickets for his forthcoming concerts in London. The singer had signed a global deal for the promotion and distribution of Planet Earth in partnership with Columbia Records, a division of music company Sony BMG. A spokesman for the group said last night that the UK arm of Sony BMG had withdrawn from Prince's global deal and would not distribute the album to UK stores.

On the Web, EMI to Offer More Choices
Robert Levine

Music blogs and social networking sites like MySpace are playing an increasingly important part in record companies’ marketing plans. Now they will also be able to sell songs from a major label that will play on the iPod from Apple.

EMI Music and Snocap are to announce today that Snocap will sell the label’s music in its MyStores, online shops that can be added to various sites on the Internet. Snocap’s MyStores would be placed on the Web sites of EMI artists like Korn, Suzanne Vega and Yellowcard, as well as on artists’ MySpace pages. Fans would also be able to place MyStores “widgets” on their own sites and MySpace pages, although Snocap would still control sales.

“It’s almost like you’re giving the label a vending machine,” Snocap’s chief executive, Rusty Rueff, said. “They can fill it up and people can take it and put it as many places as they want. This allows the artists and the fans to have a chance to engage in commerce on the most popular music sites, like MySpace.”

The price will be $1.30 a song for high-quality MP3 files that will work on any digital media player, including the iPod. Until now, Snocap had been selling independent label songs as well as Warner Music Group material in a format that did not work on the iPod.

Since MyStores can be added to a variety of Web pages, they will offer fans more places to shop for music. Over the last few years, as CD sales have fallen, music chains like Tower Records have closed, which has in turn fueled further declines. Snocap also planned to sell music at a variety of different price points, a feature the major labels want, but cannot get, from Apple’s iTunes store.

“My whole mantra has been, you have to make it easy for people to buy music,” said Barney Wragg, the head of EMI’s worldwide digital division. “You don’t have to have one big store which everyone has to come to; you can take this store and put it into pages all over the place.”

Snocap’s MyStores would also make it possible for customers to buy music where and when they first hear it. Since MySpace and various artists’ Web sites have become popular places to sample music in streaming audio, labels hope that fans will make more impulse buys.

In a survey by the analyst firm Jupiter Research, 20 percent of adults who were online identified themselves as impulse music buyers.

“MySpace has a big audience, which is interested in music, and a lot of people are listening to music on the site,” said David Card, a Jupiter Research analyst. “So if MyStores can deliver a graceful experience, I think they have a decent shot of being a big deal.”

Ubuntu's Mark Shuttleworth: Prepare for the Shared Software Tidal Wave
Todd R. Weiss

"I was poor. I was desperate. I wanted to be on this bandwagon of this Internet thing, and I wanted to find a business that wouldn't require large amounts of bandwidth or large amounts of capital. The key was Linux. It was Linux that let me connect to the Net so I could start soaking up this knowledge," said Mark Shuttleworth, founder of Ubuntu Linux.

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Mark Shuttleworth made news in 2002 when he fulfilled a lifelong ambition and became the first South African to travel into space, paying US$20 million to be a civilian cosmonaut on an eight-day flight aboard a Russian Soyuz spacecraft .

In 2004, he founded Ubuntu Linux to bring the operating system to people around the world. He is also the founder of HBD Venture Capital and the nonprofit Shuttleworth Foundation.

Question: You have pumped more than $10 million of your own money into the continuing development of Ubuntu Linux, and you have been on a personal campaign to bring a free, easy-to-use and reliable Linux to the masses around the world. Why?

Answer: In college, I was struggling to get my own personal computer hooked up to the university network. Then someone gave me a stack of Slackware Linux discs, and [i] found myself just enthralled by the breadth and depth of the tools that were available from Linux, even in those very early days.

It's like going from living in the desert to walking into an all-you-can-eat buffet. I went on to turn that interest in the Internet into a small business called Thawte (in 1995), which sold digital certificates that I created, initially at least, with cryptographic software that was available under an open source license.

Q: How did you think of getting into such a business back In 1995, just as the Internet was becoming a household word?

A: I was poor. I was desperate. I wanted to be on this bandwagon of this Internet thing, and I wanted to find a business that wouldn't require large amounts of bandwidth or large amounts of capital.

The key was Linux. It was Linux that let me connect to the Net so I could start soaking up this knowledge. It was Linux that let me put servers down in a company with an employee count of one, and to have servers in three countries and administer them all remotely over slow dial-up lines. You could only do that with Linux.

I sold that business in 1999, right at the top of the Internet bubble. That then gave me the opportunity to sit back and ask myself: What are the things in life that I would like to be a part of? You know, life is short.

One thing was to explore space and be a part of that adventure. I went and I did that. And the other thought was to be a part of this experience of free software, which had been beneficial to me -- bringing that to a much wider audience. And that's the genesis of Ubuntu.

Q: Ubuntu Linux has come a long way In just three years. How far are you from the dream of Linux for the masses?

A: Well, we certainly have been part of the process of making Linux more widely accepted and interesting and useful. Part of that has been fortunate timing. The Linux community itself around 2004 decided it was an interesting problem. The Linux kernel guys were feeling like they had proven that they could make the kernel stable and reliable and robust, and the next challenge was the desktop. So we've benefited by entering the scene right at the same time as everybody else was getting interested in that.

Q: Here in the U.S., Ubuntu has been getting attention for its desktop operating system. What's the strategy for Ubuntu in the corporate marketplace with its server OS version?

A: Of course, it will take time to build up a complete portfolio of certification. But many organizations have taken the first step, which is deploying Ubuntu on a server somewhere -- even if that's just an internal affair, such as a high-performance computing testbed and evaluation pool, places where they feel they can take some risks or places where they don't depend so much on third-party certifications.

So, for instance, people who are deploying things like LAMP (Linux, Apache, MySQL, PHP) stacks love Ubuntu because it has everything they need. We've seen very rapid adoption there. It will take time, obviously, to have people deploying it in the heart of their networks and underneath their database servers, because we have to build the relationships with those [software] vendors. That's not quite the work of a lifetime, but it's certainly a multiyear exercise.

Q: What kind of response have you been getting from traditional IT vendors?

A: It surprised people. You know, any surprise is a bad surprise for people who are in as long and intense a game as those big companies have been playing in the marketplace. I think we've shaken things up a little bit in a market that was seen to be well established and predictable, so it will take time for those companies to take a view on how they feel about the changes that we're bringing about.

Q: What do you think of the Apple OS and hardware? Are they the standard of quality for open source and Ubuntu in terms of matching their ease of use and eloquence of design?

A: In many cases, Apple has set the pace. I can think of cases where it's free software that has set the pace. The Mozilla Firefox browser is a great example of what happens when you get a small team that has good raw materials and they just relentlessly focus on making something that's a joy to use. It's a combination of simplicity and extensibility that gives you the ability to produce something that is both easy to use for a first-time user and powerful for someone who sits in front of a browser every day, all day.

Q: What do you think is the next big thing in Linux where Ubuntu can make even more waves?

A: We think that virtualization is one of the most exciting things happening in Linux today, and we're trying to incorporate the most exciting and mature technologies cleanly into Ubuntu.

Q: What are you most passionate about in your work?

A: Tidal waves. I'm fascinated by things that sweep through society and then change everything that they touch in different ways. The Internet itself was the first big tidal wave that I could actually witness. I guess I also saw desktop computing as a kid, but I didn't really have much of a perspective on it. But watching the Internet sweep through society, changing the way my mother worked, changing the way businesses worked, changing the way people designed products and so on, has been amazing. I wanted a project there that was right on the cutting edge of it.

Free software is part of a broader phenomenon, which is a shift toward recognizing the value of shared work. Historically, shared stuff had a very bad name. The reputation was that people always abused shared things, and in the physical world, something that is shared and abused becomes worthless. In the digital world, I think we have the inverse effect, where something that is shared can become more valuable than something that is closely held, as long as it is both shared and contributed to by everybody who is sharing in it.

That's a fascinating concept, and I think it's going to touch many industries. Software is the first. To be part of that is entirely another tidal wave.

Google Threatens to Close Gmail Germany Over Privacy Concerns

According to spiegel.de (german), Google is threatening to close down the german version of it’s popular gmail service if the german Bundestag passes it’s new internet surveillance law. According to googles german privacy representative, Peter Fleischer, the new law would be a severe blow against privacy and would go against Googles practice of also offering anonymous e-mail accounts.

If the Bundesregierung has it’s way, then starting 2008, any connection data concerning the internet, phone calls (With position data when cell phones are used), SMS etc. of any german citizen will be saved for 6 months, anonymizing services like Tor will be made illegal.

Personally, I applaud google for joining the protest against this absurd piece of fear-inspired legislation. A big corporation standing up against this might get some politicians to actually have a look at and think about the issue instead of just passing it through, “Cause it’s to defeat the terrorists!”.

'Citizen Journalism' Battles the Chinese Censors

In the strictly controlled media world of communist China, "citizen journalism" is beating a way through censorship, breaking taboos and offering a pressure valve for social tensions.

In one striking example this month, the Internet was largely responsible for breaking open a slave scandal in two Chinese provinces that some local authorities had been complicit in.

A letter posted on the Internet by 400 parents of children working as slaves in brickyards was the trigger for the national press to finally report on the scandal that some rights groups say had been going on for years.

The parents' Internet posting was part of a growing phenomenon for marginalised people in China who can not otherwise have their complaints addressed by the traditional, government-controlled press.

"The phenomenon of 'citizen journalism' suddenly arrived several years ago," said Beijing-based dissident Liu Xiaobo, who was one of the student leaders of the 1989 Tiananmen democracy protests.

"Since the appearance of blogs in particular, every blog is a new platform for the spread of information."

He cited the example of a couple in the southwestern city of Chongqing who became known as the "Stubborn Nails" in April because they refused to leave their home until they received adequate compensation from the property developer who wanted them out.

They quickly became household names in China -- and symbols of resistance against greedy land developers and corrupt local authorities -- mainly thanks to Internet postings.

"That case was first revealed through blogs," Liu said.

Also in Chongqing, parts of the city were this month set on fire following the beating of flower sellers by the "chengguan", city police charged with "cleaning up" the city's roads.

Witnesses to the beatings had appealed to local television journalists, but nothing was broadcast.

The incident only became known outside the city thanks to photos and stories published on the Internet, sparking anger among China's netizens.

"It's fascism," said one, while another mocked: "The inhabitants of Chongqing are truly naive, the Chinese media is all controlled by the Communist Party, they decide what people know."

Several days later, another blunder by the "chengguan" -- this time in Zhengzhou in central Henan province, again targeted at a street seller -- provoked further riots.

The image of protesters surrounding a police car, captured by a mobile phone, made its way round the world, after being posted on Chinese movie sharing site Tudou, then reposted on YouTube.

Elsewhere across China, protesters often seek to post photos or videos of unrest on the Internet to counter the versions from the state-run press and local authorities, who usually downplay or deny the events.

Recognising the threat of China's growing online community, Chinese President Hu Jintao called in January for the Internet to be "purified", and the government has since launched a number of online crackdowns.

"The department of propaganda has sent out regulations to try and control the opinions being spread on the Internet, but every citizen has the right to criticise or to take part in public affairs on the Internet," said Zhu Dake, a professor at Shanghai Tongji University.

"The government has to accept the criticisms of the people, it can no longer react crudely like in the past."

Julien Pain, who monitors Internet freedom issues for Reporters Without Borders, is less optimistic.

"One cannot truly say that the Internet in China is becoming more and more free, because at the same time as the development of citizen journalists, the government finds ways of blocking or censoring content," Pain said.

Reporters Without Borders, which labels the Chinese government an "enemy of the Internet," says about 50 cyber dissidents are currently behind bars in China.

In Food Safety Crackdown, China Closes 180 Plants
David Barboza

After weeks of insisting that food here is largely safe, regulators in China said Tuesday that they had recently closed 180 food plants and that inspectors had uncovered more than 23,000 food safety violations.

The nationwide crackdown, which began in December, also found that many small food makers were using industrial chemicals, dyes and other illegal ingredients in making a range of food products, everything from candy to seafood.

The announcement came as part of a sweeping overhaul of this country’s food safety regulations in the aftermath of a series of international food scares involving Chinese exports.

The country’s exports of contaminated vegetable protein earlier this year triggered one of the largest pet food recalls in American history.

Tainted food ingredients also leached into American meat and fish supplies, and other problem foods, such as tainted fish, have turned up in Europe and other parts of Asia.

China has strongly denied that its food exports are hazardous and has seemingly retaliated in recent weeks by seizing American and European imports.

Earlier this week, China said it had impounded two shipments of food from the United States because the orange pulp and apricots contained “excessive amounts of bacteria and mould.”

And earlier this year, regulators blocked imports of Evian water from France, saying bacteria levels in the water exceeded national standards.

Still, the government has moved aggressively in recent months to enforce the nation’s food safety regulations and to crack down on fake and counterfeit foods.

But Tuesday’s announcement, which appeared on the web site of the country’s top quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine, has added fuel to concerns about rampant fraud in the food industry here.

Regulators said 33,000 law enforcement officials combed the nation and turned up illegal food making dens, counterfeit bottled water, fake soy sauce, banned food additives and illegal meat processing plants.

“These are not isolated cases,” Han Yi, director of the administration’s quality control and inspection department told the state-run media.

China Daily, the nation’s English language newspaper, said industrial chemicals, including dyes, mineral oils, paraffin wax, formaldehyde and malachite green, had been found in everything from candy, pickles and biscuits to seafood.

Regulators said they also learned that sodium hydroxide and hydrochloric acid were being used to process shark fin and ox tendon.

These industrial chemicals are often toxic or corrosive and can be used in everything from drain cleaners, detergent and fertilizer to surfboard wax.

These types of findings have become all too common in China. For instance, in 2005, officials in south China found a company repackaging food waste and shipping it to 10 other regions. And just last week, officials said a company in Anhui province, not far from Shanghai, was selling a two-year-old rice dumpling mix as fresh, according to the state-controlled media.

Experts here say the problem is that the country’s food regulations are not being enforced and small businessmen feel they need to go to extraordinary lengths to make a profit.

Corruption and bribery have also infected the food and drug industry here.

The former head of the nation’s food and drug watchdog was recently sentenced to death for accepting bribes and approving the licensing of substandard drugs. And now, a Ministry of Agriculture official is on trial in Beijing for accepting bribes in exchange for endorsing food products.

But not all the problems stem from corruption or malfeasance. A.T. Kearney issued a report this week saying one cause of food safety problems is a lack of cold storage and logistics systems.

The consulting firm said China needs to invest about $100 billion over the next 10 years to upgrade its logistics and cold storage capabilities and to implement new standards.

In China, the study said, there are only about 30,000 cold storage trucks. In the U.S., there are about 280,000.

“In the entire supply chain there’s no common standard or world class standard,” said Zhang Bing, who helped prepare the study. “There are a lot of things contributing to the food safety problem. There are companies putting chemicals into food. But there’s also a lot of spoilage.”

F.D.A. Issues Alert on Chinese Seafood
Andrew Martin

The Food and Drug Administration today issued an alert challenging imports of five major types of farm-raised seafood from China, including shrimp and catfish, because testing found recurrent contamination from carcinogens and antibiotics.

The alert means that the fish will be allowed for sale in the United States only if testing proves that it is free of those substances.

While the federal agency stopped short of an outright ban, the alert is nonetheless hugely significant because China is a major source of imported seafood in the United States, accounting for 21 percent of total imports.

The United States imports 81 percent of the seafood that is consumed here.

“There’s been a continued pattern of violation with no signs of abatement,” said David Acheson, the F.D.A.’s assistant commissioner for food safety. He insisted that there was no imminent danger to human health, but that prolonged consumption could cause health problems.

The other varieties affected by the ban are eel, basa, which is related to catfish, and dace, which is related to carp.

The seafood alert is the latest and perhaps broadest indictment yet against Chinese products, which have come under increasing scrutiny in recent months after pet food, toothpaste, toy trains and tires have been found to be contaminated or defective in some way.

China is the world’s leading producer of farm-raised fish. Its shipments to the United States were valued at $1.9 billion in 2006, a 193 percent increase from 2001, according to the Department of Agriculture. The biggest American imports from China are shrimp, tilapia, scallops, cod and pollock, federal statistics show.

The move by the F.D.A. comes after several Southern states have already blocked the sale of Chinese seafood contaminants. Now, Chinese catfish can be sold only if it passes testing that proves it has no contaminants.

The state of Alabama announced its ban after testing found 14 of 20 samples contained fluoroquinolones, a type of antibiotic banned by the F.D.A. Mississippi officials found that 18 of 26 samples of Chinese catfish were contaminated with fluoroquinolones.
“We are saying all Chinese seafood that comes in here has to be tested prior to sale,” said Bob Odom, Louisiana’s agriculture and forestry commissioner. “The simple reason for that is we found a lot of it that is contaminated.”

The problems with Chinese seafood are evident in a database of products that the FDA stops at the border. In May, for instance, the F.D.A. turned away 165 shipments from China, 49 of which were seafood.

Monkfish was rejected for being filthy. Frozen catfish nuggets were turned away because they contained veterinary drugs. Tilapia fillets were contaminated with salmonella.

The problems were even worse in April, when 257 shipments from China were rejected, including 68 of seafood. Frozen eel contained pesticides, frozen channel catfish had salmonella and frozen yellowfin steaks were filthy, the records show.

In a report on the F.D.A.’s oversight released in May, Food and Water Watch, a Washington-based nonprofit organization, found that more than 60 percent of the seafood that was rejected at the border by the F.D.A. came from China.

The report also found that the percentage of seafood shipments that were pulled out for laboratory analysis declined in recent years, from .88 percent in 2003 to .59 percent in 2006, the report found. Over all, about 2 percent of seafood import shipments between 2003 and 2006 received either a sensory examination for color and smell or a more detailed laboratory analysis.

Of the seafood that was refused at the border, filth was the top reason and salmonella was second, with shrimp accounting for about half of those, the report found.

Of the shipments rejected for veterinary drug residues in 2006, 63 percent were from China, the report found. Vietnam had the second most rejections for veterinary drug residue, 11 percent.

The Government Accountability Office has also criticized the F.D.A.’s oversight of seafood imports. In a 2004 report, the G.A.O. determined that the seafood inspection program had improved from 2001, when the agency concluded that the seafood inspection program did not sufficiently protect consumers.

But the G.A.O. also found that the F.D.A. still had considerable room for improvement.

Chinese Tire Recall to Start Monday

New Jersey tire importer will begin replacing defective tires, but only until they run out of money.

The company that imported Chinese tires at the center of a recall demand by the National Highway Traffic Safety Administration will recall the tires and replace them until the company, Foreign Tire Sales (FTS), has run out of funds.

A lawyer for FTS said the company will begin the notifying owners of the tires on Monday and will continue the recall until the company has run out of money.

Once the company has replaced as many of the tires as it can, the company will have to declare bankruptcy.

Lawrence Levigne, the attorney representing the New Jersey-based distributor of the imported tires, estimated that the company has enough funds to replace about 10 percent of the 450,000 tires that may be defective.

The tires, made by China-based Hangzhou Zhongce Rubber Co., have an insufficient or missing gum strip, a rubber feature that helps prevent steel belts inside the tire from separating or from damaging the rubber.

FTS alerted NHTSA to the problem in an official document filed in June. NHTSA responded by ordering a recall. Failure to recall the tires could result in fines for the importer, NHTSA reminded in a letter faxed to the company yesterday.

"At the risk of putting ourselves out of business, this company did the right thing and we reported [the problem]," said Levigne, who faults NHTSA for not doing more to help the company correct the problem.

In statements made to the New York Times and Wall Street Journal, Hangzhou Zhongce has denied that the tires are defective.

Wider Sale Seen for Toothpaste Tainted in China
Walt Bogdanich

After federal health officials discovered last month that tainted Chinese toothpaste had entered the United States, they warned that it would most likely be found in discount stores.

In fact, the toothpaste has been distributed much more widely. Roughly 900,000 tubes containing a poison used in some antifreeze products have turned up in hospitals for the mentally ill, prisons, juvenile detention centers and even some hospitals serving the general population.

The toothpaste was handed out in dozens of state institutions, mostly in Georgia but also in North Carolina, according to state officials. Hospitals in South Carolina and Florida also reported receiving Chinese-made toothpaste, and a major national pharmaceutical distributor said it was recalling tainted Chinese toothpaste.

The Food and Drug Administration has advised consumers to discard all Chinese-made toothpaste, regardless of the brand.

State officials in Georgia and North Carolina said all the tainted tubes were being replaced with brands made outside China. The officials said there had been no reports of illnesses caused by the toothpaste.

Officials of the Food and Drug Administration said toothpaste with even small amounts of the bad ingredient, diethylene glycol, a syrupy poison, had a “low but meaningful risk of toxicity and injury” for children and people with kidney or liver disease.

“This stuff does not belong in toothpaste, period,” a spokesman for the drug agency, Doug Arbesfeld, said. “No Chinese toothpaste has come into the country since the end of May.”

Since the Panamanian government found Chinese toothpaste with diethylene glycol in May, countries from Latin America to West Africa to Japan have seized the toothpaste.

Panama last year inadvertently mixed the poison made in China into 260,000 bottles of cold medicine, killing at least 100 people, prosecutors there said.

Diethylene glycol is often used in Chinese toothpaste in place of its more expensive chemical cousin glycerin. Chinese regulators have said that toothpaste with small amounts of diethylene glycol is not harmful and that international concern is unjustified.

After the drug agency expressed concern about tainted toothpaste, the Georgia Department of Administrative Services checked to see whether Chinese toothpaste was being used by the state. The department found it in 83 prisons, 4 mental health centers and 4 juvenile detention centers, said Rick Beal, contracts manager for the department.

Mr. Beal said officials confiscated 5,877 remaining cases, each with 144 tubes, of the Springfresh brand. Tests showed the toothpaste had a diethylene glycol concentration of about 5 percent, he said.

The state bought the toothpaste for about 9 cents a tube in 2002. Mr. Beal said he did not know how many tubes had been used.

There are no reports of harm resulting from the toothpaste, bought from a distributor, American Amenities in Seattle.

“We do not know who their manufacturer from China was,” Mr. Beal said.

A lawyer for American Amenities, Jesse Lyon, said it had recalled all suspect shipments of the product and had decided to stop importing Chinese toothpaste. Mr. Lyon said he believed that American Amenities had about 30 institutional customers, with Georgia being the largest.

A spokesman for the North Carolina Department of Corrections, George Dudley, said his agency estimated that it bought 22,000 tubes of Pacific brand Chinese toothpaste with a small amount of diethylene glycol from Pacific Care Products in San Francisco.

Pacific Care did not respond to a request for comment, but an executive wrote to North Carolina officials that the toothpaste came from Amercare Products, also in Seattle. A spokeswoman for Amercare declined to comment.

Chinese toothpaste containing “trace amounts” of diethylene glycol has also been recalled from healthcare institutions by McKesson, a major pharmaceutical distributor and health services company, said a spokesman, James Larkin.

Mr. Larkin said although this particular brand, McKesson EverFRESH, was not on the drug agency’s list of contaminated toothpaste, McKesson asked a laboratory to test it. When small amounts of diethylene glycol turned up, the company recalled the product, he said.

“We went back through our records, and every customer that ever bought the product was contacted,” Mr. Larkin said.

He added that on short notice he could not determine how many customers had bought the product.

One institution that did was Florida Hospital Waterman, a 200-bed institution in Tavares, Fla.

“We pulled that product,” Bonnie Zimmerman of the hospital said.

Ms. Zimmerman said that the toothpaste that replaced it also came from China and it had “trace amounts” of diethylene glycol. It, too, was removed, she said.

In South Carolina, four hospitals in the Greenville Hospital System also removed Chinese toothpaste, even though its distributor said it did not have diethylene glycol, said John Mateka, executive director of materials management for the group.

Viewing American Class Divisions Through Facebook and MySpace
Danah Boyd

Over the last six months, I've noticed an increasing number of press articles about how high school teens are leaving MySpace for Facebook. That's only partially true. There is indeed a change taking place, but it's not a shift so much as a fragmentation. Until recently, American teenagers were flocking to MySpace. The picture is now being blurred. Some teens are flocking to MySpace. And some teens are flocking to Facebook. Who goes where gets kinda sticky... probably because it seems to primarily have to do with socio-economic class.

I want to take a moment to make a meta point here. I have been traipsing through the country talking to teens and I've been seeing this transition for the past 6-9 months but I'm having a hard time putting into words. Americans aren't so good at talking about class and I'm definitely feeling that discomfort. It's sticky, it's uncomfortable, and to top it off, we don't have the language for marking class in a meaningful way. So this piece is intentionally descriptive, but in being so, it's also hugely problematic. I don't have the language to get at what I want to say, but I decided it needed to be said anyhow. I wish I could just put numbers in front of it all and be done with it, but instead, I'm going to face the stickiness and see if I can get my thoughts across. Hopefully it works.

For the academics reading this, I want to highlight that this is not an academic article. It is not trying to be. It is based on my observations in the field, but I'm not trying to situate or theorize what is going on. I've chosen terms meant to convey impressions, but I know that they are not precise uses of these terms. Hopefully, one day, I can get the words together to actually write an academic article about this topic, but I felt as though this is too important of an issue to sit on while I find the words. So I wrote it knowing that it would piss many off. The academic side of me feels extremely guilty about this; the activist side of me finds it too critical to go unacknowledged.

Enter the competition

When MySpace launched in 2003, it was primarily used by 20/30-somethings (just like Friendster before it). The bands began populating the site by early 2004 and throughout 2004, the average age slowly declined. It wasn't until late 2004 that teens really started appearing en masse on MySpace and 2005 was the year that MySpace became the "in thing" for teens.

Facebook launched in 2004 as a Harvard-only site. It slowly expanded to welcome people with .edu accounts from a variety of different universities. In mid-2005, Facebook opened its doors to high school students, but it wasn't that easy to get an account because you needed to be invited. As a result, those who were in college tended to invite those high school students that they liked. Facebook was strongly framed as the "cool" thing that college students did. So, if you want to go to college (and particularly a top college), you wanted to get on Facebook badly. Even before high school networks were possible, the moment seniors were accepted to a college, they started hounding the college sysadmins for their .edu account. The message was clear: college was about Facebook.

For all of 2005 and most of 2006, MySpace was the cool thing for high school teens and Facebook was the cool thing for college students. This is not to say that MySpace was solely high school or Facebook solely college, but there was a dominating age division that played out in the cultural sphere.

When Facebook opened to everyone last September, it became relatively easy for any high school student to join (and then they simply had to get permission to join their high school network). This meant that many more high school teens did join, much to the chagrin and horror of college students who had already begun writing about their lack of interest in having HS students on "their" site. Still, even with the rise of high school students, Facebook was framed as being about college. This was what was in the press. This was what college students said. Facebook is what the college kids did. Not surprisingly, college-bound high schoolers desperately wanted in.

In addition to the college framing, the press coverage of MySpace as dangerous and sketchy alienated "good" kids. Facebook seemed to provide an ideal alternative. Parents weren't nearly as terrified of Facebook because it seemed "safe" thanks to the network-driven structure. (Of course, I've seen more half-naked, drink-carrying high school students on Facebook than on MySpace, but we won't go there.)

As this past school year progressed, the division around usage became clearer. In trying to look at it, I realized that it was primarily about class.

Socio-economic divisions

In sociology, Nalini Kotamraju has argued that constructing arguments around "class" is extremely difficult in the United States. Terms like "working class" and "middle class" and "upper class" get all muddled quickly. She argues that class divisions in the United States have more to do with lifestyle and social stratification than with income. In other words, all of my anti-capitalist college friends who work in cafes and read Engels are not working class just because they make $14K a year and have no benefits. Class divisions in the United States have more to do with social networks (the real ones, not FB/MS), social capital, cultural capital, and attitudes than income. Not surprisingly, other demographics typically discussed in class terms are also a part of this lifestyle division. Social networks are strongly connected to geography, race, and religion; these are also huge factors in lifestyle divisions and thus "class."

I'm not doing justice to her arguments but it makes sense. My friends who are making $14K in cafes are not of the same class as the immigrant janitor in Oakland just because the share the same income bracket. Their lives are quite different. Unfortunately, with this framing, there aren't really good labels to demarcate the class divisions that do exist. For this reason, I will attempt to delineate what we see on social network sites in stereotypical, descriptive terms meant to evoke an image.

The goodie two shoes, jocks, athletes, or other "good" kids are now going to Facebook. These kids tend to come from families who emphasize education and going to college. They are part of what we'd call hegemonic society. They are primarily white, but not exclusively. They are in honors classes, looking forward to the prom, and live in a world dictated by after school activities.

MySpace is still home for Latino/Hispanic teens, immigrant teens, "burnouts," "alternative kids," "art fags," punks, emos, goths, gangstas, queer kids, and other kids who didn't play into the dominant high school popularity paradigm. These are kids whose parents didn't go to college, who are expected to get a job when they finish high school. These are the teens who plan to go into the military immediately after schools. Teens who are really into music or in a band are also on MySpace. MySpace has most of the kids who are socially ostracized at school because they are geeks, freaks, or queers.

In order to demarcate these two groups, let's call the first group of teens "hegemonic teens" and the second group "subaltern teens." (Yes, I know that these words have academic and political valence. I couldn't find a good set of terms so feel free to suggest alternate labels.) These terms are sloppy at best because the division isn't clear, but it should at least give us terms with which to talk about the two groups.

The division is cleanest in communities where the predator panic hit before MySpace became popular. In much of the midwest, teens heard about Facebook and MySpace at the same time. They were told that MySpace was bad while Facebook was key for college students seeking to make friends at college. I go into schools where the school is split between the Facebook users and the MySpace users. On the coasts and in big cities, things are more murky than elsewhere. MySpace became popular through the bands and fans dynamic before the predator panic kicked in. It's popularity on the coasts and in the cities predated Facebook's launch in high schools. Many hegemonic teens are still using MySpace because of their connections to participants who joined in the early days, yet they too are switching and tend to maintain accounts on both. For the hegemonic teens in the midwest, there wasn't a MySpace to switch from so the "switch" is happening much faster. None of the teens are really switching from Facebook to MySpace, although there are some hegemonic teens who choose to check out MySpace to see what happens there even though their friends are mostly on Facebook.

Most teens who exclusively use Facebook are familiar with and have an opinion about MySpace. These teens are very aware of MySpace and they often have a negative opinion about it. They see it as gaudy, immature, and "so middle school." They prefer the "clean" look of Facebook, noting that it is more mature and that MySpace is "so lame." What hegemonic teens call gaudy can also be labeled as "glitzy" or "bling" or "fly" (or what my generation would call "phat") by subaltern teens. Terms like "bling" come out of hip-hop culture where showy, sparkly, brash visual displays are acceptable and valued. The look and feel of MySpace resonates far better with subaltern communities than it does with the upwardly mobile hegemonic teens. This is even clear in the blogosphere where people talk about how gauche MySpace is while commending Facebook on its aesthetics. I'm sure that a visual analyst would be able to explain how classed aesthetics are, but aesthetics are more than simply the "eye of the beholder" - they are culturally narrated and replicated. That "clean" or "modern" look of Facebook is akin to West Elm or Pottery Barn or any poshy Scandinavian design house (that I admit I'm drawn to) while the more flashy look of MySpace resembles the Las Vegas imagery that attracts millions every year. I suspect that lifestyles have aesthetic values and that these are being reproduced on MySpace and Facebook.

I should note here that aesthetics do divide MySpace users. The look and feel that is acceptable amongst average Latino users is quite different from what you see the subculturally-identified outcasts using. Amongst the emo teens, there's a push for simple black/white/grey backgrounds and simplistic layouts. While I'm using the term "subaltern teens" to lump together non-hegemonic teens, the lifestyle divisions amongst the subalterns are quite visible on MySpace through the aesthetic choices of the backgrounds. The aesthetics issue is also one of the forces that drives some longer-term users away from MySpace.

While teens on Facebook all know about MySpace, not all MySpace users have heard of Facebook. In particular, subaltern teens who go to school exclusively with other subaltern teens are not likely to have heard of it. Subaltern teens who go to more mixed-class schools see Facebook as "what the good kids do" or "what the preps do." They have various labels for these hegemonic teens but they know the division, even if they don't have words for it. Likewise, in these types of schools, the hegemonic teens see MySpace as "where the bad kids go." "Good" and "bad" seem to be the dominant language used to divide hegemonic and subaltern teens in mixed-class environments. At the same time, most schools aren't actually that mixed.

To a certain degree, the lack of familiarity amongst certain subaltern kids is not surprising. Teens from poorer backgrounds who are on MySpace are less likely to know people who go to universities. They are more likely to know people who are older than them, but most of their older friends, cousins, and co-workers are on MySpace. It's the cool working class thing and it's the dominant SNS at community colleges. These teens are more likely to be interested in activities like shows and clubs and they find out about them through MySpace. The subaltern teens who are better identified as "outsiders" in a hegemonic community tend to be very aware of Facebook. Their choice to use MySpace instead of Facebook is a rejection of the hegemonic values (and a lack of desire to hang out with the preps and jocks even online).

Class divisions in military use

A month ago, the military banned MySpace but not Facebook. This was a very interesting move because the division in the military reflects the division in high schools. Soldiers are on MySpace; officers are on Facebook. Facebook is extremely popular in the military, but it's not the SNS of choice for 18-year old soldiers, a group that is primarily from poorer, less educated communities. They are using MySpace. The officers, many of whom have already received college training, are using Facebook. The military ban appears to replicate the class divisions that exist throughout the military. I can't help but wonder if the reason for this goes beyond the purported concerns that those in the military are leaking information or spending too much time online or soaking up too much bandwidth with their MySpace usage.

MySpace is the primary way that young soldiers communicate with their peers. When I first started tracking soldiers' MySpace profiles, I had to take a long deep breath. Many of them were extremely pro-war, pro-guns, anti-Arab, anti-Muslim, pro-killing, and xenophobic as hell. Over the last year, I've watched more and more profiles emerge from soldiers who aren't quite sure what they are doing in Iraq. I don't have the data to confirm whether or not a significant shift has occurred but it was one of those observations that just made me think. And then the ban happened. I can't help but wonder if part of the goal is to cut off communication between current soldiers and the group that the military hopes to recruit. Many young soldiers' profiles aren't public so it's not about making a bad public impression. That said, young soldiers tend to have reasonably large networks because they tend to accept friend requests of anyone that they knew back home which means that they're connecting to almost everyone from their high school. Many of these familiar strangers write comments supporting them. But what happens if the soldiers start to question why they're in Iraq? And if this is witnessed by high school students from working class communities who the Army intends to recruit?

