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Old 13-04-06, 12:10 PM   #1
JackSpratts's Avatar
Join Date: May 2001
Location: New England
Posts: 9,750
Default Peer-To-Peer News - The Week In Review - April 15th, ’06

"I was the longest holdout for the crank being on the laptop. I was wrong. If you're a 10-year-old, maybe you can get your four-year-old to pedal for you." – Nicholas Negroponte

"This case is not about me, it's not about Apple, and it's not about the technology industry. It's about the First Amendment." – Jason D. O'Grady

"(The) fact that trade secrets can be assigned or transferred does not mean that they constitute intellectual property." – European Commission

"save the crank!" – jack spratts

save the crank!

to: nicholas negroponte, mit


seriously, the cool quotient is way too high to let that one go.

without it looks like just another piece of (very) cheap iron.

the crank captures the imagination and elevates the whole project.

it fires desire. it's 3/4 of the wow factor!

i'm writing this on a thinkpad, but i'd swap it for the crank!

save the crank! :)


jack spratts

April 15th, ’06

Fifteen Arrested In Operation Against Illegal Fire Sharing On The Internet

Fifteen people have been arrested in a large scale National Police operation against the sharing of P2P archives over the Internet.

The case is unheard of in Europe but sees 15 arrests after people used the Emule, Bittorent, Edonkey and Asureus file share programs.

They had established domains such as www.emule24horas.com and www.pctorrente.com and are thought to have generated an income of more than 900,000 € by the illegal sharing of films and programs. 17 web pages have now been blocked.

The arrests have been criticised by the Spanish Internet Users Assocaition, who described the case as ‘hardly serious’, while the Spanish copyright organisation SGAE have described the arrests as good news.

The Hole

British 'Hacker' Fears Guantanamo

A British man accused of being behind the largest ever hack of US government computer networks could end up at Guantanamo Bay, his lawyer has claimed.

Gary McKinnon, from London, denies causing $700,000 (£400,000) damage to military and Nasa systems in 2001-2.

Bow Street Magistrates' Court was told the 40-year-old feared a prosecution might take place under US anti-terror laws if it agreed to his extradition.

The US said Mr McKinnon had assurances he would be tried in a federal court.

But defence lawyers said his human rights could be breached if he was sent to the US.

Mr McKinnon was remanded on bail until 10 May when District Judge Nicholas Evans will rule whether the extradition will go ahead.

'Administrative revenge'

Much of the hearing was taken up with argument over whether Mr McKinnon would be subject to Military Order Number One - a legal procedure which enables the president to specify that suspects can be detained indefinitely.

Mark Summers, representing the US government, said there was no precedent to suggest the US would breach its promises, and the court should take on "faith" the undertaking.

Defence lawyer Edmund Lawson said the US Embassy in London had provided an "unsigned and anonymous" diplomatic note and said Mr McKinnon was still "vulnerable" to such an order.

He said the US had not given a guarantee he will face a federal court trial.

"The US government wants to extract some kind of species of administrative revenge because he exposed their security systems as weak and helpless as they were," Mr Lawson added.

Mr McKinnon is accused of hacking into computers in 14 states, including at the Pentagon and naval weapon station Earle.

At an earlier hearing his lawyers suggested his actions were not malicious - he had been trying to expose lax computer security and access what he believed was withheld information about UFOs.

F.B.I. Files Link Big Film Names to a Detective
David M. Halbfinger and Allison Hope Weiner

The chairman of Paramount Pictures and a onetime Hollywood superagent had far more direct dealings than they have acknowledged publicly with the celebrity detective at the center of a rapidly expanding wiretapping scandal, according to government evidence.

Brad Grey, Paramount's chairman, told the F.B.I. that he spoke with Anthony Pellicano about two lawsuits in which Mr. Pellicano, a private detective, was working on Mr. Grey's behalf, and that he learned information about his legal opponents directly from Mr. Pellicano. A former employee of Mr. Pellicano, who was charged in February with wiretapping and conspiracy, separately told the F.B.I. that Mr. Grey had met with the detective at least five times.

Publicly, Mr. Grey has said that he was only "casually acquainted" with Mr. Pellicano, and that his lawyers were responsible for hiring and overseeing the detective.

Michael S. Ovitz, a former talent agent and Hollywood powerhouse who served as the head of the Creative Artists Agency and was once president of the Walt Disney Company, acknowledged to the F.B.I. that he paid Mr. Pellicano in April or May of 2002 to obtain information on 15 to 20 people who were saying negative things about him. They included former business associates and Bernard Weinraub, then a reporter for The New York Times who was reporting on the demise of a company Mr. Ovitz started after he left Disney, and Anita Busch, a freelance reporter who wrote with Mr. Weinraub.

A lawyer for Mr. Ovitz, Bart H. Williams, denied that Mr. Ovitz had given Mr. Pellicano a list of anyone to investigate except the people who were suing him. If Mr. Pellicano "went out and used illegal means to get information that he thought would impress Mr. Ovitz, that was not done with Mr. Ovitz's knowledge and consent," he said.

The federal investigation, set off by a threat against Ms. Busch in June 2002, has since sent shock waves through entertainment and legal circles here. Who, exactly, initiated the threat has not been established. But the government's questioning of the two Hollywood executives — who maintain they are witnesses in the case, not targets — shows authorities circling the heavyweight entertainment lawyer Bert Fields, who worked for both.

Mr. Ovitz has not publicly acknowledged directing Mr. Pellicano to investigate Mr. Weinraub or Ms. Busch. In February, Mr. Ovitz's lawyer, James Ellis, said that Mr. Pellicano's use of law enforcement databases for checks on the two reporters, which prosecutors say was illegal, "wasn't done at our direction."

Mr. Fields, the entertainment lawyer, has acknowledged being a subject of the investigation, but, like Mr. Grey and Mr. Ovitz, has said he had no knowledge of illegal activity.

Summaries of F.B.I. interviews seen by The New York Times — documents that are routinely compiled as the raw material of investigations — give no indication that Mr. Grey or Mr. Ovitz knew Mr. Pellicano had used illegal means. But they paint a picture of their hands-on dealings with the disgraced detective.

Thus far, 14 people have been charged in the case, including the entertainment lawyer Terry N. Christensen, who has pleaded not guilty, and John McTiernan, a film director who has not yet entered a plea to a charge that he lied to the F. B. I. Mr. Grey, who headed the entertainment company Brillstein-Grey until being named chairman of Paramount in January 2005, described his interaction with Mr. Pellicano in two interviews, the second of which, on Jan. 14, 2004, told a story fuller and somewhat different from the first, which occurred on July 17, 2003. Carl H. Moor, a lawyer for Mr. Grey, said Mr. Grey had been able to say more in the second interview because at that point his "lawyers allowed him, at the request of the government, to talk about privileged communications, therefore he was at liberty to provide a more fulsome description of these matters."

Mr. Grey was questioned by the authorities about two lawsuits in which Mr. Pellicano was hired: one by his former client Garry Shandling, the comedian, who accused Mr. Grey of enriching himself at Mr. Shandling's expense, and another by a writer, Bo Zenga, who said Mr. Grey cut him out of the profits from "Scary Movie."

In his first interview, Mr. Grey told F.B.I. agents and prosecutors that he met Mr. Pellicano around 1996 in the Sunset Boulevard office building where Mr. Pellicano's detective agency and Brillstein-Grey then were neighboring tenants. Mr. Grey said he knew Mr. Pellicano enough to say hello in the hallway. Mr. Grey said he could not recall if he knew of Mr. Pellicano's association with Mr. Fields before the Shandling lawsuit, which was filed in 1998.

But Mr. Shandling, in his own F.B.I. interview, said Mr. Grey had urged him to hire Mr. Fields "and a private investigator who worked with Fields by the name of Anthony Pellicano" in 1996, when Mr. Shandling was sued by a former girlfriend and employee, Linda Doucett. Mr. Grey proposed that "Fields and Pellicano would '[dig] up dirt' " on Ms. Doucett, Mr. Shandling told agents.

In his first interview, Mr. Grey, who told investigators he was unaware of Mr. Pellicano's use of any intimidation tactics, repeatedly called Mr. Pellicano a "colorful character," and once called him "warm." Regarding the Shandling lawsuit, which was filed in 1998 and settled in 1999, Mr. Grey said he could not remember why Mr. Pellicano had been hired or any specific instructions Mr. Fields had given him.

But in the second F.B.I. interview, six months later, Mr. Grey said Mr. Fields had hired Mr. Pellicano to investigate an allegation that Mr. Shandling had a drug dependency, and to determine how a draft of a libel lawsuit against Mr. Shandling had been leaked to a magazine.

In November 2003, between Mr. Grey's two interviews, Mr. Fields publicly disclosed that he was a subject of the federal investigation of Mr. Pellicano. In Mr. Grey's subsequent F.B.I. session, he expounded upon Mr. Fields's ties to Mr. Pellicano, saying "Fields and Pellicano shared a 'key relationship,' that Pellicano was frequently used by Mr. Fields, and that Mr. Pellicano was 'part of Fields's team.' "

Mr. Grey told the F.B.I. in July 2003 that he could not recall ever speaking by phone with Mr. Pellicano during the Shandling dispute. But in January 2004, Mr. Grey said Mr. Pellicano called him "from time to time to talk about the case and the Hollywood scene." Mr. Grey said Mr. Pellicano mainly told him to "stay strong and not settle" with Mr. Shandling, and that Mr. Grey conveyed Mr. Pellicano's advice to Mr. Fields, his lawyer, who told him to ignore it.

Mr. Grey — who told agents he had worked with Mr. Pellicano on a proposal for a television series about a private detective — said in the July 2003 interview that he did not recall any face-to-face meetings with Mr. Pellicano about the Shandling case. The F.B.I. summaries do not contain any mention by Mr. Grey of any substantive meetings with Mr. Pellicano over the years.

But a month after the July 2003 interview, when a former employee of Mr. Pellicano, Lilly LeMasters, who said she worked for him from 1996 until April 2001, was asked by the F.B.I. if she recognized Mr. Grey's name, she remembered him as a Pellicano client who was "very arrogant." Ms. LeMasters said she did not know the details of the case but had seen Mr. Grey in Mr. Pellicano's office twice; she also said Mr. Pellicano visited Mr. Grey's office three or four times.

Mr. Moor, the lawyer for Mr. Grey, said: "As Mr. Grey told the government, a prominent agent and director worked with Anthony Pellicano to pitch a television program to Brillstein-Grey, and it was only in connection with that effort that Mr. Pellicano and others on that project met at the offices of Brillstein-Grey. Mr. Grey has never been to Mr. Pellicano's office."

In the January 2004 interview, Mr. Grey also told the authorities he did not recall Mr. Pellicano's ever saying anything indicating that he had inside knowledge from the Shandling camp. But Mr. Grey said he did once hear Mr. Pellicano say Mr. Shandling was driving his lawyers crazy. He said one did not have to be particularly close to Mr. Shandling "and his people to make that observation."

While Mr. Grey minimized his interactions with Mr. Pellicano, Mr. Ovitz told the F.B.I. that "he had expected to be contacted given his prior relationship with Pellicano," the interviewing agents wrote.

Mr. Ovitz said he had heard of Mr. Pellicano for years "around the campus," as he called Hollywood, and that some of his clients had used the detective. Mr. Ovitz said Mr. Pellicano called him a few times a week, presumably to drum up business, but that he did not return the calls.

Mr. Ovitz said he first met Mr. Pellicano in 2001, when Artists Management Group — the vehicle Mr. Ovitz had used to attempt a comeback as a talent manager — was disintegrating. He said he hired Mr. Pellicano to help with lawsuits by a former employee and by a sports agent demanding a commission, and paid Mr. Pellicano $25,000 for each case through the firm handling the lawsuits, Gorry Meyer & Rudd.

Mr. Ovitz said that at Mr. Pellicano's direction, Mr. Ovitz used the code name Gaspar when calling Mr. Pellicano's office. Mr. Ovitz told the F.B.I. he was ignorant of Mr. Pellicano's methods and unaware of any wiretapping, but he said he was impressed by Mr. Pellicano's "initiative and resourcefulness."

Mr. Ovitz said he believed that Mr. Pellicano was also investigating him, to drum up business; he complained of telephone problems and provided the F.B.I. agents his phone numbers.

In April or May 2002, as he was negotiating and completing the sale of Artists Management, Mr. Ovitz learned that a "group of people" were "coming after" him to attack his reputation, he told the F.B.I., and he hired Mr. Pellicano to investigate. He said he asked Mr. Pellicano for embarrassing information about 15 to 20 people who were affecting his plans to sell the business, including Ron Meyer, his former partner at C.A.A. and the current head of Universal Studios; Mr. Weinraub; and the entertainment titan David Geffen, a partner in DreamWorks. Asked if Ms. Busch was on the list, Mr. Ovitz said she was. In May 2002, Mr. Ovitz said, Mr. Pellicano obtained for him an unedited, advance copy of a Vanity Fair article to be published that August in which Mr. Ovitz attributed his problems to a "gay mafia" in Hollywood. The agents noted that Mr. Ovitz "claimed to have never read" the article.

Mr. Ovitz told the F.B.I. that he met three or four times with Mr. Pellicano and spoke "multiple" times with him in June and July of 2002. Mr. Ovitz said he received an oral report about Mr. Weinraub, Ms. Busch and Mr. Geffen, but all Mr. Ovitz said about the report was that Mr. Pellicano called Ms. Busch "boring and not worth [Ovitz's] time." When Mr. Pellicano claimed he had worked for Mr. Geffen in the past, doing "damage control" relating to "Geffen's gay lifestyle," Mr. Ovitz told the F.B.I., he wondered what Mr. Pellicano might say about him.

Mr. Ovitz said he paid Mr. Pellicano $75,000 in cash, the last payment in late June or early July 2002.
http://www.nytimes.com/2006/04/14/bu... tner=homepage

Atom heart mother

IBM Unveiling New Encryption Chip
Brian Bergstein

In an effort to boost the level of data security on portable computers, cell phones and other gadgets, IBM Corp. is unveiling a method for injecting encryption capabilities into the heart of the machines' circuitry.

There are multiple ways to achieve encryption, the mathematical art of encoding data to protect it from spying eyes. Specialized software can do the trick, as can hard-wired chips inside computers.

But IBM researchers contend that unless the encryption function is performed by a computer's central processing unit, a supremely savvy hacker can tap into the pathway between the machine's brain and the separate encryption engine.

To guard against that, IBM is announcing Monday that it has developed "SecureBlue" - a set of encryption circuitry that can be integrated into any processor, regardless of its manufacturer.

"This thing is trying to be one of the most paranoid devices on the planet," said Charles Palmer, IBM's head security researcher.

IBM is not the first to seek to integrate encryption into a computer's central processing functions. Intel Corp.'s upcoming "LaGrande" technology essentially does that, though it requires interaction with a separate chip, known as a trusted platform module.

The IBM researchers say they have developed a way to skip that step.

Richard Doherty, an analyst with the Envisioneering Group, said SecureBlue's design appears flexible enough to bring strong encryption to such new settings as cell phones and music players.

That could mean enhanced security not only for users who keep sensitive data on portable devices, but also for content owners who can use encryption to lock down copyrighted material and prevent it from being freely disseminated.

However, IBM's encryption engine is not simply a module that can be plugged into existing chips. SecureBlue needs to be woven into a processor from scratch, mixed in with other transistors somewhat "like hamburger," in the description of Bernie Meyerson, chief technologist for IBM's systems group.

That means SecureBlue, at least for the time being, likely will end up only in devices made by companies that hire IBM's custom engineering unit. That group's projects include chips for medical and defense systems and video game consoles made by Microsoft Corp., Nintendo Co. and Sony Corp.

IBM researchers said SecureBlue already has made its way into one customer's devices. But they said that company had demanded anonymity.

Considering that software vendors such as PGP Corp. already offer software-based encryption for portable devices such as BlackBerrys, IBM might have to convince skeptics that SecureBlue significantly raises the bar for security.

Bruce Schneier, founder of Counterpane Internet Security Inc., said more fully integrating encryption and processing would likely improve a machine's performance. But he said it was "just stupid" to claim that hackers would otherwise target the transmission between a computer processor and a separate encryption engine.

Far more likely, he said, is for someone to try to steal data when it was unencrypted - such as when it appeared in plain text on a computer screen.

"Security is a chain and it's as strong as its weakest link," he said. "They're talking about taking a very strong link and making it a little bit stronger, at best. Maybe."
http://hosted.ap.org/dynamic/stories...LATE=DEFAUL T

Blow to BitTorrent

Disney to Offer Free Online Shows

A published report says the Disney Company plans to start making some of its most popular programming available free on the Internet.

The Wall Street Journal says shows like "Desperate Housewives" and "Lost" would be available on a revamped Web site the morning after they air. The report says shows would be archived so viewers can eventually watch an entire season of shows from outlets including ABC and Disney Channel.

New technology would be aimed at preventing viewers from fast-forwarding through commercials, in an effort to keep advertisers happy.
http://hosted.ap.org/dynamic/stories...LATE=D EFAULT

Free Net TV Threatens Telecoms And Cable
Marguerite Reardon

Walt Disney's bold move to let people download TV shows for free could spell trouble for cable and satellite providers, but it also throws into question the strategy of telephone companies spending billions to get into the paid TV business.

On Monday, Disney-owned ABC announced plans to put "Lost," "Desperate Housewives," "Alias" and "Commander-in-Chief" on the Internet for free as part of a two-month trial beginning in May. The Net-accessible episodes, which will be available the day after the shows air, will be archived so viewers can watch any shows they miss.

Viewers will access the shows on the ABC Web site where they'll be able fast-forward, pause and rewind entire episodes. Short commercials will be aired with the programs; viewers will not be able to fast-forward through them.

Disney's ABC has been at the forefront of experimenting with new ways to distribute content over the Internet. Last year, it struck a deal with Apple Computer to sell individual episodes of some of its popular shows via the iTunes Music Store for $1.99 per episode. The two other major networks, NBC and CBS, soon followed suit by offering programs of their own on iTunes.

While the iTunes deal may have been a harbinger of bigger things to come in the realm of fee-based content downloads, Disney's move to offer shows for free on the Internet could be viewed as a direct threat to the business model of cable companies, which have been the gatekeepers of television programming in America for the last few decades. The news is equally grim for phone companies, especially Verizon Communications, which is aggressively moving into the TV business.

Over the past two years, Verizon has spent billions of dollars to build a fiber network directly into people's homes that can deliver a triple-play package of services including ultra-fast broadband, phone service and TV. It has bet the farm, so to speak, that the best way to compete against the cable companies, which are now offering phone service, is to try and beat them at their own game. But building and upgrading telecom networks for video is a capital-intensive strategy fraught with risks.

Disney's plans "raise big questions for the phone companies' long-term strategy," said Joe Laszlo, an analyst with JupiterResearch. "To some extent, building a faster network is smart no matter how content delivery evolves. But if we reach a point in five to 10 years when video over the Internet becomes a bigger part of how we consume video, then the phone companies will have to find other ways to make their video services relevant."

No one is expecting Internet television to cannibalize traditional TV models overnight. Despite advancements in streaming technology, video delivered on the Web can still be choppy, with frequent interruptions as data packets buffer and reload on the screen. In fact many viewers who watched the NCAA tournament aired by CBS on the Internet last month complained about the network being overloaded.

