Peer-To-Peer News - The Week In Review - May 15th, '10

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May 15th, 2010




"Hurt Locker" Lawsuit Target Pirates
Eriq Gardner

The war against movie piracy is getting downright explosive.

The producers of "The Hurt Locker" are preparing a massive lawsuit against tens of thousands of people who pirated the Oscar-winning drama online. The case could be filed as soon as Wednesday.

Voltage Pictures, the film's financier, has signed up with the U.S. Copyright Group, a Washington D.C.-based venture that has begun a litigation campaign targeting users of the BitTorrent peer-to-peer (P2P) service.

"The Hurt Locker" first leaked onto the web more than five months before its U.S. release last June, and was a hot item in P2P circles after it won six Oscars in March, including best picture and director. Despite the accolades, the film grossed only about $16 million in the U.S.

The U.S. Copyright Group has already filed lawsuits over about 10 other films, including German filmmaker Uwe Boll's "Far Cry," "Call of the Wild 3D" and "Uncross the Stars." Reports of those suits raised alarms in some circles, whereas others joked that the movie industry was merely suing those with poor taste.

"You can guess that relative to the films we've pursued already, the order of magnitude is much higher" with "Hurt Locker," said Thomas Dunlap, a lawyer at the firm.

If the addition of "Locker" to this litigation campaign could shake things up, so too could news about cooperation by Internet Service Providers (ISP) in this escalating fight. After filing the lawsuits, the plaintiffs must subpoena ISP records in an effort to match IP addresses with illicit behavior on BitTorrent.

According to lawyers at Dunlap's firm, 75% of ISPs have cooperated fully. Those that have resisted are mostly doing so, they say, because of the amount of work involved in handing over thousands of names. But the clock may be ticking. For example, in the lawsuit over "Far Cry," Comcast has until next Wednesday to file motions to quash subpoenas. By the end of next week, thousands of Comcast subscribers could be turned over.

Of the some 50,000 individuals who have been sued thus far, only three have tried to quash the subpoena. In one instance, a Georgia man tried to invoke the state's shield law protecting journalists from having to disclose their sources. The judge denied the motion. In another instance, a woman successfully got a court to throw out the subpoena because her IP address wasn't listed in the original complaint. Unfortunately for her, the complaint was then amended.

After unmasking individuals who have illegally downloaded films, the U.S. Copyright Group then sends a modest settlement offer. Lawyers at the firm are seeing some returns on the first two lawsuits filed back in January. About 40% have settled, according to the U.S. Copyright Group. Those who haven't settled will be sent another round of settlement offers, and the group promises to eventually serve lawsuits on these individuals.

Since news first broke about the litigation campaign, Dunlap says he's been besieged by e-mails from 20 to 30 independent film groups that have expressed frustration about rampant piracy and interest in joining up. The firm plans to send people to the Cannes Film Festival, where they've already arranged meetings with a number of other film producers to discuss further lawsuits.
http://www.reuters.com/article/idUSTRE64B0AU20100512





Big Record Labels Win LimeWire Copyright Case
Jonathan Stempel

The makers of file-sharing software LimeWire are liable to 13 major record companies that accused the service of infringing their music copyrights, a Manhattan federal judge has ruled.

In a ruling made public on Wednesday, U.S. District Judge Kimba Wood agreed with the record companies that LimeWire's parent Lime Wire LLC and its founder Mark Gorton were liable for infringement and engaging in unfair competition.

"The evidence demonstrates that Lime Wire optimized LimeWire's features to ensure that users can download digital recordings, the majority of which are protected by copyright, and that Lime Wire assisted users in committing infringement," Wood wrote in her 59-page ruling.

She added that Gorton "directed and benefited from many of the activities that gave rise to Lime Wire's liability," and knew about the copyright infringement.

The lawsuit was filed in August 2006.

Lime Wire created its service in 2000 and describes it as the world's most popular peer-to-peer file-sharing service, with more than 50 million monthly users.

These users account for 58 percent of people who said they downloaded music from a peer-to-peer service in 2009, CNET News said, citing a survey by NPD Group.

The New York-based company "strongly opposes" Wood's ruling and is committed to working with the recording industry to develop products that help music listeners, said Lime Wire Chief Executive George Searle.

Arista, Atlantic, BMG Music, Capital, Elektra, Interscope, LaFace, Motown, Priority, Sony BMG, UMG, Virgin and Warner Brothers are the 13 record companies that sued Lime Group.

Mitch Bainwol, chief executive of The Recording Industry of Association of America, a trade group representing the labels, in a statement praised Wood's ruling.

"The court's decision is an important milestone in the creative community's fight to reclaim the Internet as a platform for legitimate commerce," he said. "The court has sent a clear signal to those who think they can devise and profit from a piracy scheme that will escape accountability."

In her decision, Wood drew on a unanimous 2005 U.S. Supreme Court ruling involving the file-sharing service Grokster Ltd.

Justice David Souter ruled that someone who distributes a device with the object of promoting its use for copyright infringement, "as shown by clear expression or other affirmative steps," is liable for third-party infringement, even if the device is also used lawfully.

Wood set a June 1 conference for further proceedings in the LimeWire case.

The case is Arista Records LLC et al v. Lime Group et al, U.S. District Court, Southern District of New York, No. 06-05936.

(Reporting by Jonathan Stempel. Editing by Robert MacMillan)
http://www.reuters.com/article/idUSTRE64B63H20100513





Pirate Bay Judges Ruled Unbiased

The judges appointed to preside over the appeal of the four men found guilty in the Pirate Bay appeals hearing in September have been cleared from bias allegations, the Supreme Court (Högsta Domstolen) ruled on Wednesday.

The allegations were forwarded by financier Carl Lundström and concerned Court of Appeal (Hovrätten) judges Ulrika Ihrfelt and Kristina Boutz. Lundström alleged bias on the grounds of the pair's ties to organizations which support copyright holders.

"A judge before a trial often naturally has an opinion on a legal issue related to the case. This does not mean that he is biased, if he is prepared to follow his convictions regardless of who gains from its application," the court wrote in its judgement.
Lundström, who along with Gottfrid Svartholm Warg, Fredrik Neij and Peter Sunde, was convicted by Stockholm District Court of being an accessory to copyright violations in April 2009. The four men appealed their convictions and are fighting one year prison sentences and a collective fine of 30 million kronor ($4.3 million).

The original appeal was due to be heard in November 2009, but the bias allegations caused the date to be put back and the Court of Appeal hearing is now due to commence in September.

The case is expected to go all the way to the Supreme Court because of its precedent-setting nature: no one in Sweden has ever been found guilty of being an accessory to copyright violations via the BitTorrent file sharing peer-to-peer technology.
http://www.thelocal.se/email/155/88342/26612/20100512/





Hollywood Gets Injunction To Disconnect The Pirate Bay
enigmax

Last month it became apparent that several Hollywood movie studios had threatened to take legal action against the owner of ISP CyberBunker, the current bandwidth provider for The Pirate Bay. Now, according to fresh information from a reliable source, the studios have come good on their threats.

Last month TorrentFreak exclusively revealed that Disney Enterprises and Paramount Pictures in association with Sony Pictures, Twentieth Century Fox, Universal Studios and Warner Bros. (collectively as the MPA) had begun threatening CyberBunker owner CB3ROB Ltd with legal action over their hosting of The Pirate Bay.

The MPA stated that since CB3ROB knows that The Pirate Bay is “an infringing site”, then the company had to take responsibility for bringing those infringements to an end – in other words, stop providing the site with hosting and bandwidth. Failure to comply would result in the MPA taking legal action against CB3ROB in Germany.

After receiving new information from a previously reliable source, we can now confirm that the MPA have made good on their threats.

It appears that Columbia Pictures, Disney Enterprises, Paramount Pictures,Twentieth Century Fox, Universal, and Warner Bros. have obtained a preliminary injunction against CB3ROB Ltd from the Regional Court of Hamburg.

The injunction, which was granted without an oral hearing, states that the CB3ROB company (and its Managing Director Mr. Sven Olaf Kamphuis personally) are hereby prohibited from connecting The Pirate Bay website and associated servers to the Internet.

The injunction relates specifically to The Pirate Bay offering torrents which allow users to download the following movies – The Bounty Hunter, Alice in Wonderland, Our Family Wedding, Green Zone, Repo Men and Cop Out.

The Court agreed that CB3ROB and Sven Olaf Kamphuis are liable for infringements on the above movies pursuant to the “Störerhaftung” principle. Also known as “disturber” or “interferer” liability, it means that someone who is knowingly connected to infringements can become the subject of an injunction, without actually carrying out those infringements themselves.

From the information currently available, in order to satisfy the Court it appears that CyberBunker have to either disconnect The Pirate Bay from the Internet, or the operators of the site have to do something that has never happened in the site’s history – remove the torrents listed in the injunction on copyright grounds.

The penalties for failing to comply appear to be very severe indeed.

The Court can fix a fine of up to 250,000 euros for each recorded case of infringement on the above movies. In the event that the fine cannot be enforced, it appears that Sven Olaf Kamphuis is being threatened with up to 2 years in jail.

“We have no information about this,” CB3ROB told TorrentFreak. “No letters have reached us or our attorneys.”
http://torrentfreak.com/hollywood-ge...te-bay-100512/





German Court Orders Wireless Passwords for All

Users can be fined if a third party takes advantage of an open connection
Kirsten Grieshaber

Germany's top criminal court ruled Wednesday that Internet users need to secure their private wireless connections by password to prevent unauthorized people from using their Web access to illegally download data.

Internet users can be fined up to euro100 ($126) if a third party takes advantage of their unprotected WLAN connection to illegally download music or other files, the Karlsruhe-based court said in its verdict.

"Private users are obligated to check whether their wireless connection is adequately secured to the danger of unauthorized third parties abusing it to commit copyright violation," the court said.

But the court stopped short of holding the users responsible for the illegal content the third party downloads themselves.

The court also limited its decision, ruling that users could not be expected to constantly update their wireless connection's security — they are only required to protect their Internet access by setting up a password when they first install it.

The national consumer protection agency said the verdict was balanced.

Spokeswoman Carola Elbrecht told the German news agency DAPD it made sense that users should install protection for their wireless connection and that at the same time it was fair of the court not to expect constant technical updates by private users.

The ruling came after a musician, who the court did not identify, sued an Internet user whose wireless connection was used to illegally download a song which was subsequently offered on an online file sharing network.

But the user could prove that he was on vacation while the song was downloaded via his wireless connection. Still, the court ruled he was responsible to a degree for failing to protect his connection from abuse by third parties.

About 26 million homes in Germany have wireless Internet access, according to Bitkom, the German Association for Information Technology, Telecommunications and New Media.
http://www.msnbc.msn.com/id/37107291...ence-security/





Court Rules in Favor of RapidShare Over Filtered Uploads
Andre "DVDBack23" Yoskowitz

RapidShare has announced this week that an appeals court in Germany has ruled in favor of the file sharing site, saying it could not be found liable for distribution of unauthorized files, and that forcing the company to filter all uploads would "produce too many false positives."

The court ruled in their favor because the company does not make uploaded files publicly available, and the uploaders themselves have control of who sees the links.

In 2008, a different court ruled against the sharing site, saying they were currently not doing enough to combat copyright infringement and that the filter system employed was ineffective.

If that decision had stood, RapidShare would have had to log IP addresses, and "proactively check content before publishing it."

Adds Christian Schmid, founder of RapidShare: "We are very happy about the judgment. The court has confirmed that RapidShare is not responsible for the contents of files uploaded by its users. The judgment shows that attempts to denounce our business model as illegal will not be successful in the long run. With its 1-click-filehosting model, RapidShare responds to legitimate interests of its users and will continue to do so in the future."
http://www.afterdawn.com/news/articl...ltered_uploads





Why Hollywood Should be Nervous About Court Pick
Eriq Gardner

Hollywood may have some reason to be nervous about President Obama's nomination of Elena Kagan to be the next U.S. Supreme Court justice.

Not a whole lot is known about Kagan's judicial philosophy, which in some ways, makes her the perfect pick to win confirmation by the Senate. Her record on issues the industry cares about, though, isn't entirely opaque.

Hollywood's biggest worry about Kagan might be her philosophy on intellectual property matters. As dean of Harvard Law School from 2003 to 2009, she was instrumental in beefing up the school's Berkman Center for Internet & Society by recruiting Lawrence Lessig and others who take a strongly liberal position on "fair use" in copyright disputes.

Most notably, during those years, Professor Charles Nesson at the Berkman Center represented accused file-sharer Joel Tenenbaum in the defense of a lawsuit by the Recording Industry Association of America, the trade group representing the major U.S. record labels. Professor Nesson led his cyberlaw class in alleging that "the RIAA is abusing law and the civil process" with excessive damage claims in piracy cases. It was Kagan herself who wrote a personal letter to the U.S. District Court to help certify the students.

Paradoxically, the Obama administration later weighed in on the side of the RIAA in the case. But that was before Kagan was fully confirmed as U.S. Solicitor General. At the time, Professor Nesson expressed some doubts about whether Kagan would back the government's amicus brief and also called her "enlightened" on these issues.

Kagan got her biggest opportunity to showcase her feelings on IP when the U.S. Supreme Court asked her, as U.S. Solicitor General, to weigh in on the big Cablevision case.

Hollywood was upset when Cablevision announced its intention to allow subscribers to store TV programs on the cable operator's computer servers instead of a hard-top box. The introduction of remote-storage DVR kicked off furious litigation, and the 2nd Circuit overturned a lower court ruling by saying that the technology wouldn't violate copyright holder's rights. The studios appealed to the Supreme Court.

In Kagan's brief to the high court, she argued the justices shouldn't take the case and trumpeted fair use. She went against broadcasters there and even criticized Cablevision for limiting the scope of its arguments.

Of course, this isn't quite enough evidence to predict what kind of U.S. Supreme Court justice she will be. At Harvard, she was famous for ingratiating herself to professors of all political stripes, so who knows if Nesson has a good read on her? Working in the Obama administration, she also surrounded herself with entertainment industry advocates, including as her assistant, Ginger Anders, who worked on an amicus brief in the Cablevision case for a coalition that included the RIAA.

And finally, Hollywood's got at least one reason to cheer. Her history in academia suggests she'll be an extreme supporter of free speech under the First Amendment.
http://www.reuters.com/article/idUSTRE64A0AJ20100511





Warner Brothers Sues ‘Superman’ Lawyer
Michael Cieply and Brooks Barnes

In an aggressive move to defend its “Superman” franchise, Warner Brothers on Friday filed a lawsuit accusing a lawyer for the comic book hero’s co-creators of trying to seize control of nearly half of the lucrative property.

The suit was filed in the United States District court for the Central District of California against, among others, Marc Toberoff, a lawyer and film producer who helped the heirs of the Superman co-creator Jerome Siegel win a ruling that in 2008 let them recapture rights from Warner.

Mr. Toberoff has also represented the estate of Joseph Shuster, who with Mr. Siegel created Superman as a comic book series in the 1930s.

But Warner’s suit on Friday said Mr. Toberoff had worked for years to interfere with agreements between the studio and the heirs, to leave himself with at least 47.5 percent of any rights recovered, while the Siegel heirs and Shuster heirs would each receive only about a quarter of the rights.

“These agreements are unlawful under the copyright laws, are void as against public policy, and both violate DC Comics’ rights and threaten the ongoing viability of the Superman property,” the complaint said.

In an interview, Mr. Toberoff said that Warner had resorted to “thug tactics” and “a smear campaign against me personally” in a “last-ditch effort” to hold on to Superman. “Warner Brothers has substantially been on the losing end of this case,” he said.

Warner’s suit cited an extensive timeline of Mr. Toberoff’s attempts since 2001 to become involved with Superman. The suit said the timeline was prepared by a lawyer previously employed by Mr. Toberoff, who was not named in the complaint, and eventually provided to Warner under a court order.

The timeline, attached as an exhibit, included an introduction written by the lawyer, whose name is not included.

“The below information should save Time Warner potentially millions and millions of dollars, and if you so choose — have Marc Toberoff suspended, disgraced,” it reads in part. “Consider it an early holiday gift.”

Among other things, the timeline describes attempts by Mr. Toberoff and the talent agent Ari Emanuel to persuade the Siegel heirs to join them in exploring the Superman rights with backing from an unnamed billionaire. Mr. Emanuel declined to comment.

Warner is working on a new Superman movie, although it is still in the early stages of development.

Mr. Toberoff has built a reputation in Hollywood for representing people who claim ownership over many old television shows, films or comic book properties. He currently represents the heirs to the Marvel comic book artist Jack Kirby, who are embroiled in a dispute with The Walt Disney Company and its Marvel Entertainment unit over rights to characters like the “X-Men.”

Mr. Toberoff has scored a number of victories, including another one over Warner involving “The Dukes of Hazzard.” But his critics, including lawyers who represent the big studios, have long complained that he exerts too much control over his clients — an issue central to Warner’s complaint.

Friday’s action may signal that studios are shifting to offense when it comes to rights issues, which have become a growing point of vulnerability in a film industry that is increasingly dependent on well-known “brands” but are then exposed to the complications of copyright law.
http://www.nytimes.com/2010/05/15/bu.../15warner.html





No DMCA Protection For You
Stephen Burch

I have previously written about the Viacom v. YouTube case here and here. Ben Sheffner has an update that points to the Washington Legal Foundation amicus brief in the case. This brief, unlike the other brief mentioned in the article, deals not with the facts in this case, but rather with whether sites like YouTube should be afforded DMCA Safe Harbor protection at all. The brief is incredibly misleading, even for a Washington-based company.

My biggest problem with its brief is the assertion that if Google is given safe harbor protection, then all of the onus of preventing copyright infringement falls on the copyright holder. The DMCA requires that service providers remove content that they know to be infringing. Google has incredibly sophisticated software to determine the copyright holder of videos uploaded to its site. The problem that Google has is that almost every video that is uploaded is protected by copyright. Most of those uploading the videos own the copyright and want their videos to appear on YouTube. There is no practical way for Google to know whether the person who uploaded the video owns the copyright or not. What makes this so hypocritical is that Viacom isn’t even sure what videos it owns the copyright to and has issued bogus DMCA takedowns for innocent videos. Yet the Washington Legal Foundation thinks that YouTube should be liable when users upload infringing content? How could YouTube possibly be able to find all unwanted content when the content creators don’t even know what content is theirs?

To be fair, if some of the allegations made in the Viacom case are true, Google may be liable for videos YouTube founders purposely pirated. However, now Google goes above and beyond the legal requirements to ensure that copyright owners know when their videos are on YouTube. They then give the owners the option to make money off of the video or have it removed.

But this isn’t enough for Viacom and other television networks, as YouTube is allowing everyday users to create entertaining content. This content competes with the networks, and they don’t like that. So instead, networks would rather shut down one of the most popular sites on the Internet. That’s what I like about legal action, it’s easier than competing, and it helps improve my future job prospects.
http://blog.lawdeveloper.com/2010/05...ction-for-you/





State Court: Internet Filtering at Libraries Constitutional
Jacqui Cheng

Libraries that choose to filter Internet access are not engaging in censorship, according to the Washington Supreme Court. The court made its decision late last week on 6-3 vote, with the majority noting that libraries are not obligated to provide universal access to all constitutionally protected speech just because it exists. Still, the dissenting justices feel that filters should be removed at the request of an adult, and that the decision is "draconian."

The case was originally brought against the North Central Regional Library (NCRL) by three patrons who found that they were unable to access certain sites on the library's computers. NCRL had implemented a use policy—as well as FortiGate filtering software across all its branches—that barred access to certain kinds of content, such as porn, gambling sites, Web chat services, proxy avoidance tools, and other "adult" content. According to NCRL's policy, sites that were erroneously blocked could be unblocked at the request of an adult patron, but otherwise, the filter remained in place even if an adult were to request immediate access to certain forbidden sites.

The patrons, Sarah Bradburn, Pearl Cherrington, and Charles Heinlen, said in their suit that NCRL's filtering policy was unconstitutional, particularly the part that barred adult patrons from requesting that the filter be lifted on the spot. After all, public libraries are just that—a public service—and barring access to sites like "Women and Guns" is not far off from China's Great Firewall, which blocks sites that talk about Tibetan liberation. Or is it? According to the Supreme Court judges, libraries like NCRL have to consider their resources when it comes to both printed and electronic materials.

"Even if one were to assume a public library with unlimited funds and space, that library would be under no obligation to make all constitutionally protected printed materials available," wrote the judges. "For example, regardless of its resources a library need not place pornographic materials on its shelves, although such materials are constitutionally protected."

Of course, libraries do have physical restrictions and other costs associated with offering printed and electronic materials—at the very least, computers always seem to be scarce at the library, and Internet connections cost money. Limiting access to porn and other resource-sucking materials (that may or may not be appropriate for children in the first place) might make sense to a certain degree, and NCRL argued that adults who feel certain sites should be accessible could use already-existing methods to dispute the blocks. "Because adults can request and obtain unblocking of erroneously blocked sites, we conclude that on this record no overbreadth problem exists," wrote the judges.

Still, not everyone agreed with the methods and policies involved in filtering the Internet at NCRL. Three of the nine judges disagreed with the decision, noting that the library surely had good intentions when implementing the filter, but that there were "less censorial" ways to keep things clean.

"I am not unsympathetic to the goal of protecting children. But that laudable goal has all too often been advanced as a ground to restrict constitutionally protected speech generally though, at least in our state before today, usually unsuccessfully," wrote Justice Tom Chambers.

As noted by ReadWriteWeb, Chambers' view is particularly important when you consider a recent report from the University of Washington citing public libraries as a "critical digital hub." The Bill and Melinda Gates Foundation also published a report earlier this year saying that 44 percent of those living below the poverty level use the Internet at their local public libraries. On top of that, nearly a third of Americans over 14 used library Internet services in 2009. It's clear that the public is indeed making use of the resources available to them, and Chambers believes adults should be able to decide what they can and can't access. "The filter should be removed on the request of an adult patron. Concerns that a child might see something unfortunate on the screen must be dealt with in a less draconian manner," he wrote.
http://arstechnica.com/tech-policy/n...titutional.ars





Giving a Publishers' Letter Opposing FRPAA a Closer Look
Barbara Fister

You’re in a place that seems strangely familiar. There’ a slogan on the wall about freedom and access and principles, and you think “ah, Budapest. Or is it Berlin or Bethesda?” But no, we’re in the nation’s capital. And the principles about freedom and access . . . they’re strangely different.

Language has become twisted like a möbius strip. You’re traveling through another dimension, a realm of the imagination. You’re entering the open access Twilight Zone. Once again, some of the members of the Professional and Scholarly Publishing Division of the Association of American Publishers (AAP), have sent a letter to Congress protesting the Federal Research Public Access Act (FRPAA), making the following claims:

* FRPAA is unnecessary
* FRPAA will undermine copyright
* FRPAA will harm peer review and damage the quality of scientific research
* FRPAA will force costly burdens on government agencies
* FRPAA will give those government agencies an unfair opportunity to compete with a “well established marketplace.” (Librarians can vouch for how well-established it is.)
* FRPAA will wreak havoc by recklessly gambling on an untested experiment with “attendant risks of failure and collateral damage that U.S. research simply cannot afford.” (Be afraid, be very afraid.)

It’s accompanied by a link to a website that spells out the “Washington DC Principles for Free Access to Science.” So far as I can tell, these principles can be boiled down to “we’ll make it free if we feel like it. Sometimes we feel like it. Leave us alone.”

Surely you’re joking, Mr. Publisher

As to the first objection, that FRPAA isn’t necessary, I am reminded of an argument back in the early 1980s at the front desk at a hotel in Novgorod, Russia. We were traveling with two small and very tired children and had reserved a room for the night but instead had somehow ended up with two rooms with narrow twin beds in different parts of the hotel. (In those days, travel arrangements to the Soviet Union were handled by Intourist, a Soviet agency that relieved visitors of any uncertainty about where they should spend their hard currency.) No matter what we said, the answer was always the same: “You khave no broblem.” She probably knew how to say it in 14 languages.

She won the argument. But whenever I hear someone swear in complete contradiction to reality that there’s no need to fix what seems obviously a huge mess, I picture the hotel clerk with her fixed stare and automatic declaration that it was all very simple. We had no problem.

The publishers’ letter is equally dismissive. Depositing research in public databases “duplicates existing mechanisms that enable the public to access research in the sciences, social sciences and humanities published in scholarly journals.”

Really? Librarians don’t see it that way. We’re the ones who have to negotiate journal cuts and slash our book budgets to make ends meet. We’re the ones who try to balance the payments we have to make for copyright fees against things that would do more to promote research and student learning. We know our students and faculty resort to contacting authors or friends at other institutions, seeking copies of articles in journals that aren’t available by interlibrary loan anywhere in the region, hoping someone can provide a Samizdat copy of scarce research. Trust me, Congress—we have a problem.

Copywhat?

As to the second claim, I can’t imagine how FRPAA undermines copyright, though I could easily argue that those who own intellectual property that they don’t create have done more damage to copyright than anyone else. The balance has been tilted so unfairly to one side—toward monopoly and against the public interest—that copyright no longer promotes science or the useful arts. Instead, it creates a barrier to sharing scientific knowledge, a barrier that is particularly galling when it’s to research findings that taxpayers have funded for the public good.

The third point is nonsense. This notion that open access research is not peer reviewed is frankly the kind of pernicious scare-mongering that burned the AAP before and led responsible publishers such as the Rockefeller University Press to demand they clarify that not all members agreed with this claim.

Does the group think anyone will fall for these scare tactics again? I grant that administering the peer review process is not without cost, but there’s a lot of open access research that is just as rigorously peer reviewed as the publications of these societies. All of the things that they claim will be rendered impossible if FRPAA were passed and disrupted their revenue stream—back-office handling of the paperwork, software that lets authors submit their papers digitally and distribute it to reviewers around the world—in fact is being done by open access journals, often using open source software available to anyone.

The twin claims that a) government agencies will be unfairly penalized and b) government agencies will eat publishers for breakfast cancel each other out, so I won’t bother critiquing them. But the final argument, that this is a reckless experiment that might spin out of control and create a black hole that will swallow up the world . . . oh, wait, that was the rumor about the Large Hadron Collider, the one that didn’t destroy the universe after all, but instead sustained serious damage thanks to a baguette.

What I meant to say is that the concern that this is an untested and potentially devastating “one-way experiment” is utter nonsense. The NIH has experimented quite thoroughly, first by asking nicely if grantees would deposit their articles (not a success) and then in 2008 insisting that deposit was required as a condition of funding. (Bingo! It works!) Two years into it, there is no evidence that a black hole has opened up to swallow publishers or peer review as a result. The Wellcome Trust in the UK has been requiring funders to make their results public “as a fundamental part of its charitable mission and a public benefit” for the same period of time. Not a single publication, to my knowledge, has ceased as a result.