Thoughts and meta thoughts

I have been reticent about writing about this dynamic even though I've been tracking it for a good six months now. I don't have the language for what I'm seeing and I'm concerned about how it's going to be interpreted. I can just see the logic: if society's "good" kids are going to Facebook and the "bad" kids are going to MySpace, clearly MySpace is the devil, right? ::shudder:: It's so not that easy. Given a lack of language for talking about this, my choice of "hegemonic" and "subaltern" was intended to at least insinuate a different way of looking at this split.

The division around MySpace and Facebook is just another way in which technology is mirroring societal values. Embedded in that is a challenge to a lot of our assumptions about who does what. The "good" kids are doing more "bad" things than we are willing to acknowledge (because they're the pride and joy of upwardly mobile parents). And, guess what? They're doing those same bad things online and offline. At the same time, the language and style of the "bad" kids offends most upwardly mobile adults. We see this offline as well. I've always been fascinated watching adults walk to the other side of the street when a group of black kids sporting hip-hop style approach. The aesthetics alone offend and most privileged folks project the worst ideas onto any who don that style. When I see a divide like this, I worry because it reproduced the idea that the "good" kids are good and that Facebook participation is good.

Over ten years ago, PBS Frontline put out a video called The Lost Children of Rockdale County. The film certainly has its issues but it does a brilliant job of capturing how, given complete boredom and a desire for validation, many of the "good" kids will engage in some of the most shocking behaviors... and their parents are typically unaware. By and large, I've found that parents try to curtail such activities by restricting youth even more. This doesn't stop the desire for attention and thus the behaviors continue, but they get pushed further underground and parents become less in-touch with their "good" kids.

While I think it's important to acknowledge that some of the "good" kids aren't that good, I don't want to imply that the inverse is true. Many of them are. But many of the subaltern teens that I talk with have their heads on much tighter than the hegemonic teens. The hegemonic teens do know how to put on a show for most adults (making it more fun for me to interview them and try to work through the walls that they initially offer me). As a society, we have strong class divisions and we project these values onto our kids. MySpace and Facebook seem to be showcasing this division quite well. My hope in writing this out is to point out that many of our assumptions are problematic and the internet often reinforces our views instead of challenging them.

People often ask me if I'm worried about teens today. The answer is yes, but it's not because of social network sites. With the hegemonic teens, I'm very worried about the stress that they're under, the lack of mobility and healthy opportunities for play and socialization, and the hyper-scheduling and surveillance. I'm worried about their unrealistic expectations for becoming rich and famous, their lack of worth ethic after being pampered for so long, and the lack of opportunities that many of them have to even be economically stable let alone better off than their parents. I'm worried about how locking teens indoors coupled with a fast food/junk food advertising machine has resulted in a decrease in health levels across the board which will just get messy as they are increasingly unable to afford health insurance. When it comes to ostracized teens, I'm worried about the reasons why society has ostracized them and how they will react to ongoing criticism from hegemonic peers. I cringe every time I hear of another Columbine, another Virgina Tech, another site of horror when an outcast teen lashes back at the hegemonic values of society.

I worry about the lack of opportunities available to poor teens from uneducated backgrounds. I'm worried about how Wal-Mart Nation has destroyed many of the opportunities for meaningful working class labor as these youth enter the workforce. I'm worried about what a prolonged war will mean for them. I'm worried about how they've been told that to succeed, they must be a famous musician or sports player. I'm worried about how gangs provide the only meaningful sense of community that many of these teens will ever know.

Given the state of what I see in all sorts of neighborhoods, I'm amazed at how well teens are coping and I think that technology has a lot to do with that. Teens are using social network sites to build community and connect with their peers. They are creating publics for socialization. And through it, they are showcasing all of the good, bad, and ugly of today's teen life. Much of it isn't pretty, but it ain't pretty offline either. Still, it makes my heart warm when I see something creative or engaged or reflective. There is good out there too.

It breaks my heart to watch a class divide play out in the technology. I shouldn't be surprised - when orkut grew popular in India, the caste system was formalized within the system by the users. But there's something so strange about watching a generation splice themselves in two based on class divisions or lifestyles or whatever you want to call these socio-structural divisions.

In the 70s, Paul Willis analyzed British working class youth and he wrote a book called Learning to Labor: How Working Class Kids Get Working Class Jobs. He argued that working class teens will reject hegemonic values because it's the only way to continue to be a part of the community that they live in. In other words, if you don't know that you will succeed if you make a run at jumping class, don't bother - you'll lose all of your friends and community in the process. His analysis has such strong resonance in American society today. I just wish I knew how to fix it.

I clearly don't have the language to comfortably talk about what's going on, but I think that this issue is important and needs to be considered. I feel as though the implications are huge. Marketers have already figured this out - they know who to market to where. Policy creators have figured this out - they know how to control different populations based on where they are networking. Have social workers figured it out? Or educators? What does it mean that our culture of fear has further divided a generation? What does it mean that, in a society where we can't talk about class, we can see it play out online? And what does it mean in a digital world where no one's supposed to know you're a dog, we can guess your class background based on the tools you use?

Anyhow, I don't know where to go with this, but I wanted to get it out there. So here it is. MySpace and Facebook are new representations of the class divide in American youth. Le sigh.

Methodolological notes

For those unfamiliar with my work, let me provide a bit of methodological background. I have been engaged in ethnographic research on social network sites since February 2003 when I began studying the practices that emerged on Friendster. I followed the launch and early adoption of numerous social network sites, including Tribe.net, LinkedIn, Flickr, MySpace, Facebook, Twitter, Dodgeball, and Orkut. In late 2004, I decided to move away from studying social network sites to studying youth culture just in time for youth to flock to MySpace.

The practice of 'ethnography' is hard to describe in a bounded form, but ethnography is basically about living and breathing a particular culture, its practices, and its individuals. There are some countables. For example, I have analyzed over 10,000 MySpace profiles, clocked over 2000 hours surfing and observing what happens on MySpace, and formally interviewed 90 teens in 7 states with a variety of different backgrounds and demographics. But that's only the tip of the iceberg. I ride buses to observe teens; I hang out at fast food joints and malls. I talk to parents, teachers, marketers, politicians, pastors, and technology creators. I read, I observe, I document.

One of the biggest problems with studying youth culture is that it's a moving target, constantly shifting based on a variety of social and cultural forces. While I had been keeping an eye on Facebook simply because of my long-term interest in social network sites, I had to really start taking it seriously in the fall of 2006 when teens started telling me about how they were leaving MySpace to join Facebook or joining Facebook as their first social network site.

While social network sites are in vogue, not everyone uses them. When PEW collected data in December 2005, it found that 55% of American teens 12-17 admitted to having a SNS profile in front of their parents. 70% of girls 15-17. These numbers are low, but we don't know how low. In the field, I have found that everyone knows about them and has an opinion of them. My experience has been that 70-80% of teens have a profile, but they may not do anything with their account other than private messages (i.e. glorified email). The percentage who are truly active is more like 50. Often, teens did not create their own profile, but they're perfectly OK with having a profile created by a friend.

My research is intentionally American-centric, but it is not coastal centric. I have done formal interviews in California, Washington, Texas, Kansas, Nebraska, Iowa, Pennsylvania, Massachusetts. When I do this, I do not capture parents' income but I do get parents' education level and job. In each of these communities, I have spent time roaming the streets and talking informally with people of all ages. I have analyzed profiles from all 50 states (and DC and Puerto Rico). I use the high school data from these profiles and juxtapose them with federal information on high school voucher numbers to get a sense of the SES of the school. I have spent time in cities, suburbs, small towns, and some rural regions. There are weaknesses to my data collection. I have spent too little time in rural environments and too little time in the deep south. How I find teens to formally interview varies based on region, but it is not completely random. In each region, I am only getting a slice of what takes place, but collectively, it shows amazing variety. The MySpace profiles that I analyze are random. I do not have access to Facebook profiles, although I have spent an excessive amount of time browsing high schools to see what kind of numbers show up, even if I can't see the actual profiles. Again, none of this is perfect, but it helps me paint a qualitative portrait of what's going on.

How to Have Fun With Your Iron Moutain Guy!
Michael R. Farnum

Want to know how to have fun with the Iron Mountain person that picks up your tapes? Here's a funny story (at least I think it is funny).

In my last job we used Iron Mountain to pick up our backup tapes. Except for a few weeks, the same guy picked up our tapes from the first day I setup the service over four years ago. So we were pretty familiar with him, and he knew everyone at the front desk where we left the tapes (in case you are wondering, the front desk was a secure place, with a locked door and windows surrounding the desk).

There was a restroom on the opposite side of the hall from the front desk, and it was the closest restroom to my office, so I frequented the area quite a bit (what can I say... I drink a lot of water). Anyway, I happened to be in the restroom one day, and the our Iron Mountain guy came in carrying the case that held our backup tapes. Being a hygenic fellow, he set the tapes down away from all the stalls (but not too far away from him), then proceeded to do his business (I didn't realize that this was kind of embarrassing when I started writing it).

He did not see me when he came into the restroom, and he didn't look up when I started washing my hands (again, a little embarrassing). Here's where he made his mistake. The sink was between him and where he set down the tape case. So when I finished washing my hands, I quickly knelt down and grabbed the tape case as I was exiting the bathroom. I stepped to the side of the door and calmly waited to see what would happen.

Well, in about 5 seconds he came running out of the restroom with an expression that was a mixture of worry, rage, and confusion. He caught sight of me quickly, standing there with my best evil grin on my face. I started laughing, and the relief was evident. Of course, he was a little aggravted, and obviously his cleanliness was overridden by his job duties, because he had to go back in and wash his hands (I kept the case until he was finished). When he came back out, he was a lot calmer. But you could see that he was rethinking his process. I never comfirmed it, but I am pretty sure from that day forward he went to the restroom BEFORE he picked up our tapes.

Ridgefield Woman Wins Robotics Award
Susan Tuz

Bala Krishnamurthy, who won an international award for technology development, talks about her career in robotics.

RIDGEFIELD, CONN. -- Her years as a pioneer in the field of electric and hydraulic industrial robotics have earned resident Bala Krishnamurthy an award from the Robotic Industry Association.

Krishnamurthy is the first woman to receive the Joseph Engelberger Robotics Award for Technology Development since the international award's inception in 1977.

"Dad always told me to never say I couldn't do something because I'm a woman," Krishnamurthy said. "He always told me I could do anything my two brothers could do.

"I just wish he was still around to see me receive the award," she related. "He would have been so proud."

The award was bestowed on her June 13 at the International Symposium on Robotics.

"The RIA broke the glass ceiling this year, and Bala's receipt of the award is very well deserved," said Joseph Engelberger, for whom the award is named.

"Bala developed software for the HelpMate Robot that is used at Danbury and other hospitals around the country," Engelberger said. "Even today, there isn't any navigation system in robotics as strong as the one she wrote."

For over 25 years, Krishnamurthy has designed and developed a range of software in programming languages, network systems and related technologies that have contributed to the growth of robotics.

Her early years in robotics were spent at Unimation Incorporated in Danbury. From the mid-1980s to the mid-1990s, she led the team that developed software that allows completely autonomous courier robots to navigate through hospitals and a 3-D range sensor for robots at HelpMate Robotics Incorporated.

"When I started working in robotics, all we had was robot arms that were bolted to the floor. That was 1979," Krishnamurthy recalled.

"Those arms were used in the welding of car parts on production lines and moving large pallets," she explained. "That's where robots started out."

Born in India, Krishnamurthy came to the United States in 1968 as a young bride of 18. She went to college in India for two years and went on to earn her bachelor of arts in mathematics from Rutgers University in New Jersey.

In 1973, she applied at Stevens Institute of Technology in New Jersey to earn a master of arts degree in applied mathematics and a masters in science in computer science.

"I applied for a fellowship at Stevens and was told women don't finish their studies," Krishnamurthy related. "They were reluctant to award it to me. But I persuaded them.

"Then I became pregnant with my first child and had to take a break in my studies," she said. "It was embarrassing. But I went back and completed my advanced degrees."

Five years later, Krishnamurthy entered into an agreement to work for Unimation for less than the software development job was advertised for. Having not worked for five years while she cared for her two children, she got into Unimation by offering to take the lower pay.

"That was 1979. By 1986, I had almost quadrupled my salary," Krishnamurthy said. "It was a good move."

At Unimation, Krishnamurthy helped develop a robotic arm that could sort candy and place individual candy pieces in boxes for sale.

In 1986, she changed companies going to work for TRC (Transition Research Operations). There she helped develop a robot that scrubbed floors in industrial and school settings. Those robots were used at Bethel Middle School.

"I was excited," she said. "I had helped build a robot that moved around in the floor space you and I walk in," moving past arm robots like those used in car manufacturing.

For this breakthrough, Krishnamurthy had developed programs that could not only navigate in 3-D space but could avoid running into things in that floor space.

She worked on projects in navigation for robots that were used to move between barrels of radioactive waste testing the air for any leaks of waste in nuclear power plants.

Perhaps her most advanced design was that of the HelpMate, the robot used in hospitals to run errands to free up nurses' time.

"Bala used vision, ultrasound, navigation programs in the HelpMate," Engelberger said. "It is able to ride the elevator by itself. It is programed with a floor map of the entire hospital and can get through cluttered hospital halls. It runs the errands of going to, say, the pharmacy, letting nurses stay with their patients where they belong."

The HelpMate robot, which looks like a large refrigerator, works with people. It communicates -- telling you it's about to move, if its way is blocked, and calling for an elevator. It has a screen for nurses to program items that are needed so the robot can run errands.

By 1997, Krishnamurthy founded her own robotics consulting company, Aeolean Inc., in Danbury. She has produced more than a dozen technical articles and reports and was a member of NASA's Office of Exploration Systems research proposal review panel for Human and Robotic Technology in 2004.

Lighting a Fire Under Hard Drives
Phil Berardelli

In the race to make computers more powerful, magnets may be out and lasers may be in. Ultra-rapid pulses of polarized light fired from lasers, new tests show, can outperform conventional magnetic data writers by as much as two orders of magnitude. The technology could form the foundation of a new generation of computers that link lasers to their hard drives.

Long gone are the days when computers were required only to make mathematical calculations. Even modest desktop models are now expected to handle streaming audio and video from multiple Web sites simultaneously, for example. Those functions require huge amounts of data to be transferred quickly to and from the hard drive. But current data-processing systems, which use magnets to write and read the binary code that constitutes computer language, can only work so fast. Some users' needs have begun to bump up against the limitations of this technology. If computers are to become faster, they'll require a different data-transfer system, and the awesome promise of quantum computing remains years away.

Researchers at Radboud University Nijmegen in the Netherlands think they've found another candidate. In laboratory experiments, they used laser light to write data to a magnetic hard drive at very high speeds. The technique works because the photons transmitted by the laser actually carry angular momentum, allowing them to interact with the hard drive. Also, each laser pulse heats a tiny space on the disk just enough to make changing its polarity--thereby storing a bit of data--a little easier. The key is reversing the polarity of the laser pulses, which can produce the equivalent of either a 1 or a 0 of binary code on the disk storage medium.

The researchers managed to transfer data at intervals of about 40 femtoseconds, or quadrillionths of a second, about 100 times faster than conventional magnetic transfers, the researchers report in a paper accepted for publication by Physical Review Letters. One drawback is that the footprint of the laser pulse on the disk is about 5 microns wide, which is considerably larger than the footprint produced by existing data-transfer systems. But physics doctoral candidate and co-author Daniel Stanciu says the team is working on improvements in the technology that should reduce the footprint's size to about 10 nanometers, and he expects to see a working prototype within a decade.

"This is one of the most exciting stories in magnetics," says physicist Julius Hohlfeld of Seagate Research in Pittsburgh, Pennsylvania. Lots of other researchers have tried to employ polarized laser light to write data, he says, but everyone failed because the magnetic alloys they used for the storage medium did not work. But the disk made of gadolinium, iron, and cobalt that Stanciu's team used has succeeded. The next challenge, Hohlfeld says, will be to find a relatively cheap laser technology that can fire pulses lasting less than 100 femtoseconds.

Five Ideas That Will Reinvent Modern Computing
Cade Metz and Jamie Bsales

What's in the works at the leading high-tech research labs? Some awfully cool stuff—to say the least. This spring, we checked in on five of our favorites—Bell Labs, HP Labs, IBM Research, Microsoft Research, and the granddaddy of them all: the Palo Alto Research Center (PARC), the former Xerox facility that spawned Ethernet, laser printing , the GUI operating system, and so much more.

These research powerhouses have gone through a fair number of changes in recent years—PARC is now a completely independent operation—but they continue to push the outside of the high-tech envelope. Here, we profile a particularly clever project from each one, showcasing five ideas that reinvent everything from pointing devices to artificial intelligence. Some could bear fruit in a matter of months. Others might need years. But all will pique your interest. — next: IMAX At Home

IMAX at Home
You thought LAN parties were fun? Get ready for the projector party. At HP Labs, Nelson Chang and Niranjan Damera-Venkata have spent the past few years developing a technology that reinvents the notion of a home theater. With Pluribus, you can build a cineplex-quality image using a handful of ordinary, $1,000 PC projectors—in less time than it takes to pop the popcorn.

For a mere $12,000, you could build a home theater that stands up to the $100,000 image at local movie houses. Better yet, you could throw a projector party. Twelve friends show up with 12 off-the-shelf projectors, and suddenly you've got a wall-size image none of you could hope to produce on your own. And this mega-display is good for more than just movies. It might be even better for 3D games.

Chang and Damera-Venkata describe their project as "cluster computing for projectors." In much the same way a cluster pools the resources of multiple PCs, duplicating the effect of a supercomputer, Pluribus pools the resources of multiple projectors. "We can take several less-expensive projectors and create a super-projector," says Chang. "Automatically accounting for differences between each device, it builds a single, stable image."

Pluribus can seamlessly "tile" images from multiple projectors, fitting them together like pieces of a jigsaw puzzle. Or it can superimpose images from multiple projectors, putting one atop the other. This vastly improves resolution, sharpness, brightness, contrast, and more, but it also gives you redundancy. If one projector breaks, you still have your full image. The real trick with Pluribus, however, is that it builds these über-images so quickly. You needn't spend hours adjusting the physical position of your projectors. You simply plop them down, plug them in, and point them in the general direction you'd like them to point. Pluribus does the rest, in minutes.

The system consists of an ordinary PC workstation, a camera, and some ingenious C code. In essence, the camera grabs a snapshot of the many images streaming from your projectors and feeds that snapshot back to the software. The software then adjusts each image so they all fit together, using Chang and Venkata's algorithms—mathematical models that stretch the limits of modern computer science. "People didn't think it could be done," Damera-Venkata says.

A gaming PC with dueling graphics cards can line up 12 projectors in as little as 5 minutes, producing a 16-by-9 foot image with 4,096-by-2,304 resolution. But the system can scale up to even larger images. As you add more PCs, you could, in theory, add as many projectors as you like. A true home theater is closer than you think. — next: The Midair Mouse

The Midair Mouse
Your brand-new wireless mouse? That solves only half the problem. Sure, you're untethered, free to drive your PC from afar. But you still need a flat surface. You may be camped out on the couch or curled up in bed, but you're never more than half an arm's length from an end table or a lap desk.

Soap goes one step further: It works in midair. With this new-age pointing device, now under development at Microsoft Research, you can navigate your PC using nothing but a bare hand. You can lose the end table and the lap desk. You can even lose the couch and the bed, driving your machine while walking across the room. It's a bit like the Wii remote—only more accurate and far easier to use.

Dreamed up by Patrick Baudisch, part of Microsoft's adaptive systems and interaction research group and an affiliate professor of computer science at the University of Washington, Soap is essentially a wireless optical mouse surrounded by a fabric hull. Think of it as a beanbag with some hardware inside. As you push the fabric back and forth, across the face of the mouse, the cursor moves on your PC display.

It's called Soap because it spins in your hand like a wet bar of soap in the shower. "Basically, it's a mouse and a mouse pad in the same device," Baudisch says. "But instead of moving your mouse over your mouse pad, you move your mouse pad over your mouse."

Baudisch built his original prototype using an optical mouse he found lying around the lab and a few household items he picked up from a local RiteAid. He simply pried open his pointing device, pulled out the innards, and remounted them inside an empty bottle of hand sanitizer. Yes, an empty bottle of hand sanitizer—something that was transparent and would easily rotate inside his fabric hull. Once he pulled the hull around the bottle—and slipped some lubricant between the two—he had a mouse that worked in midair.

Because the bottle moves independently of the hull, the mouse can sense relative motion, much as it does when dragged across a tabletop. "The optical sensor looks outward, so it can see the fabric moving," Baudish continues, "and that's all the input you need." It's such a simple idea, but the results are astounding.

Soap is so accurate that you can use it to play a high-speed first-person shooter. At this year's Computer/Human Interaction (CHI) conference in San Jose, California, Baudisch played his favorite games standing up, in open space, without a tabletop in sight. The only restriction was that he couldn't rotate upward (that is, he couldn't make his 3D character do a back flip).

Baudisch plans to add that extra degree of movement, and he hopes to eliminate the lubricant inside the hull—a feature less than conducive to mass production. But his Soap prototype works today, and it has the potential to give PC users a whole new level of physical freedom.

"You get the same functionality of a mouse," Baudisch says. "And it works with any PC or display—whether it's a pocket display or a wall display. The difference is that you can use it in the living room. Or in the classroom. Or even on the subway." — next: The Perfect Machine

The Perfect Machine
Yes, we're still waiting for a full-fledged quantum computer—a machine that uses the mind-bending principles of quantum physics to achieve processing speeds even today's supercomputers have no hope of reaching. But at Bell Labs, there's a new quantum computing project in the works, a method that could finally make this long-held dream a reality. "We're still 10 to 20 years away from a quantum computer," says Bells Labs' Steven Simon. "But we're getting closer and closer."

First proposed in the early eighties by the Nobel Prize-winning physicist Richard Feynman, the quantum computer is an idea that defies common sense. Whereas today's computers obey the classical physics that govern our everyday lives, a quantum computer relies on the seemingly magical physics associated with very small particles, such as atoms.

With a classical computer, transistors store bits of information, and each bit has a value of either 1 or 0. Turn a transistor on, for instance, and it represents a 1. Turn it off and it holds a 0. With a quantum computer, the classical bit gives way to something called a quantum bit, or qubit. A qubit is stored not in a transistor or some other classical system, but in a quantum system, such as the spin of an atom's nucleus. An "up" spin might indicate a 1, and a "down" spin might indicate a 0.

The trick is that, thanks to the superposition principle of quantum mechanics, a quantum system can exist in multiple states at the same time. At any given moment, the spin of a nucleus can be both up and down, holding values of both a 1 and a 0. Put two qubits together and they can hold four values simultaneously (00, 01, 10, and 11). That makes a quantum computer exponentially faster than the classical model—fast enough, for instance, to crack today's most secure encryption algorithms.

But there's a problem. When a quantum system interacts with the classical world, it decoheres: It loses its ability to exist simultaneously in multiple states, collapsing into a single state. This means that when you read a group of qubits, they become classical bits, capable of holding only a single value.

Over the past decade, researchers have proposed several ways of getting around this problem, and some have actually built quantum computers—on a very small scale. But we've yet to see one that does more than basic calculations. Bell Labs has long been a leader in quantum computing research, and today, along with Microsoft Research and a few other labs across the country, it's working on a brand-new method that could finally make the breakthrough. Bell calls it "topological quantum computing."

In the simplest of terms, Bell researchers are tying quantum systems into knots. "In very exotic circumstances, such as very low temperature and high magnetic field, we're essentially grabbing onto the particles and moving them around each other, forming knots in what we call the space-time path," Simon explains. "If you can form the right knot, you can do the right quantum computation."

In short, these knots are a great way of solving the decoherence problem. With a topological quantum computer, your information corresponds to the topology of the knot you make, and these topologies aren't as easily disturbed as ordinary quantum systems. Will this method work? That's yet to be seen. But it certainly has potential. "Even though this approach is well behind the others—no one has even built a single qubit—many believe that it will eventually come out in front. Unlike the others, it avoids decoherence." — next: Extreme Peer-to-Peer

Extreme Peer-to-Peer
In 1543, Nicolas Copernicus forever changed the way we view the cosmos. He put the Sun at the center of things—not the Earth. Today, at the famed Palo Alto Research Center, Van Jacobson hopes to lead a similar revolution, one that forever changes the way we view PC networking. He aims to put the data at the center of things—not the server.

Jacobson likes to tell a story about a video that NBC posted to the Web during the 2006 Winter Olympics. The video showed U.S. skier Bode Miller as he was famously disqualified during the Alpine combined event, and within seconds of its posting, there was severe congestion on the router downstream from NBC's servers. At that moment, the router held 6,000 copies of the same video. Six thousand people had made 6,000 individual TCP/IP connections to the same server, and the network had no way of knowing that most of those connections were redundant. It couldn't understand that the 6,000 videos were identical. It couldn't do anything to relieve the congestion.

The classic point-to-point networking model is fundamentally flawed. Today, if you want a piece of data from the network, you almost always need a direct connection to the data's original source—the server. That's true even if the data has already been downloaded to a device that's much closer. So often, tapping into a distant server wastes time. And if the server is unavailable, you're out of luck entirely.

With a project called Content-Centric Networking, or CCN, Jacobson and his team of PARC networking gurus are turning this model on its head. They're building a networking system that revolves around the data itself, a system in which a router can actually identify that Bode Miller video and act accordingly. Under the CCN model, you don't tell the network that you're interested in connecting to a server. You tell it that you want a particular piece of data. You broadcast a request to all the machines on the network, and if one of them has what you're looking for, it responds. "You can authenticate and validate information using the information itself—independent of whom you got it from," says Jacobson. "So if you want The New York Times, you can pick it up from any machine that has a copy."

It's a bit like BitTorrent, but on a grander scale. CCN can improve everything from the public Internet to your private LAN. It can get you that Bode Miller video even if NBC's servers go down. But it's also an efficient means of keeping your calendar synchronized. You needn't set up three separate links between your PC, laptop, and a handheld. Each device simply broadcasts a request for calendar updates to all the others—wirelessly, say. Initially, Jacobson plans to roll out CCN on top of today's networking infrastructure—in much the same way BitTorrent was deployed across the existing Internet. But eventually, he wants to push these new ideas down to the Net's grass roots, to change in a fundamental way how machines speak to one another at the packet level. Yes, he's facing a mammoth task. But so did Copernicus. — next: The Man-Made Brain

The Man-Made Brain
It could be the most ambitious computer science project of all time. At IBM's Almaden Research Center, just south of South Francisco, Dharmendra Modha and his team are chasing the holy grail of artificial intelligence. They aren't looking for ways of mimicking the human brain, they're looking to build one—neuron by neuron, synapse by synapse.

"We're trying to take the entire range of qualitative neuroscientific data and integrate it into a single unified computing platform," says Modha. "The idea is to re-create the ‘wetware' brain using hardware and software."

The project is particularly daunting when you consider that modern neurology has yet to explain how the brain actually works. Yes, we know the fundamentals. But we can't be sure of every biological transaction, all the way down to the cellular level. Three years into this Cognitive Computing project, Modha's team isn't just building a brain from an existing blueprint. They're helping to create the blueprint as they build. It's reverse engineering of the highest order.

Their first goal is to build a "massively parallel cortical simulator" that re-creates the brain of a mouse, an organ 3,500 times less complex than a human brain (if you count each individual neuron and synapse). But even this is an undertaking of epic proportions. A mouse brain houses over 16 million neurons, with more than 128 billion synapses running between them. Even a partial simulation stretches the boundaries of modern hardware. No, we don't mean desktop hardware. We're talkin' supercomputers.

So far, the team has been able to fashion a kind of digital mouse brain that needs about 6 seconds to simulate 1 second of real thinking time. That's still a long way from a true mouse-size simulation, and it runs on a Blue Gene/L supercomputer with 8,192 processors, four terabytes of memory, and 1 Gbps of bandwidth running to and from each chip. "Even a mouse-scale cortical simulation places an extremely heavy load on a supercomputer," Modha explains. "We're leveraging IBM's technological resources to the limit."

Written with ordinary C code, this initial simulation is a remarkable proof of concept. As neuroscience and computing power continue to advance, Modha and his team are confident they can build cortical simulators of even greater complexity. And as they do, they hope to advance neuroscience even further, learning more and more about the inner workings of the brain and getting closer and closer to their ultimate goal.

Once they've simulated a mouse brain in real time, the team plans on tackling a rat cortex, which is about three and a half times larger. And then a cat brain, which is ten times larger than that. And so on, until they've built a cortical simulator on a human scale.

What's that good for? Anything and everything. "What we're seeking with cognitive computing is a universal cognitive mechanism, something that can give rise to the entire range of mental phenomena exhibited by humans," says Modha. "That is the ultimate goal." — next: Milestones of the Future

Milestones of the Future
Want a list of all the groundbreaking technologies due over the next decade? Tough luck. We've got neither the time nor the space. But we can give you the milestones—the 13 technologies guaranteed to change the world between now and 2020.

Summer 2007
The Real Quad-Core
AMD releases the first single-chip quad-core CPU. Code-named Barcelona, it promises 20 to 50 percent better performance than the competing multichip design from you-know-who.

Late 2007
Hello, OLED
Sony introduces the first OLED (organic light-emitting diode) television. It's too small and too expensive for mass consumption, but early adopters love its 3mm profile and 1,000,000-to-1 contrast ratio.

Like Wi-Fi—but Everywhere
Carriers launch the first WiMAX services in the U.S., giving major metro areas wireless access that rivals the speeds of Wi-Fi. The difference? No more hot spots. It's everywhere you go.

Eight-Core and More
Intel unveils an eight-core processor and completely revamps its Core architecture, moving the memory controller and graphics circuitry from distinct chipsets onto the CPU itself.

So Long, Laser Printer
The first Memjet ink-based printers hit the market, delivering 60 pages per minute at a reasonable cost per page. The trick: multiple print heads that span the entire width of the paper you're printing on.

The High-Def DVR
Seagate releases a 3.5-inch hard drive that stores 3 terabytes of data. That's 3,000 gigabytes. We're talking about a digital video recorder that records nothing but high-def video.

Can You Say 4G?
Fourth-generation cellular networks debut in the United States. The LTE (Long Term Evolution) standard doubles the throughput of 3G networks, offering 3 to 4 Mbps to real-world users.

Chips Go Optical
IBM perfects a chip for mainframes and other high-end machines that uses optical connections instead of copper. Moving photons instead of electrons improves data transfer speeds eightfold.

A Cure for Jersey Drivers
The first cars equipped with Motorola's MotoDrive technology roll off the assembly line. Able to calculate their speed and position relative to other vehicles, these cars can automatically avoid accidents.

HDTV Is Obsolete
Ultra High Definition Television (UHDTV) debuts with a resolution of 7,680-by-4,320 and 22 speakers of surround sound, dwarfing today's HDTVs, which top out at 1,920-by-1,080.

Power Off, Memory On
Manufacturers use carbon nanotubes to offer NRAM (nonvolatile random-access memory). Unlike today's SDRAM and flash memory technologies, it can hold information even when you lose power.

Wash 'N' Wear iPods
Flexible, washable OLED screens hit the market. That means laptops that roll up like place mats—not to mention smartphone and music-player displays built right into your clothing.

Offices Everywhere
Wall-sized displays made of low-power polymers and improved video-conferencing technologies let groups of home-based workers interact as if they were sitting face to face.

Asia to Beat Europe in Mobile TV: Industry Execs
Tarmo Virki

Asia is set to overtake Europe's early lead in adopting mobile television broadcasting as Europe struggles to find available airwaves for broadcasts, industry executives at an Asian trade fair said this week.

"Out of the regions of the world this represents the most interesting at the moment," Peter MacAvock, executive director of industry body DVB Project, told Reuters in an interview at the BroadcastAsia fair in Singapore.

"The appetite for mobile phone based content is higher here than anywhere else."

Mobile operators hope that mobile TV could encourage users to spend an extra 5 to 10 euros ($7-$13) a month, compensating for declining revenues from voice calls.

But executives said a lack of consensus on business models and the variety of different technologies were holding back takeup of mobile TV.

"Everybody thinks mobile TV is a great idea, but when it's time to get out the chequebook everyone starts to look at each other," MacAvock said.

So far only one standard, digital video broadcast handheld (DVB-H), has been taken up globally, while Korea, Japan, U.S. and China are embracing local technologies.

Some of these other technologies are also aiming for the global market, preventing services from being offered worldwide under a single standard.

"That standard issue needs to sort itself out first," said Chris Lee, Sony Ericsson's head of marketing in Asia Pacific.

Because spectrum availability is not a problem in many Asian countries, commercial DVB-H broadcasts have already started in India and Vietnam, with Malaysia, the Philippines and Indonesia also set to open networks this year.

In Europe, three countries have started commercial networks.

Most people who currently watch TV on their cellphones use third-generation (3G) mobile networks -- bringing in long-awaited data transmission fees to operators -- but this caps the quality of the picture and maximum amount of users.

Hollywood Seeks Ways to Fit Its Content Into the Realm of the iPhone
Laura M. Holson

The iPhone doesn’t go on sale until Friday, but Steven P. Jobs, the chief executive of Apple, is already changing the perception of the mobile phone, from a quick way to call a friend to a hip, media-friendly device. In doing so, he has forced mobile phone and Hollywood executives to react by chasing hungrily after the newest thing or face being left behind.

Mobile phone makers are scurrying to offer new products to compete with the iPhone’s touch screen. Wireless carriers also seem more willing to listen to their partners’ advice. And in Hollywood, where Mr. Jobs’s convention-defying tactics are all too familiar, media executives are eagerly preparing for a new era as they hope to position more content where consumers want it: in their hands.

Two years ago, David Ulmer, senior director of entertainment products at Motorola in Sunnyvale, Calif., and his colleagues got a “no, thank you” from wireless carriers when they tried to pitch a mobile phone with a touch screen. “Now, we are finding it easier to get people to talk to us,” Mr. Ulmer said. “Apple has changed the perception of how sexy a phone can be. Now, everyone wants to get in. It’s a whole new world. We’re in talks with everyone, Universal Studios, Time Warner, you name it.”

But perhaps the biggest shift is the notion that in the not-too-distant future, these various groups — which have worked together uneasily so far — could find themselves as competitors as consumers demand more and better access to media and care less about how they get it.

For years, mobile phone carriers like AT&T, Verizon Wireless and Sprint have closely controlled what cellphone users watch, when they watch it, and on what kind of screen they watch it — much the way the networks did with television before new technologies loosened their grip. Many in Hollywood and Silicon Valley hope the iPhone’s multimedia features will make it easier for any mobile-crazed consumer to do the same things they do on the Web: watch their favorite television shows, download maps, send e-mail messages to friends and swap videos.

