Peer-To-Peer News - The Week In Review - November 4th, '06

[JackSpratts]

"No offense meriting penal sanction has been committed." – Judge Paz Aldecoa


"It’s like Hitler’s playlist, but it’s not, because it was actually Fanny Brice’s playlist." – Jody Rosen


"We get an opportunity to produce this stuff because they make enough money selling beer that it’s worth their while to do it. I mean, we know that’s the game. I’m not suggesting we’re going to beam it out to the heavens, man, and whoever gets it, great. If they’re not making their money, we ain’t doing our show." – Jon Stewart


"The association said when newspaper Web sites are taken into account, the number of readers its members reach is up very sharply…but…it could be decades before Internet revenues exceed those from the printed editions of major newspapers." – Katharine Q. Seelye


"So they've raped them. They've raped their whole business model, and no one's got the time or energy to think about their business." – Peter Jenner


"The touch-screen gizmos seem strangely attracted to Republican candidates. One voter needed assistance from an election official, and even then, needed three tries to convince the machine that he wanted to vote for Democrat Jim Davis in the gubernatorial race, not his Republican opponent Charlie Crist." – Thomas C. Greene


"Algorithms are small but beautiful." – Richard M. Karp


"The Vista EULA is horrendous." – Scott Granneman


"Criminals travel on the road. Therefore let's have a rule which says no one should get on the road without first checking at the police station. Would you do that? Of course you wouldn't. ... The important thing is not to overreact." – Nitin Desai


"I will be 83 years old on December 12 and I've decided to retire while I'm still young." – Bob Barker


"Happy, well-fed, well-educated, hopeful people do not become suicide bombers and neither do they elect fear-mongerers." – Terry Hancock






































November 4th, '06







Viva La Revolucion!

Spanish Court Dismisses Music File-Sharing Case
AP

A Spanish judge has dismissed a case against a man who shared music files on the Internet, saying he committed no crime because his aim was not to make money.

In a ruling made public Thursday, Judge Paz Aldecoa of No. 3 Penal Court in the northern city of Santander said that there was ``no talk of money or any other compensation beyond the sharing of material available among various users.''

``No offense meriting penal sanction has been committed,'' the ruling said.

The state prosecutor's office and two music distribution associations had sought a two-year sentence against the 40-year-old man, whose identity the court asked not to be revealed.

The prosecution accused the man of violating copyright laws by downloading albums from Internet file-sharing systems and then offered them to others through e-mail and chat rooms.

But the judge said a guilty verdict ``would imply the criminalization of socially accepted and widely practiced behavior in which the aim is in no way to make money illicitly, but rather to obtain copies for private use.''

Promusicae, an entity representing the Spanish music industry said in a statement that it would appeal judge Aldecoa's ruling.

Antonio Guisasola, president of Promusicae said that peer-to-peer downloading of music and movies was ``in any case illegal and in set circumstances could be considered a crime.''

The national news agency said it was the first time a judge had made such a ruling in Spain but this could not be independently confirmed.

Justice Minister Juan Fernando Lopez Aguilar had said he expected the ruling would be appealed. He added that while the area of copied artistic material for private use had yet to be properly defined in legal terms, artists' rights must be protected as much as possible.

``Certain attacks must be taken seriously, especially those for lucrative ends,'' he said.
http://www.mercurynews.com/mld/mercu...s/15913265.htm





Copying Own CDs 'Should Be Legal'

A think-tank has called for outdated copyright laws to be rewritten to take account of new ways people listen to music, watch films and read books.

The Institute for Public Policy Research (IPPR) is calling for a "private right to copy".

It would decriminalise millions of Britons who break the law each year by copying their CDs onto music players.

Making copies of CDs and DVDs for personal use would have little impact on copyright holders, the IPPR argues.

Copyright issues have, in the past, been steered too much by the music industry, the report said.

Public respect

IPPR deputy director Dr Ian Kearns said: "When it comes to protecting the interests of copyright holders, the emphasis the music industry has put on tackling illegal distribution and not prosecuting for personal copying, is right.

"But it is not the music industry's job to decide what rights consumers have that is the job of government."

According to research from the National Consumer Council, more than half of British consumers are infringing copyright law by copying CDs onto their computers, iPods or other MP3 players.

Report author Kay Withers said: "The idea of all-rights reserved doesn't make sense for the digital era and it doesn't make sense to have a law that everyone breaks. To give the IP regime legitimacy it must command public respect."

Intellectual property laws are currently being reviewed by the government.

Chancellor Gordon Brown has asked chairman Sir Andrew Gowers to report his findings back ahead of the pre-budget report in November.

The IPPR is hoping to influence this with its report, entitled Public Innovation: Intellectual property in a digital age.

Its key recommendation is that any policy regarding Intellectual Property policy should recognise that knowledge is a public resource first and a private asset second.

Social glue

The so-called knowledge economy is growing fast as the traditional manufacturing of goods is replaced by more intangible assets.

With it is a growing paradox in which intellectual property is both a commercial and cultural resource.

"The internet offers unprecedented opportunities to share ideas and content," the report says.

"Knowledge must, therefore, perform the roles of both commodity and social glue, both private property and public domain," it adds.

The report looks at how Digital Rights Management (DRM) technologies - which restrict the sharing of music or other intellectual property - are affecting attempts to preserve electronic content.

It argues that the British Library should be given a DRM-free copy of any new digital work and that libraries should be able to take more than one copy of digital work.

Ms Withers said: "We charge the British Library as being the collective memory of the nation and increasingly it has to archive digital content.

"More and more academic journals are delivered digitally but copyright laws aren't designed to deal with digital content."

She said there was often a conflict between DRM and accessibility technologies which needs to be addressed.

"Someone with poor sight may use a screen reader technology and may have to change the format of the content to use it but some DRM technology isn't sophisticated enought to take this kind of thing into account," she said.

The report also calls for the government to reject calls from the UK music industry to extend the copyright term for sound recording beyond the current 50 years.
http://news.bbc.co.uk/go/pr/fr/-/2/h...ws/6095612.stm





Release the Music
Nov 13, 2006 from 06:00 PM to 10:00 PM

London
Register Now Ticket Type Free

Event Details: Should the Term of Copyright Protection on Sound Recordings Stay at 50 Years or Be Extended?

This question has been hanging in the air for the last couple of years, with the music industry lobbying government for an extension on the grounds that the royalties they earn from old recordings are essential to bringing new acts to the stage and supporting ageing musicians. They believe that copyright term on sound recordings should be the same length as the copyright in the composition, which currently stands at life plus 70 years.

On the other hand, copyright reformers argue that term should remain the same in order to protect the public domain and to free the huge number of old recordings which are no longer commercially viable and therefore not being released by the record labels. They also argue that there is a greater economic benefit to allowing works to pass into the public domain after 50 years so that new works can be made from them and new businesses that specialise in niche markets can flourish.

This question of term extension, along with many others, is now being considered by Andrew Gowers in his Review of Intellectual Property which was commissioned by the Treasury and is due to report before the end of the year.

The Open Rights Group believes that term extension is such an important issue that it deserves focused and rigourous discussion, so we've invited people from number of backgrounds to give us their thoughts and opinions.

We would be delighted if you could join us - the event is free to all, but places are limited so book now!

Schedule:

6.00pm - Registration.
6.30pm - Keynote by Professor Jonathan Zittrain, Chair in Internet Governance and Regulation at Oxford University.
7.30pm - Panel Discussion, moderated by John Howkins, RSA & Adelphi Charter; guests include Caroline Wilson, University of Southampton, Faculty of Law; others TBC.
8.30pm - DJ set by The Chaps, playing a pre-1955 public domain set.
10.00pm - Close.

If you sign up, but find you are not able to come, please do let us know so we can release your seat to someone else.
http://releasethemusic.eventbrite.com/





Napster Launches 'Free Download of the Day'
Rick Broida

Online music service Napster is giving away MP3s again--sort of. Starting yesterday, music fans can download a free (and legal) MP3 every day.

The first week of free downloads will feature music from Sanctuary, including a track from Iron Maiden's newest hit album, as well as Independent Online Distribution Alliance (IODA) artists, including "Nature of the Experiment" from newbie indie rockers Tokyo Police Club and "Bread on the Table" from Grammy-nominated country singer Tom Wurth. Featured downloads will be archived and available for seven days on a dedicated history page.

Okay, so no freebies from anyone you've actually heard of, but I think this is a clever way for Napster to drive traffic. And there are no strings attached--just head to the site and download the daily tune. Of course, you can also stream any song in Napster's library (up to three times). —
http://www.lifehacker.com/software/n...day-211377.php





AnalogWhole Is Here!
Weblurb

AnalogWhole is a Windows application that allows you to consolidate all your music into iTunes as MP3 files. Any music file that is playable in Windows Media Player can be re-recorded as an MP3 file. Just tell AnalogWhole where your music library is, and it will automatically re-record the file as an MP3 file. In addition, it will add the converted song to iTunes for you.

Convert all those WMA or WAV files you have that won’t play on your iPod into MP3 files that will!

The way AnalogWhole works is pretty straightforward. Almost all PC soundcards have the ability to simualtaneously play music out one channel while recording music on another channel. The standard Windows audio mixer component allows the output channel to be routed back into the soundcard input channel. AnalogWhole uses the COM interface to Windows Media Player to play the music file and while it is playing, it records it and encodes it as an MP3 file. All tagging info (i.e. artist, song title, album et cetera) is transferred to the MP3 file as well.

Click the download tab above to get started.
http://analogwhole.com/





Hack Attack: One-Click DVD Rips
Adam Pash

I love a good DVD as much as the next guy, but the whole optical media world has been on my shitlist lately. I'm sick of renting or Netflix-ing a DVD, getting an hour into it, then hitting the scratchety-skip zone that freezes up my DVD player and leaves me unable to finish my stories.

My solution to this problem is to rip every DVD I rent to my hard drive as soon as I get it. In my experience, a rip smooths over those un-renderable sections of the DVD without issue, so when I'm ready to watch the ripped DVD, it's certain to be scratch and skip-free. Since I've got no time to sit around clicking through dialogs to rip my DVDs, I've put together my very own one-click DVD ripping solution.

Check out the automated DVD rip action here:

Okay, so it's a pretty boring video, but the one-click rip is pretty handy. The AutoHotkey automation works on any Windows PC, but it's particularly useful on your home-brewed Windows DVR.

Note on file format: This method doesn't rip DVD's to DivX or some other more highly compressed format, because I want to navigate using the default menus like it's a real DVD (especially important for several episodes of a TV show on a single DVD). This method's resulting VIDEO_TS folder can be played by any software DVD player, including Lifehacker favorite, the free media Swiss Army knife that is VLC media player, or any number of packaged DVD software apps like WinDVD. Also, if you ever decide you want to turn the rip back into a physical DVD, it'll be in the perfect format for quick and easy burning.
Download and set up DVD Shrink

The first thing you'll need to do is download and install DVD Shrink (you can download it at Softpedia here). Be sure to let DVD Shrink install to your default Program Files directory, since the automated script below counts on finding DVD Shrink there. Once it's installed, you'll need to go through a trial run of ripping a DVD with DVD Shrink to get an idea of the process involved and to get your preferred settings all sussed out.

First, put a DVD in your computer and run DVD Shrink. Hit the Open Disc button or select File -> Open Disc. DVD Shrink will take a minute or two to analyze the disc and then you'll see the DVD structure in the right pane and the compression settings on the left. For our purposes, we're going to keep all of this at the default settings (so video compression remains set to "Automatic").

Next hit the Backup! button or go to File -> Backup.... In the Backup DVD pop-up, you should tell DVD Shrink where you want your DVD rips saved (i.e., the target folder). You should use something like C:\DVDs\DVD Name (though, naturally, DVD Name should be replaced by the name of your to-be-ripped DVD). The VIDEO_TS and AUDIO_TS folders (which can be played with your software DVD player) for the DVD will be saved in this directory. Setting this default now is important, because when the automated rip runs, it will use the folder path up to the last folder (i.e., C:\DVDs), creating a new folder with a name you provide (normally the name of the DVD). Hit OK and the backup will begin. At this point, cancel the rip so you can try it with your fancy new one-click rip (be sure to delete any files that may have already been ripped).

The one-click DVD rip

So now's where my best friend in the entire Windows world, AutoHotkey, comes into play. I've put together a script that automates every step I've covered above into one handy executable. It works like this: You load your DVD, then double-click the Automatic DVD Rip executable. You'll be prompted to enter the name of the DVD (make sure it's a unique name each time). Once you hit enter, the rest of the process will take care of itself. If you're an AutoHotkey-er interested at looking at the innards of the script, you can download the source script here.

If you'd rather just get straight to the ripping, I've got several executable (.exe) scripts available for download depending on your DVD drive name. For example, on my two Windows boxes, the DVD player is the E: drive on one and D: on the other. I'm putting out D:, E:, and F: scripts, but if your drive is mounted to a different letter, let me know and I can easily upload another to accommodate (or just make a few tweaks to the source script above and compile it yourself - might sound daunting, but it's AutoHotkey - almost anyone could do it!). Download the D:, E:, and F: executables below:

Automatic DVD rip D-Drive.exe
Automatic DVD rip E-Drive.exe
Automatic DVD rip F-Drive.exe

As is, creating DVD backups doesn't get much more simple than DVD Shrink. However, I love the one-click solution on my home-brewed DVR, since I can assign the execution to a button on my remote. That means I can put in a DVD, hit the rip button, enter the title, and then go back to watching TV. The DVD rip script keeps the process running from step to step, minimizing DVD Shrink whenever possible so the rip mostly takes place in the background. That said, I still plan on using the one-click script on my main computer, as well.

Additionally, if you've got a copy of Nero, DVD Shrink integrates nicely with Nero for burning new DVD backups if that's your goal. My script isn't streamlined for burning a backup disc, but it could definitely be used for that purpose, especially with a few more tweaks to my AHK script.

I've only be able to test the script on a couple of my home computers and a friend's, so if you give it a try and find a glaring error, let me know and I'll fix things up. Otherwise, welcome to the world of quick and easy DVD backups and skip-free DVD watching.
http://www.lifehacker.com/software/d...ips-208866.php





Blockbuster Tries New Online Rental Incentive
Caroline McCarthy

A correction was made to this story. Read below for details.

update Blockbuster has introduced a feature to its online rental service, giving subscribers the option of returning DVDs to stores rather than solely through the mail.

Subscribers to any Blockbuster online rental plan can use the new "Total Access" feature. When a DVD rented online is returned to a Blockbuster store, the online system immediately gears up the next movie in the subscriber's queue for shipment, thus cutting down on the lag time associated with mail.

As an added incentive, each time customers return an online rental to the store, they can get a free in-store rental. The bonus in-store rentals are, however, still subject to due dates and other stipulations associated with regular in-store rentals, and must be returned to the store from which they were obtained.

Blockbuster, once the dominant force in the movie rental business, has been faced with up-and-coming competition, such as online rental Netflix, video-on-demand services and digital downloads. Blockbuster's own online rental service was launched more than two years ago, but it has remained a step behind the Web-only Netflix, which has also made inroads into video-on-demand and has shown signs of interest in digital-download technology.

Last month, it was widely rumored that Blockbuster had opted to discontinue a test run of a $5.99-per-month plan to match Netflix's least expensive subscription option. The company has since stated that this was not the case.
http://news.com.com/Blockbuster+trie...3-6131447.html





How the MPAA Knows Where Movies are Pirated
Ernesto

I’ve posted a story about the MPAA’s piracy stats, and that NY is the pirate capital of the world. In the post I said that it was hard to track down the source of CAM releases, but that was a mistake.

Although I’m familiar with the watermarks that are put in DVD’s, I never realized that theater releases are marked as well (see picture for the “dot pattern”).

However, sometimes release groups find a way to remove these watermarks. An example can be found in the NFO of the Mission Impossible III release by SaGa. In the NFO SaGa thanks ORC, for helping them out with “de-dotting” the release.

Here’s an interesting email I received from a reader who actually worked for an anti-piracy company. Some good info, and useful tips and tricks that “might” keep pirates under the radar .

—

Thought I’d let you know how the authorities are able to track down where CAM, TS, TC, SCR, DVD SCR, etc. copies are from. In all cases, the individual copies are watermarked and then kept in a database for later comparison. These watermarks are developed and instituted either by the companies responsible for the film (i.e. Kodak) or the prints (i.e. Deluxe, Technicolor). Each has a different method, some more effective than others.

Here is a Wikipedia article about them:

Generally the CAP codes are more for film elements (i.e. CAM, TS, TC releases). For the disc and tape copies (i.e. SCR, DVD SCR) there is usually some form of watermarking combined with a time stamp or individual code of some sort.

These types of protection sometimes work and sometimes don’t. A lot of groups have experience with obfuscating them and (usually successfully) hiding where they got their copy from.

Fortunately most of the companies focusing on anti-piracy are not actively trying to target the groups themselves, leaving that task to the DOJ or FBI to handle. Because of this, most of the media attention and an overwhelming amount of the resources are dedicated to people who are not close to the scene at all, so a lot of these anti-piracy methods don’t really work very effectively.

Most of the attention is actually on users and first propagators on BitTorrent and eDonkey, so I’d actually recommend using various forms of protection such as PeerGuardian and generally staying on private trackers or at least the less popular ones (NTI being a good example). Also safe is jumping on hugely popular torrents once they reach critical mass. There are simply not enough resources for anti-piracy companies to track what 5000 seeders and 8000 leechers are doing all at once and gather data that will be usable in a court of law.

—

Another reader pointed me at the new anti-piracy watermark system that Philips has started to rollout. Philips successfully equipped over 1300 cinemas with their new system called “Cinefence”. CineFence watermarks are believed to be harder to erase by pirates, and contain the time, place and date of the recorded Film. Forensic marking of digital Films is now a mandatory requirement, as specified in the Digital Cinema System Specification.
http://torrentfreak.com/how-the-mpaa...s-are-pirated/





MySpace to Use 'Audio Fingerprinting'
AP

MySpace.com will use "audio fingerprinting" technology to block users from uploading copyright music to the social networking site, the company said Monday.

MySpace, which is owned by Rupert Murdoch's News Corp., said it will review all music files uploaded by community members to their online profiles. The files will be run through a music database from Gracenote Inc.

"MySpace is staunchly committed to protecting artists' rights, whether those artists are on major labels or are independent acts," said Chris DeWolfe, MySpace chief executive and co-founder.

The company said users who repeatedly attempt to upload copyright music files will be permanently barred from the site.

Online sites such as MySpace and YouTube have come under fire from major record labels who have sued in some cases to prevent copyright music from being included as the soundtrack to a user-generated content.

Several record labels recently announced licensing deals with YouTube, which has chosen to share ad revenue with record labels rather than filter music itself.

The challenge of policing its users' music choices is just one issue facing MySpace, which has skyrocketed in popularity over the past year.

The social networking site must address concerns that it will morph from a user-controlled site to a corporate tool that News Corp. uses to push the company's movies and TV shows. MySpace also has been grappling with frequent spam attacks and has had to take steps to limit invitations from bogus "friends" sent to thousands of users at a time.
http://hosted.ap.org/dynamic/stories...10-30-19-06-27





Is the DMCA Coming Down Under? New Copyright Bill on Fast-Track in Australia

As a result of a Free Trade Agreement between Australia and the U.S. that came into force in 2005, Australia is required to rewrite its current, relatively flexible, technological protection measure law by 1 January 2007, to make it more like the DMCA. A serious policy debate on how to frame a DRM law that does the least damage to consumers, scientific research, technological innovation and competition has been underway in Australia for several years. In February, a landmark Australian parliamentary committee report with consumer and technology-friendly recommendations for Australia’s rewrite process also pointed the way for other countries seeking a sensible response to the U.S. effort to export its unbalanced DMCA regime through recent free trade agreements. But many of the insights from that policy debate could be lost if the 219 page Copyright Amendment Bill, currently being fast-tracked through Australia’s Parliament, is passed. Apart from rewriting Australia’s current TPM law, the Bill would also make a number of sweeping changes to Australian copyright law, including introducing new criminal penalties.

After the jump we explain what’s in the Bill and what concerned Australians can do.

The Bill makes Australia's TPM law more like the DMCA. After the AUSFTA it was inevitable that there would be some movement in that direction. But what's surprising is that the final version of the bill released on October 19 differs in a key respect from the Exposure Draft issued a month ago. The first version linked the scope of legal protection for DRM to copyright infringement. That’s good policy. It’s also consistent with current Australian law and the key recommendation of the February 2006 Australian House of Representatives’ Legal and Constitutional Affairs Committee report on TPM exceptions. The new version does not make that crucial connection, and therefore creates a broader TPM ban.

While the new version’s TPM ban is broader, the Bill does contain two carve-outs: First, there’s no legal protection for region-coding access control technologies on video games and DVDs. That is likely to avoid some of the potentially anti-competitive impacts of geographic market segmentation via TPMs – a practice that involves no copyright right. The carve-out is presumably designed to preserve the 2005 Australian High Court ruling in the Sony v. Stevens PlayStation modchip case, but unfortunately, does so in the narrowest possible way. Second, there’s an attempt to exclude misuses of TPM provisions on embodied computer programs like the printer cartridge and garage door opener cases invoking the DMCA.

How bad is the last minute change in language? Even Australia's top legal minds are unsure of the precise impact. Unless the bill is delayed there will be no opportunity to assess that before the highly complex bill is pushed to a speedy vote.

But that’s not the only problem with the bill. It also creates new criminal penalties for copyright infringement. It introduces new summary and strict liability offences and criminal penalties for non-commercial infringement. These rules would apply to children as young as 14, and could make everyday Australians criminals for uploading lip-synched videos to YouTube and other commonplace activities.

While expanding penalties, the bill also rolls back copyright exceptions. The good news is that it creates new exceptions for time and space shifting that were recommended in this year’s Fair Use inquiry. The bad news is that because of muddy drafting it's not clear that the Bill will actually legalize space shifting of music to portable music players The Bill also narrows the current "fair dealing" exception for study and research involving copying of literary, dramatic and musical works. It creates a new parody exception, but frames it in a murky way that invites lawsuits.