Duty-free markets

As we struggle with budget cuts the Imaginary Journal of Poetic Economics reports that one of the corporations that signed this letter experienced a good year, with over $2 billion in profits. That could fund a lot of access, but it doesn’t. It’s less worried about the advancement of science than it is about preserving a business model that will eventually fail. The trick is to hold off its failure as long as possible.

Meanwhile, what do these publishers recommend we do to ensure the progress of science? Here’s their solution to the problem we “don’t have”:

Acting on its own in the free market, the publishing industry already has made more research information available to more people than at any time in history. Articles are widely available in major academic centers and private-sector online databases, as well as through public libraries, state universities and interlibrary loan programs.

In other words, “You have no problem. Just go to the library.”
http://www.libraryjournal.com/article/CA6728016.html





Exclusive: The Big Debate – Jeremy Silver on ‘That Piracy Thing….’
Jeremy Silver

The debate at the British Music Experience did not bode well – eleven speakers on a panel – more of a soccer team than a debate. But the presence of a member of the Pirate Bay team added an interesting dimension. Inevitably the debate itself was rather superficial. The moderator struggled manfully to keep the discussion on-theme and tried rather unsuccessfully to avoid the whole thing circling round the Pirate.

I didn’t manage to say it very well last night, but while we all lined up to land a rhetorical punch on the visiting Pirate, the ongoing phenomenon of piracy as a globally, technologically enabled catalyst for change is really the key thing to remember.

Considering that he has a criminal conviction hanging over his head, he didn’t seem so bad, the Pirate, even though we all condemn what he was part of. He didn’t seem like a malicious human being out to subvert the very moral framework of our lives. He seems like a nice, well-educated middle class tecchy, with some impish delight and without much sympathy for an industry so fragile that he could deflate its balloon with his tiny needle.

The anarchic tendency of file-sharers is a social phenomenon empowered by the technology. It is derived from both great technological facility and basic human greed. From a successful artist’s perspective, file-sharing fans may look like ”greedy thieves” but then from the perspective of the developing world that may also be how European and North American consumers appear. A developing artist may see it that way too.

File-sharing is also a technological capability that, having been unleashed on society, is highly unlikely to go away. I don’t think it’s like a smallpox virus that can be eradicated. Close down the Pirate Bay this week and another Bit Torrent site will pop up next week. Find a way to reduce the popularity or effectiveness of this particular form of unauthorized file-sharing and another technology will replace it. The chances are also that the newer forms of file-sharing will be less easy to detect, less easily identified with the individuals at various ends of the process – until our detection methods improve and seek to clamp them down, and so the cycle will continue.

There is a shift in attitude of mind required. We have to look at a world in which the reproduction right and the control of it are progressively eroded. Given the woefully low level of economic development of alternative methods of funding content, we are fortunate that the rate of erosion is slower than it might have been. Whether the impending new legislation in the UK will slow that erosion any more, I somehow doubt. And unfortunately I believe the cost of that legislation to civil liberties and freedom of speech will be much greater than the likely cultural and economic benefit it strives to achieve.

For those of us toiling in the cultural digital fields however, this kind of legislation also has another negative effect. It continues to provide incumbent businesses with a remedial focus on prevention of piracy rather than on investment in new solutions to the economic problem it causes. Worldwide expenditure on anti-piracy measures is out of all proportion to the worldwide investment in new digital content business models. More importantly the investment in new ways to invest in content is not coming from the music industry. It’s coming from new entrants who are faced with the prospect of rights holders who make it difficult and expensive to try new things out. Rights holding companies typically demand advances and even equity in companies that dare to enter their sector with a new idea for creating economic growth.

The short term benefits of growth required on a quarterly basis by shareholders and the stock markets drives the strategic perspective of publicly traded corporations. Quarterly results and end of year bonuses force executive boards into myopic decision-making. That is what they are required to do. For years I have been angered or frustrated by this, but the harsher the economic environment the more steely their focus must be on making those short-term returns.

Incumbent publicly traded companies in the creative industries today have less opportunity than they ever have to take long term strategic decisions. They struggle with the ambivalent solution and control approaches of the major technology companies who are driving their own agendas in very narrowly harnessed partnerships or direct head-to-head conflict with the economic goals of the major rights holding companies.

In order to defeat this vicious cycle of wasted energy and denial, we do need to find some ways to intervene. One way is to force the companies to open up their rights to new entrants at low cost. A second way is to address the copyright regime and bring it up to date.

The artist community, I believe, has to take the lead here in being progressive and forward-looking in a way that a creative individual can be, but a corporation cannot.

Artists of the world have to look at their innermost conflict and try to find a way out. Every artist or indeed creative producer today feels a degree of conflict about the fate of his or her work in the marketplace. Artists feel strongly that having created a piece of work they want the world to share in it. Part of the definition of being an artist is fulfilling a desire to communicate. If you have such a desire then you are likely to want to communicate with the largest possible audience you can reach.

Very few artists are satisfied with the idea that their work is only made for a small audience. Most artists appreciate their small audience but would feel better if it could be growing. And then there is the question of getting paid. Here there is much more disagreement in the community both about the scale of remunerative ambition and about the basis upon which it should be achieved. Not every artist wants to be a millionaire, but every artist who believes in him or herself would like to be able to make a “decent living” out making their work.

The conflict between the artist’s desire to share their work with as wide an audience as possible and their desire to make a decent living, come in to sharp relief when faced with the prospect that once they release their work it will be share without payment globally.

Artist are used too often as the excuse for why content cannot be made available widely, for why cumbersome one-on-one conversations are required to gain clearance or permissions. Artists ethics and moral values are set up as the barriers which rights exploiters can use as the means to raising prices. “They’ll never agree to that usage. OK for $30,000 they will.”

Rights exploiters use artists, basically, as the moral justification for immoral actions or for simply achieving economic leverage. And very often the benefit of such behaviour is greater for the exploiter than the rights owner.

If artists were able to lead in demanding a significant and world-leading change in the law of copyright – the exploiting companies would lose the moral basis for their economic motivations.

Artists could change the world by standing up and saying we do not want copyright to be about a reproduction right in a world where the reproduction of our content can no longer be controlled. We want copyright to ensure that artists get paid for their work equitably in equal proportion to the effort involved in its creation, promotion and distribution. We want copyright to ensure that artists are credited by name for the work that they create. And we want copyright to ensure that specific moral and ethical requests made by an artist are respected. So if an artist says: “I don’t want my work used in advertising at all” that is adhered to. But that the default condition of their work is that it is available for use, to be licensed, from day one automatically – without need for negotiation.

The more that artists and the entire creative community are able to take a lead on pursuing this perspective, the more likely we are to be able to develop new sustaining methods of ensuring a commercial return for creative endeavour. We need to wind down the over-investment in anti-piracy and make the radical changes needed to start stimulating future investment that will allow for high quality cultural work to thrive.
http://www.themusicvoid.com/2010/04/...-piracy-thing/





5 Insane File Sharing Panics from Before the Internet
Ralf Bakr

Thanks to new technology and the modern lassiez-faire attitude towards intellectual property, people are bootlegging their entertainment at an unprecedented rate.

Or so the record companies would like you to believe.

The truth is that media piracy has been rampant through all of history... probably since the first guy to smear his feces on the wall in the shape of a buffalo turned around and immediately saw 50 more just like it being smeared on the walls behind him.

Here are five other historical piracy scares that make this one seem even less relevant:

#5. VCR's Will Kill Television!

Video sharing sites like YouTube represent a schism of users: To some they're a convenient way to share treasured memories and display and distribute the result of your new sketch comedy troupe featuring your ex-girlfriend, your roommate, your dog and absolutely no script-writing whatsoever. But the biggest controversy, of course, is the opening of the floodgates on bootleg television that may one day spell the ultimate demise of the entire broadcasting industry, if not all of life itself!

And they may well have a point: Theft is theft, and who's going to actually pay for the programming if they can get it for free? For the first time in history, people are capable of recording and sharing video ripped straight from the very bosom of Sweet Lady Television herself, like some sort of Video Recording Device that is hitherto unprecedented in the history of- waaait a second...

Home-use VCRs were available as far back as 1963, but didn't catch on until mass-production dropped the price in the late 1970s. In an almost unrelated note: Shortly afterwards Jack Valenti, head of the MPAA, completely lost his shit.

Appearing before Congress--flecks of spittle presumably slinging from his red, swollen face and melting caustic holes into the floor--he proceeded to proclaim in all seriousness that "...the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone." He then gave this stump speech that is either the most insane or the most awesome that ever happened in Congress:

"This is more than a tidal wave. It is more than an avalanche. It is here. Now, that is where the problem is...We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine."

At which point he and his men presumably led a noble but ultimately suicidal charge against the Terminator armies amassed before him. But luckily, just before Valenti set fire to a fax machine and started chanting "ATTICA!" a voice of reason spoke up, to calmly assert that not everyone who chose to own a VCR had the overthrow of America and the death of the entertainment industry in mind. A soft-spoken hero in a sweater who we like to imagine sat down to change from dress shoes to indoor sneakers before opening up a can of whoop ass.

That's right: "Mister" Fred Rogers, a long time advocate for the VCR, gave a testimony to the Supreme Court regarding the perceived dangers of "time-shifting." That sounds much more awesome than it actually was, bringing to mind images of Mr. Rogers displacing himself in time and fighting dinosaurs with a ray gun, but really it was just broadcasting jargon for the ability to record television shows and watch them later. Mr. Rogers's impassioned speech turned out to be so fundamental to the close ruling (5-4 in favor of home recording) that it was quoted word for word in the footnotes. So what brought Mr. Rogers down from the neighborhood of opulence that he ruled with an iron fist? He testified in support of Betamax.

Beta-what? Exactly.

#4. Phonographs and Player Pianos Will Kill Music!

Pirated music is hardly a new development. In fact, there have been Metallicas in every age of man, making loud and opinionated asses out of themselves every time somebody accidentally coughs a note they once thought of using in a song. In this case, we're referring to the "March King" himself, John Philip "Stars And Stripes Forever" Sousa.

In this piece first published in Appleton's Magazine in 1906, Sousa argues that, "...I myself and every other popular composer are victims of a serious infringement on our clear moral rights to our own work..."

Ah, now there's some familiar language. "Serious infringement." What's he talking about? The phonograph machine and the player piano, infringing on his moral right to earn money playing music live. If they want to hear me, they should show up to the concert hall, damn it! They shouldn't be able to hear it from some cursed machine.

He wasn't done. He predicted these terrible machines would lead us down a slippery slope where talents like songwriting and even the ability to sing itself could be replaced by inhuman machines. Dang, what a drama queen.

After all the insane speculation about machines achieving sentience and leading some sort of musical apocalypse, he gets to the real meat of the subject: his concerns that these devices could replicate his compositions without compensating him. In the immortal words of Sousa himself:

Although to be fair, Sousa really wasn't a fan of any aspect of the recording industry. He often had his bandleader/soloist Arthur Pryor conduct his band for recording sessions. So much so that many so-called "Sousa recordings" didn't actually feature The Sous. Say what you will about our modern blowhards, but hell, at least they actually showed up on their own albums once or twice... well, that is, if there's room in between the guest spots by Akon, the tracks featuring Niki Minaj or re-mixed by Swizz Beatz and whatever other up and coming producer that puts video game soundtracks in the background of rap songs. But at least they show up to the studio.

#3. Pirated BASIC Will Kill Software Development!

Up until the mid-70s, software wasn't really a business. Games and applications were typically coded out by hobbyists for their own entertainment or to be shared at meetings with like-minded individuals and their long, luxurious beards. Back then, the computer everyone had to have was the Altair 8800, which was basically just a big baffling hunk of metal which was operated more by astrology and black ritual than user input. You see, the Altair had no keyboard, no monitor, no disk drive - just four kilobytes of memory, a line of lights and some corresponding switches that turned the lights on and off.

It wasn't until some scrawny nobody named Bill Gates and his friend Paul developed a language program for it that its potential began to truly shine. And moments after they did so, suddenly every arrow-collared, bell-bottomed neckbeard seemed to have a copy. But virtually none of them paid for it.

The thieves argued that the program was written on a government-funded computer, so why should they pay for software that's basically just subsidized by their tax dollars?

Bill Gates voiced his dissatisfaction with this argument in his now legendary bitchfest "The Open Letter To Hobbyists." The pre-billionaire Gates pointed out that for some reason, everybody knew not to steal a computer, but considered software free for the taking (he complained that they earned less than $2 an hour for their work on the software, because so few people paid for it). If this continues, Gates argued, why will anybody write software?

Pirates were undeterred. It didn't take long for hackers to work out ways to trade warez electronically: Early transactions were made through bulletin board systems. These worked similar to the way the modern Internet works... if you had to directly call up each website with your modem and politely request every byte with a cordial handwritten note.

So, decades later, in an industry where piracy is still rampant and yet a fair amount of software still seems to get written, what became of the major anti-piracy advocates? Well, let's refer back to that earliest and most vocal detractor: Bill Gates.

He now admits that piracy of its biggest product has actually expanded its market in countries like China, going so far as to say: "As long as they are going to steal it, we want them to steal ours."

And, come on, look at the damage software piracy has done. If only everybody had paid for their copies, poor Bill Gates might still have a job today... instead of retiring to literally ski everywhere he goes on gigantic drifts of dollars.

#2. The Cassette Will Kill Music! Again!

The RIAA absolutely hates your iPod. They hate it like it personally came into their homes and urinated on their sick grandmothers. They want that thing dead, and it's easy to see why: Digital music is a new development that enables stealing on a mass scale with little to no consequences. It must be stopped at all costs! Of course, we've been fed this same bucket of stupid before; the bucket was just a different color last time. Also a little clunkier, and it made clicking noises when it got old:

The Sony Walkman was invented in 1978, jump-starting the 80s, which some of us remember as the greatest decade in the history of music. Some of us were also on a lot of cocaine for pretty much the whole thing. There might be a relationship between the two clauses.

But it didn't take long before the music industry started claiming the loss of a (completely unverifiable) billion dollars a year from people taping their favorite tracks off the radio for free.

This created the massive ball of wadded up panties that was the Home Taping Is Killing The Music Industry movement. The counterpoint to this alarmism, that sharing music on cassettes was a good way to gain exposure for up-and-coming acts and would increase sales (sound familiar?) was dismissed as the mere attempt by criminals to justify their crimes. The record industry's single biggest money-makers of the last several decades were spawned exactly by the tape-exchange culture, and you can hear its influence in modern music every minute of every day: The sample.

Without home taping, we might not have the rap industry we do today. And without the rap industry we have today, the RIAA would certainly not have that diamond-encrusted turbo-jet they fly to their court-hearings in, and we're almost positive they couldn't afford the law services of Satan himself to win them.

#1. The Printing Press Will Kill Literature!

It has been suggested that the printing press owes its existence to both the rise of trade with the East (which brought paper-making technology that cheaply replaced parchment) and, believe it or not, The Black Plague.

Specifically, it was the combination of an increase in the price of copying books (because all the monks who used to do that died from plague) and the increase in raw materials for paper (from the surplus of rags accumulated from the many dead) coupled with the surplus of source material brought by refugees from plague-torn Byzantium. So there you go, kids. Literacy: Born of pain and suffering, and forged from mountains of the dead.

At first, printers in England attempted to self-police this chaos by forming the Stationers' Company in 1403, essentially a printers' guild. Eventually, however, Parliament stepped in and passed the Licensing Order of 1643, which turned the Stationers' Company into a veritable police force for censorship. They gained unprecedented authority to arrest authors, printers and publishers and destroy offensive manuscripts in exchange for a monopoly of the printing trade, basically making them the Microsoft of the Renaissance.

In response to the Licensing Order of 1643, a writer and poet named John Milton published the Areopagitica, an influential treatise on the philosophical defense of free speech and press against pre-publication censorship--which back then didn't just mean editing choice phrases out of your novel; they could actually haul your ass to jail for writing offensive crap.

Just something to keep in mind, commenters.

So why risk incarceration to speak out? Was Milton just a hardass, lookin' for literary punch-ups like a bookworm samurai? Well, Milton actually believed that the freedom to publish was God's Will. And far be it from man to deny the will of The Almighty.

That's right: This article was ordained by God himself. Especially that part about Mr. Rogers and the dinosaurs. We're practically saints up in this bitch.
http://www.cracked.com/article_18513...-internet.html





Pirate Bay Bidder Pandeya Taps Ted Cohen to Facilitate Deal
Mark Hefflinger

Hans Pandeya, whose latest attempt to acquire file-sharing hub The Pirate Bay comes in the form of a bid launched by a public American company called BMSV, has hired TAG Strategic's Ted Cohen to help facilitate the deal, Wired.com reports.
Cohen, the former head of digital at EMI, was previously retained to work on similar plans to transform file-sharing services Napster and Limewire into legitimate distribution services.

"Ten years ago, I went through this [with Napster] -- there should be a way to pull this off," Cohen told Wired.com, of a potential legal Pirate Bay. "If the industry wasn't ready ten years ago, I think they are possibly ready for it now."

"If you can convert 30 percent of [The Pirate Bay users to a paid subscription], everybody sees the wisdom in that now, more-so than they did two or three years ago. I don't think it's a fool's quest," added Cohen.

The Pirate Bay's brand reputation and past actions that infuriated copyright owners could pose obstacles to such a deal, however.

"[Branding] was a serious challenge for Bit Torrent when we did the license agreements, and it's proving difficult for a lot of other companies in a similar space," Ashwin Navid, the co-founder of file-sharing software firm BitTorrent, told Wired.com.

"For example Boxee has a hard time, DIVX has a hard time -- these companies that have pushed the envelope on copyright tend to get categorized as renegades, and the lawyers have a hard time -- and the [entertainment] brand managers have a hard time -- embracing those brands."
http://www.dmwmedia.com/news/2010/05...acilitate-deal





Gameworld: Free Games Lure New Players Including Women, Elderly
John Gaudiosi

The video game industry has weathered the economic slowdown better than most industries, but there could be a reason -- free games with new figures showing up to a third of gamers don't pay to play.

More people are getting into gaming through free titles like Zynga's "Treasure Isle" played online through social networking sites like Facebook, downloading free games like ngmoco's "Godfinger" on mobile devices like iPhone and iPad, or sitting on a friend's couch to play multiplayer maps with titles like Activision Blizzard's "Call of Duty: Modern Warfare 2."

New research from video game tracking firm Newzoo found every existing video game platform from mobile to console has an audience of at least 30 percent of non-paying players.

"The shift toward online business models servicing a broader range of target groups started before the recession and has resulted in continued growth through the rough economic times in terms of revenues," said Peter Warman, managing director and founder of Newzoo.

"The platforms offering free-to play-gaming options like massively multiplayer online (MMO) games, mobile games and casual game portals lare successfully converting players to payers."

PopCap.com, a leading game maker in the $3 billion casual games industry, offers free versions of its games like "Bejeweled Blitz" on Facebook, as well as its own site.

"Our belief is that by allowing customers to experience our games for free it's a good way to guarantee customer satisfaction, as they have been able to play the game pre-purchase with the promise of lots more fun to come," said Paul Breslin, general manager, Popcap.com.

The "Newzoo Games Market Report" said one-third of the $25.3 billion that U.S. gamers spent on video games in 2009 came from online revenues (MMOs, game portals and mobile devices) and the digital distribution of console and PC games.

Free Games Spreads The Net

The U.S. currently leads the world in online business revenues, but Warman believes the EU and other territories will continue to grow gaming revenue in this arena moving forward.

"These free options are definitely broadening the appeal of video games among older and female demographics, and a lot of these consumers don't actually consider themselves gamers at all," Michael Cai, vice president of video game research, Interpret.

"Without casual gaming portals like Pogo, Real Networks, and Big Fish Games, many older female gamers would have never paid for gaming content."

Interpret discovered that 21 percent of the U.S. population, or over 46.1 million Americans, play social network games. Over 11 million Americans only play social network games. The median age for social network gamers is 38.8, versus 30.9, which is the median age of console gamers.

Cai found that 12 percent of these social network gamers plan on buying a Wii, which would be their first game console.

More console game makers are offering consumers free play, including downloadable game demos through Microsoft's Xbox Live Arcade and Sony's PlayStation Network Store. "Handing over free content to gamers can be tremendously beneficial to developers and publishers, even if it comes in the form of a short playable demo of a game that's not spectacular," said Patrick Shaw, features editor, GamePro Magazine.

"Often times a small taste of a game is all it takes to entice the player to purchase the full game."

(Editing by Belinda Goldsmith)
http://www.reuters.com/article/idUSTRE64C5AB20100514





Saving a Penny -- Pirating the Humble Indie Bundle
Jeff

One common email we have been getting is people notifying us that they see live Humble Bundle key links around the internet on various forums, 4chan, and even Steam! I decided to look into this a little bit and try to guess how big of a phenomenon it is.

After some simple math, I estimate that over 25% of Humble Indie Bundle downloads are 'pirated' -- that is, users download from shared links from forums and other places without actually contributing anything. Note: that is not including BitTorrent and other sources.

How do people pirate the bundle? When I say this bundle is DRM-free -- I really mean DRM-free. Not only do the games themselves have no copy protection (not even a simple serial number check), but the Humble Indie Bundle website has limited copy protection. That means there are no download limits, everything is reachable on the command-line with 'wget', you can resume downloads, and do anything else you would expect to be able to do with a personal download link.

25% seems incredible given that you can simply pay $0.01 to be completely legitimate. Is this figure correct? Let's take a look at some raw download data.

Crazy bandwidth

57.3 TB of total bandwidth (49.3 TB of edge traffic)

The 57.3 TB figure is the total volume, including transfer of the origin data to the edge nodes (learn more about CDNs). The uninflated 49.3 TB figure is the important one as that is the "last-mile" bandwidth from the local edge nodes to the user.

As of this writing, 79,000 people have contributed to the bundle.

When someone contributes to the Humble Indie Bundle, they get the 5 games, plus the Samorost 2 gift. This adds up to about 746.5 MB per platform. I think it is reasonable to assume that not everyone will download every single game for their platform (at least instantly after purchasing or gifting). Is it though?

I sent my friend Eric Samuel, a statistics graduate from Cal, two days worth of raw download data from the CDN for analysis.

He found that on average a given IP address downloads 490.01 MB worth of data from the bundle. This is actually likely overstated due to multiple people downloading from the same modem. For instance, one IP alone downloaded 10.3 GB - not exactly a humble bundle!

So we can divide the 49.3 TB by 490.01 MB and we get 105,497 average downloaders.

Assuming these numbers are reasonable, we get 79,000 / 105,497 = 0.749 are estimated to be legitimate or about 25% have pirated the bundle -- directly from us. There are a lot of assumptions here, but I tried to be as conservative and simple as possible.

Why would you pirate a pay-what-you-want bundle?

So why are people sharing the Humble Bundle, when they could get it just by donating a penny to charity? We can only speculate, but here are some possible reasons:

• Some might want to donate, but it seems a whole lot easier to just click on a hyperlink than it is to enter a credit card number. Sure, it only takes a couple seconds, but for many, this is a few seconds too long. The most successful online stores all allow one-click buying, including Amazon, Steam and iTunes. In the words of one gamer, Steam showed him that he "wasn't cheap, just lazy," and I'm sure he's not alone in that realization.

• Some users may want to share the bundle with their friends, and decide that it's easier to just make one donation for a larger amount than it is to make separate gift donations.

• Some users may live in countries where none of our three processors (PayPal, Google Checkout, and Amazon) are accepted. These users might pay if they could, but they feel that they have no choice but to search for shared copies.

• Some users just want to "stick it to the man", and be edgy and rebellious. It doesn't matter if they're sticking it to indie developers, sick children, and online civil liberties... they're sticking it to someone, so they feel cool.

What are we going to do about it?

Not much.

Shouldn't we use a percentage of the proceeds to send our indie-lawyers after them? Perhaps trace their IP addresses?

No -- we will just focus on making cool games, having great customer service, and hope for the best. It sure seems to be working right now!

Should we implement a technical solution to prevent rampant piracy of our download links? That might be optimal -- only if done right though. We have gotten many positive messages (especially from Linux users) about our relaxed edge servers like this one from Don:

Hey thanks for putting the downloads on a plain server with no cookie auth required, I hate it when I can't use wget and resumes. Out in the 3rd world with 256k BURSTABLE DSL that drops on and off at random. Some websites really make it a pain to download stuff trying to block unauthorized folks, even exporting cookies and using the --load-cookies trick in wget won't work.

There is probably a way to get the best of both worlds, but it's not my area of expertise. Making the download experience worse for generous contributors in the name of punishing pirates doesn't really fit with the spirit of the bundle. When considering any kind of DRM, we have to ask ourselves, "How many legitimate users is it ok to inconvenience in order to reduce piracy?" The answer should be none.

I do have one humble request though --

If you are deadset on pirating the bundle, please consider downloading it from BitTorrent instead of using up our bandwidth! Also, even though you are pirating our games, please tell some of your friends about the Humble Indie Bundle. Posting to Facebook, telling your Twitter followers, (or simply talking to someone) sure doesn't require a credit card.
http://blog.wolfire.com/2010/05/Savi...e-Indie-Bundle





Press release

Copyright Enforcement Group Announces Extensive Portfolio of 5,500 Titles

Santa Clara, CA (RPR) 05/10/10 — The Copyright Enforcement Group (CEG) today announced that it has expanded its extensive portfolio to 5,500 copywritten titles. CEG will protect and monetize all 5,500 titles across peer-to-peer protocols (P2P), user-generated content sites (UGC) and websites 24/7/365.

Under the terms of 17 multi-year agreements, CEG has obtained the exclusive rights to protect and monetize all 5,500 titles globally. All titles are enrolled in CEG's flagship Peer to Peer Collect Service. The service allows content owners to monetize peer-to-peer (P2P) activity and realize revenues from an unexpected source: internet piracy. Infringers are continuously tracked every hour of every day. Those identified as sharing copyrighted content will automatically receive a "pre-settlement" offer by email and can settle and purchase legitimate goods via Copyright Enforcement Group's collections website at www.copyrightsettlements.com.

About Peer to Peer Collect

CEG's Peer to Peer Collect Service follows a three step process:

Step 1 - Upload & Track: Content is uploaded to the tracking system and monitored across multiple peer-to-peer protocols 24/7/365. When an infringement occurs, evidence is collected and placed in a queue for authentication.
Step 2 - Authenticate & Notify: Infringement evidence passes a strict multi-stage process involving fingerprinting and visual authentication to virtually eliminate false positives. After authentication, collection notices are automatically generated and emailed to Internet Service Providers (ISPs) and individual infringers.
Step 3 - Enforce & Collect: Infringers receive a notice via email that directs them to CEG's branded collections website at www.copyrightsettlements.com. The website allows a "pre-settlement" offer via paying a fine or purchasing goods.

Once a settlement is paid or goods are purchased the infringer is released from liability and the collection is split between the copyright owner and Copyright Enforcement Group. If an infringer doesn’t pay the settlement or ignores the notice CEG’s in-house legal team takes over until a collection is realized.