In what is the beginning of many attempts to make the cellphone more Web friendly, Apple has designed its own application so consumers can receive YouTube videos through a Wi-Fi network. Industry executives predict that as it becomes easier to get information via Wi-Fi networks, more consumers will bypass traditional wireless networks altogether. That prospect, while helpful for phone makers and media concerns, is frightening for service providers if consumers begin to regard them as irrelevant.

“Video, particularly, has largely been behind a wall,” said John Smelzer, the general manager of mobile operations for Fox Interactive Media, referring to the limited and clumsy access most consumers have to news, sports and entertainment on traditional cellphones. “It’s the antithesis of what’s happening on the Web. Any device that replicates the experience online is good for the entire industry. It will help us reach a mass audience,” he said.

Even Mr. Jobs’s competitors, who are quick to point out that the iPhone has limitations, like its sole availability through AT&T, say that it will nudge resistant wireless carriers to pay more attention to their customers’ wishes. “The iPhone is a fantastic device, but they don’t control the network,” said Craig Shapiro, head of content strategy and acquisition for Helio, the mobile phone maker and service company. “For these things to work, though, everyone has to get with the program.”

Communications companies know they have to adapt or risk being left behind. Glenn Lurie, president of national distribution for AT&T’s wireless business, said in an interview that it took an outsider like Mr. Jobs to generate interest in mobile’s potential that the industry could not muster itself. “The wireless industry has been around 20 years, and people have found the industry to be somewhat complex,” Mr. Lurie said. “Steve Jobs and the Apple team come at it from a different perspective.”

Most important, owners of Apple products stay faithful. A recent article in the Harvard Business Review said, by contrast, that in the consumer electronics category, customers of mobile phone services were among the most dissatisfied. Pricing plans and services were too confusing. Contracts were restrictive. Service among some carriers was unpredictable. And early attempts to offer video proved more frustrating than compelling.

“They don’t make it easy,” said Bill Sanders, vice president of mobile networks programming at Sony Pictures Television International. “Everyone I talk to says, ‘There are all these things that are wrong with the iPhone.’ But consumers can’t wait to get their hands on it. That’s because Apple makes it easy.”

This will not be Mr. Jobs’s first experience in redefining an industry. Many executives in the beleaguered music business hailed Mr. Jobs as a savior when the iPod was introduced in 2002 because it was an alternative to the illegal online sharing of songs. Three years later, though, they derided him in a war over pricing.

Film executives, who watched Mr. Jobs’s relationship with the music industry sour, have been more cautious in their dealings with him. In particular, major studios, including Warner Brothers Entertainment and 20th Century Fox, have resisted Mr. Jobs’s overtures to put movies on the video iPod unless he guaranteed copyright protection and reduced prices.

So far, Apple and AT&T are getting along. But even Hollywood blockbusters can have a surprising ending. “All I can speak to is that working with the Apple team for two years, the relationship has been terrific,” Mr. Lurie said. “I can’t speculate what will happen down the road.”

To be sure, all the parties in the three industries involved are circling each other warily as they seek to protect their overlapping interests. But as their ambitions collide, rivals are hiring talent from disparate fields to navigate through a unsettling era.

Cingular Wireless, which merged with AT&T, has lost a number of executives who left to join start-ups or television production companies. Among them is Jim Ryan, who helped develop mobile video at Cingular. He left in May to become chief executive of Mobile Campus, a messaging service for college students. Last year, Jon Vlassopulos, a former senior director of business development at Cingular, joined the television production company Edemol USA as a new-media executive.

A background in movies is proving valuable, too. Sherry Lansing, the former chairman of the motion picture group of Paramount Pictures, was elected to Qualcomm’s board last year, sought after for her keen knowledge of Hollywood. More recently, Christine Peters, the producer of “How to Lose a Guy in 10 Days,” was named to the board of Xero Mobile, a fledgling cellphone service aimed at college students.

“Filmmakers are not going to be happy having their films downloaded to cellphones with poor quality,” Ms. Peters said. “That’s the beauty of the iPhone. It’s simple and it looks good. Half the people who have these fancy cellphones don’t know how to use them.”

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Blade Runner at 25: Why the Sci-Fi F/X Are Still Unsurpassed

A quarter-century after Ridley Scott's dark vision of the future changed the face of filmmaking, special-effects maestro and MythBuster Adam Savage offers an appreciation.

Twenty-five years ago, the Ridley Scott film Blade Runner became an instant science fiction classic. Set in a sodden, squalid Los Angeles of 2019, the neo-noir masterpiece influenced a generation of filmmakers and video-game designers. Long before I teamed up with Jamie Hyneman to form the MythBusters, I was a special-effects modelmaker, and Scott's cyberpunk gem almost instantly became the most important film in the canon of movies I love.

I'm still such a big Blade Runner fan that I watch it at least once every 18 months. I also own pretty convincing replicas of the "blade runner blaster" wielded by Harrison Ford's world-weary former cop Rick Deckard. The source material was a Steyr Mannlicher .222 target rifle magazine cover, with a Bulldog .44 carriage underneath. I can't get enough of this prop. Now, I want a working one.

In Blade Runner's dystopian near future, replicants, or genetically engineered humanoids, do the hard work on off-world colonies. After a bloody mutiny, the androids are forbidden from coming to Earth — on pain of death. So when six rogue replicants return home, they must be "retired" — hunted down and killed — and Ford's Deckard, once a top replicant hunter, or "blade runner," is pulled out of his own retirement to do the job.

I worked on Star Wars Episodes I and II, on the Matrix films, on AI and Terminator 3; yet 25 years later there are ways in which Blade Runner surpasses anything that's been done since. Watching the theatrical release DVD at home with PM reminded me of Scott's genius for creating stunning effects with simple technology.

Virtual World
Watch this opening pan across the Los Angeles skyline — there's nearly nothing else like it. This is something I think Ridley Scott does better than almost any other director. Whether he's shooting a fantastical movie like Alien (1979), or a realistic one like Black Hawk Down (2001), you always know where you are in the movie's physical space. Blade Runner is unmatched by any other sci-fi film in terms of feeling like you're in an environment you understand. This isn't the kind of sci-fi where everyone wears silver suits. It's lived-in science fiction — a world.

Model Mastery
You have to remember, Blade Runner was made years before digital effects became common. Today, CGI [computer-generated imagery] is becoming a mature art form, but even now there are times you just can't beat doing some effects like these "in camera." Most of these cityscapes are a combination of models and traditional matte paintings. For the aerial shots they used a set about 12 ft. wide, and those towers you see belching fire are about 12 in. high. They're made of etched brass and model parts and use thousands of tiny, grain-of-wheat light bulbs like you'd find in a dollhouse. They filmed some of the fireballs in the parking lot behind the studio, and for others they used stock footage from the 1970 Antonioni film, Zabriskie Point.

Motion Control
I love the scenes where you're moving through the city and see video billboards the size of buildings. (Today we have billboards like that in Times Square — so, the movie wasn't far off!) The normal way to create these effects would be to build a miniature, shoot it and then composite in the billboards and other elements in postproduction.

But they did all of these effects in camera, which even back then was a much more complex way to execute them. The key to this is a motion-control camera — a smart robot, basically — that moves through the city on the same track, over and over again. It's accurate to within a couple thousandths of an inch. They did separate passes, rewinding the film each time and then re-exposing it to add each new element. So they did one pass for the lights on a building, another for the video projection, then a pass for the rain lighting and so on — as many as 16 passes in some cases. And all that layering is what makes you feel you're in a totally complete world, yet one that's completely alien.

Timeless Design
Scott hired an incredible art department, including Syd Mead, who started out designing cars for Ford. Some scenes have almost a 1930s look to them, while others are totally futuristic. But all the technology they designed — like flying cop cars they call "spinners" — meshes perfectly with your idea of this world. It's one of the reasons this movie has stayed at the top of my list. It just doesn't date.
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New DVDs
Dave Kehr


Warner Home Video has brought a very diverse group of 12 films together into four box sets collectively called “Cult Camp Classics.” Unsurprisingly, not all of them are cult films (if there is any fan frenzy over John Guillermin’s “Skyjacked,” it is certainly muted); a few aren’t even campy (Howard Hawks’s “Land of the Pharaohs” could be the most down-to-earth costume epic ever made); and none of them would qualify as classics, even in the Ed Wood pantheon.

What these films have in common is a starless obscurity that makes them difficult to release into the name-driven DVD market. If the condescending “cult camp” label gives them a commercial hook, I guess that’s for the good, at least as long as it means getting prints as carefully restored and transfers as technically perfect as these.

With a clean face and pressed clothes, even a desperately impoverished drive-in picture like Edward Bernd’s “Queen of Outer Space” (1958) can make a good impression. One of a large number of low-budget films from the Allied Artists library now owned by Warner Brothers, this tale of virile American astronauts landing on a Venus populated by scantily clad women (Zsa Zsa Gabor among them) probably looks better now than it ever did at the drive-in. With its once-faded DeLuxe color pumped back up to something like its original intensity, William P. Whitley’s cinematography takes on the Pop Art shimmer of Pedro Almodóvar’s early films, a crazy quilt of violently mismatched hues.

The two other titles in the “Sci-Fi Thrillers” box are “The Giant Behemoth,” a sleepy 1959 monster-stomps-city epic featuring some of the last work of the stop-motion animator Willis O’Brien (“King Kong”), and the strangely riveting “Attack of the 50-Foot Woman,” a sort of down-market science-fiction variation on “Who’s Afraid of Virginia Woolf?”

A boozy, battling couple played by Allison Hayes and William Hudson slap each other around on various flimsy sets, until Ms. Hayes’s character resolves the standoff by shooting up to a height of 50 feet, thanks to an accidental encounter with a radioactive alien.

As an outrageously literal metaphor for unleashed female anger, “50-Foot Woman” achieves a kind of demented grandeur. Apparently the director, Nathan Juran, didn’t see the poetry: he signed it with a pseudonym, Nathan Hertz, his first and middle names.

Poor Dana Andrews comes in for a beating in the box Warners has titled “Terrorized Travelers.” This former A-list star, who had become the embodiment of the returning World War II veteran in William Wyler’s “ Best Years of Our Lives” (1946), was deep into a struggle with alcoholism by the time he appeared as the traumatized ex-fighter pilot in Hall Bartlett’s 1957 “Zero Hour!” and as the embattled husband and father in a duel with thrill-seeking teenagers in the 1967 “Hot Rods to Hell.”

The second film, in particular, draws on Mr. Andrews’s 1940s stardom, pairing him with his “State Fair” co-star Jeanne Crain under the direction of John Brahm, another ’40s figure. In a plot line that could be a parody of a World War II campaign picture, Mr. Andrews plays a debilitated authority figure (he can’t drive as a result of a devastating car accident) trying to transport his wife and children across the California desert to what seems like a grim new life managing a small-town motel.

The family’s caravan of middle-class decency is attacked by speed-crazed youths in souped-up cars, urged on by a decadent blonde played by Mimsy Farmer. The film may be stiffly executed, but its underlying anger and bitterness are hard to shake. Given the year of its making, “Hot Rods to Hell” may represent one of the last times that the aging, pre-boomer generation got to have its cranky say in a movie industry that would soon shut out most voices over 40.

John Cromwell’s 1950 “Caged” is at once an obvious and an inappropriate choice for a box devoted to “Women in Peril.” A researcher looking for a trashy women’s prison film would understandably be drawn to the lurid title.

But the movie is no spoofy, salacious Roger Corman “women in cages” picture. It’s a sober, well-filmed drama in the old Warner Brothers school of social issue movies, effectively an update of “I Am a Fugitive From a Chain Gang,” with Eleanor Parker (too breathy and theatrical) as the fresh fish in the tank, and the unforgettable Hope Emerson, all 6 foot 2 inches of her, as a sadistic guard. Ms. Parker, Ms. Emerson and the screenwriters, Virginia Kellogg and Bernard C. Schoenfeld, were all nominated for Oscars.

The whole “Cult Camp Classics” enterprise is justified for me by the presence of “Land of the Pharaohs” in the “Historical Epics” volume. Howard Hawks’s only film in CinemaScope, it has been hard to see in its original format. This transfer not only gets the framing right (I noticed, for the first time, that Hawks has placed a rectangle around the opening credits to establish the correct aspect ratio for the projectionist) but also restores a long-lost four-track stereo soundtrack.

It’s still not a great movie (it features Joan Collins; need I say more?), but it’s far from the disaster it has often been portrayed as. For Hawks, the epic form is not about the DeMille pageantry of dancing girls and muscled Nubian slaves. (For that sort of thing, see its box companion, Richard Thorpe’s garish biblical blockbuster “The Prodigal”).

Rather, in typical Hawks fashion, Topic A is the business of getting a dangerous job done: in this case the construction, under the Pharaoh Khufu (Jack Hawkins), of the Great Pyramid of Giza. (To capture its scope, Hawks allows himself one of the few showy shots in his career, a 360-degree pan around the construction site that embraces thousands of extras.)

The art direction, by the incomparable Alexandre Trauner (“Children of Paradise”), alludes to the Fascist architecture so recently and disastrously popular in Europe, and Hawks makes the dictatorial Khufu an ambiguous figure: admirable for his ambition and energy, dangerous in his contempt for human life and fierce commitment to a cruel religion.

Hawks’s films always seem conspicuously secular in the context of the religiosity of much Hollywood cinema; “Land of the Pharaohs” is quietly, confidently skeptical of all things transcendent.

The Cult Camp Classics Collections: “Sci-Fi Thrillers,” “Women in Peril,” “Terrorized Travelers” and “Historical Epics,” $29.98 for each volume of three films; single titles are $14.98 each. All films in the collection are unrated, with the exception of “Skyjacked,” part of the “Terrorized Travelers” box, which is PG.


BLACK SNAKE MOAN A young nymphomaniac (Christina Ricci) finds salvation when an aging blues man (Samuel L. Jackson) chains her to his radiator and teaches her old-time values. With Justin Timberlake; Craig Brewer directs. (Paramount, $29.99, R)

SHOOTER Mark Wahlberg as a disillusioned government assassin recruited for one last job. Antoine Fuqua directs; with Michael Peña and Danny Glover. (Paramount, $29.99, R)

MONK: SEASON FIVE All 16 episodes from the fifth season of the popular television series starring Tony Shalhoub as a detective with obsessive-compulsive disorder. (Universal, $59.98, not rated)

National Lampoon Stakes Revival on Making Own Films
Andrew Adam Newman

“Did you say ‘over?’ ” the character played by John Belushi asked in “National Lampoon’s Animal House” in 1978. “Nothing’s over till we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell, no!”

It was arguably the high point for both the movie and National Lampoon itself, once a comedic standard-bearer that for most of the last two decades has run on little more than fumes, licensing its name to dozens of movies that failed spectacularly while producing few of its own. The company has not published the magazine that first made it famous in nearly 10 years.

“The National Lampoon, once a brand name above nearly all others in comedy, has become shorthand for pathetic frat boy humor,” an Associated Press review of “Van Wilder 2,” a movie made using the company’s name, said last year. Added Variety, “The four-years-in-the-making, badly recycled (not to mention awful) sequel might stain the honor of the Lampoon label if it hadn’t already produced several even worse films.”

But now, like the history-challenged Mr. Belushi rallying his fraternity brothers, National Lampoon is trying to escape its doldrums. Operating from new offices on Sunset Boulevard in Los Angeles, the company will again make original films, including the first one it has produced in 18 years, “National Lampoon’s Bag Boy,” which will be released this year. The movie is about grocery store bagging competitions and will star Dennis Farina and Brooke Shields, among others.

The company also announced this month that it was beginning production on “National Lampoon’s Ratko: The Dictator’s Son,” a comedy that will be directed by Savage Steve Holland, whose films include “Better Off Dead.”

In all, National Lampoon plans to release four of its own movies annually and acquire up to eight more for distribution.

National Lampoon is hoping to build an audience through the college cable television network it purchased in 2002 and through the original videos it has been producing for Web sites like YouTube, Veoh and Lycos.

The point of the videos is to lure viewers back to nationallampoon.com, which is highlighted at the end of each clip. The site is an umbrella for comedy Web sites that the company has been cobbling together under its brand.

National Lampoon has also gone back into print. On June 12, it released “National Lampoon Animal House 29th Anniversary Edition,” a novel version of the movie that includes still pictures from the film.

The company released the book this year instead of on the 30th anniversary for comedic effect, but also because it is eager to evoke its glory days. The big question is whether National Lampoon’s brand of frat-boy humor still has currency for the college market, which it continues to serve, or appeals just to nostalgic boomers.

“College boys still love alcohol, they still love girls, they love to have a good time — those things haven’t changed,” said Daniel S. Laikin, the chief executive of National Lampoon.

Mr. Laikin became the largest shareholder in National Lampoon Inc., which is publicly traded, in 1999, and took over its operations in 2002. He owns 40 percent of the company personally and 30 percent with partners. The business has 30 full-time employees, up from 10 when he began running it.

“The company really had just been a licensing company in the ’90s,” Mr. Laikin said on the phone from Los Angeles. “We were just licensing the name and we had no creative input. When I came in, we had to re-energize the brand and cut back on the licensing, because the only way to take control of the brand was to make sure that ultimately we put it on projects that we are proud of.”

Mr. Laikin, 45, who previously ran a venture capital firm (now dormant) called Four Leaf Partners that invested in Internet companies, has brought dozens of other humor Web sites under the National Lampoon Network umbrella.

Collectively the sites drew 5 million visitors in May, nearly twice as many as Comedy Central’s 2.6 million, according to comScore, which tracks Web traffic. Another competitor, The Onion, drew 882,000 visitors.

While no individual sites in National Lampoon’s Web network stack up individually to Comedy Central’s, having that audience in aggregate has helped National Lampoon draw major advertisers, including the United States Army and most major movie studios.

But David A. Morrison, president of Twentysomething, a marketing firm in Philadelphia and the author of “Marketing to the Campus Crowd,” said that toga parties might have passed their prime.

“There’s a brand currency with National Lampoon that’s stronger with advertisers that remember National Lampoon from their days in college,” Mr. Morrison said. “But in terms of today’s college market — their actual target market — I think it’s something of a blank canvas as a brand.”

Daring at the time, the company’s signature movie is almost quaint by today’s standards. “ ‘Animal House’ set the bar, but that bar has been far surpassed in terms of gross-out humor or sexual innuendo,” Mr. Morrison said. “It’s tame compared to something you’d see on YouTube” or the movie “Borat” or the moronic stunts in either of the “Jackass” movies, he added.

National Lampoon magazine, which was started in 1970 by alumni of Harvard Lampoon magazine, made questionable taste unquestionably funny. A 1973 cover featured a dog with a gun pointed at its head and the text, “If You Don’t Buy This Magazine, We’ll Kill This Dog.” It was selected by the American Society of Magazine Editors in 2005 as the seventh greatest cover of the last 40 years. Today, comedians like Stephen Colbert cite the magazine as an influence, as does Al Jean, executive producer of “The Simpsons,” who subscribed before working for it himself in the 1980s.

Riding on the success of the magazine, which at its peak in the mid-1970s had a circulation of more than one million, three of its writers collaborated on the screenplay for “Animal House.” Produced for less than $3 million, it attracted $261 million at the box office and was selected as one of the top 100 American comedies by the American Film Institute. National Lampoon still earns royalties on the DVD sales.

But with the notable exception of the Chevy Chase film, “National Lampoon’s Vacation” in 1983, the company never again found major success in theaters. The monthly magazine steadily lost circulation in the 1980s, eventually printing just one issue a year before ceasing publication in 1998.

Rather than conceiving movies, the company merely sold its moniker. If there were any standards for what the company would staple its name to, they were lost on many.

P. J. O’Rourke, who wrote for National Lampoon in the 1970s, told The New York Times in 2005 that what became of the company “breaks my heart, to tell you the truth.”

You might expect National Lampoon to grow defensive at such comments, but no one is quicker to agree than Mr. Laikin. “Our first years when we took over, we had a few license deals on products that we would not necessarily do today,” he said. “We have had to recreate this company from the ground up, which required revenue, which we derived from the licensing.”

Today the company knows the place to find its audience is online and in college dormitories. Its cable television network is piped into more than 600 universities with a collective enrollment of 4.9 million, the company says. The audiences for that network, at least in theory, will find their way into movie theaters when the company begins releasing its own films.

National Lampoon will have more of a stake in “Bag Boy” and its other movies than before, since it is financing and producing them itself. Universal Pictures produced “Animal House” and Warner Brothers Pictures produced “Vacation.”

Already Under Fire, a Producer Is Going Further
Michael Cieply

For a while Wednesday night’s block party for “Transformers” was shaping up to be the hottest ticket in town.

But that was before Courtney Solomon, planning a celebration of his own, called in the SuicideGirls.

Having already provoked parents, women’s groups and the ratings board with explicit ads for the coming torture movie “Captivity,” Mr. Solomon and his After Dark Films now intend to introduce the film, set for release July 13, with a party that may set a new standard for the politically incorrect.

For starters, Mr. Solomon has ordered up what he calls the three “most outlandish” SuicideGirls available from the punk porn service, even if they’re as frisky as the ones he is told once set a Portland, Ore., restaurant on fire. Some lucky fans will get to take the women as dates for party night, July 10, on two conditions: “People take the date at their own risk, and everybody on the Internet gets to watch.”

Cage fighting too is likely. Mr. Solomon’s planners are angling for Kimbo Slice, the bare-knuckle bruiser whose vicious backyard brawls are a Web favorite and who made his Mixed Martial Arts debut on Saturday.

But the warren of live torture rooms is a must. As Mr. Solomon envisions it, individuals in torture gear will wander through the West Hollywood club Privilege grabbing partygoers. All of which is a prelude to an undisclosed main event that, he warned last week over slices of pizza a few doors from his company’s new offices on the Sunset Strip, is “probably not legal.”

“The women’s groups definitely will love it,” Mr. Solomon hinted. “I call it my personal little tribute to them.”

Mr. Solomon, a fast-talking 35-year-old, and his genre-film company were barely noticed until outrage at the “Captivity” billboards — which chronicled a young woman’s torment, with frames titled “Abduction,” “Confinement,” “Torture,” “Termination” — led to a rare censure by the Motion Picture Association of America this spring.

When the association’s ratings board suspended its process for a month as a punitive measure, “Captivity” missed its May release date and was bumped to June 22. But Bob Weinstein and his Dimension Films wanted that date for their competing horror film “1408,” and he persuaded Mr. Solomon to swap for Friday, July 13. Mr. Solomon quickly called that Friday “Captivity Day.”

The idea behind Mr. Solomon’s planned party of course is to put “Captivity” back on the map, no small task given the scheduling hiccups and recent woes in the horror genre. Over the last few months a series of horror films have done poorly, culminating with the disappointing performance earlier this month by Lionsgate’s “Hostel: Part II.”

A spokesman for Lionsgate, which is co-releasing “Captivity,” declined to comment on the party plans. Mr. Solomon supervises his own promotions, though he is required to get Lionsgate’s approval for advertising under an arrangement that was tightened up after the “Captivity” debacle.

If horror is indeed lagging, part of the cure, Mr. Solomon said, is for the genre to get even scarier. To that end he persuaded the director of “Captivity,” Roland Joffé, the much-honored filmmaker behind “The Mission” and “The Killing Fields,” to undertake reshoots. These added explicit torture , including a so-called “milkshake” scene that involves body parts and a blender, to a picture that was largely psychological in its thrust when After Dark acquired the rights to it.

Mr. Joffé did not return a call last week. Mr. Solomon, a Toronto-born entrepreneur who acquired the rights to the game Dungeons & Dragons while working from his bedroom and wound up directing its film under the tutelage of the producer Joel Silver, casts his struggle with those who object to “Captivity” as a Larry Flynt-style fight against censorship and repression. Yet this promotional master of Hollywood’s dark side is waging the battle with typical outrageousness. The movie, which is rated R, will screen only once before its opening, at an expected showing for women’s groups in New York, at which he wants to engage in a town-hall-style debate with detractors.

“We would not be receptive,” said Meaghan Carey, deputy director of the New York City chapter of the National Organization for Women. “We’re not going to go protest so they can get press.”

The party meanwhile appears to break new ground even in a city that has seen its share of big nights. “I’ve been doing this for years, and haven’t had one like it,” said Maureen McGrath, vice president for sales for the SBE Restaurant Group, which owns Privilege. “Usually they want premieres to be squeaky clean. It sounds like they want this to be the antithesis of that.”

Mr. Solomon went one better in describing his plans, which are loosely intended to mimic the past doings at a once-notorious Moscow bar, the Hungry Duck. “If ‘Captivity’ is what it is, and we’re the bad boys, then ‘Captivity’ deserves a bad-boy party,” he said. “It deserves a nasty party.”

The primary audience, he said, will be fans, who can cycle through the club free in groups of 50, along with an expected army of Web-based video bloggers — the real opinion-makers when it comes to horror — who will start getting their invitations this week.

“I’m aware of it,” said Brad Miska, co-owner of one of the more popular such sites, Bloody-disgusting.com. “If they let us bring a camera, we’re there.”

Billion-Dollar Deal to Be a Partner in Some Warner Films
Brooks Barnes

In a sign that the flood of private money in Hollywood only continues to rise, Legendary, the production company of the venture capitalist Thomas Tull, will invest $1 billion in a portfolio of films co-produced by Warner Brothers Pictures.

The deal, which the companies plan to announce today, extends a partnership forged in 2005. At the time, Legendary, whose participants include AIG Direct Investments, Banc of America Capital Investors and Falcon Investment Advisors, invested $500 million in a group of Warner films. The deal included some flops but also yielded the surprise hit “300” and the blockbuster “Batman Begins.”

The new five-year agreement, arranged by Dresdner Kleinwort, a London-based investment bank, calls for Warner and Legendary to jointly finance up to 45 films. Included are movies like “Where the Wild Things Are,” an adaptation of the classic children’s book; “The Losers,” based on a gritty comic book; and a remake of “Clash of the Titans.”

Jeff Robinov, Warner’s president for production, called the mix “some of the coolest and most exciting titles in our slate.” Warner will continue to keep to itself some highly lucrative films — like the Harry Potter movies, for example — to itself.

In recent years, the major studios have sought private investors to help finance increasingly expensive movies. The film industry has also welcomed partners to offset the pain of piracy and slowing DVD sales. As a result, Hollywood has drawn significant amounts of new money from wealthy investors.

Many of those ventures have a mixed track record, and Hollywood has a long history of leaving outsiders with little to show for their investments but an empty wallet and a few star autographs. Last summer, the relationship between Legendary and Warner, owned by Time Warner, grew tense after two movies that they jointly financed, M. Night Shyamalan’s “Lady in the Water” and the animated “Ant Bully,” faltered at the box office.

“You learn more about your partner when you go through a couple of movies that don’t work than you do when times are great,” said Mr. Tull in an interview. “This is a business that certainly has its challenges, but it’s one we believe in for the long term.”

Mr. Tull declined to say what rate of return Legendary has realized, except to note that the company was making money. He said the portfolio approach of dozens of films mitigates risk. Still, the size of the new investment, Mr. Tull said, reflects Legendary’s decision that it needed to put money into a greater number of films to “accomplish our goals.”

Steve Jobs Directs Disney

Disney ditches direct-to-DVD sequels that Steve Jobs calls 'embarrassing'
Nick Spence

Disney is to scrap the lucrative direct-to-DVD animated sequels that Steve Jobs once branded “embarrassing”, according to Yahoo News.

Currently the largest Disney shareholder and a member of Disney's Board of Directors, Jobs, a longtime Disney fan, is thought to have influenced the decision.

In recent years DVD’s such as Lion King 1 1/2 and Bambi II have been commercial rather than critical hits for Disney. Little Mermaid III, which is currently in production, will be the last of the direct-to-DVD animated sequels.

In a 2003 conference call with financial analysts, Jobs said how much he hated the DVD sequels. "We feel sick about Disney doing sequels. If you look at the quality of their sequels it's pretty embarrassing." The change comes with a shake-up at the company's DisneyToon Studios, including the removal of longtime president Sharon Morrill.

DisneyToon Studios will become part of Walt Disney Feature Animation and report directly to Animation President Ed Catmull and John Lasseter, who assumed roles there after Disney bought Pixar Animation Studio last year for $7.4 billion in stock.

Two ‘Mightys’ Disappoint at the Weekend Box Office
Brooks Barnes

The expensive Noah’s Ark comedy “Evan Almighty” nearly capsized in United States theaters in its premiere weekend, selling just $32 million in tickets.

Meanwhile, a strong opening for “1408,” based on a Stephen King short story, pumped life into the troubled horror genre.

Estimates for the three-day performance of “Evan Almighty,” directed by Tom Shadyac and starring Steve Carell, are alarming Universal Pictures because of the film’s outsize budget. The studio spent more than $200 million to produce and market the movie, making it the most expensive comedy in Hollywood history.

Expectations were high, because “Bruce Almighty” sold over $70 million in tickets during its opening weekend in 2003. Universal, which made the risky decision to aim its marketing at Christian audiences, conceded that the poorly reviewed “Evan Almighty” fell short of expectations. Still, executives said it was unfair to call its performance weak.

“We never expected it to be much higher,” said Nikki Rocco, Universal’s president of distribution. “It is not unusual for family films to open at a level like this and build. This film will have legs.”

Ms. Rocco emphasized that Universal had high expectations for “Evan Almighty” overseas. Comedies typically have a hard time playing across foreign markets, but Ms. Rocco said, “This is different; it’s God.” The movie opens in most international markets in August, she said.

While “Evan” struggled at the multiplex, a strong showing for “1408” curbed speculation that audiences were tiring of horror. The film, starring John Cusack as a skeptic who investigates a mysterious room at a New York hotel where suicides have taken place, sold a better-than-expected $20 million in tickets.

New installments of the gory “Saw” and “Hostel” franchises have performed poorly at the box office, fueling worries that the genre was fading. Healthy receipts for “1408,” produced by the Weinstein Company’s Dimension Films and distributed by MGM, could signal that audiences were simply shifting away from the gruesome disembowelment stories that have dominated in recent years.

“There has been too much of the same thing,” said Bob Weinstein. “This proves the horror genre is definitely not dead.”

Mr. Weinstein had another reason to be pleased; his studio’s “Sicko,” the latest documentary from Michael Moore, was playing strongly in sneak previews.

The weekend proved much more difficult for another high-profile movie, “A Mighty Heart” from Paramount Vantage. Starring Angelina Jolie as the widow of the slain Wall Street Journal reporter Daniel Pearl, “A Mighty Heart” rode a tidal wave of publicity to the box office but brought in only $4 million on 1,353 screens, for $2,952 a screen.

The total raises questions about the studio’s decision to try to attract a serious-minded audience during the summer, when frothy material dominates. “We’re keeping our fingers crossed it builds,” said a Paramount Vantage spokesman.

NBC Exec: Think Of The Poor Corn Farmers Hurt By Movie Piracy
from the wait,-are-these-guys-serious? dept

NBC/Universal's general counsel Rick Cotton must just be trying to push his anti-piracy comments to absurd levels to see just how much he can get away with. We'd already written about his completely unsupportable statements on how law enforcement needs to spend less on traditional crime and focus more on piracy and counterfeiting. We also covered the highly problematic suggestion he made to the FCC that it force ISPs to monitor their traffic for any unauthorized material (complete with more bogus stats). However, as more people dig through that FCC filing there are some amazing quotes that really suggest that Cotton and NBC/Universal have no connection to reality with these pleas.

Public Knowledge picks up on NBC's showy concern for the American farmer:

"In the absence of movie piracy, video retailers would sell and rent more titles. Movie theatres would sell more tickets and popcorn. Corn growers would earn greater profits and buy more farm equipment."

There are all sorts of problems with this statement. As Public Knowledge points out, first off, movie theaters are doing great this year, suggesting the big "threat" of piracy had a lot less to do with its troubles than the fact that it just didn't have that many compelling movies the past few years. Also, corn farmers are doing quite well (and people still eat popcorn at home while watching pirated movies). Of course, that doesn't really matter. What's key here is that if Cotton and NBC actually believe this logic, then they don't deserve to be in business. By the very same reasoning, I could say "If all movies were pirated, then everyone would have that additional money they didn't spend on movies to spend on things like fancy dinners. Restaurants would be more crowded. Farmers would make more money by being able to sell more profitable food at higher prices." See how easy it is? It's also completely bogus, but it's just as accurate as Cotton's statement on the corn farmers. To suggest that the ripple effects don't ripple in other directions isn't just misleading, it's dangerously wrong. Of course, knowing how the entertainment industry works, next thing you know, they'll be demanding a cut of the profits corn farmers make, since, after all they're "profiting off the backs of the movie industry" without paying the industry for the benefit.

MPAA Sues Two Movie Streaming Sites
Thomas Mennecke

The MPAA announced today it has filed lawsuits against two web based movie streaming sites, YouTVpc.com and Peekvid.com, in Federal Court. Most of the MPAA's legal enforcement has taken place against P2P and BitTorrent related communities, which are notoriously more difficult to knock off line. LokiTorrent, EliteTorrents and The Pirate Bay's destinies have all been influenced by the movie industry in one form or another, with varying levels of success.

Web based indexing or hosting has long been considered a highly dangerous venture, with costly litigation a near guarantee. Just ask AllofMP3.com, who has been battling for survival against the RIAA (Recording Industry Association of America) for over a year. With the MPAA's relatively successful track record in copyright enforcement, surely no one readily streams Hollywood or theatrical run movies for the entire world to see, right?

Welcome YouTVpc.com and Peekvid.com. YouTVpc.com and Peekvid.com stream various amounts of media; however videos appear to be their main focus. YouTVpc.com is the more daring of the two, as it readily streams theatrical titles such as "Pirates of the Caribbean 3" and "Shrek the Third." YouTVpc's videos are streamed from servers located throughout the world, as it does not host any files.

Peekvid.com's collection is mostly of older movies, and indexes no theatrical run films. Apparently the legal impact against sites like LokiTorrent and EliteTorrents, who indexed movie torrents on the BitTorrent network, had no influence on the decision making process of the site's owners. This made for easy prey for the MPAA.

“The sole purpose of these sites is to disseminate content that has been illegally reproduced and distributed. They are a one-stop shop for copyright infringement. These lawsuits should serve as a warning to other aspiring movie theft ‘entrepreneurs’ that they are not above the law and will face serious consequences for their activities. Profiting from the theft of other people’s creative works is illegal and must be stopped,” said John Malcolm, Executive Vice President and Director of Worldwide Anti-Piracy Operations for the MPAA.