There’s further analysis of the bill’s far-reaching impacts in this op-ed from Professor Brian Fitzgerald and at Kim Weatherall’s excellent blog.

The bill is currently before the Australian Senate Standing Committee on Legal and Constitutional Affairs, which is due to issue its report on November 10. A public hearing will take place on November 7.

The deadline for making formal submissions has now closed, but concerned Australian citizens can still:

- Email or call your MP and express your concern that this complex bill is being rushed through the Parliamentary process without adequate opportunity for debate and an assessment of the impact of the proposed changes on Australian consumers, families, educators and the scientific community. You should ask your MP to stop the introduction of any new criminal provisions and any changes not directly required by the AUSFTA until there has been adequate time for informed public debate. (Only the trade agreement's DRM provisions are required to be in place by January 1, 2007).

MPs contact details are here.

- If your state's Senators are on the Senate Standing Committee for Legal and Constitutional Affairs, email or call them to express your concerns and ask them to record your views in the Committee's report, then reiterate your request to hold back new criminal provisions and other proposed changes that are not directly required by the free trade agreement until there's been an appropriate assessment of their impact.

The Committee members for this inquiry are Senators Payne (Chair), Ludwig, Crossin, Kirk, Trood, Brandis, Scullion and Bartlett.

Contact Details for all Senators are available at here.
http://www.aph.gov.au/Senate/senator...asp?sort=state.
http://www.eff.org/deeplinks/archives/004975.php





Music Publishers Say Kazaa Deal Reached
AP

The music publishing industry reached a tentative deal with operators of the Kazaa file-sharing network over claims of copyright infringement, an industry group said.

Publishers pursuing a class-action suit against Kazaa informed U.S. District Court on Monday that the peer-to-peer network had agreed to pay "a substantial sum" under the agreement, the National Music Publishers' Association said in a statement.

The amount of the settlement was not disclosed. It is subject to final approval by the association board.

The settlement "will be another key milestone of the ongoing transformation of the digital music marketplace to one that will allow legal services to thrive," NMPA President and Chief Executive David Israelite said in the statement.

Phil Armstrong, a spokesman for Sharman Networks Ltd., which owns and distributes Kazaa, said he was not familiar with the lawsuit and declined to comment.

Sharman Networks announced in July that it had settled copyright infringement lawsuits with music labels and movie studios, agreeing to redesign its software to block customers from downloading protected music and movies and to pay more than $115 million in penalties.

The agreements are among a wave of legal settlements between file-sharing networks and the entertainment industry since the Supreme Court ruled last year that technology companies caught encouraging customers to steal music and movies over the Internet could be sued.

Last month, a federal judge ruled against StreamCast Inc., the distributor of the Morpheus online file-sharing software, finding the firm encouraged computer users to share music, movies and other copyright works without permission.
http://hosted.ap.org/dynamic/stories...11-01-07-48-13





2 Sued for Downloading Over 1,000 Songs
Jim Fitzgerald

Patricia Santangelo wouldn't concede in her fight with record companies that accused her of pirating songs over the Internet. Now the companies are hoping for an easier tussle against her kids.

Five record companies, represented by the Recording Industry Association of America, filed a lawsuit in federal court in White Plains on Wednesday against Santangelo's son and daughter.

It said Michelle Santangelo, 20, has acknowledged downloading songs on the family computer and that her brother, Robert, 16, had been implicated in statements his best friend made. It accuses the two of downloading and distributing over 1,000 songs, including "Pretty Fly (For a White Guy)" by the Offspring, "MMMBop" by Hanson and "Beat It" by Michael Jackson.

"In short, each of the defendants participated in the substantial violations of plaintiffs' copyrights at issue and then concealed their involvement, standing idly by as Patricia Santangelo repeatedly protested their innocence and chastised plaintiffs for filing allegedly frivolous litigation," the complaint said.

The Santangelos' lawyer, Jordan Glass, disputed the recording industry's allegations and said he was at Michelle Santangelo's deposition and does not recall her "admitting or acknowledging downloading."

Patricia Santangelo, who a federal judge called "an Internet illiterate parent," drew attention last year when she denied downloading songs and refused to settle with the recording industry, which she said demanded $7,500 to keep her name out of a lawsuit for illegally downloading music.

Defenders of Internet freedom helped pay for her attorney. She proclaimed her innocence on TV. But the question remained whether her children had done it. Santangelo said she had no knowledge of them downloading and, if they did, the blame lay with computer programs, not with her or the children.

The industry is requesting an injunction, unspecified damages for each download and court costs.

The record companies have sued thousands of people, including many minors, for allegedly pirating music through file-sharing computer networks, most of which have been forced out of business.
http://hosted.ap.org/dynamic/stories...11-02-02-54-50





Rockmart Woman Ordered to Pay $6,000 for Downloading, Sharing Music

A federal judge has ordered a Rockmart woman to pay $6,350 in fines to five major recording companies for Internet file-sharing.

Judge Harold L. Murphy, Rome, granted summary judgment Monday in favor of Maverick, Sony BMG, Atlantic, Capitol and Arista, recording companies that claimed in a civil suit that Carma Walls illegally downloaded and shared eight songs they own.

The civil judgment fines Walls $6,000 in statutory damages, an amount representing $750 in statutory damages for each of the eight copyrighted sound recordings listed in the complaint; plus $350 in costs associated with filing the lawsuit.

Lawyers for the recording companies asked for summary judgment Sept 8. Murphy granted their request after Walls' attorney refused to answer the request.
http://news.mywebpal.com/partners/68...ews759022.html





EFF and 10 Zen Monkeys vs. Michael Crook and DMCA
Jeff Diehl

Social griefing a la Jason Fortuny and Michael Crook may have finally been taken too far.

The Electronic Frontier Foundation is representing 10 Zen Monkeys in a civil lawsuit against griefer Michael Crook for abusing the DMCA and violating our free speech rights.

In September, we published an article about Crook when he mimicked Jason Fortuny by trolling CraigsList and sex-baiting guys into giving him private information which he then revealed on his site (now offline), craigslist-perverts.org. He apparently did not like what we had to say. In a brash and hypocritical (though not at all surprising) move, Crook filed a bullshit DMCA take-down notice with our then-ISP, knowing that the “safe harbor” provision would compel the ISP to take immediate action, even before proof of copyright ownership was examined.

I was personally given an ultimatum to remove the material cited in the notice (a TV screen capture of Crook’s appearance on Fox News Channel), or have my account canceled. Needless to say, Crook did not own the rights to the image, and even if he did, there’s a little thing called “fair use” in the context of critical commentary.

Appalled that he was able to so easily, and without any onus of proof, jeopardize my standing with my ISP, I immediately set about moving the site to local San Francisco ISP Laughing Squid, owned by my old pal, Scott Beale — his services are more expensive, but I knew Scott would understand and respect free speech at least to the point of asking me for details before threatening to pull the plug on my site.

The first thing I did after migrating 10 Zen Monkeys was re-insert the image of Crook into the offending article and, sure enough, within 24 hours he had sent another DMCA take-down notice to Laughing Squid’s upstream provider. I’m sure he was emboldened by his success at forcing me to relocate my website once, and was trying for a repeat. But this time, Scott indeed called me to get the story. He was as angry as I was, and said I should contact the Electronic Frontier Foundation. (As an ISP, Scott hadn’t seen this particular abuse before, and was concerned — it showed just how easy it is under the current DMCA provisions to intimidate a website, for any reason whatsoever.)

“This is yet another case of someone intentionally misusing copyright law to try to shut down legitimate debate on an issue of public interest,” said EFF Staff Attorney Jason Schultz. “Crook certainly doesn’t own the copyright to the news footage — Fox News does.”

The “safe harbor” provision of the law is meant to shield service providers from liability for any copyright violations that might be committed on their clients’ websites. It basically states that, upon being notified by letter or email that there is content in violation of copyright, they can avoid any legal consequences by immediately removing it. (The reason the “safe harbor” is even necessary is because of the draconian copyright “protections” built into the DMCA — ones which sacrifice fair use among other things.) But since the take-down notice doesn’t require a court order, or any type of judicial scrutiny, it means that shady individuals or organizations can easily use the law to stifle free speech.

“Crook has used a bogus copyright claim as a pretext to squelch free speech,” said EFF Staff Attorney Corynne McSherry. “Unfortunately, it is easy to abuse DMCA takedown provisions and most internet speakers don’t have the ability to fight back.”

I removed the original image in the Crook article and instead linked to a similar image residing on someone else’s server (Crook is widely reviled on the internet, so it’s not difficult to find materials criticizing him on Google).

Surprise! Crook didn’t like that either, and on October 24th, he filed yet again, this time thinking that the DMCA could be used to intimidate an ISP for a site that links to content that doesn’t reside on their servers!

Crook seems to have a particularly malicious interpretation of the DMCA. He has declared on his blog his own campaign to serve take-down notices on sites he doesn’t like, regardless of whether he owns the copyright on the material in question. From his blog:

One site has gone completely down. It currently routes to a “Suspended” page. This site has remained down because the webmaster hasn’t responded to the complaint. I can’t be responsible for that.

None of this is surprising from someone who has devoted so much time and energy finding others in a compromised state — whether it’s horny men online, or wounded soldiers — and then systematically hurting them further, for nothing more than a fleeting, self-defeating publicity.

Until now, the instances of social griefing made famous by Jason Fortuny and aped by Michael Crook have brought up mostly privacy issues. In the case of Crook’s abuse of DMCA, we see the same childish, ill-intentioned publicity-seeking, but that’s not to say there’s no difference between Fortuny and Crook. Fortuny has never tried to stop anyone from saying anything about him — in fact, he seems to enjoy the direct negative criticisms he’s received. Crook, on the other hand, is clearly operating on a level of complexity that is far beyond his capacities — he wants to be notorious, but then uses unrelated, legalistic (though illegal!) manipulations to silence those who speak out against him. Despite his comical claim to the title of copyright defender, he is creating a real chilling effect on free speech.

Some of the targets of Crook’s DMCA exploits have self-censored, in part because to give him attention is a reward he doesn’t deserve, but also because they don’t understand their rights and cannot afford to fight. The takedown provision of this law is bad for publishers and anyone who cares about free speech, and Crook has clearly demonstrated a reason why. He has also stupidly underestimated the resolve of this publication; we hope to set an example of what can be done when First Amendment rights are fully understood, nurtured, and worn into battle
http://www.10zenmonkeys.com/2006/11/...-dmca-lawsuit/





YouTube Is Purging Copyrighted Clips
Noam Cohen

Hitting the financial jackpot, it appears, may have created some headaches for YouTube, the wildly popular video-sharing Web site that has agreed to be bought by Google for $1.65 billion in stock.

The site late last week began purging copyrighted material from Comedy Central, including clips from YouTube stalwarts like “The Daily Show With Jon Stewart,” “The Colbert Report” and “South Park.”

The action was “a result of third-party notification by Comedy Central,” according to one such e-mail message sent to a YouTube user, Jeff Reifman, who broke the news on the Web site NewsCloud.

A week earlier, nearly 30,000 clips of TV shows, movies and music videos were taken down after the Japanese Society for Rights of Authors, Composers and Publishers cited copyright infringement.

YouTube did not respond to repeated messages left over the weekend.

The situation is tricky for a network like Comedy Central, part of Viacom. Its audience is young and technologically sophisticated, and Comedy Central stars in the past have used YouTube and clip services to interact with their audience.

Stephen Colbert of “The Colbert Report,” for example, gained great attention for his mocking speech before President Bush at the White House Correspondents Dinner, which became one of the most-viewed clips at YouTube before C-Span, which broadcast the event, ordered it taken down.

In an interview with Wired magazine in September 2005, Mr. Stewart explained his view: “We get an opportunity to produce this stuff because they make enough money selling beer that it’s worth their while to do it. I mean, we know that’s the game. I’m not suggesting we’re going to beam it out to the heavens, man, and whoever gets it, great. If they’re not making their money, we ain’t doing our show.”
http://www.nytimes.com/2006/10/30/te...30youtube.html





Ohio Company Utube.com Sues YouTube
AP

A company that shut down its Web site because it was overwhelmed by millions of people looking for YouTube has sued the online video-sharing portal.

Universal Tube & Rollform Equipment Corp. said the cost of hosting its Web site - utube.com - has grown significantly in the last two months. "We've had to move our site five times in an effort to stay ahead of the youtube.com visitors," said Ralph Girkins, Universal Tube's president.

The lawsuit, filed this week in U.S. District Court, asks that YouTube Inc. stop using the youtube.com or pay Universal Tube's cost for creating a new domain. It did not specify damages.

Universal Tube, which sells used machines that make tubes, has said it has lost business because customers have had trouble accessing its site.

"We were there first by 10 years," Girkins said.

The confusion took off a couple of months ago, Girkins said. The company, with just 17 employees, got 68 million hits on its site in August, making it one of the most popular manufacturing Web sites.

The site shut down in early October just before Google Inc. announced plans to buy YouTube for $1.65 billion. It took several days before it was back up.

A YouTube spokeswoman did not return a message seeking comment Wednesday.

Universal Tube, based in suburban Perrysburg and founded in 1985, has about $12 million in annual sales.

Girkins has said the company was looking to sell the Web address and find a new home for its Web site.
http://hosted.ap.org/dynamic/stories...11-01-17-35-32





YouTube Takes Down Comedy Central Clips Based on DMCA Claims

I received a couple of emails from YouTube this afternoon (see below) notifying me that a third party (probably attorneys for Comedy Central) had made a DMCA request to take down Colbert Report and Daily Show clips. If you visit YouTube, all Daily Show, Colbert Report and South Park clips now show “This video has been removed due to terms of use violation.”

For a long time, Comedy Central has passively allowed the sharing of online clips of its shows—because let’s face it, it’s helped them generate the kind of water cooler talk that has made them a ton of money. In this Wired Interview , Jon Stewart and Daily Show Executive Producer even encouraged viewers to watch the show on the Internet:

Karlin: If people want to take the show in various forms, I’d say go. But when you’re a part of something successful and meaningful, the rule book says don’t try to analyze it too much or dissect it. You shouldn’t say: “I really want to know what fans think. I really want to understand how people are digesting our show.” Because that is one of those things that you truly have no control over. The one thing that you have control over is the content of the show. But how people are reacting to it, how it’s being shared, how it’s being discussed, all that other stuff, is absolutely beyond your ability to control.

Stewart: I’m surprised people don’t have cables coming out of their asses, because that’s going to be a new thing. You’re just going to get it directly fed into you. I look at systems like the Internet as a convenience. I look at it as the same as cable or anything else. Everything is geared toward more individualized consumption. Getting it off the Internet is no different than getting it off TV.

But apparently, all good things come to an end when there is money and attorneys involved. I assume the only online clips that will remain will have to qualify under fair use – probably short clips, with social or political importance.

With Google purchasing YouTube, ComedyCentral figured there was now an opportunity aka profit center to target. And they’ve assumably made these DMCA requests to YouTube.

So assumably, with less interesting content, YouTube is a lot less interesting now and perhaps not worth the billion dollars Google paid for it – though they knew exactly what they were getting into. It’s even possible that Apple or Viacom pushed ComedyCentral to take this step since they earn revenue from the shows.

Here is a copy of one of the emails I received:

YouTube

Dear Member:

This is to notify you that we have removed or disabled access to the following material as a result of a third-party notification by Comedy Central claiming that this material is infringing:

Stephen Colbert Interviews Steve Wozniak: http://www.youtube.com/watch?v=k-whFuN0S0M

Please Note: Repeat incidents of copyright infringement will result in the deletion of your account and all videos uploaded to that account. In order to avoid future strikes against your account, please delete any videos to which you do not own the rights, and refrain from uploading additional videos that infringe on the copyrights of others. For more information about YouTube’s copyright policy, please read the Copyright Tips guide.

If you elect to send us a counter notice, to be effective it must be a written communication provided to our designated agent that includes substantially the following (please consult your legal counsel or see 17 U.S.C. Section 512(g)(3) to confirm these requirements):

(A) A physical or electronic signature of the subscriber.

(B) Identification of the material that has been removed or to which access has been disabled and the location at which the material appeared before it was removed or access to it was disabled.

(C) A statement under penalty of perjury that the subscriber has a good faith belief that the material was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled.

(D) The subscriber’s name, address, and telephone number, and a statement that the subscriber consents to the jurisdiction of Federal District Court for the judicial district in which the address is located, or if the subscriberis address is outside of the United States, for any judicial district in which the service provider may be found, and that the subscriber will accept service of process from the person who provided notification under subsection©(1)(C) or an agent of such person.

Such written notice should be sent to our designated agent as follows:

DMCA Complaints
YouTube, Inc.
1000 Cherry Ave.
Second Floor
San Bruno, CA 94066
Email: copyright@youtube.com

Please note that under Section 512(f) of the Copyright Act, any person who knowingly materially misrepresents that material or activity was removed or disabled by mistake or misidentification may be subject to liability.

Sincerely,
YouTube, Inc.

http://www.newscloud.com/read/75528





Comedy Central Clips Back on YouTube
Nate Anderson

Comedy Central clips aren't leaving YouTube for good. Viacom, Comedy Central's corporate parent, has confirmed that it wants to find some way to keep the clips available, and has apparently given the green light for YouTube to put the material back up. No deal between the two firms has yet been done, but it sounds like one is imminent.

Last week, the company asked YouTube to pull many copyrighted clips of The Daily Show, The Colbert Report, and other Comedy Central properties, and many of them were taken down. Numerous short clips did remain available on the site, fueling speculation that Viacom was only concerned about longer clips.

YouTube fans responded immediately... using YouTube. One man posted a two-minute clip called "Why did Comedy Central assert copyrights now?" in which he wondered why Comedy Central had waited so long to act, and why they had chosen to do so now.

Viacom told multiple media outlets yesterday in a statement that it was interested in finding a workable business model for making clips available on the Internet, so one can only assume that some sort of revenue-sharing deal is in the works like those that YouTube signed with several music labels. Last week's takedown notices may have represented legitimate concern about giving away too much content at once, or they might have been a bargaining device designed to show YouTube exactly how upset its users would be if all Comedy Central content was pulled.

For now, at least, the clips are back—even the long ones, so get your Colbert fix on before Viacom has another change of heart.

Update

While our own searches showed that a huge array of Comedy Central content was still available on YouTube (including long clips of eight minutes or more), not all of the clips are available. It's not clear what criteria was used for the takedown requests, but some videos still remain down. Viacom and YouTube may be exploring a deal together, but their discussions have clearly not led to a total reinstatement of Comedy Central content.
http://arstechnica.com/news.ars/post/20061101-8126.html





Microsoft Toughens Anti-Piracy Actions
AP

Microsoft Corp. said Monday it has filed more than 50 lawsuits and other legal actions worldwide against people it says sold pirated copies of its software using online auction sites such as eBay.

The legal actions are the latest in a broad effort Microsoft has taken to curb widespread piracy of programs including the Windows operating system and Office suite. The moves come as Microsoft is seeing the market for its software become more saturated, leaving the company eager to add revenue by curbing illegal distribution.

Microsoft also is gearing up to release new versions of Windows and Office, which remain Microsoft's biggest cash cows despite the company's many other lines of business.

The legal actions were being filed Friday, Monday and Tuesday in the United States, Germany, France, the United Kingdom, Korea, Poland and several other countries.

Matt Lundy, a senior attorney with Microsoft's antipiracy group, said Microsoft works with auction sites including eBay to remove listings for software it believes is pirated, and only takes legal action if the merchants continue to sell the software after that.

EBay Inc. spokesman Hani Durzy said he couldn't comment specifically on these cases because he hadn't seen the particulars. But in general, he said, eBay works closely with Microsoft and others to remove listings for products that are believed to be pirated.

Still, legal actions aren't uncommon for the world's largest software maker. Between July 1 and Sept. 30, Microsoft took legal action about 275 times against various groups it believed were dealing in counterfeit software.
http://hosted.ap.org/dynamic/stories...10-30-22-17-59





Revision to Windows Vista Retail Licensing Terms
Nick White

I’m very pleased to let you know you this morning (or afternoon, or evening, depending on where you are when you read this) that the Windows division has revised the retail license terms for Windows Vista in a significant way. Namely, the terms regarding license-to-device assignment of the retail product (including Home Basic, Home Premium, Business and Ultimate) now read as follows:

• You may uninstall the software and install it on another device for your use. You may not do so to share this license between devices.

You can find the newly-revised retail license terms here, as I’m sure you’ll want to read them for yourself.

Our intention behind the original terms was genuinely geared toward combating piracy; however, it’s become clear to us that those original terms were perceived as adversely affecting an important group of customers: PC and hardware enthusiasts. You who comprise the enthusiast market are vital to us for several reasons, not least of all because of the support you’ve provided us throughout the development of Windows Vista. We respect the time and expense you go to in customizing, building and rebuilding your hardware and we heard you that the previous terms were seen as an impediment to that -- it’s for that reason we’ve made this change. I hope that this change provides the flexibility you need, and gives you more reason to be excited about the upcoming retail release of our new operating system.
http://windowsvistablog.com/blogs/wi...ing-terms.aspx





Surprises Inside Microsoft Vista's EULA
Scott Granneman

Scott Granneman takes a look at some big surprises in Microsoft's Vista EULA that limit what security professionals and others can do with the forthcoming operating system.

It's Autumn in St. Louis, my favorite time of year in Missouri. Coats are getting progressively thicker as the temperature drops, trees are changing their leaves in a final show of brilliant color before their skeletons show, and darkness is starting to scare away the sun a bit earlier every day. Every Thursday night this Autumn you'll find me teaching the latest iteration of a wonderful course at Washington University in St. Louis titled "Technology in Our Changing Society". Once a week my students and I examine a different issue about the point at which technology and social change intersect, and our discussions are as fulfilling as they are knotty. I can't tell you how many times this semester I've heard someone say, "This is a really complicated issue, and I'm not sure yet what I think."