Multiple Settlement Options for Infringers
CEG's solutions are designed to offer infringers fair and practical settlement options while giving copyright owners the opportunity to realize revenues that would have otherwise been lost to digital piracy. CopyrightSettlements.com offers infringers a myriad of options when compared to traditional copyright enforcement agencies. Options include monetary fines, hard goods purchases (DVDs, CDs, Books, etc.) and digital content purchases (video files, audio files, ebooks, etc.) at price points that are drastically less than traditional direct to litigation methods. In addition, infringers can remain anonymous and protect their privacy.
http://rushprnews.com/2010/05/10/cop...of-5500-titles





Gygan May Be Next Big Thing in File Sharing
Gabriel Gralla

Gygan is one of the newest additions into the file-sharing battleground. With so many choices already available--BitTorrent, Usenet, and RapidShare among others--can Gygan really offer anything new? There's nothing groundbreaking, but it does fill a niche: Gygan (free up to monthly download GB limit) combines some of the best features of RapidShare and Usenet, but unlike the two it runs on an easy-to-use standalone client.

Like RapidShare, Gygan relies on users uploading content to their specific service, which is stored in a private sharing network on Usenet. Note that this is not P2P--Gygan provides indirect access to Usenet through their own servers. This allows incredibly fast downloads and uploads (maxing out almost any connection), but it's also why you have to start paying after 1GB of free downloads. The first 1GB of downloads a month (4GB for the first month) is included for free users, but if you want more you'll have to buy a monthly package for $.33-$.50 a GB. On the other hand, unlimited uploads are free for everyone--and you can even make money through Gygan's Reward Program if enough people download your files.

If you're used to free services like BitTorrent, $.50 a GB might seem expensive, but you're paying for convenience and speed. You can start downloads from a simple URL like you would at Rapidshare, or from a .gyg file which contains the download information like a .torrent. But Gygan also offers an in-client search feature, so you don't have to waste time scouring the web for the right link (Gygan also allows you to share "private" files which do not show up in search results, and are only accessible by the download URL). And although Gygan's backend is Usenet, you would never know it; downloading is as simple as point and click, with all the complications of Usenet hidden from the user.

Despite being released to the public only a few months ago, Gygan has a decent collection of content which should only continue to grow as more users join. Already, Gygan is a viable file sharing service. If you're willing to pay for fast, easy downloads, then give Gygan a try. It's not going to overtake BitTorrent any time soon, but it may be the right fit for you.

Note: This software is free up to 1GB of monthly downloads. Pricing plans include $5 a month for 10GB, $10 a month for 25GB, and $25 a month for 75GB. The price quoted here is for 10GB a month.
http://www.pcworld.com/article/19525...e_sharing.html





NEC Announces Video Checking Technology
Lawrence Latif

NEC has announced that its video content identification technology has been incorporated in the upcoming Mpeg 7 video standard

The technology creates a signature that is compared against one from the original file to determine whether the video has been altered. According to NEC this will allow the owners of the video to automatically "detect illegal copies" and "prevent illegal upload of video content" without their consent.

NEC claims that each frame has its own signature, meaning that even minute changes to the file such as adding subtitles, watermarks or dogtags, and of course cutting out adverts, will alter the overall signature of the video.

The firm touts the efficiency of its algorithm, saying that a bog standard PC can search through 1,000 hours video in just one second. Quite what the firm's definition of a "home-class" PC would be interesting to know as we can't quite figure out how even a dual core 3GHz box can go through the 104 billion checks for 1,000 hours of video in a mere second.

NEC also claims that its technology will do away with the current manual checking by members of the movie industry and ISPs to spot dodgy videos.

While all this sounds great for the movie studios, technologies such as this are usually circumvented by the equally smart filesharing community. The time it takes for the movie studios to adopt this latest technology in their never ending battle against filesharers will determine how quickly it is cracked.

Nonetheless, the inclusion of NEC's video signature technology should mean that the Mpeg 7 standard will finally step out from the shadows and get recognised by Hollywood executives, who might chose to encode their future titles with it.
http://www.pcauthority.com.au/News/1...echnology.aspx





Check The Quality Of Pirate Media With The All New VCDQ
enigmax

There are many thousands of videos on the Internet and while it’s possible to just go blindly to any one of dozens of torrent sites and search for movies or TV shows, there is no guarantee that the quality will be good. For the last decade that information has been available from VCDQuality.com and shortly the site will be relaunching with a new owner, a full makeover and fresh support for BitTorrent users.

Most readers will be familiar with The Scene, the ‘place’ where most pirate movies, music, TV shows, software and games first hit cyberspace. Although members of this intensively private community would prefer to maintain their privacy, it is from their servers that media leaks out to the wider Internet community. According to the MPAA, The Scene sits at the top of the “Piracy Pyramid”.

Although The Scene has its own unique set of quality-control standards, this doesn’t necessarily mean that their output is always of a high quality. Although the most serious offenders will be ‘nuked’ (Scene talk for “something is wrong, don’t bother with this release”) in the case of movies, for example, Scene rules allow CAM releases which may be virtually unwatchable.

Furthermore, a release receiving a ‘nuke’ doesn’t necessarily mean that its unwatchable, it might just mean that it has breached any one of The Scene’s often bewildering and sometimes downright archaic in-house rules.

Of course, none of this would matter to ‘outsiders’ if Scene releases stayed locked away as intended for the use of the few, but they don’t. So wouldn’t it be great if there was a central source, a database of releases where the average Internet user could go for information on what’s hot and what’s not in the world of piracy?

Some might be surprised to learn that VCDQuality.com has been providing such a service for almost a decade. Founded in 2001, VCDQ quickly became the best place for the average non-Scener to find out quickly if a new movie had hit the Internet yet and in what quality. If it had, it would appear pretty quickly at the top of the list on the main page.

Along with the name of the release, the format of the source is indicated – DVDRIP, CAM, DVD Screener, R5 (Region 5) for example. This information is supported by links to screenshots of the release in question, its NFO (a small descriptive text file distributed by the Scene group responsible), the name of the release group and a link to the movie on IMDb.

Perhaps the most useful link moves off to the comment section. Here those that have actually downloaded and watched a particular release discuss what they have seen, specifically whether the video and sound of the release are up to scratch and worth the effort of finding and downloading.

Unfortunately, due to the site’s policy of shunning most advertising, it has lacked investment in recent times. A hard drive disaster last year caused quite a lot of pain and 8 weeks ago their server died altogether. It was time for a new beginning.

With the assistance of a new owner, behind the scenes the site has been receiving its first proper update in a decade. If all is going to plan, as you read this article or in the coming hours the new VCDQ will be launching with a fresh new look and a host of new features.

Along with a rock-solid server and hosting, the site will be expanding its databases. While traditionally VCDQ has reported only on Scene releases, with the rise of BitTorrent release groups, P2P releases will be reported on too

“We’ve decided to add P2P sources due to the rise of Torrent sites in recent years,” Admin Neversoft told TorrentFreak. “While the scene still produces more releases and better quality we cannot ignore the fact that your average Torrent user doesn’t care about group affiliations or rules, they just want the best quality available.”

Scene purists (and there are a lot of those reading and resident at VCDQ) will be pleased to learn that P2P releases can be filtered out from the site, but the rise of P2P and BitTorrent in particular as a force to be reckoned with can’t be denied.

“By ignoring P2P we would be ignoring a large percentage of what people are downloading out there,” Neversoft explains. “This was a difficult decision for us, we’ve always shunned the P2P scene and to a certain extent derided it but as they say… ‘If you can’t beat em, join ‘em’ and we think we can provide the same excellent service for P2P releases as well. Having said that, it will be select releases – we’re not about to become a dumping ground for every reencode out there.”

In addition the site will add movie/TV HD formats, PC, Xbox360 and Wii sections and will improve its databases with information from multiple sources. Importantly, the site will update quicker to provide news on the latest releases, faster.

That news will be delivered in a number of ways. From the nicely presented release pages, fully customizable RSS feeds, Twitter updates, improved forum and staff blogs, the new VCDQ already looks very promising indeed. Neversoft told TorrentFreak that there’s even more to come.

“In time we’ll be improving the rating/review system as well and we’re still tweaking and will be for some time but we’re going live because the site already seriously out-performs the old VCDQ so it seems silly to just keep tweaking in beta when we already have something better’ that we can deploy now,” he explains.

Moving forward, Neversoft hopes that VCDQuality can become the iMDB of the warez scene while also providing useful services to BitTorrent and Usenet sites. While user comments on torrent sites are useful for determining if a torrent is ‘fake’ or not, often the quality of the release is a neglected topic of conversation, a gap that Neversoft feels VCDQ can fill.

“What’s the point of Torrent and NZB sites having the odd comment on releases on their site when they can link to a whole smorgasbord of comments, reviews and screenshots free of charge?”

Continuing on the P2P/BitTorrent theme, VCDQ will also allow users to submit P2P release information. So, if anyone believes the site has missed an important P2P release, all they have to do is collate the NFO along with samples if they have them and submit them to the moderation team for consideration.

All in all, this is a very welcome update to a much-valued resource. Furthermore, unlike other sources that have tried to replicate the VCDQuality experience but with tacked on download links, VCDQ remains entirely legal and as such can look forward to a stable and promising future.

The new site (blue theme, as opposed to the old red) should be available within a couple of hours at the usual URL.
http://torrentfreak.com/check-the-qu...w-vcdq-100509/





Software Piracy Rate Up 2% in 2009, Study Finds

Theft hurting IT industry, economy
Jim Duffy

Expanding PC sales in emerging markets is increasing the rate of software piracy, according to a recent study by industry watchers.

The rate of global software piracy in 2009 was 43%, meaning that for every $100 worth of legitimate software sold in 2009, an additional $75 worth of unlicensed software also made its way into the market, according to a recent study by the Business Software Alliance (BSA) and IDC. This is a 2-percentage-point increase from 2008, and is fueled largely by expanding PC sales in emerging markets, the study found.
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Software theft exceeded $51 billion in commercial value in 2009, according to the BSA. IDC says lowering software piracy by just 10 percentage points during the next four years would create nearly 500,000 new jobs and pump $140 billion into "ailing economies."

Despite the uptick, 2009 piracy rates are better than expected, according to BSA. Still, "Few if any industries could withstand the theft of $51 billion worth of their products," said BSA President and CEO Robert Holleyman, in a statement.

In the United States, software piracy remained at 20%, the lowest level of software theft of any nation in the world. However, given the size of the PC market, the commercial value of pirated software in the United States was $8.4 billion in 2009, the groups said.

Other findings of the BSA/IDC study were:

• Piracy rates increased in 19 global economies, up from 16 in 2008.
• The factors driving up the global piracy rate include growth in the consumer PC base and in emerging markets — both segments with high piracy rates:
• Globally, PC shipments to consumers rose 17% in 2009, while shipments to businesses, governments and schools dropped 15%.
• The PC markets in Brazil, India and China accounted for 86% of the growth in PC shipments worldwide.
• For every dollar of legitimate software sold, another $3 to $4 in revenue is created for local firms.
• China saw the largest increase in the commercial value of pirated software of any country — growing $900 million to $7.6 billion.
• India, Chile and Canada each saw the greatest improvement in reducing software theft, each achieving a 3 percentage point decline in their piracy rates in 2009.

Holleyman called on governments, particularly those in fast-growing, high-piracy countries, to enact programs to combat piracy, foster innovation and maximize the economic impact of the IT industry.

IDC analyzed 182 sets of data from 111 countries around the world to develop the software piracy study.
http://www.networkworld.com/news/201...y.html?hpg1=bn





Lyrics Sites at Center of Fight Over Royalties
Joseph Plambeck

What’s the line in that song?

That’s what Milun Tesovic wanted to know back in 2000 as he searched online for the lyrics of his favorite tunes. But often, he got results that seemed dubious or could not find the song at all. So a year later, at age 16, he started his own site.

That site, MetroLyrics.com, crept up on search engine results, and before he knew it, he said, checks from advertisers were arriving in the mail and the site “started looking a lot more like a serious business.”

Now 24, Mr. Tesovic helps oversee the site and its handful of employees from an office outside Vancouver. It drew about 13.5 million unique users in March and generated close to $10 million in revenue in 2009.

He is not the only one walking that particular stairway to heaven. Dozens of sites with a range of quality and graphics now showcase song lyrics, raising the prominence of the words and sometimes providing significant revenue for the sites’ owners.

For songwriters and their publishers, though, the ubiquity of lyrics on Web sites presents both opportunities and problems — especially when it comes to getting some of the sites to pay royalties for use of the lyrics.

For decades, printed song lyrics lived in relative obscurity, relegated to album sleeves and sheet music. And until now, they provided no significant source of revenue.

But the digital age has provided a chance to re-evaluate the value of the words, said David Israelite, the chief executive of the National Music Publishers’ Association, which represents more than 2,500 publishers. That value, he said, “hasn’t been exploited very well.”

Collecting royalties for the lyrics has not been easy, though. The sheer number of publishers makes it cumbersome for each site to reach deals with each of them. Only in the last couple of years have companies, including Gracenote and LyricFind, gathered the licenses themselves, which they then sell to sites.

The creation of those third-party aggregators is a crucial first step toward finding significant revenue from the sites, said Peter Brodsky, an executive vice president at Sony/ATV, a major publisher.

“The best way to combat unauthorized distribution is to authorize sites and third parties to make deals and build sites that have a better experience,” he said.

Mr. Tesovic said he had always wanted to use the lyrics legally and had approached publishers about getting the rights. But it wasn’t until 2008, when MetroLyrics signed a deal with Gracenote, that legal lyrics appeared on the site.

“It’s either right or it’s wrong, and it felt wrong to not compensate the writers,” he said. “Publishers knew that when they were ready, we were ready.”

In the last two years, the music publishers association has reached out to 95 sites that carried unlicensed material, nine of which then obtained licenses, while 31 shut.

Last year, the organization sued two Web site operators. It reached a deal with one and filed a motion in April against the other, LiveUniverse, that seeks to shut its lyrics sites while the case is being resolved. A hearing on the motion is expected this week.

Brad Greenspan, the owner of LiveUniverse and a founder of MySpace, said the company ran into financial trouble in recent years and needs to untangle its contracts before it can pursue new licenses.

Despite all his effort to rein in the sites, Mr. Israelite realizes it is a battle that may never be completely won.

“I think it will be like shoplifting at stores, in that we’re hoping to keep it manageable enough,” Mr. Israelite said. “It will always exist, just a matter to what degree.”

Regulating the offending Web sites is even more difficult when they are operated outside the United States. Take the example of Lyricscafe.com, which has no licenses for its content.

According to public Web site registration information, that site is registered by a person named Plarent Nasto in Albania. When reached by e-mail, a person responding to that name said that when the site opened about 10 years ago it “was a real hobby and I updated it after work.” But, the writer said, finding time for the hobby became harder after marriage, and the site is now largely unattended.

Lyrics for many popular recent albums, like Beyoncé’s “I Am ... Sasha Fierce,” remain available on the site. The database does appear incomplete, though, missing Lady Gaga’s albums, for example.

“In 10 years, I have always removed all the song lyrics that I was asked to remove,” Plarent Nasto said. When approached by an agency about buying a license, “I told them that my site does not have enough traffic and earnings,” and requested from the agency a list of songs to take off the site, which never arrived.

Lauren Apolito, the vice president for business development at the Harry Fox Agency, which collects and distributes publishing royalties, said lyrics are often published on Web sites without a license out of “just ignorance, not malice.”

It is not clear which reason, if either, applies to Plarent Nasto’s case. According to registration information — in addition to a Plarent Nasto profile at LinkedIn.com — at least three lyrics sites are registered under that name. Plarent Nasto did not respond to an e-mail message about the other sites.

For songwriters, missing out on some royalties is only one of the problems with the unlicensed sites, which often allow users to submit the lyrics. The lyrics themselves, they say, are often wrong.

“The sites don’t necessarily care about the quality of the lyrics,” said Tia Sillers, a songwriter in Nashville, who co-wrote “I Hope You Dance,” a Grammy-winning song. “It’s a cool wealth of information, but it’s frustrating when things aren’t correct.”

Mr. Brodsky of Sony/ATV said that as the third-party databases continue to be updated, the quality of the licensed sites should improve. The opportunities to benefit from the lyrics will improve, too — as they become more prevalent on mobile applications and interactive music files.

“Every week there is some new potential income for lyrics,” he said. “The revenue is not significant now, but it’s just the beginning.”
http://www.nytimes.com/2010/05/10/bu.../10lyrics.html





Sony Music Says Eyeing EMI: Report

Sony Music said it is considering a bid for ailing British rival EMI on Sunday, while its main rivals deny any interest or decline to comment on their intentions .

"We are in a position that allows us to seize every opportunity in the market - including EMI," the head of Sony Music, Rolf Schmidt-Holz, was quoted as saying by German Sunday paper Frankfurter Allgemeine Sonntagszeitung.

EMI's owner, buyout firm Terra Firma, is asking investors for 360 million pounds ($557 million) for the British music company to prevent the investment from falling into lenders' hands, a source told Reuters last month.

EMI, home of artists like the Beatles and Coldplay, tried but failed to agree a licensing deal for its North American rights in March after holding talks with Sony Music and Universal Music Group.

Warner Music Chief Executive Edgar Bronfman on Thursday declined to comment on speculation that the U.S. music company was eyeing assets of EMI.

The head of BMG, the music venture owned by Bertelsmann and KKR, told the Financial Times last week BMG would not bid for EMI in the near term, even though it was seeking to replicate the success of its U.S. deal-making in the Britain.

The world's largest music company Universal owned by Vivendi, said in March it was not holding talks with Terra Firma about a deal for EMI,

(Reporting by Ludwig Burger; Editing by Erica Billingham)
http://www.reuters.com/article/idUSTRE64813J20100509





EMI Promises Investors Big Return
FMQB

Terra Firma Capital Partners boss Guy Hands is telling investors they could earn a 58 percent rate of return if they provide the cash needed to keep Citigroup from seizing control of EMI Group. The projection includes any recovery of the original equity, which would probably be worthless without the new investment, according to a presentation that Terra Firma sent to its clients. The firm needs to earn the financial support of 75 percent of investors and inform Citigroup of the results by May 14, according to Bloomberg News.

As part of the bail out plan, Terra Firma asked current and third-party investors for 360 million pounds ($546 million) in two parts, to restructure EMI’s 3.2 billion pounds in loans and bring the company into compliance with its debt agreements. While EMI does produce sufficient cash flow to service its obligations, it hasn’t lowered the debt enough to keep the company from breaching an agreement with lenders. If they can't come up with the cash, it is likely that Citigroup will take control of EMI and put the label up for sale.

EMI showed earnings before interest, taxes, depreciation and amortization of 330 million pounds in the fiscal year 2010, and the company says it may sell EMI Music Japan and EMI Christian Music Group in order to raise more capital. Terra Firma is seeking an initial 105 million pounds from investors to help the music company meet debt covenants through March 2011, and it is also seeking guidance from investors whether they would be willing to invest an additional 255 million pounds to ensure EMI stays compliant through 2015 when its loans end, Bloomberg reports. Terra Firma said it would be willing to contribute 55 million pounds on its own.

As previously reported, EMI was unable to strike a licensing deal with a rival label such as Sony or Universal in order to raise some mush-needed cash, but the talks are ongoing. "The majors indicated that no deal would be possible unless an equity cure for a longer period was achieved, given the perceived risks associated with the debt holder subsequently becoming the owner of the company," Terra Firma said in its presentation to investors.
http://www.fmqb.com/article.asp?id=1794736





"Idol" Creator Fuller Marks iTunes Milestone
Jill Serjeant

"American Idol" creator Simon Fuller on Monday marked a digital music milestone, and said he was looking to the Internet and other digital platforms for the next big thing in global entertainment.

At a time of crisis in the recording industry, Fuller's roster of singers which includes "Idol" winners Kelly Clarkson and Carrie Underwood, British singer Annie Lennox and The Spice Girls, have sold 160 million songs on iTunes, his artist management company 19 Entertainment said.

Billboard's Fred Bronson called Fuller's 160 million iTunes tally "historic" in a decade which has seen album sales slump and cheaper, digital sales soar.

"He is without question the biggest manager of the digital age," Bronson said.

The British entrepreneur teamed up "American Idol" with iTunes at the Apple music store's 2003 launch, spotting its potential to capitalize on the TV singing show's appeal and the tens of millions of fans who watch it weekly.

"I felt there was a real synergy with what I do, which is launching new artists and TV shows, and what iTunes does, which is to sell music in an immediate and interactive way," Fuller told Reuters in a rare interview.

According to the world recording industry group IFPI, physical sales of music fell by 12.7 percent globally in 2009 while digital music sales rose by 9.2 percent to $4.3 billion -- more than 10 times the digital market value in 2004.

Thinking Globally

Fuller, who turns 50 years-old next week, said the speed of change had come as a shock to the music industry but he expressed hope for the future.

"The future is all about how the digital and the physical worlds can co-exist," he told Reuters.

"I think music in the long term is going to be just fine. But in the short term, as we see, (it's) bedlam and chaos. We have to reinvent, in music, TV and movies, that interaction between the consumer and the content we create."

Universal Music Group International chairman Lucian Grainge said digital distribution is a good fit for Fuller's global entertainment strategy.

"Today's digital platforms for selling music and reaching consumers worldwide means, quite simply, that the future belongs to people like Simon," Grainge told Reuters.

Steve Knopper, author of the 2009 book "Appetite for Self-Destruction; The Spectacular Crash of the Record Industry in the digital age", said that although traditional album sales are shrinking, music is in good shape.

"The things that 'American Idol' has been doing and the way that Simon Fuller has been marketing the franchise digitally and otherwise, indicates that pop music is very healthy right now," Knopper said

"They are serving an important function for the record labels by putting pop music before the public in a mass way," he said.

Fuller is already placing his bets on a future in global entertainment based on the Internet. In March, he launched his multimedia interactive reality TV project "If I Can Dream", which follows a group of aspiring singers, dancers and actors living together in a "Big Brother" style house as they try to break into Hollywood.

"I think you have to be in that Internet space to fully grapple with the challenges that we face and hopefully define the next entertainment phenomenon," he said.

He described "If I Can Dream", which streams on Hulu.com, as a "fascinating experiment".

"I consider what I am doing right now as being the scientist in the laboratory doing endless experiments, most of which may not work, but I will learn more and more."

"This is the Wild West," he said. "You throw seeds down. Some grow and some don't."

(Editing by Bob Tourtellotte)
http://www.reuters.com/article/idUSTRE6490U020100510





In Mobile Age, Sound Quality Takes Step Back
Joseph Plambeck

At the ripe age of 28, Jon Zimmer is sort of an old fogey. That is, he is obsessive about the sound quality of his music.

A onetime audio engineer who now works as a consultant for Stereo Exchange, an upscale audio store in Manhattan, Mr. Zimmer lights up when talking about high fidelity, bit rates and $10,000 loudspeakers.

But iPods and compressed computer files — the most popular vehicles for audio today — are “sucking the life out of music,” he says.

The last decade has brought an explosion in dazzling technological advances — including enhancements in surround sound, high definition television and 3-D — that have transformed the fan’s experience. There are improvements in the quality of media everywhere — except in music.

In many ways, the quality of what people hear — how well the playback reflects the original sound— has taken a step back. To many expert ears, compressed music files produce a crackly, tinnier and thinner sound than music on CDs and certainly on vinyl. And to compete with other songs, tracks are engineered to be much louder as well.

In one way, the music business has been the victim of its own technological success: the ease of loading songs onto a computer or an iPod has meant that a generation of fans has happily traded fidelity for portability and convenience. This is the obstacle the industry faces in any effort to create higher-quality — and more expensive — ways of listening.

“If people are interested in getting a better sound, there are many ways to do it,” Mr. Zimmer said. “But many people don’t even know that they might be interested.”

Take Thomas Pinales, a 22-year-old from Spanish Harlem and a fan of some of today’s most popular artists, including Lady Gaga, Jay-Z and Lil Wayne. Mr. Pinales listens to his music stored on his Apple iPod through a pair of earbuds, and while he wouldn’t mind upgrading, he is not convinced that it would be worth the cost.

“My ears aren’t fine tuned,” he said. “I don’t know if I could really tell the difference.”

The change in sound quality is as much cultural as technological. For decades, starting around the 1950s, high-end stereos were a status symbol. A high-quality system was something to show off, much like a new flat-screen TV today.

But Michael Fremer, a professed audiophile who runs musicangle.com, which reviews albums, said that today, “a stereo has become an object of scorn.”

The marketplace reflects that change. From 2000 to 2009, Americans reduced their overall spending on home stereo components by more than a third, to roughly $960 million, according to the Consumer Electronics Association, a trade group. Spending on portable digital devices during that same period increased more than fiftyfold, to $5.4 billion.

“People used to sit and listen to music,” Mr. Fremer said, but the increased portability has altered the way people experience recorded music. “It was an activity. It is no longer consumed as an event that you pay attention to.”

Instead, music is often carried from place to place, played in the background while the consumer does something else — exercising, commuting or cooking dinner.

The songs themselves are usually saved on the digital devices in a compressed format, often as an AAC or MP3 file. That compression shrinks the size of the file, eliminating some of the sounds and range contained on a CD while allowing more songs to be saved on the device and reducing download times.

Even if music companies and retailers like the iTunes Store, which opened in April 2003, wanted to put an emphasis on sound quality, they faced technical limitations at the start, not to mention economic ones.

“It would have been very difficult for the iTunes Store to launch with high-quality files if it took an hour to download a single song,” said David Dorn, a senior vice president at Rhino Entertainment, a division of Warner Music that specializes in high-quality recordings.

The music industry has not failed to try. About 10 years ago, two new high-quality formats — DVD Audio and SACD, for Super Audio CD — entered the marketplace, promising sound superior even to that of a CD. But neither format gained traction. In 2003, 1.7 million DVD Audio and SACD titles were shipped, according to the Recording Industry Association of America. But by 2009, only 200,000 SACD and DVD Audio titles were shipped.

Last year, the iTunes Store upgraded the standard quality for a song to 256 kilobytes per second from 128 kilobytes per second, preserving more details and eliminating the worst crackles.

Some online music services are now marketing an even higher-quality sound as a selling point. Mog, a new streaming music service, announced in March an application for smartphones that would allow the service’s subscribers to save songs onto their phone. The music will be available on the phone as long as the subscriber pays the $10 monthly fee. Songs can be downloaded at up to 320 kilobytes per second.

Another company, HDtracks.com, started selling downloads last year that contain even more information than CDs at $2.49 a song. Right now, most of the available tracks are of classical or jazz music.

David Chesky, a founder of HDtracks and composer of jazz and classical music, said the site tried to put music on a pedestal.

“Musicians work their whole life trying to capture a tone, and we’re trying to take advantage of it,” Mr. Chesky said. “If you want to listen to a $3 million Stradivarius violin, you need to hear it in a hall that allows the instrument to sound like $3 million.”