The fragility of web based distribution is so apparent that hardly anyone considers this a viable enterprise - especially in the United States. The MPAA took note that both sites are quite popular as Peekvid "averages over 53,000 unique users per day who view over 184,000 pages of content. YouTVpc – whose servers are located in Scottsdale, Arizona - averages more than 6,000 unique daily visitors who view over 21,000 pages of content per day." Additionally, the MPAA noticed the abundance of advertising. To the movie industry, this means YouTVpc.com and Peekvid.com are profiting at their expense.

Neither site responded to Slyck's request for comment, and the legal justification for operating such a site is currently unknown. LokiTorrent or EliteTorrents could argue they only indexed torrent files of material existing on the BitTorrent network. With these two sites, although movies stream from other locations, the film is watchable via a flash player directly on either site. If LokiTorrent's and ElieteTorrent's impressive threshold for legal justification was dismissed, YouTVpc.com and Peekvid.com might find their business model in trouble.

Hollywood Scrambles as Strike Looms
Michael Cieply

In Hollywood’s upper reaches this week, few are bothering to count past two. As in Adam Sandler has already booked his two “pre-strike” pictures, so let’s try Vince Vaughn.

Though it’s unclear whether the forthcoming contract expirations of the entertainment industry’s writers, actors and directors will lead to a work stoppage over the next year, Hollywood is nonetheless frantically hedging its bets.

Producers, executives, agents and filmmakers are aware that even a hard-working star can most likely squeeze in no more than two movies before June 30 of next year, when the last of the deals end. After that date no studio wants to be caught with filming on its schedule, especially under expensive “pay or play” deals. (Such arrangements require companies to pay actors or others even if the movie isn’t made.)

And that has turned moviedom’s midsummer months into an unusually tense season. Deal makers are frantically trying to line up top actors for their presumed two-picture limit, even as they try to avoid thinking about the inevitable vacuum that will come after the contract expiration dates, with or without a strike, because no films are being set to shoot next July.

“We’re trying to do in six months what we usually do in 12,” said Patrick Whitesell, a partner with the Endeavor agency, which represents Mr. Sandler and others caught up in the chase.

Mr. Sandler, as it happens, is supposed to start “You Don’t Mess With the Zohan” for Sony Pictures soon, and is probably locked up on “Bedtime Stories” for Disney after that. Mr. Vaughn, meanwhile, has been mentioned in connection with a half-dozen projects, but his plans are complicated by the prospect of a heavy promotional schedule for the comedy “Fred Claus,” already shot and awaiting release by Warner Brothers in the fall.

The squeeze can be particularly painful for directors, who can easily invest 18 months in preparing, shooting and refining a picture, and may find themselves out of work for a year or more if they do not pin down studio, star and script in the next few weeks.

In one go-round, Paul Greengrass, finished with this August’s “Bourne Ultimatum,” with Matt Damon, a client of Mr. Whitesell’s, has been trying to round up that star to shoot “Imperial Life in the Emerald City” for Universal and Working Title Films. But Mr. Damon is also looking at “The Informant,” a conspiracy thriller to be directed by Steven Soderbergh for Warner Brothers.

If Mr. Damon commits to both, and everything falls into place with the studios, that would mean a long delay for “The Fighter,” a Paramount boxing film that is being lined up as a possible project for him with the director Darren Aronofsky. For that one, however, Mr. Damon would have to contend with weight fluctuations that would be difficult to control on a tight schedule. (Mr. Aronofsky is simultaneously developing another project for Universal, a spokeswoman for him said.)

In another closely watched decision, Jim Carrey, who is represented by the Creative Artists Agency, has been juggling at least three contenders for his presumed two slots. One, “Believe It or Not!,” would come from Paramount, with the director Tim Burton. Another, “I Love You Phillip Morris,” would be independently financed, with the directors Glenn Ficarra and John Requa (who were writers of “Bad Santa”). Yet another, “Me Time,” might come from Fox, but no director has yet been named. And still other projects could come into the mix.

A spokeswoman for Mr. Carrey declined to comment. In the Rube Goldberg exercise of Hollywood scheduling, little can be done without a final script. So the heat has been turned up lately on film writers to deliver the goods, even as their television-writing brethren are facing a different sort of pressure, to deliver extra episodes of television shows that will become a network bulwark against a possible writers’ strike this fall. (The writers’ contracts expire in October, while those of actors and directors end next June.)

“What we’re seeing is a stockpiling” of dramatic episodes and an increase in strike-resistant reality programming, said Steven Katleman, a lawyer with the Greenberg Traurig firm, which represents a number of television actors, writers and producers. Mr. Katleman pointed, for instance, to a recent outsize order for 30 episodes of the NBC series “Heroes.”

The studios’ eagerness to book films that will be seen in late 2008 or the summer of 2009 has been particularly intense, given the unusual alignment of contract expirations and a broad expectation that writers and actors are bent on playing hardball on issues related to compensation for new forms of digital distribution.

“It’s a pretty lethal combination,” said Jack Kyser, senior vice president and chief economist for the Los Angeles County Economic Development Corporation. Whether or not a real walkout occurs, Mr. Kyser said, the insistence that no film or television show be scheduled to shoot after next June will almost certainly cause a “de facto” strike.

A similar situation occurred in 2001, when studios shot extra shows and movies in the first two quarters of the year in advance of a negotiation with actors. Work then fell to a third of that level for the next several quarters, as measured by a count of filming days at locations around Los Angeles.

Things are even more complicated now, because actors, by accident of timing, are actually negotiating eight separate contracts over the next year, including those covering commercials and interactive work. Executives of the Screen Actors Guild declined to be interviewed about the scheduling of their various talks.

Asked about the rush to production, Barbara Brogliatti, a spokeswoman for the Alliance of Motion Picture and Television Producers, which represents entertainment companies, said, “As we enter these negotiations, we are hoping for the best, but we have a fiduciary duty to prepare for the worst.”

Given that major feature films require months of preproduction and may require 16 weeks or more in front of the camera, the “be prepared” spirit means that most big casting choices for the next two years’ film schedule will soon have been made.

And Hollywood won’t have much to talk about come spring, except labor negotiations, politics and the weather.

“Next year at Cannes, it’s going to be dead,” said Mr. Whitesell, referring to the telephone action that usually connects Hollywood festivalgoers with business at home. “I mean dead.”

The Web Site Celebrities Fear
Allison Hope Weiner

While the networks tussled over which would land the first interview with Paris Hilton after her release from jail, the upstart Web site TMZ.com was breaking most of the news.

On June 3, TMZ.com was the only media outlet to capture on video Ms. Hilton’s surrender at the Los Angeles central jail for men, while other outlets waited outside the Lynwood women’s jail for her to arrive there. When Ms. Hilton was released early by the Los Angeles County Sheriff, Lee Baca, and when Judge Michael T. Sauer ordered the sheriff to take her back to court, TMZ.com was first to report that Sheriff Baca had initially refused to follow the judge’s order.

TMZ.com has so dominated the coverage on Ms. Hilton that Larry King, who is scheduled to interview her on CNN Wednesday night, will turn over tonight’s one-hour show to TMZ.com’s anchor and managing editor, Harvey Levin, the man who may represent the future of celebrity journalism.

In the past, media coverage of celebrities often hinged on the promotional agenda of studios, publicists and other handlers. Under the direction of Mr. Levin, a former lawyer and investigative reporter, and Jim Paratore, an executive consultant to the site, TMZ.com has quickly gained an audience by posting news articles garnered from documents, unofficial videotapes, exclusive paparazzi shots and other sources like law enforcement officials and courthouse clerks. (The name stands for “thirty mile zone,” referring to the area around Los Angeles populated by celebrities.)

“We work as hard at breaking a Britney Spears story as NBC would work on breaking a President Bush piece,” Mr. Levin said.

As a result, TMZ.com has become the celebrity handler’s worst nightmare. The site has had a series of damaging celebrity scoops, including the police report detailing Mel Gibson’s drunken anti-Semitic tirade, Michael Richards’s racist rant in a comedy club, an audiotape of the angry phone message Alec Baldwin left for his daughter and a photograph of Anna Nicole Smith’s refrigerator filled with methadone and Slim-Fast.

But TMZ.com’s reach extends well beyond the approximately nine million people who visit the Web site each month. The site has become a reliable source for the mainstream media, which has become less self-conscious about reporting every detail of celebrity missteps, according to Hilary Estey McLoughlin, the president of Telepictures Productions, a division of Warner Brothers, which co-owns the TMZ site with AOL. Both Warner Brothers and AOL are divisions of Time Warner.

“There are times, like with the Paris Hilton story, where we’ve set the agenda for what local news and national news are covering,” Ms. Estey McLoughlin said. “Paris Hilton leads every newscast.”

Last week, for example, TMZ.com posted excerpts of O.J. Simpson’s unpublished book, “If I Did It.” Although it wasn’t the first Web site to have excerpts, TMZ’s involvement helped make the book again a national story.

Mr. Levin likens the influence of TMZ to a wire service. “We’ve become like The Associated Press in the world we cover,” he said.

That influence has also made him a feared figure in Hollywood. One publicist who declined to speak on the record because of fear of retaliation against his clients likened Mr. Levin’s power to that of the 1940s and 1950s gossip columnists like Walter Winchell.

“If you have something you know they will like, you tip them to it,” the publicist said. “It’s kind of the old way you dealt with the old-time gossip columnists. You have to occasionally feed them an item. You have to be in the game with them. If you’re a publicist and the only time you call up is to complain about an item, they’ll laugh at you.”

Even Hollywood criminal lawyers concede that dealing with TMZ has now become part of their legal strategy. Shawn Chapman Holley, who represents Nicole Richie, acknowledges that TMZ’s ability to get information has affected strategic decisions in Ms. Richie’s drunken-driving case.

“When we approach the bench, what we know and when TMZ will know it is a factor discussed with the judge,” said Ms. Holley. “Miss Richie’s case would be set for a particular day and to throw off TMZ.com, I would go in a day before. Unfortunately, TMZ.com figured out my strategy and were there when I arrived. So now I’m trying to figure out some other strategy.”

In some respects, TMZ, which first appeared in December 2005, represented a throwback to earlier journalism, when many reporters relied on documents rather than arranged interviews to break news.

“We had a seminal moment in the first month with the Paris Hilton car crash with her boyfriend,” recalled Mr. Paratore. “She was pulled over by police, and we caught the whole thing on camera, and it got picked up a lot. We could see people were really attracted to content like that.”

Initially, Mr. Levin was wary of creating a celebrity Web site. He had spent more than a decade as an investigative reporter for KCBS-TV in Los Angeles. He had also created and executive-produced the canceled series “Celebrity Justice” and covered many high-profile trials, including the O. J. Simpson case.

But eventually, he found that the 24-hour news cycle appealed to his competitive metabolism. “I started seeing that if you don’t have time periods and publishing cycles, you can publish on demand and beat everybody,” said Mr. Levin.

TMZ.com has been ranked the No. 1 Hollywood news site for nine months against well-known brands like Entertainment Weekly’s EW.com, People.com and E! Online. Time Warner does not break out revenue figures for TMZ.com, but the site is profitable, according to people familiar with the numbers who did not want to be identified because they are not authorized to speak about the site’s finances. Beginning in July, TMZ’s 25 staff members will work out of offices in West Hollywood and one reporter will continue to work from New York.

The Web site’s success has drawn criticism not only from the stars it covers, but also from competitors who claim the Web site pays for articles. Mr. Levin argues that the site has never paid for a story, although it does pay for videotapes and photographs.

“We have a budget for that,” said Mr. Paratore. “But the budget is nowhere near the numbers being thrown around for the Paris Hilton interview.”

Along with turning celebrity stories into dramas that unfold in real time, TMZ has also contributed to the different tone of much entertainment coverage.

“Five years ago there was so much reverence in the discussion,” said Janice Min, editor-in-chief of Us Weekly. “I’ve seen a shift in the tone. It’s now equal parts reverence and contempt, and TMZ has been able to capitalize on that contemptuous feeling. TMZ pokes fun at celebrity — sometimes gentle, sometimes quite harsh — and to millions of people, that’s more engaging than reading a canned interview.”

Ms. Min said that she often checks the site and competes with it to break news. “But it’s great to have them out there,” she said. “It’s like going to an all-you-can-eat buffet where you never get full.”

Inevitably, however, TMZ comes to rely on a symbiosis with the people it covers.

“We supply them with news all the time because it goes around the world in 12 seconds,” said Stan Rosenfield, George Clooney’s publicist. “There’s a pragmatism that takes hold, because people read it.”

Howard Bragman, a publicist who owns the firm Fifteen Minutes, which represents Ricki Lake, Leeza Gibbons and Isaiah Washington, has also found some benefits to dealing with TMZ.

“Compared to many of the other outlets, they’re 1,000 percent better. If you have a good relationship with them, they’ll change an occasional word or swap an occasional picture, but that’s just for friends of the family,” he said. “And since it goes around the world in seconds, you can leak something to them without fingerprints and it looks like somebody else did it. I’ve certainly done that.”

Given that TMZ is a part of Time Warner, it would seem that the site’s interest in exposing celebrities’ bad behavior might conflict with the overall interest of the parent company that employs some of those same stars.

Mr. Paratore counters that the site’s relationship to Time Warner and questions that might arise from that relationship were dealt with before TMZ’s introduction.

“Everybody understands what it means to be in this business,” he said. “There have always been stories in Time magazine, People and Entertainment Weekly that have not always been flattering to other divisions within the company, and everybody understands that you can’t control it and they don’t try.”

Indeed, in some ways, TMZ is one of the few remnants of the AOL-Time Warner merger that has resulted in some cross-platform success. There are rumors that TMZ is going to open a bureau in Washington, but Mr. Levin dismisses those reports. He is too busy working on the new TMZ syndicated daily television show set to begin on Sept. 10.

Germany Bans Cruise Film Shoot
Louis Charbonneau

Germany has barred the makers of a movie about a plot to kill Adolf Hitler from filming at German military sites because its star Tom Cruise is a Scientologist, the Defence Ministry said on Monday.

Cruise, also one of the film's producers, is a member of the Church of Scientology which the German government does not recognise as a church. Berlin says it masquerades as a religion to make money, a charge Scientology leaders reject.

The U.S. actor has been cast as Colonel Claus von Stauffenberg, leader of the unsuccessful attempt to assassinate the Nazi dictator in July 1944 with a bomb hidden in a briefcase.

Defence Ministry spokesman Harald Kammerbauer said the film makers "will not be allowed to film at German military sites if Count Stauffenberg is played by Tom Cruise, who has publicly professed to being a member of the Scientology cult".

"In general, the Bundeswehr (German military) has a special interest in the serious and authentic portrayal of the events of July 20, 1944 and Stauffenberg's person," Kammerbauer said.

Cruise's publicists could not be reached for comment.

Stauffenberg had been deeply opposed to the Nazis' treatment of the Jews and planted a briefcase bomb under a table near Hitler in his "Wolf's Lair" headquarters on July 20, 1944. The bomb went off but only wounded the Fuehrer.

The film, slated for a 2008 release and to be directed by Bryan Singer and co-starring Kenneth Branagh, is called "Valkyrie" after Operation Valkyrie, the plot's codename.

The main site of interest would be the "Bendlerblock" memorial inside the Defence Ministry complex in Berlin. This is where Stauffenberg and his co-conspirators hatched the plot and where he and his closest comrades were executed when it failed.

Kammerbauer said the ministry had not yet received official filming requests from the producers of "Valkyrie".

Andy Griffith the 'New' Star on Independent Film Circuit in 'Waitress

At age 81, Andy Griffith has been discovered.

Sure, he will always be known as Sheriff Andy Taylor, the gentle father to son Opie and gunless lawman in Mayberry who dispensed a homegrown wisdom on the "The Andy Griffith Show." Or as the disheveled yet shrewd Atlanta defense lawyer Ben Matlock.

But he is now a new type of star in the critically acclaimed film "Waitress." A supporting character in a movie starring Keri Russell as Jenna, a top-notch pie maker trying to leave her brutish husband, Griffith steals the show as the cranky owner of the diner where she works.

"I'm glad to be back," Griffith said. "I loved working in the film, and I just thought it was actually wonderful."

The movie was written and directed by Adrienne Shelly, who was found slain in her Manhattan home office not long after "Waitress" was accepted at the Sundance Film Festival. Griffith said that Shelly, who also stars in the film, "knew exactly what she wanted to hear."

"She wanted me to be very firm, and she kept after me to be firm, be firm," Griffith said. "I said, 'I'M TRYING.' She said, 'That way.'"

Griffith lives a fiercely private life with wife Cindi in the North Carolina Outer Banks town of Manteo. Until "Waitress," he had not appeared in a live-action film since 2001. But he said he got three scripts at once and chose "Waitress" for the quality of Shelly's writing and because Joe "was a good, pivotal part. Joe means a lot to this film."

Producer Michael Roiff said he and Shelly could not believe their good fortune at landing Griffith for the role. Griffith was on the set for just four days of the 20-day shoot, but he did not disappoint.

"We were so excited about the performance he was delivering," Roiff said. "In the editing room, putting scenes together, she and I would just look at each other and think, 'How did we get so lucky? Who let this happen in our movie?'

"Literally, on the set and in the editing room, there was a continuous process of looking at each other and breaking out in that wise, small smile and realizing we were working with one of the best out there."

Critics agree, with The Wall Street Journal's Joe Morgenstern calling Griffith an "inspired" casting choice: "An octogenarian who looks his age, and looks like he's enjoying it, this comic virtuoso is as commanding as ever, but with a new dimension of restraint."

Equally important to Griffith is the praise of his friends, including Oscar-winning director Ron Howard, who played Griffith's son, Opie, in "The Andy Griffith Show" — which airs every day somewhere in the world, Griffith said.

"Ron Howard called me a few mornings ago. He and his wife had seen it and he wanted to tell me how much he liked it. And he thought I was good in it, too," Griffith said. Griffith has been a success on stage for decades, starring in the Broadway and movie versions of "No Time for Sergeants" and in Elia Kazan's 1957 movie, "A Face in the Crowd," in which Griffith's character, the coarse Lonesome Rhodes, becomes a television star who mocks his fans off-air. When "The Andy Griffith Show" ended its eight-year run in 1968, it bowed out as the No. 1 show in television.

It is a career that has brought Griffith plenty of accolades, including a Presidential Medal of Freedom in 2005. But the honor that Griffith mentions now is the collection of photographs from "Waitress" he received when he finished filming.

After he spoke his last line, Shelly said, "This is Andy's last shot in the picture," Griffith recalled. "And there is a picture of her embracing me at that moment, and it's a wonderful picture. And when she said that, the whole company started applauding, all up and down the hall. It was like opening night at 'No Time for Sergeants,' which was a long time ago. That's been 50 years now."

Griffith is still looking for work. Asked when he will get a part in a Ron Howard blockbuster, Griffith chuckles again and mentions an earlier phone conversation with Howard. "And he said, 'Sometime, it will happen.' I look forward to it when it does happen.

"At least Ronnie still knows that I'm a pretty good actor."

Walking With Presidents and (Hollywood’s) Kings
Jeanine Basinger

The first time I heard Jack Valenti speak, I noted that he was dapper, unexpectedly handsome and short. He had arrived at a meeting of the trustees of the American Film Institute to nominate his friend Kirk Douglas for the annual Life Achievement Award. When he had finished and whirled out, he was still dapper and unexpectedly handsome, but he had grown very big in stature.

I had witnessed Mr. Valenti in action, an in-the-flesh version of his autobiography, “This Time, This Place: My Life in War, the White House, and Hollywood.” He had exuded charm, established himself as everyone’s pal with a few harmless anecdotes, taken the room by surprise with a passionate (and well-prepared) speech and rapidly moved on to his next battle, confident he’d get what he came for. (He did; Mr. Douglas got the award.)

Mr. Valenti, who died on April 26, was a warrior, and he knew how to win. He just looked harmless.

Mr. Valenti was born in Houston, the grandchild of Sicilian immigrants, and his parents taught him loyalty, love of the United States and the importance of education, values he never surrendered or compromised.

Still, “a fierce ambition burned in me,” he wrote. “I wanted to see more, know more and feel more than what seemed to be my lot.” He found three major combat zones in which to achieve his dreams — war, politics and movie-making — and he writes about each in a different manner.

Mr. Valenti’s earliest chance to make something of himself came in World War II. He entered the Army Air Corps and flew a B-25 on 51 combat missions over Europe, earning the Distinguished Flying Cross for his valor. His descriptions of that time, that place, are among the most vivid in his book. His prose throbs with memories of an experience that was simultaneously exhilarating, terrifying and “brutal, callous and cruel.”

After the war Mr. Valenti completed his education at Harvard Business School and returned to Texas, joining with a friend to form a highly successful advertising agency. When Vice President Lyndon B. Johnson, a fellow Texan, asked Mr. Valenti to organize President John F. Kennedy’s visit to Houston, scheduled for Nov. 21, 1963, Mr. Valenti managed on short notice to mastermind a flawless event. Pleased and impressed, Johnson impulsively invited him to go along on the next leg of Kennedy’s journey: a brief hop to Fort Worth and Dallas, set for the next day.

Mr. Valenti went, and found himself eyewitness to the assassination of one American president and the emergency swearing in of another aboard Air Force One. Mr. Valenti would never again return to his life as an adman in Houston. That fateful Nov. 22 and its aftermath became the defining event of his life, a frame to hold his story, a shadow over it but also a foundation under it.

Mr. Valenti served three years in the Johnson White House as a top presidential aide. In this section of the book he is circumspect. He’s a shrewd observer but careful with what he shares. Since he supervised Johnson’s speeches, decided whom the president would see (or not see) and where he would go (or not go) to speak (or not speak), a reader wishes for more. If Jack Valenti were a great writer (he’s not), a tattletale or even a Judas (he’s not), his book could have been one of the most important historical pictures of the tormented decade of the 1960s in the United States.

Mr. Valenti left Washington in 1966 when Lew Wasserman, the chief executive of MCA Universal Studios, offered him the opportunity to become the head of the Motion Picture Association of America. To accept, Mr. Valenti had to face Johnson’s wrath, and it says a lot about him that he did face it, carried the day and ended up still friends with that mercurial politician.

Writing about Hollywood, Mr. Valenti is looser, more willing to tell tales. His good-old-boy Texas storytelling skills are brought into irreverent play. He wryly describes his first meeting with the combined studio moguls (“the most skeptical audience in the Western world”). Full of Oval Office confidence, Mr. Valenti gave a rousing speech defining his job problems, only to hear Jack Warner, the tough-guy head of Warner Brothers, calmly tell him, “Your biggest problem will be the people sitting around this table.”

Ultimately, Mr. Valenti learned how to operate in Hollywood: “In any meeting, I had to know who could carry the room at a particularly sensitive moment.” He does not state the obvious: it was usually he.

His most enduring legacy from those years was his establishment in 1968 of the motion picture rating system, for which he fought ferociously and which he defended without apology. In the preface to his book Mr. Valenti warns the reader that he is writing for his grandchildren. In other words, he’s going to censor himself. Just as he kept a lid on fear under combat stress, a lid on President Johnson (no doubt a lid the size of Kansas) and a lid on the leaders of Hollywood, Mr. Valenti keeps his memoir firmly under control. He tells only what he wants to tell, disappearing behind platitudes or quotations from Emerson, Faulkner and others when camouflage is needed.

To compensate, he never apologizes for being a Democrat and gives opinions on literature (“I never fathomed James Joyce”), Cary Grant (“getting Cary to pick up the restaurant check was a miracle few had ever witnessed”), Oscar night (“a ghastly piece of business”) and more.

Mr. Valenti is only indirectly the hero of his own story, but he’s still a clever adman who knows how to sell his product. What emerges is a portrait of a man who was not, as some might think, merely a political toady. In his own way he was strong and relentless, with a tough definition for leadership: “I have my own formula, which is quite simple. It is rooted in the ability to engage in courtship, to cosset talent, to understand the human condition and to make decisions fast.”

When Mr. Valenti died at 85 of complications from a stroke, he had already unknowingly written his own most honest epitaph: “The professional does his job right every time, without regard for anything else.” He had lived his life as a gentleman and a patriot, always the smooth operator (with scruples), but a man of steel whenever that became necessary. He might have been the last of the breed.

New Commitment to Charity by Mexican Phone Tycoon
Elisabeth Malkin

Carlos Slim Helú may be the richest man in the world. And in Mexico, where tens of millions of people live in seemingly intractable poverty, that distinction has been drawing some heat.

Mr. Slim’s companies dominate Mexico’s telecommunications industry, and they have sold cellphones to 130 million people throughout the Americas. His businesses have a hand in just about everything: one company built Mexico’s largest offshore oil platform, another sells CDs. He has interests in retailing, banking, insurance, mining, road building and cigarettes.

Because Mexico’s income distribution is severely skewed, Mr. Slim has come to personify the small elite who control vast sections of the economy. So he has been feeling the pressure to give much of his enormous fortune away. Three months ago, he pledged to increase the endowments of his companies’ foundations to $10 billion from $4 billion in the next four years. He promises to spend money on education and health. And he has begun to frequent the international philanthropy circuit, speaking at conferences, and hobnobbing with Bill Clinton and some of the Kennedys.

In a recent two-hour interview in his office here, Mr. Slim promised that there would be no ceiling on his donations. “We want to get to the root of problems, no limits,” he said.

He has granted several interviews in his office, which is tucked above a branch of his bank and down the hall from a gallery showing works from his collection of European and Mexican art. The interviews, and a four-hour news conference in March, seem to be part of an effort to soften his robber baron reputation.

Fortified by Cuban cigars and Diet Coke, Mr. Slim mapped out a vision of what he planned to do with his fortune. “It is a life project, it is a challenge,” he said.

“Poverty is resolved with education and jobs,” he continued. “You don’t need to teach a man how to fish, as the Chinese used to say. Instead of giving him the fish, instead of teaching him how to fish, you have to teach him how to sell the fish so that he eats something else besides a fish.”

For that, he said, even before education, you need good health care, beginning with nutrition for pregnant women.

Skeptics argue that the value of Mr. Slim’s philanthropy has to be measured against the damage his telephone monopoly did to the economy. “At some level I can applaud his philanthropy,” said Denise Dresser, a political analyst and professor at the Instituto Tecnológico Autónomo de México, “but it would be better for Mexico if he stopped blocking competition first.”

Mr. Slim is now 67, a widower with six adult children. He has passed the day-to-day operations of his companies to his sons and sons-in-law.

“He has a lot of money, and he can think about larger issues,” said Rossana Fuentes-Berain, editorial page editor of the newspaper El Universal, who has followed Mr. Slim’s career for the last 15 years. “He wants to be part of that world where making money is not an end in itself.”

The son of a Lebanese immigrant, Mr. Slim became rich by buying companies cheap and turning them around. His ascent through billionaire ranks began after the government sold the phone monopoly Teléfonos de Mexico in 1990 to a group he led with France Télécom and what was then Southwestern Bell.

Last year, Forbes magazine put him at No. 3 on its list of the world’s richest. This year, it bumped him up to second place, estimating his net worth at $53.1 billion. A Mexican online publication, Sentido Común, which tracks his fortune closely, reports that his companies’ value has grown so fast this year that he has now swept into first place with a fortune of $57 billion, just above Bill Gates of Microsoft.

Along the way he has fought off new competitors, and the efforts of Mexico’s antitrust regulator in the courts, and lobbied against legislation that may rein him in. Competitors say that his phone company, widely known as Telmex, stalls when it is required to link them to its national network and overcharges them to transport their signals. The governor of Mexico’s central bank has criticized Telmex’s control, arguing that it has held back the country’s competitiveness.

Mr. Slim concedes that Telmex has 90 percent of Mexico’s phone lines, but says that his competitors have poached half the most profitable ones. “We have never opposed the entry of a competitor,” he said. “Let them come on in.”

Still, Mexico — with just 16 phone lines for every 100 people — lags well behind countries including Poland and Turkey in the reach of basic phone service.

With cash generated in Mexico, Mr. Slim has built the largest cellphone company in Latin America, América Móvil, successfully competing in big markets like Brazil. He is expanding south with new construction and infrastructure companies, bidding to build roads and dams.

Mr. Slim combines an omnivorous attention to detail with a penchant for simplicity. Everything you need to make a decision, he says, should fit on one sheet of paper. That includes a preoccupation of his, baseball. He has pared down reams of baseball statistics to a handwritten page, where he ranks the top sluggers.

But his precision with numbers seems to vanish when it comes to his philanthropy. He gives no accounting of what he has spent and is still vague about where much of the new money will go.

What he does say is that he plans to set up two institutes for health and education. Each will be financed by an initial endowment of $500 million, said Arturo Elias, a son-in-law and his point man for philanthropy. A smaller sports institute that will promote amateur and student sports is to follow.

Mr. Slim tapped Dr. Julio Frenk, a former Mexican health minister who was on the short list to head the World Health Organization last year, to set up the health institute.

“The broad philosophy was already there,” said Dr. Frenk, now a senior fellow at the Bill and Melinda Gates Foundation. The institute will take on public health problems by sponsoring research, backing successful programs and disseminating health information.

“We don’t see the beneficiaries of these institutions as somebody in a subordinate position,” Dr. Frenk said. “We see them as citizens with a right, because health and education are a right. But their access to that right has been limited.”

Dr. Frenk’s involvement has given pause to Mr. Slim’s critics. “If you are going to do this seriously, you need to have people who are professionals,” Ms. Dresser said. “He’s moving in the right direction in that sense.”

He appears to be open to collaboration. Shortly after four top United States foundations wrote him in November inquiring about his philanthropy, he called to set up a meeting, said C. R. Hibbs, director of the Mexican office of the William and Flora Hewlett Foundation.

In fact, Mr. Slim’s philanthropy may be better known in the United States, where his image is more benign. In September, he spoke at the Clinton Foundation’s annual meeting, where he was introduced as the most powerful man in Central and South America and the “greatest philanthropist” in Mexico. Last week, Mr. Slim pledged at least $100 million to Mr. Clinton’s foundation to fight Latin American poverty.

Fifteen years ago, Mr. Slim met Nicholas Negroponte, founder of the Massachusetts Institute of Technology’s Media Lab, who has been raising money to give $100 laptops to children in the developing world.

Mr. Slim is one of Mr. Negroponte’s biggest backers, promising to spend $50 million to buy 250,000 laptops for children in Mexico and Central America. (The price is closer to $175 right now.) Their Internet connections will be free, Mr. Elias said.

In an e-mail message, Mr. Negroponte said Mr. Slim “is very generous when it comes children, education and Latin America,” adding, “I do not have to ‘sell him’ on the idea.”

A Kennedy family member, Anthony K. Shriver, said he approached Mr. Slim about five years ago to support the Mexican operation of Best Buddies, which pairs students with intellectually disabled people.

“I know that they give us millions of dollars,” Mr. Shriver said.

Among Mexico’s philanthropic movement, there is hope that others will follow Mr. Slim’s public commitment. Mexico’s nonprofit sector is tiny and opaque, said Michael Layton, who heads the philanthropy and civil society project at the autonomous technological institute.

“In the United States, people understand that the rich man is blessed by God to administer the community’s resources,” said Jorge Villalobos, director of the Mexican Center for Philanthropy. “In Mexico, this vision doesn’t exist.”

Mr. Slim makes no apologies for his fortune.

Wealth is “like an orchard, a fruit tree,” he said.

“You have to distribute the fruit, not the branch. You have to plant more seeds to create more wealth.”

Billionaire Thinks in Trillions for His Computer Designs
John Markoff

Twenty-six years ago as a Stanford University graduate student and a co-founder of Sun Microsystems, Andreas Bechtolsheim designed a simple but powerful personal computer workstation that would help define the modern technology era.

Today, at a high-performance computing conference in Dresden, Germany, he plans to introduce his newest machine: a supercomputer to be named the Sun Constellation System that will compete for the title as the world’s fastest when installation is complete this year.

“It is hard to believe that 30 years later I am still working on the same problem,” said Mr. Bechtolsheim, who is better known as Andy.

Between the milestones, Mr. Bechtolsheim, who is 51 years old, has designed a parade of computers that have continued to squeeze the most processing power or storage capacity into the smallest possible space. And, despite becoming one of the richest people in the world, he remains obsessed with designing ever more powerful computers. His new machine, which is currently being installed at the Texas Advanced Computing Center in Austin, is the latest example of his trademark elegant and simple engineering. It is set apart from other supercomputers made from tens of thousands of networked microprocessor chips by Mr. Bechtolsheim’s ability to orchestrate the range of computing disciplines that are needed to create the fastest computers.

As such, he is the leading candidate to inherit the mantle of Seymour Cray, a famous computer designer who consistently designed the world’s fastest computers from the 1960s until his death in a car accident in 1996. “He is this amazing blend of artist and engineer and that reminds me of Seymour,” said Larry Smarr, an astrophysicist and supercomputer user, who was an early customer of Sun Microsystems’ computers as director of the National Center for Supercomputing Applications during the 1980s.

Mr. Bechtolsheim’s 18-hour-a-day dedication to computer design is all the more remarkable because of his wealth. He has founded three successful companies in addition to being one of Google’s first financial backers. The initial $100,000 check he wrote to the Google founders Sergey Brin and Larry Page is an investment now worth more than $1.5 billion.

None of that great wealth is apparent in the man who sits in a windowless conference room talking about supercomputing switching fabrics at a rapid-fire pace with his eyes closed and with one hand pressed against his face in concentration. A reporter who first interviewed Mr. Bechtolsheim in 1981 while he was still at Stanford, discovered last week that the computer scientist was still clad in Birkenstock sandals and still dressed like a graduate student.

Ola Torudbakken, a Sun engineer who worked for Mr. Bechtolsheim on the Texas supercomputer from his home in Norway, said it was routine to begin exchanging e-mail messages with Sun’s chief architect when it was 5 a.m. in California, then complete their conversations as late as midnight West Coast time when he was starting the next day’s work in Europe.

“I try not to bother him between 7 a.m. and 8 a.m. when he is having breakfast with his family,” he said.

Since returning to Sun in 2004, Mr. Bechtolsheim has been appearing in technical settings, speaking about the problems impeding progress in the design of the fastest supercomputers. As supercomputers have shifted from custom processors to machines made from tens of thousands of off-the-shelf microprocessors, the design challenge has become how to permit the processors to share data needed to answer ever more complex scientific and engineering problems. Mr. Bechtolsheim has been critical of some of the biggest machines that have had high performance claims, but have performed poorly in real world applications.

“A lot of these high-end systems are superego machines,” he said, referring to the industry practice of competing for the ranking of the world’s fastest computing mcahine based on a single type of mathematical calculation. Indeed, some of the fastest supercomputers slow to a crawl when they are given types of problems that require the movement of significant amounts of data between processors.

Mr. Bechtolsheim thought he had found a solution to that problem by modifying an industry standard data switch, making it possible for any of the 13,000-plus Advanced Micro Devices Barcelona microprocessors to communicate with each other more than 10 times as fast as with existing switches.