No panic among telecoms
A Verizon spokeswoman said the company does not feel threatened by Disney's move to offer some of its shows on the Web. And executives at the National Cable and Telecommunications Association convention in Atlanta this week also said they aren't especially worried about Disney's plans.

"It's speculative to assume people will abandon one model in favor of another," said Sharon Cohen-Hagar, a spokeswoman for Verizon. "That's quite a leap into the future. Given the kind of network we are building, we believe we're well positioned to go wherever the market takes this."

Indeed, Verizon, as well as the entrenched cable operators, are already offering on-demand programming that lets viewers select movies or TV shows and watch them whenever they want. They are also offering consumers digital recording services that let them record programs and watch them at a later time.
But advancements in technology could eventually eliminate the need for consumers to subscribe to a third party such as a cable operator or a telephone company to schedule programming. Companies such as Kontiki and EdgeStream are improving the quality of streaming video on the Net. And others such as Cisco Systems and Microsoft are working on products that will let people watch video downloads from the Net on their TVs.

These advancements, coupled with the fact that broadband penetration continues to grow, makes it possible for millions of people to watch TV directly from the Internet. In 2005, roughly 55 percent of all online users had broadband, according to JupiterResearch. That figure is expected to reach 69 percent by 2010.

A step toward a la carte
If content providers are willing to distribute their shows over the Internet themselves, viewers could simply use a search engine to find what they want to view, and then watch it directly from the Internet anytime they want.

Clearly Disney's move signals that content owners are feeling more comfortable about Internet distribution. Others have also started distributing video over the Net.

Warner Bros., for example, has teamed with AOL to distribute classic sitcoms such as "Growing Pains" and "Welcome Back Kotter." In March, CBS offered free online streaming of the NCAA basketball tournament. In November, NBC started offering its Nightly News broadcast on the Web for free after the newscast airs on TV. MTV's Comedy Central also launched a site called MotherLoad in November that offers clips of existing shows and airs new shows only available on the Web site.

And just last week, a group of Hollywood studios said they will sell digital versions of films such as "Brokeback Mountain" and "King Kong" through Movielink.com and CinemaNow with certain restrictions.

While experts agree that most people will continue to subscribe to a paid TV service for a long time coming, some research indicates there is consumer appetite to watch downloaded content from the Internet.

Parks Associates predicts that roughly 60 percent of broadband users will be downloading some video a la carte from the Web in 2010. These estimates were calculated when it was assumed that people would pay $1.99 an episode to download shows from iTunes, according to Kurt Scherf, vice president and principal analyst with Parks Associates. The figure could be even higher if content is offered for free, as Disney plans to do. Today, only about 3 percent of broadband subscribers download video from the web.

Increased competition in the video market from Internet-based video services could cause network operators to look for other ways to make money, added

"Even though Disney is delivering content independently of the cable operator or the telephone company, it would be interesting to see if network providers respond by blocking content," he said.

The issue referred to as Net neutrality centers on whether carriers should be able to charge different fees to content providers who access their network. For weeks, the topic has been hotly debated in the industry as lawmakers draft legislation that addresses the issue.

"I think Disney's move could open up this debate even more," Laszlo said. "I wouldn't be surprised if we saw large media companies getting into the debate soon."

Jury Awards TiVo $73 Million in Patent Case

A federal jury awarded TiVo more than $73 million in damages on Thursday in a patent infringement lawsuit against EchoStar Communications over a recording device.

TiVo received most of the $87 million in damages it sought in a case that one lawyer called "life or death" for the company that was among the first to sell devices to pause and rewind live television.

The case in Federal District Court in Marshall was closely watched on Wall Street, with some analysts even dropping in during the two-week trial. They said a victory would help TiVo win other royalty deals involving digital video recorders.

News of the verdict sent TiVo shares soaring nearly 20 percent, or $1.60, to $9.65 in late-session electronic trading. EchoStar shares dropped 27 cents.

The judge could triple the $73.9 million award — which is subject to appeal — since the jury found that EchoStar had "willfully" infringed TiVo's patent.

In a statement, EchoStar called the verdict "the first step in a very long process" and said it considered TiVo's patent overly broad.

The general counsel for TiVo, Matthew Zinn, said the verdict gave the company more leverage to negotiate royalty deals with cable companies that, like Dish, use digital video recorders that function much like a TiVo.

The rivals have taken sales away from TiVo by offering boxes and service at lower prices. Mr. Zinn would not rule out suing cable companies that use other boxes, but he called it a last resort.

James M. Barton, a TiVo co-founder, said, "We're just trying to build products that people use and enjoy, and this gives us more runway to do that."

The 10-member jury deliberated just over two hours after hearing two weeks of highly technical testimony from engineering experts.

The panel agreed with TiVo's nine claims that EchoStar had used its technology without license for its own D.V.R.'s.

"It wasn't unanimous to start with, but we were very close," a jury forewoman, Cathy Lindsey, a school secretary, said.

An electrical engineer paid by TiVo said the EchoStar boxes relied on technology covered by TiVo patent, but two experts hired by EchoStar said the designs were different.

"We just looked at the evidence and tried to maintain the big picture," said a juror, Brenda Dotson, a third-grade teacher.

TiVo claimed EchoStar violated its patent for a "multimedia time warping system" to pause, rewind or fast-forward live TV programs by recording them. EchoStar's original box "didn't work. It was a disaster," a TiVo lawyer Sam Baxter said in closing arguments.

In closing arguments, a lawyer for EchoStar, Harold McElhinny, said TiVo was using EchoStar as a scapegoat for its failure to compete against other makers of set-top boxes. He said TiVo's box was overpriced at a time when Dish and cable companies were giving away recorders to new subscribers.

The $87 million request was based on a financial consultant's estimate of how much TiVo would have earned if EchoStar had not sold more than 4 million of its own recorders using TiVo technology.

The jury awarded $73.99 million instead of $87 million because it was not convinced TiVo had done everything it could to promote its patent, which was approved in 2001, the forewoman said. As a result, jurors based damages starting in January 2004, when TiVo filed the lawsuit.

Read It? Watched It? Swap It
Michel Marriott

For Heather Perlmutter, a 41-year-old investment portfolio manager in Manhattan, the Web site with the whimsical name made perfect sense. Like many Americans, she found herself awash in CD's, DVD's and VHS tapes that were seldom if ever played anymore. They just took up valuable space in the Upper West Side apartment where she lives with her husband and two young children.

Then a friend of a friend told her about Zunafish (www.zunafish.com), a new Web site that matches people with discs and tapes to trade — and video games and paperback books, too.

To the delight of her 7-year-old son, Ms. Perlmutter recently used the site to barter her tape of "Fried Green Tomatoes," the 1991 Kathy Bates drama in which an unhappy housewife befriends an elderly woman in a nursing home, for a tape of Steven Spielberg's digital dinosaur blockbuster, "Jurassic Park."

"You feel like you're getting something special, that you're getting the better part of the deal," Ms. Perlmutter said. "Wow, somebody wants your stuff. I guess it's one man's trash is another man's treasure."

That was certainly the thinking of Dan Elias and Billy Bloom, the unlikely founders of Zunafish.

In a highly competitive era, independent tinkerers who are convinced they have a big idea can face big problems getting the idea to market. Even video games, once famous for whisking their creators from makeshift workshops to fast fortunes and expensive cars, are mostly made today by corporate teams of designers and programmers in sprawling office parks.

But Mr. Elias, a television news anchor in western Massachusetts, and Mr. Bloom, the owner of a volleyball league in New York City, both self-described amateurs at creating a digital service and company, spawned Zunafish, a singularly simple-to-use media trading site.

"We have no background in technology," said Mr. Elias, a 45-year-old native New Yorker who now lives in Northampton, Mass. "I think we always thought from the start that it was a big idea. There are hundreds of billions of dollars of idle media materials sitting in people's homes."

Mr. Bloom, 47, said of the company's humble origins, "If we lived in the country, it would have literally been created in one of our garages."

The site, which looks remarkably similar to a prototype Mr. Bloom sketched on notebook paper four years ago with Mr. Elias, trades only one-for-one items within the same category — CD's, DVD's, VHS tapes, video games, audio books or paperback books. No item (for example, a seven-disc DVD set of the first season of the television series "24") is worth more than any another (say, a DVD of Peter Jackson's "King Kong").

Traders using the site determine the relative value of an item by choosing to swap or not. No one is ever forced to make a trade, Mr. Elias noted.

Each trader pays Zunafish $1 through credit or debit card for each trade. The site then calculates the postage costs and creates addressed mailing labels that can be downloaded and printed out. Each trader, Mr. Bloom said, is responsible for paying the postage and mailing the item promptly.

Like buyers and sellers on eBay, the traders on Zunafish rate each other, providing a confidence index for future transactions.

"We take extremely limited involvement in the transaction," Mr. Elias said. "It is mediated by a user-rating system. Not by us."

Zunafish started on Jan. 1, with no fanfare or publicity. Mr. Bloom and Mr. Elias said that the circle of traders had been limited so far — they did not disclose figures — but that they felt strongly that throngs of prospective users would discover the site.

"It is only as strong as the community that comes to it," Mr. Elias said of Zunafish. "It takes a few minutes to sit down and post all of your stuff. But once you do, you've made an investment that pays off week by week as people come to inquire about things that you own."

Unlocking new value in practically discarded household items is a growing phenomenon. Michael J. Silverstein, a senior vice president of the Boston Consulting Group and co-author of "Treasure Hunt: Inside the Mind of the New Consumer" (Portfolio Hardcover, 2006), says middle-class consumers are becoming more comfortable economizing in some areas so they have more capital to buy premium items in other areas.

He said that if consumers were asked to place all of their CD's and DVD's, for example, in three piles — those they love, those they like well enough to keep and those they would be happy to have taken away — the piles would most likely be equal.

Any system that helps people easily trade away what they do not want for what they do want is "a beautiful synchronicity," Mr. Silverstein said in an interview.

Further, he notes in his book that online companies like eBay owe much of their success to their enormous appeal to the "consumer value calculus."

Mr. Elias said Zunafish played to the same calculus. That is hardly an accident. "We often found ourselves asking, 'How does eBay do it?' given the breadth of its success."

One notable feature is how easy it is to post items on Zunafish to be traded.

Mr. Bloom said Zunafish used a database that was updated weekly. Type in the name of an item or its universal product code (usually found near an item's bar code) — or the I.S.B.N. number for books — and the database pulls up a full description of the item and a digital photograph of its cover. If the match is correct, the user clicks O.K. and the item is posted.

There are other online trading sites, including Peerflix and BarterBee, which started last summer, that offer trading in similar categories. But other sites tend to offer a more limited range of items, or they use more complicated systems, requiring points and memberships to execute trades.

Todd Chanko, an analyst with Jupiter- Research, said he saw limits to the appeal of online trading.

"There's a lot of ways to do this in the real world," he said. "There are flea markets, thrift shops and street corners where people just dump things." As a result, "the real value proposition here is for those who don't have those opportunities, who live in areas far too remote."

And for many of those consumers, he said, Internet access and use tends to be relatively low.

But Zunafish investors, mostly the friends and relatives of Mr. Elias and Mr. Bloom, disagreed. In a matter of weeks, they had investments from 19 of the 21 people they approached. Ultimately they raised $485,000 in capital in two rounds and valued the company at $3.5 million. But the journey from idea to start date took almost four years, including the services of a corporate lawyer, a patent lawyer and a trademark lawyer. Just debugging the Web site itself seemed never-ending, the men said.

So far, they are keeping their day jobs. "None of us has thought about leaving our positions at all," Mr. Bloom said. "In the distant future that this should generate sufficient income to support itself and support us. ..."

He never finished the sentence. But Mr. Bloom pondered the question for a few moments, then borrowed from a "Star Wars" movie to sound a philosophical note. "Always in motion," he said in his best impression of the Jedi sage, Yoda, "is the future."

Startup Called Webaroo Touts 'Web On A Hard Drive'
Paul McNamara

Search the Web from your laptop or handheld -- without an Internet connection of any kind?

This seeming impossibility is what a Bellevue, Wash.-based startup called Webaroo has set out to realize -- they call it "search unplugged" -- and even company president Brad Husick concedes that he found the idea "crazy" at first blush.

Of course, it wasn't that long ago that a laptop with an 80-gigabyte hard drive seemed crazy, too. But ever-more-monstrous drives are common today and they serve as the foundation upon which Webaroo is basing its free, ad-supported search service. The company and service officially emerge from behind their stealth shield tomorrow armed with a flashy bundling agreement from laptop maker Acer. (The site is supposed to go live tonight at 10 p.m. Pacific Time, so you cannot download the software until then.)

"It's not inconceivable that a couple of years from now laptops are going to have 400- or 500-gigabyte drives in them," says Husick, who co-founded Webaroo in 2004 with CEO Rakesh Mathur and CTO Beerud Sheth. "What if you could take that space and it would be enough to carry the Internet with you? If you think about searching the Web without being tied to a connection of some kind -- and then periodically connecting to get refreshed -- that was the kernel of our idea. How do you put the Web on a hard drive? … That's why it was so crazy."

The first thing to acknowledge is that the phrase "put the Web on a hard drive" is not to be taken literally. As Husick explains: “Let's say the HTML Web is 10 billion pages -- it's actually a little less than that -- but at 10K per page that's 1 million gigabytes, also known as a petabyte. It's going to be a long time before notebooks have million-gigabyte hard drives. So how do you get a million gigabytes down to what you need?”

Webaroo does it, he says, through "a server farm that is of Web scale" and a set of proprietary search algorithms that whittle the million gigabytes down to more manageable chunks that will fit on a hard drive: up to 256 megabytes for a growing menu of "Web packs" on specific topics -- your favorite Web sites, city guides, news summaries, Wikipedia and the like -- that make up the service's initial offerings; and something in the neighborhood of 40 gigabytes for the full-Web version the company intends to release later this year.

"We've developed these algorithms that give you a set of meaningful, relevant results for anything on which you search," Husick says. "In effect, we give you the first couple pages of results."

That's all you really need, the company argues, because studies show that most people rarely look beyond the first 10 to 20 results returned by a typical search. With Webaroo you're being returned not just a list of pages, but the pages themselves -- with all graphics intact -- as well as key live links from those pages and the pages to which they lead. They're talking roughly 10,000 pages per "Web pack," or plenty to provide a meaningful search experience for whatever the subject matter at hand, Husick says.

Users must download and install 5 megabytes worth of Webaroo software to get started and then synch up with the Webaroo service site to refresh the content in their topic-specific packs, or, later this year, the full-Web version. Husick insists these pack updates take only minutes, but I’m already seeing corporate network managers wincing at the notion of this application sweeping the workplace.

All in all, though, there's no denying the "wow" factor here.

"It's kind of surprising that nobody else has done something like this," says Rob Enderle, president of the Enderle Analyst Group. "It's one of those things that a lot of folks will download."

Enderle believes the service could be a big hit among those whose jobs regularly take them away from their 'Net connections -- frequent fliers, for example.

"It's going to be a while before hot spots are in all the places we need to have them," he says.

Which isn't to say that ever more ubiquitous 'Net connections won't pose a challenge to the Webaroo business model.

"Long-term their opportunity may have more to do with [search] performance" than the offline capability itself, Enderle says.

Husick tells me that performance benefit was reinforced for the company by a rousing reception their service received from Japanese mobile operators who he says were salivating over Webaroo as a means to siphon search traffic away from their increasingly crowded wireless broadband networks.

Webaroo will also be touting the potential cost savings and convenience of its service.

"Every hotel I go to wants to charge me $10 to $15 a night for Internet. Every airport wants to charge me another $10 to get connected," Husick says. "If I've got five minutes before I have to board my flight, do I want to spend that five minutes connecting or do I want to spend five minutes getting my search answer?"

There's a fine line between crazy and audacious -- we'll know soon enough which side Webaroo falls on.

Do you hear what I hear?

Ad Measurement Is Going High Tech

Explosion of media offerings complicates finding whether message is getting through
Don Clark

Media companies have long searched, with mixed results, for proof that advertising works. Some high-tech help may be on the way.

A number of established audience-measurement companies and industry newcomers are developing tools to better gauge the connection between media exposure and consumer behavior. The audience-measurement job is more complicated these days because of an explosion of media offerings in and outside the home.

A dark horse in the race is Integrated Media Measurement Inc., a start-up led by some prominent technology entrepreneurs that is using specially adapted cellphones to measure what consumers listen to and see. The company has developed software that helps the phones take samples of nearby sounds, which are identified by comparing them against a database.

Besides television and radio, IMMI, as the San Mateo, Calif., company calls itself, says the technology can track exposure to CDs, DVDs, videogames, sporting events, audio and video on portable gadgets and movies in theaters. The closely held company has been testing its system for nine months with about 200 consumers in Sacramento, Calif., and hopes to help answer some tricky questions. They include:

• How often are TV shows watched outside the home?

• Which songs prompt listeners to change radio stations?

• Which movie trailers get viewers to go to the theater?

"For the first time, you may be able to get an answer to one of the holy-grail questions -- is my promo working?" says Alan Wurtzel, president of research for General Electric Co.'s NBC Universal unit, who has been briefed on the IMMI system. "It's a very interesting methodology."

The field has plenty of competition. Another entrant is Media Audit, a unit of Houston's International Demographics Inc., which has collaborated with Paris-based Ipsos SA on a cellphone-based measurement system being tested by such companies as radio-station owner Clear Channel Communications Inc.

Some companies argue that cellphones could lead to distorted research. Survey participants, for example, could change how often they carry or converse on phones or download content to them.

Arbitron Inc. instead proposes a special-purpose gadget called the portable People Meter, which it has been testing in Houston. GfK AG's Mediamark Research Inc. also is developing a pager-size media-measurement device.

Radio and TV exposure has long been measured, respectively, by Arbitron and VNU NV's Nielsen Media Research. Methods include pen-and-paper usage logs filled out by selected panels of consumers, as well as devices that passively measure media usage in the home.

But consumers' media exposure has taken on many new forms, including delayed TV broadcasts with digital video recorders, Internet video, videogames and songs or movies that are downloaded to Apple Computer Inc.'s iPod or other portable devices. The new measuring services aim to better follow consumers as they move among the media types.

IMMI Chief Executive Tom Zito previously led videogame company Digital Pictures and Garageband.com, a Web music start-up. A partner at both ventures was Amanda Welsh, now an IMMI senior vice president. Al Alcorn, IMMI's chief technology officer, co-founded videogame pioneer Atari Corp.

The entrepreneurs, backed by $14 million in venture capital, plan to give survey participants cellphones that can take reliable sound samples, Mr. Zito said. Those snippets -- taken every 30 seconds and altered mathematically so any conversation is made unintelligible -- are transmitted continuously to IMMI. Sounds from headphone devices such as iPods can be transmitted to the cellphones with a wireless accessory. IMMI has been building a database of sound signatures, with help from customers testing the company's services as well as with CD content it has licensed.

Arbitron and some other companies prefer an approach that uses inaudible identifying code, sometimes called a watermark, that can be inserted into broadcast programming. Arbitron spokesman Thom Mocarsky argues that matching audio samples doesn't work, say, if two radio stations are airing the same syndicated program.