Still, these remain niche interests so far, and they are complicated by changes in the recording process. With the rise of digital music, fans listen to fewer albums straight through. Instead, they move from one artist’s song to another’s. Pop artists and their labels, meanwhile, shudder at the prospect of having their song seem quieter than the previous song on a fan’s playlist.

So audio engineers, acting as foot soldiers in a so-called volume war, are often enlisted to increase the overall volume of a recording.

Randy Merrill, an engineer at MasterDisk, a New York City company that creates master recordings, said that to achieve an overall louder sound, engineers raise the softer volumes toward peak levels. On a quality stereo system, Mr. Merrill said, the reduced volume range can leave a track sounding distorted. “Modern recording has gone overboard on the volume,” he said.

In fact, among younger listeners, the lower-quality sound might actually be preferred. Jonathan Berger, a professor of music at Stanford, said he had conducted an informal study among his students and found that, over the roughly seven years of the study, an increasing number of them preferred the sound of files with less data over the high-fidelity recordings.

“I think our human ears are fickle. What’s considered good or bad sound changes over time,” Mr. Berger said. “Abnormality can become a feature.”
http://www.nytimes.com/2010/05/10/bu...a/10audio.html





An Indie That Believes in CDs
Joseph Plambeck

The waters might be choppy for the music business right now, but the Concord Music Group is happy to ride those waves.

In April, Concord, an independent label, announced two deals, one to distribute Paul McCartney’s post-Beatles catalog and another to buy Rounder Records, the roots label from Boston whose “Raising Sand” won a Grammy for best album in 2009.

Those two additions are the latest in a years-long period of growth for Concord, which is based in Beverly Hills. And they come at a time when many other labels are shrinking or battling for survival.

The success has Glen Barros, Concord’s chief executive, singing a tune not always heard around the industry.

“The future of the music business is very bright,” Mr. Barros said. “People want to listen to great music.”

He thinks people will pay for that music, too, especially the fans he calls the adult audience. Concord has focused its attention on that group, trying to lure people less inclined to chase the latest pop sensation and more interested in music Mr. Barros describes as “timeless and authentic” — more McCartney and less Justin Bieber.

All of its deals in the last decade have tried to scratch that niche, from a partnership with Starbucks in 2004 to the purchase of Fantasy Records the same year to its most recent moves.

In the case of Rounder, Mr. Barros said, it “fit perfectly with who we are.”

Typically — and especially at the major labels — a company’s fortunes rest on a bet that a tiny number of artists will reap huge sales, supporting the rest of its roster.

Concord, however, focuses on getting steady sales from its catalog of 13,000 master recordings and releasing new albums by artists — like James Taylor and Chick Corea — who all pull their own weight.

“The majors and the classic business model have been hit hard because the hit business has been hit hard,” said Mr. Barros. “A low batting average doesn’t work.”

Mr. Barros said he expected Concord to have more than $100 million in revenue this year, 10 times more than in 2003, and said the company had a consistent operating profit. It has about 160 employees, up from about 50 in 2003.

That is a long way from where it started in 1972 as a small jazz label based in Concord, Calif., about 30 miles northeast of San Francisco. It kept a relatively low profile through 1999, when it was bought by Norman Lear, a longtime television producer; Hal Gaba, an entertainment executive; and Tailwind Capital.

Big changes arrived in 2004, when the label joined with Starbucks to release Ray Charles’s “Genius Loves Company,” a record that won eight Grammys and sold more than 3.2 million copies, according to Nielsen SoundScan.

That was the same year the company bought Fantasy, a jazz label that owned Stax Records, a soul label, for $83 million.

Those two moves “launched us to a different place,” said Mr. Barros, opening doors that had previously been locked.

One of those doors led to Paul McCartney, who has sold more than 9.4 million albums in the United States since 1991. In 2007, Concord and Starbucks released Mr. McCartney’s “Memory Almost Full,” starting a relationship that led to last month’s announcement.

Although Starbucks has since dialed back the music selection in its stores, its partnership with Concord has endured, providing the label with a smooth access point to artists.

“Their passion for jazz and music that stands the test of time is the same focus we have,” said Chris Bruzzo, a vice president at Starbucks who oversees music for the company. “They’re right in our sweet spot.”

That sweet spot — the adult market — is less inclined to illegally download music and more inclined to buy a CD. This is especially true for baby boomers. According to the NPD Group, a market research firm, people 50 and older buy 16 percent of all albums and singles but buy 28 percent of all the physical music sold.

Concord’s reliance on physical sales can be a double-edged sword, though, Mr. Barros said.

While the company has suffered less than the major labels from illegal file-sharing, fewer stores now sell CDs, and those that do often devote less shelf space and push out smaller genres.

But Mr. Barros finds solace in knowing that his company’s growing digital sales include more albums than singles, unlike much of the industry.

John Virant, the president of Rounder, said that when the label’s founders decided to sell the company — more of a succession plan than a desperation move, Mr. Virant said — Concord was the only place that he approached. The deal was for an undisclosed amount.

“What we saw in their history is that they’ve acquired other labels and been active with them in maintaining and building the brand identities,” Mr. Virant said. “The focus for the both of us has been on career artists, not on the hit-driven singles.”

While the company continues to grow, the artists and managers working with it say they still get a personal, indie-label treatment. Of course, with just 1 percent market share in the United States, it still is very much an independent.

“The first thing you notice is that everyone you deal with is a true, old-fashioned music-obsessed person,” Jon Landau, Bruce Springsteen’s longtime manager, said in an e-mail message. Mr. Landau has worked with a major label alongside Mr. Springsteen and with Concord as the manager of Alejandro Escovedo, a rock musician who has a new album coming out next month.

Sonal Gandhi, a music analyst at Forrester Research, said that the major labels have many advantages over independents, including the capital to invest in new technologies. But an independent’s ability to limit its focus can reap rewards.

“If they stick to particular genres that have music fans, those fans still tend to buy music,” especially in genres like jazz and rock, where the physical product has more value than a digital download, she said.

The company, meanwhile, says more changes lie ahead.

“I see us growing,” said Mr. Lear, who, at 87, remains Concord’s chairman. “The opportunity that was Rounder exists elsewhere, and we’ll grow.”
http://www.nytimes.com/2010/05/10/bu...10concord.html





The Death of the Album (in Handy Graph Form)
Nate Anderson

Online copyright infringement may well play a role in the declining revenues of the recorded music industry over the last few years, but other, stronger forces are at work. Chief among them: the shift to digital singles, the death of the album, and the rise of streaming. To an industry accustomed to fattening up on album-only CD revenue for two decades, this new world has been tough to accept.

The independent digital music distributor TuneCore reminded us of just how much people prefer singles to albums—and that this preference isn't just reserved for teeny-bop bands on major labels who put out "crap CDs."

TuneCore head Jeff Price released some stats from 2009, and he was upbeat about the state of the business. "There is more music selling by more artists now than at any time in history," he wrote. "Music sales by unit are up, not down (RIAA, IFPI and Nielsen data also state this)."

Unit sales in digital have been growing, in many cases dramatically—but sales have been almost exclusively in singles. When a 99¢ song and a $10 album both count as a "unit," it's easy to see why the revenue situation is changing.

Below is TuneCore's 2009 sales data. Forty percent of all sales were single-track downloads, 57 percent were streams, and a mere 2.3 percent were full albums.
http://arstechnica.com/tech-policy/n...graph-form.ars





Rosa Rio, Organist From Silent Films to Soap Operas, Dies at 107
Margalit Fox

On Oct. 6, 1927, the day “The Jazz Singer” splashed noisily across American movie screens, Rosa Rio broke down and wept. Al Jolson was talking, and the very sound of him, she knew, would put her out of business.

But Miss Rio’s fears went unrealized, and for the next eight decades — until her final performance, last year — she built a career as one of the country’s premier theater organists.

Miss Rio was undoubtedly among the very last to have played the silent-picture houses, accompanying the likes of Chaplin, Keaton and Pickford on the Mighty Wurlitzer amid velvet draperies, gilded rococo walls and vaulted ceilings awash in stars. She was also one of the few women to have made her way in a field dominated by men.

Miss Rio died on Thursday, less than three weeks before her 108th birthday. The death, at her home in Sun City Center, Fla., was confirmed by her husband, Bill Yeoman.

For the silents, Miss Rio provided music — often improvised — to set moods that images alone could not: the footsteps of a cat burglar, the sighs of young lovers and the dreadful roar of the oncoming train as the heroine flailed on the tracks. When silents gave way to talkies, she became a ubiquitous presence on the radio; when radio yielded to television, she played for daytime serials. The Queen of the Soaps, the newspapers called her.

In Miss Rio’s career one can trace the entire history of entertainment technology in the 20th century. After all, she was alive, and playing, for nearly all of it.

Midcentury Americans could scarcely touch a dial without hearing Miss Rio. As the staff organist of the NBC radio network from the late 1930s to 1960, and an occasional organist for ABC Radio, she provided live music for a spate of popular shows, including “The Shadow,” starring a trim Orson Welles, and “The Bob and Ray Show.” Her television credits include “As the World Turns” and the “Today” show.

In recent years, long after television dispensed with live organists, Miss Rio accompanied silent films at some of the nation’s tenderly restored movie houses. She was most closely associated with the Tampa Theater in Florida, a lavish picture palace built in 1926.

Several times a year Miss Rio would rise from beneath the stage there, seated at the organ in sequined evening gown, diamond rings and gold lamé slippers. As she wafted majestically upward, the room shook with her signature tune, “Everything’s Coming Up Roses,” or, as she much preferred to call it, “Everything’s Coming Up Rosa.”

Borne on a wave of cinematic nostalgia, Miss Rio had come blissfully full circle.

Miss Rio was born on June 2, 1902. Her maiden name and birthplace have been lost to time; her given name was Elizabeth and she was reared in New Orleans. She began calling herself Rosa Rio — a name narrow enough to fit neatly on a theater marquee — early in her career.

At 8, Elizabeth began piano lessons and immediately decided on a show business career. This, her parents made clear, was no fit occupation for a proper Southern girl.

She persevered, and her parents relented a little. Playing in church would be fine, they decided. So would the genteel life of a children’s piano teacher. With these callings in mind, Elizabeth entered the Oberlin College Conservatory in Ohio.

She chafed there until the day she visited a Cleveland movie palace and heard a theater organ for the first time. Not long afterward, she transferred to the Eastman School of Music in Rochester, which had a program in silent-film accompanying.

Miss Rio’s first marriage, to John Hammond, an organist, ended in divorce. She is survived by her second husband, Mr. Yeoman, whom she married in 1947; three grandchildren; and nine great-grandchildren. A son, John Hammond III, died several years ago.

In the 1920s, Miss Rio played in movie houses around the country before being hired by the Fox Theater in Brooklyn. Then came Jolson, and she found supplementary work as an accompanist and vocal coach. One of her clients was an unknown singer named Mary Martin, whom Miss Rio accompanied on her successful audition for the Cole Porter musical “Leave It to Me!” (1938), Martin’s Broadway debut.

At NBC, Miss Rio played for as many as two dozen radio shows a week, often with just 60 seconds between shows to bolt from one studio to another. On Sept. 1, 1939, the day Germany invaded Poland, she was summoned to work at 2 a.m. For the next 10 hours, she performed somber music between news bulletins. After the United States entered the war, she had her own show, “Rosa Rio Rhythms,” broadcast to American troops overseas.

Radio of the period was a rough-and-tumble world — a man’s world. Miss Rio gave as good as she got.

As recounted in Leonard Maltin’s book “The Great American Broadcast: A Celebration of Radio’s Golden Age” (Dutton, 1997), she was playing a show at NBC one day when the announcer, Dorian St. George, crept up behind her, undid the buttons down the back of her blouse and unhooked her bra. Miss Rio, performing live before a gallery of visitors, could do nothing but play on.

When the music stopped, Mr. St. George stepped up to the microphone to do a commercial. As he intoned plummily with the gallery looking on, Miss Rio stole up behind him, unbuckled his belt, unzipped his fly and neatly dropped his trousers. Then, according to Mr. Maltin’s book, she started on his undershorts.

What happened next is unrecorded.
http://www.nytimes.com/2010/05/15/arts/music/15rio.html





Dodging Presidential Scorn of the iPad
Brooke Crothers

After President Obama on Sunday cited Apple's iPad--among other devices--as being a "distraction" rather than a tool for learning, he spoke of only one possible vision of the tablet's future.

iPad has a lot of potential as an educational tool in addition to its obvious entertainment value.

In a widely reported commencement speech at Hampton University in Virginia, Obama lamented the tendency of popular electronic devices to simply entertain and divert, rather than educate.

The president prefaced his comments by saying that college graduates face a difficult economy, then added: "With iPods and iPads; Xboxes and PlayStations...information becomes a distraction, a diversion, a form of entertainment, rather than a tool of empowerment, rather than the means of emancipation."

That the president laments the impact of devices like the iPod, Xbox, and PlayStation is not surprising and echoes the sentiment expressed by computer pioneer and entrepreneur Max Palevsky.

But the jury on the iPad is still out--even if some believe the iPad is only a "toy", compared with traditional tools like the laptop. The problem is that this view belies the promise of the iPad. Or, at least one vision of the iPad and tablets in general.

A quick glance at Apple's iPad app page lists the predictable entertainment apps but also educational apps like "The Elements" and "Shakespeare Pro" and of course iBooks.

And education sites are brimming with ideas about how the iPad can revolutionize education. "Imagine for just a second...if every student in a classroom had a tablet...The information could be immediately updated unlike the current format of a textbook that in some instances is obsolete before it is in the hands of the user," according to one site for teachers.

Time will tell if the iPad becomes just another distraction or, rather, more of a reading platform and educational tool. But until then, Obama might even be well advised to tout the iPad's potential at schools rather than slamming it as just another attention-deficit device.
http://news.cnet.com/8301-13924_3-20...=2547-1_3-0-20





Sorry, But the iPad is Not 'Killing' Netbook Sales

Hopefully by now, most readers of this site understand how the tech world works: Apple releases a successful product (the iPad) but it suddenly becomes The Second Coming (tm). So much so that Fortune's web-based Mac blog, Apple 2.0, has suddenly decided that--get this--the iPad is "killing" the netbook. Only in the reality distortion field could such nonsense pass as truth. Here's the silliness:

Morgan Stanley's Katy Huberty's proprietary research shows ... the impact of the iPad and other tablets on the broader gadget market, starting with netbooks. As her chart shows, sales growth of these low-cost, low-powered computing devices peaked last summer at an astonishing 641% year-over-year growth rate. It fell off a cliff in January and ....

... and these things both happened before the iPad. Just saying. In the case of last summer, when netbook sales peaked, way before the iPad. Before, in fact, we knew what an iPad was. But please, don't let that get in the way of your premise...

... shrank again in April — collateral damage, according to Huberty, from the January introduction and April launch of the iPad.

Sigh.

Here's the thing. Netbook sales growth did slow last summer. (Netbook unit sales are still on the way up.) But it's slowed because of stronger-than-expected sales of larger, full-featured (and more expensive) Windows 7 notebooks, according to IDC, a company that, by the way, actually has a rich history of measuring PC market share. Here's a story about this very fact from The Wall Street Journal, from just last week:

Pricier, more powerful notebook computers are sucking some of the steam from netbooks, the low-priced darlings that helped fuel sales for the PC industry in the past two years.

Many consumers—searching for more computing power than the compact, portable netbooks can deliver—are opting to pay more for laptops with bigger displays and circuitry suited for jobs like manipulating photos and video, which is beyond the capability of most netbooks.

The shift is a sharp reversal of recent buying patterns, when netbooks provided some of the industry's only growth through the recession.

"I think it has taken a lot of folks by surprise," said Brad Brooks, vice president for Windows consumer software marketing at Microsoft Corp.

Microsoft's data—based on unit sales for its operating systems in the first quarter—indicate that laptops in the $550 to $850 range grew faster than the 35% year-over-year growth in overall Windows unit sales to consumers, Mr. Brooks said.

Netbook sales, meanwhile, grew less than 20%, stabilizing at around 12% to 18% of the consumer market in the U.S., Europe and Japan, he said.

However, data from market-researcher NPD suggest netbooks remain extremely popular in the U.S., with sales growing 81% in January compared with the same month in 2009, 73% in February and 48% in March.

Paul Otellini, chief executive of Intel Corp., characterizes both tablet PCs and netbooks as "market expansive," rather than taking sales from conventional portable devices.

And IDC is now forecasting that "mininotebook" (i.e. netbooks and sub-12-inch machines) will sell 45.6 million units in 2011 and 60.3 million in 2013. If I remember the numbers from 2009, they were 10 percent of all PCs, or about 30 million units. Explain again how the iPad will beat that. Please. Even the craziest iPad sales predictions are a small percentage of that.

IDC also says that "the current slowdown is not because of the iPad, it is simply a combination of seasonality and the law of big numbers" and that the company "doen't expect much in the way of iPads stealing way sales from netbooks."

So. Who you gonna believe? An Apple blogger from a web site and a Morgan Stanley employee? Or IDC and The Wall Street Journal.

Right. I knew that. And judging from all the press this stupid Apple 2.0 blog post got today, you're not alone.

Pass the Kool-Aid.
http://community.winsupersite.com/bl...ook-sales.aspx





Beer, Betrayal, a Lost iPhone in Apple Device Tale
Alexandria Sage

Fearing "huge" losses in sales after pictures leaked of its fourth-generation iPhone, Apple Inc convinced police to launch a felony investigation and Chief Executive Officer Steve Jobs contacted the offending Web site himself to try and recover the gadget.

A California court unsealed a search warrant on Friday in the case of the lost or stolen prototype 4G iPhone whose inner workings ended up on popular gadget site Gizmodo -- weaving a bizarre tale of beer gardens, paranoid lawyers and emails to the Apple chieftain.

Apple, which has released a new iPhone in each of the past three summers, is known for its secrecy. It is widely believed to be releasing its latest model this summer.

The story of the missing iPhone that belonged to an Apple engineer has captivated Silicon Valley since news broke last month. The missing phone apparently caused concern among Apple executives, according to a meticulously detailed April 23 search warrant by Matthew Broad, a detective with the San Mateo County Sheriff's office.

An outside lawyer for the company considered the missing prototype "invaluable" and publication of its details "immensely damaging" to Apple's future sales, Broad wrote. The detective is a member of the county's squad that investigates high-tech crimes.

The loss of the prototype, owned by Apple employee Robert Gray Powell, in late March prompted a meeting between company executives and law enforcement.

"Riley stated the publication of the device and its features is immensely damaging to Apple," wrote Broad in the warrant, referring to Apple's outside counsel, George Riley of O'Melveny and Myers.

Apple's director of information security, Rick Orloff, and the company's general counsel, Bruce Sewell, were also at the April 20 meeting.

Riley said Apple customers would delay purchases until the new iPhone was released, "thereby hurting overall sales and negatively effecting Apple's earnings," the detective wrote.

"Riley stated he could not currently provide an estimated loss, but he believed it was 'huge,'" Broad wrote.

Apple officials were not available for comment.

Beer And Betrayal

The incident began when Apple engineer Powell lost the prototype iPhone while at a German restaurant and beer garden in Redwood City, in the San Francisco Bay Area.

It was then either found or stolen by Brian Hogan, according to the search warrant.

But Hogan's room-mate, worried that the iPhone could be traced back to her after he plugged it into her computer, tipped off Apple that he had sold it to Gizmodo for $8,500.

Photos and details of the new device -- ripped apart to reveal its inner workings -- subsequently appeared on the website.

The device featured several improvements on the current generation model, including video, according to Gizmodo.

Jobs then contacted Gizmodo's editor Brian Lam who replied in an email that the device would be returned if Apple acknowledged that it was indeed the iPhone prototype, according to Broad's report.

Lam then gave Apple the address of Gizmodo employee Jason Chen, to arrange for the iPhone's pickup.

Police later seized some 22 items, including an iPhone iPad, 3 Macbooks, an Apple base station and other devices, from Chen's residence.

San Mateo District Attorney Chris Feasel told Reuters no charges had been filed but the investigation was ongoing.

"We are working with Chen's attorney to expedite the search of the computers," he said.

A San Mateo County Superior Court judge had sealed the search warrant on April 28, but ordered it unsealed on Friday after petitioning by a coalition of media outlets.

(Editing by Edwin Chan, Richard Chang and Leslie Gevirtz)
http://www.reuters.com/article/idUSTRE64D60S20100514





Oh No Not Again, Apple Loses Another 4th Gen iPhone

Wow, Apple aren’t being too careful these days, they appear to have lost another 4th gen iPhone – this one is a 16 GB model. These images have appeared on a Vietnamese website Taoviet.vn.

Rumors are that this handset was bought in the US for $4,000 by a Vietnamese businessman, along with an iPad. What do you think? Genuine? Other rumors suggest this iPhone is fitted with the A4 processor, same as the iPad.
http://theappwhisperer.com/2010/05/1...th-gen-iphone/





WHOA: Google Android Outsells Apple iPhone In The U.S.
Jay Yarow

Android-based phones outsold the iPhone in the U.S. for the first time last quarter.

Google's Android-based smartphones accounted for 28% of smartphone sales, while the iPhone accounted for 21%, according to market research firm NPD.

Research In Motion outsold both of them, and had 36% of the sales.

In a press release, NPD analyst Ross Rubin attributed the strong sales of RIM and Android phones to Verizon's buy-one-get-one deals.

Android is now on dozens of handsets on each major carrier, so it makes sense that it leapt passed the iPhone.

This data only reinforces our belief that Apple needs to start selling its phones at Verizon Wireless as soon as possible.
http://finance.yahoo.com/news/WHOA-G....html?x=0&.v=1





When Did Apple Become Uncool?
Christopher Null

It's hard to remember a time when Apple wasn't the coolest company on the planet. In 1984, the company made its voice heard with a groundbreaking Super Bowl ad that launched the Macintosh to the world.

In 2001, the iPod was released. In 2007, we got the iPhone. Today, hundreds if not thousands of blogs exist with the sole charter of writing about Apple every day, and coverage from the mainstream media ranging from USA Today to the Wall Street Journal is, to put it mildly, fawning to the point of embarrassment. Apple has seemingly done no wrong for a decade.

But the tide is clearly changing, and Apple is finding itself increasingly on the defensive against allegations that it has become stodgy, overbearing, mean-spirited, and even uncool.

It's hard to determine exactly when and where Apple lost its groove. Was it when the company brought the hammer down on iPhone tinkerers, "bricking" jailbroken iPhones? Was it when the company began threatening to delete applications from the app store because it didn't like how they were developed? Or when it asked the cops to raid the house of a blogger who wrote about an unreleased product? Or when a Pulitzer Prize winner's cartoon was banned from the app store? Or when Apple's "no nipples on your iPhone" policy led an edgy fashion magazine to dub its censored iPad version the "Iran Edition?"

Don't get me wrong, I'm still an iPhone fan, but society as a whole seems to be over it. The cachet of whipping out your iPhone at a restaurant is all but gone now; you're more likely to witness rolled eyes while the real oohs and aahs are directed at the guy with the latest Android handset. While the facts remain in question, it's not hard to believe that Android is now outselling the iPhone, at least in certain circles.

But there's no doubting that Apple has been spending the last several months digging its own hipster grave as it becomes an angry sourpuss of a company that many have started comparing to Microsoft, something that was unthinkable only a few years ago.

And Apple may actually be even worse than Redmond. Consider the Gestapo tactics of firing overly chatty employees and, in perhaps the dumbest move from the company ever, sending a team of cops to break down the door of a Gizmodo blogger and seize his computers, all over a misplaced cell phone. Apple prizes its secrecy — a tactic that has been incredibly successful at building buzz and placing free media stories for years — but now that secrecy has turned mean-spirited, the business equivalent of the old man yelling at kids to get out of his yard. (If you don't believe me, check out some of the replies that Steve Jobs sends when people email him.)

The situation isn't dire (yet), but it's not great. After all, when pop culture stalwarts like Jon Stewart and The Simpsons start mocking you, it's kind of hard to regain your cool, kooky commercials or no.

Rest assured, Apple mania isn't likely to go away anytime soon. I mean, if Betty White can return to the pop-culture eye, anyone can. But even if the coolness has worn off, unless Apple stumbles by releasing a truly awful product or gets caught up in a financial scandal, it's tough to see the masses turning against it for good.

On second thought, the company already had the financial scandal. No one much cared.

There were iPhones to think about.
http://news.yahoo.com/s/ytech_wguy/2...ch_wguy_tc2000





Test Flights Into the Google Cloud
Brad Stone

JORDON WING is a devoted user of Google products like Gmail, the Chrome browser and Google Docs, the Web-based word processing program.

A few weeks ago, Mr. Wing, a high school student from Spokane, Wash., took another Google product out for a spin: the Chrome Operating System.

Google is not expected to unveil the highly anticipated Chrome OS until the end of the year, and the software is expected to run, at first, only on the class of low-cost PCs called netbooks. But Mr. Wing, along with a growing number of other Google fans, did not want to wait.

These people are downloading home-brewed versions of the operating system derived from the esoteric source code, which Google releases under the name Chromium. Google is developing the Chrome system as an open-source project and periodically releases the Chromium code online, to let other Web developers contribute to the project.

Several resourceful users have taken those undistilled vats of source code and done something Google says it never expected: they’ve compiled it into working versions of the operating system, tailoring it for use on dozens of computer brands and making it available to regular folks who want to preview one possible vision of their high-tech future.

“Maybe it’s because I’m still kind of a kid, but all this new stuff is exciting,” said Mr. Wing, who installed Chromium on his Dell Inspiron laptop and recently extolled its virtues. “The idea of an operating system that really only does one thing — gets you onto the Internet very quickly — is perfect for me.”

When officially released, Chrome OS will represent a milestone for Google. It will not only be its entry into the market for operating systems, long dominated by its archrival Microsoft, but also a new computing paradigm.

The Chrome operating system is designed to allow computers to boot up to the Web within seconds, onto a home screen that looks like that of a Web browser. Users of devices running Chrome will have to perform all their computing online or “in the cloud,” without downloading traditional software applications like iTunes and Microsoft Office, or storing files on hard drives. Devices running Chrome will receive continuous software updates, providing added security, and most user data will reside on Google’s servers.

Some analysts are skeptical that regular folks will flock to devices that place such severe limits on their computing activities. Chrome OS “is a bet on a future in which we move beyond rich applications and everything eventually gets delivered through a Web browser,” said Michael Gartenberg, an analyst at the research firm Interpret. But that time is not here yet, he said: “Chrome this year and next year is mostly a science project.”

But for legions of Google heads, the fact that it feels like a science project adds to the allure. Working versions of Chromium have appeared across the Web and have been downloaded more than a million times. By all accounts, the most popular and functional have been on the Web site of a 17-year-old in Manchester, England, who goes by the Internet handle “Hexxeh.”

Liam McLoughlin, as Hexxeh is known to family and friends, is a college student and programmer who has taken Google’s Chromium code and compiled it so the operating system can be downloaded to a separate USB memory stick, which can then be used to boot up a computer. He has spent countless evenings and weekends configuring Chromium to work on various kinds of computers, including the Macintosh, and added features that Google has not gotten to yet, like support for the Java programming language.