I respect and understand completely what they're saying. After all, when you're wrestling with issues around free speech, biotechnology, identity online, or virtual property, discussions tend to operate in shades of grey instead of black and white. Sometimes issues are a bit more cut and dried, and a student will utter a bon mot that perfectly encapsulates an issue. A long time ago, a high school kid who wasn't that great of a student told the class, after a long discussion about governments and politics, "Well, here's what I've learned: socialism is fair but doesn't really work, while capitalism isn't fair but does work mostly." Not too bad for a 9th grader. More recently, I had the adults in "Technology in Our Changing Society" read both the Windows XP EULA and the GNU General Public License. When I asked them what they thought, one woman said, "The EULA sounds like it was written by a team of lawyers who want to tell me what I can't do, and the GPL sounds like it was written by a human being who wants me to know what I can do." Nice.

The next version of Windows is just around the corner, so the next time we discuss software licensing in my course, the EULA for Vista will be front and center. You can read the Microsoft Vista EULA yourself by going to the official Find License Terms for Software Licensed from Microsoft page and searching for Vista. I know many of you have never bothered to read the EULA - who really wants to, after all? - but take a few minutes and get yourself a copy and read it. I'll wait.

Back? It's bad, ain't it? Real bad. I mean, previous EULAs weren't anything great - either as reading material or in terms of rights granted to end users - but the Vista EULA is horrendous.
http://www.securityfocus.com/columnists/420





Court to Weigh Microsoft, AT&T Dispute
AP

The Supreme Court said Friday it would intervene in a patent dispute between giants Microsoft Corp. and AT&T Corp. over Windows programs distributed overseas. An appeals court ruled that Microsoft had infringed on an AT&T patent for a type of speech-coding technology.

The outcome could be worth more than $1 billion to Microsoft if the justices find that the lower court ruling improperly extended U.S. patent protections to overseas transactions, said Dennis Crouch, a visiting law professor at Boston University.

"Almost every patent infringement lawsuit against Microsoft asks for damages for U.S. sales as well as foreign export sales," Crouch said. Microsoft has acknowledged its liability for domestic sales.

Microsoft lawyers claimed the ruling by the U.S. Court of Appeals for the Federal Circuit in favor of AT&T "threatens to impose massive liability on U.S. software companies" and could prompt companies to move their research facilities out of the country.

Solicitor General Paul Clement, invited by the court to offer his views, urged justices to take the case. AT&T's remedy "lies in obtaining and enforcing foreign patents, not in attempting to extend United States patent law to overseas activities," Clement said.

AT&T lawyers said that the ruling only protected its patent, which covers a program with a "speech codec" that digitizes speech. "Congress's congressional authority is to protect the rights of U.S. inventors, not U.S. infringers," they said. AT&T Corp. is a subsidiary of AT&T Inc.

Congress extended the reach of patent protections after the Supreme Court ruled against the holder of a patent on a shrimp deveining machine who complained that a manufacturer shipped component parts overseas to avoid U.S. patent law.

The high court had earlier refused to consider a separate case stemming from a jury's decision that Microsoft should pay $521 million for infringing patents held by Eolas Technologies Inc. and the University of California. Microsoft challenged a ruling that the award should be based on worldwide sales rather than domestic sales.

Chief Justice John Roberts took no part in the court's decision to hear the case. The court offered no explanation, but Roberts' most recent financial disclosure shows that he owns between $100,000 and $250,000 in Microsoft stock.

The case is Microsoft Corp. v. AT&T Corp., 05-1056.
http://hosted.ap.org/dynamic/stories...10-27-21-54-15





New U.S. System to Review Software Patents

American companies General Electric, IBM,, Microsoft and Hewlett-Packard have joined with the New York Law School and the U.S. Patent and Trademark Office (USPTO) to inaugarate a new system of peer review for software patents.

The four companies, plus Red Hat, the world's biggest listed open source software business, are the lead sponsors behind the Community Patent Review project.

The one-year pilot program will begin in early 2007 and focus on published but not-yet-granted patent applications relating to computer software. Scientists and engineers will be able to submit prior art to patent examiners at the USPTO using an online system. All Community Patent review project documents will be available on the internet for public comment.

"High-quality patents increase certainty around intellectual property rights, reducing contention and freeing resources to focus on innovation," said David Kappos, vice president of IP law at IBM.

Red Hat chief patent counsel Adam Avrunin said finding references that show the subject matter of a patent application is already known, especially in the software field, is often troublesome for examiners at the Patent Office who have a duty to grant patents only to inventive technologies.

The Community Patent Review will "enable examiners to have access to the best technical information experts to enhance the quality of issued patents," said Kaz Kazenske, a senior director in Microsoft's IP team and former deputy commissioner of the USPTO.

But some patent applicants are worried about the new system. They wonder if examiners will be overloaded with information that it makes it harder, not easier, for examiners to reach a decision. If so, this could actually increase patent pendency for software-related applications, which now stands at around four years.

"These are all valid concerns," said Marc Ehrlich, group IP counsel in IBM's microelectronics division. But he said that many companies are backing the project.

In addition to the five lead sponsors, Intel, International Characters, Out-of-the-Box Computing and Oracle have already agreed to allow some of their patent applications to be reviewed as a part of the initiative.

John Doll, the USPTO's Commissioner of Patents, told MIP that the initiative had received strong backing from industry and academia.

"It's been a tremendous help in being able to attract people who are so willing to work with us," he said.

Ehrlich said that officials in other IP offices, including the EPO and JPO, will be watching the initiative closely.

"There's concrete interest, which is good news for us because when they are ready the software will already be in place," he said.
http://news.xinhuanet.com/english/20...nt_5276621.htm





Google Donates $30,000 to CC
Candace Lombardi

Google has donated $30,000 to Creative Commons, the open licensing organization.

The charitable corporation has essentially created a new method for the licensing and sharing of intellectual property.

Creative Commons (CC) empowers creators of original content with licensing alternatives that allow them to retain copyright protection while permitting free use of their content under certain circumstances. In this way, artists, scientists and others are able to gain visibility in the wider world while protecting their content.

CC has developed licensing support for audio and video this year, in addition to its licensing support for images and text, according to Google's Code blog.

Content creators can choose from a range of options, and unknowns are not the only ones to use a CC license. Pearl Jam, for example, used a CC "Attribution Non-commercial No Derivatives" license so that people could legally copy, share and distribute the band's "Life Wasted" single.

The donation comes at a time when Google has been heavily criticized, and sued, for possible copyright violations over its Google Book Search project.
http://news.com.com/2061-10812_3-6131876.html?





Circulation Plunges at Major Newspapers
Katharine Q. Seelye

Circulation at the nation’s largest newspapers plunged over the last six months, according to figures released today. The decline, one of the steepest on record, adds to the woes of a mature industry beset by layoffs and the possible sale of some of its flagships.

Overall, average daily circulation for 770 newspapers was 2.8 percent lower in the six-month period ending Sept. 30 than in the comparable period last year, the Audit Bureau of Circulations reported. Circulation for 619 Sunday papers fell by 3.4 percent.

But some papers fared much worse. The Los Angeles Times lost 8 percent of its daily circulation, and 6 percent on Sunday. The Boston Globe, owned by The New York Times Company, lost 6.7 percent of its daily circulation and almost 10 percent on Sunday.

The New York Times, one of the few major papers whose circulation held steady over the last few reporting periods, did not emerge unscathed this time: its daily and Sunday circulation each fell 3.5 percent. The Washington Post suffered similar declines.

The Wall Street Journal’s new Weekend Edition, just over a year old, lost 6.7 of its circulation from a year ago.

Both The Los Angeles Times and The Boston Globe have been in the news lately as potential owners expressed interest in buying them. The Los Angeles paper is owned by the Tribune Company, which is entertaining offers from private equity firms to sell some of its properties, or perhaps even the whole company. Jack Welch, the former president of General Electric, has expressed interest in buying The Globe.

The Philadelphia Inquirer, which changed hands earlier this year and where the new owner is in the middle of difficult contract negotiations with the paper’s unions, lost 7.6 percent of its daily circulation and 4.5 percent on Sunday.

Newspaper circulation has been in a long, slow decline for decades. But the pace of loss seems accelerated now, as the industry tries to adjust to the steady migration of readers and advertisers to the Internet.

Newspaper executives attribute some of the latest losses to intentional cutbacks in the number of copies that are paid for in bulk by third parties, for example to be distributed to hotel guests. These count as paid circulation but are of less interest to advertisers than copies paid for directly by readers.

Though the industry has felt consecutive declines over the last five years, the Newspaper Association of America said that the figures for the latest period were “the largest variance year over year” of which it was aware.

Still, the association said, when newspaper Web sites are taken into account, the number of readers its members reach is up very sharply. Revenues from Web sites are rising quickly as well, but they account for only a small portion of overall revenues, and it could be decades before Internet revenues exceed those from the printed editions of major newspapers.

One of the few large papers to substantially increase its circulation in the latest report was The New York Post, which managed to squeak past its rival, The Daily News, by about 10,000 copies, and trumpeted the news today on a giant billboard in Times Square.

In fact, both New York tabloids reported increases in circulation, with the Post up by 5.13 percent and the Daily News by 1 percent.

Col Allan, editor of The Post, said his paper was doing well because it has a better sense of what readers want and a sense of humor. He said the Post’s circulation figures were firmer than those of other papers in New York because it sells fewer copies in bulk to third-party sponsors.
http://www.nytimes.com/2006/10/30/bu...papercnd.html?





Hartford Launches Program Offering Free Wireless Access
AP

Some city residents are getting wired.

Hartford announced Friday that it is launching a $1 million pilot program to test a free municipal wireless network in two city neighborhoods.

The idea is to give lower-income families access to information on education, health care and jobs.

In addition to free wireless access, the city will offer 900 refurbished, wireless-ready computers for $150 each.

"Hartford is on the wrong side of the digital divide," said Hartford Mayor Eddie Perez. "We all know that in employment today, jobs continue to be tied into the Internet. So many jobs require online access, both to find out about them and to get access to them."

The pilot program will serve downtown and the Blue Hills neighborhood. About 5,000 homes and 75,000 people, including more than 50,000 commuters who work downtown, will be able to use it.

The mayor's staff estimates that only about 25 percent of city households have a working computer with Internet access, compared with 70 percent of suburban homes.

The new broadband wireless network, developed with help from IBM, uses a technology called Wi-Fi, or wireless fidelity.

Users will get free unlimited access through March, after which only the first 20 hours a month will be free. After that, residents can buy unlimited access for $12 to $17 a month. Commuters who work in Hartford won't get free access but can buy it for the same price as city residents.

The first phase of the program will last about a year, and Perez said he hopes to expand to the entire city within three years. The project will cost an estimated $5.8 million, some of which may be offset by usage fees and advertising.

As the network gets bigger, the city will offer more computers and in-depth computer classes at public libraries. People who buy the reduced-price computers will need to attend 45-minute training sessions.

More than 300 publicly operated networks nationwide are either up and running or in the planning phase.
http://hosted.ap.org/dynamic/stories...10-27-12-12-29





Municipal Report: Bogus Experts, Bogus Concern

Faking interest in broadband deployment to maximize revenue

Editorial: The Reason Foundation is yet another free-market think tank that believes that eliminating government oversight in the broadband sector will result in broadband utopia. Their editorials and position papers insist they are concerned with "optimizing broadband deployment" in this country, but the real agenda is simply maximizing revenue. With that in mind, they've issued this compact, which attacks municipal broadband and offers up the free-marketeers guide to a better broadband tomorrow.

"As scholars and analysts specializing in broadband policy, we recently convened online to examine the issue," the group notes. "Empirical research and economic rationale guided our deliberations," the group insists. The only problem is that the crew of "scholars and analysts" assembled to tackle the nuanced debate over muni-broadband all share the same ideology, and all in one way or another are on the payroll of incumbent telecom providers.

Signees for the free market manifesto include gentlemen such as the Heartland Institute's Joseph Bast, whose organization rails against what it calls the "junk science" that health officials aim at the tobacco industry. Also signing off on the manifesto is Sonia Arrison, an employee of the telco-funded Pacific Research Institute, whose pro-incumbent editorials appear frequently in papers and websites across the nation without her ties to industry clearly illuminated.

While these financial ties obviously do not invalidate the group's positions, the suggestion that the group, and groups like them, are concerned with broadband "deployment" should be insulting to those interested in honest debate over this nation's telecom infrastructure. The Reason Foundation and the compact's signees are concerned with one thing: maximum possible revenue for their clients.

Their focus is not to increase broadband deployment. That would require offering broadband services to rural portions of America, where their employer's ROI would be dubious and stock prices would suffer. Whether you can get DSL in the remotest regions of your Ohio suburb is the very last thing on the mind of individuals such as Joseph Bast and Sonia Arrison, or organizations such as the Heartland Institute.

The group's suggestions for "maximizing deployment", include the elimination of all "unnecessary regulations", telecom taxes or fees (though as discussed many of these are phony and imposed by the providers themselves), as well as ensuring that municipalities are "prohibited from investing in, managing or operating broadband infrastructure and services."

But wait: wouldn't banning towns and cities from offering broadband be regulation? And wouldn't it be "un-necessary regulation" considering companies like AT&T have discovered they can simply compete in the muni-wireless sector? Strange how such rabid fans of a free-market aren't interested in allowing market darwinism to play out.

The reality is that these groups only truly oppose regulation when it runs contrary to the interests of their corporate financiers and their own portfolios. Many of these groups would find regulations preventing the dumping of toxic chemicals into river water equally "unnecessary" if the price was right. We'd likewise see expert statistics suggesting mutant frogs are a boon to the local ecosystem.

While there are certainly flaws with many municipal broadband models, these are decisions that should be made by the communities themselves, not subjective analysts on the payroll of major telecom providers. Fans of a free market should be eager to see the organic free-market at work. If these municipal broadband operations are such a flawed idea: let them fail.

While incumbent providers have every right to declare an area unprofitable, they should not have the right to then ban these communities from wiring themselves. These broadband black holes were created by the providers. They should either fill them or get out of the way, taking their cadre of subjective experts with them.

The country's largest corporations currently control both sides of the debate over this nation's broadband policies. They freely voice their opinions via press release (and now blogs) on one hand, then pose as objective experts and even fake consumer groups to support these policies on the other.

What should be a meaningful dialog over this nation's broadband infrastructure has devolved into a dishonest stage-show where legitimate consumer concerns (such as rural broadband deployment) are increasingly marginalized.
http://www.dslreports.com/shownews/79247





FCC Rebukes Logan, Says Continental Can Offer WiFi
Peter J. Howe

A two-year effort by Logan International Airport officials to shut down private alternatives to the airport's $8-a-day wireless Internet service was decisively rejected yesterday by federal regulators, who blasted airport officials for raising bogus legal and technological arguments.

The Federal Communications Commission unanimously sided with Continental Airlines Inc. in a challenge Continental brought. The FCC ruled the airline has a clear right to offer WiFi access in its Terminal C lounge, and the Massachusetts Port Authority, which runs Logan, had no authority to order Continental to shut it off.

Massport activated its own WiFi service in 2004.

"Today we strike a victory for the WiFi revolution in the cradle of the American Revolution," FCC commissioner Jonathan S. Adelstein said in a prepared statement. Evoking more Revolutionary War symbols, he added: "The WiFi movement embodies the spirit of American freedom, and in our action we say 'Don't tread on me.' "

The FCC rejected Massport's claims that letting airlines provide WiFi service in their lounges could jam airline and public-safety radio systems.

Commissioner Michael J. Copps , in a separate statement, said: "The record is clear -- in fact, uncontested -- that allowing multiple WiFi operators in the airport will cause no interference to the safety-of-life communications that the airport authority conducts on its dedicated, separate, and licensed public safety channels."

"We are disappointed in the ruling," Massport spokeswoman Danny Levy said, "but [are] reviewing it carefully and weighing our options moving forward." Levy had no further comment.

The FCC action appears to open the door for other airlines to offer WiFi at Logan. In addition to Continental, T-Mobile USA was ordered by Massport to shut down a WiFi service it offered in American's Terminal B. Delta Air Lines was threatened by Massport with legal action if it offered WiFi in Terminal A.

Continental's challenge drew more than 2,000 statements of support from passengers. Top airline, consumer electronics, and telecommunications groups also weighed in against Massport, as did Partners HealthCare System, the Boston hospital giant. It said the Massport policy could have established a dangerous precedent for landlords forcing tenants to buy landlord-controlled WiFi service.

In its 25-page ruling, the FCC shredded all of Massport's legal arguments for why it should be able to regulate WiFi, which uses the same kind of unlicensed airwaves as cordless phones and baby monitors. The FCC faulted Massport for "erroneous characterizations" of fundamental federal rules and said "Massport misreads . . . and misconstrues the applicable regulatory framework."

A Continental spokesman, Dave Messing, called the ruling "a resounding victory to the airline and to consumers." Although T-Mobile was ordered to remove WiFi gear from the American lounge, Continental has been able to keep its Logan WiFi service during the appeal, Messing said.
http://www.boston.com/business/techn...an_offer_wifi/





Electronics Giants Team for Wireless HD
May Wong

The world's leading electronics makers have teamed up to develop a wireless technology to carry high-definition video and eliminate some of the cable spaghetti that links televisions with set-top boxes and other equipment.

Seven companies were to announce Tuesday that they formed the WirelessHD Consortium to free high-definition TVs from the tangle of cables connected to cable or satellite boxes, gaming consoles, DVD players, or even camcorders and other portable multimedia gadgets.

The companies are LG Electronics Inc., Matsushita Electric Industrial Co., known for its Panasonic brand, NEC Corp., Samsung Electronics Co. Ltd., Sony Corp., and Toshiba Corp., as well as SiBEAM Inc. a wireless technology startup.

Industry analysts predicted the first products to carry the WirelessHD technology won't hit the market until at least 2008.

But unlike the challenges other emerging wireless formats face in gaining market traction, "the fact that WirelessHD has the backing of all the major electronics companies gives it a leg up," said Brian O'Rourke, a senior analyst at research firm In-Stat/MDR.

The format is designed to work within ranges of up to 32 feet - and within the same room - using the 60-gigahertz radio frequency band, said John Marshall, chairman of WirelessHD.

It will transmit high-definition video that has not been compressed digitally so users should experience the same image quality they currently get with wired HD-capable video connectors.

The WirelessHD group has been working quietly for more than a year and aims to have the technical specifications completed next spring. It intends to integrate the technology into HDTVs and a range of other audio-video equipment, as well as make it compatible with other wireless and wired video formats, Marshall said.

The consortium also expects adapters will be made so consumers with older model DVD players or set-top boxes can have the option of wireless connectivity with their HDTV sets, he said.

"In the last few years, the number of digital devices has really just amplified, and consumers are looking for a way to simply manage this A-V network," Marshall said. "This can get rid of both the spaghetti in the front and back of the television."

Transmitting HD video seamlessly and wirelessly requires a large amount of radio bandwidth and poses technical issues involving picture quality and interference.

Though WirelessHD hasn't released full details of how its technology will work, the consortium claims it will deliver high-definition video at multi-gigabit data rates - faster than any other radio technology in development.

Making a wireless technology affordable enough for manufacturers - and their customers - could be yet another obstacle.

A few chip-maker startups, such as Radiospire Networks Inc., Tzero Technologies and Pulse-LINK Inc., are using a different radio technology to develop products to stream high-definition video wirelessly, O'Rourke said, but the adapter-like devices expected to use their wireless chips will likely cost several hundred dollars.

"WirelessHD says it is targeting a low-cost solution, but we'll have to see," O'Rourke said. "Adding a couple of bucks (to the manufacturing cost) is a lot of money already."
http://hosted.ap.org/dynamic/stories...10-31-07-48-17





China Looking to Stop Internet Addiction
AP

China's government wants to develop technology to stop children from becoming addicted to the Internet, a news report said Friday.

Chinese officials encourage Internet use for education and business but express growing worry about its effect on children and the possibility that it could be addictive. Chinese psychologists are looking into the possibility that heavy Internet users suffer a form of addiction, and a handful of clinics have opened to wean patients off compulsive Web use.

Parliament is considering a measure to "encourage research and development of technologies to prevent minors from becoming Internet addicts," the official Xinhua News Agency reported.

It said the proposed measure - an amendment to a law on protection of minors - would encourage research into such things as software that stops online gaming at a fixed time.

The measure also would ban minors from Internet cafes, bars and commercial dance halls, Xinhua said.

China has the world's second-biggest population of Internet users after the United States, with 123 million people online. But the government tries to regulate what Web surfers can see, barring access to material deemed subversive or obscene.
http://hosted.ap.org/dynamic/stories...10-27-21-53-37





Google, Others Defend China Operations
Derek Gatopoulos

Internet search leader Google and other major U.S. technology companies insisted Tuesday that their products benefit Chinese citizens despite government restrictions and warnings that online censorship is spreading.

Providing some information is better than giving none at all, the companies said, but human rights groups warned that heavy filtering of Web content is increasing in developing countries - with some using China as a model.

China denied it censored Internet sites at all, saying criminal investigations are unrelated to freedom of expression.

Human rights groups have sharply criticized Google Inc., Yahoo Inc., and Microsoft Corp., along with technology provider Cisco Systems Inc., accusing them of helping the Chinese government restrict information and crack down on dissidents.

"We concluded that we would prefer to provide as much information to the Chinese people as we could through the Google search engines, in spite of the fact that we also are self-censoring material which the China government tells us we are not to exhibit," said Vint Cerf, a Google vice president.

Fred Tipson, senior policy official at Microsoft, said state vigilance in China appeared to be strengthening.

"It is a point at which point you decide the Chinese people are worse off for having this service in their country," he said.

"We have to discuss at what point censorship or persecution of bloggers has reached a point, or monitoring email has reached a point ... where it's simply unacceptable to continue to do business there. We try to define those levels and the trends are not good at the moment. And not just in China."