But encoding a watermark also has downsides, Mr. Zito says, including requiring time and effort on the part of content providers -- and embedding such identifiers isn't possible on DVDs and CDs that have already been sold.

Dave Harkness, a senior vice president of strategy and business development at Nielsen, said both watermarks and sampling may be needed to provide the most complete exposure ratings. But sampling alone may still provide valuable information to advertisers and media companies, he said.

IMMI's Mr. Zito says there is evidence that sampling provides useful clues about ad effectiveness. Some respondents in the Sacramento test who were exposed to a particular trailer for the movie "King Kong" went to see the film more than twice as often as those who saw an alternate trailer for the movie, IMMI's data show.

With conventional media ratings, "we don't have the opportunity to take a look at cause and effect," said Artie Bulgrin, senior vice president of research and sales development at ESPN, which has been evaluating IMMI's service. "What we see so far is very interesting and very compelling."

EFF: AT&T Forwards All Internet Traffic Into NSA

The Electronic Frontier Foundation (EFF) on Wednesday filed the legal briefs and evidence supporting its motion for a preliminary injunction in its class-action lawsuit against AT&T.

After asking EFF to hold back the documents so that it could review them, the Department of Justice consented to EFF's filing them under seal -- a well-established procedure that prohibits public access and permits only the judge and the litigants to see the evidence.

While not a party to the case, the government was concerned that even this procedure would not provide sufficient security and has represented to the Court that it is "presently considering whether and, if so, how it will participate in this case."

"The evidence that we are filing supports our claim that AT&T is diverting Internet traffic into the hands of the NSA wholesale, in violation of federal wiretapping laws and the Fourth Amendment," said EFF Staff Attorney Kevin Bankston.

"More than just threatening individuals' privacy, AT&T's apparent choice to give the government secret, direct access to millions of ordinary Americans' Internet communications is a threat to the Constitution itself. We are asking the Court to put a stop to it now," said Bankston.

EFF's evidence regarding AT&T's dragnet surveillance of its networks includes a declaration by Mark Klein, a retired AT&T telecommunications technician, and several internal AT&T documents. This evidence was bolstered and explained by the expert opinion of J. Scott Marcus, who served as Senior Technical Advisor for Internet Technology to the Federal Communications Commission from July 2001 until July 2005.

The internal AT&T documents and portions of the supporting declarations have been submitted to the Court under a tentative seal, a procedure that allows AT&T five court days to explain to the Court why the information should be kept from the public.

"The public deserves to know about AT&T's illegal program," said EFF Legal Director Cindy Cohn. "In an abundance of caution, we are providing AT&T with an opportunity to explain itself before this material goes on the public docket, but we believe that justice will ultimately require full disclosure."

The NSA program came to light in December, when the New York Times reported that the President had authorized the agency to intercept telephone and Internet communications inside the United States without the authorization of any court.

"Mark Klein is a true American hero," said EFF Staff Attorney Kurt Opsahl. "He has bravely come forward with information critical for proving AT&T's involvement with the government's invasive surveillance program."

In the lawsuit, EFF is representing the class of all AT&T residential customers nationwide. Working with EFF in the lawsuit are the law firms Traber & Voorhees, Lerach Coughlin Stoia Geller Rudman & Robbins LLP and the Law Office of Richard R. Wiebe.
http://www.spamdailynews.com/publish...says_EFF. asp

High-def TV Not Ready For Net's Prime Time
Greg Sandoval

Fans of video upload sites shouldn't expect to enjoy clips of amateur singers, bikini-clad dancing girls or mouse-eating centipedes streamed in high definition anytime soon.

While Hollywood and the consumer electronics industry are gambling on new high-definition video formats and televisions, there may not be enough room in the Net's pipes or in the servers offering video streams to make HD videos, which can require twice as much broadband capacity as traditional videos, a regular part of the Internet viewing experience.

While that's hardly the end of the world for a site like YouTube.com, which is more concerned with streaming user-created content than anything coming out of Hollywood, it does present a dilemma for an organization like Major League Baseball's MLB.com , which already has more than 800,000 subscribers regularly watching games over the Net.

For now, the Internet-viewing public will have to be satisfied with watching live sporting and news events, or homemade movies presented on streaming sites like YouTube in formats offering slightly grainy images and sometimes-jerky motion. In fact, every industry expert interviewed for this story said that the way things stand now there just isn't enough bandwidth going into the home to stream the more expansive HD video.

"HD files tend to be too large to easily stream or download over typical American broadband connections," said Joe Laszlo, senior broadband analyst for Jupiter Research. "Our 1.5 megabyte connections are great for music, OK for lower-quality video but fairly unacceptable for HD video...I don't think we'll see a lot of HD content."

The typical Internet connection is 2 to 3 megabits per second, says Laszlo. The minimum needed to stream HD-quality video is 5mbps. Laszlo added that even if bandwidth were to be increased, computers with lower graphics processing power may be unable to display the richer details that HD provides.

That could mean a missed opportunity. In a report released Wednesday, the research firm IDC predicted Web video will generate $1.7 billion in annual sales by 2010, a 750 percent jump from sales this year. "Internet video services are on the brink of becoming a mainstream phenomenon in the United States," IDC said in the report.

Clogged pipes
The HD streaming problem is simple to understand. Imagine a pipe with liquid running through it. There is only so much room inside the pipe. In the case of broadband, the liquid is bits of information. The more video streaming over the Net, the more that pipe gets filled up--particularly as the pipe narrows on the final leg into the home.

In part, the "clogged pipe" issue is used by big telecommunications companies as they argue for some sort of tiered structure that would allow them to better control traffic on their networks. Internet companies, on the other hand, argue that so-called Net neutrality laws are needed to ensure that all Internet traffic is treated equally.

"There's no denying it," says Michel Billard, president of Itiva, which is working on improving broadband efficiency. "As more video-on-demand companies continue to gobble up bandwidth, there isn't going to be enough to go around."

Few companies are more interested in improving Net video quality than Major League Baseball. The league has been a trendsetter in distributing live events over the Net. Critics showered praise on MLB's technicians for handling the live feeds of this year's NCAA basketball tournament games to more than 268,000 viewers.

Justin Shaffer, MLB.com's chief architect, is more optimistic than many insiders regarding when the Net may be ready for HD.

"Things are really starting to come around," Shaffer said. "Clearly there needs to be upgrades in bandwidth, but there's definitely reason to be encouraged."

He said several companies are working on technology that would allow computers in close proximity to each other to share data. Instead of streaming the same images to multiple people, such technology would send the information once to a hub computer and then use that to distribute it to others.

HD doesn't present as much of a problem to sites such as do CinemaNow and Movielink, which recently unveiled plans to offer downloadable movie services. Apple Computer and Amazon.com are also exploring the possibility of distributing films over the Net, according to a report this month in the New York Times.

Akimbo Systems, which distributes video content over the Web, downloads material that doesn't have to be watched live. Users who leave their computer running can get feeds from Akimbo regardless of any traffic jams on the Web. Once the film or TV content is finished downloading, the viewing will be excellent because the information is already on the user's hard drive.

"You have to get away from the streaming model to distribute high definition," said Josh Goldman, CEO of Akimbo Systems. "It's best to do it as a download."

But even with downloads, there's a big size difference. The movie "Walk the Line," available on Apple's QuickTime site, for example, has a standard and high-definition offering. The file size for standard definition is 36 megabytes and the high definition is 93 megabytes. The HD version packs more than twice the amount of information than the standard.

Will lower quality stymie the nascent Internet video market?

"If HD were to hit, it wouldn't really affect YouTube," said Julie Supan, the company's spokeswoman. "Our service focuses on short format, fast delivery and lower-quality video content uploaded from devices. Our service is more about the entertainment quality of video content versus the 'resolution' of the content."

Josh Martin, an IDC analyst, echoed Supan's comments. He said sites like iFilm, Atom Entertainment and YouTube draw audiences because of the unique entertainment they offer. Martin uses as an example a clip that has crisscrossed the Internet recently of an autistic high-school basketball player who became a national star by hitting six three-point shots in a game.

"Is that story less compelling because it's not high definition?" Martin said. "I don't think so."

Every Click You Make, They'll Be Watching You
Bob Tedeschi

WOULD you trust a company enough to let it follow your every click online?

Claria, a company once vilified for raining pop-up advertisements across the Internet through its Gator software, is betting its business that the answer is yes. Claria said it would announce Monday the release of PersonalWeb, a service that will let people download a piece of tracking software and receive a home page filled with news stories and other information tailored to their interests.

If a man, for example, downloaded the software and surfed through stories about the N.C.A.A. basketball tournament and car reviews, his PersonalWeb home page would reflect those interests the next time he clicked to it. In addition to showing newer headlines about cars and college basketball, the page might also feature ads from car companies or for jerseys from the man's favorite team.

Claria says that because those ads are so closely aligned to the user's interests and recent behavior, marketers will be willing to pay more than they might on other sites for the ability to reach PersonalWeb users.

That part of Claria's plan is convincing enough for some analysts, and privacy advocates appear satisfied that Claria will stand by its pledge to track only the computer (whose owner it does not identify), not the personal information of the user. Whether many consumers will use the service anyway — and give marketers an audience worth pursuing — is the big question.

"I'm not convinced that consumers will place enough of a value on personalization that they'll be willing to download a piece of software and change their home page just to try it," said Kenneth Cassar, an analyst with Nielsen/NetRatings, an Internet consultancy. "And it remains to be seen whether Claria's personalization will yield something that much better than the typical home page of today."

Mr. Cassar said that very few people even changed the default home page that came installed with their browser, and relatively few people created personalized home pages on services like Yahoo, MSN and Google. According to ComScore MediaMetrix, another online consulting firm, 14 percent of Yahoo's 27 million visitors in February had a customized home page, and Yahoo's service was by far the most popular of its kind.

The chief executive of Claria, Scott VanDeVelde, argues that because PersonalWeb requires little work and delivers more relevant information than, say, MyYahoo, it should enjoy an advantage over competing services. "The ideal home page is one that always changes with your interests," Mr. VanDeVelde said. "And over time, this gets even smarter about serving you content you're interested in."

PersonalWeb's technology gathers information about all the users on the service, then ranks the pages they read according to how many other people visit those pages and how long they stay, among other things; people can suspend the tracking. Then, when someone surfs or searches for a specific category of information, Claria will identify relevant pages that the user didn't find, and post them on a PersonalWeb home page.

People can seed their home pages by choosing from a list of topics much the same way they might choose from suggestions when they customize their Yahoo home page, for instance. PersonalWeb includes about 600 such topics, from taxidermy to coin collecting.
Those who are not interested in customizing their page can simply wait until the service knows enough about them to serve up similar suggestions. How long they will have to wait is partly a function of how many other users with similar interests join in, since Claria must track people with similar interests before it can make good suggestions.

Mr. VanDeVelde said the company, based in Redwood City, Calif., would advertise the service online starting this month and would also market the service to other online publishers, which could offer it to their readers. For instance, he said, a city-oriented newspaper might let its readers create a home page largely made up of the paper's stories, but let PersonalWeb present other stories on topics outside of the paper's specialty.

Readers would visit the newspaper's Web site more often as a result, Mr. VanDeVelde predicted, thereby generating more advertising for Claria and the publisher to share. So far, Claria has signed no such agreements with United States publishers, but it has set up a joint venture with Yahoo Japan to possibly implement the technology there.

Claria's shift to the PersonalWeb platform culminates a transition that has been several years in the making, starting in 1999, when Claria, then called the Gator Corporation, helped spawn the pop-up advertising trend online. Gator's service tracked people's behavior then displayed pop-up ads for, say, Priceline.com when they visited Expedia.

Gator bundled its eWallet software with other free applications like Kazaa, the music-sharing software, then shared the ad revenues. Privacy advocates complained that Gator didn't clearly tell consumers they were installing tracking and pop-up software or give them and easy way to delete it. The company changed its name to get rid of the Gator stigma, among other reasons.

Companies on whose Web sites the ads appeared, including The New York Times, among many others, sued Gator for copyright and trademark infringement. The cases settled out of court, but even as Claria changed its practices to suit privacy advocates — and built a business that generated $100 million in advertising in 2004 — it could not shake its reputation as an Internet bully.

Last year, when its planned initial public offering failed, the company, still private, put its resources behind PersonalWeb. Online privacy advocates acknowledge that PersonalWeb bears little resemblance to the business that infuriated publishers and users in the past, but they continue to balk at the idea of tracking consumers in any way.

"Claria's likely to make a lot of people uneasy when they realize how much of their personal life is exposed through their Web surfing," said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group.

While other companies are stopping short of asking consumers to expose their complete surfing habits, they are considerably more interested in personalizing their sites for consumers than they were a few years ago, said Michael Strickman, chief technology officer of ChoiceStream, which helps companies like Yahoo, America Online and others personalize the products or content they show to consumers.

"Compared to a couple of years ago, we're doing a lot more taking of phone calls than banging on doors," Mr. Strickman said.

Part of the reason is that the technology is more refined than it was during the dot-com boom, when online personalization was more theory than reality. Still, Mr. Strickman said, the technology has limits.

"Getting things right is not easy," he said. "When you're showing an ad, it doesn't really matter if you get it wrong. But if you're saying, 'this is a list of things I recommend,' you'd better make sure there's nothing glaringly off, or the user will tune you out."

Google Aims To Track Users With Wi-Fi
Chris Nuttall and Kevin Allison in San Francisco

Google aims to be able to track its users to within 100-200 feet of their location through new wireless networks in order to serve them with relevant advertising from local businesses.

The leading internet search company, which depends on advertising for 99 per cent of its revenues, was selected on Wednesday by San Francisco as its preferred bidder to provide a basic free wi-fi internet service covering the entire city.

It had partnered in its bid with the internet service provider Earthlink, which intends to charge a fee for a faster internet connection.

Google and Earthlink will now enter final contract negotiations with the city. There were five other bidders including a non-profit group backed by Cisco Systems and IBM.

The company hopes to defray the costs of offering a free service through contextual advertising. Analysts have speculated that the San Francisco bid could be a prelude to Google seeking to extend its reach into localities nationwide.

It is already planning a free wi-fi network by the summer covering the city of Mountain View, where its headquarters is based, and the San Francisco service may be up and running by the end of the year.

Google says users linking up with wi-fi transmitters placed around cities can be located to within a couple of blocks. This would open up a new level of advertising opportunities for the company, allowing it to serve tightly focused ads on its web pages from small businesses in the immediate area.

The bid to blanket-cover San Francisco with cheap internet access is part of a broader move towards municipal wireless networks by big US cities.

Philadelphia became the first major US city to begin construction of a citywide wireless network when it signed a deal with Earthlink earlier this year.

Other big cities such as Chicago, Boston and Austin have announced their own wireless network plans.

Experts have warned, however, that the free wireless model remains unproven and may not offer the best solution for smaller cities and towns addressing the "digital divide" to promote economic development.

In a separate development, Google has launched a local listings service for real estate.

Typing "real estate" or "homes for sale" in its search box prompts users to enter their postal codes and see a map showing properties and their details in their area. The "mash-up" combines Google Maps with its Google Base classifieds service.

Why VOIP Needs Crypto
Bruce Schneier

There are basically four ways to eavesdrop on a telephone call.

One, you can listen in on another phone extension. This is the method preferred by siblings everywhere. If you have the right access, it's the easiest. While it doesn't work for cell phones, cordless phones are vulnerable to a variant of this attack: A radio receiver set to the right frequency can act as another extension.

Two, you can attach some eavesdropping equipment to the wire with a pair of alligator clips. It takes some expertise, but you can do it anywhere along the phone line's path -- even outside the home. This used to be the way the police eavesdropped on your phone line. These days it's probably most often used by criminals. This method doesn't work for cell phones, either.

Three, you can eavesdrop at the telephone switch. Modern phone equipment includes the ability for someone to listen in this way. Currently, this is the preferred police method. It works for both land lines and cell phones. You need the right access, but if you can get it, this is probably the most comfortable way to eavesdrop on a particular person.

Four, you can tap the main trunk lines, eavesdrop on the microwave or satellite phone links, etc. It's hard to eavesdrop on one particular person this way, but it's easy to listen in on a large chunk of telephone calls. This is the sort of big-budget surveillance that organizations like the National Security Agency do best. They've even been known to use submarines to tap undersea phone cables.

That's basically the entire threat model for traditional phone calls. And when most people think about IP telephony -- voice over internet protocol, or VOIP -- that's the threat model they probably have in their heads.

Unfortunately, phone calls from your computer are fundamentally different from phone calls from your telephone. Internet telephony's threat model is much closer to the threat model for IP-networked computers than the threat model for telephony.

And we already know the threat model for IP. Data packets can be eavesdropped on anywhere along the transmission path. Data packets can be intercepted in the corporate network, by the internet service provider and along the backbone. They can be eavesdropped on by the people or organizations that own those computers, and they can be eavesdropped on by anyone who has successfully hacked into those computers. They can be vacuumed up by nosy hackers, criminals, competitors and governments.

It's comparable to threat No. 3 above, but with the scope vastly expanded.

My greatest worry is the criminal attacks. We already have seen how clever criminals have become over the past several years at stealing account information and personal data. I can imagine them eavesdropping on attorneys, looking for information with which to blackmail people. I can imagine them eavesdropping on bankers, looking for inside information with which to make stock purchases. I can imagine them stealing account information, hijacking telephone calls, committing identity theft. On the business side, I can see them engaging in industrial espionage and stealing trade secrets. In short, I can imagine them doing all the things they could never have done with the traditional telephone network.

This is why encryption for VOIP is so important. VOIP calls are vulnerable to a variety of threats that traditional telephone calls are not. Encryption is one of the essential security technologies for computer data, and it will go a long way toward securing VOIP.

The last time this sort of thing came up, the U.S. government tried to sell us something called "key escrow." Basically, the government likes the idea of everyone using encryption, as long as it has a copy of the key. This is an amazingly insecure idea for a number of reasons, mostly boiling down to the fact that when you provide a means of access into a security system, you greatly weaken its security.

A recent case in Greece demonstrated that perfectly: Criminals used a cell-phone eavesdropping mechanism already in place, designed for the police to listen in on phone calls. Had the call system been designed to be secure in the first place, there never would have been a backdoor for the criminals to exploit.

Fortunately, there are many VOIP-encryption products available. Skype has built-in encryption. Phil Zimmermann is releasing Zfone, an easy-to-use open-source product. There's even a VOIP Security Alliance.

Encryption for IP telephony is important, but it's not a panacea. Basically, it takes care of threats No. 2 through No. 4, but not threat No. 1. Unfortunately, that's the biggest threat: eavesdropping at the end points. No amount of IP telephony encryption can prevent a Trojan or worm on your computer -- or just a hacker who managed to get access to your machine -- from eavesdropping on your phone calls, just as no amount of SSL or e-mail encryption can prevent a Trojan on your computer from eavesdropping -- or even modifying -- your data.

So, as always, it boils down to this: We need secure computers and secure operating systems even more than we need secure transmission.

Windows on Mac, Simultaneously
Pete Mortensen

Apple Computer's surprise software release allowing the company's newest Intel-based Macs to run Windows has put "virtualization" -- an alternative, and arguably superior, method of achieving the same result -- in the spotlight.