He explained that his work on Chromium began partly as a way to demonstrate his computing skills and possibly open doors in the technology industry. It also sprang from an interest and belief in Google’s computing vision. “Many people don’t care about how PCs work and all the security software that comes with today’s computers. They just want to use the Internet,” he said.

Since last fall, a small but vibrant community has formed around his work, encouraging him with ideas and supporting his efforts by providing money for servers and other programming tools.

Steve Pirk, a former systems engineer at the Walt Disney Company and now based in the Seattle area, helped to support a coding marathon this year by donating $50 via PayPal, which Mr. McLoughlin spent on a supply of highly caffeinated Jolt cola.

Mr. Pirk said he tested Hexxeh’s resulting software, code-named Flow, on a half-dozen computers; all functioned properly running Chromium from a USB drive. He says he looks forward to the day when low-powered but fully functional computers running Chrome can help lead to a new wave of telecommuting. “The more work we do in the cloud, the less need there is for people to be in physically secure network environments,” he said.

All of the activity around these prenatal incarnations of Chrome is something of a double-edged sword for Google. The company wants developers and other companies to work beside its engineers, developing their own versions of the operating system. But Google says it did not anticipate that regular people would start using Chromium — and evaluating it — before it was ready for prime time.

NEVERTHELESS, the Google executive in charge of Chrome OS took pains to express support for the Google fans trying Chromium — and for their presumptive band leader, Mr. McLoughlin.

Sundar Pichai, vice president of product management, said that “what people like Hexxeh are doing is amazing to see.” Though he called the Chromium releases an “unintended consequence” of the process of developing open-source software, he said, “If you decide to do open-source projects, you have to be open all the way.”
http://www.nytimes.com/2010/05/09/business/09ping.html





Big Leap: Microsoft Makes Free Version of Office, its Cash Cow

When Microsoft launches its latest business and personal software suite Office 2010 on Wednesday in New York, it will introduce a free version, Office Web Apps, to compete with Google.
Sharon Pian Chan

In the beginning, there was word processing.

Then, simply, Word.

Spreadsheets became Excel. Presentation software, if it was ever known by such a name, was simply PowerPoint. Long before Google's preeminence in search, Microsoft dominated business and personal software with a suite known as Office.

The company launches its latest version, Office 2010, on Wednesday in New York — and the stakes couldn't be higher.

The lucrative franchise is threatened by a changing market spouting a four-letter word: free. The biggest threat comes from Google, specifically Google Docs, Web applications accessible from any computer.

Because of Google, Microsoft has been forced to make a free ad-supported version called Office Web Apps.

Google's software is unlikely to depose Office, especially among heavy business users who write reports, draw up corporate budgets and put together sales presentations. But Office 2010 does represent a slow tipping of the entire technology industry, from a PC world Microsoft long has dominated to a cloud-computing world, where software roams free on the computer, phone, tablet and television, and the old ways of making money are changing.

"We think it's actually an opportunity for us," said Stephen Elop, president of Microsoft Business Division, which makes Office. "We have an opportunity to draw in many, many people who today are not engaged in the Office experience, or have not paid for software along the way, or are on very old software."

Wednesday's event at NBC Studios in New York will mark the first day business customers can buy copies of Office 2010 that gets installed on PCs. The software will start selling in stores to small businesses and consumers sometime in June. The free Office Web Apps also will be available to consumers in June.

Microsoft's challenge

Free is not a part of Office's history. The Business Division, whose chief product is Office, brought in $19 billion in sales in fiscal 2009, more than a third of Microsoft's $58 billion in sales for the year. It generated more than half of the company's operating profit — $12 billion of the overall $20 billion.

But Microsoft's ability to sustain these numbers is being challenged by the new way people use technology.

"As the world goes increasingly more and more mobile, the way people want to access and use applications is increasingly shifting to the Web," said Sarah Friar, an analyst at Goldman Sachs who follows Microsoft. "Google becomes the face of that beast, but I think it's a broad industry shift, not just Google, that is bringing Microsoft around to this."

Instead of selling copies of Office, the company may have to find other revenue streams, including advertising to underwrite free software.

Much is riding on the company's next steps. Microsoft estimates 500 million people use Office, many of them still chugging away on Office 2003 or even older versions. About half the users are believed to have paid for it. The others have not, many of them using pirated versions.

Microsoft is less worried about piracy, more worried about people who choose Google Docs instead.

Four years ago, Google began offering the stripped-down Web-based word-processing, spreadsheet and presentation software to compete with Office.

Google Docs saves each file on a Google server so people can access it from any PC or device rather than saving it to a thumb drive, e-mailing it back and forth as an attachment or physically being at a specific computer to open a file.

The public version of Google Docs is free to individuals, and Google sells the software to businesses for $50 per user each year in a suite called Google Apps. The paid version has more security, privacy controls and customer support, and it runs on a network with guaranteed service levels. Google says that, combined, more than 25 million people are using the free and paid versions.

"The way people work today is not reflected in the tools they have at their disposal," Google spokesman Andrew Kovacs said. "Office was built 20 years ago for someone sitting at a desk on their own. ... Google Docs, launched four years ago, it was about collaboration."

Chris Vander Mey, senior product manager at Google, called Office a great tool. "Every business should have two or three copies," he added. "We don't think everyone needs it. It's like Photoshop — not everybody needs it."

Spreading competition

To counter Google Docs, Office Web Apps will offer more features and what the company claims is a better visual presentation than its competitor. But Office Web Apps will not have all the features of Office 2010, which is being priced from $119 to $499, depending on the version.

"We've had a long history of lots of competition," said Chris Capossela, senior vice president of Microsoft Business Division. "We have to focus on a really great product our customers will love. We think that if we do that, we'll continue to be the leader."

That competition has spread on the Web. A month ago, Microsoft launched Docs for Facebook, building a free Web-based version of Office that works inside the social network. Microsoft also recently laid claim to the URL www.docs.com.

Capossela said the Office team has been building its new version since Office 2007 came out in 2006, with a focus on working across the PC, the browser and the phone. Seven million users have downloaded the test version of the software, the company reports.

The free version of Office Web Apps will have advertising; Google says it has no plans to add ads to Google Docs.

New Office features

As always, Microsoft has put much effort into building new features for the software.

Office Web Apps, for instance, allows users to create, edit and share Office docs with people who have Office and those who don't. Two people could simultaneously edit the same spreadsheet, Word document or PowerPoint presentation from different locations through a PC, the Web or a Windows Mobile phone.

"It's nice to be able to walk to any PC connected to the Internet and you can use Office Web Apps to create docs. You can round-trip the files from the PC to the phone to the browser," Capossela said. "Nothing is gone. The pictures, footers, headers will all be there."

The Office team also built a new social-network feature into Outlook, the Outlook Social Connector, so users can pull up contact information from Facebook and LinkedIn without leaving Microsoft's e-mail software.

A new video-editing feature was added to PowerPoint, and the new Word has a photo-editing feature.

Google dismisses the new Office features. "We're not about new features," Vander Mey said. "We're about new behavior."

Embracing the cloud

Observers say an Office that embraces the cloud is just the beginning for Microsoft. As Chief Executive Steve Ballmer has said, "we're all in" when it comes to the cloud. Microsoft has built large data centers in Houston, Chicago, Ireland and other locations to launch cloud services.

In January, the company launched its cloud-computing platform, Azure, which is courting software developers to build Web-based applications on a Microsoft-hosted platform.

The big question now is how the move to the cloud will affect the Office sales.

"Not all of it is going to be at risk, but you could see $1 billion being at risk over a couple-year period," said Goldman Sachs' Friar.

The customers Microsoft stands to lose most are consumers who now buy Office for personal use. Friar estimates that Office made $1.8 billion in fiscal 2009 from consumers. Consumers who already are adopting cloud-based software such as iTunes and Facebook are more likely to move to free Web versions than business customers.

Business customers, who Friar estimates make up 90 percent of Office customers, are unlikely to immediately make the jump, given that the free Web version will have online advertising, less security and privacy, no guarantees that the service would always work, and far fewer features than the PC version. These customers sign long-term contracts with Microsoft, paying an annual fee per worker with automatic upgrades to the latest version. It's slower, steadier income.

They eventually may move to the cloud, and Microsoft has to figure out how to bridge the PC past and the cloud future.

"It's going to force them to think through very different business models from how they get paid today," Friar said.
http://seattletimes.nwsource.com/htm...toffice09.html





A Faster Wi-Fi Format Aims to Eliminate Most Wires
Mark Milian

Baby-wires Ready to cut the cord? The next generation of Wi-Fi technology could make most wires obsolete.

The Wi-Fi Alliance, an organization that certifies wireless industry standards, announced the specification for a new format for transmitting data over the air at speeds up to 10 times faster than today's top-of-the-line hotspots.

The nonprofit group is billing the technology as a replacement for most wired connections between electronics.

In cooperation with the Wireless Gigabit Alliance, the Wi-Fi Alliance will lobby wireless networking manufacturers, like Linksys and D-Link, to build the new WiGig format into upcoming products over the next couple years.

The organizations envision WiGig as a complement to existing Wi-Fi bands rather than as a replacement. That's because WiGig's coverage range is significantly smaller. One access point probably couldn't blanket a home, said Kelly Davis-Felner, the marketing director for the Wi-Fi Alliance.

"Where you'll really see the benefit is streaming across the room or between separate rooms from stored media libraries," Davis-Felner said.

At a speed of 7 gigabits per second, WiGig can easily handle the transfer of high-def video. That positions it as a replacement for wired HDMI connections or optical audio cables.

So imagine launching a video on Hulu, and with the click of a button, zipping that stream from a laptop on the couch to the living room's big-screen television. Or unpacking an Xbox, plugging it into the wall and voila, the system has already found your TV over the network and is ready to be played.

Even that second step of the equation -- the electrical wires -- could be cut eventually.

Placing the Palm Pre or Dell's Latitude Z laptop on their companion charging stations powers them using induction -- no cords required (except for, uh, the one from the charger to the wall). You would, of course, still need to remember to plop it on the charging stand periodically.

"Users want to cut the cords," said Bruce Montag, a senior technical staffer for Dell's chief technology officer and a WiGig Alliance board member. With WiGig, he's excited about synchronizing his music and movies with his computer and cellphone, without having to remember to plug in.

Sounds great. Can we have it now?

"I would not expect it to take less than two years" before a product hits the market, Davis-Felner said. Since the Wi-Fi Alliance established itself about a decade ago, most wireless technology standards have taken at least a couple years for adoption -- with the exception of the most recent transition to the 802.11n wireless specification, she said.

WiGig Alliance Chairman and President Ali Sadri is optimistic about a speedy roll-out. In addition to Dell, Cisco Systems recently joined the organization's board of directors. While Sardi pointed to Apple as an innovator in driving new technology uptake, he wouldn't comment on the company's involvement. Apple didn't respond to a request for comment.

"We have practically all of the Wi-Fi chip manufacturers on board," he said.

The WiGig standard, which runs on the 60 GHz spectrum, could be made compatible with existing devices that support Wi-Fi, but those gadgets wouldn't see the speed benefits of WiGig.
http://latimesblogs.latimes.com/tech...ifi-wigig.html





Telecoms’ Secret Plan To Attack Net Neutrality: Target Video Gamers And Stoke Fear Of Chinese Censorship

Net neutrality, a guiding principle for preserving a free and fair Internet, means that Internet service providers are not allowed to discriminate based on content for its customers. However, telecommunications firms — like AT&T, Verizon, Comcast and others — are firmly against net neutrality because they would like to increase their profits by deciding which websites customers can see, and at what speed. The telecom industry has dumped hundreds of millions of dollars into a lobby campaign against net neutrality. As the FCC now takes up net neutrality rule making, the industry is pushing an “outside approach” of hiring front groups and astroturf operatives.

This morning, representatives from various front groups launched a new coordinated campaign to kill net neutrality. Speaking on Capitol Hill, these front groups took turns decrying the evils of the principle of a fair and unbiased Internet. LULAC, which is funded by AT&T, called Net Neutrality “Obamacare for the Internet.” Americans for Prosperity — a corporate front group founded by oil billionaire David Koch but also funded by telecom interests — unveiled a new ad smearing net neutrality as a “government takeover” (the initial ad buy is $1.4 million dollars). And Grover Norquist, representing his “Americans for Tax Reform” corporate front group, said net neutrality is like what China does, “putting policemen on every corner, on the street or on the Internet.” Watch it:

ThinkProgress has obtained a PowerPoint document which reveals how the telecom industry is orchestrating the latest campaign against Net Neutrality. Authored by representatives from the Atlas Network — a shell think tank used to coordinate corporate front group efforts worldwide — the document lays out the following strategy:

– Slides 7-8 calls for the campaign to target “libertarian minded internet users and video gamers” and “social conservative activists” with anti-government messages and a rebranding of net neutrality as “Net Brutality.”

– Slide 9 calls for a strategy of creating a Chinese blog to compare net neutrality to Chinese government censorship, outreach via social networking platforms like Twitter and Facebook.

– Slides 10-11 detail how representatives met at Grover Norquist’s infamous “Wednesday morning meeting” to orchestrate the new campaign. Norquist is known to use his Wednesday meetings to plot strategy and conservative coalition building towards lobbying goals.

The PowerPoint was created on April 14th, shortly before the campaign website officially launched. The “Net Brutality” website relies heavily on Americans for Prosperity sources, as well as a website called NetCompetition.org — which is openly funded by the American Cable Association, At&T, Comcast, and the US Telecom Association.

During the Jack Abramoff investigation, Norquist was exposed for selling support from his front groups to corporations. In one damning e-mail, Norquist is promised $50,000 dollars in exchange for providing his Americans for Tax Reform support to one of Abramoff’s clients. Today, Norquist was not only parroting the PowerPoint talking points at the press conference, but he also brought in other key conservative movement leaders and Republican lawmakers to the event.

In addition to the front groups, the loudest voice against net neutrality is still Glenn Beck, who has smeared free Internet proponents as Marxists and Communists, and has adopted the attack that net neutrality constitutes a “government takeover.” However, it is important to realize that even Beck is being fed with opposition research dug up by operatives at Americans for Prosperity. This research document, compiled by Americans for Prosperity staffers, lays out point by point the attacks Beck has used in the past few weeks to disparage net neutrality supporters. If Beck picks up this new outreach to video game enthusiasts and the false comparison to Chinese censorship, then the impact of the “Net Brutality” PowerPoint will be even more apparent.

Telecom firms like AT&T and Verizon are among the most profitable in the world, yet America lags behind other countries in terms of broadband access and speed. Instead of dumping lobbying money into anti-net neutrality front groups and fear-mongering campaigns, the telecom industry should invest in improving service and accessibility.
http://thinkprogress.org/2010/05/11/...ty-grover-afp/





'Secret' Telecom Anti-Net Neutrality Plan Isn't
Declan McCullagh

The Center for American Progress seemed to have blockbuster news on Tuesday: an expose titled "Telecoms' Secret Plan To Attack Net Neutrality."

On its Think Progress blog, the liberal advocacy group announced it had "obtained" a PowerPoint document "which reveals how the telecom industry is orchestrating the latest campaign against Net neutrality" through a pseudo-grassroots effort. The story was echoed on Slashdot, Boing Boing, and innumerable pro-regulation blogs.

There's just one problem with Think Progress' claim: It's not, well, accurate.

In a case of truth being stranger than astroturf, it turns out that the PowerPoint document was prepared as a class project for a competition in Florida last month. It cost the six students a grand total of $173.95, including $18 for clip art.

The "No Net Brutality" campaign idea was one of the four finalists created as an assignment for a two-and-a-half week "think tank MBA" program. The other finalists were a project promoting free speech in Venezuela, one supporting education reform in Poland, and one dealing with sales taxes rates in Washington, D.C. ("No Net Brutality" came in third. The Polish reform idea won.)

Not only was the PowerPoint document presentation no secret, but it was posted publicly on the competition's blog, along with an audio recording of the event in Miami where the student contestants presented their ideas to the judges.

The competition was organized by the Atlas Economic Research Foundation, a nonprofit, free-market group that spends millions of dollars a year supporting regional think tanks in other countries, especially those where the rule of law or protection of individual rights may be impaired. Some examples include the Imani Center for Policy and Education in Ghana, the Fundacion Global in Argentina, and the Cathay Institute for Public Affairs in China.

"The Think Progress article is hilarious," David MacLean, the Canadian member of the six-person student team from four different continents, told CNET on Wednesday. "We've had a really good laugh in the last day over this. This is one of the funniest things I've ever seen."

MacLean added: "It was a class project done at the Atlas think tank MBA program. We came up with the concept in a few days." Part of Atlas' curriculum on how to manage think tanks required creating the campaign on a $100 budget and "the goal was to make it launch," said MacLean, who lives in Alberta.

Neither Lee Fang, the author of the Think Progress article, or a spokesman for the Center for American Progress responded to repeated requests for comment.

Kristin McMurray, the American member of the team, said: "We have not had any contact with any telecom company during this campaign. The only funding we received was the $100 given to us by Atlas." The campaign actually ended up costing the students money, since they chipped in some of their own cash, said McMurray, an editor at the Sunshine Review, a nonpartisan organization that pushes state and local governments to post more information online.

A post that appeared late Tuesday on the NoNetBrutality.com Web site says: "I'm sorry to dash all the conspiracy theorists hopes and dreams, but No Net Brutality is a bonafide concerned citizens initiative." The post said that the contestants spent all of $173.95 on the idea, including printing and $20 to register the .com and .org domain names.

The origin of "Net Brutality"

To brainstorm ideas and create proof of concept campaigns, the students attending the Atlas program split into multiple teams. Besides McMurray and MacLean, the other students assigned to the group that came up with the "NetBrutality" idea were Yolanda Talavera (Nicaragua), Vincent De Roeck (Belgium), Huafang Li (China) and Aykhan Nasibli (Azerbaidjan). Talavera's name appears in the PowerPoint document as its creator.

Their PowerPoint presentation sketches out suggestions for how to rally opposition to the Federal Communications Commission's move to regulate how broadband providers are allowed to manage their network.

Many conservatives and libertarians oppose the idea, arguing that the Internet has flourished precisely because it has been unregulated. FCC Chairman Julius Genachowski has said that new rules--the agency's previous attempt was tossed out by a federal appeals court earlier this year--are necessary to stop discriminatory activities by Internet providers.

The presentation shown at the Miami conference says: "Our agenda is to stop the government from taking over the Internet" by making the public aware of the "negative effects of this proposal." The students suggested targeting video game users and other potential allies through a Twitter account, a Facebook page, and a blog written in Chinese.

Because De Roeck, who runs a student group in Belgium, had a previous invitation to show up at a weekly meeting of conservatives convened by Americans for Tax Reform, he used his three minutes of allotted time as an opportunity to distribute a flyer about their "NetBrutality" idea. The Atlas students thought "maybe that would give us an edge over the competition," McLean said.

The concept of large corporations spreading their money around Washington to push for or block new laws is, of course, nothing new in political circles. A 2008 CNET article revealed how a secretive lobbying organization in Washington, D.C., called the LawMedia Group--hired by Comcast--did some or all of the writing for an anti-Net neutrality op-ed. An anti-Google campaign of dubious provenance that enlisted groups such as the American Corn Growers Association and the League of Rural Voters also was linked to LMG.

And it is an article of faith among broadband providers that Silicon Valley companies give millions to groups that support extensive Net neutrality regulations. Free Press redacts the source of over $3 million in contributions from pages 16 and 17 of its financial disclosure statement, and Google, eBay, and Amazon.com give money to Public Knowledge.

"There are genuine concerns with how the network is managed," said Jim Harper, director of information policy studies at the free-market Cato Institute, who was not aware of the Atlas student competition until Wednesday. "There are genuine concerns with asking the FCC to do it. But groups that are obsessing themselves with the politics of it are diluting their own stories."

The phrase "Net Brutality" may have been first used three years ago when FreedomWorks chairman Dick Armey, now a prominent figure in the tea party movement, assailed a Maryland proposal that he said would not allow Internet service companies to charge different prices for different amounts of bandwidth.

But it wasn't a good enough slogan to win Atlas' student competition in Florida. "I still think in my mind, no disrespect to our competitors, that we had the best project," said MacLean, the Canadian team member.

Update 1:15 p.m. PT: I've heard back from Lee Fang, the Center for American Progress blogger who wrote yesterday's article. Fang said in e-mail: "The purpose of these types of PR firms and front groups is to obfuscate who they are actually working for. All we know is that this presentation was given at a lobbyist meeting with (Americans for Tax Reform's) Grover Norquist, then Grover Norquist and several telecom funded groups launched a new anti Net Neutrality bill / public campaign." But Fang's headline says this was the "Telecoms' secret plan" -- I asked him what reason he has to believe that AT&T, Verizon, and so on even knew the student project existed and have not recewived a reply. I've also asked a Center for American Progress spokeswoman, Suzi Emmerling, how much money the organization receives from Google, eBay, and Amazon.com, and she has not replied.

Update 1:25 p.m. PT: Joseph Humire, an Atlas program manager, replied to say that the actual judging in the student competition was held in Virginia, "but the participants did get a chance to showcase their campaigns in Florida." And Liz Rose, the communications director for Free Press, sent me e-mail saying: "We take no corporate donations." I've asked Rose whether any technology executives were the individuals who have written large checks to Free Press (including ones for $450,000, $500,000, $700,000 in the 2008 fiscal year) and have not heard back from her.
http://news.cnet.com/8301-13578_3-20004758-38.html





Bill Would Require FCC Report Before Reclassifying Broadband
Grant Gross

A U.S. lawmaker has introduced legislation to require the U.S. Federal Communications Commission to deliver a detailed cost-benefit analysis to Congress before moving forward with a plan to reclassify broadband as a regulated common-carrier service.

The bill, authored by Representative Cliff Stearns, a Florida Republican, would also require the FCC to conduct a market study to show "market failure" in the broadband industry before moving forward with the plan to reclassify broadband.

FCC Chairman Julius Genachowski's plan to reclassify broadband as a regulated service is a mistake, Stearns said at a press conference Tuesday organized by Americans for Prosperity, an antiregulation advocacy group. The effort will hurt the FCC's goal of making broadband available to all U.S. residents, he said.

"I think this is a partisan move by him to regulate the Internet," Stearns said. "This curious step by Chairman Genachowski would reverse course and ... do an end run around Congress, where this issue should and must be debated first."

Genachowski, a Democrat, announced last week that he would launch a proceeding to reclassify broadband from a largely unregulated information service to a regulated common-carrier service in response to an appeals court ruling last month saying that the agency did not have the authority to enforce informal network neutrality rules. Comcast, which had slowed some peer-to-peer traffic in the name of network management, challenged the FCC's authority to enforce the informal rules in place since 2005.

The reclassification of broadband is needed for the FCC to pass formal net neutrality rules and to implement parts of its national broadband plan, released in March, Genachowski said.

At the same time that the FCC reclassifies broadband as a regulated service, the FCC would move to exempt broadband from most traditional telecom regulations under Genachowski's plan.

Stearns, the ranking Republican on the House Energy and Commerce Committee's Communications, Technology and the Internet Subcommittee, said that the Internet Investment, Innovation and Competition Preservation Act would require the FCC to "prove" there is market failure in the broadband industry before reclassifying broadband, then go to Congress for approval.

The 11-page bill would require the FCC to provide to Congress "substantial evidence that the market failure is causing specific, identified harm to consumers by preventing a substantial number of consumers nationwide from accessing a substantial amount of lawful Internet content, applications, and services of their choice."

Under the bill, the FCC would also have to consider the costs of enforcement and the impact on innovation and broadband investment before reclassifying broadband. The bill would also require the FCC to revisit its reclassification decision and look for market failures every two years.

The Stearns bill would also require the FCC, if it passes net neutrality rules, to enforce them on application providers and Web content providers as well as broadband providers.

In October, Senator John McCain, an Arizona Republican, and Representative Marsha Blackburn, a Tennessee Republican, introduced bills to prohibit the FCC from creating formal net neutrality rules, after the agency launched a rulemaking process to do so. Both bills have gone nowhere.

During the press conference with Stearns, Americans for Prosperity (AFP) announced that it will launch a US$1.4 million advertising campaign to warn U.S. residents of the FCC's broadband regulation plans. The TV spot will run in Pennsylvania, Hawaii, Washington, D.C., and on national cable, the group said.

"The wave of new regulations proposed by the FCC amounts to nothing less than a Washington takeover of the Internet," said Phil Kerpen, vice president for policy at AFP. "The FCC wants to reduce the Internet to an old-fashioned, government-regulated utility."

A few blocks away from the press conference, net neutrality supporter Free Press was hosting a daylong forum on media reform Tuesday, and FCC member Mignon Clyburn, a Democrat, ripped into net neutrality and reclassification opponents, saying they were spreading "misinformation" about the FCC's efforts.

"An unfortunate reality is that having an open forum with reasonable and honest debate in this sphere appears unlikely," she said. "Instead, the lobbying machine for some extremely powerful interests has already been churning out quote-worthy lines at a rapid rate."

Clyburn disputed assertions that the FCC was trying to take over the Internet. The FCC would only give itself regulatory authority over broadband in a few areas, including net neutrality, privacy and broadband subsidies, she said. The commission will avoid imposing regulations that it used when "Ma Bell" was a telecom monopoly in the U.S., like some critics have suggested, she said.

"Nothing could be further from the truth," she added. "We are merely looking to preserve the authority that almost everyone assumed we had ... prior to the court's decision."
http://www.pcworld.com/article/19605...oadband .html





Well, These New Zuckerberg IMs Won't Help Facebook's Privacy Problems
Nicholas Carlson

Facebook CEO Mark Zuckerberg and his company are suddenly facing a big new round of scrutiny and criticism about their cavalier attitude toward user privacy.

An early instant messenger exchange Mark had with a college friend won't help put these concerns to rest.

According to SAI sources, the following exchange is between a 19-year-old Mark Zuckerberg and a friend shortly after Mark launched The Facebook in his dorm room:

Zuck: Yeah so if you ever need info about anyone at Harvard

Zuck: Just ask.

Zuck: I have over 4,000 emails, pictures, addresses, SNS

[Redacted Friend's Name]: What? How'd you manage that one?

Zuck: People just submitted it.

Zuck: I don't know why.

Zuck: They "trust me"

Zuck: Dumb fucks.

Brutal.

Could Mark have been completely joking? Sure. But the exchange does reveal that Facebook's aggressive attitude toward privacy may have begun early on.

Since Facebook launched, the company has faced one privacy flap after another, usually following changes to the privacy policy or new product releases. To its credit, the company has often modified its products based on such feedback. As the pioneer in a huge new market, Facebook will take heat for everything it does. It has also now grown into a $22 billion company run by adults who know that their future depends on Facebook users trusting the site's privacy policy.

But the company's attitude toward privacy, as reflected in Mark's early emails and IMs, features like Beacon and Instant Personalization, and the frequent changes to the privacy policy, has been consistently aggressive: Do something first, then see how people react.