Amnesty International said it was planning to deliver a petition on Internet freedom to organizers of the U.N.-organized Internet Governance Forum in Athens, where the remarks were made Tuesday.

Rights groups and related agencies warned that online censorship is spreading globally among repressive governments.

"The combination of non-democratic regimes and commercial filtering technology is especially worrying," said Ron Deibert, a political science professor at the University of Toronto and a member of the Open Net Initiative that monitors filtering globally.

The group has labeled China as employing "pervasive" filtering, as well as Iran, Syria, Tunisia, Uzbekistan, Burma, and Vietnam.

"We have also seen an increase in offensive forms of filtering which attack servers. ... This was observed targeting opposition groups before election time in countries including Belarus and Kyrgystan," Deibert said.

Censorship is a key focus at this week's inaugural Internet Governance Forum, which ends Thursday. Other main issues are related to security of online networks and diversity of the Internet as Web growth is predicted to shift to China, India and developing countries.

Julien Pain of the group Reporters Without Borders said Web censors were gaining strength in many of those growth countries and that their main target was not dissidents but keeping information from the general population.

"Internet censorship is really spreading around the world," he said. "Ten years ago, the Internet was not important for an African dictator. ... Now China is a model for these countries and their model is spreading around the world."

Yang Xiaokun, a Chinese government representative at the Athens forum, denied all censorship allegations made by major human rights groups.

"We do not have restrictions at all," he said. "Some people say that there are journalists in China that have been arrested. We have hundreds of journalists in China, very few have been arrested. But there are criminals in all societies and we have to arrest them. But these are legal problems. It has nothing to do with freedom of expression."
http://hosted.ap.org/dynamic/stories...10-31-14-13-53





Microsoft Considers China Policy
Darren Waters

A senior executive for Microsoft has said the firm could pull out of non-democratic countries such as China.

Fred Tipson, senior policy counsel for the computer giant, said concerns over the repressive regime might force it to reconsider its business in China.

"Things are getting bad... and perhaps we have to look again at our presence there," he told a conference in Athens.

"We have to decide if the persecuting of bloggers reaches a point that it's unacceptable to do business there."

"We try to define those levels and the trends are not good there at the moment. It's a moving target."

Selling to China

Earlier in the day, speaking at the Internet Governance Forum, Mr Tipson had defended the work Microsoft was doing in China.

At a session about openness he denied that some big businesses were "colluding" with certain governments.

He was joined in the debate by Art Reilly, senior director at Cisco Systems.

As the only two representatives of major business sat on the panel, they were the focus of accusations from some delegates that the companies were not doing all they could to enable freedom of expression.

Cisco was attacked at the forum for selling equipment to police in China, while Microsoft has been criticised for allegedly censoring blogs in the country.

Mr Tipson said: "We are maximising access to information to users in governments that Amnesty is targeting for its criticism.

"It's those users we have to keep our focus on."

Mr Reilly, senior director of strategic technology policy at Cisco was asked if the firm had any ethical problems with an alleged sale of router equipment to the Chinese police.

Human rights activists are concerned that the technology is being misused by some governments to track the online activities of people and to filter dissident comment.

He said: "We do not sell a different product in one country to another.

"It is essential that there are security and network management capabilities in a network that enable the free flow of information - it is the same technology used by parents and libraries to prevent children from accessing pornography for example."

He added: "We are not colluding with any country to do any specific filtering."

He said that he was not familiar with the sale of "any product to any particular entity in China".

Mr Tipson said it was a condition of companies to abide by the local laws in countries with whom they do business.

Mr Reilly said that here had been a "substantial increase in use and ability for information to flow in China" since Cisco entered the Chinese market in 1994.

There are now 120 million people online in China, up from 80,000 in 1994.

Advancing human rights

"The economic value in the internet is driving growth and development in educational opportunities [in China]," said Mr Tipson.

"Openness is often too segmented too narrowly into a discussion around freedom of speech," he added.

Mr Tipson said it was "critical not to portray the internet as a threat to governments".

"The internet is transforming the political culture of China. There is no question about it."

Fellow panellist, Anriette Esterhuysen, executive director of professional body APC, said: "I don't think we should make corporations responsible for securing our freedoms."

She said governments should be enforcing ethical policies on companies that are doing business with foreign governments.

There was also a feeling expressed by some that the internet was making progress as a tool for advancing human rights.

Andrew Puddephatt, who has worked for various human rights organisations, said: "Where access exists you can definitely get information and ideas on the net that you cannot get on conventional media. That is progress."
http://news.bbc.co.uk/go/pr/fr/-/2/h...gy/6102180.stm





Aggregating Blogs in Greece Could Get You Sued
Article in english about the BlogMe.gr case.

The administrator of Blogme.gr, a Greek blog aggregation website had his house raided, his hard drive seized and was himself arrested by the Greek cybercrime division last week, after having been served with a libel lawsuit without prior notice, because a public figure was offended by a satirical blog that was linked to by his site. The outraged response by Greek bloggers was immediate and unprecedented, reaching in the hundreds of posts within two days of the raid. The developing story coincides with the Internet Governance Forum being hosted in Athens this week, to be attended by Internet luminaries, entrepreneurs and activists like Vint Cerf, Bob Kahn and Joi Ito and featuring panels on Openness and Freedom of Expression.

On a related note, Amnesty International recently put out a "Call to Bloggers", to stand up for Internet freedom ahead of the IGF, while a representative of Reporters without Frontiers (RSF) will also be on hand to attend the meeting. RSF recently published it's 5th Annual Worldwide Press Freedom Index, which ranks Greece 32nd among 168 places, leading other EU15 members such as France and Italy, as well as the US, but lagging behind such countries as Namibia, Bolivia and Bosnia - Herzegovina.

Prior successes of the Greek cybercrime division include the arrest of Swedish programmer Rick Downes on charges of spreading spam via handshake. Greece also made international headlines four years ago because of the shortsighted and highly controversial electronic games ban. The government was forced by public outcry, both at home and abroad -as well as the intervention of the European Commission- to amend the law and later suspend and deprecate it as unconstitutional.
http://oneiros.gr/blog/2006/10/29/blogmegrstory





FinReactor and EliteTorrents
Thomas Mennecke

The BitTorrent community has made the world a lot smaller. No matter what part of the world a BitTorrent user resides, millions are connected by a virtually identical protocol. This not only applies to the end user, but the tracker administrators that help make the community possible.

The exact number of the BitTorrent population has been difficult to zero in; however it’s generally agreed by examining the DHT (Distributed Hash Table) that at least 5-6 million individuals are regularly swarming files. A file request in North America may gather pieces from just about anywhere in the world; and likewise a file request from Australia may swarm with dozens of global locations.

In order to facilitate this massive transfer of files, a centralized index or tracker must coordinate the transfer of torrent files. These torrent files then tell the client which locations, based on the IP address, the file segments are located. From there, the client begins the swarm and within hours, or days, the requested file will trickle its way home.

There’ve been plenty of efforts designed to disrupt this flow of information. Most notably, indexing and tracking sites such as SuprNova, LokiTorrent, and ThePirateBay were forced offline. All but ThePirateBay were permanently eradicated.

In the United States, the renowned BitTorrent tracker EliteTorrents.com was raided by the FBI and US Customs in May of 2005. It was the last BitTorrent tracker operating in the United States. Although not as widely traveled as ThePirateBay or Suprnova, news surrounding this event was just as impressive.

On October 17, 2006, EliteTorrents administrator Grant Stanley plead guilty to a “two count felony information charging conspiracy to commit copyright infringement and criminal copyright infringement in violation of the Family Entertainment Copyright Act.”

This is the first conviction in the United States directly related to P2P and file-sharing. As part of his punishment, Mr. Stanley is to spend the next 5 months incarcerated, followed by an additional 5 months of home detention. On top of that, he is to spend an additional 3 years of supervised release, and in all likelihood stay far away from anything to do with BitTorrent. Finally, Mr. Stanley is to pay a $3,000.00 fine.

Yesterday, another substantial BitTorrent verdict was rendered. This time, the decision was against 21 operators and administrators of the Finnish BitTorrent tracker, Finreactor.

“21 operators of the Finreactor peer-to-peer-network were convicted yesterday by the district court of Turku in Finland,” an IFPI press release reads. “Fourteen operators were convicted for copyright offences and seven for aiding for copyright offences. The operators were in charge of the technical operation of the system as well as the user control.”

Although technologically very similar, if not identical, in every aspect to EliteTorrents, the punishment rendered is worlds apart. Unlike Mr. Grant who has a very bleak outlook for the next five months, those convicted in Finland have a considerably more optimistic, albeit more expensive, prospect.

The 21 individuals convicted have been ordered to pay a €566,000, or $720,630. (US) fine - divided by 21 individuals, that’s still $34,000 each. Compared to Mr. Stanley, the Finish crew got off light.

The BitTorrent network may bond very different peoples and cultures; however the laws of the outside world hold no such similarities. Mr. Stanley will pay a significantly less fine than his Finish BitTorrent brethren; however at the very least the convicted Finreactor administrators and operators won’t have to spend any time in prison.
http://www.slyck.com/story1325.html





Fewer Eggs, More Baskets in the Incubator
Joe Nocera

A few weeks ago, Google announced that it planned to install a large solar energy system on the roof of its headquarters in Mountain View, Calif. “Green tech” is all the rage right now in Silicon Valley, with venture money pouring into environmental start-ups, and hip technology companies falling all over themselves to show their earth-friendly bona fides.

But that’s not why the Google announcement caught my eye. No, what intrigued me was the company that was building its solar system: EI Solutions, a division of Energy Innovations. And Energy Innovations is — are you sitting down for this? — an Idealab company.

Idealab? The original “Internet incubator” founded in the mid-1990s by the charismatic, hyperkinetic Bill Gross? The one that flew so high during the Internet bubble — with companies like eToys and Eve.com and PetSmart.com — only to crash and burn once boom turned to bust? The one that was sued in 2002 by some of its most high-profile investors, including T. Rowe Price, which asserted that its money had been misused and wanted it back? Yes, that Idealab.

We haven’t heard much about Internet incubators lately — and with good reason. Many of them no longer exist. Several that went public during the boom, like CMGI, now sport anemic stock prices, and aren’t really incubators anymore. The essential business model of an incubator — that a company could exist purely to create start-up companies — is now viewed largely as bubble folly.

But Mr. Gross and Idealab, it turns out, are still very much with us. Idealab is still a company that exists to create start-ups, most of which begin life as a glimmer in Mr. Gross’s fertile brain. The companies it starts aren’t always about the Internet anymore, though some are. Mr. Gross has started a company that is making an affordable 3-D printer, which it hopes to bring to market next year. Another Idealab company sells proprietary robotics technology to supermarkets and toy companies. Yet a third, Spin.com, is an Internet search engine in which advertisers pay only if customers take an action, rather than simply click to a site. (Mr. Gross is the inventor of the “paid search” idea that Google went on to perfect.)

When you visit Idealab now, you still walk into the kind of cool, wide-open office in Old Town Pasadena that screams dot-com. But the new Idealab also has a machine shop. Most of all, Idealab and its founder have a seriousness of purpose, a sense of mission and a humility that were once largely lacking. Which perhaps explains why, though it’s still too early to say for sure, Idealab is an incubator that may actually wind up succeeding.

“You gotta see these pictures,” Mr. Gross said, his voice rising happily. “They just came in this morning.”

We were deep into a lengthy interview, and now, finally, he was getting excited — the way I remember him pretty much all the time during the bubble. For much of the interview, we had been talking about the bad times after the bust arrived. His tone had been somber, grim even, as he recalled the painful past.

But this — this was fun! The pictures had been sent, via e-mail, from China. China is where the Energy Innovations solar devices are to be manufactured. And the pictures showed several Energy Innovations executives, alongside a handful of Chinese workers, actually making the first of its solar products — using a radical new approach to solar energy that Mr. Gross hopes will finally give solar the economics it needs to become a viable energy source.

“Right now,” he explained, “a kilowatt of electricity generated from coal costs 9 cents. For solar, it’s 27 cents before government rebates, which cuts it in half. We are trying to get it below 9 cents, without any rebates. We’re halfway there.” The product itself is like no solar panel you’ve ever seen — tons of little mirrors that move with the sun and concentrate its power, allowing solar power to be generated much less expensively than it is now. It is an amazing feat of engineering ingenuity.

As Mr. Gross tells it now, Idealab was never originally intended to be only about Internet companies. But in the 1990s, it was so easy to start an Internet company that it became the path of least resistance. Idealab began churning out a company a month with a kind of indiscriminate glee. And the companies themselves took off like rockets — eToys had a $7.8 billion market capitalization on its first day as a public company — allowing Mr. Gross, and those around him, to believe they could do no wrong.

We all know now that the bubble ended in March 2000, but it took Mr. Gross much longer than that to face reality. Idealab had raised $1 billion from investors in anticipation of an initial public offering, and had wildly expanded its operations. Even as the stocks in its public companies were collapsing — eToys, you’ll recall, eventually collapsed — Mr. Gross kept hoping against hope that it would turn around.

Finally, at the beginning of 2001, he could no longer avoid the truth. There would be no public offering. Shockingly, despite having raised all that money, Idealab was down to about $40 million in cash. With its extravagant spending habits, Idealab would be out of cash in two months unless it started changing. Belatedly, it shut down struggling companies, and closed its branch offices. Mr. Gross had to lay off more than half Idealab’s staff.

There was a lot of soul-searching, and anguish over the mistakes he had made. But not for a moment did Mr. Gross think about liquidating Idealab. One of his greatest strengths — and greatest weaknesses — is his eternal optimism. That is what led him to foolishly start so many companies during the boom, but it is also what allowed him to carry on during the hard times. He never lost his belief that his model of company-creation could work — if, that is, he could learn to bring his own frenetic idea-generating brain under control.

So, no longer would Idealab start a company a month. “We needed a much higher bar for the kind of companies we would create,” he said. “We needed to have protectable intellectual property. Our companies had to be in growing industries, with high margins — and protectable margins. That was something we never used to think about. EToys had great customer service, but it had no protectable intellectual property. Anybody could do it.”

And finally, Mr. Gross said, the companies he wanted to start had to be able to make a real difference in the world. You could argue, I suppose, that to make such a grandiose statement suggests that Mr. Gross and his colleagues were still afflicted with at least some of the hubris of the bubble days. But Mr. Gross argues that building a company requires so much effort, and entails heartbreak, that it just didn’t seem to be worth it unless Idealab companies were going to do something that mattered.

One of the first companies to emerge from this new focus was Energy Innovations. As I listened to Mr. Gross talk about it, I realized that it probably saved Idealab. Mr. Gross has long had a passion for solar energy, and because he is an engineer — a graduate of CalTech — he deeply understood the issues involved. For the first time in Idealab’s history, he made himself the company’s chief executive, and the company began to consume the majority of his time and energy.

Which, of course, meant that he wasn’t spending nearly as much time pursuing all the other ideas that poured out of his head — Energy Innovations mattered too much to him, and he didn’t want to be distracted. He also needed to figure out how to keep it up and running when Idealab had zero ability to raise money. Thanks in part to the bust, and in part to the lawsuit, which was finally settled in 2004, Idealab had to hobble along with cash it could generate on its own. “We sold a small company to AOL,” he recalled. “Another to eBay. $6 million here. $10 million there.”

Then some of his older companies began to recover, especially Overture.com, the original paid search engine. Idealab began selling some of its stock, and by 2004, when Yahoo bought Overture for $1.6 billion, it had generated some $300 million for Idealab. Suddenly, things were looking up again.

Today, Idealab has just under $100 million, which gives Mr. Gross plenty of running room now that the company’s costs are under control. More than that, though, venture capitalists are investing again in Idealab companies. Energy Innovations has raised $50 million in outside capital, and when I spoke to Erik Straser of the venture firm Mohr Davidow Ventures, which is the lead outside investor, he couldn’t have sounded more excited about the company’s prospects — or about Bill Gross. “Bill is one of the best idea generators I’ve ever seen,” he said. “But he also has an understanding of his strengths and weaknesses. People can grow and learn, even people as highly intelligent as Bill.”

Howard Morgan, an Idealab director and longtime friend of Mr. Gross, said: “He’s become humbler. There is no question about it. He realizes that there are limitations to what he can accomplish.”

Mr. Gross prefers journalism that offers lessons to readers, and as our interview drew to a close he struggled to find one. He talked about being more rigorous when ideas popped into his head, about the ups and downs of entrepreneurship, about being willing to persevere with an idea that you believed in. But none struck him as satisfactory.

Later, though, as we walked back to his office from dinner, he said: “We have a lot more wisdom now. I wish we hadn’t had to go through what we did to acquire that wisdom. But maybe that was the only way.”
http://select.nytimes.com/2006/10/28.../28nocera.html





Web Breakthrough 'Could Bring Cheap Calls For All'
Jonathan Richards and Holden Frith

The price of phone calls is set to fall dramatically thanks to a groundbreaking development that will enable any regular phone to make calls using the internet.

Charges are expected to drop by as much as quarter from early next year, and when the system is more established it will cost the same to call Australia and Aberdeen.

The breakthrough depends on a technology called ENUM, which converts any phone number into an internet address. Other phones can then find and connect to this number in the same way that a browser finds a website.

This removes a major barrier to the mainstream use of internet phone calls. In the past, web-based systems have been unable to find the numbers they require, a job normally performed by the telephone exchange.

"Eventually there will be no concept of international calls and the need for mobile roaming could disappear entirely," David Groom, vice president of the Amdocs telecoms consultancy, said. "Calls will become free as part of and internet connection."

If, as expected, Department of Trade and Industry approves the roll-out for early 2007, a majority of calls will be made via the internet within five years, analysts say.

Domestic mobile calls are also likely to be affected as wi-fi hotspots become more widespread, enabling phones to send calls via the internet while on the move. The whole of Norwich, large sections of the City of London, and 99 per cent of Cornwall are already wi-fi zones.

Skype, one of the most popular systems among consumers, only supports true web-based calls between registered customers, who must use headsets and computers to conduct the call.

A facility called SkypeOut lets people call standard telephone users, but this diverts calls to the existing telephone network for the ‘last mile’ of each call, between the local exchange and the home, and incurs charges for doing so.

ENUM allows users to sidestep the exchanges – and the phone companies – entirely. "You won’t need to use telephone companies to find the person you’re calling anymore," said Jay Daly, a consultant with Nominet, the .uk domain name registry, who has worked with an industry group developing ENUM. "It’s the equivalent of opening Skype up to everyone."

"We are still some years from being able to do away with ordinary phone networks but this technology is a huge step in that direction," he added.

Many obstacles remain, and Mr Groom said that it would take some time before a system of registering numbers is adopted. "Because the use of telephone numbers is regulated both globally and within each country, the process of creating and delegating these domains requires the involvement and approval of regulatory bodies," he said.

Phone users may also have to put up with some of the risks and inconveniences of the internet. "It’s not without problems," Mark Main, senior analyst in broadband services at Ovum, said. "There are privacy and security issues. Spam, for instance, could now be directed at phone numbers."

"But there will be a significant reduction in the cost of voice calls, perhaps 25 per cent," he added. "You'll soon just pay for a bundle of broadband access and voice calls will be part of that."

So far the technology has been introduced only in Germany and Austria, but British phone companies are expected to start using it from early next year, as soon as the industry reaches a consensus on how it should be implemented.

Initially, ENUM will be used mainly by existing phone companies to reduce the cost of carrying customers’ calls, but in time individual use of the technology will bring other benefits.

Customers will be able to sign up for a "number for life", that will follow them from home to home throughout the world. The system also allows calls to become more sophisticated. For instance, if there is no answer at a landline, the caller could choose to be redirected to a mobile number or e-mail inbox.
http://www.timesonline.co.uk/article...400579,00.html





Japan's Softbank Mobile a Victim of its Popularity as Customers Rush to Switch From Rivals
AP

TOKYO Japanese mobile phone carrier Softbank Mobile Corp., which slashed its prices last week to undercut rivals, said it had to stop taking new applications Sunday because it was flooded by new customers wanting to switch to its service.

It is a bitter victory for Softbank, which had rolled out the aggressive price cuts in a last-ditch effort to score on last Tuesday's arrival in Japan of number portability — a system that lets people keep the same numbers when they switch carriers.

It is expected to bring big changes to Japan's mobile phone market.

Softbank, which bought British carrier Vodafone's mobile business in Japan earlier this year and is run by technology mogul Masayoshi Son, had been looking for ways to catch up with larger competitors like NTT DoCoMo and KDDI Corp.

Softbank stopped accepting new customers shortly after noon Sunday when its computer system couldn't handle the load, the company said in a news release. It apologized to customers and promised to resume taking switch-over business when it readies the system for increased volume.

The company did say how many customers had tried to enroll.

It was the second time in two days that Softbank had to suspend taking switch-over customers.

On Saturday, it suspended applications for fear the huge number would paralyze its computer system, Kyodo News agency reported.

The system was temporarily resumed Sunday before being shut down again, Kyodo said.

The new fee system unveiled by Softbank features free calls and instant messages between subscribers, and lowers basic monthly fees, in some cases by 70 percent.

Softbank will also underprice any bargain offer by competitors within 24 hours, ensuring that its monthly service charges will always be 200 yen (US$1.69; €1.34) cheaper than those of its rivals.

Tokyo-based Softbank, which leads Japan as a broadband services provider and owns a 41 percent stake in Yahoo! Japan, has been going all-out to shake off the image — from the carrier's Vodafone days — that it offers only unfashionable, bulky handsets.

Softbank has promised 15 new handset models in 64 colors by the end of the year, with some phones as thin as a coin.

The phones will come with an easy link to the Yahoo! Japan mobile portal, allowing people to access Web-based information for free instead of having to pay content providers.