Released Wednesday, Apple's Boot Camp beta installs Microsoft's OS in a partition on the hard drive, thus offering Mac users the option of booting up either with OS X or Windows XP. Virtualization, by contrast, allows Macs to run Windows and Mac OS X not just on the same machine, but at the same time, with only a slight drop in performance.

Although Apple says it has no plans to create a virtualization product for the Mac, the advantages of this approach are strong enough that a number of rivals are rushing to market with Mac virtualization products even as Apple offers its dual-boot option.
On Thursday, Herndon, Virginia-based Parallels released a public beta of its virtualization software package, Parallels Workstation 2.1.

"What's the value of a dual-boot solution? Is there any value? I don't really think so," said Parallels marketing manager Benjamin Rudolph.

Virtualization is heating up in the corporate market, and it's likely only a matter of time before it becomes standard issue on most computers. In a sign of what's to come, VMWare this week announced it would give away a key specification for defining and formatting virtual machine environments. Microsoft fired back by offering up its Virtual Server 2005 R2 Enterprise Edition, also for free.

Virtualization for the Mac has been slower to market, but promises to explode. CodeWeavers, the primary corporate backers of the open-source Wine Project, which allows Windows applications to run in Linux, has said it will release a Mac OS X version of CrossOver Office, a shrink-wrapped version of the technology.

Alexandre Juilliard, who oversees Wine, said Mac users will get to try it themselves in the very near future. "No date is set, but it's probably a matter of a couple of months now," he said.

Microsoft is also evaluating an Intel-native (and presumably much faster) version of its Virtual PC product, although it has not yet committed to the project.

VMWare, the largest vendor of virtualization software, did not return calls seeking comment for this story.

Apple, for its part, has shown no interest in creating its own virtualization software. In the run-up to the release of Boot Camp, many speculated that Apple was working on its own virtualization software, but the company denies it.

"We are not providing a way to run Windows within OS X," Natalie Kerris, an Apple spokeswoman, said Wednesday.

Virtualization makes it possible to install Windows XP, Linux, OS/2 Warp and other Intel-compatible operating systems on Intel-Mac hardware and run the alternate operating systems from the comfy confines of OS X.

The technique fools so-called guest operating systems into believing they are in charge of the computer's hardware. Though similar in appearance to emulators like Microsoft's VirtualPC, virtualization is an entirely different approach that is made possible because OS X, Windows and Linux are now all native to Intel hardware.

Emulators essentially re-create a foreign computer architecture in software, like an Intel machine on top of Apple's older PowerPC platform. Virtualization, by contrast, is like a window that lets the guest operating system burrow through to the underlying hardware. So a guest operating system like Windows, which runs natively on Intel chips, is still executed natively. There is no time-consuming code translation from one architecture to another.

In a virtual environment, Windows runs as a Mac OS X application inside its own window. Safari and iPhoto can happily co-exist with Microsoft Access running on Windows XP. The virtualization software even supports monitor spanning. On a two-monitor system, Mac OS X can be running on one screen, and Windows XP on the other.

The virtualization approach to running multiple operating systems simultaneously differs sharply from Apple's dual-booting Boot Camp software. Boot Camp requires users to reboot each time they wish to switch from Mac OS X to Windows.

Not everyone thinks virtualization trumps the dual-boot approach, however.

For one thing, dual-booting guarantees maximum possible performance. Using Boot Camp methods, a MacBook Pro functions as a native Windows XP laptop; there is no trickery involved.

For the moment, there is one area where dual-booting into Windows is indisputably superior: gaming. The current version of Parallels Workstation has limited support for 3-D graphics. Rudolph said better video will come in the next version. Dual-booting with Boot Camp yields native 3-D driver support under Windows XP.

Analyst Tim Bajarin, president of market research firm Creative Strategies, said he believes most users will prefer dual-booting to virtualization. Years of unsatisfactory experiences with slow emulation software -- though fundamentally different from virtualization -- could make some wary of trying the new technology, he said.

"I think Apple's approach, based on maximizing the role of the processor, is actually the cleanest way to do it," he said.

But Parallels' Rudolph said dual-booting systems are not in tune with the way people work. Having to shut down OS X to boot into Windows wastes time, he said, adding that a Mac running Parallels' virtualization software is almost as fast as a dedicated Windows box.

"If a native Windows machine runs at 100 out of 100 on speed, our version of virtualization runs at a 90 or 95," he said. "It's very fast and very stable."

That said, not all of the new Intel-Macs will handle virtualization equally. Parallels Workstation is expected to run better on the MacBook Pro and iMac than it will on the Mac mini, Rudolph said. That's because the two higher-end machines include chip-level hardware support, known as Intel virtualization technology, or VT, that improves performance to near-native levels, he said.

"We've noticed, between VT-powered machines versus non-VT-powered machines, up to a 150 percent performance increase," Rudolph said.

The initial public beta of Parallels Workstation is good for 30 days. The full release, expected in several weeks, will cost $50. Bring your own operating systems, of course.

Bush No Friend To Tech, Say Stanford Panelists
Michael Kanellos

The Bush administration is starving the U.S. tech industry of two crucial ingredients, according to members of a panel of academics and entrepreneurs at Stanford University: foreign students and research grants.

"If you make it difficult for foreign students to come here or work here, you will have a dramatic influence on education in the United States and the quality of industry," said Mark Horowitz, a professor of electrical engineering at the university and the founder of Rambus. "The U.S. is becoming less attractive for graduate students."

Academics often are hostile to politicians, but Stanford has typically not been a hotbed of leftist resentment--former Reagan Secretary of State George Schultz has an office here after all, as does former Defense Secretary William Perry. The engineering faculty is crawling with millionaires who founded companies while climbing up the tenure ladder. Silicon Valley is also a hotbed of limousine libertarianism. In other words, it's the sort of university where you're not going to see massive protests over capital gains cuts or multibillion dollar weapons programs. So hearing such strong statements against a conservative president is slightly novel.

The problem, according to Horowitz and others, is that the U.S. tech industry has thrived by being able to attract the best students from all over the world, who graduate and then start companies. If the pipeline gets squeezed, they will start to attend school in China or Europe.

Funding from the Defense Advanced Research Projects Agency (DARPA) have also declined, according to Mendel Rosenblum, another Stanford professor and founder of VMWare. Grants from the agency in the 60s, 70s and 80s were instrumental in funding the development of technologies that subsequently exploited by companies such as Sun Microsystems. There has been a dramatic decline in funding and the timeline is much shorter, The Internet, for instance, was originally a DARPA program. Horowitz noted that he's had funding from a DARPA project every year, but next year he will not get any grant money.

Netscape founder Jim Clark was the most outspoken.

"We do have a unique environment here and I hope it survives eight years of bad government," Clark said. "Urge all of your friends to vote democratic."

Humans Evolved Color Vision To See Emotion, Not Food
Michael Kanellos

Your eyes evolved to see rosy cheeks.

The eyes in humans and their closest relatives in the primate world are geared to detect subtle changes in skin tone caused by blood oxygen levels, according to a new study from Caltech.

The spectral sensitivity of color cones in humans and chimps are somewhat unusual. Bees have four color cones that are evenly spread across the visible color spectrum. Birds have three color cones. By contrast, humans have three types of cones that are sensitive to a limited range of wavelengths. The closeness, however, allows for the detection of subtle tone changes. When someone blushes, the skin becomes red from elevated oxygen levels. If you're exhausted, you become pale from the lack of oxygen. When a primate is ready to mate, oxygen levels rise again leading to blushing. The human and chimp eye can capture these different color levels, which can be signals of fitness or heartiness.

Interestingly enough, primates completely covered in hair have different types of color detectors. The parts of skin (the scalp) that are insensitive to color blushing in humans and chips are also covered in hair. Since the skin there can't help express emotion, the theory goes, it might as well help you keep warm.

"For a hundred years, we've thought that color vision was for finding the right fruit to eat when it was ripe," says Mark Changizi, a theoretical neurobiologist and postdoctoral researcher at Caltech. "But if you look at the variety of diets of all the primates having trichromat vision, the evidence is not overwhelming."

When You Can't Take It With You, a Scan Saves the Pages for a Later Look
Eric A. Taub

The interminable delays now commonplace in doctors' offices have one very minor benefit: the ability to while away the hours reading about Jessica Simpson's latest romance. Yet all too often the call to head off to the examining room seems to come just as one gets to the best part of the article.

Instead of ripping out the page and ruining the magazine for everyone else, readers can scan the article with the new DocuPen RC800 from Planon.

This $300 pen-shaped device can be dragged down the length of a page to create a file that can be transferred to a Mac or PC through a U.S.B. connection. The text can also be edited using character recognition software that comes with the $350 "professional" package.

Unlike previous models of the pen, the RC800 can scan in color, useful for photos and brochures.

The 9½-inch-long DocuPen, available now through the company's Web site (www.planon.com), has eight megabytes of memory, enough to store several hundred pages of black and white text, or one to three color pages at the highest resolution. A microSD memory card can be inserted to increase storage capacity.

Study Links Punishment to an Ability to Profit
Benedict Carey

Sociologists have long known that communes and other cooperative groups usually collapse into bickering and disband if they do not have clear methods of punishing members who become selfish or exploitative.

Now an experiment by a team of German economists has found one reason punishment is so important: Groups that allow it can be more profitable than those that do not.

Given a choice, most people playing an investment game created by the researchers initially decided to join a group that did not penalize its members. But almost all of them quickly switched to a punitive community when they saw that the change could profit them personally.

The study, appearing today in the journal Science, suggests that groups with few rules attract many exploitative people who quickly undermine cooperation. By contrast, communities that allow punishment, and in which power is distributed equally, are more likely to draw people who, even at their own cost, are willing to stand up to miscreants.

An expert not involved in the study, Elinor Ostrom, co-director of the Workshop in Political Theory and Policy Analysis at Indiana University, said it helped clarify the conditions under which people will penalize others to promote cooperation.

"I am very pleased to see this experiment being done and published so prominently," Dr. Ostrom said, "because we still have many puzzles to solve when it comes to the effect of punishment on behavior."

Dr. Ostrom has done fieldwork with cooperatives around the world and said she often asked other researchers and students whether they knew of any long-lasting communal group that did not employ a system of punishment. "No one can give me an example," she said.

In the experiment, investigators at the University of Erfurt in Germany enrolled 84 students in the investment game and gave them 20 tokens apiece to start. In each round of the game, every participant decided whether to hold on to the tokens or invest some of them in a fund whose guaranteed profit was distributed equally among all members of the group, including the "free riders" who sat on their money. Because the profit was determined by a multiple of the tokens invested, each participant who contributed to the fund enjoyed less of a return than if the free riders had done so as well.

The tokens could be redeemed for real money at the end of the experiment.

About two-thirds of the students initially chose to play in a group that did not permit punishment. In the other group, the students had the option in each round of penalizing other players; it cost one token to dock another player three tokens. All participants could see who was contributing what as the game progressed, and could choose to switch groups before each round.

By the fifth round, about half of those who began the study in the no-penalty group had switched to the punitive one. A smaller number of students migrated in the other direction, but by Round 20 most had come back and the punishment-free community was a virtual ghost town.

"The bottom line of the paper is that when you have people with shared standards, and some who have the moral courage to sanction others, informally, then this kind of society manages very successfully," said the study's senior author, Bettina Rockenbach, who was joined in the research by Bernd Irlenbusch, now at the London School of Economics, and Ozgur Gurek.

Switching groups frequently prompted remarkable behavioral changes in the students. Many of those who had been free riders in the laissez-faire group eagerly began penalizing other selfish players upon switching. Dr. Rockenbach compares these people to heavy smokers who are insistent on their right to light up, until they quit. "Then they become the most militant of the antismokers," she said.

Being exploited appeared to cause deep frustration and anger in most students, she said.

Other experts said the results were an important demonstration of how self-interest can trump people's aversion to punitive norms, at least in the laboratory. Out in the world, they said, it is not usually so clear who is free-riding, or even whether a given group is encouraging cooperative behavior in most people.

"The mystery, if there is one, is how these institutions evolve in the first place," Duncan J. Watts, a sociologist at Columbia, wrote in an e-mail message, "i.e., before it is apparent to anyone that they can resolve the problem of cooperation."

Kaspersky warns of cross-platform virus proof of concept

It Can Infect Both Windows And Linux Systems
Jaikumar Vijayan

Kaspersky Labs is reporting a new proof-of-concept virus capable of infecting both Windows and Linux systems.

The cross-platform virus is relatively simple and appears to have a low impact, according to Kaspersky. Even so, it could be a sign that virus writers are beginning to research ways of writing new code capable of infecting multiple platforms, said Shane Coursen, senior technical consultant at Kaspersky.

In a note on its Web site, the SANS Internet Storm Center (ISC) in Bethesda, Md,. said the new virus “is a sign the cross-platform aspects are becoming important. As the developers of viruses continue to research this, we will see more cross-platform malware come about in the future.”

The new virus, which Kaspersky calls Virus.Linux.Bi.a/Virus.Win32.Bi.a, is written in assembler and infects only those files in the current directory. “However, it is interesting in that it is capable of infecting the different file formats used by Linux and Windows,” Kaspersky said.

“It isn’t surprising that we are seeing a multiplatform virus,” given the growing popularity of Linux on enterprise desktops, Coursen said. “This is simply proof-of-concept code to show this kind of thing can be done.”

The new virus shows that malicious hackers may be exploring ways of getting new systems into bot networks, according to Johannes Ullrich, chief technology officer at the SANS ISC. But crafting such multi-platform malware is not particularly easy, he said.

“Writing a cross-platform worm is difficult because it limits you to functions that are available on both operating systems,” Ullrich said. “You have to also code the virus in assembly to make it work without relying on any OS-specific function,” he said.

The relatively small number of systems running on non-Windows platforms also makes it less appealing for hackers to go to the trouble of crafting cross-platform viruses, he said.

Though rare, this is not the first instance of such a virus appearing in the wild. In 2001, the sadmind/ISS worm exploited a hole in Sun Microsystems Inc.’s Solaris to infect systems running vulnerable versions of the operating system. Infected systems then scanned for and attacked servers running Microsoft Corp.’s IIS Web server software. That same year, another proof-of-concept virus named Winux infected both Windows and Linux systems.

“Even today, Web sites sending exploits to their visitors tend to detect what browser/platform the visitor is using and send a matching exploit to install some malware,” SANS said in its note.

It’s important for enterprises to be aware of such issues and implement anti-virus tools for protecting non-Windows operating systems if they haven’t done so already, Ullrich said.

“For those thinking their “pet” computer is invulnerable to the virus threat -- it’s not,” SANS said.

Evergreen's $8.50 DN-2000 MP3 Player
Thomas Ricker

Japanese Co. Evergreen is no stranger to the cheap and crap-plasticy product. Now they combine their love of the two and apparent hatred for human-kind in this $8.50 DN-2000 MP3 player targeting the ill-fated shores of Japan, and perhaps, beyond. It runs for 5-hours on a single AAA battery and supports 1GB SD cards. You realize of course, that we are now at the dawn of disposable MP3 players don't you? Gawd save our souls.

The Watchers

Get ready for Microsoft, cable and phone companies, and quite a few other people to know a lot more about what you do on your computer, thanks to House Bill
Ben Fenwick

It’s supposed to protect you from predators spying on your computer habits, but a bill Microsoft Corp. helped write for Oklahoma will open your personal information to warrantless searches, according to a computer privacy expert and a state representative.

Called the “Computer Spyware Protection Act,” House Bill 2083 would create fines of up to a million dollars for anyone using viruses or surreptitious computer techniques to break on to someone’s computer without that person’s knowledge and acceptance, according to the bill’s state Senate author, Clark Jolley.

“The bill has a clear prohibition on anything going in without your permission. You have to grant permission,” said Jolley, R-Edmond. “You can look at your license agreement. It will say whether they have the ability to take that information or not.”

But therein lies the catch.

If you click that “accept” button on the routine user’s agreement, the proposed law would allow any company from whom you bought upgradable software the freedom to come onto your computer for “detection or prevention of the unauthorized use of or fraudulent or other illegal activities in connection with a network, service, or computer software, including scanning for and removing computer software prescribed under this act.”

That means that Microsoft (or another company with such software) can erase spyware or viruses. But if you have, say, a pirated copy of Excel — Microsoft (or companies with similar software) can erase it, or anything else they want to erase, and not be held liable for it. Additionally, that phrase “fraudulent or other illegal activities” means they can:

—Let the local district attorney know that you wrote a hot check last month.

—Let the attorney general know that you play online poker.

—Let the tax commission know you bought cartons of cigarettes and didn’t pay the state tax on them.

—Read anything on your hard drive, such as your name, home address, personal identification code, passwords, Social Security number … etc., etc., etc.

“I think in broad terms that is still a form of spying,” said Marc Rotenberg, attorney and executive director of the Electronic Privacy Information Center in Washington, D.C. “Some people say, ‘Well, it’s justified.’ I’m not so clear that should be the case. Particularly if the reason you are passing legislation is to cover that activity.”

The bill is scheduled to go back before the House for another vote. Will the Oklahoma House, on behalf of all computer users in the state of Oklahoma, click “accept”?

Where did you go yesterday?

Computer users first accepted updates when anti-virus makers, such as Symantec Corp. or McAfee, began back in the Nineties offering regular updates in an attempt to stay current with the alarming number of viruses introduced over the Internet. This was followed by Windows ME and 2000 allowing updates to their programs via downloads. By the time Windows XP came out, regular online updates became part of the product one purchased.

At around the same time, the Napster phenomenon pushed music corporations, courts and lawmakers into taking action against online file sharing of music. Hip, computer-savvy listeners traded pirated MP3 recordings beyond count, leading to action by the music industry to go on a search and destroy mission against the online music traders, even in Oklahoma. In 2000, Oklahoma State University police seized a student’s computer containing thousands of downloaded songs after he was traced by a recording industry group.

Anti-spyware bill author Jolley said that’s what people like the OSU student get for sharing their information online.

“You have to look at the other side of that issue,” Jolley said. “When they agreed to put their files online, they literally agreed to allow people to come on their computers and search the files online. On a P-to-P (peer-to-peer) network, you are inviting other people to see what you have. That’s a risk you run by participating in file share.”

Jolley said his spyware bill is supposed to stop “phishers” from stealing one’s identity off of one’s computer, is supposed to stop “Trojan horse” viruses from being installed on the computer and is supposed to make illegal a host of other techniques for spying on a user’s personal information.

“It prohibits them from taking things as basic as your home address, your first name, your first initial in combination with your last name, your passwords, any personal identification numbers you have, any biometric information, any Social Security, tax IDs, drivers licenses, account balances, overdraft histories — there is a clear prohibition on that,” Jolley said.

Indeed, Sections 4 and 5 of the act specifically forbid anyone from doing so without the user’s permission.

However, Section 6 of the act says such a prohibition “shall not apply” to “telecommunications carrier, cable operator, computer hardware or software provider or provider of information service” and won’t apply to those companies in cases of “detection or prevention of the unauthorized use of or fraudulent or other illegal activities.”

Which means software companies updating a user’s software or the cable company monitoring that user’s activities on a broadband modem hookup can turn over that user’s history of writing hot checks to the district attorney if the company feels like it, said Rotenberg.