And this does appear to reflect Mark's own views of privacy, which seem to be that people shouldn't care about it as much as they do -- an attitude that very much reflects the attitude of his generation.

After all, here's what early Facebook engineering boss, Harvard alum, and Zuckerberg confidant Charlie Cheever said in David Kirkpatrick's brilliantly-reported upcoming book The Facebook Effect.

"I feel Mark doesn't believe in privacy that much, or at least believes in privacy as a stepping stone. Maybe he's right, maybe he's wrong."

Again in Kirkpatrick's book, Facebook COO Sheryl Sandberg puts it this way:

"Mark really does believe very much in transparency and the vision of an open society and open world, and so he wants to push people that way. I think he also understands that the way to get there is to give people granular control and comfort. He hopes you'll get more open, and he's kind of happy to help you get there. So for him, it's more of a means to an end. For me, I'm not as sure."

Facebook declined to comment about Mark's attitude toward privacy.
http://www.businessinsider.com/well-...roblems-2010-5





Facebook’s Gone Rogue; It’s Time for an Open Alternative
Ryan Singel

Facebook has gone rogue, drunk on founder Mark Zuckerberg’s dreams of world domination. It’s time the rest of the web ecosystem recognizes this and works to replace it with something open and distributed.

Facebook used to be a place to share photos and thoughts with friends and family and maybe play a few stupid games that let you pretend you were a mafia don or a homesteader. It became a very useful way to connect with your friends, long-lost friends and family members. Even if you didn’t really want to keep up with them.

Soon everybody — including your uncle Louie and that guy you hated from your last job — had a profile.

And Facebook realized it owned the network.

Then Facebook decided to turn “your” profile page into your identity online — figuring, rightly, that there’s money and power in being the place where people define themselves. But to do that, the folks at Facebook had to make sure that the information you give it was public.

So in December, with the help of newly hired Beltway privacy experts, it reneged on its privacy promises and made much of your profile information public by default. That includes the city that you live in, your name, your photo, the names of your friends and the causes you’ve signed onto.

This spring Facebook took that even further. All the items you list as things you like must become public and linked to public profile pages. If you don’t want them linked and made public, then you don’t get them — though Facebook nicely hangs onto them in its database in order to let advertisers target you.

This includes your music preferences, employment information, reading preferences, schools, etc. All the things that make up your profile. They all must be public — and linked to public pages for each of those bits of info — or you don’t get them at all. That’s hardly a choice, and the whole system is maddeningly complex.

Simultaneously, the company began shipping your profile information off pre-emptively to Yelp, Pandora and Microsoft — so that if you show up there while already logged into Facebook, the sites can “personalize” your experience when you show up. You can try to opt out after the fact, but you’ll need a master’s in Facebook bureaucracy to stop it permanently.

Care to write a status update to your friends? Facebook sets the default for those messages to be published to the entire internet through direct funnels to the net’s top search engines. You can use a dropdown field to restrict your publishing, but it’s seemingly too hard for Facebook to actually remember that’s what you do. (Google Buzz, for all the criticism it has taken, remembers your setting from your last post and uses that as the new default.)

Now, say you you write a public update, saying, “My boss had a crazy great idea for a new product!” Now, you might not know it, but there is a Facebook page for “My Crazy Boss” and because your post had all the right words, your post now shows up on that page. Include the words “FBI” or “CIA,” and you show up on the FBI or CIA page.

Then there’s the new Facebook “Like” button littering the internet. It’s a great idea, in theory — but it’s completely tied to your Facebook account, and you have no control over how it is used. (No, you can’t like something and not have it be totally public.)

Then there’s Facebook’s campaign against outside services. There was the Web 2.0 suicide machine that let you delete your profile by giving it your password. Facebook shut it down.

Another company has an application that will collect all your updates from services around the web into a central portal — including from Facebook — after you give the site your password to log in to Facebook. Facebook is suing the company and alleging it is breaking criminal law by not complying with its terms of service.

No wonder 14 privacy groups filed a unfair-trade complaint with the FTC against Facebook on Wednesday.

Mathew Ingram at GigaOm wrote a post entitled “The Relationship Between Facebook and Privacy: It’s Really Complicated.”

No, that’s just wrong. The relationship is simple: Facebook thinks that your notions of privacy — meaning your ability to control information about yourself — are just plain old-fashioned. Head honcho Zuckerberg told a live audience in January that Facebook is simply responding to changes in privacy mores, not changing them — a convenient, but frankly untrue, statement.

In Facebook’s view, everything (save perhaps your e-mail address) should be public. Funny too about that e-mail address, for Facebook would prefer you to use its e-mail–like system that censors the messages sent between users.

Ingram goes onto say, “And perhaps Facebook doesn’t make it as clear as it could what is involved, or how to fine-tune its privacy controls — but at the same time, some of the onus for doing these things has to fall to users.”

What? How can it fall to users when most of the choices don’t’ actually exist? I’d like to make my friend list private. Cannot.

I’d like to have my profile visible only to my friends, not my boss. Cannot.

I’d like to support an anti-abortion group without my mother or the world knowing. Cannot.

Setting up a decent system for controlling your privacy on a web service shouldn’t be hard. And if multiple blogs are writing posts explaining how to use your privacy system, you can take that as a sign you aren’t treating your users with respect, It means you are coercing them into choices they don’t want using design principles. That’s creepy.

Facebook could start with a very simple page of choices: I’m a private person, I like sharing some things, I like living my life in public. Each of those would have different settings for the myriad of choices, and all of those users could then later dive into the control panel to tweak their choices. That would be respectful design - but Facebook isn’t about respect — it’s about re-configuring the world’s notion of what’s public and private.

So what that you might be a teenager and don’t get that college-admissions offices will use your e-mail address to find possibly embarrassing information about you. Just because Facebook got to be the world’s platform for identity by promising you privacy and then later ripping it out from under you, that’s your problem. At least, according to the bevy of privacy hired guns the company brought in at high salaries to provide cover for its shenanigans.

Clearly Facebook has taught us some lessons. We want easier ways to share photos, links and short updates with friends, family, co-workers and even, sometimes, the world.

But that doesn’t mean the company has earned the right to own and define our identities.

It’s time for the best of the tech community to find a way to let people control what and how they’d like to share. Facebook’s basic functions can be turned into protocols, and a whole set of interoperating software and services can flourish.

Think of being able to buy your own domain name and use simple software such as Posterous to build a profile page in the style of your liking. You’d get to control what unknown people get to see, while the people you befriend see a different, more intimate page. They could be using a free service that’s ad-supported, which could be offered by Yahoo, Google, Microsoft, a bevy of startups or web-hosting services like Dreamhost.

“Like” buttons around the web could be configured to do exactly what you want them to — add them to a protected profile or get added to a wish list on your site or broadcast by your micro-blogging service of choice. You’d be able to control your presentation of self — and as in the real world, compartmentalize your life.

People who just don’t want to leave Facebook could play along as well — so long as Facebook doesn’t continue creepy data practices like turning your info over to third parties, just because one of your contacts takes the “Which Gilligan Island character are you?” quiz? (Yes, that currently happens)

Now, it might not be likely that a loose confederation of software companies and engineers can turn Facebook’s core services into shared protocols, nor would it be easy for that loose coupling of various online services to compete with Facebook, given that it has 500 million users. Many of them may be fine having Facebook redefine their cultural norms, or just be too busy or lazy to leave.

But in the internet I’d like to live in, we’d have that option, instead of being left with the choice of letting Facebook use us, or being left out of the conversation altogether.
http://www.wired.com/epicenter/2010/05/facebook-rogue/





Four Nerds and a Cry to Arms Against Facebook
Jim Dwyer

How angry is the world at Facebook for devouring every morsel of personal information we are willing to feed it?

A few months back, four geeky college students, living on pizza in a computer lab downtown on Mercer Street, decided to build a social network that wouldn’t force people to surrender their privacy to a big business. It would take three or four months to write the code, and they would need a few thousand dollars each to live on.

They gave themselves 39 days to raise $10,000, using an online site, Kickstarter, that helps creative people find support.

It turned out that just about all they had to do was whisper their plans.

“We were shocked,” said one of the four, Dan Grippi, 21. “For some strange reason, everyone just agreed with this whole privacy thing.”

They announced their project on April 24. They reached their $10,000 goal in 12 days, and the money continues to come in: as of Tuesday afternoon, they had raised $23,676 from 739 backers. “Maybe 2 or 3 percent of the money is from people we know,” said Max Salzberg, 22.

Working with Mr. Salzberg and Mr. Grippi are Raphael Sofaer, 19, and Ilya Zhitomirskiy, 20 — “four talented young nerds,” Mr. Salzberg says — all of whom met at New York University’s Courant Institute. They have called their project Diaspora* and intend to distribute the software free, and to make the code openly available so that other programmers can build on it. As they describe it, the Diaspora* software will let users set up their own personal servers, called seeds, create their own hubs and fully control the information they share. Mr. Sofaer says that centralized networks like Facebook are not necessary. “In our real lives, we talk to each other,” he said. “We don’t need to hand our messages to a hub. What Facebook gives you as a user isn’t all that hard to do. All the little games, the little walls, the little chat, aren’t really rare things. The technology already exists.”

The terms of the bargain people make with social networks — you swap personal information for convenient access to their sites — have been shifting, with the companies that operate the networks collecting ever more information about their users. That information can be sold to marketers. Some younger people are becoming more cautious about what they post. “When you give up that data, you’re giving it up forever,” Mr. Salzberg said. “The value they give us is negligible in the scale of what they are doing, and what we are giving up is all of our privacy.”

The Diaspora* group was inspired to begin their project after hearing a talk by Eben Moglen, a law professor at Columbia University, who described the centralized social networks as “spying for free,” Mr. Salzberg said.

The four students met in a computer room at N.Y.U., and have spent nearly every waking minute there for months. They understand the appeal of social networks.

“Certainly, as nerds, we have nowhere else to go,” Mr. Salzberg said. “We’re big nerds.”

“My social life has definitely collapsed in favor of maintaining a decent GPA and doing this,” Mr. Sofaer said.

One of their teachers, Finn Brunton, said that their project — which does not involve giant rounds of venture capital financing before anyone writes a line of code — reflected “a return of the classic geek means of production: pizza and ramen and guys sleeping under the desks because it is something that it is really exciting and challenging.”

And the demand for a social network that gives users control is strong, Mr. Brunton said. “Everyone I talk to about this says, ‘Oh my God, I’ve been waiting for someone to do something like that.’ ”

There have been at least two other attempts at decentralized networks, Mr. Brunton said, but he thought the Diaspora* group had a firmer plan. Its quick success in raising money, he said, showed the discontent over the state of privacy on the social sites. “We will have to see how widely this will be adopted by the non-nerds,” Mr. Brunton said. “But I don’t know a single person in the geek demographic who is not freaked out” by large social networks and cyber warehouses of information.

The Diaspora* crew has no doubts about the sprawling strengths and attractions of existing social networks, having gotten more than 2,000 followers of “joindiaspora” on Twitter in just a few weeks.

“So many people think it needs to exist,” Mr. Salzberg said. “We’re making it because we want to use it.”
http://www.nytimes.com/2010/05/12/ny...er=rss&emc=rss





Tell-All Generation Learns to Keep Things Offline
Laura M. Holson

Min Liu, a 21-year-old liberal arts student at the New School in New York City, got a Facebook account at 17 and chronicled her college life in detail, from rooftop drinks with friends to dancing at a downtown club. Recently, though, she has had second thoughts.

Concerned about her career prospects, she asked a friend to take down a photograph of her drinking and wearing a tight dress. When the woman overseeing her internship asked to join her Facebook circle, Ms. Liu agreed, but limited access to her Facebook page. “I want people to take me seriously,” she said.

The conventional wisdom suggests that everyone under 30 is comfortable revealing every facet of their lives online, from their favorite pizza to most frequent sexual partners. But many members of the tell-all generation are rethinking what it means to live out loud.

While participation in social networks is still strong, a survey released last month by the University of California, Berkeley, found that more than half the young adults questioned had become more concerned about privacy than they were five years ago — mirroring the number of people their parent’s age or older with that worry.

They are more diligent than older adults, however, in trying to protect themselves. In a new study to be released this month, the Pew Internet Project has found that people in their 20s exert more control over their digital reputations than older adults, more vigorously deleting unwanted posts and limiting information about themselves. “Social networking requires vigilance, not only in what you post, but what your friends post about you,” said Mary Madden, a senior research specialist who oversaw the study by Pew, which examines online behavior. “Now you are responsible for everything.”

The erosion of privacy has become a pressing issue among active users of social networks. Last week, Facebook scrambled to fix a security breach that allowed users to see their friends’ supposedly private information, including personal chats.

Sam Jackson, a junior at Yale who started a blog when he was 15 and who has been an intern at Google, said he had learned not to trust any social network to keep his information private. “If I go back and look, there are things four years ago I would not say today,” he said. “I am much more self-censoring. I’ll try to be honest and forthright, but I am conscious now who I am talking to.”

He has learned to live out loud mostly by trial and error and has come up with his own theory: concentric layers of sharing.

His Facebook account, which he has had since 2005, is strictly personal. “I don’t want people to know what my movie rentals are,” he said. “If I am sharing something, I want to know what’s being shared with others.”

Mistrust of the intentions of social sites appears to be pervasive. In its telephone survey of 1,000 people, the Berkeley Center for Law and Technology at the University of California found that 88 percent of the 18- to 24-year-olds it surveyed last July said there should be a law that requires Web sites to delete stored information. And 62 percent said they wanted a law that gave people the right to know everything a Web site knows about them.

That mistrust is translating into action. In the Pew study, to be released shortly, researchers interviewed 2,253 adults late last summer and found that people ages 18 to 29 were more apt to monitor privacy settings than older adults are, and they more often delete comments or remove their names from photos so they cannot be identified. Younger teenagers were not included in these studies, and they may not have the same privacy concerns. But anecdotal evidence suggests that many of them have not had enough experience to understand the downside to oversharing.

Elliot Schrage, who oversees Facebook’s global communications and public policy strategy, said it was a good thing that young people are thinking about what they put online. “We are not forcing anyone to use it,” he said of Facebook. But at the same time, companies like Facebook have a financial incentive to get friends to share as much as possible. That’s because the more personal the information that Facebook collects, the more valuable the site is to advertisers, who can mine it to serve up more targeted ads.

Two weeks ago, Senator Charles E. Schumer, Democrat of New York, petitioned the Federal Trade Commission to review the privacy policies of social networks to make sure consumers are not being deliberately confused or misled. The action was sparked by a recent change to Facebook’s settings that forced its more than 400 million users to choose to “opt out” of sharing private information with third-party Web sites instead of “opt in,” a move which confounded many of them.

Mr. Schrage of Facebook said, “We try diligently to get people to understand the changes.”

But in many cases, young adults are teaching one another about privacy.

Ms. Liu is not just policing her own behavior, but her sister’s, too. Ms. Liu sent a text message to her 17-year-old sibling warning her to take down a photo of a guy sitting on her sister’s lap. Why? Her sister wants to audition for “Glee” and Ms. Liu didn’t want the show’s producers to see it. Besides, what if her sister became a celebrity? “It conjures up an image where if you became famous anyone could pull up a picture and send it to TMZ,” Ms. Liu said.

Andrew Klemperer, a 20-year-old at Georgetown University, said it was a classmate who warned him about the implications of the recent Facebook change — through a status update on (where else?) Facebook. Now he is more diligent in monitoring privacy settings and apt to warn others, too.

Helen Nissenbaum, a professor of culture, media and communication at New York University and author of “Privacy in Context,” a book about information sharing in the digital age, said teenagers were naturally protective of their privacy as they navigate the path to adulthood, and the frequency with which companies change privacy rules has taught them to be wary.

That was the experience of Kanupriya Tewari, a 19-year-old pre-med student at Tufts University. Recently she sought to limit the information a friend could see on Facebook but found the process cumbersome. “I spent like an hour trying to figure out how to limit my profile, and I couldn’t,” she said. She gave up because she had chemistry homework to do, but vowed to figure it out after finals.

“I don’t think they would look out for me,” she said. “I have to look out for me.”
http://www.nytimes.com/2010/05/09/fa...09privacy.html





Amazon Spying On Your Ebook Highlighting

There have already been plenty of questions over who "owns" the ebooks you've bought, with stories of remotely deactivated books and remotely deactivated features -- neither of which happens when you have a real physical book. But there are also other concerns opened up by newly activated features. Apparently one new feature -- sent in by a few concerned readers -- is that Amazon will now remotely upload and store the user notes and highlights you take on your Kindle, which it then compiles into "popular highlights."

I have no doubt that the feature provides some interesting data, but it's not clear that users realize their highlighting and notes are being stored and used that way. Amazon basically says there's no big privacy deal here, because the data is always aggregated. But it sounds like many users don't realize this is happening at all. Amazon says people can find out they added this feature by reading "forum posts and help pages" -- but it's not clear how many people actually do read those things. While I'm sure many people are fine with this, others might not be. And it once again highlights a key concern in that the "features" of your "book" can change over time. Your highlighting may have been yours in the past, but suddenly it becomes Amazon's with little notice.
http://techdirt.com/articles/20100511/1018059377.shtml





My tweet was Silly, but the Police Reaction was Absurd

For one joke on Twitter I've had my civil liberties trampled on, and have now got a criminal record
Paul Chambers

The vast majority of us like to consider ourselves decent people. We pay our taxes, hold doors open for others, stay out of trouble, that kind of thing. I certainly thought of myself this way, a 26-year-old man trying to forge a career and get on with life. So when I was arrested on 13 January at work by four police officers, it came as a bit of a shock.

The reason for the arrest was a tweet I had posted on the social network Twitter, which was deemed to constitute a bomb threat against Robin Hood airport in Doncaster: "Crap! Robin Hood airport is closed. You've got a week and a bit to get your shit together otherwise I'm blowing the airport sky high!" You may say, and I certainly realise now, it was ill-advised. But it was clearly frustration, caused by heavy snowfall grounding flights and potentially scuppering my own flight a week later. Like having a bad day at work and stating that you could murder your boss, I didn't even think about whether it would be taken seriously.

Call me naive or ignorant, but the heightened state of panic over terror issues was not something I considered as relating to me in any way – until I was arrested, shoved into a police car in front of colleagues, hauled off to Doncaster police station, and interviewed for the rest of the day. My iPhone, laptop and desktop hard drive were confiscated during a search of my house. It was terrifying and humiliating.

I never expected to be charged, but a month later I was: not under the offence of making a bomb threat, for which I was originally arrested, but under the communications act for the offence of sending a menacing message. This first appeared to be an absolute offence, much the same as speeding: conviction does not depend on mens rea. For a stupid mistake, I was faced with the prospect of a career-ruining criminal conviction. After fresh legal advice it turned out I could argue I had no intention and awareness to commit the crime, and I could plead not guilty. Even after all the preceding absurdity and near-breakdown-inducing stress, I was confident common sense would prevail in my day in court.

Unfortunately,yesterday I was found guilty and ordered to pay £1,000 in fines and legal costs, which I have to find along with my own legal costs of another £1,000. I am considering an appeal, though I have no means, having left my job due to the circumstances.

The bright side has been an outpouring of support on Twitter, unexpected and overwhelming, with many users – including Stephen Fry and Jonathan Ross – offering to cover or donate towards my costs via a fund set up by a third party. Writers Sali Hughes, Emma Kennedy and Graham Linehan were among more than a thousand others who sent messages after my verdict was announced. Right now I'm unsure whether to accept their help, but I am truly warmed by the offers.

Whatever happens now, I remain terrified. Terrified of speaking my mind, terrified that my life has potentially been ruined. Most of the authorities could see it for what it was, and yet I find myself with a conviction because the Crown Prosecution Service decided it was in the public interest to prosecute. It would appear we live in such a hyper-sensitive world that we cannot engage in hyperbole, however misguided, without having civil liberties trampled on by, at best, heavy-handed police.

I would have fully accepted the police coming to my house to question me; it would have taken all of five minutes to realise what had happened. I would have learned my lesson and no taxpayer money would have been wasted on a frivolous prosecution. I have had some very dark days, and my family has been put through the wringer, because I made one silly joke.
http://www.guardian.co.uk/commentisf...record-airport





Press release

Carnegie Mellon Study of Twitter Sentiments
Yields Results Similar to Public Opinion Polls

PITTSBURGH—Computer analysis of sentiments expressed in a billion Twitter messages during 2008-2009 yielded measures of consumer confidence and of presidential job approval similar to those of well-established public opinion polls, Carnegie Mellon University researchers report.

The findings suggest that analyzing the text found in streams of tweets could become a cheap, rapid means of gauging public opinion on at least some subjects, said Noah Smith, assistant professor of language technologies and machine learning in the School of Computer Science. But tools for extracting public opinion from social media text are still crude and social media remain in their infancy, he cautioned, so the extent to which these methods could replace or supplement traditional polling is still unknown.

"With seven million or more messages being tweeted each day, this data stream potentially allows us to take the temperature of the population very quickly," Smith said. "The results are noisy, as are the results of polls. Opinion pollsters have learned to compensate for these distortions, while we're still trying to identify and understand the noise in our data. Given that, I'm excited that we get any signal at all from social media that correlates with the polls."

The study findings will be presented May 25 at the Association for the Advancement of Artificial Intelligence's International Conference on Weblogs and Social Media in Washington, D.C.

In the study, Smith and his colleagues collected a billion microblog messages — averaging about 11 words each — posted to Twitter during 2008 and 2009. They used simple text analysis techniques to identify messages that pertained to the economy or to politics and then found words within the text that indicated if the writer expressed positive or negative sentiments.

Results regarding consumer confidence were compared with the Index of Consumer Sentiment (ICS) from Reuters/University of Michigan Surveys of Consumers and the Gallup Organization's Economic Confidence Index. Political sentiments regarding President Obama were compared with Gallup's daily tracking poll on presidential job approval and views regarding the 2008 U.S. presidential election were compared with a compilation of 46 different polls prepared by Pollster.com. The ICS, Gallup and Pollster.com measurements were all obtained from telephone surveys using traditional polling techniques.

The Twitter-derived sentiment measurements were much more volatile day-to-day than the polling data, but when the researchers "smoothed" the results by averaging them over a period of days, the results often correlated closely with the polling data, said Brendan O'Connor, a graduate student in Carnegie Mellon's Language Technologies Institute and first author of the study. Consumer confidence, for instance, followed the same general slide through 2008 and the same rebound in February/March of 2009 as was seen in the poll data. The researchers noted that the ICS and Gallup data had a correlation of 86 percent over the period; the Twitter-derived sentiments had between 72 percent and 79 percent correlation with the Gallup data, depending on the number of days averaged to smooth the data.

Likewise, both the Twitter-derived sentiments and the traditional polls reflected declining approval of President Obama's job performance during 2009, with a 72 percent correlation between them.

But the researchers found that their sentiment analysis did not correlate as well with election polling during 2008. For instance, increased mentions of "Obama" tended to correlate with rises in Barack Obama's polling numbers, but increased mentions of "McCain" also correlated with rises in Obama's popularity. Improved computational methods for understanding natural language, particularly the unusual lexicon of microblogs, will be necessary before Twitter feeds can be reliably mined to predict elections, the researchers concluded.

"The Web is so mainstream now that there's no question that the Web is representative somehow of the population," O'Connor said. But pinning down Web demographics is still difficult, he acknowledged, noting that Twitter traffic alone increased by a factor of 50 during the two-year span of the study.

Using computer programs to judge the sentiments of microblogs is fraught with potential error, but even with the crude tools used in this exploratory research, the accuracy is better than can be achieved by chance, O'Connor said. "The massive amount of data was crucial in making this work," he explained. "We don't need to get the sentiment of every individual right to understand sentiments in aggregate."

Improved natural language processing tools, as well as query-driven analysis and use of demographic and time stamp data available on some social media sites, could increase the sophistication and reliability of microblog analysis.

In addition to Smith and O'Connor, authors of the study include Bryan R. Routledge, associate professor of finance, and Ramnath Balasubramanyan, a Ph.D. student in language technologies. Download a copy of the paper at http://www.cs.cmu.edu/~nasmith/.
http://alumni.cmu.edu/news/archive/2...terpolls.shtml





Secret Forum Reveals Oz Firewall Backroom Dealing

Circumvention legal, but you can't tell anyone how
Jane Fae Ozimek

Australia’s plans for a firewall to protect its population from smut on the internet are rapidly evolving from farce to total chaos. Weekly revelations on bulletin boards suggest that Stephen Conroy, the man behind the big idea, does not know what forthcoming legislation on the topic will say, when it will be introduced or how the firewall will work in practice.

Meanwhile, it turns out that the Minister’s own Department of Broadband, Communications and the Digital Economy (DBCDE) has been hosting a secret forum for discussions with ISPs likely to be affected by proposals. Along the way it floated the idea of making it a crime to advise surfers on how to do things that are perfectly legal to do. Confused? You will be.

First up is the time scale for plans to introduce the new firewall. As already reported, the question of when legislation will be introduced has now been bouncing between the offices of Prime Minister Kevin Rudd and Communications Minister Stephen Conroy. Severe wriggling from Conroy’s office suggests that plans for an early introduction of legislation have been put on the back burner for now.

As if one embarrassment were not enough, at the end of April, Electronic Frontiers Australia (EFA) revealed that it had in its possession screenshots of a secret forum hosting discussions between the Department of Communications and various ISPs.

Despite assurances from Conroy in December 2009 that legislation would be before the Australian parliament by March of this year, one post on the forum from mid-April acknowledged that the Department had not yet assembled even draft legislation.

Meanwhile further digging inside this forum revealed that departmental officials appear to have been discussing the possibility of making it a criminal offence to advise individuals of means that would enable them to circumvent the filter – even where the means themselves were perfectly legal.

This last revelation proved too much for the Australian Pirate Party, which weighed into the debate shortly after, accusing the government of hosting plans that would be at home with oppressive regimes such as Iran or China.

A spokesman for the Pirate Party said: "What is concerning ... is that the Department of Broadband, Communications and the Digital Economy (DBCDE)] have considered making the promotion of circumvention somehow illegal.

"If circumvention will not be illegal, then how can it be illegal to simply tell people how to circumvent the government-controlled infrastructure in order to secure access to information that the Australian Government may deem inappropriate."

Such an offence, according to the Pirate Party would mean "effectively silencing political debate" in Australia.

However, in an apparent attempt to stop the rot, the Department of Communications last Monday finally provided answers to a string of questions on the working of the firewall previously put to it by Green Senator, Scott Ludlam.

In yet another apparent volte-face, the department now claims that it would be perfectly legal for customers to adopt circumvention techniques. Its response further reveals that the Minister is well aware of the efficacy of such techniques, prompting speculation that he is actually far better informed than his public pronouncements suggest: that he knows the firewall will be of minimal effectiveness, and therefore his pursuit of this project is motivated more by populist politics than a desire to find a practical solution.