Softbank's other businesses include Internet Protocol telephoning, online gaming, electronic stock trading, Net broadcasting, and an investment arm. It also owns the Fukuoka Softbank Hawks professional baseball team.
http://www.iht.com/articles/ap/2006/...k_Overload.php





Cell Phone Takes Security to New Heights
Yuri Kageyama

A new mobile phone in Japan takes security pretty seriously: It can recognize its owner, automatically locks when the person gets too far away from it and can be found via satellite navigation if it goes missing.

The P903i from NTT DoCoMo, Japan's top mobile carrier, comes with a small black card about the size of a movie-ticket stub. The card works as a security key by connecting wirelessly with the cell phone.

If an owner keeps the card in a bag or pocket, the phone recognizes when the card moves too far away and locks automatically to prevent someone from making a call. The user can choose to have the phone lock when it is 26 feet, 66 feet or 130 feet away.

People who lose their security cards can punch in a password to unlock the phone. But they will have to buy a new card to set the lock again.

The extra security is handy because, like other recent Japanese phones, the P903i can be used as a credit card or a prepaid cash card.

Of course, the new security feature won't prevent snoops from getting information from the phone - reading personal e-mails, say - if it is within the set distance of the security key.

To guard against such intruders, users can activate the phone's facial identification feature.

Here's how that works. Owners must first take at least three photos of themselves with the phone's camera. Up to 10 can be shot, in various situations - with and without glasses, with and without makeup, indoors and outdoors.

Then, if the facial-recognition feature is turned on, before accessing the handset a user has to take a picture of himself with the camera. The phone analyzes features such as distance between the eyes and unlocks if the image matches the stored data.

A separate function recognizes whether the eyes are blinking - in case someone tries to show the owner's photo to gain fraudulent entry. Not only that, a four-letter password can be added to this process, to guard against an identical twin getting unauthorized access.

"Security is increasingly a key function for mobile phones as they become loaded with more sophisticated features," said NTT DoCoMo spokeswoman Mamiko Tanaka. "Handset makers are all competing to come up with interesting ways to strengthen security."

Should the P903i get lost, the user can track it with its onboard Global Positioning System. After entering the phone number into a Web site, the owner will see a map showing the phone's rough location - directions via GPS can be off by several hundred feet.

Pricing for the phone, which is manufactured by Matsushita Electric Industrial Co. and planned for sale in the next few months, has not yet been announced. Using the GPS service to look for a missing phone will cost $2.50 a pop.
http://hosted.ap.org/dynamic/stories...10-28-07-35-40





Businesses Seek Protection on Legal Front
Stephen LaBaton

Frustrated with laws and regulations that have made companies and accounting firms more open to lawsuits from investors and the government, corporate America — with the encouragement of the Bush administration — is preparing to fight back.

Now that corruption cases like Enron and WorldCom are falling out of the news, two influential industry groups with close ties to administration officials are hoping to swing the regulatory pendulum in the opposite direction. The groups are drafting proposals to provide broad new protections to corporations and accounting firms from criminal cases brought by federal and state prosecutors as well as a stronger shield against civil lawsuits from investors.

Although the details are still being worked out, the groups’ proposals aim to limit the liability of accounting firms for the work they do on behalf of clients, to force prosecutors to target individual wrongdoers rather than entire companies, and to scale back shareholder lawsuits.

The groups hope to reduce what they see as some burdens imposed by the Sarbanes-Oxley Act, landmark post-Enron legislation adopted in 2002. The law, which placed significant new auditing and governance requirements on companies, gave broad discretion for interpretation to the Securities and Exchange Commission. The groups are also interested in rolling back rules and policies that have been on the books for decades.

To alleviate concerns that the new Congress may not adopt the proposals — regardless of which party holds power in the legislative branch next year — many are being tailored so that they could be adopted through rulemaking by the S.E.C. and enforcement policy changes at the Justice Department.

The proposals will begin to be laid out in public shortly after Election Day, members of the groups said in recent interviews. One of the committees was formed by the United States Chamber of Commerce and until recently was headed by Robert K. Steel.

Mr. Steel was sworn in last Friday as the new Treasury undersecretary for domestic finance, and he is the senior official in the department who will be formulating the Treasury’s views on the issues being studied by the two groups.

The second committee was formed by the Harvard Law professor Hal S. Scott, along with R. Glenn Hubbard, a former chairman of the Council of Economic Advisers for President Bush, and John L. Thornton, a former president of Goldman Sachs, where he worked with Treasury Secretary Henry M. Paulson Jr.

That group has colloquially become known around Washington as the Paulson Committee because the relatively new Treasury secretary issued an encouraging statement when it was formed last month. But administration officials said Friday that he was not playing a role in the group’s deliberations.

Its members include Donald L. Evans, a former commerce secretary who remains a close friend of President Bush; Samuel A. DiPiazza Jr., chief executive of PricewaterhouseCoopers, the accounting giant; Robert R. Glauber, former chairman and chief executive of the National Association of Securities Dealers, the private group that oversees the securities industry; and the chief executives of DuPont, Office Depot and the CIT Group.

Jennifer Zuccarelli, a spokeswoman at the Treasury Department, said on Friday that no decision had been made about which recommendations would be supported by the administration.

“While the department always wants to hear new ideas from academic and industry thought leaders, especially to encourage the strength of the U.S. capital markets, Treasury is not a member of these committees and is not collaborating on any findings,” Ms. Zuccarelli said.

But another official and committee members noted that Mr. Paulson had recently pressed the groups in private discussions to complete their work so it could be rolled out quickly after the November elections.

Moreover, committee members say that they expect many of their recommendations will be used as part of an overall administration effort to limit what they see as overzealous state prosecutions by such figures as the New York State attorney general Elliot Spitzer and abusive class action lawsuits by investors. The groups will also attempt to lower what they see as the excessive costs associated with the Sarbanes-Oxley Act.

Their critics, however, see the effort as part of a plan to cater to the most well-heeled constituents of the administration and insulate politically connected companies from prosecution at the expense of investors.

One consideration in drafting the proposals has been the chain of events at Arthur Andersen, the accounting firm that was convicted in 2002 of obstruction of justice for shredding Enron-related documents; the conviction was overturned in 2005 by the Supreme Court. The proposals being drafted would aim to limit the liability of auditing firms and include a policy shift to make it harder for prosecutors to bring cases against individuals and companies.

Even though Arthur Andersen played a prominent role in various corporate scandals, some business and legal experts have criticized the decision by the Bush administration to bring a criminal case that had the effect of shutting the firm down.

The proposed policies would emphasize the prosecution of culpable individuals rather than corporations and auditing firms. That shift could prove difficult for prosecutors because it is often harder to find sufficient evidence to show that specific people at a company were the ones who knowingly violated a law.

One proposal would recommend that the Justice Department sharply curtail its policy of forcing companies under investigation to withhold paying the legal fees of executives suspected of violating the law. Another one would require some investor lawsuits to be handled by arbitration panels, which are traditionally friendlier to defendants.

In an interview last week with Bloomberg News, Mr. Paulson repeated his criticism of the Sarbanes-Oxley law. While it had done some good, he said, it had contributed to “an atmosphere that has made it more burdensome for companies to operate.”

Mr. Paulson also repeated a line from his first speech, given at Columbia Business School last August, where he said, “Often the pendulum swings too far and we need to go through a period of readjustment.”

Some experts see Mr. Paulson’s complaint as a step backward.

“This is an escalation of the culture war against regulation,” said James D. Cox, a securities and corporate law professor at Duke Law School. He said many of the proposals, if adopted, “would be a dark day for investors.”

Professor Cox, who has studied 600 class action lawsuits over the last decade, said it was difficult to find “abusive or malicious” cases, particularly in light of new laws and court decisions that had made it more difficult to file such suits.

The number of securities class action lawsuits has dropped substantially in each of the last two years, he noted, arguing that the impact of the proposals from the business groups would be that “very few people would be prosecuted.”

People involved in the committees said that the timing of the proposals was being dictated by the political calendar: closely following Election Day and as far away as possible from the 2008 elections.

Mr. Hubbard, who is now dean of Columbia Business School, said the committee he helps lead would focus on the lack of proper economic foundation for a number of regulations. Most changes will be proposed through regulation, he said, because “the current political environment is simply not ripe for legislation.”

But the politics of changing the rules do not break cleanly along party lines. While some prominent Democrats would surely attack the pro-business efforts, there are others who in the past have been sympathetic.

People involved in the committees’ work said that their objective was to improve the attractiveness of American capital-raising markets by scaling back rules whose costs outweigh their benefits.

“We think the legal liability issues are the most serious ones,” said Professor Scott, the director of the committee singled out by Mr. Paulson. “Companies don’t want to use our markets because of what they see as the substantial, and in their view excessive, liability.”

Committee officials disputed the notion that they were simply catering to powerful business interests seeking to benefit from loosening regulations that could wind up hurting investors.

“It’s unfortunate to the extent that this has been politicized,” said Robert E. Litan, a former Justice Department official and senior fellow at the Brookings Institution who is overseeing the committee’s legal liability subgroup. “The objectives are clearly not to gut such reforms as Sarbanes-Oxley. I’m for cost-effective regulation.”

The main Sarbanes-Oxley provision that both committees are focusing on is a part that is commonly called Section 404, which requires audits of companies’ internal financial controls. Some business experts praise this section as having made companies more transparent and better managed, but many smaller companies call the section too costly and unnecessary.

Members of the two committees said that they had reached a consensus that Section 404, along with greater threat of investor lawsuits and government prosecutions, had discouraged foreign companies from issuing new stock on exchanges in the United States in recent months.

The committee members said that an increase in stock offerings abroad was evidence that the American liability system and tougher auditing standards were taking a toll on the competitiveness of American markets. But others see different reasons for the trend and few links to liability and accounting rules.

Bill Daley, a former commerce secretary in the Clinton administration who is the co-chairman of the Chamber of Commerce group, expects proposed changes to liability standards for accounting firms and corporations to draw the most flak. But he said that the changes affecting accounting firms are of paramount importance to prevent the further decline in competition. Only four major firms were left after Andersen’s collapse.

Another contentious issue concerns a proposal to eliminate the use of a broadly written and long-established anti-fraud rule, known as Rule 10b-5, that allows shareholders to sue companies for fraud. The change could be accomplished by a vote of the S.E.C.

John C. Coffee, a professor of securities law at Columbia Law School and an adviser to the Paulson Committee, said that he had recommended that the S.E.C. adopt the exception to Rule 10b-5 so that only the commission could bring such lawsuits against corporations.

But other securities law experts warned that such a move would extinguish a fundamental check on corporate malfeasance.

“It would be a shocking turning back to say only the commission can bring fraud cases,” said Harvey J. Goldschmid, a former S.E.C. commissioner and law professor at Columbia University. “Private enforcement is a necessary supplement to the work that the S.E.C. does. It is also a safety valve against the potential capture of the agency by industry.”
http://www.nytimes.com/2006/10/29/bu...rtner=homepage





Federal Government Routinely Loses Computers Containing Sensitive Personal Information on Americans
Jack Date and Pierre Thomas Report:

The federal government has routinely lost computers containing massive amounts of sensitive personal information, according to a new report by the House Committee on Government Reform.

Every one of the 19 departments and agencies audited reported at least one loss of personally identifiable information since 2003. Overall, the U.S. government gets a D+ for computer security.

The report shows more than 800 incidents, including the loss of hundreds of laptop computers and flash drives containing personal information about millions of Americans.

Many of the incidents involve "employee carelessness, contractor misconduct, and third party thefts," the report says.

The Department of the Treasury, which includes the IRS, reported 340 separate incidents, the most of any department or agency. According to the report, the Treasury Department "could not report the number of individuals impacted, whether notification of individuals had occurred, or whether incident-specific remedial efforts were undertaken."

The Department of Transportation reported only one minor incident to the Committee, but a Freedom of Information Act request uncovered a series of data breaches that compromised information affecting 133,000 people. The Department of Transportation also lost nearly 400 laptop computers, the report said.

The Defense Department reported 43 incidents, including the loss of the personal information of 30,000 recruiting prospects after a laptop fell off a motorcycle belonging to a Navy recruiter. A thumb drive lost in March of this year contained records on more than 200,000 enlisted Marines.

Some of the losses had been previously reported, such as the massive loss of data from the theft of a Department of Veterans Affairs official's laptop. But the report says few of the incidents it describes have been reported publicly.
http://blogs.abcnews.com/theblotter/...l_governm.html





Banks Facing Fines Over ID Thefts

Several leading banks may be facing unlimited fines over allegations that they dumped confidential customer account details in bin bags on streets.

The information watchdog, Richard Thomas, told the Times that he had received "highly disturbing evidence".

He is investigating alleged lapses by the Royal Bank of Scotland, Halifax, HSBC, Natwest and Post Office, it said.

The British Bankers Association said it was normal practice to dispose of confidential information securely.

It said this was done using specialist rubbish collection teams.

Mr Thomas told the newspaper he is considering enforcement action which could result in unlimited fines.

He said banks advised people to be careful with personal information and to do things such as shred everything because of identity theft was a "growing problem".

"If the banks themselves are being careless with the information, that seems to me to be wholly unacceptable," he said.

Mr Thomas said among the findings in bin bags were bank statements, loan applications which had been turned down and paying-in slips.

It comes after BBC investigators found customer names, addresses and account details when rifling through discarded rubbish.

The team, from BBC One's Watchdog, warned that the information could be used by criminals to steal clients' identities.

Mr Thomas said he would look into their findings, the team said.
http://news.bbc.co.uk/go/pr/fr/-/2/h...ws/6093600.stm





Hackers Penetrate Water System Computers
Richard Esposito

A foreign hacker who penetrated security at a water filtering plant near Harrisburg, Pa., is under investigation by the FBI for planting malicious software capable of affecting the plant's water treatment operations, ABC News has learned.

The hacker tried to covertly use the computer system as its own distribution system for e-mails or pirated software, officials told ABC.

"The concern was high because it is a computer that controls an important infrastructure system, and if, for some reason, it caused it to fail, it would have disrupted service," said Special Agent Jerri Williams of the FBI's Philadelphia field office.

The Columbus Day weekend intrusion is the fourth recorded cyber-attack on a U.S. water supply in the past four years, according to the records of WaterISAC, an industry information sharing and analysis center with members from among more than 1,000 drinking water and wastewater systems in the United States.

The hacker operating on the Internet tapped into an employee's laptop and then used an employee's remote access as the point of entry and installed a virus and spyware in the water plant computer system. Following the intrusion, the plant changed all passwords to the system and eliminated home access to the system.

"This is very common...computer hackers try to gain control of systems to use them as a resource to distribute e-mails, pirated software. It does not appear that this particular computer was hacked into for any other reason," said Special Agent Williams.

In one of three past attacks cited by WaterISAC, hackers used a Korea-based telecom to launch a denial of service attack on one water supply. In a second, they penetrated a top-level data control and acquisition system on a California irrigation district wastewater treatment plant. And in a third, they announced their entry into the computer system with a message, "I enter in your server like you in Iraq."

"We are seeing an increase in reporting," said WaterISAC Executive Director Diane Van De Hei. Prior to Sept. 11, 2001, most of the incidents were managed locally, she said.

WaterISAC was established in December 2002. The private sector group uses "push" e-mail technology to distribute information from the Department of Homeland Security, EPA and other government agencies to more than 10,000 clients in the water utility sector.

According to a 2006 Computer Crime and Security Survey by the San Francisco-based Computer Security Institute, 52 percent of 616 survey respondents reported unauthorized use of their computer systems in the past 12 months.
http://blogs.abcnews.com/theblotter/...s_penetra.html





Rage against the machine

Diebold Struggles to Bounce Back From the Controversy Surrounding its Voting Machines.
Barney Gimbel

Here's a five-step plan guaranteed to make an obscure company absolutely notorious.

First get into a business you don't understand, selling to customers who barely understand it either. Then roll out your product without adequate testing. Don't hire enough skilled people. When people notice problems, deny, obfuscate and ignore. Finally, blame your critics when it all blows up in your face.

With missteps like those, it would be hard to succeed in the gumball business. But when your product is the hardware and software of democracy itself, that kind of performance gets you called not just incompetent but evil - an enemy of democracy. And that is what has happened to Diebold Inc. (Charts) of Canton, Ohio, since it got into the elections business in 2001.

The move seemed like a good idea at the time. The $3 billion public company, whose core products are ATMs, bank vaults and security systems, had just sold 186,000 voting machines to Brazil, where they delivered a quick and clean count in the 2000 presidential elections.

Surely, Diebold reasoned, it could duplicate this success closer to home. "We thought if we got this right," says Thomas Swidarski, the company's CEO and president, "then we could do it across the globe."

But faster than you can say hanging chad, things went wrong. In early 2003, activists found a version of Diebold's secret software on the Internet. The code had so many security flaws that one group would later post a video of a chimpanzee changing votes.
Weeks later, Diebold's then-CEO Walden O'Dell famously wrote to fellow Bush supporters in a fundraising letter that he was committed to "help Ohio deliver its electoral votes to the President." It didn't take long for political activists, many of them already suspicious of the new voting technology, to begin diving through the company's dumpsters and picketing its shareholder meetings.

Though other voting-machine companies have also had their difficulties, it is "the dreaded Diebold," as one blogger on DailyKos refers to it, that stirs up the likes of Michael Moore. "The reason Diebold gets so much heat," says activist Bev Harris, author of "Black Box Voting: Ballot Tampering in the 21st Century," "is not because they're any worse than their competitors. It's because we got more information on them early on."

The drumbeat of bad news has never stopped. This year, researchers have found more security flaws, and another version of the software was leaked. In Maryland, Diebold allegedly knew that some of its machines had defective motherboards but did not replace them for a year. Both candidates for governor there advised their supporters to vote via absentee ballot rather than use Diebold machines.

Rolling Stone published an article alleging that Diebold helped deliver Georgia to the GOP (Diebold calls the story "fiction"). The company is an unwitting star in a new HBO documentary called "Hacking Democracy." Oh, and the SEC is investigating accounting irregularities.

Deep in a corporate nightmare, Diebold is wondering how to shake itself awake. After all, this is a 147-year-old company once headed by Eliot Ness, the storied crime fighter. Internally there is little doubt that the company rues the day it stepped out of its comfort zone and into the maw of electoral politics.

Selling political equipment to politicians is an ugly business - and thanks to lawsuits, lobbying expenses and public relations consultants, the profit margins have been stingy too. (The voting division, which accounts for just 5 percent of the $3 billion company's revenue, only started making money last year.)

But after a close look at Diebold and its operations, it's hard to see the company as evil. Naive? Yes. Ignorant? Sure. Stupid? Sometimes. "We didn't know a whole lot about the elections business when we went into it, "admits Swidarski. "Here we are, a bunch of banking folks thinking making voting machines would be similar to making ATMs. We've learned some pretty painful lessons."

A history of success

A cow, a lantern, and a straw-filled barn made Charles Diebold (pronounced DEE-bold) a household name in the banking world. It was the night of Oct. 8, 1871, when, as legend has it, the Great Chicago Fire started in Mrs. O'Leary's cowshed. When 878 Diebold safes survived with their contents unharmed, business took off.

Canton became known as "Little Germany," thanks to the thousands of immigrants who flocked to work in the Diebold factories. (German immigrants arriving in New York reportedly only had to say "Diebold" for directions to Canton-bound trains.)

By the beginning of the 20th century, the company was making jails, trapdoors for gallows, and padded cells for asylums. During World War II it made armor plating for tanks and airplanes. Then, in the 1960s, the company bet its future on a speculative technology: automated teller machines.

Diebold quickly became a global market leader. But it stayed intensely Midwestern, content to manufacture its machines locally and allow companies like IBM (Charts) to distribute them overseas.

In the mid-1990s, however, when rival NCR (Charts) passed it to become the market leader, Diebold changed tactics and took control of its worldwide distribution (today its share is 30 percent). The company began buying up suppliers around the world, including a Brazilian ATM maker, Procomp Amazonia, in October 1999.

Entering the political sphere

Around the same time, the Brazilian government was looking to fully automate its election system. Procomp got the $106 million contract - Diebold's largest ever - to make 186,000 identical electronic voting machines for the 2000 presidential election.

At the exact same time that Florida's officials were haggling over butterfly ballots, Brazil's were congratulating themselves on a clean and tidy result.

Emboldened by Diebold's success in Brazil, CEO Walden O'Dell set out to ensure that the company got a serious piece of the U.S. elections business.

The first problem was that the Brazilian machines weren't sophisticated enough for the U.S. market and couldn't be certified quickly. So O'Dell needed to buy a company to get into the market for the 2002 midterm elections.

In June 2001, Diebold announced it was acquiring Global Electronic Systems, based in McKinney, Texas, for about $30 million. Global was a $7 million operation that made most of its money printing ballots for its optical-scan reading machine. Its touch-screen system, the Accu-Vote-TS, wasn't a big seller.

Nothing was a big seller then. The elections business was populated by a couple dozen private firms that often literally sold equipment out of the back of their cars. That's because their customers were poor.

U.S. elections are intensely local affairs, run by more than 3,000 separate counties. Buying new equipment was a luxury. If county commissioners had to choose between filling a pothole or buying new voting equipment, the pothole invariably won.

That all changed when Congress passed the Help America Vote Act in 2002. With it came $3.9 billion in grants for states to replace punch-card and mechanical-lever machines and to set up statewide voter lists.

Local election officials soon found themselves inundated by high-powered lobbyists. "I don't think those election boards had ever seen as many dinners out," says Paul Tipps, a prominent Democrat who lobbied for Diebold in Ohio.

With its main rivals - Oakland, Calif.-based Sequoia Voting Systems and Omaha, Neb.-based Election Systems & Software - making inroads in Florida, Diebold targeted other states. In March 2002, just two months after it completed its purchase of Global, Maryland put in a $13 million order to equip four counties with touch-screen machines. In May, Georgia signed a $54 million contract to buy 20,000 Diebold machines.

Early warning signs

After the takeover, the big contracts meant big problems. Diebold had let the Global operation alone, but it just couldn't keep up. Orders were lost, manufacturing fell behind schedule, the technical staff was overwhelmed.