“You go back to the old-fashioned wiretap laws,” Rotenberg said. “There was an exception to allow telephone companies to listen in on telephone calls. The theory was that it was necessary to make sure that the service was working. Part of what’s going on here is to significantly expand that exemption to a whole range of companies that might have reason for looking on your computer. The statute will give them authority to do so. I think it’s too broad. I think the users in the end need to be able to allow that themselves.”

Jolley insists his proposed law would not allow Microsoft, Symantec or Cox Communications to become “Big Brother.”

“The goal of this is not to allow any company to go through and scan your computer,” Jolley said. “If they are, it has to be for a specific purpose. If you don’t want them doing that, don’t agree to (the user’s agreement).”

Which means, when a user accepts Microsoft’s Windows operating system on that new computer, or Norton AntiVirus, or Apple’s operating system or a host of other online-upgradable programs, that user agrees to being watched by the company.

Who on Earth would write such a law? It wasn’t Jolley, or anyone in Oklahoma.

Let’s Buy Some Music: Part 1
Frank Gruber

We’ve analyzed the services that sell digital music (iTunes and its competitors). This Part 1 focuses on the pay-per-download services. In Part 2 we’ll compare the all-you-can-eat subscription services.

While compact disc sales have declined 19 percent since 2001, online music sales have started to boom. According to a recent report by the International Federation of the Phonographic Industry, revenues from digital music sales almost tripled in the last year, to $1.1 billion in 2005. Apple’s iTunes accounted for over 85 percent of the single song downloads, but Apple is not alone in the online music space.

Legal downloads now account for about 6% of record companies’ revenues, up from practically zero two years ago.

We’ve signed up for just about every music download and subscription site out there and prepared a two part feature and pricing comparison of the best. We’ve divided the sites into “rent” v. “buy”. “Rent” sites are subscription based, all-you-can-eat services where you get to listen to all music in the catalog as long as you continue to pay the monthly fee. “Buy” sites are pay-per-download services, like iTunes, where you can also burn the song to a CD, and then rip the CD back to a computer and strip out any digital rights management (DRM) restrictions.

There are eleven total sites that sell downloadable, CD-burnable music. However, two of these sites, AOL Music Now and Virgin Digital, require a paid subscription to their all-you-can-eat service in order to download songs (downloads cost an additional $0.99 each on both services). We’ve therefore left them out of the comparison chart.

Another, eMusic, is focused on independent labels, and we’ve removed it from the comparison even though it offers DRM-free music at an attractive price ($0.25 per song). eMusic is an awesome service - the side by side table comparision didn’t give it the credit it deserves.

The remaining eight services are AllofMP3, BuyMusic, iTunes, MSN Music, Napster Light, Real Rhapsody, Walmart.com and Yahoo Music Unlimited.

All but iTunes use the Windows Media Audio (WMA) file format. iTunes supports the AAC format. The only reason this is important is that Apple iPods won’t play WMA files, and non-iPods can’t play the iTunes AAC format. So your selection may largely be determined by which music player you choose to use.

The choice for best overall service is dead simple. The best service by far is AllofMP3.com. Music costs $0.02 per MB (about 9 cents per song at medium quality levels), and it can be downloaded in any common audio format and quality level. It is so cheap and easy to use that many people choose to download music from AllofMP3 in lieu of ripping their own CD collection.

The problem is that AllofMP3 operates under a different set of rules (Russian copyright law) than the rest of the companies. The service has been around for years and has many loyal users; however, its continued existence is in question. Some people have ethical concerns with using the service since no money makes its way back to the artists or labels.

Of the remaining services, the first question is what music player you will use. If you want to use an iPod, you need to use iTunes (or AllofMP3). If you want to use a non-iPod device, any of the others will work. The clear winner of the non-iTunes services is Real Rhapsody. They have one of the largest selections of music, quickly include new music, and have the cleanest user interface on the store. Rhapsody also has the highest quality downloads, at 192 kbps.

At $0.99 per song, though, Rhapsody is not the cheapest provider. That honor goes to BuyMusic at $0.79 per song. If you are price sensitive, BuyMusic may be the best choice for you.

Additional comparison information for all services is included in the table above.

Internet Calls Untethered From Your PC
David Pogue

WHY does Skype get so much hype? Sure, this software lets you make free "phone calls," computer to computer, anywhere in the world. But it wasn't the first such program, it's not the most feature-laden, and it's still a mystery to most people over 25.

Yet somehow, Skype is changing everything. Twenty-five million people are using it to make free calls, much to the annoyance of the phone companies. College students call home and friends with it. Business travelers keep in touch with the family. Visitors to the United States chit-chat with their buddies in Europe, Japan or wherever. The software — free from skype.com and available for Mac, Windows, Linux and PocketPC — is pitifully easy to use, and the sound quality is more like FM radio than a phone call.

Skype's popularity has caused some impressive ripples in the fabric of business and society. The word is now a verb, à la Google ("Have your people Skype my people"). Last fall, eBay bought Skype for $1.3 billion and 32.4 million shares of eBay stock. And most intriguing of all, an entire industry of Skype accessories has sprung up.

But one niggling footnote continues to dog Skype: to make free calls, you and your conversation partner must both sit there in front of your computers, nerdlike, wearing headsets. You can call regular telephones, but that's not free. (Rates are complicated, but 2.1 cents a minute is typical.) And you still have to sit handcuffed to your computer.

Wouldn't it be nice if you could make and receive Skype calls from your home phone or any ordinary cellphone?

Enter the VoSky Call Center ($60 at actiontec.com), nicknamed the Liberator. (All right, I gave it that nickname, but still.) It's a tiny black box, about the size of a sandwich, that connects to a Windows PC (with a U.S.B. cable), to your phone line and to your telephone. An exceptionally clear instruction sheet walks you through the installation.

As a final preparatory step, you're supposed to install Skype, if you haven't already, fill up its buddy list with the Skype addresses of your pals, and assign a speed-dial number to each one. Then you're ready for the VoSky magic show.

FOR its first trick, the Call Center will let you call Skype buddies using the telephone on your desk. You pick up the handset, dial ## (which means, "This one's for Skype") and listen to a recorded female voice say: "Welcome to the VoSky Call Center. Please enter your contact's speed-dial number." (She pronounces it VOSS-key.)

Fortunately, you don't have to sit through her complete recording; you can interrupt by dialing at any time. She's just a digital audio file, not easily insulted.

There's a quick click, and then the call is placed. Your comrade, perhaps thousands of miles away, hears the familiar Skype ring tone, sits down at the PC, puts on the headset and answers. You, meanwhile, chat cheerily on your cordless phone as you move about, do the laundry or set the table.

The sound quality is excellent. It's not as good as a Skype-to-Skype call, of course, because you're listening on a phone — but it's much better than a regular phone call.

If you've signed up for SkypeOut, that 2.1-cents-a-minute plan that lets you call phone numbers rather than computers, you make calls in exactly the same way. Pick up your phone and touch ##2 (or whatever the speed-dial number is), or even ## plus a standard phone number in international format.

The second magic trick is even more impressive. This time, you can make a Skype call from your cellphone, wherever you happen to be.

To make this work, you tell the Call Center's PC software ahead of time how long it should wait — say, until the fifth ring — before answering incoming calls.

Then, when you're out and about with your cellphone, you dial home. After the designated number of rings, the Call Center's recorded young lady answers. After you plug in your password, she prompts you to touch the desired speed-dial number, and off you go. You're talking free to your aunt in Antigua, from your cellphone, courtesy of your home phone and your PC.

"Free" is a relative term, of course. Just calling your home number may still be using up your cellphone's monthly minutes, depending on the time of day and what kind of cellular plan you have. Even so, you'll save a lot of money if you call internationally.

Trick No. 3 is Skype forwarding. If you're away from home when somebody tries to reach you using Skype, the Call Center rings your cellphone (or any number you specify) so you can take the call.

The Call Center's last trick is call return, and it's pretty neat. Suppose you try to reach Dad in Dallas, but he's not at his desk. In that case, the Call Center's recorded voice offers to call you back when he is online. Sooner or later, when you least expect it, your cellphone rings; it's your Call Center, whose voice lets you know that Dad is online again. She tells you that if you'd like to call him right now (using Skype), press 1.

Incidentally, none of this affects your home phone's ability to make regular phone calls. You place them just as you always do (without dialing ## first), and the phone rings normally when someone calls you. Handy indicator lights on the Call Center box let you know whether you're answering a regular call or an Internet call.

This all sounds pretty complicated on paper, no doubt. But for the most part, each individual function is beautifully done, crisply and simply executed and easily learned.

There are, alas, exceptions.

They begin with the necessity to leave your PC turned on, with Skype running, at all times. That requirement alone may be a show-stopper for anyone concerned about the environment or electric bills.

Another issue is that to make a Skype call from your phone, you have to use the handset to which it's connected. You can't use another extension in the house (unless it's part of a multihandset cordless system).

Then there's the dialing-in problem. You see, the Call Center can, at your option, turn the computer into a digital answering machine; if you've turned it on, calling your home number produces the young woman's voice saying, "Please leave a message" (although if you're calling in so you can make a Skype call, you can just tap out your password instead).

So what's the problem? Incredibly, you can't replace the young woman's answering-machine greeting with a recording of your own voice.

Yet if you don't turn on the answering function, then calling your home number greets you with a recording that says, "Please enter your password." That's great if it's you calling, but it's bound to befuddle anyone else who happens to call. The only way to avoid that problem is to set the Call Center to wait, say, eight rings, long after your traditional answering machine picks up. But then, of course, you sacrifice the entire "call home to call Skype" feature.

And speaking of the recordings: Good heavens, was this the best voice-over talent ActionTec could find? The young lady speaks slowly and self-consciously, like the world's worst actor in a junior high musical. You can just imagine her saying, "Do not look now, Dorothy, but are those flying monkeys I see? Oh dear me."

If those gotchas don't getcha, though, you'd be hard-pressed to find another $60 gadget that works so crisply, reliably and efficiently. If you're among the 25 million existing Skypaholics, the Call Center could magnify the pleasure of making those free calls. And if you're not, the VoSky Call Center is one more reason to see what Skype is all about.

Old Fashion, High Tech USB Skype Phone

Do you pine for the good old days when things were simpler, even the telephones? Then at the same time hunger for high tech computers and prefer Skype over your grandmothers old rotary phone? This may well be the phone to bring both old fashioned and high tech together in the same odd product.

While it may look like your grandmothers old phone from the 50's, this is actually a USB 1.1 powered Skype phone for use with your PC. Powered entirely by the USB bus, there is no need for an external power supply. Plug this phone in and you can go old school, and new school at the same time. The phone is Windows XP and 2000 compatible.

Cell Phone Industry Steps Closer to VoIP
Ryan Nakashima

Wojtek Felendzer held a mobile phone to his ear as he walked across the room, the call automatically switching behind the scenes from a Wi-Fi wireless hotspot to the regular cellular network.

"Can you still hear me?" the Nokia Corp. employee asked.

"Yes," the reporter answered.

"That's good," he said. "This is seamless handover. The voice didn't drop. Nothing bad happened."

While Felendzer took only a few steps, his demonstration at the CTIA Wireless 2006 conference here proved that mobile Voice over Internet Protocol, or VoIP, technology has made a meaningful step forward.

For years, Wi-Fi telephones and walkie-talkie-like communicators have been available for hospitals and offices. Now, manufacturers and mobile carriers are preparing to link standard cellular networks to the mishmash of Wi-Fi hotspots, a move that will expand coverage and perhaps make cheaper mobile minutes a reality.

The technology, called Unlicensed Mobile Access, or UMA, will help those who have high-speed Wi-Fi routers overcome any poor coverage in their houses or apartments. It's also a way for mobile carriers to expand their footprint without spending lots of money on new infrastructure.

UMA could enable users of souped-up handsets to wirelessly download content at broadband speeds at home and take that on the road when they leave.

"Everything from multimedia to audio, video - when you look at the capabilities of phones now, the options expand pretty quickly," Nokia spokesman Eric Estroff said.

At the conference in Las Vegas last week, Samsung Electronics Co. Ltd. unveiled its t709 phone capable of seamlessly accessing Wi-Fi and cellular networks. Nokia's 6136 and Motorola Inc. (MOT)'s A910 were introduced in February at a conference in Spain.

ABI Research expects the market for Wi-Fi enabled mobile handsets to reach 100 million units annually by 2009.

Carriers in Europe have expressed interest. France Telecom (FTE) SA has said it will be Nokia's first European customer for its UMA phones, while Nordic operator TeliaSonera AB said in February it is moving ahead with trials for business customers.

But U.S. carriers were tightlipped about when they might roll out the service and at what price, despite Nokia and Samsung representatives saying they would start selling functioning handsets in the country this year.

T-Mobile USA, a unit of Deutsche Telekom AG (DT), was widely expected to be among the first by tapping its 7,400 Wi-Fi hotspots at hotels, airports and Starbucks coffee shops nationwide.

Its logo also adorned Samsung's new model on display here, but a T-Mobile USA spokesman said the company had no comment.

Cingular Wireless LLC, jointly owned by landline giants AT&T Inc. (T) and BellSouth Corp. (BLS), said it was looking at the technology and already supports a personal digital assistant that receives data on Wi-Fi and cellular networks.

But analysts said Cingular is concerned that offering Wi-Fi calls inside a home could hurt its parent companies' landline businesses.

Plus, there's the question of how to charge customers, who might expect free calls.

"Pricing is always an issue," said Cingular spokesman Ritch Blasi. "Who's network are you going to be using, and do you share minutes? ... People might expect that because they're calling on a Wi-Fi that they're paying for a broadband connection into their home already."

But such offerings could help traditional landline phone companies retain customers who are increasingly using VoIP phones enabled by eBay Inc. (EBAY)'s Skype or Vonage Holdings Corp., industry executives and analysts say.

"This is a proactive response from them to get out of this threat of Voice over IP," said Steven Shaw, director of marketing for Kineto Wireless, a Milpitas, Calif.-based company developing UMA technology.

"You see this giant bucket of minutes called fixed-network minutes going toward zero because of Skype and Voice over IP," he said. "You've now got the option to take those minutes and put those on the mobile network as fast as possible. That's what UMA does."

UMA works by tunneling cellular information packets through the Internet when Wi-Fi is available and reverting to cellular towers when it is not. A back-end controller inside the network makes the switch.

Voice minutes over Wi-Fi networks are far cheaper than minutes on cellular networks because they use free radio spectrum and the Internet and do not require large cell towers.

Nearly 200 U.S. cities have announced plans to offer Wi-Fi hotspots free of charge. Last week, Google Inc. (GOOG) and EarthLink Inc. (ELNK) became the leading bidders for building a Wi-Fi network in San Francisco, a project that would make it the largest city in the nation to offer a free service.

Frank Hanzlik, managing director of the Wi-Fi Alliance, a global nonprofit industry group, said cost savings will drive growth in Wi-Fi-enabled mobile phones.

"They're keeping you connected in the best way at the lowest cost. And that's really good for the consumer."

But he said technical and business issues may slow progress. Some raised concerns that users with computer-like devices may be able to switch voice carriers once they get Wi-Fi access.

"It's not going to be for everyone and it's not going to happen overnight," Hanzlik said. "This is absolutely a journey and it's going to take place in several steps."

Pay to payphones
Web copy

PeerBox is a peer-to-peer file sharing application for the next generation mobile devices.

PeerBox allows searching for files in open P2P networks, downloading the files onto the phone and sharing the files with other users.

PeerBox also allows downloading premium content from Nareos servers. PeerBox is integrated with 3rd party Robust Audio Hashing (fingerprinting) technology to recognize copyrighted content and collect payments for it.

PeerBox home screen gives access to various PeerBox screens, as well as to featured and recommended songs.

For each one of the songs, you can view the details, and download the songs.

In PeerBox beta, all the songs are free.

Looking at the Free Market, and Seeing Red
Randall Stross

LOU DOBBS is a master of the sinister tease. Last month, he was in top form. Previewing a story, he told viewers of his nightly CNN newscast that when the State Department seeks secure network communications, it "turns to Communist China," and thus renders the United States "perhaps more vulnerable than ever."

The story turned out to be another Lou Dobbs exercise in bashing immigrants, or, more precisely, bashing a single immigrant: Lenovo, the PC maker originally based in China that last year acquired I.B.M.'s PC division and is now based in Raleigh, N.C. Lenovo recently won a competitive bid to sell the State Department $13 million worth of personal computers. Mr. Dobbs, like some politicians on Capitol Hill, suggests that those PC's could provide shadowy spooks in the Chinese government with an ideal means of conducting espionage.

Merely hinting at such a possibility is enough to hurt Lenovo's reputation. This is a potentially serious impairment in the highly competitive, commoditized PC business. What is happening to Lenovo, the most internationalized company in the industry, is a drive-by smearing.

Mr. Dobbs is not the only practitioner of the hit-and-run attack. In his segment about Lenovo he called upon Michael R. Wessel, a member of the U.S.-China Economic and Security Review Commission, an advisory body to Congress. Mr. Wessel said that the State Department would use the Lenovo computers in offices around the world, potentially providing China access to "some of our deepest secrets," a "treasure trove of information they could use against us."

Mr. Wessel's segment was too brief to explain how China's agents would be able to grab hold of the machines to install the software for clandestine data transmission back to the party's Central Committee. The Lenovo desktops headed for the State Department will be assembled in facilities in North Carolina, not a People's Liberation Army compound in China. Also unexplained was how infected machines would meet General Services Administration security standards and get past the State Department's two computer security groups, which oversee the administration of their own test suites and install firewalls and other security software.

Last week, I spoke with Mr. Wessel to learn more about the basis for his alarm. It turned out that he was not able to describe how Chinese agents could gain access to the Lenovo machines, undetected, while they were being assembled.

When I asked why he thought the State Department's security procedures were inadequate, he suggested that he could not say because the State Department had been less than forthcoming with him. "We don't fully know" what the procedures are, he said. But when I asked him if he had requested information from the department about its protocols before he publicly voiced his concerns about the Lenovo deal, he said he had not.

Larry M. Wortzel, the chairman of the security review commission on which Mr. Wessel serves, was even more animated in asserting that there were security risks in the Lenovo sale to the State Department. When I spoke with him, he professed to be mystified as to "why the State Department would take the risk." What had the State Department told him about its security procedures? He, too, had yet to speak with anyone there; the commission's request for a briefing had been drafted but not yet sent.

Both commissioners assume that Lenovo is managed by puppets whose strings are pulled in Beijing. Mr. Wessel said he was certain that "a major portion" of Lenovo was "controlled by the Chinese government." State enterprises are placed in the hands of "princelings," who are the children of government leaders, he began to explain before I interrupted.

Princelings installed at the meritocratic Lenovo? When I asked Mr. Wessel to identify a Lenovo princeling, he said, "I haven't done a research of Lenovo." He said he had merely "raised questions" and had "never purported to have answers." This was similar to the reply from Mr. Wortzel when he was asked to substantiate his allegations with details.

The fact is that Lenovo is a living repudiation of the system that these critics assume it represents. It was born in 1984 from un-Communist entrepreneurial impulses among a group of Chinese computer scientists who wanted to start their own company. Their employer, the Chinese Academy of Sciences, gave them $25,000 in venture capital, and off they went. It was among the first Chinese companies to issue employee stock options.