Most ominous of all for the theoretical firewall is a departmental admission that the government will put in hand a "technical review" if ever the filter hits the 10,000 URL mark and starts to creak under the strain.

As the EFA suggests, this answer raises more issues than it addresses, and relies on the degradation of the Australian network being gradual, rather than catastrophic. It does appear, however, that the government has no plans to deal with a possible overload of its firewall bringing the Australian internet to its knees – beyond setting up a review when such an event actually happens.

By then, of course, it could all be far too late.
http://www.theregister.co.uk/2010/05...irewall_forum/





How an Unfixed Net Glitch Could Strand You Offline
Peter Svensson

In 1998, a hacker told Congress that he could bring down the Internet in 30 minutes by exploiting a certain flaw that sometimes caused online outages by misdirecting data. In 2003, the Bush administration concluded that fixing this flaw was in the nation's "vital interest."

Fast forward to 2010, and very little has happened to improve the situation. The flaw still causes outages every year. Although most of the outages are innocent and fixed quickly, the problem still could be exploited by a hacker to spy on data traffic or take down websites. Meanwhile, our reliance on the Internet has only increased. The next outage, accidental or malicious, could disrupt businesses, the government or anyone who needs the Internet to run normally.

The outages are caused by the somewhat haphazard way that traffic is passed between companies that carry Internet data. The outages are called "hijackings," even though most of them are not caused by criminals bent on destruction. Instead the outages are a problem borne out of the open nature of the Internet, a quality that also has stimulated the Net's dazzling growth.

"It's ugly when you look under the cover," says Earl Zmijewski, a general manager at Renesys Corp., which tracks the performance of Internet data routes. "It amazes me every day when I get into work and find it's working."

When you send an e-mail, view a Web page or do anything else online, the information you read and transmit is handed from one carrier of Internet data to another, sometimes in a long chain. When you log into Facebook, your data might be handed from your Internet service provider to a company such as Level 3 Communications Inc., which operates a global network of fiber-optic lines that carry Internet data across long distances. It, in turn, might pass the data to a carrier that's connected directly to Facebook's server computers.

The crux of the problem is that each carrier along the way figures out how to route the data based only on what the surrounding carriers in the chain say, rather than by looking at the whole path. It's as if a driver had to get from Philadelphia to Pittsburgh without a map, navigating solely by traffic signs he encountered along the way — but the signs weren't put up by a central authority. If a sign pointed in the wrong direction, that driver would get lost.

That's essentially what happens when an Internet route gets hijacked. Because carriers pass information between themselves about where data should go — and this system has no secure, automatic means of verifying that the routing information is correct — data can be routed to some carrier that isn't expecting the information. The carrier doesn't know what to do with it, and usually just drops it. It falls into a "black hole."

On April 25, 1997, millions of people in North America lost access to all of the Internet for about an hour. The hijacking was caused by an employee misprogramming a router, a computer that directs data traffic, at a small Internet service provider.

A similar incident happened elsewhere the next year, and the one after that. Routing errors also blocked Internet access in different parts of the world, often for millions of people, in 2001, 2004, 2005, 2006, 2008 and 2009. Last month a Chinese Internet service provider halted access from around the world to a vast number of sites, including Dell.com and CNN.com, for about 20 minutes.

In 2008, Pakistan Telecom tried to comply with a government order to prevent access to YouTube from the country and intentionally "black-holed" requests for YouTube videos from Pakistani Internet users. But it also accidentally told the international carrier upstream from it that "I'm the best route to YouTube, so send all YouTube traffic to me." The upstream carrier accepted the routing message, and passed it along to other carriers across the world, which started sending all requests for YouTube videos to Pakistan Telecom. Soon, even Internet users in the U.S. were deprived of videos of singing cats and skateboarding dogs for a few hours.

In 2004, the flaw was put to malicious use when someone got a computer in Malaysia to tell Internet service providers that it was part of Yahoo Inc. A flood of spam was sent out, appearing to come from Yahoo.

"Hijacking is very much like identity theft. Someone in the world claims to be you," said Todd Underwood, who worked for Renesys during the Pakistan Telecom hijacking. He now works for Google Inc., trying to prevent hijacking of its websites, which include YouTube.

In 2003, the Bush administration's Critical Infrastructure Protection Board assembled a "National Strategy to Secure Cyberspace" that concluded that it was vital to fix the routing system and make sure the "traffic signs" always point in the right direction.

But unlike Internet bugs that get discovered and fixed relatively quickly, the routing system has been unreformed for more than a decade. And while there's some progress being made, there's little industry-wide momentum behind efforts to introduce a permanent remedy. Data carriers regard the fallibility of the routing system as the price to be paid for the Internet's open, flexible structure. The simplicity of the routing system makes it easy for service providers to connect, a quality that has probably helped the explosive growth of the Internet.

That growth has also increased the risks exponentially. Fifteen years ago, maybe 8,000 people in the world had access to computers that use the Border Gateway Protocol, or BGP, which defines how carriers pass routing information to each other. Now, Danny McPherson, chief security officer at Arbor Networks, believes that with the growth of Internet access across the world and the attendant increase in the number of carriers, that figure is probably closer to 1 million people.

Peiter Zatko, a member of the "hacker think tank" called the L0pht, told Congress in 1998 that he could use the BGP vulnerability to bring down the Internet in half an hour. In recent years, Zatko — who now works for the Pentagon's Defense Advanced Research Projects Agency — has said the exploit would still work. However, it would likely take a few hours rather than 30 minutes, partly because a greater number of Internet carriers would need to be hit.

Plenty of solutions have been proposed in the Internet engineering community, going back as far as 1995. The U.S. government has supported these efforts, spurred in part by the Bush administration's 2003 strategy statement. That has resulted in some trials of new technology, but adoption by data carriers still appears distant. And the federal government doesn't have any direct authority to force changes.

One reason is that the weaknesses in the system are in the routing between carriers. It doesn't help if one carrier introduces a new system — every one it connects with has to make the change as well.

"It's kind of everybody's problem, because it impacts the stability of the Internet, but at the same time it's nobody's problem because nobody owns it," says Doug Maughan, who deals with the issue at the Department of Homeland Security.

The big Internet carriers seem willing to accept the status quo. Spokesmen at AT&T Inc. and Verizon Communications Inc., two of the largest, world-spanning carriers of Internet traffic, said they were unable to find anyone at their companies who could discuss the issue of routing reform.

Pieter Poll, the chief technology officer at Qwest Communications International Inc., says that he would support some simple mechanisms to validate data routes, but he argues that fundamental reform isn't necessary. Hijackings are typically corrected quickly enough that they don't pose a major threat, he argues.

One fix being tested would stop short of making the routing system fully secure but would at least verify part of it. Yet this system also worries carriers because they would have to work through a central database.

"My fear is that innovation on the Internet would slow down if there's a need to go through a central authority," Poll says. "I see little appetite for that in the industry."

Jeffrey Hunker, a former senior director for critical infrastructure in the Clinton administration, says he's not surprised that little has happened on the issue since 2003. He doesn't expect much to happen in the next seven years, either.

"The only thing that's going to drive adoption is a major incident, which we haven't had yet," he says. "But there's plenty of evidence out there that a major incident would be possible."

In the meantime, network administrators deal with hijacking an old-fashioned way: calling their counterparts close to where the hijacking is happening to get them to manually change data routes. Because e-mails may not arrive if a route has been hijacked, the phone is a more reliable option, says Tom Daly, chief technical officer of Dynamic Network Services Inc., which provides Web hosting and other Internet services.

"You make some phone calls and hope and pray," Daly says. "That's about it."
http://www.newstimes.com/news/articl...ine-476726.php





U.S. Struggles to Ward Off Evolving Cyber Threat
Phil Stewart and Jim Wolf

The United States is losing enough data in cyber attacks to fill the Library of Congress many times over, and authorities have failed to stay ahead of the threat, a U.S. defense official said on Wednesday.

More than 100 foreign spy agencies were working to gain access to U.S. computer systems, as were criminal organizations, said James Miller, principal deputy under secretary of defense for policy.

Terrorist groups also had cyber attack capabilities.

"Our systems are probed thousands of times a day and scanned millions of times a day," Miller told a forum sponsored by Ogilvy Washington, a public relations company.

He said the evolving cyber threat had "outpaced our ability to defend against it."

"We are experiencing damaging penetrations -- damaging in the sense of loss of information. And we don't fully understand our vulnerabilities," Miller said.

His comments came as the Obama administration develops a national strategy to secure U.S. digital networks and the Pentagon stands up a new military command for cyber warfare capable of both offensive and defensive operations.

The Senate last week confirmed National Security Agency Director Keith Alexander to lead the new U.S. Cyber Command, which will be located at Ft. Meade, Maryland, the NSA's headquarters.

Miller suggested the new organization, which is expected to be fully operational in October, had its work cut out for it.

Among its challenges are determining what within the spectrum of cyber attacks could constitute an act of war.

Miller said the U.S. government also needed to bolster ties with private industry, given potential vulnerabilities to critical U.S. infrastructure, like power grids and financial markets.

Staggering Loss

Hackers have already penetrated the U.S. electrical grid and have stolen intellectual property, corporate secrets and money, according to the FBI's cybercrime unit. In one incident, a bank lost $10 million in cash in a day.

"The scale of compromise, including the loss of sensitive and unclassified data, is staggering," Miller said. "We're talking about terabytes of data, equivalent to multiple libraries of Congress."

The Library of Congress is the world's largest library, archiving millions of books, photographs, maps and recordings.

U.S. officials have previously said many attempts to penetrate its networks appear to come from China.

Google announced in January that it, along with more than 20 other companies, had suffered hacking attacks that were traced to China. Google cited those attacks and censorship concerns in its decision to move its Chinese-language search service from mainland China to Hong Kong.

Miller took an example from the Cold War playbook to explain how the United States military would need to prepare for fallout from a cyber attack, which could leave cities in the dark or disrupt communications.

In the 1980s, the Pentagon concluded that the military needed to prepare to operate in an environment contaminated by the use of weapons of mass destruction.

"We have a similar situation in this case. We need to plan to operate in an environment in which our networks have been penetrated and there is some degradation," he said.

One of the challenges Miller singled out was the development of enough U.S. computer programmers in the future.

"In the next 20 to 30 years, other countries including China and India will produce many more computer scientists than we will," he said. "We need to figure out how to not only recognize these trends but take advantage of them."

(Editing by Paul Simao)
http://www.reuters.com/article/idUSTRE64B5T420100512





The Cybersecurity Boom
Marjorie Censer and Tom Temin

When cybersecurity firm Triumfant was founded in late 2002, it developed software meant to assist help desks in managing information technology problems. The company soon found a more valuable use for its software: detecting malicious acts on networks of computers and making automatic fixes.

Earlier this year, the small Rockville-based firm, which has fewer than 20 employees, announced it is partnering with Fairfax-based SRA International, a major government contractor, to beef up SRA's cybersecurity product.

The company -- which today works exclusively in the cybersecurity field -- is just one of the beneficiaries of what analysts say is a growing boom in cybersecurity work. From small, recently-established firms all the way up to the well-known defense contracting giants, local companies are building up their cyber credentials.

There's plenty of reason for the surge. The increasing number and intensity of cyberattacks has attracted the attention of the Obama administration and Congress, which have begun steering new dollars to the problem. And much of that new spending is focused on the Washington region, as the federal government consolidates many of its cybersecurity-focused agencies in the area.

With the National Security Agency, the soon-to-be-relocated Defense Information Systems Agency and the newly-founded U.S. Cyber Command at Fort Meade; the Department of Homeland Security set to move to Anacostia; and the Pentagon just across the river, a region known for information technology is fast becoming a cybersecurity capital.

"There's this gravitational pull in Washington," said Philip Eliot, a principal at the D.C. private equity firm Paladin Capital Group.

David Z. Bodenheimer, a partner at law firm Crowell & Moring in Washington who leads the firm's homeland security practice and specializes in government contracts, said the unclassified portion of the federal government's cybersecurity work is estimated at $6 to $7 billion annually. The classified portion is likely just as large -- and potentially bigger, he said.

"I think it is a real growth opportunity in coming years," Bodenheimer said. "The market is still rather fragmented and in flux, but is developing with a speed that it is attracting both the major defense and homeland security contractors who are establishing independent business units to pursue these opportunities, and it is also a real opportunity for the smaller players who have niche products."

As start-ups and others rush to stake claims, some wonder if a bubble of sorts is beginning to inflate. Roger Novak, founder of Novak Biddle Venture Partners, recalled that many venture firms in the early 2000s chased similar prospects.

"A lot of the early people made significant money, but there were a lot of 'me too' companies," he said. "So a lot of people in the investment community probably absorbed losses in the space and began to move on."

But now, he said, the administration's focus is once again piquing venture interest and spurring larger companies to pursue acquisitions of companies that already have cybersecurity footholds. Novak is bullish on the sector; after all, his firm invested in Triumfant in 2006.

Eliot said key opportunities right now are in securing mobile devices, protecting against Web-based attacks that come from reputable Web sites, and fending off internal threats.

Those are problems "that to date don't have good solutions," he said.

One reason the field is attracting so many companies is that the barriers to entry are low -- at least relative to other defense industries.

"The strictly defense markets largely have strictly defense suppliers," said David L. Rockwell, a senior analyst at the Teal Group. "In cybersecurity -- so far you [have] had a lot more variety in who's able to get contracts, and I think we can expect that to continue."

The big defense contractors are moving quickly to protect their turf. Lockheed Martin in late 2009 opened what it calls the NexGen Cyber Innovation and Technology Center, a research and development center, in Gaithersburg.

The center brings together 14 companies -- including Hewlett-Packard, Intel, McAfee, Microsoft and Symantec -- that make up a cybersecurity technology alliance formed at the same time.

BAE Systems opened in January a new cyber facility in Columbia intended to give BAE a "world-class analytical capability," said John Osterholz, the company's vice president for cyberwarfare and cybersecurity. Staffed by 20 to 25 people, the office helps BAE quickly understand and characterize threats.

And Chantilly-based TASC, divested from Northrop Grumman last year, has named a new lead executive for its cyber business, said TASC's president and chief executive, Wood Parker.

"I'm sure that every company says that they are interested or they have a cyber business," he acknowledged. "I can tell you that TASC has a robust cyber business today."

The largest IT and defense contractors are keenly interested in helping the government manage its computer networks. Lockheed Martin, Boeing, General Dynamics, ManTech International, Northrop Grumman and SAIC (which recently acquired CloudShield Technologies) are all competing in the space.

Smaller companies see more opportunity in creating products that can protect networks or help the government keep tabs on threats -- especially if that gear and software can be deployed across agencies and departments.

A key player in shaping future business is likely to be the Commerce Department, chiefly via the National Institute of Standards and Technology in Gaithersburg. NIST has been systematically revising its extensive collection of guidance documents for network security. It is including industry and military experts in these revisions in an attempt to unify approaches taken by the federal government broadly.

NIST figures prominently in legislation making its way through Congress. A major bill, reported out in late March by the Senate Commerce, Science and Transportation Committee, chaired by John D. Rockefeller IV (D-W.Va.) would create a cybersecurity advisory panel with the White House, designate the Commerce Department as the clearinghouse for cyberthreat information, and strengthen NIST's authority to set cybersecurity standards for federal contractors and grant recipients. The bill, S 773, would also give the National Science Foundation new authority to establish what it calls a Federal Cyber Service: Scholarship for Service program.

On the House side, the Homeland Security, Science and Technology Authorization Act would double the money available to DHS for cybersecurity research and development.
http://www.washingtonpost.com/wp-dyn...050704503.html





Hollywood Elite Targeted in Local Credit Card Scam

There's a first-floor apartment in the Armour Square neighborhood where actor Ben Stiller lived. Then David Duchovny moved in, as did Oscar-winning director Paul Haggis.

Well, maybe they didn't live there, but that's where their credit cards were being sent.

Then writer-directors Paul Schrader ("Taxi Driver") and Noah Baumbach ("The Squid and the Whale") suddenly ordered new cards and asked them to be sent to the little apartment on the South Side.

So last month, at the bank's request, an undercover agent from the U.S. Postal Inspection Service hand delivered them.

Now this week Adedamola Olatunji, 29, a Nigerian-born man who allegedly used Stiller's card to run up charges on iTunes and an on-line dating service, was indicted on forgery, mail fraud, theft, aggravated identity theft, computer fraud and other felony charges.

Court records and a source familiar with the investigation said Citibank officials contacted the postal inspector's office early last month after the credit card accounts for Stiller, Duchovny and Haggis were compromised and replacement cards were delivered to Olatunji's address in the 2700 block of South Princeton Avenue.

After obtaining personal information on the victims, Olatunji allegedly called the bank to report a lost card and requested a new one be sent to the Princeton Avenue address. The source said investigators recovered personal information for Stiller and Haggis in the trash at Olatunji's residence.

The inspector's office, along with the Chicago Police, intercepted the replacement cards for Schrader and Baumbach, and on April 13 showed up at Olatunji's door. He allegedly identified himself as "Paul" and signed for both cards.

"He said Noah was in the back," the source said.

Olatunji allegedly told investigators he tried to purchase several thousand dollars worth of merchandise with the card to send to a friend in the United Kingdom, the source said. The scam is a way to work around companies' refusal to ship items to Nigeria and other countries where fraud is a big-time business.

"Obviously, the bank has some issues they've got to straighten out," the source said. "The guy calls up with a foreign accent and says: 'Hey, I'm Ben Stiller, I lost my card. Can you send me a new one?' Oh. Sure, why not?"

A representative for the bank was not immediately available for comment tonight.
http://www.chicagobreakingnews.com/2...card-scam.html





Trading in Fantasy
Felix Salmon

IN the 1950s, onion growers were often shocked at the low prices they were getting. Casting around for a villain to blame, they alighted on derivatives traders, and they persuaded Congress to ban any futures trading in onions.

Today onions are the only commodity for which futures trading is banned. Not coincidentally, onion prices remain extremely volatile: they doubled in 2008, and then fell by 25 percent in 2009.

Today, no one is silly enough to ask a member of Congress to simply outlaw futures trading in a certain type of contract — no one, that is, except Hollywood film producers. Under the proposed financial-reform legislation making its way through the Senate, the bit of the 1958 bill saying “except onions” would be amended to read “except onions and motion picture box office receipts.”

Hollywood was scared into pushing for the new language after the Commodity Futures Trading Commission, which regulates futures trading, recently approved two applications for markets in contracts based on movie grosses. But if the new provision makes its way into law, the biggest losers will be the very film producers who lobbied for it.

The proposed contracts are simple: they would allow traders to bet on the total box-office receipts of movies in their first four weeks of release. A contract on “Iron Man 2,” for instance, might be trading at $390, meaning that the market is expecting the film to gross $390 million in its first four weeks. If you think it’s going to make more than that, you would go long, or buy the contract; if you think it’s going to make less, you would go short, or sell it. At the end of the four weeks, the contract would expire at whatever the four-week gross is. If you went long at $390 and the film ended up earning $450 million in its first four weeks, then you’d make $60 for every contract you bought.

Hollywood’s mouthpiece, the Motion Picture Association of America, has argued that the new market could tarnish “the reputation and integrity of our industry” and would constitute “unbridled gambling” — though there’s nothing “unbridled” about the regulatory strictures involved in being listed on a Chicago commodity exchange.

The real reason most of Hollywood is opposed to this development is unclear, but it is probably simply the age-old story of large, conservative institutions being averse to change. Top executives at the biggest studios may suspect that smaller and nimbler competitors would get more benefit out of such a market: it’s easier to hedge a $10 million project than a $200 million one.

Yet as Lionsgate Films, one of the few studios supporting the market, has recognized, a futures contract on box office receipts would be great news for the industry. For one thing, if the market got big enough, it would allow studios to easily hedge their investments in movies just by entering into a simple derivatives transaction. Studios could essentially sell contracts on their movies’ grosses into the open market, and pocket the proceeds. They would lose money on the contract if the movie does well, but in that case they’d make enough money on the movie itself to cover their derivatives losses.

That kind of thing would be a lot easier, and a lot cheaper, than the studios’ current methods of trying to hedge exposure and sell risk: the financing arrangements behind a typical Hollywood movie, with countless co-producers and incomprehensible accounting, make the average collateralized debt obligation look simple and transparent.

And even if the studios didn’t participate in the market, they would still benefit. People care much more about things they bet on, and the fake-money version of these contracts — the online Hollywood Stock Exchange, in operation since 1996 — has done wonders for increasing awareness of coming films among its users, without a single dollar of publicity and marketing money being spent.

What’s more, the contracts for the proposed market would be based on the first four weeks of box-office results, not just the opening weekend. A lot of people, of course, would be betting on that opening-weekend number, which is more a function of hype than a movie’s long-term chances of success. Just as many, however, would wait until the movie comes out, watch it on its opening weekend, make their own qualitative determination of how well it will continue to perform over the rest of the month and then place their bets accordingly.

Hollywood has an entirely predictable predilection for shooting itself in the fiscal foot, so none of this should come as a surprise. But it is sad that the most intriguing derivatives product to be approved in years will probably be banned by Congress — thanks to the very people who stand to benefit the most from it.
http://www.nytimes.com/2010/05/10/opinion/10Salmon.html





Salary Dispute Holds Up "Twilight 5" Announcement
Matthew Belloni

The studio behind the "Twilight" feature franchise is working furiously to close the talent deals required to split Stephenie Meyer's fourth novel in the vampire series into two films.

But an unlikely roadblock is holding up an announcement -- and could even lead to cast changes for the series' final installment.

Summit Entertainment is close to finalizing agreements with leads Kristen Stewart, Robert Pattinson and Taylor Lautner, all of whom will get big raises to return for a fifth installment of the vampire romance saga. And director Bill Condon is already signed to film two "Breaking Dawn" movies, which would be shot back-to-back starting in the fall and released in November 2011 and summer 2012, respectively.

But Summit is having a harder time locking in some of the franchise's secondary characters. Deals for Peter Facinelli (who plays Carlisle Cullen) and Billy Burke (Bella's father, Charlie Swan) are done, but sources say the actors who play the Cullen kids (especially Kellan Lutz and Ashley Greene) are trying to sink their teeth into bigger paydays that the studio is so far unwilling to provide.

"We may have a situation where one of them is thrown out on the street to make a point," says a source close to the dealmaking.

So are we headed for a recasting on the final "Twilight"?

There is precedent. After the success of the first film, Summit axed Rachelle Lefevre, who played Victoria, in part because her reps played hardball on money. (Bryce Dallas Howard got the job instead.) Now, two films into the series, even the minor Twilighters (Lutz in particular) have become sought-after stars, so it makes sense they'd want to be paid more for the final film. But sources say the offers from Summit -- which are said to be at least 10 times what the actors made on the first movie -- were deemed "offensive" given the mega-money the franchise has generated.

Summit declined to comment on the situation. But the studio wants to move quickly to pull the trigger on the two movies -- which it won't until the talent deals are further along -- and it isn't afraid to recast if agreements can't be reached.

Additionally, it has even more reason to be concerned about costs this time around. As is typical with blockbuster franchises, the "Twilight" movies are becoming more expensive with each installment.

The leads are going to do especially well if "Breaking Dawn" is split into two parts. The trio were initially signed for three films (remember, this was back when "Twilight" was a low-budget adaptation of a niche young-adult novel), but in the spring of 2009 -- after the first movie became an international hit -- they renegotiated all their deals so Summit could lock them for a fourth movie.

The studio then realized that "Breaking Dawn," with its 900-plus pages and narratives told from two perspectives, was dense enough to be split into two installments (as Warner Bros. announced it would do for the final "Harry Potter" book). Just one problem: The cast wasn't signed for a fifth movie. They're all huge stars now, with Lautner in particular running up his quote to the $7.5 million range, so another renegotiation commenced.

That meant ponying up big-time for the leads, which will make the final movie far more expensive than the others ("Eclipse," which hits theaters June 30, is costing around $65 million, a figure sure to be dwarfed by the fourth and fifth, even if costs can be amortized by shooting them at the same time). For that reason, Summit is still holding out the option of simply doing one "Breaking Dawn," although multiple sources say they'd be shocked if the fifth film doesn't happen.

Summit also is eyeing another cost-cutting measure for the final installments. A deal is currently being negotiated to move the production to Louisiana (the first was shot in Portland and the second two in Vancouver and Italy). Luring "Twilight" would be a huge "get" for the state -- and, given the tax credits, a money-saver for the studio.
http://www.reuters.com/article/idUSTRE64A0MU20100511





Magazines Team Up to Tout 'Power of Print'

As pickup in ad sales boosts their confidence, publishers point to strengths they say remain relevant in internet age
Russell Adams and Shira Ovide

Magazine executives spent much of last year telling anyone who would listen that they were taking their brands digital.

Their message this year: Print rules.

Five leading magazine publishers have pitched in on a multimillion-dollar ad campaign touting the "power of print." They say nearly 1,400 pages of the ads will be sprinkled through magazines including People, Vogue and Ladies' Home Journal this year.

The ads press the case that magazines remain an effective advertising medium in the age of the Internet because of the depth and lasting quality of print, compared with the ephemeral nature of much of the Web's content.

"The Internet is fleeting. Magazines are immersive," says one ad, which is slated to appear in May issues of the participating publications. The first spread features a photo of swimmer Michael Phelps from ESPN The Magazine, with the headline "We surf the Internet. We swim in magazines."

Backing the campaign are Time Warner's Time Inc., Hearst, Advance Publications' Condé Nast, Wenner Media and Meredith. The ads were created by WPP's Young & Rubicam.

The effort is scheduled to be announced Monday at an industry conference in San Francisco.

Just a few months ago, a handful of publishers announced another collaborative effort aimed at readying magazines for the migration of readers to digital devices. Since then, however, industry executives say advertising has begun creeping back into magazines after a two-year drought. The improved results have given them more ammunition to persuade readers and advertisers alike that the ink-on-paper business isn't dying.

"A lot of us sat back for way too long and listened to all this abuse and said nothing about it," says Jann Wenner, who orchestrated the campaign. "Meanwhile, we sit on top of one of the greatest mediums," adds Mr. Wenner, whose Wenner Media publishes Rolling Stone and US Weekly.

The five publishers say they have committed to run the first of the ads in the front one-fifth of their titles' pages, and have agreed to run all subsequent ads in the first half.

The ad space they are devoting to the campaign is valued at more than $90 million, based on public ad rates for each of their participating magazines. They say they have never before attempted such a large-scale campaign.

The spark for the campaign was a "manifesto" Mr. Wenner penned last year, in which he said that just as TV didn't kill magazines, the Internet was a threat only to publications that lost focus on what makes magazines unique. "In a certain way, this campaign is aimed at the magazine business itself," Mr. Wenner.

That the campaign might seem out of sync coming from an industry that has spent so much time trying to prove it can hold its own in the digital arena is beside the point, executives involved in the collaboration say. The purpose of the campaign is to remind people that these brands are rooted in print products with huge cultural and commercial influence, they say.