Last April, his description of the breakthrough in a technical speech at an annual retreat of the world’s leading supercomputer designers in Salishan, Ore., raised some eyebrows among the world’s supercomputer designers. “It’s a pretty interesting architecture,” said Jack Dongarra, a computer scientist at the University of Tennessee and one of the researchers who keeps track of the world’s fastest computers. “It shows that Sun is still a player in terms of high- performance computing.”

Like Steve Wozniak, another Silicon Valley computer design luminary, Mr. Bechtolsheim became immersed in the world of computing in high school. According to John Fowler, the executive who runs Sun’s systems business, Mr. Bechtolsheim took a job in a machine shop while in high school in rural Germany. His boss asked him if he could build a system to make it possible to program an advanced milling machine. Mr. Bechtolsheim, constructed a computer and an operating system from scratch to control the machine. He then struck a licensing deal for his system which proved so successful that by the time he graduated from high school he was earning more than his father.

That led him to believe that studying computer science might be a worthy goal, Mr. Fowler said.

Before transferring to Stanford as a graduate student, Mr. Bechtolsheim attended graduate school at Carnegie Mellon University in 1976 where he joined an early project to build a cluster-based supercomputer. Mr. Bechtolsheim literally filed down plastic computer chip packages in order to make them small enough to squeeze into the design of an early system board, recalled Brian Reid, who was a graduate student with him at Carnegie Mellon.

People who know him well say that that persistence underscores his determination as a designer.

Mr. Bechtolsheim’s newest machine will ultimately be tested against his most powerful rival, I.B.M., in the $10 billion market for high-performance computers. I.B.M., based in Armonk, N.Y., now dominates the high end of the fastest computing ranks and expects to maintain that position when the newest Top500 supercomputer rankings are announced today in Dresden.

Indeed, I.B.M. will introduce a redesigned version of its BlueGene supercomputer, to be named BlueGene/P today at the conference, saying that the new machine, scheduled to be installed next year, will finally break the petaflop computing barrier — the ability to execute a thousand trillion mathematical operations a second.

Executives at I.B.M. are skeptical about the new Sun supercomputer, noting that the system is late to be installed. “Having done six generations of machines,” said Dave Turek, the company’s vice president of Deep Computing. “I have come to realize that very little goes right the first time.”

A number of Silicon Valley technologists are, however, betting on Mr. Bechtolsheim. “He’s a perfectionist,” said Eric Schmidt, Google’s chief executive, who worked with Mr. Bechtolsheim beginning in 1983 at Sun. “He works 18 hours a day and he’s very disciplined. Every computer he has built has been the fastest of its generation.”

Murdoch Reaches Out for Even More
Jo Becker

This article was reported by Jo Becker, Richard Siklos, Jane Perlez and Raymond Bonner, and written by Ms. Becker.

In the fall of 2003, a piece of Rupert Murdoch’s sprawling media empire was in jeopardy.

Congress was on the verge of limiting any company from owning local television stations that reached more than 35 percent of American homes. Mr. Murdoch’s Fox stations reached nearly 39 percent, meaning he would have to sell some.

A strike force of Mr. Murdoch’s lobbyists joined other media companies in working on the issue. The White House backed the industry, and in a late-night meeting just before Thanksgiving, Congressional leaders agreed to raise the limit — to 39 percent.

One leader of the Congressional movement to limit ownership was Senator Trent Lott, Republican of Mississippi. But in the end, he, too, agreed to the compromise. It turns out he had a business connection to Mr. Murdoch. Months before, HarperCollins, Mr. Murdoch’s publishing house, had signed a $250,000 book deal to publish Mr. Lott’s memoir, “Herding Cats,” records and interviews show.

An aide to Mr. Lott said the book deal had no bearing on the senator’s decision, and a spokesman for Mr. Murdoch chalked it up to coincidence. Still, the ownership fight showcases the confluence of business, political and media prowess that is central to the way Mr. Murdoch has built his global information conglomerate.

His vast media holdings give him a gamut of tools — not just campaign contributions, but also jobs for former government officials and media exposure that promotes allies while attacking adversaries, sometimes viciously — all of which he has used to further his financial interests and establish his legitimacy in the United States, interviews and government records show.

Mr. Murdoch may be best known in the this country as the man who created Fox News as a counterweight to what he saw as a liberal bias in the news media. But he has often set aside his conservative ideology in pursuit of his business interests. In recent years, he has spread campaign contributions across both sides of the political aisle and nurtured relationships with the likes of Bill and Hillary Clinton.

More than 30 years after the Australian-born Mr. Murdoch arrived on the American newspaper scene and turned The New York Post into a racy, right-leaning tabloid, his holding company, the News Corporation, has offered $5 billion to buy a pillar of the business news establishment — Dow Jones, parent company of The Wall Street Journal.

The sale would give Mr. Murdoch control of the pre-eminent journalistic authority on the world in which he is an active, aggressive participant. What worries his critics is that Mr. Murdoch will use The Journal, which has won many Pulitzer Prizes and has a sterling reputation for accuracy and fairness, as yet another tool to further his myriad financial and political agendas.

“It is hard to imagine Rupert Murdoch publishing The New York Post in Midtown Manhattan, with all of his personal and political biases and business interests reflected every day, while publishing The Wall Street Journal in Downtown Manhattan with no interference whatsoever,” James Ottaway Jr., a 5 percent shareholder and former director of Dow Jones, said recently.

Members of the Bancroft family, which controls Dow Jones, have sought elaborate assurances from Mr. Murdoch that he will preserve the independence of The Journal’s news coverage. Last night, advisers to both sides said they were close to reaching an agreement on editorial control, but it was unclear whether the Bancrofts would approve a deal. When he bought The Times of London in 1981 he gave similar assurances, but some former editors say he meddled with news operations anyway.

Mr. Murdoch declined a request for an interview, but has recently said he would preserve The Journal’s independence. Gary L. Ginsberg, a News Corporation executive, said it was “insulting” for anyone to suggest that Mr. Murdoch would compromise the integrity of “one of the world’s great newspapers” adding, “It’s not good business and it’s not good politics and it’s absurd on its face.”

From his beginnings as a proprietor of a single Australian newspaper, Mr. Murdoch now commands a news, entertainment and Internet enterprise whose $68 billion value slightly exceeds that of the Walt Disney Company.

The American newspaper industry has never seen a publisher quite like him. Mr. Murdoch has long been a pivotal figure in England and Australia, and in the dozen years since he has moved his base of operations to this country, he has insinuated himself into the political and financial fabric of the United States. His businesses have thrived in a highly regulated environment in part because of his remarkable ability to mold the rules to fit his needs.

This became clear in the regulatory fight over media ownership, a battle critical to Mr. Murdoch’s audacious creation of a fourth national television network, Fox. He has also turned his political clout on business rivals, as he did when he mounted a campaign recently against the Nielsen television rating agency.

“Rupert is sort of an 18th-century guy: the world is still forming, and he’s going to do what he can to hack out a place in the wilderness and defend it,” said Richard D. Parsons, the chairman of Time Warner, who both competes and socializes with Mr. Murdoch.

Political Relations

Shortly before Christmas in 1987, Senator Edward M. Kennedy taught Mr. Murdoch a tough lesson in the ways of Washington.

Two years earlier, Mr. Murdoch had paid $2 billion to buy seven television stations in major American markets with the intention of starting a national network. To comply with rules limiting foreign ownership, he became an American citizen. And to comply with rules banning the ownership of television stations and newspapers in the same market, he promised to sell some newspapers eventually. But almost immediately he began looking for ways around that rule.

Then Mr. Kennedy, Democrat of Massachusetts, stepped in. Mr. Kennedy’s liberal politics had made him a target of Murdoch-owned news media outlets, particularly The Boston Herald, which often referred to Mr. Kennedy as “Fat Boy.” He engineered a legislative maneuver that forced an infuriated Mr. Murdoch to sell his beloved New York Post.

Mr. Murdoch was able to buy back the tabloid five years later, but the sale represented a rare and, some say, transforming defeat.

“Teddy almost did him in,” said Philip R. Verveer, a cable television lobbyist. “I presume that over time, as his media ownership in this country has grown and grown, he’s realized that you can’t throw spit wads at leading figures in society with impunity.”

In fact, among the ranks of the lobbyists who have done Mr. Murdoch’s bidding in Washington in recent years is Anthony Podesta, Mr. Kennedy’s former counsel.

Over time, Mr. Murdoch has shown an ability to adapt to changing political winds. In Britain, his newspapers had a long history of being pro-Tory and anti-Labor, and he was personally close with former Prime Minister Margaret Thatcher. But in 1997, two of Mr. Murdoch’s papers endorsed Tony Blair for prime minister. Mr. Murdoch became a frequent guest at No. 10 Downing Street, “effectively a member of Blair’s cabinet,” said Lance Price, who was a Blair spokesman from 1998 to 2001.

Mr. Murdoch had reason to court Mr. Blair: ensuring that the new government would allow him to keep intact his British holdings, which by then included The Times of London, multiple tabloids and a stake in Sky News. Many in the Labor Party under Mr. Blair favored the enactment of media ownership limits, which could have forced Mr. Murdoch to divest some of his interests. But Mr. Blair “quietly dropped the policy,” Mr. Price said.

“Blair’s attitude was quite clear,” Andrew Neil, the editor of The Sunday Times under Mr. Murdoch in London from 1983 to 1994, said in an interview. “If the Murdoch press gave the Blair government a fair hearing, it would be left intact.”

Mr. Murdoch’s trajectory in the United States has been similar. His credentials as a purveyor of conservative journalism notwithstanding, he operates like many less visible corporate executives in not allowing his personal politics to get in the way of his bottom line.

An analysis of campaign finance records shows that since 1997, Republicans have received only a slight majority — 56 percent — of the $4.76 million in campaign donations from the Murdoch family and the News Corporation’s political action committees and employees. Since Democrats won control of Congress in the 2006 elections, the company and its employees have given more than twice as much to Democrats as to Republicans, the records show.

“We did seek more balance,” said Peggy Binzel, Mr. Murdoch’s former chief in-house lobbyist. “You need to be able to tell your story to both sides to be effective. And that’s what political giving is about.”

Mr. Murdoch has an army of outside lobbyists, who have reported being paid more than $11 million since 1998 to address issues as diverse as trade relations, programming decency and Internet regulation.

One firm focuses almost exclusively on parts of the tax code that affect the News Corporation. By taking advantage of a provision in the law that allows expanding companies like Mr. Murdoch’s to defer taxes to future years, the News Corporation paid no federal taxes in two of the last four years, and in the other two it paid only a fraction of what it otherwise would have owed. During that time, Securities and Exchange Commission records show, the News Corporation’s domestic pretax profits topped $9.4 billion.

The News Corporation’s outside lobbying team has been a veritable political Noah’s ark. It has included Republicans like Ed Gillespie, former Republican Party chairman; former Senator Alfonse M. D’Amato of New York; and the firm headed by former Mayor Rudolph W. Giuliani of New York. But it has also included former Democratic members of Congress, as well as several high-ranking Clinton administration officials, including Jack Quinn, former White House counsel.

Mr. Murdoch’s association with the Clintons is perhaps the best example of his ever-morphing relationships with the powerful, and theirs with him. For years, the former president was a favorite target of The New York Post, which seemed to delight in referring to him as “former horndog-in-chief.”

In October 2002, Mr. Clinton and Mr. Murdoch had a lunch meeting at Mr. Clinton’s office in Harlem. It was arranged by Mr. Ginsberg, who had worked in the White House counsel’s office in the Clinton administration and is now the News Corporation’s executive vice president for corporate affairs.

More recently, Mr. Murdoch donated $500,000 to the former president’s Global Initiative and was one of its featured panelists at a 2005 event in New York. In 2006, The Post issued a surprising endorsement of Mrs. Clinton in her Senate re-election bid. On June 5 and 6 of this year, Mr. Ginsberg and Peter A. Chernin, president and chief operating officer of the News Corporation, were hosts of back-to-back fund-raisers for Mrs. Clinton’s presidential campaign, one in New York and one in Los Angeles.

The Nielsen Battle

In early 2004, an alarm went off at the News Corporation headquarters.

Nielsen Media Research was preparing to switch to a more sophisticated technology to calculate ratings that television stations use to set advertising rates for local programming. Results of a trial run showed sharp drops in ratings for shows carried on stations owned by the News Corporation, particularly those aimed at minority viewers.

With millions of dollars at stake, Mr. Murdoch sprang into action. He hired the Glover Park Group, a consulting firm with deep ties to the Clinton administration, to run a grass-roots ground war. Charging that the system was faulty and that it undercounted minorities, the firm started an extensive advertising campaign intended to delay the rollout of the new technology and staged protests around the country that drew such unlikely allies as the Rev. Al Sharpton. Among the Democrats who wrote to Nielsen opposing the new system was Mrs. Clinton.

The New York Post pursued the story, running news headlines like “Nailing Nielsen” and routinely failing to mention its parent company’s interest in the outcome.

The resulting two-year campaign was unusually brazen, even by Beltway standards. Protesters massed outside Nielsen offices in New York. The atmosphere grew so charged that Nielsen’s chief, Susan Whiting, hired a personal bodyguard and the company strengthened security at its headquarters, according to Nielsen officials.

At one point, Ms. Whiting publicly accused Mr. Chernin and Mr. Murdoch’s son Lachlan of threatening to do “everything possible to discredit you and the company in Washington” if she did not back down. Mr. Chernin and Mr. Murdoch publicly denied making the threat.

But the News Corporation turned to Republican allies to put pressure on Nielsen. Senator Conrad Burns, a Montana Republican who was chairman of the Commerce Committee’s communications subcommittee, and Representative Vito J. Fossella, a New York Republican, introduced legislation that threatened Nielsen with government oversight.

One day after the bill was introduced, The New York Post ran an opinion article co-written by Mr. Fossella expressing outrage over plans for a museum at ground zero in Lower Manhattan. A news report in the paper that day raised the same concerns. Mr. Ginsberg said “the notion that Rupert had anything to do with that is laughable.”

Political contributions flowed to nearly all the legislation’s supporters. In 2005, the year the legislation was introduced, records show that the bill’s 29 sponsors and co-sponsors together received at least $144,650 in donations from the News Corporation’s political action committees and lobbyists.

Ultimately, the dispute was settled quietly. Mr. Murdoch succeeded in keeping the old rating system in place for several months in the three top markets, New York, Chicago and Los Angeles. Those months included the sweeps period, when advertising rates are set.

Mr. Ginsberg said the campaign was successful in highlighting concerns about tracking minority viewership and “educating certain groups as to how to use this new technology.”

But Dale Snape, who lobbied for Nielsen, said: “It was a classic example of him using all his resources to try to politically influence an outcome — he bought a Hill debate. It was scorched earth, and it was all about money. They created a public interest furor where there was none.”

Media Ownership Rules

For more than 70 years, the federal government has regulated media ownership to protect against any entity gaining too much power over the dissemination of information. And for much of the last two decades, Mr. Murdoch has chafed against those restrictions, winning exceptions and easing regulations.

Again and again, Mr. Murdoch won crucial skirmishes with the Federal Communications Commission. In this he was helped most by his Republican allies, including former Speaker Newt Gingrich and the Bush administration, which has promoted measures to allow more consolidation.

During the Clinton administration, Mr. Murdoch was able to draw upon Republican support when the F.C.C. chairman at the time, Reed E. Hundt, opened an investigation into whether the News Corporation had violated commission rules in acquiring television stations to form the Fox Network.

According to two former F.C.C. officials, Mr. Murdoch’s chief in-house lobbyist at the time, Preston Padden, confronted Mr. Hundt’s chief of staff at a meeting at a coffee shop near the agency’s headquarters. Mr. Hundt would not be able to “get a job as dog-catcher” if the F.C.C. took away a single News Corporation television license, Mr. Padden warned, they said.

The warning, one of the officials said, “was designed to send a harsh signal that if we continued, they would do everything in the world to make our life miserable.” As Mr. Hundt later recalled in a memoir, Mr. Murdoch assailed him in an op-ed article in The Wall Street Journal, and Congressional Republicans rose up against him.

In the end, the F.C.C. found that the deal had violated the rules. But Mr. Hundt declined to strip Mr. Murdoch of his licenses, reasoning that the fault lay with the Reagan-era F.C.C. for approving the acquisitions in the first place. Mr. Padden, who has left the News Corporation, refused requests for an interview.

It was the first of many victories for Mr. Murdoch in the new political climate that swept into Washington in 1994 when the Republicans won control of Congress. It was a fortunate time for Mr. Murdoch, whose business interests and political ideology were in ascendancy.

The new Congress overhauled telecommunications laws for the first time in decades, allowing media companies like Mr. Murdoch’s to expand by increasing the share of the national audience they could reach. So long as a company did not reach more than 35 percent of American households, it could buy as many stations as it wanted.

Mr. Murdoch’s lobbyists were also able to get a provision in the bill requiring the F.C.C. to review the cap periodically. It was just such a review that led the Bush administration to increase the cap again in 2003. By then, Mr. Murdoch had bought additional stations that put him over the 35 percent limit, as had another company, Viacom.

The F.C.C. chairman at that time, Michael K. Powell, proposed a broad loosening of media ownership rules, including raising the cap to 45 percent. (Two of Mr. Powell’s top advisers, Susan Eid and Paul Jackson, now work for Mr. Murdoch.)

Ultimately, a federal appeals court threw out the new rules. But by then, Congress and the White House had intervened, passing into law the 39 percent compromise.

Mr. Lott, an outspoken critic of media consolidation, agreed to the increase because it was still lower than what Mr. Powell had proposed, said his spokesman, Nick Simpson. Mr. Simpson added that Mr. Lott did not want to force companies to sell stations and that his book deal did not affect his view of Mr. Murdoch’s legislative agenda.

Many companies publish books by public officials. But because of Mr. Murdoch’s wide business interests, HarperCollins’s book deals have at times drawn scrutiny. Its decision to cancel a book critical of Chinese Communist leaders by Hong Kong’s last British governor was assailed as a move by Mr. Murdoch to protect his Chinese business interests, a charge he denied.

HarperCollins also provoked a firestorm when it gave Mr. Gingrich a $4.5 million book contract as Congress was preparing to redraw the media ownership rules.

Mr. Ginsberg pointed out that Mr. Murdoch later fired the Gingrich book’s editor for making what he regarded as an “uneconomical and unseemly” deal. He said that in general Mr. Murdoch did not involve himself in decisions about book contracts, and added, “If these books aren’t viable, they aren’t published.”

Mr. Lott’s book sold 12,000 copies, according to Nielsen Bookscan, which tracks about 70 percent of all domestic retail and Internet sales. Senator Arlen Specter, Republican of Pennsylvania, received $24,506 from HarperCollins for his modest-selling book “Passion for Truth,” according to financial disclosure forms. Senator Kay Bailey Hutchison, Republican of Texas, got $141,666 for her book “American Heroines,” which has sold better. All sit on either the Commerce or Judiciary Committees that most closely oversee the media business.

HarperCollins has also given book deals to Senator Chuck Hagel, Republican of Nebraska, and a $1 million advance to Justice Clarence Thomas of the Supreme Court, both of whose books are due out next year.

A former HarperCollins executive, granted anonymity to speak candidly about the company, said Mr. Murdoch was less hands-on than people assumed. “It’s not done in a direct way where he issues instructions,” the executive said. “It’s a bunch of people running around trying to please him.”

Ms. Binzel, the former chief government strategist for the News Corporation, said Mr. Murdoch got the breaks he did in the United States based on the merits, not his political connections. He took on the major networks and created more competition in the media marketplace, something regulators had long desired, she said.

“Rupert has always been a visionary, and when you bring in a visionary, they are frequently going up against the establishment,” she said. “So much of what Rupert has faced in Washington has been getting rid of rules that protect incumbents. The reason he convinced people to do that was that he was going to be providing something new.”

The Dow Jones Bid

Now, Mr. Murdoch is trying to convince the Bancroft family to sell him The Journal.

Dow Jones has proposed a committee to safeguard the paper’s editorial independence that includes a continuing role for some members of the Bancroft family and current Journal editors and executives.

Mr. Murdoch has said he prefers the model of committee used at The Times of London. His company bought The Times in 1981 and in order to win approval for the deal Mr. Murdoch agreed to an independent oversight committee and guidelines intended to prevent him from meddling in coverage.

According to interviews with former Times editors and affidavits filed in an unrelated 1995 libel suit, there were clashes over the publisher’s involvement in the paper from the very start.

Harry Evans, who was editor at the time of Mr. Murdoch’s acquisition and was forced out soon after, wrote a memoir vividly describing his constant fights with the new publisher. In his affidavit, Mr. Evans describes Mr. Murdoch’s ordering the publication of a cartoon that Times editors had deemed tasteless and his complaining that too many stories had a left-wing bent. Another former editor said Mr. Murdoch once pointed to the byline of a correspondent and asserted, “That man’s a Commie.”

Fred Emery, another former Times editor, said Mr. Murdoch once said to him: “I give instructions to my editors all around the world; why shouldn’t I in London?”

The turmoil of those first years subsided, in part, one former Times editor said, because Mr. Murdoch got rid of those who did not adhere to his politics. “He puts people in who will do his bidding,” said Mr. Neil, the former editor.

The current editor of The Times, Robert Thomson, paints a different picture: “I’ve had absolutely no interference and a lot of investment in a loss-making newspaper, for which Rupert Murdoch gets no credit.”

Under Mr. Thomson, the business pages of The Times expanded, and there are now 18 foreign reporters, compared with 8 when he came to the paper. The Times is the only British newspaper with a Baghdad bureau.

Mr. Thomson, who is expected to play an important role at The Journal if the News Corporation buys it, said Mr. Murdoch would invest in the paper and expand overseas coverage.

Over the years, as Mr. Murdoch built his empire, he has lusted after The Journal.

In the mid-1980s, he attended a black-tie press dinner in New York and found himself sitting next to Julie Salamon, then The Journal’s film critic and a former New York Times reporter. She vividly recalls his fascination with the inner workings of the newspaper and said he clearly expressed his desire to own it someday.

Ms. Salamon initially dismissed Mr. Murdoch. “The idea of this tabloid guy buying The Journal, which was then at the zenith of its success, seemed preposterous,” she said.

But by the end of the meal, impressed by Mr. Murdoch’s canny sense of the American media landscape, Ms. Salamon said, “I went home with a funny feeling in the pit of my stomach, like this guy might actually do it.”

Inkless Thursday

Journal Reporters Protest Over Murdoch Bid
Richard Pérez-Peña

Many of The Wall Street Journal’s reporters did not show up for work this morning, to protest the expected sale of the newspaper’s parent, Dow Jones & Company, to Rupert Murdoch’s News Corporation, and the fact that they do not have a contract.

The reporters will return to work by mid-afternoon, ending a “stay-out” that their union has been secretly planning for several days, organizers said.

It is not clear how many reporters participated in the action, or how it affected the Journal’s operation. The newspaper’s Web site continued to post articles on breaking news, some of them written by reporters who work for the online operation or for Dow Jones Newswires reporters, who were not included in the job action. But in calls to several Journal reporters, most of them said they had not gone to work today.

“We’re not asking anybody to stop doing their jobs or blow off a story,” said E. S. Browning, a reporter and chairman of the contract bargaining committee of the union, the Independent Association of Publishers’ Employees. “The goal is to convey the depth of this feeling about the threat to the newspaper, and the fact that we’re still demanding a fair contract.”

Many Dow Jones reporters and editors have said they fear that News Corporation would water down and politicize the serious journalism the company is known for, and people at other news organizations say they have seen an increase in the number of Journal reporters inquiring about jobs.

Union officers said they spread word of the job action by word-of-mouth, not putting anything in writing until they released a statement this morning, and that some reporters did not learn of it until yesterday. Organizers told new reporters still on probation, who can be dismissed at will, to report for work.

The company declined to comment.

Moyers on Murdoch

If Rupert Murdoch were the Angel Gabriel, you still wouldn’t want him owning the sun, the moon, and the stars. That’s too much prime real estate for even the pure in heart.

But Rupert Murdoch is no saint; he is to propriety what the Marquis de Sade was to chastity. When it comes to money and power he’s carnivorous: all appetite and no taste. He’ll eat anything in his path. Politicians become little clay pigeons to be picked off with flattering headlines, generous air time, a book contract or the old-fashioned black jack that never misses: campaign cash. He hires lobbyists the way Imelda Marcos bought shoes, and stacks them in his cavernous closet, along with his conscience; this is the man, remember, who famously kowtowed to the Communist overlords of China, oppressors of their own people, to protect his investments there.

The ambitious can’t resist his blandishments, nor his power to get or keep them in office where they can return his favors. Mae West would be green with envy at his little black book of conquests: Tory Margaret Thatcher, Labor’s Tony Blair, George Bush. Even Jimmy Carter couldn’t say no. Now, Bill and Hillary Clinton, who know which side of their bread is buttered, like having it slathered by their new buddy Rupert. Our media and political system has turned into a mutual protection racket.

You will not be surprised to learn that Murdoch’s company paid little or no federal income tax over the past four years. His powerful portfolio positions him to claim a big stake in Yahoo and his takeover of The Wall Street Journal, now owned by the Bancroft family, which, like Adam and Eve, the parents of us all, are tempted to sell their birthright for a wormy apple.

Murdoch and The Journal’s editorial page are made for each other. They’ve both pursued the right's corporate and political agenda of the past quarter century. Both venerate what The Journal editorials call the “animal spirits” of business. But The Journal’s newsroom is another matter – there facts are sacred and independence revered. Rupert Murdoch has told the Bancrofts he’ll not meddle with the reporting. But he’s accustomed to using journalism as a personal spittoon. In the months leading up to the invasion of Iraq, he turned the dogs of war loose in the newsrooms of his empire and they howled for blood. Murdoch himself said the greatest thing to come out of the war would be “$20 a barrel for oil.”

Of course he wasn’t the only media mogul to clamor for war. And he’s not the first to use journalism to promote his own interests. His worst offense with FOX News is not even its baldly partisan agenda. Far worse is the travesty he’s made of its journalism. Fox News huffs and puffs, pontificates and proclaims, but does little serious original reporting. His tabloids sell babes and breasts, gossip and celebrities. Now he’s about to bring under the same thumb one of the few national newsrooms remaining in the country.

But the problem isn’t just Rupert Murdoch. His pursuit of The Wall Street Journal is the latest in a cascading series of mergers, buy-outs, and other financial legerdemain that are making a shipwreck of journalism. Public minded newspapers are being dumped by their owners for wads of cash or crippled by cost cutting while their broadcasting cousins race to the bottom. Murdoch is just the predator of the hour. The modern maestro of a financial marketplace ruled by money and moguls. Instead of checking the excesses of private and public power, these 21st century barons of the First Amendment revel in them; the public be damned.

- Bill Moyers


Michael Moore Denied Entry Into the NYSE
John Amato

It seems the money-men don’t want Moore anywhere near them at the NYSE. Michael Moore went down to Wall Street to ask people to divest from health insurance companies and guess what happened? He couldn’t get in…CNBC’s Maria Bartiromo looks pretty flustered when Moore asks her if any other guest had ever been denied access with her before?

Moore: They’ll let me on the floor tomorrow?

Bartiromo: We don’t have the permission…(stumbling)…to do that…

Moore: Has anyone been denied with you as a guest?

Bartiromo: Ummm, hey…let’s talk about health care a second….


Straight Shooter Says:

They’ll let Coultergeist in with her skanky black dress if she promises to say something hateful about Michael Moore.

Court Takes Sharp Right Turn in Monday Decisions
Mike Leonard

In a series of 5 to 4 decisions, the United States Supreme Court today veered sharply to the right. The Court voted along strict ideological lines to side with the Bush administration in deciding four contentious, high-profile cases.

The four cases ran the jurisprudential gamut. They included challenges to the McCain-Feingold campaign finance law, the Endangered Species Act, and taxpayer-funded faith-based initiatives, as well as a free speech case involving an Alaskan student who waved a sign reading “Bong Hits 4 Jesus” in front of television cameras during an Olympic ceremony. In the end, the Court opened loopholes in McCain-Feingold and in the Endangered Species Act, dismissed a suit objecting to publicly-funded religious programs, and upheld the suspension of the Alaskan student.

In all four cases, the majority consisted of the same conservative bloc and the minority of the Court’s left wing. The conservative majority in all four cases included Antonin Scalia, Clarence Thomas, Anthony Kennedy and the two Bush appointees, Samuel Alito and Chief Justice John Roberts. John Paul Stevens, David Souter, Ruth Bader Ginsberg and Stephen Breyer dissented.

One of the decisions is receiving particular attention due to its direct political implications. In Federal Election Commission v. Wisconsin Right to Life, the Court struck down a provision of McCain-Feingold barring television ads financed by corporations or unions from mentioning political candidates by name within 60 days of a general election or 30 days of a primary.

Writing for the majority, Chief Justice Roberts said that case-by-case consideration of an ad’s substance should override “amorphous considerations of intent and effect.” The decision went on to say that since the anti-abortion ads in question “may reasonably be interpreted as something other than an appeal to vote for or against a specific candidate,” they failed, in the opinion of the majority, to qualify as “express advocacy,” which is legalese for an advertisement endorsing or opposing a political candidate.

“The court should give the benefit of the doubt to free speech, not censorship,” in setting the threshold for “express advocacy,” the majority wrote.

The four dissenters expressed their frustration at the reasoning of the majority, which they said has opened a gaping loophole in the ability of government to regulate campaign contributions. “After today,” they wrote, “the ban on contributions by corporations and unions and the limitation on their corrosive spending when they enter the political arena are open to easy circumvention, and the possibilities for regulating corporate and union campaign money are unclear.”

The uncertainty introduced into standards for determining “express advocacy” could also eliminate the law’s deterrent effect, since corporations and unions may now challenge attempts at regulation on a case-by-case basis, at worst earning an ex post facto rebuke or nominal fine.

Justice Breyer, writing for the minority, warned that today’s decision might indicate the end of McCain-Feingold.

The decision represented a reversal a 2003 decision by a more ideologically balanced roster of Justices.

Critics have noted that this Court has been unusually willing to contradict recent precedent. Just last month, a divided Court upheld the Partial-Birth Abortion Ban after the Court’s previous lineup struck down a nearly identical Nebraska law as unconstitutional. Since the Supreme Court decided the presidency in 2000, there has been widespread concern among legal scholars that increasing politicization of the judicial branch could lead to a Court less concerned with interpreting the constitutionality of laws than with the short-term political ascendancy of its majority ideology.

Spurring the fear of Justices playing politics was the seemingly inconsistent line the Court took with respect to “[giving] the benefit of the doubt to free speech, not censorship.” The same majority that struck down McCain-Feingold’s blanket-proscription of corporate advertising on free speech grounds today failed to extend that courtesy to a high school student suspended for an off-campus prank.

In the most sensational of the four cases decided today, the Court sided 5 to 4 against a student suspended for unfurling a banner declaring, somewhat ambiguously, “Bong Hits 4 Jesus” as the Olympic torch passed through Juneau, Alaska in 2002. The student appealed his 10-day suspension, and the case reached the Supreme Court earlier this year.

Chief Justice Roberts, again writing for the majority, declared that “deterring drug use by children” is a compelling enough cause to circumvent the usual free-speech protections enjoyed by students.

Justice Stevens, dissenting, noted that the banner comprised “nonsense” speech “never meant to persuade anyone to do anything,” rather than a cogent pro-drug argument or a rebuttal of the school’s anti-drug policy or message. In a tongue-in-cheek allusion to the Court’s famous 1969 proclamation in favor of student speech, Justice Stevens declared that students had capable enough minds to discern a harmless prank from a propaganda message. They “do not shed their brains at the schoolhouse gate,” he said.

“Students do not shed their constitutional rights to freedom of speech…at the schoolhouse gate,” the 1969 opinion read.

Justices End 96-Year-Old Ban on Price Floors
Stephen LaBaton

Striking down an antitrust rule nearly a century old, the Supreme Court ruled today that it is no longer automatically unlawful for manufacturers and distributors to agree on setting minimum retail prices.

The decision will give producers significantly more leeway, though not unlimited power, to dictate retail prices and to restrict the flexibility of discounters.

Five justices said the new rule could, in some instances, lead to more competition and better service. But four dissenting justices agreed with the submission of 37 states and consumer groups that the abandonment of the old rule would lead to significantly higher prices and less competition for consumer and other goods.

The court struck down the 96-year-old rule that resale price maintenance agreements were an automatic, or per se, violation of the Sherman Antitrust Act. In its place, the court instructed judges considering such agreements for possible antitrust violations to apply a case-by-case approach, known as a “rule of reason,” to assess their impact on competition.

The decision was the latest in a string of opinions this term to overturn Supreme Court precedents. It marked the latest in a line of Supreme Court victories for big businesses and antitrust defendants. And it was the latest of the court’s antitrust decisions in recent years to reject rules that had prohibited various marketing agreements between companies.

The Bush administration, along with economists of the Chicago school, had argued that the blanket prohibition against resale price maintenance agreements was archaic and counterproductive because, they said, some resale price agreements actually promote competition.

For example, they said, such agreements can make it easier for a new producer by assuring retailers that they will be able to recoup their investments in helping to market the product. And they said some distributors could be unfairly harmed by others — like Internet-based retailers — that could offer discounts because they would not be incurring the expenses of providing product demonstrations and other specialized consumer services.

A majority of the court agreed that the flat ban on price agreements discouraged these and other marketing practices that could be helpful to competition.

“In sum, it is a flawed antitrust doctrine that serves the interests of lawyers — by creating legal distinctions that operate as traps for the unaware — more than the interests of consumers — by requiring manufacturers to choose second-best options to achieve sound business objectives,” the court said in an opinion by Justice Anthony M. Kennedy and signed by Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Clarence Thomas and Samuel A. Alito Jr.

But in his dissent, portions of which he read from the bench, Justice Stephen G. Breyer said there was no compelling reason to overturn a century’s worth of Supreme Court decisions that had affirmed the prohibition on resale maintenance agreements.

“The only safe predictions to make about today’s decision are that it will likely raise the price of goods at retail and that it will create considerable legal turbulence as lower courts seek to develop workable principles,” he wrote. “I do not believe that the majority has shown new or changed conditions sufficient to warrant overruling a decision of such long standing.”

During the period from 1937 to 1975 when Congress allowed the states to adopt laws that permitted retail price fixing, economists estimated that such agreements covered about 10 percent of consumer good purchases. In today’s dollars, Justice Breyer estimated that the agreements translate to a higher annual average bill for a family of four of roughly $750 to $1,000.

The dissent was signed by Justices John Paul Stevens, David H. Souter and Ruth Bader Ginsburg.