Recalls Swidarski, the unit lacked "the wherewithal really to know how to manage a business. They were doing complex rollouts without the depth or breadth or skill set to deal with what they were going to do."

The same could be said of the customers. Election administrators were often unsophisticated county employees who had been in the job forever. "If we work with Bank of America and they want to roll out 1,000 ATMs, they'll have 25 professional project managers," says Swidarski. "You go to a meeting at a county and you're looking at two people."

It didn't help that Global's touch-screen system, the AccuVote-TS, was flawed from the start. It had purchased the technology from a small company called I-Mark, whose founders had designed it as an unattended voting terminal that could be used in places like shopping malls or supermarkets. "The only problem was they weren't looking at security," says Douglas Jones, a computer science professor at University of Iowa who has been testing voting machines since 1994.

Not quite the only problem. Because there was little demand for touch-screen systems before 2001, Global hadn't spent much on software development. (Jones thinks they needed to start over.)

So the system voters used in 2002 was bug-ridden. Diebold machines crashed early and often, and there was insufficient trained staff to cope with the inevitable problems. (One problem: "vote hopping," where, due to an uncalibrated touch screen, pressing one candidate counted the one next to it.) Even so, after the election, press accounts largely glossed over the problems as isolated hiccups. Orders continued to roll in. And then things fell apart.

Until recently, hardly anyone gave a thought to the mechanics of voting. Even fewer thought about hackers. But in the wake of 2000, the mechanics of voting became politicized.

One key moment came when Bev Harris heard her suburban Seattle county was considering switching to electronic touch-screen machines. Curious, she started trawling the Internet for information - and late one night in January 2003, she discovered a cache of files on an unprotected Diebold server. In it were e-mails between programmers discussing the system's problems.

"Distributing this software is extremely dangerous," a programmer wrote in 2001. "Our smart-card format has absolutely no security, so if someone were to get a copy of this software and a reader, they could stand at the ballot station and quietly burn new voters cards all day.... I can see the cover of USA Today in my head. Consider everyone warned." (Diebold says the problem was fixed before the 2002 elections.)

Digging further, Harris found a version of the company's secret software that ran the machines. She passed it to Avi Rubin, a computer science professor at Johns Hopkins University in Baltimore. Within an hour, Rubin says, he discovered that the software's encryption system was one "everyone knew was broken since 1998." That same day, he found that the administrative password to all the machines was the same: 1-1-1-1.

"It looked like an experimental student project," Rubin says. "If it was my student's project, they would have gotten an F." His report, which came out two days after Maryland had awarded Diebold a $56 million contract for 11,000 touch-screen machines, galvanized those who had always been suspicious of electronic voting.

The company pointed out in a 27-page retort that the software wasn't in use and that there were checks and balances to prevent fraud. The response didn't satisfy the skeptics; an avalanche of criticism - some of it thoughtful, some of it wacko - began to bear down.

In 2004, California decertified Diebold machines and joined a civil lawsuit filed by Bev Harris that alleged Diebold lied when it said its equipment had been federally certified. The company admitted no guilt but agreed to settle, paying California $2.6 million.

At the same time, it continued to have manufacturing problems, once shutting down production because the touch-screen machines were malfunctioning. (It took a year to replace the defective motherboards.)

Changing gears

Soon, Swidarski, then a senior marketing executive in the ATM unit, took over the elections business. "The board understands, as best anyone can, the volatile nature of the business/media and that politics are involved," Swidarski wrote in an e-mail to his deputies in the elections division. "However, the board cannot understand how the [Secretary of State] of [California] indicates that we have lied, misled, and withheld information."

Swidarski fired many Global staff and brought in a new boss from Canton, Dave Byrd, to run the business. The voting unit began to operate more smoothly, grossing $150 million in 2005 and making a small profit.

In December 2005, the board pushed O'Dell out and named Swidarski CEO. Just as he did with the elections business, Swidarski cleaned house: Only two of the seven top executives he inherited are still at Diebold today.

Swidarski is cut from a different cloth than his predecessor. O'Dell liked deals and was frankly bored by ATMs; he loved being known as one of Bush's Pioneers - generous Republican donors. A former senior executive with Emerson Electric, O'Dell's top priority was to make the numbers.

Swidarski, by contrast, is more focused on the customers than he is on Wall Street. (He refuses to give quarterly earnings guidance.) A former marketing executive at PNC Bank in Pittsburgh, he is straightforward and unpretentious. In his short tenure as CEO, he has changed the mood at Canton. "This place is dramatically different from a year ago," says CFO Kevin Krakora, "almost night and day."

Smart Business 100, Swidarski's $100 million plan to cut costs and increase customer service, is beginning to show dividends. Since fading to less than $35 in September 2005, Diebold's stock is now at $42. Profits dropped 41 percent last year, but were still a healthy $161 million on $2.6 billion of revenue.

Diebold looks set to beat those numbers this year. "The new management team," says Gil Luria, a research analyst at Wedbush Morgan Securities, "seems to be on top of what they really need to do to turn around the company." Krakora puts it simply, "This company prints cash."

Dubious voting

But its voting machines continue to attract scorn. In August, Edward Felten, a computer-science professor at Princeton University, got his hands on a Diebold machine similar to those still used in Georgia. With the help of two graduate students, he posted a video online that showed him infiltrating and installing a virus in what appears to be less than a minute.

Felten found that the key to the lock protecting the memory card, which is used to both update the software and record votes, was one commonly used in office furniture and even hotel minibars. Once the door to the slot was open, he could slip in a virus-infested memory card and alter votes. "We were completely floored by how easy it was," Felten says.

Diebold disputes the accuracy, integrity and plausibility of the Princeton study, pointing out that Felten's team used an old machine with two-year-old software not in use today. Plus, the team had four months to figure it all out.

"The report all but ignores physical security and election procedures," says Mark Radke, marketing director of Diebold Election Systems. "Every local jurisdiction secures its voting machines - every voting machine, not just electronic machines. Electronic machines are secured with security tape and numbered security seals that would reveal any sign of tampering."

Therein lies the rub, says Michael Shamos, a computer-science professor at Carnegie Mellon University who has been testing election equipment since 1980.

"Diebold doesn't fully get it about security," he says. "Their position every time somebody raises the prospect of insider manipulation of elections is, 'Are you telling me you think that these election officials would commit a felony?' And the answer is, 'Yes, that's what we're saying. They might commit a felony, and what is your system doing to prevent them?'"

Even so, Shamos doesn't completely buy the Princeton study. "What Felten found wasn't a bug in the software," he says. "It was a deliberate feature that comes from the need to be able to update the machines quickly."

Felten, he says, makes it seem like anyone with a memory card could go into a Diebold machine, root around and swing an election. Shamos points out that since the machines aren't networked, a virus would have to be tailored to the ballot and inserted into each machine one wanted to manipulate. That's a lot more work - and a lot more opportunities to screw up - than it looks like on video.

A national rollout of almost any product is bound to have glitches. But when elections depend upon the product in a country whose politics are scarred by distrust, there is little tolerance for error.

The problem critics had with the early touch-screen systems was the lack of a tangible way - such as the kind of receipt consumers get at ATM machines - to verify results. (Oddly, few made this complaint about lever machines.)

Though about half of the touch-screen systems in use today provide an audit trail that voters can see, that presents its own problems, such as installing the paper or keeping it from jamming.

What really gets the critics going, though, is the possibility of stealing or "editing" votes by the bundle, either in a specific precinct or, worse, by hacking into a central database. As William "Boss" Tweed, who effectively ran New York City in the mid-1800s, once noted, "The ballots made no result; the counters made the result."

Diebold's critics say that is the problem. But for all the sound and fury swirling around the company, there has not been a single confirmed incident of tampering with a Diebold or any other electronic machine; it's much more difficult to write a computer virus than to tinker with a ballot box. (Ah, say the critics, but prove it hasn't happened.)

So what's the prediction for this election? The primaries were a mixed bag. One big story was that Florida was not a story, but there were problems elsewhere, from poll workers unable to boot up the machines, to transmission problems, to unexpected screen freezes.

"History shows us it always takes at least three good-sized elections before we have any new system down," says Doug Lewis, the executive director of the Election Center, an organization that represents and trains local election administrators. "It would be a miracle if there weren't problems in this election."

As for Diebold, Swidarski is questioning whether the election business "fits into our product portfolio." He says he'll make a decision within the next three months. But it says something that Swidarski recently ordered the name "Diebold" removed from the front of the voting equipment. Why? A spokesman would only say, "It was a strategic decision on the part of the corporation."

Reporter associate Susan Kaufman contributed to this article.
http://money.cnn.com/magazines/fortu...n=money_latest





Report: Voting Machines Can be Compromised, But Safeguards in Place
Susan Haigh

The new voting machines that will be used in 25 Connecticut cities and towns next week are vulnerable to tampering, but state officials are taking steps to prevent that, according to a report released Tuesday by the University of Connecticut.

The optical scan devices, which automatically read paper ballots filled out by voters, can be compromised in a matter of minutes by tactics such as neutralizing one candidate so his or her votes aren't counted or swapping the votes of two candidates, the report said.

"Such tabulation corruptions can lay dormant until the Election Day, thus avoiding detection through pre-election tests," according to the report.

But the authors of the report credit the secretary of the state's office for implementing new security procedures to protect the machines.

A team of UConn professors known as the Voting Technology Research Center is advising the secretary of the state's office. Alex Shvartsman, a computer science and engineering professor, who heads up the group, said the state has implemented strict rules for how the machines get from the supplier to polling places, tamper-resistant packaging of the machines and planned postelection audits.

"If nobody touches the devices, if there is an unbroken chain of custody from the supplier to the polling place, then we're very confident that nothing can go wrong with them - short of a mechanical malfunction," Shvartsman said.

The optical scan machines are first being used in 25 towns this election, replacing the old mechanical lever machines. The rest of the state will use the new machines next year. Nearly 330,000 voters will be affected this year.

With the new system, voters fill out a paper ballot similar to a bubble sheet used for a standardized test and then scan it into a machine for verification. The technology also provides a paper trail for every vote cast, which Shvartsman said makes the devices more reliable than touch screen and other electronic voting machines.

Secretary of the State Susan Bysiewicz said the report confirms that optical scan machines are the most secure form of voting technology.

"When we considered possible new voting technologies, security was paramount," she said.

But one of her political opponents, Green Party candidate Mike DeRosa, said the report raises concerns about the manufacturer of the new machines, Diebold Election Systems of Ohio, whose machines have been criticized around the country for various malfunctions. He suggested the state should hire technical experts to service the machines.

"We need to have professionalization of our electoral process in Connecticut," DeRosa said.

But Bysiewicz has said Massachusetts-based LHS Associates Inc., not Diebold, designed the machines. Diebold acquired LHS and submitted a bid to the state to provide its electronic machines and LHS's optical scan machines, she said. The state rejected the Diebold-designed machines, Bysiewicz said.

According to the report, the UConn professors determined that a laptop computer user with a simple computer cable can obtain information from the memory cards of the optical scan machines. They also determined there are ways to feed multiple ballots into the machine when an attendant is not watching.

"Poll workers must not be allowed to take their eyes off the machines, and should be wary of attempts at distraction," the report reads.

Shvartsman said he believes the local poll workers are ready for the job.

"I've seen some of these silver-haired ladies and they're tough," he said. "I think we're in good hands."

The new voting machines are helping Connecticut meet the requirements of a federal law enacted after the chaotic Florida recount in the presidential election in 2000.
http://hosted.ap.org/dynamic/stories...10-31-17-55-19





U.S. Investigates Voting Machines’ Venezuela Ties
Tim Golden

The federal government is investigating the takeover last year of a leading American manufacturer of electronic voting systems by a small software company that has been linked to the leftist Venezuelan government of President Hugo Chávez.

The inquiry is focusing on the Venezuelan owners of the software company, the Smartmatic Corporation, and is trying to determine whether the government in Caracas has any control or influence over the firm’s operations, government officials and others familiar with the investigation said.

The inquiry on the eve of the midterm elections is being conducted by the Committee on Foreign Investment in the United States, or Cfius, the same panel of 12 government agencies that reviewed the abortive attempt by a company in Dubai to take over operations at six American ports earlier this year.

The committee’s formal inquiry into Smartmatic and its subsidiary, Sequoia Voting Systems of Oakland, Calif., was first reported Saturday in The Miami Herald.

Officials of both Smartmatic and the Venezuelan government strongly denied yesterday that President Chávez’s administration, which has been bitterly at odds with Washington, has any role in Smartmatic.

“The government of Venezuela doesn’t have anything to do with the company aside from contracting it for our electoral process,” the Venezuelan ambassador in Washington, Bernardo Alvarez, said last night.

Smartmatic was a little-known firm with no experience in voting technology before it was chosen by the Venezuelan authorities to replace the country’s elections machinery ahead of a contentious referendum that confirmed Mr. Chávez as president in August 2004.

Seven months before that voting contract was awarded, a Venezuelan government financing agency invested more than $200,000 into a smaller technology company, owned by some of the same people as Smartmatic, that joined with Smartmatic as a minor partner in the bid.

In return, the government agency was given a 28 percent stake in the smaller company and a seat on its board, which was occupied by a senior government official who had previously advised Mr. Chávez on elections technology. But Venezuelan officials later insisted that the money was merely a small-business loan and that it was repaid before the referendum.

With a windfall of some $120 million from its first three contracts with Venezuela, Smartmatic then bought the much larger and more established Sequoia Voting Systems, which now has voting equipment installed in 17 states and the District of Columbia.

Since its takeover by Smartmatic in March 2005, Sequoia has worked aggressively to market its voting machines in Latin America and other developing countries. “The goal is to create the world’s leader in electronic voting solutions,” said Mitch Stoller, a company spokesman.

But the role of the young Venezuelan engineers who founded Smartmatic has become less visible in public documents as the company has been restructured into an elaborate web of offshore companies and foreign trusts.

“The government should know who owns our voting machines; that is a national security concern,” said Representative Carolyn B. Maloney, Democrat of New York, who asked the Bush administration in May to review the Sequoia takeover.

“There seems to have been an obvious effort to obscure the ownership of the company,” Ms. Maloney said of Smartmatic in a telephone interview yesterday. “The Cfius process, if it is moving forward, can determine that.”

The concern over Smartmatic’s purchase of Sequoia comes amid rising unease about the security of touch-screen voting machines and other electronic elections systems.

Government officials familiar with the Smartmatic inquiry said they doubted that even if the Chávez government was some kind of secret partner in the company, it would try to influence elections in the United States. But some of them speculated that the purchase of Sequoia could help Smartmatic sell its products in Latin America and other developing countries, where safeguards against fraud are weaker.

A spokeswoman for the Treasury Department, which oversees the foreign investment committee, said she could not comment on whether the panel was conducting a formal investigation.

“Cfius has been in contact with the company,” said the spokeswoman, Brookly McLaughlin, citing discussions that were first disclosed in July. “It is important that the process is conducted in a professional and nonpolitical manner.”

The committee has wide authority to review foreign investments in the United States that might have national security implications. In practice, though, it has focused mainly on foreign acquisitions of defense companies and other investments in traditional security realms.

Since the political furor over the Dubai ports deal, members of Congress from both parties have sought to widen the purview of such reviews to incorporate other emerging national security concerns.

In late July, the House and the Senate overwhelmingly approved legislation to expand the committee’s scope, give a greater role to the office of the director of national intelligence and strengthen Congressional oversight of the review process.

But the Bush administration opposed major changes, and Congressional leaders did not act to reconcile the two bills before Congress adjourned.

Foreigners seeking to buy American companies in areas like defense manufacturing typically seek the committee’s review themselves before going ahead with a purchase. Legal experts said it would be highly unusual for the panel to investigate a transaction like the Sequoia takeover, and even more unusual for the panel to try to nullify the transaction so long after it was completed.

It is unclear, moreover, what the government would need to uncover about the Sequoia sale to take such an action.

The investment committee’s review typically involves an initial 30-day examination of any transactions that might pose a threat to national security, including a collective assessment from the intelligence community. Should concerns remain, one of the agencies involved can request an additional and more rigorous 45-day investigation.

In the case of the ports deal, the transaction was approved by the investment committee. But the Dubai company later abandoned the deal, agreeing to sell out to an American company after a barrage of criticism by legislators from both parties who said the administration had not adequately reviewed the deal or informed Congress about its implications.

The concerns about possible ties between the owners of Smartmatic and the Chávez government have been well known to United States foreign-policy officials since before the 2004 recall election in which Mr. Chávez, a strong ally of President Fidel Castro of Cuba, won by an official margin of nearly 20 percent.

Opposition leaders asserted that the balloting had been rigged. But a statistical analysis of the distribution of the vote by American experts in electronic voting security showed that the result did not fit the pattern of irregularities that the opposition had claimed.

At the same time, the official audit of the vote by the Venezuelan election authorities was badly flawed, one of the American experts said. “They did it all wrong,” one of the authors of the study, Avi Rubin, a professor of computer science at Johns Hopkins University, said in an interview.

Opposition members of Venezuela’s electoral council had also protested that they were excluded from the bidding process in which Smartmatic and a smaller company, the Bizta Corporation, were selected to replace a $120 million system that had been built by Election Systems and Software of Omaha.

Smartmatic was then a fledgling technology start-up. Its registered address was the Boca Raton, Fla., home of the father of one of the two young Venezuelan engineers who were its principal officers, Antonio Mugica and Alfredo Anzola, and it had a one-room office with a single secretary.

The company claimed to have only two going ventures, small contracts for secure communications software that a Smartmatic spokesman said had a total value of about $2 million.

At that point, Bizta amounted to even less. Company documents, first reported in 2004 by The Herald, showed the firm to be virtually dormant until it received the $200,000 investment from a fund controlled by the Venezuelan Finance Ministry, which took a 28 percent stake in return.

Weeks before Bizta and Smartmatic won the referendum contract, the government also placed a senior official of the Science Ministry, Omar Montilla, on Bizta’s board, alongside Mr. Mugica and Mr. Anzola. Mr. Montilla, The Herald reported, had acted as an adviser to Mr. Chávez on elections technology.

More recent corporate documents show that before and after Smartmatic’s purchase of Sequoia from a British-owned firm, the company was reorganized in an array of holding companies based in Delaware (Smartmatic International), the Netherlands (Smartmatic International Holding, B.V.), and Curaçao (Smartmatic International Group, N.V.). The firm’s ownership was further shielded in two Curaçao trusts.

Mr. Stoller, the Smartmatic spokesman, said that the reorganization was done simply to help expand the company’s international operations, and that it had not tried to hide its ownership, which he said was more than 75 percent in the hands of Mr. Mugica and his family.

“No foreign government or entity, including Venezuela, has ever held any stake in Smartmatic,” Mr. Stoller said. “Smartmatic has always been a privately held company, and despite that, we’ve been fully transparent about the ownership of the corporation.”

Mr. Stoller emphasized that Bizta was a separate company and said the shares the Venezuelan government received in it were “the guarantee for a loan.”

Mr. Stoller also described concerns about the security of Sequoia’s electronic systems as unfounded, given their certification by federal and state election agencies.

But after a municipal primary election in Chicago in March, Sequoia voting machines were blamed for a series of delays and irregularities. Smartmatic’s new president, Jack A. Blaine, acknowledged in a public hearing that Smartmatic workers had been flown up from Venezuela to help with the vote.

Some problems with the election were later blamed on a software component, which transmits the voting results to a central computer, that was developed in Venezuela.

Simon Romero contributed reporting from Caracas, Venezuela.
http://www.nytimes.com/2006/10/29/wa.../29ballot.html





More State Delay Possible on New Voting Machines
Marc Humbert

Already the worst in the nation for complying with new voting standards, New York may again stretch the deadline for counties to order new voting machines, raising new fears about whether they will be available for next year's elections, a state official said Tuesday.

Lee Daghlian, a spokesman for the state Board of Elections, said the board may decided at its meeting on Wednesday to push back the required date for counties to order the machines to "late January or sometime in February."

The deadline had already been shoved back to early January from mid-December.

Daghlian said slower-than-expected state testing of new machines to replace the decades old lever-action machines still used in New York was responsible for the possible new delay.

The state board spokesman said that even with the new delay, New York could possibly make the state-mandated 2007 election deadline for the new machines.

"But if it keeps getting lengthened we might not make it," Daghlian said.

Bo Lipari, a representative of the League of Women Voters on a state advisory panel dealing with replacing voting machines, was less optimistic than Daghlian.

"A delay like this probably puts the nail in the coffin for replacing lever machines in 2007," said Lipari, who is also executive director of New Yorkers for Verified Voting.

New York has been slower than all other states in complying with the federal Help America Vote Act adopted in the wake of the disputed 2000 presidential election. The U.S. Justice Department sued New York earlier this year to force it to install new voting machines for the disabled and compile statewide voter registration lists in time for this year's elections. A court settlement was negotiated to bring New York into compliance.

Nonetheless, state officials are also facing a state-adopted law requiring that the lever-action machines still being used by voters this year be replaced by the 2007 election.

Also at issue is about $50 million already received by the state in federal aid to help pay for the voter system upgrade. State officials have asked federal officials not to require the return of those funds.
http://hosted.ap.org/dynamic/stories...EAST&TEMPLATE=





E-Voting State by State: What You Need To Know
Angela Gunn

Many Americans will head to the polls for November's midterm elections with less certainty than ever about how -- or whether -- their votes will be counted.

Two years after the controversy-plagued 2004 elections, four years after HAVA (the Help America Vote Act) was passed, and six years after the Supreme Court and America romanced the hanging chad, experts are bracing for yet another wave of challenges to regional vote-counting systems.

One-third of us will use voting machines that have never before served in a general election. Legal challenges to paperless DRE (direct-recording electronic) voting technologies are proliferating across the country, and as computer scientists demonstrated earlier this year, hacking challenges to many of these machines can bear fruit even faster than demands for recounts.