The Academy of Sciences retains a minority ownership position, but so do I.B.M. and three American private-equity firms. The largest block of shares is owned by public shareholders. (Its shares are traded on the Hong Kong exchange.) Lenovo is headed not by a princeling but by an American, William J. Amelio — a former senior vice president for Dell, as it happens.

Perhaps the security concerns could be validated by an authority on China's military. I spoke with James C. Mulvenon, deputy director of the Center for Intelligence Research and Analysis, which is based in Washington and run by Defense Group Inc.

Dr. Mulvenon said he had many concerns about China's state-sponsored espionage activities, but Lenovo was not on his list. He described the controversy about Lenovo as "xenophobia and anti-China fervor dressed up as a technology concern."

Rob Enderle of the Enderle Group, a technology consulting firm in San Jose, Calif., said he also saw the criticism of Lenovo as lacking in substance. With an executive staff split between Chinese and Americans, Lenovo is the most global company in the PC industry, he said. The real story, he said, was that these critics were "really torqued that China is out-executing the U.S."

Lenovo is an inviting magnet for all sorts of free-floating American anxieties about global competition. The visceral nature of these concerns can be seen in other remarks by Mr. Wortzel of the U.S.-China Economic and Security Review Commission. He said, "As a taxpayer, I have a serious concern about why my tax money is spent on a computer made by a company owned by the government of the People's Republic of China." Why, he asked, couldn't the State Department place its order with a "100 percent American-owned company"?

The cold-war template of us versus them, capitalist versus Communist, does not fit the geography of the globalized supply chain that underpins the computer industry. All players, even the "100 percent American-owned" vendors, have a major presence in China. Roger L. Kay, the president of Endpoint Technologies Associates, a consulting firm in Natick, Mass., said China had attracted so many companies based in the United States that the PC ecosystem there had reached a critical mass. Low-cost production is not the draw. "Now the reason you want to be in China," he said, "is because that's where everyone else is."

Wishing wistfully for a return to the past — in which I.B.M. was still in the PC business — is not likely to improve American competitiveness here and now. Mr. Enderle said that ignoring the discomfiting fact that technology companies based in the United States are losing leadership positions to their counterparts in east Asia — not just China, but also Taiwan and South Korea — does not make the problem go away. "It's still going to hit us," he said.

NEVERTHELESS, Mr. Dobbs and members of the U.S.-China Economic and Security Review Commission have tarred Lenovo with suspicion of espionage — and the State Department with being their willing dupe. Mr. Kay says the damage to Lenovo has been done, even if the State Department purchase proceeds.

"The next time," Mr. Kay predicted, "the government bureaucrat will say: 'Do I want to go through this? No, I'll go with the company that is perceived as American.' "

The smears will linger, he fears. "Facts don't matter," he said. "Perception matters."

Alarm Over Shopping Radio Tags
David Reid

Supermarkets have already brought everything under the sun under one roof, and along the way been accused of denuding the High Street of butcher, baker and candlestick-maker.

Now they are introducing a new technology that some say threatens a fundamental invasion of our privacy.

We are all familiar with barcodes, those product fingerprints that save cashiers the bother of keying in the code number of everything we buy.

Now, meet their replacement: the RFID tag, or radio frequency ID tag.

These smart labels consist of a tiny chip surrounded by a coiled antenna.

Good tracking

While barcodes need to be manually scanned, RFID simply broadcasts its presence and data to electronic readers.

It means the computer networks of companies can track the position and progress of billions of products on rail, road, sea and shelf.

Albrecht Von Truchsess, from the German supermarket chain Metro Group, which uses this technology, says: "RFID really brings a revolution to everything that is transported from one point to the other, and in the future you will have it really on everything.

"That means that we don't have to do anything while the goods are on the way from the production site to our stores. It is just done automatically."

For all the benefits the technology promises, the roll-out of RFID is in danger of being derailed by the public's perception of it.

A Christian author in the US, for example, has just published a book claiming RFID will evolve into the mark of the beast featured in Revelations and presage the end of the world.

'Big Brother'?

The technology has also attracted criticism from more moderate voices.

Among these is Vint Cerf. He is one of the inventors of the internet and is now employed by Google as the company's internet evangelist.

He told Click: "What everybody worries about is that these identifiers will be used not to keep track of the object, but of the person associated with the object and then there's a Big Brother scenario that everybody worries about.

"But when the economics get to the point where the readers are inexpensive and the chips are inexpensive, then you start to ask yourself who has the ability to read the chips and what do they do with the information?"

Metro sees RFID working for it by having food traceable back to the farm, queues cut to nothing, and shelves that shout when they are empty.

But with remotely readable tags on everything from boots to beans, is it the customers or what they buy that is being labelled?

Former Australian privacy commissioner Malcolm Crompton says: "If done wrongly, it really is possible that I can buy things in one shop and be tracked in another shop, that the data, once collected, stays there for someone to come in and collect and use under circumstances that I don't know about or that I don't approve of.

"I think that is when society is on a slippery slope."

The fear is that what we buy will be forever linked to us. In the nightmare scenario, an innocently discarded soft drink can could end up in what later becomes a crime scene.

RFID could open a whole new field of forensics where the tag on the can removes any reasonable doubt.

Taking steps

Concerns about RFID have been taken up by Viviane Reding, the European commissioner for information society and media.

She has recently launched a public consultation process with a view to seeing whether RFID needs to be regulated.

She says: "A new technology that is bound to be multiplied by 10 to 15 times in the next coming years in numbers of sales will not fly, and will not be of benefit to the community and to the economy if the consumers are afraid that this technology might be a threat to their privacy."

One solution being floated is the idea of killing the code on the chip as customers leave the shop.

Whatever comes out of the European Commission's consultation, it looks likely that your Saturday shop will never be the same again.

Kanguru's 64GB King Kong Flash Drive

Kanguru has dropped the bomb on the USB 2.0 flash drive market with a whopping 64 GB of storage space on a flash drive about the size of a pack of gum. The drive is called the Kanguru Flash Drive Max. How does storing 10,666 6MB MP3s sound? What about an entire Windows XP install along with applications? All on a small flash drive with a 10 year data retention rate.

With all that storage space, you may want to encrypt some large more important files, luckily KanguruShield encryption software is included. You can encrypt not only the entire drive, but you can also set up partitions and encrypt only the ones you choose.

What's the catch when it come to this drive? Cost is the first big factor, you could actually buy an awesome laptop for what this thing retails for at an MSRP of $2799.95. Kanguru also does not mention the speed of the drive, the more cynical may see that as an admission of slow speed. Compatible with Windows, Mac and Linux the King Kong of flash drives is sure to please, if you can stomach the cost.

Read/write speeds are up to 9MB/5MB/sec respectively, according to the manufacturer – Jack.

From February

Officer Lost Memory Stick With Details Of Afghan Mission

The Dutch military is red-faced following the revelation it has let confidential information slip through its fingers - twice.

The military recently had to own up to losing a USB memory stick with sensitive information. Then the news division of broadcaster RTL reported on Wednesday it had come into possession of top-secret information from a second misplaced memory stick.

This information was compiled by the military about Afghanistan. Parliament is expected to give the green light on Thursday to the controversial deployment of 1,200 Dutch troops to southern Afghanistan.

A captain in the Air Force, who had spent five months in Afghanistan, left the unencrypted USB stick in a rented car two weeks ago. Two young men found it and copied the contents onto a computer.

The USB stick was returned to the captain a week ago and the finders received a gift certificate in return. The captain, according to RTL, said nothing about the incident and it only came to light when RTL received the information.

It included highly-sensitive recommendations on how Dutch troops should react when confronted with aggression. It also contained details on reconnaissance missions and security measures for Defence Minister Henk Kamp.

Kamp said on Thursday afternoon the captain has been discharged from the military.

This incident bears striking similarities to one last year when an employee of the intelligence service left computer disks in a lease car.

The disks included information about the sex life of murdered populist politician Pim Fortuyn. Crime journalist Peter R. de Vries featured the disks on his television programme.

The Public Prosecutor's Office (OM) announced on Wednesday De Vries would not be prosecuted for revealing State secrets.

All About NSA's and AT&T's Big Brother Machine, the Narus 6400

Earlier today we found out that the EFF had sued AT&T over their secret work with the NSA on surveillance of millions of US citizens without wiretaps. We learned that paragraph 65 of this complaint shows EFF is trying to turn it into a nationwide Class Action suit covering all current and former customers (any after 9/2001) of AT&T. And we learned that a retired AT&T technician had stepped forward and disclosed the installation of secret NSA spy equipment in the San Francisco trunk facility. As well as the belief that similar equipment is in place in Seattle, San Jose, Los Angeles and San Diego.

Specifically, this equipment was the Narus ST-6400, a machine that was capable of monitoring over 622 Mbits/second in real time in May, 2000, and capturing anything that hits its' semantice (i.e. the meaning of the content) triggers. The latest generation is called NarusInsight, capable of monitoring 10 billion bits of data per second.

Follow me over the jump and let's learn some more about the private company Narus, it's founder Ovi Cohen, and board member Bill Crowell. Shall we?
bewert's diary :: ::

Narus is a private company founded in 1997 by Ori Cohen, who had been in charge of technology development for VDONet, an early media streaming pioneer. It has venture funding from an all-star team of investors including JP Morgan Partners, Mayfield, NeoCarta, Presidio Venture Partners, Walden International, Intel, NTT Software and Sumisho Electronics.

Of note is that while Hoover's company factsheet on Narus continues to list Mr. Cohen as Chairman, while Narus's own website listing of the Board of Directors no longer mentions Mr. Cohen.

Prior to 9/11 Narus worked on building carrier-grade tools to analyze IP network traffic for billing purposes, to prevent what they term "revenue leakage". Post-9/11 they have continued down that path while adding more semantic monitoring abilities for surveillance purposes. They even brought in former Deputy Director of the NSA William P. Crowell as an addition to their Board of Directors. From the Press Release announcing this:

Crowell is an independent security consultant and holds several board positions with a variety of technology and technology-based security companies. Since 9/11, Crowell has served on the Defense Advanced Research Projects Agency (DARPA) Task Force on Terrorism and Deterrence, the National Research Council Committee on Science and Technology for Countering Terrorism and the Markle Foundation Task Force on National Security in the Information Age.

His past positions have included president and chief executive officer of Cylink, a leading provider of e-business security solutions, as well as a series of senior positions at the National Security Agency, including deputy director of operations and deputy director of the Agency. Crowell has served as chairman of the President's Export Council (PEC) Subcommittee on Encryption, which worked with the Administration, Congress and private industry to substantially loosen restrictions on the export of encryption products and technology.

"Narus has an impressive track record of working with tier-one carriers to keep their networks running safely, continuously and profitably," said William Crowell. "I look forward to helping Narus as they forge new strategic partnerships and continue to break new ground in the telecommunications industry."

So these guys (1) build hugely cool network monitoring devices and (2) are tied into US (at least) national security organizations at the highest levels. What are these hugely cool machines capable of?

From the Key Features list of NarusInsight

-Universal data collection from links, routers, soft switches, IDS/IPS, databases, etc. provides total network view across the world's largest IP networks.

-Normalization, Correlation, Aggregation and Analysis provide a comprehensive and detailed model of user, element, protocol, application and network behaviors, in real time.

-Seven 9s reliability from data collection to data processing and analysis.

-Industry-leading packet processing performance that supports network speeds of up to OC-192 at layer 4 and OC-48 at layer 7, enabling carriers to monitor traffic at either the edge of the network or at the core.

-Unsurpassed and limitless scalability to support the world's largest, most complex IP networks.

-Unparalleled flexibility -- NarusInsight's functionality can easily be configured to meet any specific customer requirement (Narus Software Developer Kit -SDK).

-Unparalleled extensibility -- NarusInsight's functionality can easily be configured to feed a particular activity or IP service such as security, lawful intercept or even Skype detection and blocking.

How powerful is this? OC-192 carries about 10 gigabits of data per second. Ten billion bits per second, monitored in real-time. That is stunning. This is one damned powerful machine, one of the most powerful I've ever heard of in 25 years in IT.

And what does it monitor while looking at this 10 billion bits of IP data per second? First lets take a look at what the network model is, the OSI model of seven layers. NarusInsight focuses on two layers: number four, the transport layer, built on standards like TCP and UDP, the physical building blocks of internet data traffic, and number seven, the application layer, built on standards like HTTP and FTP, which are dependent on the application using them, i.e. Internet Explorer, Kazaa, Skype, etc. It monitors 10 billion bits per second at level four and 2500 million bits per second at level seven. For reference, the 256K DSL line I am using equals .24 million bits per second. So one NarusInsight machine can look at 10,000 million DSL lines at once in great detail. That is a pretty damn big number. This is some really serious hardware with equally serious software. Which is our next subject.

So what exactly is done to and with this data? That's kind of a grey area, so let's try to find what we can. The starting point is called the Internet Protocol Detail Record, which Narus helped found. From that FAQ I just linked to, we learn that

IPDR stands for the Internet Protocol Detail Record, the name comes from the traditional telecom term CDR (Call Detail Record), used to record information about usage activity within the telecom infrastructure (such as a call completion).

NDM-U stands for Network Data Management - Usage. It refers to a functional operation within the Telecom Management Forum's Telecom Operations Map. The NDM function collects data from devices and services in a service providers network. Usage refers to the type of data which is the focus of this document.

IPDR.org is the non-profit organization that promotes use of the IPDR NDM-U and other related standards. The principle deliverable for IPDR.org is the NDM-U specification and related development tools.

And is it actually being used?

IPDR.org has been in existence since 1999 and more than a dozen vendors have actual IPDR implementations "etched in code". Their systems are actually able to talk to each other and interoperate. Version 2.5 and up of the NDM-U represents a stable basis for development. IPDR.org's Interoperability Pavilion is a working demonstration of multiple companies exchanging service usage data in that format.

Service usage data. That would be data on the actual usage of the Internet. And what kind of data would this be? Way back in 1999, this article stated

In an effort to provide more complex network traffic analysis, Narus is introducing its semantic network traffic service. The company cites research which predicts the fast-growing ISP sector will become stagnant without the ability to offer differentiated services. In order to gain significant revenues from these services, a technology was necessary to allow usage based pricing.

"We realized that, at the heart of the data that is needed to accurately measure usage and enable 'pay-as-you-go' business models for Internet service providers, is what we call the 'semantics' of network traffic," said Ori Cohen, Narus' founder and chief executive officer.

"In short, by seeing the 'semantics' of network traffic, service providers can see 'inside' the data, providing much more detailed insight about the use of the Internet and the perceived value of specific applications than existing technologies allow."

Semantic Traffic Analysis uses network technology to consistently capture and analyze all IP data streams on heavily trafficked networks remotely and non-invasively. In addition, the semantics of the data stream are determined also, as well as the protocol used and the application taking place. A variety of other data is available as well.

Remember that semantics is not just the data, but rather the meaning of the data. It looks at the the data in a more comprehensive way than looking for keywords. Each NarusInsight machine does this at 2500 million bits per second, in real-time.

You really wonder why BushCo doesn't want to talk about this stuff? It's the biggest invasion of privacy in history by several orders of magnitude.

How can we know? From Narus' Lawful Intercept and Regulatory Compliance page:
Explosive Internet growth in recent years has transformed worldwide communications, yielding tremendous efficiencies and benefits, as well as many risks.

For example, terrorist attacks around the globe have been carefully orchestrated through Internet-based forms of communications such as e-mail, messaging, hidden Web pages and now VoIP, forcing governmental organizations and law enforcement agencies to re-evaluate how they are providing public security as it becomes so much easier and faster to communicate electronically.

Recent mandates and the resulting standards referenced under CALEA in the United States and ETSI in Western Europe aim to preserve the right of law enforcement agencies to conduct authorized electronic surveillance in an effort to protect the public and its right to privacy. However, these mandates create IT headaches for carriers as they struggle to meet the requirements.

With a suite of products targeted at meeting lawful intercept requirements, Narus simplifies lawful intercept tasks helping carriers and agencies meet requirements without experiencing any degradation in service quality.

Key benefits

-Packet-mode data intercepts for Service Providers and Carriers.
-Wireline to wireless and WiFi or dialup to broadband.
-"Instant Compliance" with CALEA and ETSI for simple, fast and hands-free compliance.
-Carrier-grade speeds, performance and scalability.
-Supports all of your services, out-of-the-box.
-Securely manages resources while simplifying audits and reporting.
-Network and vendor agnostic.
-Enables additional application for revenue generation or revenue protection.

This data flows right into NarusInsight Intercept Suite, which enables

Packet-level, flow-level, and application-level usage information is captured and analyzed as well as raw user session packets for forensic analysis, surveillance or in satisfying regulatory compliance for lawful intercept.

The Lawful Intercept module offers carriers and service providers compliance with regulatory requirements regarding lawful intercept. The Lawful Intercept module provides an end-to-end solution consisting of Administration, Access and Delivery functions. The Lawful Intercept module is compliant with CALEA and ETSI standards. It can be seamlessly integrated with third party products for testing/validation or as a complete law enforcement solution.

The Directed Analysis module seamlessly integrates with NarusInsight Secure Suite or other DDoS, intrusion or anomaly detection systems, securely providing analysts with real-time, surgical targeting of suspect information (from flow to application to full packets). The Directed Analyis module provides industry standard formats and offers tools for archival and integration with third party investigative tools.

These capabilities include playback of streaming media (i.e. VoIP), rendering of web pages, examination of e-mail and the ability to analyze the payload/attachments of e-mail or file transfer protocols. Narus partner products offer the ability to quickly analyze information collected by the Directed Analysis or Lawful Intercept modules. When Narus partners' powerful analytic tools are combined with the surgical targeting and real-time collection capabilities of Directed Analysis and Lawful Intercept modules, analysts or law enforcement agents are provided capabilities that have been unavailable thus far.

Imagine how great a tool "instant compliance" with the Communications Assistance for Law Enforcement Act could be with this kind of reach and detail. Especially if a secret Presidential Directive allows it to be used without the warrants required under the Act.

That's what it appears we are up against, folks. Real-time semantic data monitoring on a huge scale. A scale beyond what most of us can even comprehend. It's scarey.

This Boring Headline Is Written for Google

Steve Lohr

JOURNALISTS over the years have assumed they were writing their headlines and articles for two audiences — fickle readers and nitpicking editors. Today, there is a third important arbiter of their work: the software programs that scour the Web, analyzing and ranking online news articles on behalf of Internet search engines like Google, Yahoo and MSN.

The search-engine "bots" that crawl the Web are increasingly influential, delivering 30 percent or more of the traffic on some newspaper, magazine or television news Web sites. And traffic means readers and advertisers, at a time when the mainstream media is desperately trying to make a living on the Web.

So news organizations large and small have begun experimenting with tweaking their Web sites for better search engine results. But software bots are not your ordinary readers: They are blazingly fast yet numbingly literal-minded. There are no algorithms for wit, irony, humor or stylish writing. The software is a logical, sequential, left-brain reader, while humans are often right brain.

In newspapers and magazines, for example, section titles and headlines are distilled nuggets of human brainwork, tapping context and culture. "Part of the craft of journalism for more than a century has been to think up clever titles and headlines, and Google comes along and says, 'The heck with that,' " observed Ed Canale, vice president for strategy and new media at The Sacramento Bee.

Moves to accommodate the technology are tricky. How far can a news organization go without undercutting its editorial judgment concerning the presentation, tone and content of news?