"Going digital is very important to Time Inc., but I don't want my clients to believe that no one is reading the printed word," says Time Inc. Chief Executive Ann Moore.

Even so, the Internet is expected to continue attracting a growing proportion of ad dollars away from traditional media. The share of global ad spending devoted to the Internet will rise to 16% by 2012, up from 12% last year, according to ZenithOptimedia, part of ad company Publicis Groupe. By the middle of the next decade, the firm expects the Internet to overtake newspapers as the world's second-largest advertising medium, behind TV.

Magazines' challenge is to be ahead of the digital curve while recognizing that for now print is their best asset, ad buyers say. Magazines are grappling with how to adjust to new devices like Apple's iPad, the tablet computer that is sparking fear but also enthusiasm in the media business.

"The iPad is bringing sexy back to magazines," says Robin Steinberg, an executive at Publicis's MediaVest arm who advises marketers on print advertising.

Amid a decline in spending on traditional media, other industries are making similar pitches for themselves. The Newspaper Association of America has run repeated ads to publicize the number of people who read a daily newspaper. As with the magazine campaign, the newspaper trade group says its ads are designed to counter the notion print is a dead medium.

The local-TV industry's trade group is starting an on-air ad campaign this month to encourage companies to advertise on their local TV stations.

The Internet Advertising Bureau couldn't be reached for comment.

The Michael Phelps ad is accompanied by an essay about the appeal of magazines. "Even in the age of the Internet, even among the groups one would assume are most singularly hooked on digital media, the appeal of magazines is growing," the ad says. The publishers point to data from Mediamark Research & Intelligence that show magazine readership has risen 4.3% over the past five years.

There are seven spreads in the series, four of which are essay-like and three that are more lighthearted. The campaign's signature is "Magazines: the Power of Print,'' with each letter of the word magazines appearing as it does in the title of a major publication. The "a'' is from Vanity Fair.
http://online.wsj.com/article/SB1000...13003314.html#





Playboy Raises the Bar with 3-D Centerfold

Playboy magazine, a pioneer in featuring photographs of naked women on its pages, said on Tuesday its June issue's 3-D centerfold will be an eye-popping collectible.

It was an idea the Playboy Enterprises' (PLA.N) founder Hugh Hefner says he had a half-century ago when he created the monthly, but couldn't afford.

HBO, a unit of Time Warner Inc (TWX.N), is helping out with the cost of 3-D glasses bound up with the issue, which hits newsstands on Friday.

Playboy's Playmate of the Year, Hope Dworaczyk, can be seen like no centerfold has been seen before. Her offering of a glass of wine appears to come off the page, along with the rest of her.

The 3-D craze has exploded with viewers donning glasses to take in movie hits "Avatar" and "How to Train Your Dragon."

In a crowded field of magazines, Playboy has seen its circulation decline to less than 3 million from 6 million in the 1970s.

"You're constantly competing for people's time, you're competing for their attention," said Playboy editorial director Jimmy Jellinek. "You have five seconds to reach them. In order to force them to physically go to the newsstand and buy your product, you have to give them a reason. And this is a reason ...

"It's tactile. It's something that uses the platform and the medium for which it was created," he said.

(Reporting by Andrew Stern; Editing by Bill Trott)
http://www.reuters.com/article/idUSN119942120100511





For Crime, Is Anatomy Destiny?
Patricia Cohen

Poverty, greed, anger, jealousy, pride, revenge. These are the usual suspects when it comes to discussing the causes of crime. In recent years, however, economists have started to investigate a different explanation for criminal activity: physical attributes.

A small band of economists has been studying how height, weight and beauty affect the likelihood of committing — or being convicted of — a crime. Looking at records from the 19th, 20th and 21st centuries, they have found evidence that shorter men are 20 to 30 percent more likely to end up in prison than their taller counterparts, and that obesity and physical attractiveness are linked to crime.

“The profession has developed a large interest in biology,” what some refer to as anthropometric economics or history, said Gregory N. Price, an economist at Morehouse College and one of the authors of a paper on height and crime.

There is already a sizable stack of research that examines the connections between physical characteristics and the labor market. Economists have found, for example, that every inch of additional height is associated with a nearly 2 percent increase in earnings; that employees rated beautiful tended to earn 5 percent more an hour than an average-looking person, while those rated as plain earned 9 percent less; that obesity can cause a drop in white women’s earnings.

To make a point about income tax, Gregory Mankiw, an economist at Harvard and the former chairman of President George W. Bush’s Council of Economic Advisers, has facetiously proposed taxing taller people more, since someone 6 feet tall can be expected to earn $5,525 more a year than someone who is 5-foot-5, after accounting for gender, weight and age.

Linking physical traits to criminality may sound like a throwback to the biological determinism advocated by 19th-century social Darwinists who believed that there was a genetic predisposition for wrongdoing. Practitioners are quick to distance themselves from such ideas.

Mr. Price, for example, argues that crime can be viewed, at least partly, as an “alternative labor market.” If individuals with certain physical attributes are disadvantaged in the labor force, they may find crime more attractive, he said.

H. Naci Mocan, an economist at Louisiana State University and an author of a paper on crime and attractiveness, explained that theories about the relationship between weight, height or beauty and the labor force emerged because “economists looking at standard determinants — like education, experience, productivity, human capital — found that they could only explain some of the variation in wages.”

“This is very new,” Mr. Mocan said of the research into crime. “It opens up our horizons a little more.”

A link between a physical attribute and salary, or crime, does not necessarily mean cause and effect. Mr. Mocan pointed out that we do not know why someone who is overweight, unattractive or short is at a disadvantage in the labor market or more likely to commit a crime. It could be employer discrimination, customer preference or that the physical attribute may make the worker less productive. If a job involves carrying heavy loads, for instance, brawn would be an advantage.

That is what both Howard Bodenhorn, an economist at Clemson University, and Mr. Price concluded from 19th-century prison records. In that era increased body weight was associated with a lower risk of crime. In the 21st century, though, in which service jobs are much more common, Mr. Price found that being overweight was linked to a higher risk of crime.

Mr. Mocan and Erdal Tekin, an economist at Georgia State University, analyzed data from a national survey of adolescent health that involved 15,000 high school students who were interviewed in 1994, 1996 and 2002. They found that being unattractive in high school was correlated with a lower grade point average, more problems with teachers and suspensions.

Other studies have found that shorter students tend to participate less frequently in clubs and sports. As a result these students may suffer a drop in self-esteem or not develop certain kinds of social skills that are useful later in life, the two economists theorized.

According to their study, both men and women who were rated unattractive (as rated on a five-point scale) in high school were more likely to commit — or at least more likely to be caught while committing — one of seven crimes, including burglary and selling drugs, than those rated average or attractive.

Mr. Price said anthropometric economics was based on the work of economic historians — including the Nobel Prize-winner Robert Fogel, John Komlos at the University of Munich and Richard H. Steckel at Ohio State University — who have used height and weight to assess changing social conditions.

Since biologists believe that 80 percent of height is determined by genetics and 20 percent by environmental conditions, height — and sometimes weight — can be an index of childhood nutrition, health care and exposure to disease. Thus smaller stature may be a sign of an impoverished upbringing.

Mr. Komlos, for example, wrote a 2007 paper with Benjamin E. Lauderdale that found that Americans were the “tallest in the world between colonial times and the middle of the 20th century,” but have since “become shorter (and fatter) than Western and Northern Europeans. In fact, the United States population is currently at the bottom end of the height distribution in advanced industrial countries.”

“We conjecture,” they concluded, “that the United States health-care system, as well as the relatively weak welfare safety net, might be why human growth in the United States has not performed as well in relative terms as one would expect on the basis of income alone.”

Though beauty would superficially seem to be in the same category as weight and height, studies that assess the economic advantage of being attractive are actually quite different, said Christina Paxson, an economist at Princeton who has studied the relationship between stature and status. While height is a sign of health and social conditions, the impact of beauty is more psychological, she said. There the question is how someone’s perception of a worker’s productivity, skill and talent is influenced by looks.

Mr. Price has suggested that there may be policy implications in his work, saying, “Public health policies successful at reducing obesity among individuals in the population will not only make society healthier, but also safer.”

At the moment, Mr. Mankiw is skeptical of any real-world utility. “Economists love quantifying things,” he said, “but there are so many possible interpretations, it doesn’t settle debates as much as it opens up questions.”

He did note that his students at Harvard have been particularly fascinated by the research that shows quantifiable economic advantages of beauty. The benefit of these “weird facts,” he said, is that it “forces you to think about the world in ways you didn’t before.”
http://www.nytimes.com/2010/05/11/books/11crime.html





Another Ouster at Top Deepens Fujitsu Mystery
Hiroko Tabuchi

By global standards, Japanese companies are seen as taking an idiosyncratic approach to corporate governance. But even by Japanese standards, a several high-level management changes at the technology giant Fujitsu have struck analysts and management specialists as unusual.

On Sept. 25, Kuniaki Nozoe, then the president of Fujitsu, says he was called into a windowless room on the 32nd floor of his company’s sleek headquarters near Tokyo Bay.

There, he says, he was accused by several members of Fujitsu’s board of keeping company with “antisocial forces” — a euphemism here for the yakuza, or Japan’s notorious mafia — and ordered to resign on the spot. The company announced he had stepped down “due to illness.”

Mr. Nozoe, who denies any links with the mafia, says he has never set foot in the company since. He has challenged Fujitsu over his dismissal, submitting a public letter with questions about the company’s allegations and calling for an independent investigation of the board’s actions.

Fujitsu has stuck by its conduct, saying that it acted in the best interests of the company.

“We have disclosed enough information, and we have not said anything inaccurate,” the current president, Masami Yamamoto said at a news conference last month. Fujitsu declined to make executives or board members available for this article.

Mr. Nozoe plans to present more of his side on Wednesday in Tokyo in an address to the Foreign Correspondents Club. His ouster was not the first unusual departure in recent years for Fujitsu, a once-potent force in information technology that battled with I.B.M. in the 1990s to develop the fastest computers but is now struggling to keep up with nimbler, more dynamic rivals.

In April 2008 Toshihiko Ono, a senior vice president who had been the assumed heir to the Fujitsu presidency, was abruptly removed from office. Fujitsu accused Mr. Ono of ties to a counterfeiting scheme, but he was never charged with a crime and he has vehemently denied the accusation through his lawyer.

Mr. Ono left two weeks after Fujitsu announced that its president at the time, Hiroaki Kurokawa, would step down — to the bewilderment of many in the industry who had applauded his leadership. In the five years at Fujitsu’s helm, Mr. Kurokawa had turned the company around from a 122 billion yen ($1.3 billion) net loss to a 48 billion yen net profit in 2008, and he had just started an ambitious management plan that was to run to 2010.

Fujitsu has offered little explanation to investors for any of those three sudden departures.

The company’s stock, which was trading above $40 in New York (800 yen in Tokyo), plunged after the two 2008 departures. It lost half of its value in the ensuing months, and has only gradually regained part of that ground.

The management upheaval “raises questions about who is really in charge, about who is accountable for Fujitsu’s corporate actions, and whether corporate actions are truly in the best interest of shareholders,” Damian Thong, a Tokyo-based analyst for Macquarie, wrote recently. Some management specialists see Fujitu’s case as perhaps an exaggerated example of the way management at publicly traded companies can seem, from the outside at least, to be subject to personal relationships and even vendettas, with too little objective supervision by corporate boards.

“It’s still common for listed companies in Japan to be run as if management, not shareholders, were the owners,” said Jamie Allen, who leads the Hong Kong-based Asian Corporate Governance Association. Many Japanese companies still weight their boards heavily with insiders, specialists say, leaving little opportunity for independent voices on behalf of shareholders.

For example, Toyota Motor, which has come under scrutiny over its slow handling of fatal defects in its vehicles, does not have a single external member on its board. In Fujitsu’s case, four members of its nine-member board are current executives. Of the remaining external members, three are former Fujitsu executives, including Naoyuki Akikusa, a former president who was chairman until 2008 and is still a senior adviser with an office at the headquarters here.

Local news media have been rife with speculation of a rift between Mr. Nozoe and Mr. Akikusa, whom Fujitsu declined to make available for an interview. Mr. Nozoe and Mr. Ono said he was present at their dismissals.

Lack of investor confidence in Japanese corporate strategy, Mr. Allen said, is one reason Tokyo’s stock market has underperformed. Financial regulators here are calling for companies to bolster corporate governance, including adding more independent directors. But experts say the old way still is largely in effect.

Fujitsu, after initially announcing in September that Mr. Nozoe was leaving because of illness, said on April 14 that he had in fact been dismissed for associating with an investment company, Sandringham Private Value. Fujitsu contends that Sandringham has links to Japanese organized crime figures — an allegation that has prompted Sandringham to file a defamation suit against Fujitsu.

Mr. Nozoe had worked with the fund to seek a buyer for Nifty, Fujitsu’s struggling Internet service unit, as part of an overhaul effort at the company. Mr. Nozoe says that his attempt to streamline Fujitsu’s sprawling businesses made him many enemies in the company. In fact, all three high executives forced out since early 2008 had sought to scale down Fujitsu by spinning off unrelated businesses — a direction that many financial analysts have said is needed for the company to remain competitive.

“I was restructuring the company at fever pitch,” Mr. Nozoe said. “That means downsizing, getting people to leave. I’m afraid I may have caused resentment in some circles.”

Meanwhile, the influence retained by Mr. Akikusa — still widely viewed as the company’s most powerful board member— has been perhaps one of the most puzzling elements of Fujitsu’s story.

Under his leadership as president from 1998 to 2003, the company slumped, becoming a symbol of the decline of Japan’s technological prowess: a laggard to South Korean rivals in electronics and to American competitors in Internet services. By 2002, Fujitsu had sunk to an annual loss of 383 billion yen, and its share price had plunged 90 percent. Mr. Akikusa stepped down the next year, giving way to Mr. Kurokawa.

But Mr. Akikusa stayed on, becoming chairman through 2008, and he has kept the board seat he has held for more than two decades, planning to retire next month.

“When company boards are filled with only insiders, company spats can quickly lead to serious standoffs between board members,” said Masaru Hayakawa, professor of corporate law at Doshisha University, in Kyoto. “Add to that personal grudges and hurt egos, and it becomes even more difficult to resolve conflicts,” he said.

Mr. Akikusa’s successors have helped nurse the company back to health, selling off money-losing divisions to focus on computing and network systems.

In the latest quarter, Fujitsu reported a net profit of 45.7 billion yen, on revenue of 1.3 trillion yen.

It is unclear whether the financial improvement will continue under the president newly installed by the board, Masami Yamamoto, an engineer who has run Fujitsu’s cellphone and personal computer business since 2007 and, at 56, the company’s youngest president since 1981. But the big changes appear done.

“We have done what we need to do in terms of drastic measures,” Mr. Yamamoto said at his first news conference last month. “The dust,” he said, “has settled.”
http://www.nytimes.com/2010/05/11/bu...11fujitsu.html





Samsung Doesn't Find Satirical Spoof Amusing

The South Korean electronics giant's libel suit against a British columnist shows both the power of corporate conglomerates and a different view of defamation, satire and free speech.
John M. Glionna

In his Christmas Day 2009 column for the Korea Times, Michael Breen decided to lampoon such national newsmakers as President Lee Myung-bak and the pop idol Rain.

Headlined "What People Got for Christmas," the English-language column also poked fun at global technology giant Samsung Electronics, referring to past bribery scandals as well as perceptions that its leaders are arrogant.

The piece was meant as a satirical spoof, the columnist says, but Samsung wasn't laughing.

Breen's column ran as local media reported that President Lee would soon pardon Samsung Chairman Lee Kun-hee on a 2008 conviction for tax evasion. Chairman Lee, 68, had already received a federal pardon in the 1990s on a conviction for bribing two former presidents while he was with the firm.

On Dec. 29, the day of Lee's pardon, Samsung sued the freelance columnist, the newspaper and its top editor for $1 million, claiming damage to its reputation and potential earnings. After the Korea Times ran clarifications, the newspaper and its editor were dropped from the suit.

But Samsung continues to pursue Breen personally for libel, both civilly and on criminal charges that he intentionally libeled the company. If convicted, he faces a hefty fine and even jail time.

"The reason I'm being sued is that the beast roared," said Breen, 57, a British native and longtime social commentator and South Korean resident who wrote a 1998 book on South Korea's modern history.

In its suit, Samsung said the column used a "mocking tone" to add "baseless, malicious and offensive false information to criticize" the firm.

After Samsung complained, the paper ran two clarifications, one of which Breen says he was told by editors was written by Samsung.

Legal experts here say the case underscores the considerable power wielded in South Korean society by such mammoth corporate conglomerates, known as chaebols, which are dominated by top officials, often related, who are treated here as near-royalty.

In a nation where reporters are often discouraged from highlighting chaebol transgressions, some say Samsung's pursuit of Breen is intended as a warning.

The message: Even when joking, don't mess with the chaebols.

"In South Korea, it's considered taboo to criticize the chaebols," said Kim Ky-won, professor of economics at Korea National Open University. "They hold very close to absolute power."

Most critical stories run in smaller media less dependent on ads from big companies. Major media reports are mostly limited to breaking news of prosecutions of chaebol leaders but seldom probe deeper, critics say.

"Samsung has financial power over the press. They're their own sanctuary where no one can intervene or criticize them," said Kim Keon-ho, an official at the Citizens' Coalition for Economic Justice.

Breen, who now owns a Seoul public relations firm and wrote "The Koreans: Who They Are, What They Want, Where Their Future Lies," also pens occasional newspaper columns in English and Korean.

The Christmas Day column imagined what gifts public figures in the news might send. "I wanted to give people a laugh at Christmas," Breen said. "One of the prices of being a public figure is to be the occasional butt of a joke."

One item read that Samsung had sent to all employees photographs of the son of the firm's chairman with instructions for hanging the photo next to one of his father — an allusion to North Korea's Kim Il Sung and Kim Jong Il.

Breen also wrote that Samsung, "the rock upon which the Korean economy rests, sent traditional year-end cards offering best wishes for 2010 to the country's politicians, prosecutors and journalists along with [$50,000] gift certificates."

Samsung said the comments go beyond the definition of satire allowed under South Korean law.

The lawsuit refers to Breen as a Korean "specialist" with wide-ranging influence. Since 80% of its revenues are from overseas, the firm is sensitive to any "minor accident or mistake" that could adversely affect its international reputation, the suit said.

"Even though anyone who read or heard of this article knows that this is not true, they can mention this as a joke, which can be spread easily, so its damage is very serious," the lawsuit read.

In South Korea, experts say, "Saturday Night Live"-style satire is not a common form of humor.

Additionally, both South Korean civil and criminal codes regarding defamation are stricter than in many other countries, including the U.S., said Brendon Carr, an American attorney who practices in Seoul.

"In South Korea, injury to one's reputation is the key element, not the truth," he said. "The fact that a statement is true is not an absolute defense. Satire is not a defense. That's different from the American definition. America is a free speech society, whereas Korea is not. It has historically been a 'sit down and shut up' society."

Punishment here is tougher if the statement is not true. "But you're punished in all cases for revealing things that injure someone's reputation," Carr said. "If you say, 'Look out for Jim. He's a crook. He swindled me,' that's a crime in South Korea. And people use it. Defamation may be the No. 1 criminal complaint here."

In the U.S., a person can be held liable for defamation against a public figure or company only if the statements are false and uttered maliciously.

"Breen's background is as a columnist writing for an English-speaking audience with liberal attitudes toward permissible speech," Carr said. "Where he ran into trouble is when he tweaked a Korean organization that decided to use the legal tools they would use against any Korean."

In recent years, the local news media have published several reports of people alleging that Samsung offered them money.

In 2008, Sisa In magazine reported that a former lawmaker told it that she received an unusual campaign contribution from Samsung: a golf bag containing thousands of dollars in cash. She returned it.
http://www.latimes.com/news/nationwo...,5749941.story





Argentinian Politician's Proposal For New Anti-Plagiarism Law Plagiarizes Wikipedia
from the where's-the-anti-irony-law dept

Britxardo alerts us to an amazingly ironic story coming out of Argentina. It seems that an elected politician there, Gerónimo Vargas Aignasse, has introduced some new legislation against plagiarism (Google translation of the original). It seems odd enough that he would be outlawing plagiarism (here in the US plagiarism is socially shunned, and could cost you your job, but isn't against the law unless it also reaches the point of copyright infringement, which is different), and it's made even worse by the fact that it looks like he's confusing plagiarism with copyright infringement -- noting in the explanation of the bill that "plagiarism" is harming the recording industry.

But that's not the ironic part.

As unbelievable as it may seem, it appears that the text Vargas Aignasse used to explain the bill was plagiarized straight from Wikipedia (Google translation of the original). Seriously. And not just a little bit. The first three paragraphs of the Spanish Wikipedia page on plagiarism are identical to three paragraphs in the explanation of the bill.

Just to make sure someone didn't do the opposite and take the text of the introduction and make it the Wikipedia page, I looked, and as I'm typing this, the Wikipedia page hasn't been updated since April -- and it looks like the bulk of that page has actually been in place for quite some time. The bill was introduced on May 6th.

It's difficult to think of anything more ironic than introducing a bill that calls for "imprisonment from three to eight years" for plagiarism... that plagiarizes the explanation for that bill. It's out and out plagiarism too. The three paragraphs look to be copied completely, and no effort is made to identify the source. It's also a bit weird that the text from Wikipedia -- which is basically just a definition of plagiarism -- is being used as the explanation of the bill. Nowhere does it describe why it's a problem or why it requires stringent jailtime. But, perhaps that's something Vargas Aignasse can ponder while serving three to eight years in prison for violating the law he just introduced... with the law he just introduced.
http://www.techdirt.com/articles/201...33339425.shtml





Wayward 'Zombiesat' Poses Risk to Other Satellites
Dan Goodin

An out-of-control Intelsat satellite that stopped communicating with ground crews last month poses a threat to other satellites as it wanders about 36,000km above the earth.

Dubbed Galaxy 15, the satellite stopped responding to ground controllers on April 5, according to Space.com. Since then, engineers have sent more than 150,000 commands to the roving craft in an attempt to regain control of it.

Its most recently reported orbital spot was 133 degrees west longitude 36,000km over the equator.

The first satellite that's likely to face signal interference is the AMC-11, which is owned by SES. Galaxy 15 will enter the AMC-11's neighborhood on May 23 and will exit it around June 7. May 31 to June 1 will be the riskiest time for AMC-11 customers as its parent, SES World Skies, tries to position it as far as possible from the wayward Galaxy 15 while still allowing it to operate as normally as possible.

SES and Intelsat have been meeting since shortly after Galaxy 15 lost contact in an attempt to minimize interference.

Galaxy 15 could interfere with other satellites as well. The Galaxy 13 and Galaxy 14 could encounter problems in mid July.

Galaxy 15 is just one of many "zombiesats" that wander the geostationary arc after becoming unresponsive. Many eventually drift to one of two libration points located at 105 degrees west and 75 degrees east. More than 160 satellites are gathered at these points, which are the orbital equivalents of rain gutters.
http://www.theregister.co.uk/2010/05...ard_satellite/

















Until next week,

- js.



















Current Week In Review





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Jack Spratts' Week In Review is published every Friday. Submit letters, articles, press releases, comments, questions etc. in plain text English to jackspratts (at) lycos (dot) com. Submission deadlines are Thursdays @ 1400 UTC. Please include contact info. The right to publish all remarks is reserved.


"The First Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public." - Hugo Black

[theknife]

"Hurt Locker" Lawsuit Target Pirates
Eriq Gardner

The war against movie piracy is getting downright explosive.

The producers of "The Hurt Locker" are preparing a massive lawsuit against tens of thousands of people who pirated the Oscar-winning drama online. The case could be filed as soon as Wednesday.

Voltage Pictures, the film's financier, has signed up with the U.S. Copyright Group, a Washington D.C.-based venture that has begun a litigation campaign targeting users of the BitTorrent peer-to-peer (P2P) service.

"The Hurt Locker" first leaked onto the web more than five months before its U.S. release last June, and was a hot item in P2P circles after it won six Oscars in March, including best picture and director. Despite the accolades, the film grossed only about $16 million in the U.S.

The U.S. Copyright Group has already filed lawsuits over about 10 other films, including German filmmaker Uwe Boll's "Far Cry," "Call of the Wild 3D" and "Uncross the Stars." Reports of those suits raised alarms in some circles, whereas others joked that the movie industry was merely suing those with poor taste.

"You can guess that relative to the films we've pursued already, the order of magnitude is much higher" with "Hurt Locker," said Thomas Dunlap, a lawyer at the firm.

If the addition of "Locker" to this litigation campaign could shake things up, so too could news about cooperation by Internet Service Providers (ISP) in this escalating fight. After filing the lawsuits, the plaintiffs must subpoena ISP records in an effort to match IP addresses with illicit behavior on BitTorrent.

According to lawyers at Dunlap's firm, 75% of ISPs have cooperated fully. Those that have resisted are mostly doing so, they say, because of the amount of work involved in handing over thousands of names. But the clock may be ticking. For example, in the lawsuit over "Far Cry," Comcast has until next Wednesday to file motions to quash subpoenas. By the end of next week, thousands of Comcast subscribers could be turned over.

Of the some 50,000 individuals who have been sued thus far, only three have tried to quash the subpoena. In one instance, a Georgia man tried to invoke the state's shield law protecting journalists from having to disclose their sources. The judge denied the motion. In another instance, a woman successfully got a court to throw out the subpoena because her IP address wasn't listed in the original complaint. Unfortunately for her, the complaint was then amended.

After unmasking individuals who have illegally downloaded films, the U.S. Copyright Group then sends a modest settlement offer. Lawyers at the firm are seeing some returns on the first two lawsuits filed back in January. About 40% have settled, according to the U.S. Copyright Group. Those who haven't settled will be sent another round of settlement offers, and the group promises to eventually serve lawsuits on these individuals.

Since news first broke about the litigation campaign, Dunlap says he's been besieged by e-mails from 20 to 30 independent film groups that have expressed frustration about rampant piracy and interest in joining up. The firm plans to send people to the Cannes Film Festival, where they've already arranged meetings with a number of other film producers to discuss further lawsuits.
http://www.reuters.com/article/idUSTRE64B0AU20100512

the pressure is mounting, no? i keep wondering when they are going to come after Usenet...

my Usenet is an SSL connection, but i have no idea how safe that is. i've been thinking about IPredator, TPB's vpn service, for that little extra bit of peace of mind...

[JackSpratts]

Originally Posted by theknife

the pressure is mounting, no? i keep wondering when they are going to come after Usenet...

nice little racket. for the price of a coffee they get a couple of grand.

and to think i was one of the few who paid to see the hurt locker in a theater. had i known my hard earned cash would go to persecute my fellow file sharers i would've skipped that nerve racking eyesore entirely.

- js.

[theknife]

RIP Newzbin

[theknife]

Originally Posted by theknife

RIP Newzbin

like a phoenix rising from the ashes...you just gotta love these people