Election-reform watchdog groups haven't kept pace with the massive funding influx and official support that the move to electronic voting has experienced. (Nor, critics say, have they enjoyed the close relationships that exist between many of the e-voting suppliers and government officials in charge of framing the rules for the acquisition of such machines.) But watchdogs and critics have made good use of available resources, especially the Web and the blogosphere, to discuss their findings and keep the issue alive as HAVA implementation has lurched into place.

It's a lot to keep up with, especially since most of us would rather be thinking about who to vote for, not how we'll do it -- and certainly not about what might go wrong. To that end, Computerworld.com presents what you need to know for each of the 50 states and the District of Columbia. You'll find out what equipment and systems are in place for voter registration and polling, any significant legal challenges to the systems, previous Computerworld coverage of individual states, selected coverage from other media, and links to government watchdog sites. We've also got concise FAQ-style information on the vendors, technologies and laws that are important to the issue. Finally, since e-voting is beginning to attract attention in the culture at large, we've asked watchdog Brad Friedman to review one of the highest-profile projects on the horizon: the HBO documentary Hacking Democracy, premiering Nov. 2.
http://www.computerworld.com/action/...icleId=9004591





Florida Ballot Terminals Favor Republicans
Thomas C Greene

Florida voters using electronic ballot machines are having persistent problems choosing Democrats in early elections, the Miami Herald reports.

The touch-screen gizmos seem strangely attracted to Republican candidates. One voter needed assistance from an election official, and even then, needed three tries to convince the machine that he wanted to vote for Democrat Jim Davis in the gubernatorial race, not his Republican opponent Charlie Crist.

Another voter who went Democrat across the board kept finding Republicans listed in the summary screen. He made repeated attempts until, finally, the machine registered his votes correctly, and he cast his ballot.

Yet another frustrated voter who complained of difficulties selecting a Democrat was told that the machine she was using had been troublesome. Poll workers fiddled with it for a bit, and then it seemed to work properly.

Apparently, this happens all the time. According to the Herald, "Broward County Supervisor of Elections spokeswoman Mary Cooney said it's not uncommon for screens on heavily used machines to slip out of sync, making votes register incorrectly. Poll workers are trained to recalibrate them on the spot - essentially, to realign the video screen with the electronics inside. The 15-step process is outlined in the poll-worker's manual."

Well that's a relief. Only we have to wonder, if the screens "slip out of sync," might other components do so as well? And why are poll workers permitted to fiddle with the machines?

Unfortunately, the article (http://www.rawstory.com/showoutartic...s/15869924.htm) tells us little. It sounds as if the machines are of poor quality, but the paper neglects to mention the manufacturer(s) responsible for them. The elections supervisor's spokesperson seems altogether too comfortable with the notion that the machines are unreliable. 'They do that all the time?'

With early elections already underway, it looks as if Florida will again be in the headlines for the wrong reasons, as it so often is.
http://www.theregister.co.uk/2006/10...ont_cooperate/





Dutch Government Scraps Plans to Use Voting Computers in 35 Cities Including Amsterdam
AP

Voters in Amsterdam and 34 other Dutch cities may be using paper and pencil instead of computerized voting machines in national elections next month.

The government on Monday banned the use of one common type of computer voting machine, fearing that secret ballots may not be kept secret. It ordered a review of all electronic machines after the Nov. 22 election.

Government Renewal Minister Atzo Nicolai said the move was necessary after an investigation found the machines made by Sdu NV emitted radio signals that a technology-savvy spy could use to peek at a voters' choices from a distance of up to several dozen meters (yards).

"What can be detected is the image on the screen that's visible to the voter, by which his voting could be monitored," Nicolai said in a letter to parliament.

"In short, the machines made by the company Sdu can now be tapped, and there are no technical measures that can be taken before the upcoming elections that would prevent this tapping and guarantee the secrecy of the ballot."

He said he had revoked the permits for all the machines, about 10 percent of all voting machines used in the country.

A sample of the other machines used in next month's vote will be tested before the results are certified to ensure against fraud, Nicolai said.

The turnabout came after a group called "We Don't Trust Voting Computers" protested the vulnerability of electronic voting to fraud or manipulation.

"I think this will have repercussions far beyond Holland" said Rop Gonggrijp, one of the group's founders, after Monday's announcement.

"Holland was one of the first countries to use e-voting widely, certainly in Europe, and it has played a leading role in adoption of voting machines, so it's only natural that Holland be one of the first to realize there are drawbacks," he said, calling the adoption of voting machines a "hasty decision."

Officials with Sdu, the maker of the banned "NewVote" voting machines, could not immediately be reached for comment. Dutch media cited a company executive saying the machines were built to government specifications and he was planning to protest the decision.

The Dutch parliament summoned Nicolai to defend the decision in an extra session Tuesday.

"I realize what this change to the voting process means for these 35 cities" Nicolai wrote. He asked voting councils, the Interior Ministry and other election-related groups to help come up with alternatives quickly.

The City of Amsterdam said in a statement it now plans to use a traditional paper ballot and red-colored pencils. "We'll have to pull those red pencils out of the basement again and sharpen them up," mayor Job Cohen told NOS news.

Machines, made by Nedap NV, are widely used in Germany, France and other European countries.

Gonggrijp predicted that many local and national governments will stop using current models of Nedap and other voting machines within a year.

But the chief technical officer of Nedap's voting systems division said he was confident the machines were secure.

"Nedap is pleased about the concerns and that people are becoming interested in the functioning of voting systems, since that's the cornerstone of democracy," said Matthijs Schippers.

He said the machines were no less vulnerable to fraud than paper ballots, which also can be manipulated if unprotected.
http://www.iht.com/articles/ap/2006/...g_Machines.php





"Anybody can do it."

American Election Hacker Testifies
admin

American computer programmer Clinton Eugene Curtis is seen in this video testifying under oath in front of the U.S. House Judiciary Members in Ohio.

He tells the members how he was hired by Congressman Tom Feeney in 2000 to build a prototype software package that would secretly rig an election to sway the result 51 / 49 to a specified side.

He explains that it would be undetectable and only takes 100 lines of code to implement, watch it and then think about where your vote is really going
http://www.hack247.co.uk/2006/11/02/...ker-testifies/

Editor’s note: The official accused at the 2004 forum has denied all allegations. – Jack.





Diebold Demands That HBO Cancel Documentary on Voting Machines

Film saying they can be manipulated 'inaccurate'
Michael Janofsky

The program, "Hacking Democracy," is scheduled to debut Thursday, , five days before the 2006 U.S. midterm elections. The film claims that Diebold voting machines aren't tamper-proof and can be manipulated to change voting results.

"Hacking Democracy" is "replete with material examples of inaccurate reporting," Diebold Election System President David Byrd said in a letter to HBO President and Chief Executive Chris Albrecht posted on Diebold's Web site. Short of pulling the film, Monday's letter asks for disclaimers to be aired and for HBO to post Diebold's response on its Web site.

According to Byrd's letter, inaccuracies in the film include the assertion that Diebold, whose election systems unit is based in Allen, Texas, tabulated more than 40 percent of the votes cast in the 2000 presidential election.

The letter says Diebold wasn't in the electronic voting business in 2000, when disputes over ballots in Florida delayed President Bush's victory for more than a month and raised questions about the reliability of electronic voting machines.

"We stand by the film," said Jeff Cusson, a spokesman for HBO, which is a unit of Time Warner Inc.

"We have no intention of withdrawing it from our schedule. It appears that the film Diebold is responding to is not the film HBO is airing."

David Bear, a spokesman for Diebold, said the company bought another firm, Global Elections, in 2002 that served about 8 percent of balloting in 2000, including voters in Florida. The company, which hasn't seen the film, based its complaints on material from the HBO Web site, Bear said.

This is Diebold's second recent defense of its system. On Sept. 26, Byrd wrote to Jann Wenner, editor and publisher of Rolling Stone, saying a story written by Robert F. Kennedy Jr., "Will the Next Election Be Hacked?" was "error-riddled" and that readers "deserve a better researched and reported article."

The HBO documentary is based on the work of Bev Harris, the Renton woman who founded BlackBoxVoting.org, which monitors election accuracy. In 2004 the attorney general of California took up a whistle-blower claim filed by Harris against Diebold and settled with the company for $2.6 million in December.
http://seattlepi.nwsource.com/nation...diebold01.html





Grading Congress on High-Tech Cred

CNET News.com ranks every member of the U.S. Congress based on their technology-related votes. Some aren't happy about their score.
Declan McCullagh and Anne Broache

Ever since the mid-1990s, politicians have grown fond of peppering their speeches with buzzwords like broadband, innovation and technology.

John Kerry, Al Gore and George W. Bush have made fundraising pilgrimages to Silicon Valley to ritually pledge their support for a digital economy.

But do politicos' voting records match their rhetoric? To rate who's best and who's worst on technology topics before the Nov. 7 election, CNET News.com has compiled a voter's guide, grading how representatives in the U.S. Congress have voted over the last decade.

While many of the scored votes centered on Internet policy, others covered computer export restrictions, H-1B visas, free trade, research and development, electronic passports and class action lawsuits. We excluded the hot-button issue of Net neutrality, which has gone only to a recorded floor vote in the House of Representatives so far, because that legislation has generated sufficient division among high-tech companies and users to render it too difficult to pick a clear winner or loser.

The results were surprisingly mixed: In the Senate, Republicans easily bested Democrats by an average of 10 percent. In the House of Representatives, however, Democrats claimed a narrow but visible advantage on technology-related votes.

Many high scorers came from Silicon Valley, the birthplace of a laissez-faire attitude toward Internet taxation and regulation. Also unsurprising was George Allen, a first-term Virginia Republican who won the top score in the Senate, at 78 percent, after becoming chairman of the Senate High Tech Task Force five years ago.

A less obvious winner was Rep. Ron Paul, a Texas Republican who represents a rural district along the Gulf Coast that's home to few Web 2.0 start-ups but plenty of cattle ranchers and petrochemical companies. He topped the House rankings with a score of 80 percent, narrowly besting two Northern California Democrats.

"I believe strongly in protecting the Internet," Paul said in an interview. "My colleagues aren't quite as interested in the subject. That, to me, is disappointing."

To create our 2006 News.com scorecard, we selected 20 representative votes in the U.S. House of Representatives and 16 votes in the U.S. Senate. Then we wrote a computer program to download, sort and tabulate approximately 10,400 individual "yeas" or "nays."

To be sure, no political scorecard can satisfy everyone, and all scorecards require making difficult choices. When compiling our votes, we paid close attention to votes on Internet taxes and free trade, which trade associations have long viewed as key factors when evaluating a politician's record. We also included votes on amendments requiring additional reporting to Congress about which electronic surveillance techniques the FBI employs.

Overall, we rewarded politicians who viewed Web sites and computer software as deserving no more regulation than, say, books and magazines--an approach that handed poorer scores to anyone clamoring for new laws. That principle led us to take a dim view of a call for a federal probe of "Grand Theft Auto: San Andreas" and a proposal to target social-networking sites like MySpace.com.

We also awarded points for votes for other longtime favorites of technology companies, such as renewing the research and development tax credit, and curbing class action lawsuits, which lobby group TechNet counted as a priority last year.

Similarly, we gave poor grades to politicians who supported laws that were either duplicative or not effective. Those included the 2003 Can-Spam Act--which zapped tougher state laws and hardly stemmed the flow of junk e-mail--and regulations said to thwart spyware that the Department of Justice and the Federal Trade Commission both say are unnecessary.

Unfortunately, Congress' tendency to shy away from recorded votes means that some important events were not available to score. Bills such as the Family Entertainment and Copyright Act, a Web content-labeling measure, and a high-performance computing measure were approved by voice vote without a record of individual politicians' choices.

Only the winners applaud
Winners reached by News.com did not quibble with their scores. Republican Sen. Mike Crapo of Idaho, who came in second in the Senate with a score of 73 percent, sent us a statement reiterating his commitment to limited regulation and Internet taxation. He told us in an e-mail, "It is important to take every opportunity to support the technology industry, both in my home state of Idaho and nationwide."

Maria Cantwell, a former RealNetworks executive running for a second term in Washington state, landed the top spot among Senate Democrats with a score of 67 percent. "Washington's technology sector is vital to our state's economy," campaign spokeswoman Amanda Mahnke said. "Given her background working in this field, Sen. Cantwell is particularly proud to help support northwest innovation in the Senate."

The losers, on the other hand, complained bitterly about the choice of votes. Sen. John Kerry, the 2004 Democratic presidential candidate, voted in the pro-tech direction in only 2 of 13 votes. That put in him second-to-last place in the Senate, with a score of just 15 percent.

"The methodology behind this scorecard is cuckoo for cocoa puffs," Kerry spokesman David Wade said. "He's been a leader on Net neutrality, helped write the first Internet tax moratorium, and built a coalition of tech leaders and mayors to fight for broadband deployment."

But the Massachusetts Democrat has frequently taken a pro-Internet tax stance. Kerry voted in 1998 to require a supermajority in both the House and the Senate to renew the Internet tax moratorium; and he voted in 2001 against making the moratorium permanent. He also opposed killing an amendment that would encourage online taxation. (Kerry skipped the fourth tax vote, which was held during the 2004 presidential campaign.)

Similarly, a spokeswoman for Democrat Daniel Akaka of Hawaii, the worst-scoring senator, at just 14 percent, claimed that her boss was "not only a friend to the tech industry but also a protector of its future." Akaka scored well on just 2 of 14 votes.

"Sen. Akaka voted in favor of protecting our national security and the American consumer," spokeswoman Donalyn Dela Cruz said. "More specifically, a couple of the votes dealt with protection of our children using the Internet, and another was on a provision contained in the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror and Tsunami Relief. In these cases, his votes do not reflect on his support for the tech industry."

Akaka voted in 1995 for the Communications Decency Act, opposed not only by civil libertarians but also by Microsoft, America Online, Netcom, Compuserve and Prodigy, which jointly sued to overturn it. (In 1997, the U.S. Supreme Court gutted the law as unconstitutional.) In addition, Akaka voted for a so-called emergency appropriations bill last year that contained the controversial Real ID Act, which creates a nationalized digital ID card under the direction of the Department of Homeland Security.

The 30-second hit piece threat
Top-scoring politicians said some bills, especially ones that proponents couched in terms of protecting children from Internet dangers, were politically difficult to oppose.

Rep. Paul, a physician and Texas Republican, has been in a tense re-election campaign with Democratic cattle rancher Shane Sklar. Sklar has been running advertisements questioning Paul's voting record--and especially focusing on Internet-related votes.

"It's the No. 1 issue being used in the campaign against me," said Paul, who has a reputation on Capitol Hill for putting principle before politics. "You do know when you're voting a certain way that it may come back to politically haunt you in the campaign."

Sklar's Web site, for instance, says Paul "has repeatedly voted against legislation designed to catch online child predators"--without noting the constitutional objections that Paul raised at the time.

"I have a personal belief that the responsibility of raising kids, educating kids and training kids is up to the parents and not the state," Paul said. "Once the state gets involved, it becomes too arbitrary."

Like Paul, Democratic Rep. Zoe Lofgren, who represents the district around San Jose, Calif., was in a tiny minority when voting against the Can-Spam Act. She also opposed the Deleting Online Predators Act, which proposes yanking federal dollars from schools and libraries that fail to block MySpace and other social-networking sites. (In July, the House approved that measure by an overwhelming 410-to-15 vote, but it has stalled since then.)

"If you take a look at some of these issues, it's really kind of grandstanding," Lofgren said in a telephone interview. "If you don't come from a tech-rich district, and you know it's going to be a 30-second hit piece ad someplace in the middle of the country, I think that explains it, and that's why (the Republicans scheduled that vote), too--to try to kind of set people up for elections."
http://news.com.com/Technology+voter...3-6131719.html

The Map




Group of University Researchers to Make Web Science a Field of Study
Steve Lohr

The Web has become such a force in commerce and culture that a group of leading university researchers now deems it worthy of its own field of study.

The Massachusetts Institute of Technology and the University of Southampton in Britain plan to announce today that they are starting a joint research program in Web science.

Tim Berners-Lee, who invented the Web’s basic software, is leading the program. An Oxford-educated Englishman, Mr. Berners-Lee is a senior researcher at M.I.T., a professor at the University of Southampton and the director of the World Wide Web Consortium, an Internet standards-setting organization.

Web science, the researchers say, has social and engineering dimensions. It extends well beyond traditional computer science, they say, to include the emerging research in social networks and the social sciences that is being used to study how people behave on the Web. And Web science, they add, shifts the center of gravity in engineering research from how a single computer works to how huge decentralized Web systems work.

“The Web isn’t about what you can do with computers,” Mr. Berners-Lee said. “It’s people and, yes, they are connected by computers. But computer science, as the study of what happens in a computer, doesn’t tell you about what happens on the Web.”

The Web science program is an academic effort, but corporate technology executives and computer scientists said the research could greatly influence Web-based businesses. They pointed in particular to research by Mr. Berners-Lee and others to build more “intelligence” into the Web — moving toward what is known as the Semantic Web — as an area of study that could yield a big payoff.

Web science represents “a pretty big next step in the evolution of information,” said Eric E. Schmidt, the chief executive of Google, who is a computer scientist. This kind of research, Mr. Schmidt added, is “likely to have a lot of influence on the next generation of researchers, scientists and, most importantly, the next generation of entrepreneurs who will build new companies from this.”

Web science is related to another emerging interdisciplinary field called services science. This is the study of how to use computing, collaborative networks and knowledge in disciplines ranging from economics to anthropology to lift productivity and develop new products in the services sector, which represents about three-fourths of the United States economy. Services science research is being supported by technology companies like I.B.M., Accenture and Hewlett-Packard, and by the National Science Foundation.

Web science research, said Irving Wladawsky-Berger, a technology strategist at I.B.M. and visiting professor at M.I.T., is “a prerequisite to designing and building the kinds of complex, human-oriented systems that we are after in services science.”

Mr. Berners-Lee and his colleagues at the M.I.T. Computer Science and Artificial Intelligence Lab and in Britain have had preliminary discussions with government agencies in the United States and Europe that finance scientific research, as well as with leading technology companies. But Mr. Berners-Lee said his group had decided to publicly circulate their ideas about Web science before trying to attract government, foundation and corporate funding.

With initial support from M.I.T. and the University of Southampton, the program will hold workshops on Web science and sponsor research fellowships. “But we also want to educate and train people who can understand and analyze how these huge, complex systems on the Web work,” said Wendy Hall, a professor at the University of Southampton. “That means eventually having undergraduate and graduate programs in Web science.”

The M.I.T.-Southampton partnership, the researchers emphasized, is intended as a catalyst for Web science research at universities worldwide.

Privacy, for example, will be one area of research in Web science. The traditional approach to protecting privacy has been to restrict access to databases containing personal information. But so much personal information is already available on the Web, often given voluntarily on sites like MySpace and Facebook, that the old approach will not work, said Daniel J. Weitzner, technology and society director at the Web consortium.

On the Web, Mr. Weitzner said, a better way to try to guard privacy may be to develop rules, backed by accountability and sanctions, for how personal information is used by businesses, government agencies and individuals.

Ben Shneiderman, a professor at the University of Maryland, said Web science was a promising idea. “Computer science is at a turning point, and it has to go beyond algorithms and understand the social dynamics of issues like trust, responsibility, empathy and privacy in this vast networked space,” Professor Shneiderman said. “The technologists and companies that understand those issues will be far more likely to succeed in expanding their markets and enlarging their audiences.”
http://www.nytimes.com/2006/11/02/te...02compute.html





Pentagon Boosts 'Media War' Unit

The US defence department has set up a new unit to better promote its message across 24-hour rolling news outlets, and particularly on the internet.

The Pentagon said the move would boost its ability to counter "inaccurate" news stories and exploit new media.

Defence Secretary Donald Rumsfeld said earlier this year the US was losing the propaganda war to its enemies.

On Monday, Vice-President Dick Cheney said insurgents had increased attacks in Iraq to sway the US mid-term polls.

The Bush administration does not believe the true picture of events in Iraq has been made public, the BBC's Justin Webb in Washington says.

The administration is particularly concerned that insurgents in areas such as Iraq have been able to use the web to disseminate their message and give the impression they are more powerful than the US, our correspondent says.

'Correcting messages'

The newly-established unit would use "new media" channels to push its message and "set the record straight", Pentagon press secretary Eric Ruff said.

"We're looking at being quicker to respond to breaking news," he said.

"Being quicker to respond, frankly, to inaccurate statements."

A Pentagon memo seen by the Associated Press news agency said the new unit would "develop messages" for the 24-hour news cycle and aim to "correct the record".

The unit would reportedly monitor media such as weblogs and would also employ "surrogates", or top politicians or lobbyists who could be interviewed on TV and radio shows.

Mr Russ said the move to set up the unit had not been prompted either by the eroding public support in the US for the Iraq war or the US mid-term elections next week.

'War of ideas'

Mr Rumsfeld said earlier this year that he was concerned by the success of US enemies in "manipulating the media".

"That's the thing that keeps me up at night," Mr Rumsfeld said.

On Monday, US Vice President Dick Cheney also made reference to the use of media, suggesting insurgents had increased their attacks and were checking the internet to keep track of American public opinion.

"It's my belief that they're very sensitive of the fact that we've got an election scheduled and they can get on the websites like anybody else," Mr Cheney told Fox News.

"There isn't anything that's on the internet that's not accessible to them. They're on it all the time. They're very sophisticated users of it."

Mr Cheney's comments came as American forces suffered one of the highest death tolls in October - more than 100 troops killed - since the war began in 2003.

President Bush has said recently that terror groups were trying to influence public opinion in the US, describing their efforts as the "war of ideas".
http://news.bbc.co.uk/go/pr/fr/-/2/h...as/6100906.stm





U.S. Seen Balking at Challenge by Islamist Web

The Bush administration is failing to counter Islamist online propaganda that could propel militancy into the next generation, experts say.