So far, the news media are gingerly stepping into the field of "search engine optimization." It is a booming business, estimated at $1.25 billion in revenue worldwide last year, and projected to more than double this year.

Much of this revenue comes from e-commerce businesses, whose sole purpose is to sell goods and services online. For these sites, search engine optimization has become a constant battle of one-upmanship, pitting the search engine technologists against the marketing experts and computer scientists working for the Web sites.

Think of it as an endless chess game. The optimizer wizards devise some technical trick to outwit the search-engine algorithms that rank the results of a search. The search engines periodically change their algorithms to thwart such self-interested manipulation, and the game starts again.

News organizations, by contrast, have moved cautiously. Mostly, they are making titles and headlines easier for search engines to find and fathom. About a year ago, The Sacramento Bee changed online section titles. "Real Estate" became "Homes," "Scene" turned into "Lifestyle," and dining information found in newsprint under "Taste," is online under "Taste/Food."

Some news sites offer two headlines. One headline, often on the first Web page, is clever, meant to attract human readers. Then, one click to a second Web page, a more quotidian, factual headline appears with the article itself. The popular BBC News Web site does this routinely on longer articles.

Nic Newman, head of product development and technology at BBC News Interactive, pointed to a few examples from last Wednesday. The first headline a human reader sees: "Unsafe sex: Has Jacob Zuma's rape trial hit South Africa's war on AIDS?" One click down: "Zuma testimony sparks HIV fear." Another headline meant to lure the human reader: "Tulsa star: The life and career of much-loved 1960's singer." One click down: "Obituary: Gene Pitney."

"The search engine has to get a straightforward, factual headline, so it can understand it," Mr. Newman said. With a little programming sleight-of-hand, the search engine can be steered first to the straightforward, somewhat duller headline, according to some search optimizers.

On the Web, space limitations can coincide with search-engine preferences. In the print version of The New York Times, an article last Tuesday on Florida beating U.C.L.A. for the men's college basketball championship carried a longish headline, with allusions to sports history: "It's Chemistry Over Pedigree as Gators Roll to First Title." On the Times Web site, whose staff has undergone some search-engine optimization training, the headline of the article was, "Gators Cap Run With First Title."

The Associated Press, which feeds articles to 11,000 newspapers, radio and television stations, limits its online headlines to less than 40 characters, a concession to small screens. And on the Web, there is added emphasis on speed and constant updates.

"You put those demands, and that you know you're also writing for search engines, and you tend to write headlines that are more straightforward," said Lou Ferrara, online editor of The Associated Press. "My worry is that some creativity is lost."

Whether search engines will influence journalism below the headline is uncertain. The natural-language processing algorithms, search experts say, scan the title, headline and at least the first hundred words or so of news articles.

Journalists, they say, would be wise to do a little keyword research to determine the two or three most-searched words that relate to their subject — and then include them in the first few sentences. "That's not something they teach in journalism schools," said Danny Sullivan, editor of SearchEngineWatch, an online newsletter. "But in the future, they should."

Such suggestions stir mixed sentiments. "My first thought is that reporters and editors have a job to do and they shouldn't worry about what Google's or Yahoo's software thinks of their work," said Michael Schudson, a professor at the University of California, San Diego, who is a visiting faculty member at the Columbia University Graduate School of Journalism.

"But my second thought is that newspaper headlines and the presentation of stories in print are in a sense marketing devices to bring readers to your story," Mr. Schudson added. "Why not use a new marketing device appropriate to the age of the Internet and the search engine?"

In journalism, as in other fields, the tradition of today was once an innovation. The so-called inverted pyramid structure of a news article — placing the most important information at the top — was shaped in part by a new technology of the 19th century, the telegraph, the Internet of its day. Putting words on telegraph wires was costly, so reporters made sure the most significant points were made at the start.

Yet it wasn't all technological determinism by any means. The inverted pyramid style of journalism, according to Mr. Schudson, became standard practice only in 1900, four decades or more after telegraph networks came into use. It awaited the rise of journalists as "an avowedly independent, self-conscious, professionalizing group," confident of their judgments about what information was most important, he said.

The new technology shaped practice, but people determined how the technology was used — and it took a while. Something similar is the likely path of the Internet.

"We're all struggling and experimenting with how news is presented in the future," said Larry Kramer, president of CBS Digital Media. "And there's nothing wrong with search engine optimization as long as it doesn't interfere with news judgment. It shouldn't, and it's up to us to make sure it doesn't. But it is a tool that is part of being effective in this medium."

But the crank’s so cool!

Negroponte: Slimmer Linux Needed For $100 Laptop
Stephen Shankland

The One Laptop Per Child organization will use Linux on its inexpensive machines, but the operating system suffers the same code bloat as Windows, the project's leader said Tuesday.

"People aren't thinking about small, fast, thin systems," said Nicholas Negroponte, chairman of the One Laptop Per Child nonprofit association, in a speech at the LinuxWorld Conference and Expo here. "Suddenly it's like a very fat person (who) uses most of the energy to move the fat. And Linux is no exception. Linux has gotten fat, too."

The association hopes to distribute 5 million to 10 million of the systems to children in India, China, Brazil, Argentina, Thailand, Egypt, and Nigeria in the first quarter of 2007, somewhat later than the late 2006 launch Negroponte predicted at the World Economic Forum last year. He hopes the project will help supply the world's billion children with an education that undertrained teachers often can't supply. "At least 50 percent of those children don't get anything that even approximates what you and I would call an education," he said.

Microsoft Chairman Bill Gates criticized the initiative's products earlier this year, saying they should use more powerful machines with better displays, though Gates subsequently offered a warmer opinion. Negroponte chafed at Gates' view nonetheless.

"It's not about a weak computer. It's about a thin, slim, trim, fast computer," he said. Not only that, Microsoft is even involved in the effort. "We are also talking to Microsoft constantly. We are going to ship them development boards. They are going to make a Windows CE version (that supports the hardware). So jeez--why criticize me in public?"

System specs
The system will use a 500MHz processor from Advanced Micro Devices with 128MB of memory. It will use 512MB of flash memory and no hard drive, he said. The biggest remaining cost is the display.

The system will use a dual-mode display with a black-and-white, 1110-by-830-pixel mode in sunlight and a 640-by-480-pixel color mode otherwise.

Negroponte said one meeting with an unnamed display manufacturer spotlighted the importance of high-volume manufacturing.

"I said, 'We'd like to work with you on the display. We need a small display. It doesn't have perfect color uniformity, it can have pixel or two missing, it doesn't have to be that bright," Negroponte recounted. "The manufacturer said, 'Our strategic plan is to make big displays with perfect color uniformity, zero pixel defects and to make it very bright for the living room.'"

"I said, 'That's too bad, because I need 100 million a year.' They said, 'Well, maybe we can change our strategic plan.' That's the reason you need scale," Negroponte said.

As initially envisioned, the laptops sported a hand crank on the side to generate power, but Negroponte has scrapped that idea because the twisting forces that would be bad for the machine. Instead, some form of power generation device, likely a pedal, will be attached to the AC power adapter, he said.

"I was the longest holdout for the crank being on the laptop. I was wrong," he said, adding, "If you're a 10-year-old, maybe you can get your four-year-old to pedal for you."

The organization's goal is to sell $135 laptops in 2007, then cut the price to $100 in 2008 and $50 in 2010, he said.

The machines will consume 2 watts of power when running, 1 watt for the display, Negroponte said.

He's not worried about connecting the machines to the Internet because networking will develop on its own, he said, but later added that the vision relies on a built-in "mesh" network that links all the machines, even when the rest of the computers are shut down.

"I think between WiFi, WiMax and 3G, that's going to happen," Negroponte said. "We're heading to the point where 50 percent of the world will have a cell phone or some kind of (communication device) within 18 months. It's too voice-centric, and I could campaign to make it more data-centric, but that's going to happen, too."

The laptops mesh networks will be anchored by data cached locally on $100 servers to be housed at schools, he added.

Once children have the laptops, they'll teach themselves, he predicted, making teacher training beside the point. "Teachers teach the kids? Give me a break," he said. "Give any kid an electronic game and the first thing they do is throw away the manual and the second thing they do is use it."

Few Buyers At Patent Auction
Michael Kanellos

It looked like it was going to be Gary's lucky day.

An inventor, engineer and co-owner of a two-person company in Cleveland, he offered up a suite of patents for varying the valve timing in car engines at the Ocean Tomo Patent Auction here Thursday. The night before the auction, he said he has tried to commercialize the invention for several years. Ford Motor called him for a meeting in Detroit, but nothing happened. He also went to England to meet another manufacturer, but no licensing deal transpired.

"I am sort of ambivalent about selling," said Gary, who asked that he be identified only by his first name to preserve anonymity. "This has been six or seven years of my life."

Bidding climbed fast. "$1.1 million I am bid," said British auctioneer Charles Ross. "$1.3 million," he bellowed. "$1.4 million. Do I hear $1.5 million."

Then something occurred that seemed to happen quite a bit at the auction: No further bids came in. The last $1.4 million bid didn't meet the reserve, and the lot was withdrawn. No sale.

"We had the second highest bid out there," Gary said after the auction. He was upbeat and said he and his partner would continue to try to sell it.

Buyers and sellers had a tough time connecting at the highly publicized auction. Seventy-four lots of patents were offered up for auction, but only around 25 sold. Most of the time, the bids failed to meet the minimum reserve set by the seller, causing the item to be withdrawn.

A few auctions generated a fanfare of drama. A patent submitted by inventor Douglas J. Ballantyne for compressing movies for distribution on TVs went on the block at $300,000. "$450,000 I'm now bid. The bid is $500,000" said Ross. It climbed to $650,000 and stalled, but then ratcheted up rapidly to $900,000.

After crossing $1 million, only two bidders were left. It went to $1.1 million, then $1.2, followed by $1.3 million. The room of more than 300 attendees went silent. Ross stared at one of the bidders. Seconds passed. Ross didn't smile or change his expression, but he shifted his gaze to the other bidder.

"I will sell the lot for $1.4 million," he bellowed, notifying the room that the last bidder has just raised the sale price during that last exchange of stares. "Going once for $1.4 million. Going twice...Sold for $1.4 million."

A few rounds before that, a bidding duel between a woman and a man I couldn't pick out in the crowd drove the price of a set of patents for a flash memory module from 3Com from $350,000 to $950,000 in just a few minutes. The audience burst into applause.
Auction highs and lows
But those were the rare highlights. Most of the other patents sold for between $8,000 and $10,000, many to an anonymous bidder over the phone. An unidentified woman in the crowd also 'hoovered' in a few patents in this price range from a variety of fields. The running suspicion among people at the cocktail party that followed was that she came from a patent firm that earns revenue from licensing or suing others. (No one wore name tags to preserve anonymity.)

Some patents didn't even get bidders. Ross started the bidding on a patent for preventing air conditioners from overheating at $500,000. "Will someone bid me $500,000? $300,000...$200,000," he said. "I don't like going backward." When no bids emerged, the lot was withdrawn.

"When you're selling paintings or cars, you rarely go below $300,000," Ross, who also appears on Antiques Roadshow in England, said after the auction. "But patents are different. No one is going to come in and say, 'That is going for three-quarters of a million dollars. I think I will give it a punt.'"

The wide variety of the offerings did make it tough for sellers, many said after the auction. When the automotive patents were on the block, the bidders from semiconductor companies sat on their hands. Material science companies bid on things like the patent for Estrified propoxylated glycerols (a fat substitute invented by Arco Chemical) while the parties who showed up for the patent from inventor Andrea Rose for sizing clothes online sat on their hands.

Still, many bids came close to the reserve, said Jim Malackowski, CEO of Ocean Tomo, and eight sellers said they would stick around to hammer out deals with the potential buyers.

"The serious bidders did their homework," Malackowski said. "The result was kind of what we expected."

Future auctions will likely have to be better calibrated, said Stuart Soffer, an intellectual property consultant and technical expert witness from Menlo Park, Calif. Most sellers overvalued the value of their patents. Many, he added, will also likely have trouble getting more money through licensing their patents than they would have obtained by selling at the auction for a price that was below their reserve. The auctions should also more tightly follow a theme so the majority of the bidders who attend will be interested in most of the patents, he added.

The slow pace and low bids on some of the lots surprised him. "I wanted to get up and say, 'Ok. I bid $1,000," Soffer laughed.

But, like on eBay, the sellers who managed to offload something were glad they participated. Jeff Rosedale, an attorney at Woodcock and Washburn in Philadelphia, managed to sell a patent that grew out of his doctoral thesis. He got $10,000 for it. It will have to be split four ways, and he spent about $1,000 in attending the auction, he said.

"So I made a little money. Now, that's not counting the hours I put in (evaluating the value of the patent," he said. "But it was worth it."

Thursday's auction, he added, is likely only a first step in a process that will become more common.

Some Worries as San Francisco Goes Wireless
Laurie J. Flynn

When Mayor Gavin Newsom announced 18 months ago that he intended to provide free wireless access to all of the city's 760,000 residents, Chris Vein said he felt sorry for the "poor guy" who would have to carry out the complex task. Today, nine months after taking the job as head of the city's technology department, Mr. Vein is the point person in negotiations over the details.

Last week, the city announced it had selected Google and EarthLink to build the wireless network, which it hopes will be in operation early next year. The two companies, along with Tropos Networks and Motorola, which will help build the infrastructure for the network, beat out five other bidding teams in a six-week review process.

The exact terms and business model are to be decided in negotiations that are expected to begin next month between the city and EarthLink, the lead company.

But in the few days since the winning bidder was announced, the city, along with Mr. Vein, has found itself at the center of debate about the role of advertising, the implications of the network on consumer privacy and the effect on telecommunications companies that today sell Internet access in the city.

The San Francisco service will be EarthLink's fourth municipal wireless network. The plan is to blanket the city's 49 square miles so that all residents can connect to the Internet from their homes and offices and even from their neighborhood park.

Mr. Vein said that, from the start, the project's mission had been to help bridge the so-called digital divide by providing wireless access to residents who could not get it otherwise.

"This is really intended to help those people first, and everybody else second," said Mr. Vein, San Francisco's executive director of telecommunications and information services.

The other companies that submitted bids for the city contract were SF Metro Connect, a collaboration between Cisco Systems; I.B.M. and SeaKay Inc., a nonprofit group; Communications Bridge Global; MetroFi; NextWLAN; and Razortooth Communications.

Mr. Vein, who was not on the review committee, said the group led by EarthLink narrowly beat out MetroFi. Mr. Vein said that EarthLink's experience building a similar high-profile wireless network under construction in Philadelphia may have contributed to its winning the San Francisco contract.

Users of the network in San Francisco will be able to choose from two options. From Google, at no cost, they will be able to connect to the Internet at the modest speed of 300 kilobits a second, about six times as fast as a dial-up connection but slower than cable service. The trade-off is that they will see a variety of on-screen advertising, though exactly what that will look like is part of the negotiations.

Or, for an estimated $20 a month, subscribers will be able to connect through EarthLink at roughly four times that speed and see no advertising at all.

Mr. Vein said he thought the typical San Francisco resident, and the additional 400,000 who commute into the city every weekday, would take advantage of the free service, but that the city's many small businesses would likely pay for the faster service.

San Francisco already has more wireless hot spots than most other American cities — about 800 of them, nearly 400 of them free, according a recent report by JBoss, a research company — but the new network would extend throughout the entire city.

For Google, the San Francisco network is indicative of the company's move to expand well beyond search, into areas like local advertising and real estate listings.

But even before the city announced the winning bidder, privacy advocates had begun to criticize the Google approach for what they say is its potential to violate consumer privacy. Early last week, the Electronic Frontier Foundation and the Electronic Privacy Information Council released a joint report calling the EarthLink and Google proposal "privacy-invasive," because it would involve "cookies" that track users from session to session to enable customized delivery of ads.

Mr. Vein said the criticism was premature given that the city and the companies had not yet negotiated the details of the network.

"While we have picked somebody, we haven't necessarily agreed to the details of the proposal," Mr. Vein said. "It is just a starting point."

Mr. Vein said the city would make decisions related to privacy as the issues came up during negotiations. "I will be pushing to maintain the privacy and security of citizens as best I can as I put this deal together," he said.

Megan Quinn, a Google spokeswoman, said the company intended to work closely with the city and EarthLink to allay any concerns. "Always our users' privacy and security are of utmost importance to us," she said. "This is a planning process."

At the formal announcement of the project last October, Mr. Newsom told reporters he feared that telecommunication companies serving San Francisco would try to block the building of the network. At the time, SBC Communications (now AT&T), Comcast and other companies in California argued that low-cost access to the Internet was already widely available to the public in San Francisco.

In addition to Philadelphia, EarthLink is building wireless citywide networks in Anaheim and Milpitas, Calif., all priced at $20 a month. Dozens of other cities have various wireless networks under development or in the planning stages, including Chicago, Boston and Austin, Tex.

MetroFi already offers citywide wireless access in several midsize Silicon Valley cities including Cupertino, Sunnyvale and Santa Clara.

Esme Vos, who writes about municipal wireless projects at muniwireless.com, estimates that cities, towns and counties in the United States will spend nearly $700 million over the next three years to build citywide wireless networks.

William Tolpegin, vice president for development and planning at EarthLink in Atlanta, said the EarthLink-led consortium expected to spend $8 million to $10 million to build the network in San Francisco.

A Web Site Born in U.S. Finds Fans in Brazil
Seth Kugel

RIO DE JANEIRO — Ask Internet users here what they think of Orkut, the two-year-old Google social networking service, and you may get a blank stare. But pronounce it "or-KOO-chee," as they do in Portuguese, and watch faces light up.

"We were just talking about it!" said Suellen Monteiro, approached by a reporter as she gossiped with four girlfriends at a bar in the New York City Center mall here. The topic was the guy whom 18-year-old Aline Makray had met over the weekend at a Brazilian funk dance, who had since found her on Orkut and asked her to join his network.

Orkut, the invention of a Turkish-born software engineer named Orkut Buyukkokten, never really caught on in the United States, where MySpace rules teenage cyberspace. But it is nothing short of a cultural phenomenon in Brazil.

About 11 million of Orkut's more than 15 million users are registered as living in Brazil — a remarkable figure given that studies have estimated that only about 12 million Brazilians use the Internet from home. (And that 11 million does not include people like Ms. Makray, who clicked on Hungary as a nod to her heritage, or someone named Mauricio who wrote in Portuguese but jokingly registered as being from Mauritius.)

Expect Brazilian Portuguese dictionaries to add "orkut" to upcoming editions. O Globo, Rio's biggest daily newspaper, refers to it without further explanation. And the Brazilian media routinely measures the popularity of music groups and actors by the number of user communities dedicated to them on Orkut.

"Surto," a popular comedic play showing in Rio de Janeiro, is peppered with references to Orkut. And the site's jargon has entered the Brazilian lexicon, like "scrap" (pronounced "SKRAH-pee" or "SHKRAH-pee"), meaning a note that one user leaves in another's virtual scrapbook for everyone — including jealous boyfriends and girlfriends and curious suitors — to see.

But the sheer popularity of Orkut, which people can join by invitation only, has had several unexpected consequences. Almost as soon as Brazilians started taking over Orkut in 2004 — and long before April 2005, when Google made Orkut available in Portuguese — English-speaking users formed virulently anti-Brazilian communities like "Too Many Brazilians on Orkut."