The case involved an appeal of a judgment of $1.2 million against Leegin Creative Leather Products Inc. after it cut off Kay’s Kloset, a suburban Dallas shop, for refusing to honor Leegin’s no-discount policy. The judgment was automatically tripled under antitrust law.

Leegin’s marketing strategy for finding a niche in the highly competitive world of small leather goods was to sell its “Brighton” line of fashion accessories through small boutiques that could offer personalized service. Retailers were required to accept a no-discounting policy.

After the United States Court of Appeals for the Fifth Circuit, in New Orleans, upheld the judgment and said it was bound by Supreme Court precedent, Leegin took the case to the Supreme Court. Unless it is settled, the case, Leegin Creative Leather Products v. PSK Inc., will now be sent down to a lower court to apply the new standard.

The Supreme Court adopted the flat ban on resale price agreements between manufacturers and retailers in 1911, when it founded that the Dr. Miles Medical Company had violated the Sherman act. The company had sought to sell medicine only to distributors who agreed to resell them at set prices. The court said such agreements benefit only the distributors, not consumers, and set a rule making such agreements unlawful.

Justice Kennedy said today that the court was not bound by the 1911 precedent because of the “widespread agreement” among economists that resale price maintenance agreements can promote competition.

“Vertical agreements establishing minimum resale prices can have either pro-competitive or anticompetitive effects, depending upon the circumstances in which they are formed,” he wrote.

But Justice Breyer said in his dissent that the court had failed to justify the overturning of the rule, or that there was significant evidence to show that price agreements would often benefit consumers. He said courts would have a difficult time sorting out the price agreements that help consumers from those that harm them.

“The upshot is, as many economists suggest, sometimes resale price maintenance can prove harmful, sometimes it can bring benefits,” he wrote. “But before concluding that courts should consequently apply a rule of reason, I would ask such questions as, how often are harms or benefits likely to occur? How easy is it to separate the beneficial sheep from the antitrust goats?”

“My own answer,” he concluded, “is not very easily.”

Food, Toiletry Items to Pay Library Fines Instead of Cash

People who owe overdue fines to the Wethersfield, Conn. Library can pay them off with pasta, canned foods or items such as toothpaste.

The library is collecting food and toiletries needed for the food bank in exchange for forgiving fines on overdue books and materials.

"It's a win, win for everybody. People make a tangible donation that helps somebody and at the same time erase their fines," Laurel Goodgion, the library's director, said Monday.

During the library's Food for Fines campaign, which began this month, several bags of food and toiletry items have been collected.

Fines for overdue books currently are 5 cents a day or $1 a day for DVDs and videos.

Goodgion says food and toiletry donations are good for all fines, even dating back a year ago. However, people will still have to use cash to pay for a lost or damaged book.

"We need the materials back or the money to replace those lost items and we can't do that with a can of tuna," Goodgion said.

This Isn't Free Speech: How THREESPEECH Hides it's Censorship

This is the comments thread to THREESPEECH's first podcast. We all know TS is effectively a sham blog set up by Sony to promote itself, presumably as no one else will.

Firstly, the irony of name withstanding, obviously TS are entitled to remove comments they don't like. But how they do that is very important. Especially as they state:

We won’t censor content so long as this space is used constructively.
But what I've found goes beyond merely deleting negative comments. Here's the long and the short of it:

Short Version: THREESPEECH will delete your "negative" comment (e.g. asking what "semi-offical" means) but from then on maintain a different version of the web site just for you so that you think your post still exists.

Long Version: After reading what Penny-arcade had to had tosay about Threespeech - I listened to their Podcast. It is seedy. As such I posted this on the comments thread:

I’ve just listened to the whole podcast.

The Internet has one commodity. Trust.

The viewers have to believe the creaters. And with this sites ambiguity thats impossible. How about a detailed explanation of the site. Answer these questions:

* Are you being paid by Sony, it’s marketing department, or by others on behalf of Sony to make this site? It seems the answer is yes.

* Are you given free reign to voice your true opinions? It seems the answer is no.

* What are Sony’s aims with this site?

I am ashamed. This site, and the podcast is so “on-topic” that it beggers belief. It’s like a concerted effort to “push” “hard-core” opinion on the Sony Brand products.

At no point did I see a genuine criticism of any of the platforms. And minor criticism was quickly distorted back into something positive.

Sony wins no fans by trying to insidiously promote itself in this way. To try and have it’s cake and eat it.

And I pity those involved. Because it’s clear you have asperations in the games media field and you’ve damaged your CV beyond repair with job.

I want Sony to do well with the PS3. The ability to install Linux (and thus Myth TV etc) will mean I’m far more likely to buy one over the 360. But this kind of marketing is truly offensive.

Comment by Lave — June 28, 2007 @ 4:51 pm

And thought nothing of it. For various boring reasons I have to run two browsers on my laptop. One runs locally. One runs on a machine 5 miles away and unix pipes the window to my machine. After a while my comment was still happily siting on the thread. But then when I happened to visit the site with the different machine's browser it was nowhere to be seen.

Here's a screencap of both browsers side by side. One has my comment the other doesn't.

Link as 1024*768

You can see for yourself. Do the following:

1) Go to the thread and read post 79.

2) Go to the comment field and post something (but please be nice - maybe even a link here... )

For your name put: Lave
For your email put: skeptobotURIGELLER@blogspot.com (remember to remove the fraud's name).
For your website put: http://skeptobot.blogspot.com

3) Reread post 79 and see how my post is back. Their server clearly thinks your me now. And is trying to hide it's censorship from you.

Free Speech indeed.

It's such a strange situation. From the postings of one guy there called Ben who replied to my comments that haven't been deleted - it seems he isn't being paid directly. No doubt he gets free stuff. But that the perk of any journalist. And he admits he has no control over what makes the first page and comments. So he's not much more than a patsy giving them some respectability.

But behavior like this makes it certain (even though it was already) that this is a Sony run site. Which I've no problem with - if they explain what that means, rather than making a blog that is clearly designed to fool people into thinking this is "honest" enthusiasm.

Down with aggregation

The Cult of the Amateur
Michiko Kakutani

Digital utopians have heralded the dawn of an era in which Web 2.0 — distinguished by a new generation of participatory sites like MySpace.com and YouTube.com, which emphasize user-generated content, social networking and interactive sharing — ushers in the democratization of the world: more information, more perspectives, more opinions, more everything, and most of it without filters or fees. Yet as the Silicon Valley entrepreneur Andrew Keen points out in his provocative new book, “The Cult of the Amateur,” Web 2.0 has a dark side as well.

Mr. Keen argues that “what the Web 2.0 revolution is really delivering is superficial observations of the world around us rather than deep analysis, shrill opinion rather than considered judgment.” In his view Web 2.0 is changing the cultural landscape and not for the better. By undermining mainstream media and intellectual property rights, he says, it is creating a world in which we will “live to see the bulk of our music coming from amateur garage bands, our movies and television from glorified YouTubes, and our news made up of hyperactive celebrity gossip, served up as mere dressing for advertising.” This is what happens, he suggests, “when ignorance meets egoism meets bad taste meets mob rule.”

This book, which grew out of a controversial essay published last year by The Weekly Standard, is a shrewdly argued jeremiad against the digerati effort to dethrone cultural and political gatekeepers and replace experts with the “wisdom of the crowd.” Although Mr. Keen wanders off his subject in the later chapters of the book — to deliver some generic, moralistic rants against Internet evils like online gambling and online pornography — he writes with acuity and passion about the consequences of a world in which the lines between fact and opinion, informed expertise and amateurish speculation are willfully blurred.

For one thing, Mr. Keen says, “history has proven that the crowd is not often very wise,” embracing unwise ideas like “slavery, infanticide, George W. Bush’s war in Iraq, Britney Spears.” The crowd created the tech bubble of the 1990s, just as it created the disastrous Tulipmania that swept the Netherlands in the 17th century.

Mr. Keen also points out that Google search results — which answer “search queries not with what is most true or most reliable, but merely what is most popular” — can be manipulated by “Google bombing” (which “involves simply linking a large number of sites to a certain page” to “raise the ranking of any given site in Google’s search results”). The Week in Review is edited and published by Jack Spratts. And he cites a recent Wall Street Journal article reporting that hot lists on social networking Web sites are often shaped by a small number of users: that at Digg.com, which has 900,000 registered users, 30 people were responsible at one point for submitting one-third of the postings on the home page; and at Netscape.com, a single user was behind 217 stories over a two-week period, or 13 percent of all stories that reached the most popular list in that period.

Because Web 2.0 celebrates the “noble amateur” over the expert, and because many search engines and Web sites tout popularity rather than reliability, Mr. Keen notes, it’s easy for misinformation and rumors to proliferate in cyberspace. For instance, the online encyclopedia Wikipedia (which relies upon volunteer editors and contributors) gets way more traffic than the Web site run by Encyclopedia Britannica (which relies upon experts and scholars), even though the interactive format employed by Wikipedia opens it to postings that are inaccurate, unverified, even downright fraudulent. This year it was revealed that a contributor using the name Essjay, who had edited thousands of Wikipedia articles and was once one of the few people given the authority to arbitrate disputes between writers, was a 24-year-old named Ryan Jordan, not the tenured professor he claimed to be.

Since contributors to Wikipedia and YouTube are frequently anonymous, it’s hard for users to be certain of their identity — or their agendas. Postings about political candidates, for instance, can be made by opponents disguising their motives; and propaganda can be passed off as news or information. For that matter, as Mr. Keen points out, the idea of objectivity is becoming increasingly passé in the relativistic realm of the Web, where bloggers cherry-pick information and promote speculation and spin as fact. Whereas historians and journalists traditionally strived to deliver the best available truth possible, many bloggers revel in their own subjectivity, and many Web 2.0 users simply use the Net, in Mr. Keen’s words, to confirm their “own partisan views and link to others with the same ideologies.” What’s more, as mutually agreed upon facts become more elusive, informed debate about important social and political issues of the day becomes more difficult as well.

Although Mr. Keen’s objections to the publishing and distribution tools the Web provides to aspiring artists and writers sound churlish and elitist — he calls publish-on-demand services “just cheaper, more accessible versions of vanity presses where the untalented go to purchase the veneer of publication” — he is eloquent on the fallout that free, user-generated materials is having on traditional media.

Mr. Keen argues that the democratized Web’s penchant for mash-ups, remixes and cut-and-paste jobs threaten not just copyright laws but also the very ideas of authorship and intellectual property. He observes that as advertising dollars migrate from newspapers, magazines and television news to the Web, organizations with the expertise and resources to finance investigative and foreign reporting face more and more business challenges. And he suggests that as CD sales fall (in the face of digital piracy and single-song downloads) and the music business becomes increasingly embattled, new artists will discover that Internet fame does not translate into the sort of sales or worldwide recognition enjoyed by earlier generations of musicians.

“What you may not realize is that what is free is actually costing us a fortune,” Mr. Keen writes. “The new winners — Google, YouTube, MySpace, Craigslist, and the hundreds of start-ups hungry for a piece of the Web 2.0 pie — are unlikely to fill the shoes of the industries they are helping to undermine, in terms of products produced, jobs created, revenue generated or benefits conferred. By stealing away our eyeballs, the blogs and wikis are decimating the publishing, music and news-gathering industries that created the original content those Web sites ‘aggregate.’ Our culture is essentially cannibalizing its young, destroying the very sources of the content they crave.”

Google Better than LimeWire?
Thomas Mennecke

In the never ending search for music, the end user is always confronted with a near limitless supply of options. P2P or iTunes? LimeWire or FrostWire? Usenet or BitTorrent? Perhaps I should just “ask Google”?

Ask Google. It has become the response to millions of questions over the last several years. There was once a time when people may have known the answer to a question, or could provide helpful insight. Yet those days are long gone as Google’s massive index provides an answer to every conceivable question imaginable. Is it possible that Google is a better provider of music than LimeWire? Maybe, why don’t you go ask Google?

That’s the question Jimmy Ruska asked Google, and received some very interesting answers. Jimmy Ruska developed two video tutorials which gained an impressive level of popularity on YouTube. His technique and results were astounding; it was quite possible with a bit of tweaking that Jimmy may have demonstrated that Google was better than LimeWire for downloading music. At least, that’s what Jimmy claims.

Most people understand that web based searching for music can provide a multitude of results, if you can cut through the spam. Jimmy’s first tutorial, which received over 300,000 views, brought about a novel concept when searching for MP3s. Instead of simply typing the desired file with the MP3 extension, Jimmy’s concept used the search tags ‘intitle: “index.of”’. This forces Google to only reveal directories, and not web pages. This exposes files that people may have stored on servers not necessarily linked on web pages.

The first iteration of his concept worked very well and received largely positive feedback on YouTube. However, that was only a sneak peak of things to come. A few months later, Jimmy automated his process and launched Jimmyr.com. His new search feature simplifies the search process for the end user by automatically entering most of the search parameters specified in his initial tutorial. Instead of remembering where to place periods and where quotations go, simply enter the desired query and let Jimmy’s search engine do the rest.

So the question returns to “Is Google better than LimeWire?” The resoundingly concrete answer is, “perhaps in some ways.” When it comes to ease of use, resourcefulness, and data information, LimeWire blows away Jimmy’s technique. Yet Jimmy’s search engine demonstrates that Google can indeed rival or compete with P2P technology.

As the record industry heaves up its latest attempt to crack down on file-sharing on college campuses, students are finding many of their P2P networks blocked. In the absence or crippling of P2P technology, Jimmy’s technique will certainly have many users answering, “Yes, Google is better than LimeWire.”

File-Sharing on Windows Vista
Brandon McCaskill

Windows Vista has the dubious honor of probably being the most controversial OS that Microsoft (MS) has ever released. Critics have relentlessly assailed it as a resource hog, an attempt to copy OS X, being too little too late for an upgrade from XP, and/or as simply being XP with some window dressings.

Of all the characteristics of the new OS, perhaps none have received more attention than the content protection measures built into it. Combined with MS' announced Windows Genuine Advantage verification features, the issue has rapidly snowballed into a huge sphere of negative sentiment that Microsoft themselves have surprisingly done relatively little to mitigate.

Many users worried that their unprotected content would refuse to play, and there are various claims floating around the internet that this is the case. Others have fretted that Vista would block file-sharing altogether.

Due to the nature of most file-sharing, the lack of official information from MS or major tech news sources is understandable. Up to this writing, I was aware of only one such article - Paul Thurrott's Compatibility Guide, in which he reported that two programs widely used for content acquisition and sharing, AnyDVD and uTorrent, work perfectly. On the other hand, there seems to be a flood of uncertain information on the internet in the form of blog and forum posts.

As such, the Slyck team felt it was time to look into the issue ourselves and provide the file-sharing community with a clear picture of exactly what is and isn't possible on Vista.

PLEASE NOTE: This article is not intended to be a review of Vista itself. Nor is it a statement for or against that or any other available OS. It is certainly not an argument for or against switching or upgrading. Its primary purpose is to provide accurate information as to what works and what doesn't on a particular platform.

Testing was done on a Toshiba Satellite A135-S4527 laptop running Windows Vista Home Premium. It can be picked up from your local Circuit City (for those who live in the US) for $599.99. Specs are quite modest:

CPU: Intel Core Duo (1.73GHz)
RAM: 1GB 533MHz DDR2 SDRAM (PC2-4200)
GPU: Intel Integrated Graphics

During initial setup, Vista rated the system 3/5 for expected performance.

The investigation into file-sharing on Vista will cover 3 main areas: the operating system, clients, and hardware.

Operating System

Users do well to familiarize themselves with the following if they wish to do anything significant with Vista:

UAC - User Account Control, basically does for Vista what sudo does for *nix systems by giving users limited authority by default. Since many clients were developed on/for XP in which admin authority was a given, this is where users are likely to have the most issues, albeit minor ones that can easily be overcome. It can be disabled by following the instructions here, but that was not attempted for this article since it is not recommended for security purposes any more than disabling sudo would be a good idea for Linux.

UAC is invoked even for some native MS apps, so it's likely to be a permanent fixture in the Windows experience from here on out almost regardless of the software vendor. You won't see it for every program you launch, just some. This suggests that are ways to develop UAC-friendly apps, but perhaps most developers haven't gotten around to doing so yet. Programs, options and links that require a UAC prompt will have a small "Windows shield" logo superimposed upon their own icon(s).

Run as administrator - this allows users to run programs with admin authority. It can be invoked once by right clicking on an executable and selecting "Run as administrator," or permanently by right clicking -> Properties -> Compatibility -> and selecting the matching check box. Note that this option does not necessarily exempt the program in question from UAC. It only generally gives it access to parts of the OS that it normally wouldn't have.

Compatibility mode - Accessed from the same Properties -> Compatibility menu as "Run as administrator" above. Allows users to run programs as they would on previous Windows versions.

Permissions - Since users now have limited access by default, access to some files and folders often have to be enabled manually either to allow access, period, or to allow access without a UAC prompt. Users will probably need to do this for external hard drives, as it was necessary for this test. It is accomplished by right clicking the object in question -> Properties -> Security. Depending on how many files you have on the drive, you may have to wait a while as the OS changes the permissions settings on each one. Doing so for a 250GB USB2.0 drive took a couple minutes, but was a lot better than having to go through a UAC prompt for nearly every operation within Explorer.

In rare cases, you may also have to grant yourself ownership of a particular folder. To do so, click "Advanced" on the Security tab -> Owner -> Edit.

The reason for the above complications is to prevent major changes to the system without the user's specific and deliberate consent. Whether or not this is effective is the province of security articles and will not be debated here.

File transfer issue(?) - When transferring files from one drive to another and emptying the recycling bin, Vista will attempt calculate the remaining time to complete the operation. For some reason, it often spends more time doing the calculation than actually performing the requested operation. This appears to be because it tries to calculate the time first before starting the transfer. So far, MS has not delivered a default Windows Update for this issue, but has provided a hotfix for it. The hotfix isn't absolutely necessary, but if you're annoyed by the above problem, it should help you out. Once it is applied (no reboot needed), Vista will still do the time calculation but actually execute the transfer simultaneously, thus bringing the process back to XP-like speeds.

Other issues that users may have heard of, but are not very critical for the most part:

DRM - Our experience was that if you avoid protected content, you'll never see the DRM in Vista, period. MP3s, XviDs, etc. are handled with aplomb and unhindered regardless of their source. Not once was the impression given that the OS was maliciously interfering with my media files.

Windows Genuine Advantage (WGA) - 5 days into using the system, while applying updates regularly, this was never encountered.


For obvious reasons, not every client out there could be reported on, but care was taken to test the most widely used ones. Some common non-P2P apps for content acquisition and playback were also tested.

Alt.Binz - On first startup after installation, the program complained that it couldn't load unrar.dll. When it closed thereafter, Vista presented a message saying that it detected that the program hadn't run correctly, and provided an option to run it as administrator. Accepting that option eliminated any further issues.

Aside: Vista apparently has a feature in which it can actively detect software compatibility problems and both offer and search for solutions of its own.

Ares - Works perfectly. Also, the bug some users experienced on XP with Ares killing their network connection appears to have been resolved.

Cabos - Works perfectly.

eMule - Works perfectly. May take a while to connect to Kad on initial startup after installation, but that has been a problem on XP also. Successfully imported incomplete downloads from an external hard drive previously attached to an XP Pro SP2 system and completed them.

Filetopia - Initial run attempt ended in nondescript error from the program before it even loaded. Running as administrator and in XP SP2 compatibility mode fixed that problem. No other issues.

Frostwire - Works perfectly.

KCeasy - This is the only client I had unresolved issues with. Connections seemed to be a bit iffy. On one run, it connected to all 3 networks (Gnutella, Ares and OpenFT) well, while on the next (done the next day), it could connect to the OpenFT network only. Even then, the connection was held for only 15 minutes, after which no connections seemed possible.

Markus Kern, KCeasy's developer, responded to our email inquiry.

“KCeasy's built in patcher for tcpip.sys, which raises the concurrent connection limit introduced in Windows XP SP2, is not working on Vista which might be one reason you see these disconnects," Markus told Slyck.com. "There are no other networking issues with KCeasy on Vista that I am aware of. The connection problems you see are most likely of general nature and may simply go away if you use KCeasy for a while so it is able to collect a stable node list.”

There are of course some things which could be done to generally improve KCeasy's connection stability but I haven't been working on it for a while due to time constraints.[/quote target=_blank>

Your mileage may differ, but on this end it was essentially zero with KCeasy. However, since the client is FLOSS, we can only hope that another developer will step in soon to patch the problem if Kern is unable to.

mIRC - Given the demise of AutoXDCC, I almost didn't consider any IRC clients until Slyck.com member lordfoul pointed me to this excellent guide that works just as well with Vista as it does with XP. Caveat: you will probably have to grant yourself ownership of the C:\Program Files\mIRC folder as Vista will not allow you to unzip the XDCC browser script to that location otherwise. Refer to the "Permissions" section above to see how to do this. Once that is done, operation is essentially flawless. Unfortunately, mIRC's biggest bug is one that has nothing to do with the OS it runs on - it costs $20 .

Pidgin - Formerly known as Gaim, Pidgin is an IM client, but it can also be used for file-sharing via IM file transfers. No issues were observed besides that pressing Esc no longer exited IM windows as it did in XP.

Shareaza - Crashed once on initial run when I tried to open my Library (shared files) using the Folders view within the app. Problem could not be reproduced, and operation was perfect thereafter.

Soulseek - Works perfectly.

uTorrent - Works perfectly.

VLC - An iPod video from MariposaHD crashed the client repeatedly. No problems with other formats.

Windows Media Player 11 (built-in) - Works perfectly. No playback issues whatsoever, including the high CPU usage reported by some other users.

Exact Audio Copy - Works perfectly with no UAC notifications at all. Given that EAC is actually recommended in published official MS OS guides, it's very likely it was tested for compatibility in-house.

foobar2000 - Works perfectly.

Firefox - A few bugs. 2 upload sites, Box.net and fileden.com, didn't work. In the former case, I couldn't even open the "Add Files" dialog, while on fileden.com the upload never even started. An email to support@box.net produced the response that Vista is not supported (Windows 2000, XP and OS X are). However, since IE7 handled both tasks easily and without complaint, I believe it is reasonable to conclude that the problem lies either with Firefox or the upload sites themselves.

WinMX - I did not test this software due to WPNP's now defunct status. However, according to WinMXWorld.com, there is a patch to enable connectivity.


Given the buzz on the internet about Vista being a severe system hog, I expected a slow, poky experience with the specs on the test machine.


Even with Aero enabled, response is snappy and the PC multitasks easily without so much as an audible fan noise increase. Aside from the file transfer issue mentioned at the outset, no complaints about stability, speed or capacity can be made. Given the fact that this machine is equipped with integrated graphics, a high powered graphics card does not appear to be necessary either.

RAM usage is large by default, but that's because of a feature of Vista called SuperFetch. SuperFetch actively learns the user's program usage habits and preloads programs/files that are likely to be used into memory. The philosophy behind this is apparently that empty RAM, like idle CPU cycles, is about as useful as a 7 car garage with a single motorcycle in it. The real challenge is NOT how much RAM is used, but how well it is used and how fast data can be moved into and out of the existing capacity. As such, Vista's RAM usage will almost always be high and so is not a fair performance metric for the OS.

Test experience mirrors that of ZDnet blogger Ed Bott's 3rd Day with a similarly equipped $422 Dell desktop. Even on a (relatively) cheap machine, the OS barely seems to make the PC break a sweat. In fact, if the test laptop did this well while rated only 3/5, it's likely that a high powered OEM machine would have performed even better.


If you have XP Pro SP2 and are happy with it, you don't need Vista as long as the former is still supported, especially for P2P. But if you already have Vista or were planning to get it anyway, there's no need to wait for SP1. It's ready to go as is.

My firsthand experience leads me to believe that a lot of the negative "issues" buzzed about the OS on the net are just inaccurate, malicious or plain wrong. File-sharing is easy and indistinguishable from XP (minus the Aero look) once you understand how the OS is set up. DRM (or at least the effects thereof) is practically nonexistent unless you personally decide to buy protected content.

Ironically, if you're a Linux user, you may be slightly more comfortable with Vista's new "security everywhere, access denied by default" set than the average Windows user (this is not to be interpreted as an argument for or against switching).

Because there are quite a few things that I didn't have the space to cover here that are different between Vista and XP, there will be a slight learning curve even for experienced XP users if they really want to become Vista power users. While it's not absolutely necessary, it's a good idea to take advantage of MS' excellent and extensive documentation. I picked up Microsoft Windows Vista Inside Out from my local Barnes and Noble. Thanks to it, I was able to easily solve the Permissions issue I mentioned above. The same information can probably be found easily online via the Microsoft Knowledgebase, but if you prefer quick answers to 15 minutes of Google, you can take the route I did.

Microsoft has rightly been severely criticized over the years for being a monolith that's difficult to interact with directly, and unfortunately that's still the case. Still, if you'd like to keep up with where Vista's going and what the dev team is up to, check out the Windows Vista Team Blog.

In this author's opinion, 2 words sum up the Vista file-sharing experience:

All clear.

Unless you rely exclusively on KCeasy/the OpenFT network or religiously use Firefox for uploads, there is nothing to be concerned about. In any case, the problems with those 2 apps appear to be external to the OS itself - i.e. it's not that Vista's blocking them.

Because I never had to upgrade via an installation, I can't comment on exactly how the new OS works in that case. However from the above there's a distinct likelihood that there's a lot less truth and fairness to the nightmare stories floating around out there than their authors would like you to believe.

That's it. Go right ahead.

EC Threat to BBC over Downloads

The BBC has been accused of forcing people to use Microsoft operating systems and has been threatened with a complaint to the European Commission.

The charge concerns the use of Microsoft technology in the corporation's forthcoming iPlayer.

The web service, set for launch later this year, allows viewers to watch shows up to 30 days after broadcast.

The BBC has said it does intend to allow access to its content from computers with other operating systems.

A statement from the organisation read: "The BBC aims to make its content as widely available as possible and has always taken a platform agnostic approach to its internet services.

"It is not possible to put an exact timeframe on when BBC iPlayer will be available for Mac users. However, we are working to ensure this happens as soon as possible and the BBC Trust will be monitoring progress on a six monthly basis."

Next steps

The accusations against the BBC have been made by advocacy group the Open Source Consortium (OSC).

They argue that the iPlayer will force people to use and purchase Microsoft products because it will initially only work on Microsoft Windows computers. This would give the software company an unfair advantage and would be uncompetitive, they say.


• iPlayer will allow viewers to catch up on TV programmes for seven days
• Some TV series can be downloaded and stored for 30 days
• Viewers will be able to watch shows streamed live over the internet
• Users will not be able to download programmes from other broadcasters
• Classical recordings and book-readings are excluded from iPlayer

The OSC would like to see the iPlayer use formats that work on all operating systems. "The BBC has a mandate to provide equal access to people irrespective of platform," said Mark Taylor, president of OSC.

"We don't think it is appropriate to lock people into a particular desktop technology."

The OSC has compared the situation to the BBC offering programmes that only work on certain makes of television.

"We believe the BBC has a higher duty of care than a purely commercial organisation," Mr Taylor told the BBC News website.

The group, composed of organisations, businesses and individual proponents of open source software, has already complained to the telecoms and broadcast regulator Ofcom, as well as the DTI and BBC Trust.

Ofcom have previously stated that access to the iPlayer be "only one of many factors influencing the decision to purchase a new computer [or] operating system.

However, OSC disagrees and says the next step is to make a formal complaint to the European Commission (EC).

"We're preparing the full details at the moment and we will be sending a formal letter within the next week," said Mr Taylor.

The EC will then have to decide whether there is a case to answer.

Public interest

The Windows-only media player was approved by the BBC Trust at the end of April this year. The BBC had initially chosen to concentrate on a Windows-based system as it is the world's dominant operating system.

In addition, it allows the corporation to use Microsoft's off-the-shelf Digital Rights Management (DRM) system that means the programmes are deleted after 30 days.

All programmes, once downloaded, are only playable within iPlayer or using Window's Media Player 10 or 11.

The DRM also prevents them being copied to other mediums such as DVD.

When the broadband player was approved, the corporation's governing body asked the BBC to ensure that the iPlayer could run on different systems - such as Apple Macs - within "a reasonable time frame", initially twenty-four months.

The BBC has previously said it cannot commit to a two-year time frame as many decisions would have to be made by third parties.

A statement from the BBC read: "Our ability to deliver this open approach will be influenced by the availability of alternative DRM systems on the market.

"In order to maximise public value, the BBC must balance extending access to content with the need to maintain the interests of rights holders and the value of secondary rights in BBC programming. Without a time-based DRM framework the BBC would not be able to meet the terms of the trust's PVT (Public Value Test) decision."

However, the OSC argue that DRM-free downloads would be in the "public interest".

"In an ideal world all DRM would be removed," said Mr Taylor.

Top Broadband ISPs Deny P2P Shaping

Telstra, Optus and iiNet say they do not know what their users download, nor will they slow their speeds to prevent them from doing so
Naomi Hamilton

Australia's leading broadband providers Telstra, Optus and iiNet all deny limiting P2P traffic within their networks in order to increase network speeds and save costs. This comes despite a recent admission from Westnet, along with several other ISPs, that it has been using traffic controls to limit P2P traffic for the past year and will continue to do so.

"Customers buy a speed and download quota from us. We don't examine what they do with it," said iiNet managing director, Michael Malone.

Telstra's BigPond spokesperson, Craig Middleton, said it does not limit P2P traffic and nor did it have plans to in the future.

"We have no policies [on P2P file sharing], but as a content provider (BigPond Movies, Games, Sport and Music) we support the legal purchase of content, not piracy," he said.

Optus was less conclusive.

"Optus uses various tools to manage its network and bandwidth to maximise the performance of its customers' connections," a company spokesperson said. "Optus continues to review and revise its strategies as usage trends change and technical options evolve. Optus does have the capability to prioritise data traffic and may use this capability in the future."

An increasing number of smaller ISPs such as Westnet, Exetel and Netspace have recently admitted to limiting P2P traffic - the most notable being BitTorrent files. The topic has garnered much debate on broadband discussion forum Whirlpool in the past month.

"The key purpose of the traffic prioritisation tools is to ensure latency sensitive applications, such as online gaming, web browsing, e-mail and VOIP, are not negatively impacted by peer to peer applications," said a posting this week on the Westnet blog.

"An important point to note is that Westnet has not enforced a fixed limit on the amount of bandwidth available to peer to peer applications. The amount of bandwidth available to peer to peer traffic is dynamically limited only when the bandwidth required to service the other applications exceeds expectations," it goes on to say.

"Traffic is the only cost that an ISP has to deal with, explained iiNet's Malone. "If customers download lots, then it costs us more money. Customer usage is going up steadily, but the cost of bandwidth is not going down. The combined result is that traffic costs are increasing at a pretty steady rate" he said. "The issue is just cost management."

However, Malone did not believe that throttling P2P traffic has anything to do with perceived legality issues.

"Australian ISPs are protected from liability as common carriers by the safe harbor provisions of the Broadcasting Services Act. I'm not hearing any ISPs saying that the driver is concern about liability. The rules in Australia are very clear. So that's not it."

The possible limitation of P2P traffic comes on top of download quotas set by Australian ISPs, which may irk many ISP customers. "All ISPs in Australia do limit users who download too much (BigPond is the only ISP in Australia that double dips by hitting uploads as well). We all have some sort of 'download quota' for a fixed price per month", said Malone.

"The problem is the average utilisation. ISPs work out their plans by making an assumption about what percentage of the quotas will get used, on average across the base. In the past, if customers had a 10GB quota for instance, then they didn't use all of it, they might have used (say) 30%. Today that number could be close to 90% on average, but there is no additional revenue. The assumptions have just changed, which has increased costs, but not revenue", he said.

Telstra, Optus and iiNet deny that the problems associated with P2P use on their networks have occurred as a result of over-subscribed bandwidth.

"If ISPs had 'over-subscribed' then customers would be getting congestion on everything. That's not happening at all with any of the ISPs who are de-prioritising P2P", said Malone. "More bandwidth costs more money. So ISPs don't buy any more than they need. If you can reduce the amount of bandwidth, then your costs are less and your prices can be more competitive."

Malone added that he considers the issues of P2P traffic are associated with philosophic argument, rather than reality. "The heavy users of P2P are outraged that their (non time critical) data is treated as lower priority than your web browsing or video conference. And realistically, 97% of your customer base don't even notice. Everyone is happy (except the leechers, who were too happy anyway, at the expense of the ISP)", he said.

"This is a storm in a teacup," he said.

How MySpace Is Hurting Your Network

Increasingly popular social-networking sites such as MySpace, YouTube, and Facebook account for huge volumes of DNS queries and bandwidth consumption.
Carolyn Duffy Marsan

Increasingly popular social-networking sites such as MySpace, YouTube and Facebook are accounting for such huge volumes of DNS queries and bandwidth consumption that carriers, universities and corporations are scrambling to keep pace.

The trend is prompting some network operators to upgrade their DNS systems, while others are blocking the sites altogether. Moreover, the "MySpace Effect" is expected to hit many more nets soon, as these network-intensive interactive features migrate from specialty sites to mainstream e-commerce operations and intranets.

"Social media is not just going to be in pure-play sites like MySpace and Facebook. It's going to become increasingly prevalent across retailers, media and entertainment," says Mike Afergan, CTO of Akamai, a content delivery network company that supports MySpace, Facebook and Friendster. "It drives a lot more requests and a lot more bit-traffic across these networks."

The demanding nature of social-networking sites was highlighted in May when the Department of Defense announced it was blocking worldwide access to 13 Web sites, including MySpace and YouTube.

"The Commander of DoD's Joint Task Force, Global Network Operations has noted a significant increase in use of DoD network resources tied up by individuals visiting certain recreational Internet sites," Army General B.B. Bell said in a memo. "This recreational traffic impacts our official DoD network and bandwidth availability, while posing a significant operational security challenge."

The Defense Department began blocking access to these sites on May 14 on its unclassified IP network, which is called NIPRNET for Non-secure Internet Protocol Routed Network.

The military isn't the only organization to notice how taxing these sites are on network resources.

"One of the things we're hearing more and more from carriers is that social-networking sites like MySpace and YouTube are contributing to an exponential increase in DNS traffic," says Tom Tovar, president and COO of Nominum, which sells high-end DNS software to carriers and enterprises.

Social-networking sites create large volumes of DNS traffic because they pull content from all over the Internet. Most of these sites use content-delivery networks to extend the geographical reach of their content so users can access it closer to home.

"A single MySpace page can have anywhere from 200 to 300 DNS lookups, while a normal news site with ads might have 10 to 15 DNS lookups," Tovar says. "It's an exponential increase."