From the Middle East, Asia and Europe, Islamists have built an expansive Internet library of sophisticated texts on the ideology that underpins violence against the West and other enemies, analysts and intelligence officials said.

``It's a steady, stealthy indoctrination aimed at creating a whole new generation of jihadists. And scandalously, it is unopposed,'' said Stephen Ulph, who studies the Islamist Web for the Jamestown Foundation, a Washington think tank.

E-books and online pamphlets, with titles such as ``39 Ways to Serve and Participate in Jihad,'' encourage the growth of home-grown militant cells across the world, including in such Western countries as Canada and Britain, the experts believe.

U.S. intelligence is reluctant to mount an effective counteroffensive by recruiting Islamic experts from overseas to rebut and even ridicule Islamist authors, according to experts and U.S. officials.

``Anything exposing the West as a supporter would destroy Islamic opposition to the jihadis,'' one intelligence official on condition of anonymity. ``We are completely out of luck with the Muslim world, across the board.''

Several agencies including the CIA, FBI and the office of U.S. National Intelligence Director John Negroponte are part of a closely guarded effort to monitor the content of Islamist Web sites.

But the program is hampered by stringent security standards that make it hard for intelligence agencies to employ Islamist experts from the Arab world.

``Even if we think we understand elements of the religion, we certainly don't understand elements of their cultural communications,'' the intelligence official said.

Pop Jihad Propaganda

Others warned that U.S. policy-makers could be making a fatal error by ignoring doctrinal online texts that lay bare the substance of a violent Islamist mind-set.

``In order to be able to fight something, you have first of all to understand what is going on. And I don't think that at this stage they understand it well enough to fight it,'' said Rita Katz, director of the SITE Institute, which tracks and analyzes international terrorism.

In a presentation this week, Ulph said doctrinal material accounts for 60 percent of Islamist Web content and most texts are in Arabic. But many have begun to reappear in English and other European languages in an apparent appeal to Muslims living in the West.

One of the most popular is the 1,600-page treatise, ``Call to Global Islamic Resistance,'' a comprehensive guide to militant life by al Qaeda ideologue Mustafa Setmariam Nasar, also known as Abu Musab al-Suri, who was captured in Pakistan a year ago.

The Islamist Web became a center for al Qaeda operational planning, training and fund-raising after the fall of the Taliban regime in Afghanistan.

Thousands of Islamist Web sites have since sprouted, many appealing to disenfranchised Muslim youth with so-called Pop Jihad propaganda that can include films of beheadings and spectacular attacks on U.S. troops in Iraq.

But Ulph and others, including former intelligence officials, say the future of Islamist militancy depends on the more sophisticated doctrinal material, capable of guiding the life of the committed militant from childhood to martyrdom.

``The focus has been on how these guys use the Internet for fund-raising and operations,'' said Jarret Brachman of the Combating Terrorism Center at the U.S. Military Academy at West Point, New York. ``Only recently have we realized there are strategic implications.''
http://www.nytimes.com/reuters/washi...islamists.html





Entercom to Sell 3 Radio Stations Due to Antitrust Concerns
Deborah Yao

The Justice Department said Tuesday it has suspended an antitrust investigation into Entercom Communications Corp.'s purchase of several New York radio stations because the company said it would sell three stations to comply with media ownership rules.

The Justice Department had been looking into Entercom's $262 million purchase of 15 radio stations from CBS Corp. in Austin, Texas; Cincinnati; Memphis, Tenn.; and Rochester N.Y.

The investigation centered on Rochester where Bala Cynwyd-based Entercom already owns four radio stations, one AM and three FM. The acquisition would hand over four more FM stations in the area.

With eight radio stations, Entercom would control more than 57 percent of the radio advertising market, and the Justice Department was investigating whether its dominant market share would lead to reduced competition and higher prices for radio advertising.

Federal Communications Commission's rules on local ownership would prohibit Entercom from owning more than five FM stations in an area, requiring it to sell two.

Entercom said it's planning to sell three stations - the CBS-owned WRMM-FM and WZNE-FM and Entercom's WFKL-FM - to comply with FCC rules. The stations are expected to be sold within three months to a buyer approved by the Justice Department, according to a news release issued by the department Tuesday.

After the sale, Entercom's share of Rochester's radio ad market would fall to 40 percent.

Entercom officials did not immediately return a call for comment Tuesday.

One of the nation's largest broadcasters, Entercom owns radio stations in 20 markets and posted annual revenue of $432.5 million. CBS, based in New York, owns and operates 179 radio stations in 40 markets nationwide, among other assets. Last year, it reported $14.5 billion in total revenue.

Shares of Entercom fell by 2.6 percent, or 75 cents, to close at $27.67 on Tuesday on the New York Stock Exchange. CBS shares fell by 6 cents to end the day at $28.94 on the New York Stock Exchange.
http://hosted.ap.org/dynamic/stories...EAST&TEMPLATE=





Cingular to Offer 25 XM Radio Streams
AP

XM Satellite Radio Holdings Inc., a provider of satellite radio, and Cingular Wireless LLC, a wireless carrier with more than 58 million customers, announced a partnership Thursday to stream 25 XM music channels to Cingular handsets.

Beginning Nov. 6, Cingular Wireless customers will be able listen to a variety of XMs popular commercial-free music channels through the XM Radio Mobile service.

Audio streams of 25 commercial-free XM music channels will be available to Cingular customers.

XM will deliver data to make it possible to view the song title, artist and album while listening on a variety of compatible handsets.
http://hosted.ap.org/dynamic/stories...11-02-00-34-26





Shooting Down Satellite Radio?
Olga Kharif

Terrestrial broadcasters are going for an FCC-aided kill in their long-raging fight with XM and Sirius

The radio wars are escalating. In a one-two punch aimed at enlisting regulators to their cause, the National Association of Broadcasters (NAB) and National Public Radio want the Federal Communications Commission to investigate alleged misdeeds by satellite radio companies XM (XMSR) and Sirius (SIRI).

On Oct. 12, National Public Radio CEO Ken Stern wrote to FCC Chairman Kevin Martin alleging that the satellite broadcasters' devices interfere with NPR broadcasts. And last week, David Rehr, president and CEO of the powerful NAB, fired off two letters to Martin alleging several regulatory violations.

Old Radio Vs. New Radio The latest correspondence should strike Martin with a sense of déja vu—and Sirius and XM with a sense of foreboding. Seven months ago the NAB sought the FCC's help in preventing XM from acquiring wireless licenses to provide an array of new services, such as on-demand audio and video, competing more directly with terrestrial radio. XM abandoned the bid in May, figuring that the agency would oppose the effort.

That's just one of many instances where terrestrial broadcasters and satellite radio outfits have clashed over the years. And the NAB, which represents land radio stations, with some 260 million listeners every week, has won thus far.

"The NAB has tried to kill satellite radio from the beginning," says Tom Watts, an analyst with Cowen & Co. (COWN) "Because the FCC has listened, broadcasters are using the regulators as a weapon now." That's proving easier, however, since XM and Sirius have recently admitted to some of the violations—which is partially why the terrestrial broadcasters are taking their fight further in this latest skirmish.

Satellite Slip-ups Claiming "a persistent corporate (if not industry) circumvention of the FCC's regulations," the NAB and NPR are demanding an investigation into at least three separate issues, two of which the broadcasters raised with the FCC earlier this year. The NAB's goal seems to be stripping XM and Sirius of their licenses.

The satellite operators have displayed "a lack of candor in dealing with the FCC," says NAB spokesman Dennis Wharton. "In such cases, a licensee can have the license taken away."

That worst-case scenario is unlikely to play out: Some of the alleged violations cited in the NPR letter can't be conclusively linked to satellite radio devices. Other alleged missteps could simply result in tens of thousands of dollars in fines and a slap on the hand, says John Garziglia, a lawyer specializing in FCC issues at law firm Womble Carlyle in Washington. "It doesn't appear to be a big deal," he says.

Yet other allegations, if the FCC deems them serious, could result in temporary degradation in quality of service for satellite radio subscribers, major product recalls, and even shifts in the satellite radio industry's marketing and content strategies. These measures could potentially prompt a slowdown in satellite radio subscriber growth.

Consultancy ABI Research currently predicts subscriber numbers to rise from 14 million by yearend to 30 million at the end of 2011. "NAB's sole interest here is in trying to hamper competing services that offer consumers compelling choices that terrestrial radio can't provide," according to a statement from XM. New York-based Sirius didn't return calls seeking comment.

FCC Compliance There are several complaints, and several possible outcomes. Take the NAB claim, supported by XM and Sirius' own filings, that some of the satellite companies' terrestrial repeaters (devices that receive signals and retransmit them), installed on buildings and towers to ensure seamless satellite radio coverage, don't comply with FCC rules. Of XM's 794 repeaters, 19 weren't authorized by the FCC, and as many as 142 are located more than 500 feet from their authorized locations.

The NAB also finds fault with 11 Sirius repeaters, though the letter states that "Sirius' effort to minimize the significance of its transgressions is apparent." In an industry where terrestrial radio stations have followed FCC rules to the dot, the violations "bring into question the fitness of the licensee," says Tom Taylor, editor-in-chief of industry publication Inside Radio.

The NAB letter further alleges that 28%, or 221 of XM's repeaters, exceed their authorized power level. XM says that has not adversely affected other broadcasters' transmissions, and it's working with the FCC to correct such problems.

If the FCC were to ask XM and Sirius to remove or tweak the offending repeaters, which is likely, that could result in temporary degradation in service quality for customers in the affected areas while the work is being done, says Frank Viquez, a research director at ABI Research.

In its second claim, the NAB contends that XM and Sirius shouldn't be allowed to give away their products for free to new car buyers or online. Last week, Sirius streamed Howard Stern's program for free on its Web site.

The NAB argues that such freebies ought to subject satellite radio to the same FCC regulations as those governing terrestrial radio. That likely would trigger restrictions, for example, on language and other racy content.

Content Issues If the FCC listens and tries to regulate the satellite radio industry's content, that could affect programs like The Howard Stern Show, which has single-handedly driven millions of subscribers to Sirius (see BusinessWeek.com, 9/7/06, "A Sirius Stab at XM"). Earlier this year, the Federal Trade Commission and the FCC commenced probes into XM's marketing practices. In September, XM disclosed that the Securities & Exchange Commission began an informal inquiry into how the company tried to reach subscriber targets last year.

Finally, there's the third complaint, from NPR, which claims that many FM modulators, used to feed programming from portable satellite radio devices into car stereos, exceed FCC power requirements. That means a driver listening to NPR might suddenly hear a blast of obscenities from Howard Stern from a car as far as 100 feet away. NPR stations have received hundreds of complaints from listeners, says Mike Starling, chief technology officer of NPR Labs, which has studied the issue.

In July, NPR Labs measured FM modulator levels in traffic in the Washington, D.C., area. While it found that 30% to 40% of the modulators exceeded FCC-mandated power levels, the study couldn't conclusively determine whether satellite radio devices or, say, unrelated MP3 players used in cars were the violators, says Starling.

In June, Marsha MacBride, executive vice-president for legal and regulatory affairs at the NAB and former FCC chief of staff, cited NAB-sponsored research in a letter to Martin, asking him to examine both satellite radio players and MP3 players, some of whose FM modulator emission levels exceeded regulations by as much as 20,000%.

What can the FCC do to solve this problem? Potentially, the agency could order a recall of the satellite operators' FM modulators, installed in cars by people who bought the radios at retail stores. Viquez estimates that such a recall could involve more than 1 million cars.

While the modulators' power levels can be adjusted with a very cheap part, owners might have to take their cars into professional body shops for repair. And that's likely to peeve many customers.

Losing Numbers Any of these disruptions could affect XM and Sirius' subscriber targets or financial performance. Earlier this year the FCC found that some XM and Sirius FM transmitters, used in portable devices, did not comply with certain emission levels. The companies' manufacturing partners had to halt shipments and tweak their designs. The direct result: XM widely missed the Street's subscriber estimates in the second quarter, says David Bank, an analyst with RNC Capital Markets (see BusinessWeek.com, 10/4/06, "Investors Tune Out of Radio Stocks").

Of course, whether Martin responds to the land-based broadcasters' latest complaints remains to be seen. But this flurry of blows has the potential to leave satellite radio with a few bruises.
http://www.businessweek.com/technolo...v.g3a.rss1030l





40,000 internet radio stations silenced for this? – Jack

An Exchange with SoundExchange on Unpaid Artists

The Money Belong to the Artists Who Created the Music
Fred Wilhelms

SoundExchange is the sole entity that collects and distributes license fees for digital distribution of recordings; primarily satellite radio services and Internet streaming broadcasts (but NOT downloads). Over the years they have collected money for thousands of artists who don't know about it.

Several years ago, John Simson, the Executive Director of SoundExchange, asked for my help in finding these people. I work primarily with veteran artists and have proven pretty proficient at finding people. Despite my constant prodding, SoundExchange never put me to work, and I finally washed my hands of the project when John told me he could give me the list of "unfound" artists, but only if I agreed to a Non-Disclosure Agreement. In essence, I could find out who they had money for, I just couldn't tell anyone they were on the list.

What happens to the money they can't pay because they can't find the person to pay?

They get to keep it themselves. Nothing succeeds like failure.

In my email this morning was the following note from Simson:

Fred:

Given your concern on this issue I wanted to notify you that, after SoundExchange Board approval, we have posted a list of all performers who are oweð royalties from the period February 1, 1996 to March 31, 2000 and which are subject to release under Copyright Office regulations regarding undistributed royalties.

The list is on the website. Please call me if you have any questions or any ideas regarding our continuing efforts to locate featured performers.

Thanks in advance for any assistance in locating addresses or other contact information for any of the performers on this list.

Regards,

John

This was my reply:

John,

Thank you for the note.

I have already seen the list on your website. This is truly a prime example of "too little, too late." I understand why SoundExchange waited so long to publicize the list. It is, or at least it should be, a major embarrassment to the organization, and to everyone who has publicly said what a good job the organization has done finding people.

If my comments sound harsh to you, they should. You and I know how SoundExchange has failed to keep its promise, and how much more could have been done to prevent this injustice, and I just cannot put a positive spin on this.

In the first two hours after I had the list, and even before I had gotten completely through the "A" entries, I found five people you and your staff were not able to find in six years. And just so I'm clear on this, these were people I did not know when I started the search. At most, it took three telephone calls to find a current contact and pass on the information about registration. I actually came up with one by checking Directory Assistance in his hometown.

Sadly, there is no way I can spend the time necessary before the deadline to do everything I could to see that SoundExchange does the job it was given. There are just too many people on your "unfound" list, and I have clients who need my immediate attention. All I can do is reach out to as many people as possible in the limited time left and hope that my efforts start a landslide that swamps your office before December 15.

I may be wrong, but I suspect that, with the publication of the list, SoundExchange has abandoned any proactive efforts to locate the "unfound." I hope, for your sake, that after the deadline, you never hear one story about an artist being unable to afford a prescription, or getting evicted, and then you discover they were on the forfeited list. That prospect haunted me during my AFTRA days, and it still bothers me that I didn't do enough to prevent it from happening over and over again.

I truly wish there was some penalty that SoundExchange would have to pay for not finding people. Instead, the organization profits from its own failure by getting to keep the money it should be paying out.

That's a disgrace. Every time you deposit your paycheck, or get a bonus, or give one to someone else for a "job well done," or even expense a lunch, some of that money is coming from artists who never knew it was there because SoundExchange didn't find them in time.

I know the search was not easy, and that there was really no possibility you were going to find everyone, or even almost everyone. You and I know, however, that SoundExchange didn't do all that it could to cut that list to size. I think you are a good enough man to realize the scope of this failure, and I hope that it eventually impels you to do whatever it takes to make SoundExchange responsive to those it is supposed to serve. Today, for artists, the organization is nowhere close to meeting that goal.

Fred

Here's the list of the people they can't find:

http://63.236.111.137/jsp/unpaidArtistList.jsp

I've been circulating the following message. Feel free to forward it to any mailing lists, message boards and telephone poles in your neighborhood.

AN URGENT MESSAGE TO RECORDING ARTISTS

SoundExchange is the entity that collects and distributes broadcast royalties from digital distribution of music. This includes streaming Internet broadcasts (not downloads) and satellite radio services. These royalties have been payable since February 1, 1996. If your music has been played on the Internet since that date, you are entitled to a share of the royalties.

On December 15, 2006, any royalties that are unclaimed for performances up through March 31, 2000 WILL BE FORFEITED.

If you, as an individual or as a member of a recording group, are not registered with SoundExchange by December 15, 2006, you will lose all rights to your royalties earned before March 31, 2000.

There are thousands of identified artists who will lose these royalties unless they act before the deadline. SoundExchange has listed these "unfound" artists on their website.

http://63.236.111.137/jsp/unpaidArtistList.jsp

Take the time to read the list. If you are on it, follow the instructions for filing a claim. It costs you nothing and it does not take much time. If you register now, you will receive the unclaimed royalties and will received future royalties automatically.

Friends and families of recording artists should also check the list. If you know anyone on there, PLEASE LET THEM KNOW IMMEDIATELY. You will note that there are a number of deceased performers on the list. If you know any surviving relatives, let them know about this.

This money belongs in the hands of the artists who created the music.

http://63.236.111.137/jsp/unpaidArtistList.jsp

Fred Wilhelms is a lawyer who represents musicians and songwriters. He can be reached at: fred.wilhelms@gmail.com
http://counterpunch.org/wilhelms09232006.html


Help Us Find These Musicians and Get Them Paid

SoundExchange and Unpaid Music Artists
Fred Wilhelms

Our story from last week on SoundExchange and a huge list of unpaid music artists has had a global impact.

It has been reposted on a number of websites, listservs and message boards, and because my address is included, I get the feedback.

A guy in Singapore has found a couple electronica artists and let him know about the royalty fund.

An Australian video game designer spent an hour on Google, found contact info about two dozen artists and has heard back from seven of them, including C. W. McCall of "Convoy" fame, thanking him for telling him.

The family of blues legend Son House has applied because a friend found his name on the list.

Over a hundred "world music" artists from the list have been contacted.

That's just the reaction I know about. It's been amazing.

And it tells me one thing; if SoundExchange had exploited that sense of community that music creates, I doubt there would be more than a handful of artists left on the list, and those would be ones who, for whatever reason, didn't want to be found.

I am willing to bet that every one of the artists who has registered since September 15 has done so as a result of the negative publicity given the lists and the viral current that runs link-by-link from the CounterPunch article and the other fee starting nodes. That could be the most important development that comes out of this mess: a reinforcement that the "truth is out there" on the Internet, you just need to tap into it.

SoundExchange wasted a lot of money on its unsuccessful "search" efforts over the years when the most effective and cost efficient solution was just a couple emails and message board posts away. Good Lord, a SoundExchange MySpace page might have cleared 50% of that list in weeks.

One other side effect of the CounterPunch piece has been the reigniting of a longstanding debate among the heavy thinkers of the technology world about the best way for artists to get paid. SoundExchange was the darling of the "blanket license" proponents; showing, they thought, that a collective effort was the most efficient and effective way to move money to the creators. The SoundExchange lists tarnish that idea a bit. The other main proponents the "micropayers" (in which each artist negotiates payment individually with each end consumer) are overjoyed, and will be until someone explains that they are, in essence, reproducing standard record company royalty accounting standards and projecting them on every artist forever. That's not such a hot idea, either. The debate, however, has moved up a notch, thanks to CounterPunch giving it new fuel and air.

So, at the end of a week, we can pretty say that CounterPunch has succeeded in doing what it is supposed to do; it stirred things up and actually caused some action in the right direction. The stirring has been a great deal of fun, and the progress is measured in money moved to artists and new heights of both rhetoric and fact.
http://counterpunch.org/wilhelms09232006.html


Anyone Seen the Mormon Choir?
Dan Mitchell

WHERE the devil is the Mormon Tabernacle Choir?

For years, it seemed as if SoundExchange, the nonprofit organization that handles royalty payments for musicians whose work is streamed over the Internet and broadcast on satellite radio networks, didn’t know. The group insists that it tried hard to find the choir and about 9,000 other artists who still hadn’t been paid. A few months ago, SoundExchange posted the list on its Web site, giving artists a deadline of Dec. 15 before they lose their money forever (soundexchange.com).

Some people have criticized SoundExchange saying it has sat on its hands. Who, they ask, doesn’t know that the Mormon Tabernacle Choir is in Utah? And how hard can it be to find the Olsen twins? The list has received a lot of publicity online, and the Olsens, the Mormons and others have been paid, but not without criticism directed at SoundExchange.

Writing for the Web site of the political newsletter Counterpunch, Fred Wilhelms, a lawyer who helps musicians with royalty payments, accused Sound-Exchange of moving slowly on purpose. “What happens to the money they can’t pay because they can’t find the person to pay?” he asked. “They get to keep it themselves. Nothing succeeds like failure” (counterpunch.org).

SoundExchange denies the accusation. In a letter responding to an article in The Los Angeles Times, the organization’s executives said they had “engaged in numerous outreach campaigns” that managed to get payments to 25,000 artists last year. As for the difficulties tracking down well-known musicians, they said “a number” of the artists on the list “simply have failed to respond to our notifications” (latimes.com).

For SoundExchange, the timing of the negative attention couldn’t be worse. It is fighting before the Library of Congress (loc.gov) to remain the sole distributor of the royalties. Would-be competitors including Royalty Logic would like to get into the field (royaltylogic.com).

For the most part, the amounts in question aren’t very impressive — so far. Just 75 of the artists whose music streamed from 1996 to 2000 are owed $500 or more. But the amounts are growing every year, and the future of the business looks bright, as both streaming audio and satellite broadcasting become more popular. According to SoundExchange, royalties will total more than $40 million next year. (Downloaded music, as from iTunes, isn’t involved.)

In the meantime, has anyone seen Men Without Hats? SoundExchange has a check for them.
http://www.nytimes.com/2006/10/28/bu.../28online.html