Virgin Media, a cable service provider with 10 million subscribers (including 3.5 million broadband users) in the United Kingdom, has found that the amount of DNS traffic generated by social-networking sites has grown dramatically in the past 10 months. YouTube and Facebook traffic has doubled in that time frame but still represents a fraction of Virgin Media's overall DNS traffic. YouTube grew from 0.5 percent to 0.75 percent of the carrier's DNS traffic, while Facebook grew from 0.5 percent to 1 percent.
In contrast, MySpace now represents 10 percent of Virgin Media's DNS traffic, up from 7.2 percent last fall.

The social-networking sites "are generating much more DNS queries per user than other sites," says Keith Oborn, network systems product architect with Virgin Media. "Because of the way MySpace pages are structured, a single page can generate hundreds of DNS queries."

Oborn says the fact that many of these social-networking sites, including MySpace and YouTube, are served by content-delivery networks adds to the DNS traffic.

"They're making use of an awful lot of short TTLs [time to live values]," Oborn says. "That increases the load on the DNS servers. The same thing would happen for an enterprise customer as you see happening on a service provider network."

Oborn says it's rare for one Web site to account for 10 percent of DNS traffic.

"MySpace is the one that everybody knows about," he says. "It's the thing we need to keep a careful eye on in DNS land."

Virgin Media is addressing this phenomenon by upgrading its DNS infrastructure to the latest version of Nominum's software, which uses a technique called Anycast to provide load balancing for improved redundancy. Virgin Media will complete the upgrade this summer.

With the new configuration, Virgin Media says it "could do 2.5 million DNS queries per second, but all we need is 50,000 or 60,000," Obort says. "We have a lot of overcapacity in DNS, which is both cheap and good to have. ... It cost us a few hundred thousand pounds at most."

Virgin Media is anticipating continued growth in its DNS traffic, driven in part by social-networking sites. "Overall our DNS traffic is growing twice as fast as the number of users," Oborn says.

At the University of Kansas, social-networking sites, including MySpace, Facebook and YouTube, are among the 10 most popular destinations for a user population that averages 20,000 per day, including faculty, staff and students.

These sites "generate a lot of DNS requests since each item on the Web pages is spread over dozens and dozens of servers," says Travis Berkley, supervisor of LAN support services at the university.

The school hasn't needed to upgrade its DNS infrastructure yet to handle the extra traffic that social-networking sites generate. It runs BIND Version 9 software for its DNS servers.

"We have two servers that are the primary for campus, and they seem to keep up just fine," Berkley says, adding that "some departments have set up their own workgroup DNS servers."

One advantage for the the university is that it already limits how much Internet bandwidth students can consume from their dorm rooms. So even though the university doesn't limit access to social-networking sites, it can ensure that usage of these sites is limited to a fixed proportion of its Internet bandwidth.

"We did that independent of these sites or even peer-to-peer," Berkley added.

MySpace seems to be the biggest contributor of the social-networking sites in terms of fostering DNS queries. MySpace declined to comment for this article.

"MySpace is really a pain in the butt," says Cricket Liu, vice president of architecture at InfoBlox, which sells DNS appliances to carriers and corporations. "It generates an enormous number of DNS queries because of the way it refers to content. The domain names they are using all seem to be part of their own content-delivery network."

Liu says any organization running a recursive name server will feel the pinch from MySpace's DNS-heavy design. That includes carriers, universities and corporations.

"The recursive name server is ultimately responsible for getting the answer on behalf of the resolver on the laptop or desktop machine," Liu explains. "So it's the one that has to go out and navigate the Internet's name space, find the authoritative name server for MySpace.com and get the data back. Then it has to keep going back to the MySpace.com name servers to resolve the different domain names on a page. ... It might have to hit those MySpace.com name servers 45 times or more for a particular page."

MySpace's own DNS servers are less affected by this situation than those run by carriers or enterprises.

"The amount of horsepower it takes to handle a recursive query is more than it takes to handle an authoritative query," Liu explains. "MySpace has to run name servers that are authoritative for MySpace.com. ... The same piece of hardware can do an order of magnitude more responses when it's authoritative for MySpace.com than it can do acting as a recursive server. That's because it doesn't have to track the ongoing progress of the name resolution process; it just has to answer it."

The impact of sites like MySpace is also minor on the root servers and top-level domains. For example, VeriSign estimates that social-networking sites account for less than 1 percent of the DNS queries at the .com and .net level. VeriSign handles 32 billion DNS queries a day.

Experts agree that carriers and enterprises are the ones that will need to watch their DNS traffic trends in light of the "MySpace Effect."

"The rise of social-networking sites is just one of a number of factors that are causing the increase in DNS queries," Liu says. "Another would be antispam mechanisms and just the increasing penetration of broadband."

And it's not just DNS queries that social-networking sites like MySpace drive, but also large volumes of traffic.

"Social-media sites are driving a fantastic amount of usage," Akamai's Afergan says. "These sites are motivating their users to be interacting with their sites in a very engaging way, which is driving a large experience time."

Afergan says social-networking sites affect network utilization in two ways: the profile-based sites like MySpace generate a lot of requests per user for small files, while the video-based sites like YouTube demand a lot of bandwidth for large video files to be transmitted across the network.

"Most of our networking partners are seeing these sites drive an incredible amount of traffic, both in the number of requests and the bytes involved in those requests," says Afergan.

The heavy network demand of these Web sites is one reason that seven of the top 10 social-networking sites use Akamai's content-delivery service to offload traffic. It's also a reason that many carriers allow Akamai to put edge servers inside their networks to serve up rich content locally.

"Part of what we do for carriers is minimize the traffic on their networks," Afergan says, adding that Akamai's servers also reduce DNS traffic.

The impact of social-networking sites is primarily on carrier and university networks today, but it is likely to affect more corporations as they add social-networking features to their e-commerce and intranet sites.

IBM, for example, runs its own social network called BluePages, which allows employees to provide information about themselves to other employees.

Meanwhile, Coca-Cola this month is set to launch a mobile phone-based social-networking community for Sprite drinkers called Sprite Yard.

"Imagine when there are thousands of these sites," says Ken Silva, CSO of VeriSign. "Then they will be a more significant share of overall DNS queries."

Silva worries more about the impact on DNS from the migration of telephony and television services to the Internet than he does about social-networking sites.

"If one big telephony provider migrates to the Internet, they could bring millions of users and generate big chunks of bursty growth," he says.

VeriSign is in the midst of a three-year, US$100 million upgrade to its DNS infrastructure, which supports the .com and .net registries and two root servers. The upgrade will increase the company's DNS capacity tenfold.

"Planning for these things like social-networking sites and large infrastructure moving to IP is what this upgrade is all about," Silva adds.

FTC Shoots Down Net Neutrality, Says it is Not Needed
Ken Fisher

The Federal Trade Commission today dealt a serious blow to "Net Neutrality" proponents as it issued a report dismissive of claims that the government needs to get involved in preserving the fairness of networks in the United States.

The report, entitled "Broadband Connectivity Competition Policy," was drafted in response to growing concerns about broadband competitiveness and network neutrality. The FTC intends the report to be consulted as a guideline by policy makers and legislators, but it has no binding force. Nevertheless, the report's findings are yet another sign that US government agencies are not particularly interested in the network neutrality problem right now. In fact, the FTC is essentially saying that they can find no evidence of a problem to begin with.

In a statement, Chairman Deborah Platt Majoras said, "This report recommends that policy makers proceed with caution in the evolving, dynamic industry of broadband Internet access, which generally is moving toward more - not less - competition. In the absence of significant market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area."

The "hands-off" approach is the approach preferred by the telecoms, who will also be delighted that Chairman Majoras cleared them of any wrong-doing in their network management so far. Nevertheless, the FTC says that it will continue to monitor the situation, as will the FCC and DOJ. Perhaps more encouraging for proponents of such legislation, the FTC says that increased awareness of the debate will help them with monitoring the need for government regulation.

"As a byproduct of the ongoing debate over network neutrality regulation, the agencies have a heightened awareness of the potential consumer harms from certain conduct by, and business arrangements involving, broadband providers," the report states. "Perhaps equally important, many consumers are now aware of such issues. Consumers—particularly online consumers—have a powerful collective voice. In the area of broadband Internet access, they have revealed a strong preference for the current open access to Internet content and applications."

Indeed, while this appears to be another victory for the opponents of net neutrality, the language of the report suggests that should something more fishy arise, the FTC will be watching. In particular, the report says that the FTC will be watching a set of particular questions closely:

• How much demand will there be from content and applications providers for data prioritization?
• Will effective data prioritization, throughout the many networks comprising the Internet, be feasible?
• Would allowing broadband providers to practice data prioritization necessarily result in the degradation of non-prioritized data delivery?
• When will the capacity limitations of the networks comprising the Internet result in unmanageable or unacceptable levels of congestion?
• If that point is reached, what will be the most efficient response thereto: data prioritization, capacity increases, a combination of these, or some as yet unknown technological innovation?

As you can see, these are all very fundamental questions, and indeed the answer to all of them involves a giant helping of "wait and see."

Further reading:

FTC Report (PDF)
FTC Statement


Bush Official Goes Nuclear in Net Neut Row
Gavin Clarke

Supernova 2007 A San Francisco tech show degenerated into a shouting match today, after a pugnacious Bush commerce official squared off with heated supporters of net neutrality.

John Kneuer, the assistant secretary for communications and information, quickly lost his temper and began shouting back at Supernova 2007 attendees after taking flack for saying the free market - not government intervention - would protect internet innovation and access.

Taking a brief time out from shouting his responses at delegates who'd rejected his claims the free market has ensured consumer choice in US broadband internet access, Kneuer remarked in an aside: "I started out very politely."

That came seconds after he told delegates what they really wanted was for the government to mandate terms and conditions of internet service in the US.

"That's absolutely what you are asking for!" he shouted to counter-shots of "no!" and "there is no market place!", referring to the fact a handful of phone and cable companies control the lion share of broadband internet access and service in the US.

Increasingly, it seems, those companies will be allowed by the Government to charge for different levels of internet service - ending net neutrality.

Kneuer, who previously served with a Washington DC law firm representing telecoms companies, had fueled the crowd's anger during a short Supernova presentation.

Identifying delegates as "application providers", he said it was their responsibility to compete with broadband incumbents by offering their own service, founded initially on portions of the 700Mhz spectrum. This spectrum will be sold under auction once terrestrial TV providers complete their move to digital in February 2009.

He ruled out government action on net neutrality, with measures such as safeguarding packet prioritization and quality of service. "The end state of that is innovation in the regulator space outstrips the innovation in the application space," Kneuer said.
"The challenge is for the right application company to play in the access layer... this is a green field opportunity to have a radically different market participant to bring concepts of open access. If there is a pro consumer benefit to open access and if consumers need and want that, the carrier that brings that to consumers will have a powerful need and advantage and bring competitive pressures on other access layer providers.

"I firmly believe market forces are going to provide even more open networks and access much, much, much better than I can do as a regulator," he said.

The Bush administration, meanwhile, was challenged to donate a portion of the spectrum to academic institutions for research purposes. Speaking after Kneuer, a researcher for Cooperative Association for Internet Data Analysis (CAIDA) (http://www.caida.org/home/) expressed frustration that there's currently no reliable way to gather independent data on the internet.

Researchers are instead forced to rely on vendor figures or are refused information on the grounds of privacy or the law, principal investigator KC Claffy said.

"We need numbers on spam, but where do you get numbers on spam from - anti-spam vendors. These aren't the people you want to be getting numbers from when setting policy," she said. "Let's look at what a public network is really used for. We cannot answer that. And the carriers are about to ask us to pay for traffic, 99 per cent of which is spam! If the Commerce Department really wants to help us they will provide the research community with a really open network we can all study."

U.S. Net Access Not All That Speedy
Leslie Cauley

The USA trails other industrialized nations in high-speed Internet access and may never catch up unless quick action is taken by public-policymakers, a report commissioned by the Communications Workers of America warns.

The median U.S. download speed now is 1.97 megabits per second — a fraction of the 61 megabits per second enjoyed by consumers in Japan, says the report released Monday. Other speedy countries include South Korea (median 45 megabits), France (17 megabits) and Canada (7 megabits).

"We have pathetic speeds compared to the rest of the world," CWA President Larry Cohen says. "People don't pay attention to the fact that the country that started the commercial Internet is falling woefully behind."

Speed matters on the Internet. A 10-megabyte file takes about 15 seconds to download with a 5-megabit connection — fast for the USA. Download time with a 545-kilobit connection, about the entry-level speed in many areas: almost 2½ minutes.

Broadband speed is a function of network capacity: The more capacity you have, the more speed you can deliver. Speed, in turn, allows more and better Internet applications, such as photo sharing and video streaming. Superfast speeds are imperative for critical applications such as telemedicine.

In recent years, communities also have found that good broadband is essential to draw businesses and jobs.

For all those reasons, Cohen says, it is important for policymakers to act now: "In order to maintain our place in today's global economy — and to create the jobs we need — our government must act."

The CWA report is based on input from 80,000 broadband users (less than 5% of respondents used dial-up). In addition to drawing comparisons with other countries, the report ranks U.S. states on median download speeds. (Upload speeds are also rated.)

The Federal Communications Commission, which has broad sway over the emerging broadband market, defines "high speed" as 200 kilobits per second. The benchmark was adopted more than a dozen years ago when still-slower dial-up was the rule. Cohen says 200 kilobits is not even recognized as broadband in most countries today. "There is nothing speedy about it."

The FCC in April opened a proceeding that could result in the redefinition of what can be advertised as "broadband Internet service" in this country. "We're asking the question if the definition should be changed," spokeswoman Tamara Lipper says.

The comment period ended May 31, and a report from the FCC is likely in the fall.Internet on-ramp speeds by state
Median broadband Internet access speed for each state in testing by the Communications Workers of America. Test your speed at http://www.speedmatters.org.

State Median download speed (mbps) Speed rank

USA 1.973

Alaska 0.545 51

Alabama 1.777 25

Arkansas 1.326 42

Arizona 1.635 29

California 1.520 36

Colorado 1.354 41

Connecticut 2.244 15

District of Columbia 1.372 39

Delaware 2.657 9

Florida 2.368 13

Georgia 2.714 7

Hawaii 1.965 23

Iowa 1.262 47

Idaho 1.323 43

Illinois 2.184 17

Indiana 1.955 24

Kansas 4.167 2

Kentucky 1.607 32

Louisiana 2.751 6

Massachusetts 3.004 5

Maryland 2.589 10

Maine 1.534 35

Michigan 2.042 19

Minnesota 1.771 26

Missouri 1.432 38

Mississippi 1.620 30

Montana 1.312 45

North Carolina 2.225 16

North Dakota 1.308 46

Nebraska 1.994 22

New Hampshire 2.700 8

New Jersey 3.680 3

New Mexico 1.716 27

Nevada 1.617 31

New York 3.436 4

Ohio 1.359 40

Oklahoma 1.689 28

Oregon 2.390 12

Pennsylvania 1.567 33

Rhode Island 5.011 1

South Carolina 2.338 14

South Dakota 0.825 50

Tennessee 2.035 20

Texas 1.509 37

Utah 1.323 43

Virginia 2.394 11

Vermont 2.005 21

Washington 2.176 18

Wisconsin 1.551 34

West Virginia 1.117 49

Wyoming 1.246 48

Speed tests results for Sept. 2006 through May 2007; most participants had DSL or cable modem connections Source: CWA Communications


Mapping the Internet

Routing traffic through peer-to-peer networks could stave off Internet congestion, according to a new study.
Duncan Graham-Rowe

The increased use of peer-to-peer communications could improve the overall capacity of the Internet and make it run much more smoothly. That's the conclusion of a novel study mapping the structure of the Internet.

It's the first study to look at how the Internet is organized in terms of function, as well as how it's connected, says Shai Carmi, a physicist who took part in the research at the Bar Ilan University, in Israel. "This gives the most complete picture of the Internet available today," he says.

While efforts have been made previously to plot the topological structure in terms of the connections between Internet nodes--computer networks or Internet Service Providers that act as relay stations for carrying information about the Net--none have taken into account the role that these connections play. "Some nodes may not be as important as other nodes," says Carmi.

The researchers' results depict the Internet as consisting of a dense core of 80 or so critical nodes surrounded by an outer shell of 5,000 sparsely connected, isolated nodes that are very much dependent upon this core. Separating the core from the outer shell are approximately 15,000 peer-connected and self-sufficient nodes.

Take away the core, and an interesting thing happens: about 30 percent of the nodes from the outer shell become completely cut off. But the remaining 70 percent can continue communicating because the middle region has enough peer-connected nodes to bypass the core.

With the core connected, any node is able to communicate with any other node within about four links. "If the core is removed, it takes about seven or eight links," says Carmi. It's a slower trip, but the data still gets there. Carmi believes we should take advantage of these alternate pathways to try to stop the core of the Internet from clogging up. "It can improve the efficiency of the Internet because the core would be less congested," he says.

To build their map of the Internet, published in the latest issue of the Proceedings of the National Academy of Sciences, the researchers enlisted the assistance of 5,000 online volunteers who downloaded a program to help identify the connections between the 20,000 known nodes.

The distributed program sends information requests, or pings, to other parts of the Internet and records the route of the information on each journey.

Previous efforts had relied upon only a few dozen large computers to carry out this task, says Carmi. But by using this distributed approach, which meant collecting up to six million measurements a day over a period of two years from thousands of observation points around the world, it was possible to reveal more connections, says Scott Kirkpatrick, a professor of computer science and engineering at the Hebrew University of Jerusalem, who also took part in the study. In fact, the project has already identified about 20 percent more of the interconnections between Internet nodes than ever before.

The researchers then used a novel hierarchical approach to map the connectivity data, taking into account how the nodes are connected. Each node was assessed based on how well connected it was to other nodes that are better connected.

Most previous research efforts only considered the number of connections as an indicator of the importance of a node without factoring in where those nodes lead, says Carmi. But taking this new approach, known as a k-shell model, allows for dead-end connections to be discounted, since they play a lesser role in the connectivity of the Internet.

Seth Bullock, a computer scientist at University of Southampton who studies network complexity and natural systems, finds it encouraging to see people taking a more sophisticated approach to modeling network structures, which are often quite crude.

But, Bullock warns, although there are potential benefits to improving the efficiency of the Internet using peer-to-peer networks, letting peer-to-peer networks grow in an unconstrained way could just as easily result in the creation of more congestion. For example, there would be nothing to prevent them from channeling data through the same nodes, thereby creating congestion elsewhere. Even so, there is currently a lot of interest in trying to figure out how to improve the Internet in the future; revealing its structure should help this process, says Kirkpatrick.

Bell Canada Agrees to Buyout Offer
Ian Austen

Bell Canada’s directors endorsed a privatization offer worth 34.8 billion Canadian dollars ($32.9 billion) from the Ontario Teachers’ Pension Plan and Providence Equity Partners early today, the company said in a statement. If approved by shareholders, the deal would be Canada’s largest takeover to date, worth about 51.7 billion Canadian dollars after assumption of debt and other factors, and among the largest leveraged buyouts in history.

The announcement from Canada’s largest communications company came with unusual swiftness. Bell only received bids from three groups on Tuesday morning and the board began reviewing them yesterday. Canada Pension Plan Investment Board and Kohlberg Kravis Roberts offered a similar, all-cash privatization. Cerberus Capital Management, along with Canadian partners, proposed a more complex structure that would have kept some Bell equity trading.

Teachers’ offer, which was enhanced on Friday, will pay 42.75 Canadian dollars a share. Within the last year, the company’s stock has traded for as little as 25.32 Canadian dollars.

With a 6.3 percent stake in Bell, Teachers’ is already Bell’s largest shareholder. It has made little secret of its dissatisfaction with Bell’s lagging share price and the company’s management. That situation ultimately led to a review by a special committee of Bell’s board and the company’s auction.

One player, however, was absent from those talks. Telus, Bell’s smaller but more successful competitor from Western Canada, announced its intention to bid. But just after Tuesday’s deadline for offers, it withdrew citing unspecific complaints about the auction process.

The unusually secretive process — Teachers’ and Providence had not even confirmed that they had made a bid — was unpopular with many investors who saw the value of their shares swing based on rumors and incomplete news reports.

Bell is one of Canada’s most widely held companies with retail investors making up 60 percent of its shareholder base.

While they will receive a healthy premium for their stock, those shareholders will lose Bell’s dividend payments, which are the chief attraction of the company for many small investors. Long-term shareholders may also face a substantial capital gains tax.
There has been speculation that Telus will return with a hostile bid. Its ability to pay with both cash and shares gives it the chance, in theory, to outbid Teachers’ and Providence, as does its ability to exact substantial cost savings from Bell. But if Teachers’ has negotiated a hefty breakup fee, that might make a Telus offer impractical.

Canadian law prohibits foreign control of telecommunications companies, making it impossible for foreign communications firms to enter the bidding.

Internet Radio "Day of Silence" Hushes Thousands of Stations
Jacqui Cheng

Today is June 26, and that means that it's the Internet radio Day of Silence. The Day of Silence was organized by Radio Internet Newsletter publisher Kurt Hanson in order to protest against retroactive royalty rate increases that could end up putting many Internet radio stations out of business. The rates are due to go into effect in less than a month, and with no significant help from Congress as of yet, Internet broadcasters are resorting to silence to demonstrate what will happen if the proposed increases go into effect.

In March, the Copyright Royalty Board said that it planned to change the method by which Internet broadcasters would pay for royalties from a per-song to a per-listener rate. This, combined with new base fees of $500 for each separate station that a broadcaster managed, would require many Internet radio stations to pay crippling fees to the Copyright Royalty Board that would essentially put them out of business.

National Public Radio attempted to get a rehearing with the CRB, arguing that the decision was an "abuse of discretion," but their appeal was denied less than a month later. Still, the CRB offered a small reprieve from the threat of retroactive fees in May by extending the deadline for retroactive rates from May 15 to July 15. A couple of weeks later, SoundExchange tweaked its requirements so that smaller broadcasters won't have to pay increased royalties until 2010—a decision that was unpopular with SaveNetRadio, which argued that SoundExchange's offer would still punish larger webcasters while ensuring that smaller ones would never see any growth.

Hmm, where does Yahoo want me to go?

In response, thousands of Internet radio stations today are broadcasting static, silence, a message explaining the Day of Silence, or are simply not accessible at all. Yahoo! Music agreed to shut down its roughly 200 Internet broadcast stations in honor of the Day of Silence and only offers links to savenetradio.org. Real Rhapsody displays a message on its site when anyone tries to access its channels, urging readers to visit SaveNetRadio as well. Pandora went so far as to take down its entire web site to offer a message about the Day of Silence, and Live365.com shut down some 10,000 of its Internet radio channels today with a message on its web site asking listeners to contact their senators and representatives about the Internet Radio Equality Act.

Smaller-name broadcasters are participating in the Day of Silence too. LoudCity shut down 500 of its own stations today, and one of my personal favorites, .977 Music, is broadcasting silence as well. There are no 80s hits for me today. Noticeably absent from today's protest is popular Internet broadcaster Last.FM, however, despite the fact that the CBS-owned broadcaster will be required to pay the same fees as the others.

"This 'Day of Silence' is an encore of a successful media event that small webcasters organized on May 1, 2002 in response to a similarly royalty rate ruling from a Copyright Arbitration Royalty Panel (CARP) five years ago," wrote Hanson on his web site. "That event garnered national attention and was subsequently followed by a rate cut by the Librarian of Congress and the passage of the Small Webcaster Settlement Act for the period 1998-2005."

He and other broadcasters hope that the outcome of today's Day of Silence will be just as favorable. The Internet Radio Equality Act was introduced to both the Senate and the House earlier this year, which would overturn the CRB's royalty hikes and instead introduce a more palatable rate of 7.5 percent of total revenues. However, neither entity has yet to vote on the legislation, leaving Internet broadcasters anxious as the July 15 deadline looms.

Bridge Studies Webcasters' "Day Of Silence"

Tuesday's Internet Radio "National Day Of Silence" saw thousands of Webcasters silence their streams in protest of the proposed Copyright Royalty Board fee hike. Now Bridge Ratings is releasing a two-part study on the effectiveness of the protest.

Bridge asked 3000 people ages 13+ if they listen to Internet radio, finding that 21 percent did, a consistent stat with previous research. Out of that 21 percent, 55 percent said they didn't tune in to Internet radio on Tuesday, while 45 percent said they did. When asked if their favorite station had gone silent on Tuesday, 62 percent said theirs had. Out of that group, 72 percent said they simply found a station that was streaming and listened to that instead, while 23 percent didn't listen to Internet radio.

Bridge will release the second half of the study tomorrow, seeing what the Internet radio audience's behavior was today, the day after the protest.

In related news, WXPN/Philadelphia says that over 11,000 listeners signed an online petition yesterday protesting the CRB rates. "We had hoped to garner a minimum of 5,000 signatures," said Roger LaMay, WXPN GM. "The overwhelming response of our loyal listeners sends a loud message to legislators and hopefully they will heed the call to save streaming radio."

Online Listeners Returned After "Day Of Silence"

Yesterday, Bridge Ratings released the first part of its study on the impact of Webcasters' "Day of Silence" protest on Tuesday. They found that out of Internet radio listeners surveyed, 55 percent said they didn't tune in to Internet radio on Tuesday, while 45 percent said they did. When asked if their favorite station had gone silent on Tuesday, 62 percent said theirs had. Out of that group, 72 percent said they simply found a station that was streaming and listened to that instead, while 23 percent didn't listen to Internet radio.

When online stations returned to normal on Wednesday, Bridge surveyed their panel again, with 89 percent tuning in once again to their favorite stations. Therefore, Bridge concluded that the "Day of Silence" did have a significant impact on Internet listenership, even if 45 percent of those surveyed did find an alternate station to listen to.

Integrity of Hardware-Based Computer Security Is Challenged

Withdrawn Black Hat paper hints at flaws in TPM security architecture
Tim Greene

A presentation scheduled for Black Hat USA 2007 that promised to undermine chip-based desktop and laptop security has been suddenly withdrawn without explanation.

The briefing, “TPMkit: Breaking the Legend of [Trusted Computing Group’s Trusted Platform Module] and Vista (BitLocker),” promised to show how computer security based on trusted platform module (TPM) hardware could be circumvented

“We will be demonstrating how to break TPM,” Nitin and Vipin Kumar said in their abstract for their talk that was posted on the Black Hat Web site but was removed overnight Monday.

“The demonstration would include a few live demonstrations. For example, one demonstration will show how to login and access data on a Windows Vista System (which has TPM + BitLocker enabled),” the abstract said.

BitLocker is disk-encryption technology in Microsoft’s Vista operating system that relies on TPM to store keys.

In an e-mail, Vipin Kumar says, “We have pulled back our presentation from … Black Hat. So, we won't be presenting anything related to TPM/BitLocker in Black Hat. … We would not like to say anything about the TPM/BitLocker for the time being.” He didn’t respond to inquiries about why the brothers withdrew.

A spokesman for the conference was unable to offer more information. “At their request, they are no longer presenting. That is all the info I have,” said the spokesman, Nico Sell, in an e-mail.

The conference brings together technically savvy security experts from business, government and the hacking community to discuss the latest security technologies. Frequently, Black Hat briefings become controversial because they point out previously unknown weaknesses in products or technologies.

The Kumars’ promised exploit would be a chink in the armor of hardware-based system integrity that TPM is designed to ensure.

TPM is also a key component of Trusted Computing Group’s architecture for network access control (NAC). TPM would create a unique value or hash of all the steps of a computer’s boot sequence that would represent the particular state of that machine, according to Steve Hanna, co-chair of TCG’s NAC effort.

This initial hash of a known, trusted machine would be stored in the TPM and compared to the hash that is created when that machine last booted up. As part of TCG’s NAC plan, if the hash values don’t match, that indicates the machine has been altered and might no longer be secure, says Hanna.

That check, known as remote attestation, would be part of decision making by a NAC policy server. In their description of their talk, the Kumars said they have developed a tool called TPMkit that bypasses remote attestation andwould let a computer that is not in a trusted state gain access anyway.

At the Black Hat conference in Amsterdam earlier this year the Kumars demonstrated a bootkit that can insinuate itself into the Vista kernel without setting off Vista security alarms. At the time, the pair said they thought TPM was the only way to ensure that unsigned code is blocked from executing during the Vista boot sequence.

The Kumars live in India and run a security consulting firm called NV Labs.

New York Legislators Keep e-Voting Software in Public Hands
Marc L. Songini

With this year's New York Senate and Assembly session now ended, local voting activists are chalking up a victory for the public at the expense of Microsoft Corp. and the e-voting industry.

The activists had feared that Microsoft and a handful of e-voting device vendors would quietly weaken the state's strict e-voting software escrow law before the current legislative session ended on Friday. Approved two years ago by the legislature, the law requires voting system vendors to place all source code and other related software in escrow for the New York State Board of Elections so it can be examined as needed. The law also dictates that a voting system vendor waives all intellectual property and trade right secret rights should the software need to be reviewed in court.

Microsoft, whose Windows software is used in some of the vendors' devices, sought to amend the law to avoid the strict escrow provisions. That move riled Empire State voting activists such as Bo Lipari, executive director of New Yorkers for Verified Voting, who publicized Microsoft's efforts in his blog the week before the session ended. By focusing on Microsoft's plans, concerned citizens created a groundswell of support in the legislature to ensure the law remained untouched, Lipari said.

"We won for a change," he said on Friday. He estimated that about 3,000 constituent calls had been placed with the legislature about the issue. "There was a huge outpouring of support and the legislature noticed this. It was a forceful way to remind them to re-affirm their commitment to these strong laws."

New York State Assemblywoman Barbara Lifton, a Democrat from the 125th Assembly District, echoed that sentiment. "The voting machine vendors have known for two years what our laws said," Lifton said Thursday. "Now they're saying that those parts of their systems using Microsoft software have to be proprietary? It's just wrong. We're holding firm on our current state law which calls for open source code."

But Lipari had his worries before the matter was resolved. Earlier this month, in his blog, he called Microsoft the "800-pound gorilla of software development" as he called attention to its plans. Microsoft, he said, had been steadily lobbying legislators and circulating an unsigned document that would redefine the law.

"These changes would gut the source code escrow and review provisions provided in our current law, which were fought for and won by election integrity activists around the state and adopted by the legislature in June 2005," he warned at the time. He noted that the amendment would have redefined the escrow law to apply only to "election-dedicated voting system technology." Any piece of code that hadn't been specifically designed for use in a voting system would be exempt from the requirement.

"Microsoft's proposed change to state law would effectively render our current requirements for escrow and the ability for independent review of source code in the event of disputes completely meaningless -- and with it the protections the public fought so hard for," Lipari said.

Microsoft wasn't alone, Lipari said in an interview. Voting machine maker Sequoia Voting Systems and others also tried to weaken the state's escrow laws, he said. He was especially worried that in the last week of the legislative session many bills were being worked on, and it would have been easy to slip in language to change the escrow law. "This was a very dangerous week for all sorts of damage to be done," he said. "The fact that we caught this early, and brought it out into the light of day made it much harder to get away with."

Microsoft's Albany-based lobbyist deferred comment on the issue. For its part, Microsoft declined to confirm it had drafted the document in Lipari's possession. "We don't specifically discuss our lobbying efforts, but we have been in constructive dialogue with the New York State Board of Elections," a Microsoft spokeswoman said last week.

"Microsoft appreciates and understands the situation New York State is in with regard to compliance with the provision in its election law requiring voting machine software source code to be held in escrow," she said in an e-mail. "At present, Microsoft does not make its source code available for escrow under the election law because of our concern that this code could be disclosed to third parties without adequate protections for our intellectual property rights."

A spokeswoman for Sequoia Voting Systems, which uses some of Microsoft's development technology in its devices, defended her company's lobbying. "We also vigorously protect our intellectual property and trade secrets as well as the overall security of our voting system," she said. Sequoia currently complies with all current state and federal review and escrow laws, she noted.

Over the past year, she said Sequoia has worked with the Elections Board to satisfy its requirements without disclosing any third-party proprietary source code such as Microsoft's. After the legislature's session closed, she expressed frustration, claiming the issue remains unresolved. "We would ideally like to work with the board to reach a solution that works for all parties involved," she said Friday.

A spokesman for the New York State Elections Board downplayed the lobbying efforts. "The voting system vendors have been discussing this with us for some time," he said last week. "We continue to have a dialogue on the escrow subject."

That includes the board taking in and reviewing comments from voting rights advocates, as well as other interested parties, he said.

EFF Press Release

Dangerous Ruling Forces Search Engine to Log Users

Public Interest Groups Urge Court to Block Radical Expansion of Discovery Rules

San Francisco - The Electronic Frontier Foundation (EFF) and Center for Democracy and Technology (CDT) urged a California court Friday to overturn a dangerous ruling that would require an Internet search engine to create and store logs of its users' activities as part of electronic discovery obligations in a civil lawsuit.

The ruling came in a copyright infringement lawsuit filed by motion picture studios against TorrentSpy, a popular search engine that indexes materials made publicly available via the Bit Torrent file sharing protocol. TorrentSpy has never logged its visitors' Internet Protocol (IP) addresses. Notwithstanding this explicit privacy policy, a federal magistrate judge has now ordered TorrentSpy to activate logging and turn the logged data over to the studios.

"This unprecedented ruling has implications well beyond the file sharing context," said EFF Staff Attorney Corynne McSherry. "Giving litigants the power to rewrite their opponent's privacy policies poses a risk to all Internet users."

The magistrate judge incorrectly reasoned that, because the IP addresses exist in the Random Access Memory (RAM) of TorrentSpy's webservers, they are "electronically stored information" that must be collected and turned over to the studios under the rules of federal discovery.

This decision could reach every function carried out by a digital device. Every keystroke at a computer keyboard, for example, is temporarily held in RAM, even if it is immediately deleted and never saved. Similarly, digital telephone systems make recordings of every conversation, moment by moment, in RAM.

"In the analog world, a court would never think to force a company to record telephone calls, transcribe employee conversations, or log other ephemeral information," said EFF Senior Staff Attorney Fred von Lohmann. "There is no reason why the rules should be different simply because a company uses digital technologies."

The decision also threatens to radically increase the burdens that companies face in federal lawsuits, potentially forcing them to create and store an avalanche of data, including computer server logs, digital telephone conversations, and drafts of documents never saved or sent.

The magistrate judge in the case has stayed her order while TorrentSpy appeals the ruling. The case is Columbia Pictures Industries v. Bunnell, No. 06-01093 FMC, pending in the U.S. District Court for the Central District of California before Judge Florence-Marie Cooper.

For the full amicus brief:

NZ Banks Demand a Peek at Customer PCs in Fraud Cases
Stephen Bell

Banks in New Zealand are seeking access to customer PCs used for online banking transactions to verify whether they have enough security protection.

Under the terms of a new banking Code of Practice, banks may request access in the event of a disputed transaction to see if security protection in is place and up to date.

The code, issued by the Bankers' Association last week after lengthy drafting and consultation, now has a new section dealing with Internet banking.

Liability for any loss resulting from unauthorized Internet banking transactions rests with the customer if they have "used a computer or device that does not have appropriate protective software and operating system installed and up-to-date, [or] failed to take reasonable steps to ensure that the protective systems, such as virus scanning, firewall, antispyware, operating system and antispam software on [the] computer, are up-to-date."

The code also adds: "We reserve the right to request access to your computer or device in order to verify that you have taken all reasonable steps to protect your computer or device and safeguard your secure information in accordance with this code.

"If you refuse our request for access then we may refuse your claim."

InternetNZ was still reviewing the new code, last week, executive director Keith Davidson told Computerworld.

"In general terms, InternetNZ has been encouraging all Internet users to be more security conscious, especially ... to use up-to-date virus checkers, spyware deletion tools and a robust firewall," Davidson says.

"The new code now places a clear obligation on users to comply with some pragmatic security requirements, which does seem appropriate. If fraud continues unabated, then undoubtedly banks would need to increase fees to cover the costs of fraud," he says, so increasing security awareness and compliance in advance is probably the better tactic for both banks and their customers.

"Bank customers who are unhappy with the new rules may choose to dispense with electronic banking altogether, and return to dealing with tellers at the bank. But it seems that electronic banking and in particular Internet banking has become the convenient choice for consumers," Davidson says.

The code also warns users that they could be liable for any loss if they have chosen an obvious PIN or password, such as a consecutive sequence of numbers, a birth date or a pet's name; disclosed a PIN or password to a third party or kept a "written or electronic record" of it. Similar warnings are already included in the section that deals with ATM and PINs for Eftpos that was issued in 2002.

There is nothing in this clause allowing an electronic record to be held in a password-protected cache -- a facility provided by some commercial security applications.

For their part, the banks undertake to provide information on their websites about appropriate tools and services for ensuring security, and to tell customers where they can find this information when they sign up for Internet banking.

"One issue we have raised with the Bankers Association in the past is that banks should not initiate email contact with their customers," Davidson says.

The code allows banks to use unsolicited email among other media to advise of changes in their arrangements with the customer, but Davidson says they should only utilize their web-based mail systems.

"It is hardly surprising that some people fall victim to phishing email scams when banks use email as a normal method of communication, and therefore email can be perceived as a valid communication by end users," he says.
http://www.computerworld.com/action/...rc =news_list

Power Supply Still a Vexation for the NSA

Summertime could pose hotter trouble for agency
Siobhan Gorman

A year after the National Security Agency nearly maxed out its electrical capacity, some offices are experiencing significant power disruptions as the agency confronts the increasingly urgent problem of an infrastructure stretched to its limits, intelligence officials said.

The spy agency has delayed the deployment of some new data-processing equipment because it is short on power and space. Outages have shut down some offices in NSA headquarters for up to half a day. And some officials fear that major problems could occur this summer as temperatures climb.

The NSA has been working to develop and implement short- and long-term plans to ensure a steady supply of electricity to the nation's largest intelligence agency; they range from creating rapid-response teams to revamping power substations, internal documents show.

The current shortage has been projected for nearly a decade. Some of the rooms that house the NSA's enormous computer systems were not designed to handle newer computers that generate considerably more heat and draw far more electricity than their predecessors.

It is the result of "mismanagement at very high levels," said Ira Winkler, a former NSA analyst. "They let it get out of hand."

NSA spokeswoman Andrea Martino declined to comment on the reason for the electrical problems. "We cannot discuss the specifics that may or may not affect the agency's operations for national security purposes," she said, adding that Congress has been kept informed.

The agency has already been forced to delay installing some high-tech equipment to avoid overloading the system, according to a senior intelligence official who spoke on condition of anonymity because he is not authorized to speak to the news media.

New equipment for data processing, as well as some purchased for one of the agency's signature initiatives, the mammoth modernization effort dubbed Turbulence, are among those that have been held up, the senior official said. The lengths of the delays are classified.

The issue has become a top priority for the NSA's director, Lt. Gen. Keith B. Alexander. In recent classified testimony to Congress, he warned that the agency would have to shut down significant amounts of equipment and resort to rolling blackouts if drastic action were not taken, the official said. Alexander also told Congress that the NSA was delaying the deployment and installation of equipment, the official said.

His testimony was part of an effort to persuade lawmakers to add more than $800 million - the exact sum is classified - to the NSA's 2007 budget, the senior official added.

Congress recently approved the NSA request in a classified spending bill, said Rep. C.A. Dutch Ruppersberger, a Maryland Democrat who chairs the House Intelligence subcommittee that oversees the agency.

However, lawmakers also reprimanded the NSA, intelligence officials said, for using money for spy operations to pay for electrical expenses without congressional approval.

"It got to a point where it became a serious problem," Ruppersberger said, referring to the NSA's power shortage. "We're attempting to deal with it now."

For brief periods last summer, the NSA hit the ceiling of the power capacity at its Fort Meade campus, forcing the agency to turn off or idle technical equipment, the senior intelligence official said. The agency also had to shift the timing of power use for some computers responsible for processing data, to even out electrical loads, and continues to do so.

Some intelligence officials said they are worried that as this summer heats up, anticipated spikes in power demand could have dire consequences.

"I don't think it's going well," said one government source with direct knowledge of the power problem, who was speaking on condition of anonymity. "I am concerned with the possibility of a large-scale blackout and the damage it would cause across the board. ... We're experiencing problems in all of our buildings."

As the NSA has attempted to reduce electricity consumption, it has turned down air-conditioning and heating systems in parts of some buildings.

"In the morning, it's like a sweatshop," the government source said.

Last winter, according to one intelligence analyst, some employees wore gloves in the office to try to keep warm, adding that it made for challenging typing.

As part of its short-term effort to redirect power use and upgrade systems, the NSA has had to resort to partial, rolling brownouts at its computer "farms" and scheduled power outages, the senior intelligence official said, adding that these have become more frequent in recent months.

Among the most significant electrical issues was a series of outages in several buildings at NSA headquarters April 30 and May 1, which caused computers to unexpectedly restart and triggered blackouts that lasted between 45 minutes and four hours in some offices, according to the government source.

Ruppersberger said he was told the outages were scheduled. Martino would not comment on whether they had been planned but said in a statement that "routine power outages are carefully coordinated to ensure that backups are in place for mission assurance during repairs and upgrades to infrastructure."

The NSA's impending electrical crisis has been predicted since at least 1998. It had become an urgent priority by last summer.

As Alexander explained in a classified March 2007 memo, the three power substations that serve the main Fort Meade campus cannot support the agency's demands, according to the senior intelligence official. Each substation serves certain buildings, and power cannot easily be transferred to other substations if demand spikes, the senior official said.

The NSA's buildings are also exceeding the limits of their 1970s- and 1980s-era wiring, the senior official said.

Routine power demands have been disrupting work in some offices for up to half a day, the government source said. He noted, for example, that new office equipment has been overloading existing circuits in one office up to three times a week, taking anywhere from 30 minutes to four hours to get the power back on. This problem, however, is not yet widespread, the senior official said.

The problems cannot be fixed quickly because substantial re-engineering is required, the senior intelligence official explained.

The NSA's top brass is also concerned about a major space crunch. The agency's post-9/11 data deluge has pushed its computerized "data centers" to near capacity, the senior official said.

In an unclassified April 2007 memo, Alexander told NSA employees that he had created a "triage team" to address power problems as they arose. He said the NSA was taking steps to re-engineer some facilities to "better take advantage of existing power."

The agency is also employing conservation measures, according to the senior intelligence official, referring to the March classified memo. One example: incorporating "thrift savings" provisions into contracts, to create incentives for the use of power-saving equipment on new projects.

Other, longer-term measures include upgrading electrical infrastructure in buildings on the Fort Meade campus and the three substations, moving additional operations elsewhere to reduce demand and building new facilities. To handle the data overload, there are additional plans to move some of the agency's data-storage equipment to new government facilities in Tennessee and Texas. But those sites are not expected to be ready until about 2010.

"These measures are effectively addressing many of the short-term data-center, distribution, and campus-wide challenges," Alexander wrote in his April memo.

Ruppersberger said he believes Alexander's plan puts the NSA "on track" to fix the electrical problems. But he added that the agency still needs to show it can implement the plan.

Senate Intelligence Committee Chairman John D. Rockefeller IV said these issues will not be resolved quickly.

"The NSA is committing significant resources to fixing the problem," the West Virginia Democrat said in a statement. "We believe they have a plan in place to address the situation, but it will take time and a considerable amount of money."

Some current and former officials question whether the short-term plans will buy enough time to resolve a mostly long-term problem.

According to an agency document, the NSA's power consumption is nearly three times higher than the average for Defense Department buildings. The main culprit: power demand from the NSA's 24-hour watch centers and supercomputers, as well as a large number of computers in each building.

Some current and former officials said they are frustrated that NSA leaders took so long to address the problem.

The problem was first brought to the attention of then-Director Kenneth Minihan in 1998 as he prepared to upgrade the agency's technology infrastructure. But he chose not to pay for electricity upgrades along with the new technology infrastructure, the senior intelligence official said. Minihan did not respond to requests for comment.

The issue has arisen periodically since then, including the planning for the NSA's modernization programs, but each time leaders chose to set it aside, the official said. As recently as 2004 and 2005, the question of an emerging power deficit came up as the NSA outlined an expansion of its field sites under then-Director Gen. Michael V. Hayden, but no formal plans were made to address electricity problems, the official said.

A spokesman said that Hayden, who now heads the CIA, rejected that accusation and said Hayden took steps to deal with the problem when he was there.

"During his service at NSA, there was major construction at regional (signals-intelligence) operations centers. One goal of that initiative was to ease the burden on the Ft. Meade compound," spokesman Paul Gimigliano said in a written statement. "It's simply wrong to suggest that the director knew of a problem with NSA's electrical infrastructure and ignored it."

The regional centers did help, the senior official acknowledged, but they did not fix the outdated electrical system at headquarters, and some of the efforts were scaled back as Hayden left.

Early in 2006, an internal NSA team produced an extensive study of the power and space shortages that highlighted the urgency of the problem and predicted that the NSA would soon hit a "ceiling" in its electrical capacity, the official said.

Only when it hit that ceiling last summer, the official added, did the agency truly begin mobilizing to address the problem.

Senate Issues Subpoenas in Eavesdropping Investigation
James Risen

The Senate Judiciary Committee today issued subpoenas to the White House, Vice President Dick Cheney’s office and the Justice Department after what the panel’s chairman called "stonewalling of the worst kind" of efforts to investigate the National Security Agency’s policy of wiretapping without warrants.

The move put Senate Democrats squarely on a course they had until now avoided, setting the stage for a showdown with the Bush administration over one of the most contentious issues arising from the White House’s campaign against terrorism.

Senator Patrick J. Leahy, the Vermont Democrat who is chairman of the committee, said the subpoenas seek documents that could shed light on the legal basis used by the administration to justify the wiretapping, as well as on disputes within the government over its legality.

In addition, the panel is seeking materials on issues related to the wiretapping , including those concerning the relationship between the Bush administration and several unidentified telecommunications companies that aided the N.S.A. eavesdropping program.

The panel’s action was the most aggressive move yet by lawmakers to investigate the N.S.A. program since the Democrats gained control of Congress this year. Mr. Leahy said at a news conference today that the committee issued the subpoenas because the administration has followed a “consistent pattern of evasion and misdirection” in dealing with Congressional efforts to scrutinize the program. “It’s unacceptable. It is stonewalling of the worst kind,” he added.

The White House, the vice president’s office and the Justice Department declined today to say how they would respond to the subpoenas. “We’re aware of the committee’s action and will respond appropriately,” Tony Fratto, White House deputy press secretary, said.

“It’s unfortunate that Congressional Democrats continue to choose the route of confrontation,” he added.

A spokeswoman for Vice President Cheney also said his office would respond later, while a Justice Department spokesman said, “The department will continue to work closely with the Congress as they exercise their oversight functions, and we will review this matter in the spirit of that longstanding relationship.”

The Senate panel’s action comes after dramatic testimony last month by James Comey, former deputy attorney general, who described a March 2004 confrontation at the hospital bedside of then-Attorney General John Ashcroft between Justice Department officials and White House aides over the legality of the program.

Before Mr. Comey’s testimony, the White House had largely been able to fend off aggressive oversight of the N.S.A. wiretapping program since it was first disclosed in December 2005. The Republican-controlled Congress held a series of hearings last year, and even considered several legislative proposals to curb the scope of the eavesdropping. But Mr. Cheney repeatedly pressured Republican Congressional leaders to pull back without forcing the administration’s hand.

When the Democrats won the 2006 midterm elections, many political analysts predicted that the N.S.A. program — which a federal judge declared unconstitutional — would be one of the first Bush administration operations to undergo new scrutiny. But in January, administration officials announced that it was placing the program under the legal framework of the Foreign Intelligence Surveillance Act, a move it had previously refused to consider.

The Democrats have largely focused on objections to the war in Iraq in their first months in power, and had appeared reluctant to take aggressive steps to challenge policies on harsh interrogation practices, secret Central Intelligence Agency prisons and wiretapping without warrants, for fear of being labeled soft on terrorism.

For instance, at a confirmation hearing June 19 for John A. Rizzo as general counsel of the C.I.A., no member of the Senate Intelligence Committee directly challenged the agency’s practices of secret detention or harsh interrogation.

Mr. Rizzo successfully dodged the tougher questions by saying he preferred to answer them in closed session. The Senate Intelligence Committee has conducted closed-door oversight of the N.S.A. wiretapping program, but it has not been as aggressive as the Judiciary Committee in publicly challenging the administration over it.

But Mr. Comey’s testimony has given Democrats an opening to argue that they are focusing on the legal issues involved in the program, rather than on the merits of monitoring the phone calls of suspected terrorists.

“The Comey testimony moved this front and center,” said Senator Charles E. Schumer, the New York Democrat who is a member of the Judiciary Committee. “Alarm bells went off. His testimony made it clear that there had been an effort to circumvent the law.”

The Senate panel has been asking the administration for documents related to the program since Mr. Comey’s testimony, but the White House had not responded to a letter from Mr. Leahy and Senator Arlen Specter of Pennsylvania, the ranking Republican on the committee. As a result, the panel voted 13 to 3 last Thursday to authorize Mr. Leahy to issue the subpoenas, with three Republicans voting in favor of issuing them. Separately, the House Judiciary Committee has also threatened to issue subpoenas for the same documents.

The wiretapping is just one of several legal issues on which Congress and the administration are squaring off. For example, the White House is under pressure to respond to subpoenas issued two weeks ago by the House and Senate judiciary committees for witnesses and documents related to the dismissal of federal prosecutors. Thursday is the deadline for the White House to turn over documents linked to Harriet E. Miers, the former White House counsel and Sara M. Taylor, the former political director.

If the White House fails to produce the material, the House and Senate could begin a process leading to contempt resolutions to force compliance. Meanwhile, Mr. Cheney is in a separate standoff with Congress and the National Archive over his office’s refusal to follow an executive order concerning the handling of classified documents by his office.

Congressional Democrats were angered when Mr. Cheney declared that his office did not have to abide by the order that all executive branch offices provide data to the National Archives about the amount of material they have classified.

Mr. Cheney’s office said that he was not a member of the executive branch, because he was president of the Senate, and so was not bound by the order. House Democrats responded by threatening to cut off funding to his office.

David Johnston and Scott Shane contributed reporting.

Chertoff Cites License Option to Passports

The nation's homeland security chief, Michael Chertoff, visited the Peace Bridge on Monday and said he will explore secure driver's licenses as a means of border identification.

Chertoff, who met New York officials concerned about the effect of a new passport requirement on border crossing starting next summer, said he would consider possibly delaying it if New York and other states commit to quickly developing a secure license.

"This is about finding a way forward that's reasonable but also secure," Chertoff said.

Earlier this month, Chertoff faulted those who want to derail the rule requiring U.S. citizens to carry passports when returning from Canada, Mexico, the Caribbean and Bermuda, saying national security is at stake.

However, New York officials are worried about border delays and the effect on travelers and business.

The Peace Bridge, which runs between Buffalo and Fort Erie, Ontario, is the third busiest commercial crossing and second busiest passenger vehicle crossing along the northern border, handling $20 billion in trade annually between the United States and Canada.

Last September, Chertoff told Congress he would consider permitting travelers to use alternative forms of ID, such as driver's licenses, if they are improved to prevent tampering or other forgeries.

And last week, the Bush administration said it will delay the passport rule for six more months.

Beginning in January, land and sea travelers returning from Canada, Mexico, the Caribbean, and Bermuda will be allowed to present a birth certificate and driver's license in lieu of a passport.

That is expected to last at least until the summer of 2008, when officials hope to require passports or similar documentation at all land and sea crossings.

In March, Chertoff had said high-security driver's licenses aimed at letting U.S. citizens return from Canada without a passport could be adopted elsewhere if Washington state's experiment works.

The pilot project, signed into law by Gov. Chris Gregoire three months ago, calls for Washington to begin issuing new "enhanced" driver's licenses in January. They will look much like conventional driver's licenses, but will be loaded with proof of citizenship and other information that can be easily scanned at the border.

May I see your papers please

National ID Plan May Have Killed Immigration Bill
Declan McCullagh

The U.S. Senate definitively rejected President George Bush's immigration bill on Thursday, just hours after senators expressed deep misgivings with portions that would have expanded the use of a national ID card.

Because the procedural vote was 46 to 53, with 60 votes needed to advance the immigration legislation, the proposal is likely to remain dead for the rest of the year.

Privacy advocates were quick to claim that a vote against Real ID cards the previous evening doomed the bill.

Wednesday's vote showed that senators were willing to delete the portion of the labyrinthine immigration bill that would require employers to demand the Real ID cards from new hires. Because some of the bill's backers had insisted that the ID requirement remain in place--as a way to identify illegal immigrants--they were no longer as willing to support the overall bill.

"The proponents of national ID in the Senate weren't getting what they wanted, so they backed away," said Jim Harper, a policy analyst at the free-market Cato Institute who opposes Real ID. "It was a landmine that blew up in their faces."

In a press release, the two Montana Democrats, Max Baucus and Jon Tester, said they were happy that a pro-privacy approach killed the bill. "If Jon and I just brought down the entire bill, that's good for Montana and the country," said Baucus, who cosponsored the amendment deleting the employer verification rule.

But supporters of the overall legislation, which would have created a new category of "Z" visas for currently illegal immigrants, expressed dismay at its apparent demise.

Microsoft said it was disappointed by Thursday's procedural vote against advancing the bill, which will "likely result in the collapse of comprehensive immigration reform that is desperately needed to address the shortage of highly skilled talent."

"The American people understand the status quo is unacceptable when it comes to our immigration laws," Bush said.

Opponents of the bill, including Republican senator Jim DeMint of South Carolina, said derailing it was a victory. "When the U.S. Senate brought the amnesty bill back up this week, they declared war on the American people," DeMint said.

The American Civil Liberties Union, another longtime foe of Real ID, said the Real ID requirements were a "poison pill that derailed this bill, and any future legislation should be written knowing the American people won't swallow it." Another section of the immigration bill would have given $1.5 billion to state officials to pay for Real ID compliance.

Even if the immigration bill is goes nowhere, however, the Real ID Act is still in effect. It says that, starting on May 11, 2008, Americans will need a federally approved ID card to travel on an airplane, open a bank account, collect Social Security payments or take advantage of nearly any government service.

States must conduct checks of their citizens' identification papers and driver's licenses may have to be reissued to comply with Homeland Security requirements. (States that agree in advance to abide by the rules have until 2013 to comply.)

28-Mile Virtual Fence Is Rising Along the Border
Randal C. Archibold

If the effort to catch people illegally crossing the border here in the southern Arizona desert is a cat-and-mouse struggle, the Homeland Security Department says it has a smarter cat.

It comes in the form of nine nearly 100-foot-tall towers with radar, high-definition cameras and other equipment rising from the mesquite and lava fields around this tiny town.

Known as Project 28, for the 28 miles of border that the towers will scan, the so-called virtual fence forms the backbone of the Secure Border Initiative, known as SBInet, a multibillion-dollar mix of technology, manpower and fencing intended to control illegal border crossings.

If successful, hundreds of such towers could dot the 6,000 miles of the Mexican and Canadian borders.

But glitches with the radar and cameras have forced the project to miss its June 13 starting date, just as Congress focuses anew on border security in the Senate measure to overhaul immigration law.

Officials at the Homeland Security Department insist that Boeing, which has a $67 million contract to develop the project and others, will soon put it back on track, though they are not providing a new completion date.

Boeing referred requests for comment to the department.

“We are making good progress,” the executive director of the border program, Gregory Giddens, said.

Democrats in Congress are questioning why the problems were not disclosed at a hearing on the project on June 7. It was only afterward, in communication to Congressional staff members, that the delays came to light.

“The department’s failure to be forthcoming and the repeatedly slipping project deadlines not only impede Congress’ ability to provide appropriate oversight of the SBInet program, but also undermine the department’s credibility with respect to this initiative,” Representatives Bennie G. Thompson of Mississippi, chairman of the House Homeland Security Committee, and Loretta Sanchez of California, chairwoman of a border subcommittee, both Democrats, wrote in a letter on June 19 to the department.

In a report in February, the Government Accountability Office warned that Congress needed to keep a tight rein on the program, because, it said, “SBInet runs the risk of not delivering promised capabilities and benefits on time and within budget.”

Officials estimate total cost of the initiative through 2011 at $7.6 billion. The accountability office has suggested that figure is too low.

Boeing won the contract, which includes $20 million for Project 28, in September and has undertaken it with a sense of urgency, Mr. Giddens said, adding that he would prefer a delay over starting the project with malfunctioning equipment.

Rather than develop new technology, Boeing took existing cameras, sensors, radar and other equipment and bundled them into a system that although not technologically novel is unlike anything the Border Patrol now uses.

The cameras, set off by radar, are to beam high-quality images of targets miles away to field commanders and agents, making it possible to determine almost instantly whether they are watching a family outing or a group of illegal immigrants.

The information is to flow over a high-speed wireless network into laptops in dozens of Border Patrol vehicles that, in theory, would respond quicker and more efficiently to breaches than they do now.

“We are living the dividing line between the old Border Patrol and the new patrol of the future,” said David Aguilar, chief of the Border Patrol.

“It will not only detect, but identify what the incursion is,” Mr. Aguilar added, a step up from the existing ground sensors, fence cameras and footprint tracking that can lead to “false positives.”

With much of the 2,000-mile-long Mexican border a wilderness of plains, plunging ravines and soaring craggy hills, officials consider virtual fencing a pragmatic improvement to far-flung agents and physical fences — 88 miles now have primary fencing — that illegal immigrants knock down, bore through and slip over and under.

The towers are ringed with a six-foot-tall chain-link fence, and the Border Patrol can warn people away through a loudspeaker. Private guards are at the towers now.

On Thursday morning at a tower north of here, a reporter and a photographer walked right up to the tower, observing and photographing it for several minutes with no guard in sight.

Mr. Aguilar said he was not concerned about such access, speculating that no threat was discerned or the cameras were not turned on then.

Residents near the towers have raised concerns, questioning why most towers are miles from the border and whether they will allow unscrupulous agents to peer into their bedrooms.

“We don’t live in clusters,” said Roger Beal, who runs a grocery store in the isolated town of Arivaca, the site of a tower and about 10 miles from the border. “The homes here are not 10 feet apart. People value their privacy here, and we are just not used to being observed. Do it at the border. This isn’t it.”

Mr. Aguilar, the Border Patrol chief, said: “We are members of the community. We recognize their sensitivity. But we feel confident our officers are going to follow policy and common sense. Can I guarantee you nothing is going to happen? No, we are all human.”

Although the towers are in a region with heavy traffic in smuggling, Boeing chose to place them close to existing roads and away from the most rugged terrain to help captures.

Mr. Aguilar said the towers did not need to be right on the border, suggesting that traffickers would find it difficult to move their routes undetected in the rough terrain even if they figured out the locations of the towers. The expected locations have been published in a public environmental assessment.

The virtual fence is one piece of a flurry of border enforcement. The Border Patrol said it was on pace to hire thousands of agents, with the goal of a total of 18,000 by the end of 2008, up from just under 12,000 in 2006, when President Bush announced the push.

In addition, officials expect to have 370 miles of physical fencing by the end of next year. Drug seizures are increasing, and arrests for illegal immigration have dropped since last summer, when the National Guard arrived to supplement agents.

Though scholars say an array of factors, including economic and social trends in Latin America and the vagaries of the drug trade could explain the trends, Mr. Aguilar said they vindicated the stricter enforcement.

After the system is fully functioning, he said, “the net will be very, very tight.”

FBI to Restrict Student Freedoms
Canada IFP

US university students will not be able to work late at the campus, travel abroad, show interest in their colleagues' work, have friends outside the United States, engage in independent research, or make extra money without the prior consent of the authorities, according to a set of guidelines given to administrators by the FBI.

Federal agents are visiting some of the New England's top universities, including MIT, Boston College, and the University of Massachusetts, to warn university heads about the dangers of foreign spies and terrorists stealing sensitive academic research.

FBI is offering to brief faculty, students and staff on what it calls "espionage indicators" aimed at identifying foreign agents.

Unexplained affluence, failing to report overseas travel, showing unusual interest in information outside the job scope, keeping unusual work hours, unreported contacts with foreign nationals, unreported contact with foreign government, military, or intelligence officials, attempting to gain new accesses without the need to know, and unexplained absences are all considered potential espionage indicators.

Faculty, staff and students are encouraged to monitor their colleagues for signs of suspicious behaviour and report any concerns to the FBI or the military.

"What we're most concerned about are those things that are not classified being developed by MIT [Massachusetts Institute of Technology], Worcester Polytech [Worcester Polytechnic Institute] and other universities," Warren Bamford, special agent in charge of the FBI's Boston office, told the Boston Herald. "It's to make sure these institutions receive training...[on] what spies look for. There are hundreds of projects going on that could be useful to a foreign power."

"My understanding is that what the FBI is proposing is not illegal, but it does raise questions about the chilling effect in regard to academia,"Chris Ott, Communications Manager of the ACLU of Massachusetts told WSWS. "What will it mean about feeling free to pursue information? People on the campuses will be afraid to ask questions or take on the investigation of certain areas, say, for example, nuclear energy. "

University administrators have expressed their appreciation of FBI efforts.

"It was a very nice offer," Robert A. Weygand, vice president for administration and a former Rhode Island congressman told the Boston Herald. "We are taking it under consideration."

Last year the FBI initiated the College and University Security Effort (CAUSE), in order to establish an "alliance" between the Federal agency and academic institutions.

According to the FBI, through CAUSE, Special Agents in charge meet with the heads of local colleges to discuss national security issues and to share information and ideas.

New Poll Finds That Young Americans Are Leaning Left

Adam Nagourney and Megan Thee

Young Americans are more likely than the general public to favor a government-run universal health care insurance system, an open-door policy on immigration and the legalization of gay marriage, according to a New York Times/CBS News/MTV poll. The poll also found that they are more likely to say the war in Iraq is heading to a successful conclusion.

The poll offers a snapshot of a group whose energy and idealism have always been as alluring to politicians as its scattered focus and shifting interests have been frustrating. It found that substantially more Americans ages 17 to 29 than four years ago are paying attention to the presidential race. But they appeared to be really familiar with only two of the candidates, Senators Barack Obama and Hillary Rodham Clinton, both Democrats.

They have continued a long-term drift away from the Republican Party. And although they are just as worried as the general population about the outlook for the country and think their generation is likely to be worse off than that of their parents, they retain a belief that their votes can make a difference, the poll found.

More than half of Americans ages 17 to 29 — 54 percent — say they intend to vote for a Democrat for president in 2008. They share with the public at large a negative view of President Bush, who has a 28 percent approval rating with this group, and of the Republican Party. They hold a markedly more positive view of Democrats than they do of Republicans.

Among this age group, Mr. Bush’s job approval rating after the attacks of Sept. 11 was more than 80 percent. Over the course of the next three years, it drifted downward leading into the presidential election of 2004, when 4 of 10 young Americans said they approved how Mr. Bush was handling his job.

At a time when Democrats have made gains after years in which Republicans have dominated Washington, young Americans appear to lean slightly more to the left than the general population: 28 percent described themselves as liberal, compared with 20 percent of the nation at large. And 27 percent called themselves conservative, compared with 32 percent of the general public.

Forty-four percent said they believed that same-sex couples should be permitted to get married, compared with 28 percent of the public at large. They are more likely than their elders to support the legalization of possession of small amounts of marijuana.

The findings on gay marriage were reminiscent of an exit poll on Election Day 2004: 41 percent of 18-to-29-year-old voters said gay couples should be permitted to legally marry, according to the exit poll.

In the current poll, 62 percent said they would support a universal, government-sponsored national health care insurance program; 47 percent of the general public holds that view. And 30 percent said that “Americans should always welcome new immigrants,” while 24 percent of the general public holds that view.

Their views on abortion mirror those of the public at large: 24 percent said it should not be permitted at all, while 38 percent said it should be made available but with greater restrictions. Thirty-seven percent said it should be generally available.

In one potential sign of shifting attitudes, respondents, by overwhelming margins, said they believed that the nation was prepared to elect as president a woman, a black person or someone who admitted to having used marijuana. But they said that they did not believe Americans would elect someone who had used cocaine or someone who was a Mormon.

Mr. Obama has suggested that he used cocaine as a young man. Mitt Romney, the former governor of Massachusetts and a candidate for the Republican nomination, is a Mormon.

By a 52 to 36 majority, young Americans say that Democrats, rather than Republicans, come closer to sharing their moral values, while 58 percent said they had a favorable view of the Democratic Party, and 38 percent said they had a favorable view of Republicans.

Asked if they were enthusiastic about any of the candidates running for president, 18 percent named Mr. Obama, of Illinois, and 17 percent named Mrs. Clinton, of New York. Those two were followed by Rudolph W. Giuliani, a Republican, who was named by just 4 percent of the respondents.

The survey also found that 42 percent of young Americans thought it was likely or very likely that the nation would reinstate a military draft over the next few years — and two-thirds said they thought the Republican Party was more likely to do so. And 87 percent of respondents said they opposed a draft.

But when it came to the war, young Americans were more optimistic about the outcome than was the population as whole. Fifty-one percent said the United States was very or somewhat likely to succeed in Iraq, compared with 45 percent among all adults. Contrary to conventional wisdom, younger Americans have historically been more likely than the population as a whole to be supportive of what a president is doing in a time of war, as they were in Korea and Vietnam, polls have shown.

The nationwide telephone poll — a joint effort by The New York Times, CBS News and MTV — was conducted from June 15 to June 23. It involved 659 adults ages 17 to 29. The margin of sampling error is plus or minus four percentage points for all respondents.
The Times/CBS News/MTV Poll suggests that younger Americans are conflicted in their view of the country. Many have a bleak view about their own future and the direction the country is heading: 70 percent said the country was on the wrong track, while 48 percent said they feared that their generation would be worse off than their parents’. But the survey also found that this generation of Americans is not cynical: 77 percent said they thought the votes of their generation would have a great bearing on who became the next president.

By any measure, the poll suggests that young Americans are anything but apathetic about the presidential election. Fifty-eight percent said they were paying attention to the campaign. By contrast, at this point in the 2004 presidential campaign, 35 percent of 18-to-29-year-olds said they were paying a lot or some attention to the campaign.

Over the last half century, the youth vote has more often than not gone with the Democratic candidate for president, though with some notable exceptions. In 1984, Ronald Reagan won his second term as president by capturing 59 percent of the youth vote, according to exit polls, and the first President George Bush won in 1988 with 52 percent of that vote. This age group, however, has supported Democratic presidential candidates in every election since.

The percentage of young voters who identified themselves as Republican grew steadily during the Reagan administration, and reached a high of 37 percent in 1989. That number has declined ever since, and is now at 25 percent.

“I think the Democratic Party is now realizing how big an impact my generation has, and they’re trying to cater to that in some way,” Ashley Robinson, 21, a Democrat from Minnesota, said in an interview after she participated in the poll. “But the traditional Republican Party is still trying to get older votes, which doesn’t make sense because there are so many more voters my age. It would be sensible to cater to us.”

That a significant number of respondents said they were enthusiastic about just two of the candidates — Mr. Obama and Mrs. Clinton — to a certain extent reflects that both candidates have been the subject of a huge amount of national attention and have presented the country with historic candidacies. Mr. Obama would be the first black president and Mrs. Clinton the first woman. Other candidates could begin drawing attention from this group as the campaign takes a higher platform.

More important, though, at least for Mrs. Clinton and Mr. Obama is the impression this group has of them. In the poll, 43 percent of respondents said they held an unfavorable view of Mrs. Clinton, a number that reflects the tide of resistance she faces nationwide. By contrast, only 19 percent said they had an unfavorable view of Mr. Obama.

Marjorie Connelly, Marina Stefan and Dalia Sussman contributed reporting.

Scholars Urge Bush to Ban Use of Torture

High school seniors present president with letter during annual program

President Bush was presented with a letter Monday signed by 50 high school seniors in the Presidential Scholars program urging a halt to "violations of the human rights" of terror suspects held by the United States.

The White House said Bush had not expected the letter but took a moment to read it and talk with a young woman who handed it to him.

"The president enjoyed a visit with the students, accepted the letter and upon reading it let the student know that the United States does not torture and that we value human rights," deputy press secretary Dana Perino said.

The students had been invited to the East Room to hear the president speak about his effort to win congressional reauthorization of his education law known as No Child Left Behind.

The handwritten letter said the students "believe we have a responsibility to voice our convictions."

"We do not want America to represent torture. We urge you to do all in your power to stop violations of the human rights of detainees, to cease illegal renditions, and to apply the Geneva Convention to all detainees, including those designated enemy combatants," the letter said.

Top honor
The designation as a Presidential Scholar is one of the nation's highest honors for graduating high school students. Each year the program selects one male and one female student from each state, the District of Columbia, Puerto Rico, Americans living abroad, 15 at-large students, and up to 20 students in the arts on the basis of outstanding scholarship, service, leadership and creativity.

"I know all of you worked hard to reach this day," Bush told the students in his education speech. "Your families are proud of your effort, and we welcome your family members here. Your teachers are proud of your effort, and we welcome your teachers. And our entire nation is proud to call you Presidential Scholar."

The scholars travel to Washington each June for seminars, lectures and workshops with government officials, elected representatives and others.

Until next week,

- js.

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