And, more darkly, Orkut's success has made it a popular vehicle for child pornographers, pedophiles and racist and anti-Semitic groups, according to Brazilian prosecutors and nonprofit groups. Hatemongering on Orkut has also been decried in the United States and elsewhere, but it is in Brazil where the biggest effort is under way to halt the problem and confront Google's seemingly tight-lipped attitude.

SaferNet Brasil, a nongovernmental organization founded late last year, tracks human rights violations on Orkut and has generated much press coverage of illegal activity on the site. (Many forms of racist speech are outlawed in Brazil.)

SaferNet's president, Thiago Nunes de Oliveira, a professor of cyberlaw at the Catholic University of Salvador, said the problem had exploded in the last few months. "In 45 days of work, we identified 5,000 people who were using the Internet, and principally Orkut, to distribute images of explicit sex with children," he said. And that was aside from the racists, neo-Nazis and other hate groups the organization found.

In February, after several failed attempts to contact Google's Brazil office, Mr. Nunes de Oliveira said, SaferNet Brasil filed a complaint with federal prosecutors in São Paulo. Prosecutors summoned Google's Brazilian sales staff to a meeting on March 10 and asked them for help identifying users breaking Brazilian human rights laws.

Google declined a reporter's requests for a direct interview with Mr. Buyukkokten, but a spokeswoman forwarded some of Mr. Buyukkokten's responses by e-mail. The Brazilian office, he said, handles ad sales and does not even work with Orkut, which produces no revenue. "Orkut prohibits illegal activity (such as child pornography) as well as hate speech and advocating violence," he wrote. "We will remove such content from Orkut when we are notified."

But Mr. Nunes de Oliveira said that removing the content was not what they were asking for. "The incapacity of the authorities to investigate these crimes is principally the lack of cooperation by Google in identifying those users," he said. He also worried that Google was not archiving evidence of crimes as it deleted offending pages.

Thamea Danelon Valiengo, part of a team of federal prosecutors working on cybercrime cases in São Paulo, agreed. She said that prosecutors had asked judges to order Google to turn over information on users who perpetrate crimes. So far, she said, Google has agreed to send a lawyer to Brazil for a meeting in May.

Mr. Buyukkokten wrote by e-mail that Google would cooperate with the authorities, but did not specify whether, for example, it would provide logs allowing users to be traced by their Internet address, as prosecutors have asked. A Google spokeswoman, Debbie Frost, said by e-mail that in four to six weeks, Orkut would deploy a tool that would "better identify and remove content that violates our terms of use."

In general, though, Orkut fanatics seem undisturbed by illegal activity on the site, which most of those interviewed said they had never come across personally. They were more interested in finding long-lost classmates and friends, one of the site's most lauded abilities. Schools, workplaces, even residential streets have "communities" joined by people who have studied, worked or lived there.

And everyone has stories of romance foiled by a telltale posting. Ms. Makray once found the page of a man who had flirted with her in a club. "He hadn't told me that he had children or that he was married," she said. "I discovered it on Orkut."

Erika Laun, 23, checks Orkut every day from work to keep an eye on her boyfriend. "When we were first going out," she said, "a girl who liked him was always sending messages and making fun of the messages that I sent him." The rival's sister, whom he didn't even know, helped out, sending messages like "Hey big boy, love you, 1,000 kisses."

"I was really angry," Ms. Laun said.

No one quite knows why Orkut caught on among Brazilians and not Americans, although the fact that it is an invitation-only network might explain why it exploded in Brazil. In a 2005 interview with the newspaper Folha de São Paulo, Mr. Buyukkokten said it might be because Brazilians were "a friendly people," and perhaps because some of his own friends, among the first to join the network, had Brazilian friends.

Fernanda Leon, an architecture student eating at a Middle Eastern restaurant here with her boyfriend, said she thought Brazil had gravitated toward Orkut because of the country's inherently social culture. "Brazilians really want to interact with other people, both old friends and new people," she said. She has 379 friends on her network.

Mr. Nunes de Oliveira of SaferNet stressed that he was only against the illegal uses of Orkut. "It's a fantastic tool, an excellent service," he said. "We do not want it gone."

As Katrina Recedes, Newspapers Still Float
Katharine Q. Seelye

Glenn Currie, an architect, slid 50 cents into a coin box here the other morning and pulled out a copy of The Sun Herald, the local daily published in nearby Gulfport.

"I read it every day," he said. "They report what we need to know."

Mr. Currie, 59, said he especially appreciated the paper's before-and-after series, which features a building before Hurricane Katrina struck seven months ago, and after, often to shocking effect.

Less than 80 miles west in New Orleans, a similarly intense reader interest is taking place. At CC's coffeehouse on Magazine Street one morning last week, there were so many people absorbed in that day's Times-Picayune that the scene looked like a commuter train.

"These writers are energized and passionate," said Angele Thionville, 34, a mother of three boys, as she glanced up from the paper. She was not a big fan of The Times-Picayune before Katrina, she said, but now if she misses the paper one day, "I feel so out of touch."

While much of the country has moved on from coverage of Katrina, considered the largest natural disaster in modern American history, both The Sun Herald and The Times-Picayune remain all Katrina, all the time. For their role in covering and enduring the storm, both papers have received accolades, and next week both may well receive Pulitzer Prizes.

Both papers have struggled along with their communities, and during the recovery have faced some similar issues and adopted similar approaches to their new reality. But there are major differences, too. Both have taken on a new importance as news sources and as advocates in their communities. With buildings along 70 miles of the Gulf Coast reduced to matchsticks and parts of New Orleans abandoned and still without reliable electricity or phone service, The Sun Herald and Times-Picayune are connecting with readers the way newspapers did before the arrival of television.

The big question, ultimately tied to the economic fortunes of their areas, is what kind of future these newspapers will have as news organizations and businesses. Here their stories diverge. The Sun Herald, which before the storm had a circulation of 47,000 daily and 55,000 on Sunday, has rebuilt its circulation and advertising base; it is just 400 shy of its prestorm circulation and a few percentage points short of its prestorm ad revenue.

Even as many homes and buildings remain skeletal or in mounds of debris, the presence of casinos here and the likelihood that more will come has instilled confidence in the region.

The Times-Picayune, which had more than five times the circulation of The Sun Herald, now has regained about two-thirds of its readers, with a circulation of 176,000 daily and 196,000 on Sunday. But readers are returning faster than advertisers. Only 10 percent of the city's businesses have reopened. "We're suffering significant revenue losses," said Ashton Phelps Jr., publisher of the newspaper, which is owned by Advance Publications.

The obstacles that New Orleans and its newspaper faced in the storm and continue to face are on a different order of magnitude from the Gulf Coast as a whole. More than 200 people died in Mississippi, and 300 are still missing. In New Orleans, more than 1,100 died, and 2,000 are missing.

New Orleans faces bigger challenges, too, in part because of its terrain. The water remained in New Orleans, while it quickly drained from other communities along the coast. New Orleans is scrambling to reinforce the levees as the next hurricane season approaches, and residents are still waiting for flood maps before they decide whether to rebuild, leaving a cloud of uncertainty over the city. It is also in the midst of a chaotic mayor's race with two dozen candidates, making its leadership seem unstable and its direction unclear.

The tiny Sun Herald, indeed much of the Gulf Coast, has been overshadowed by the attention paid to New Orleans. But recognition may be at hand. Editor & Publisher, which reports on the newspaper business, said last month that The Sun Herald was in line to receive the Pulitzer Prize for public service.

The Times-Picayune, according to Editor & Publisher, is a Pulitzer finalist in two categories: commentary (by Chris Rose, one of its columnists) and breaking news, for reporting that a major levee had been breached and the city was being flooded while other media were reporting that New Orleans had been spared.

The Pulitzer board, which does not comment on finalists at this stage of the process, is meeting in New York later in the week to vote on the winners, and is to announce them next Monday.

The report that The Sun Herald may be under consideration for the public service award, journalism's highest honor, has already been something of a victory for the paper — and something of a disappointment for The Times-Picayune, stoking a newfound competition between the two. The Sun Herald likes to emphasize that it did not miss a day of print publication, while The Times-Picayune points to the scope of the disaster in New Orleans and its near-impossible reporting conditions.

The Pulitzer board can move finalists to different categories, so no one can say if either paper will make the cut or in which category. But the head-to-head competition over Katrina coverage suggests that the board will have to grapple with the very definition of public service.

The spotlight on New Orleans after Katrina has been a sore point for Mississippi. The Sun Herald has editorialized to that effect, complaining that the national media had left the broader Gulf Coast a footnote in the New Orleans story.

Before the storm, The Sun Herald, which is owned by Knight Ridder, had an emergency plan in place. The paper, in advance, sent four of its news staff members and two Knight Ridder designers to its sister paper, The Ledger-Enquirer in Columbus, Ga., while most of the staff reported along the coast and hunkered down in the Sun Herald building.

The building was built after Hurricane Camille destroyed the region in 1969. It sustained little damage from Katrina, and its presses remained dry, but it lost all power and communications. Shortly, the Knight Ridder cavalry arrived in Gulfport.

"They showed up with sat phones, chain saws, food and water," said Stan Tiner, The Sun Herald's editor and a former marine. "The logistics were very well organized." Even P. Anthony Ridder, the company's chief executive, showed up.

The Times-Picayune staff evacuated its building in delivery trucks as the floodwaters rose, and headed to Baton Rouge, La. A small band of reporters and editors felt sick at the thought of leaving and commandeered a delivery truck to return to New Orleans, defying martial law to report the news. The Times-Picayune suspended publication for three days.

Staff members at both papers experienced much of the grief that their readers did, but while many lost their houses, no employees died. Some lost loved ones, and all have their own harrowing tales.

Jean Prescott, 64, a features writer at The Sun Herald, said that her sister and her sister's husband drowned in their house. The authorities subsequently misplaced the bodies, she said, then they cremated someone else instead of her sister. The family did not receive her sister's ashes for three months.

"It wasn't unique," Ms. Prescott said. "So many people were found dead, they just couldn't keep track."

Workers at both papers said they are throwing themselves into telling their readers' stories instead of coping with their own.

"We're journalists and we just pack it away," said James O'Byrne, 46, features editor of The Times-Picayune, whose home was ruined. "You don't get a special badge of courage for losing your home," he said; it was a common event.

Anita Lee, 49, a reporter at The Sun Herald, said, "We're just not dealing with a lot of it," as she stepped around the debris of her former home and showed off the government-issued trailer where she lives now. "Our insurance is up in the air, our S.B.A. loan is not finalized, our house has not been torn down, and we're writing about other people in the same situation."

In some ways, she said, the shared experience with her readers has made her job easier. "I always tried to get to a level of understanding with the people I was interviewing," she said. "Now I get there a lot quicker."

The experience has given the pages of both papers a new urgency, and both seem less constrained by traditional objectivity, to the point of printing front-page editorials.

"We're far more direct in getting at what we think matters," said Jim Amoss, the editor of The Times-Picayune. "The urgency is palpable."

Mike Perlstein, 45, a criminal justice reporter at The Times-Picayune, said that articles about underhanded dealings and "good-old-boy New Orleans ways of doing things" that once drew ho-hum reactions are now "drawing howls of outrage from readers and keeping the news staff really engaged."

"There are issues on the business side, as there are with any newspaper," he added. "But we're still riding a riveting and unbelievable story about the rebuilding of a major American city."

Part of that rebuilding for the city and the paper depends on the return of advertisers. "It's a chicken-and-egg thing," said Tod Smith, who directs advertising plans for major clients in New Orleans. "What comes first, the services that people need? Or the people who support the services? There are a lot of unanswered questions."

The paper has many ads for car dealers (many people had car insurance, so practically all cars in New Orleans look brand new). The paper also is running small ads for services like mold remediation and air-duct cleaning. And its big department store, Dillard's, is open and buying full-page ads.

On the Gulf Coast, Dillard's remains shuttered. But Vicki Barrett, the advertising director at The Sun Herald, said that what the paper had lost in retail advertising, it had gained in classified ads. Perhaps one measure of the comeback status of both regions is an ad in The Sun Herald that would seem unthinkable in New Orleans — a company promising to meet "all your swimming pool needs."

The Sun Herald is optimistic about its future. South Mississippi, with its miles of white sandy beachfront and new casinos being built inland, expects more than $30 billion in new investment in the next few years.

"It's going to be a boom like no newspaper market has ever seen," said Ricky R. Mathews, The Sun Herald's publisher.

Gary Pruitt, the chief executive of McClatchy, which recently agreed to buy Knight Ridder, agrees. Mr. Pruitt is selling 12 of Knight Ridder's 32 papers, but he is keeping The Sun Herald, saying it meets his criteria for a growth market.

"We're basing our decision on our readings of the business and population projections and the resiliency of the local economy," he said.

Mr. Phelps, of The Times-Picayune, addressed the matter at a meeting of newspaper executives recently.

"The $64,000 question for us is this: What is the economy going to look like 18 months, two years from now, when most of the insurance checks have been cashed and the federal relief efforts taper off?" Mr. Phelps asked.

"We just don't know," he said, adding later: "The truth is that it's so big, we have still not found the bottom of how life has changed for us. We're still riding Katrina's winds."

How to

Capture HDTV Using Your Firewire-Equipped Cable Box

According to FCC regulations, all DVRs that cable companys rent must have an active firewire port. While unfortunately you likely won't be able to record premium channels such as HBO, INHD, DiscoveryHD. All broadcast channels must be open. If any broadcast channels are encrypted a quick call to your cable company will fix this. This is a dream come true for all you TV archivers.

While I use this method primarily for recording 720p, and 1080i HDTV sources, this will work for standard definition digital channels as well.

Method and links.

Are Software Patents Evil?
Paul Graham

A few weeks ago I found to my surprise that I'd been granted four patents. This was all the more surprising because I'd only applied for three. The patents aren't mine, of course. They were assigned to Viaweb, and became Yahoo's when they bought us. But the news set me thinking about the question of software patents generally.

Patents are a hard problem. I've had to advise most of the startups we've funded about them, and despite years of experience I'm still not always sure I'm giving the right advice.

One thing I do feel pretty certain of is that if you're against software patents, you're against patents in general. Gradually our machines consist more and more of software. Things that used to be done with levers and cams and gears are now done with loops and trees and closures. There's nothing special about physical embodiments of control systems that should make them patentable, and the software equivalent not.

Unfortunately, patent law is inconsistent on this point. Patent law in most countries says that algorithms aren't patentable. This rule is left over from a time when "algorithm" meant something like the Sieve of Eratosthenes. In 1800, people could not see as readily as we can that a great many patents on mechanical objects were really patents on the algorithms they embodied.

Patent lawyers still have to pretend that's what they're doing when they patent algorithms. You must not use the word "algorithm" in the title of a patent application, just as you must not use the word "essays" in the title of a book. If you want to patent an algorithm, you have to frame it as a computer system executing it. Then it's mechanical; phew. The default euphemism for algorithm is "system and method." Try a patent search for that phrase and see how many results you get.

Since software patents are no different from hardware patents, people who say "software patents are evil" are saying simply "patents are evil." So why do so many people complain about software patents specifically?

I think the problem is more with the patent office than the concept of software patents. Whenever software meets government, bad things happen, because software changes fast and government changes slow. The patent office has been overwhelmed by both the volume and the novelty of applications for software patents, and as a result they've made a lot of mistakes.

The most common is to grant patents that shouldn't be granted. To be patentable, an invention has to be more than new. It also has to be non-obvious. And this, especially, is where the USPTO has been dropping the ball. Slashdot has an icon that expresses the problem vividly: a knife and fork with the words "patent pending" superimposed.

The scary thing is, this is the only icon they have for patent stories. Slashdot readers now take it for granted that a story about a patent will be about a bogus patent. That's how bad the problem has become.

The problem with Amazon's notorious one-click patent, for example, is not that it's a software patent, but that it's obvious. Any online store that kept people's shipping addresses would have implemented this. The reason Amazon did it first was not that they were especially smart, but because they were one of the earliest sites with enough clout to force customers to log in before they could buy something. [1]

We, as hackers, know the USPTO is letting people patent the knives and forks of our world. The problem is, the USPTO are not hackers. They're probably good at judging new inventions for casting steel or grinding lenses, but they don't understand software yet.

At this point an optimist would be tempted to add "but they will eventually." Unfortunately that might not be true. The problem with software patents is an instance of a more general one: the patent office takes a while to understand new technology. If so, this problem will only get worse, because the rate of technological change seems to be increasing. In thirty years, the patent office may understand the sort of things we now patent as software, but there will be other new types of inventions they understand even less.

Applying for a patent is a negotiation. You generally apply for a broader patent than you think you'll be granted, and the examiners reply by throwing out some of your claims and granting others. So I don't really blame Amazon for applying for the one-click patent. The big mistake was the patent office's, for not insisting on something narrower, with real technical content. By granting such an over-broad patent, the USPTO in effect slept with Amazon on the first date. Was Amazon supposed to say no?

Where Amazon went over to the dark side was not in applying for the patent, but in enforcing it. A lot of companies (Microsoft, for example) have been granted large numbers of preposterously over-broad patents, but they keep them mainly for defensive purposes. Like nuclear weapons, the main role of big companies' patent portfolios is to threaten anyone who attacks them with a counter-suit. Amazon's suit against Barnes & Noble was thus the equivalent of a nuclear first strike.

That suit probably hurt Amazon more than it helped them. Barnes & Noble was a lame site; Amazon would have crushed them anyway. To attack a rival they could have ignored, Amazon put a lasting black mark on their own reputation. Even now I think if you asked hackers to free-associate about Amazon, the one-click patent would turn up in the first ten topics.

Google clearly doesn't feel that merely holding patents is evil. They've applied for a lot of them. Are they hypocrites? Are patents evil?

There are really two variants of that question, and people answering it often aren't clear in their own minds which they're answering. There's a narrow variant: is it bad, given the current legal system, to apply for patents? and also a broader one: it is bad that the current legal system allows patents?

These are separate questions. For example, in preindustrial societies like medieval Europe, when someone attacked you, you didn't call the police. There were no police. When attacked, you were supposed to fight back, and there were conventions about how to do it. Was this wrong? That's two questions: was it wrong to take justice into your own hands, and was it wrong that you had to? We tend to say yes to the second, but no to the first. If no one else will defend you, you have to defend yourself. [2]

The situation with patents is similar. Business is a kind of ritualized warfare. Indeed, it evolved from actual warfare: most early traders switched on the fly from merchants to pirates depending on how strong you seemed. In business there are certain rules describing how companies may and may not compete with one another, and someone deciding that they're going to play by their own rules is missing the point. Saying "I'm not going to apply for patents just because everyone else does" is not like saying "I'm not going to lie just because everyone else does." It's more like saying "I'm not going to use TCP/IP just because everyone else does." Oh yes you are.

A closer comparison might be someone seeing a hockey game for the first time, realizing with shock that the players were deliberately bumping into one another, and deciding that one would on no account be so rude when playing hockey oneself.

Hockey allows checking. It's part of the game. If your team refuses to do it, you simply lose. So it is in business. Under the present rules, patents are part of the game.

What does that mean in practice? We tell the startups we fund not to worry about infringing patents, because startups rarely get sued for patent infringement. There are only two reasons someone might sue you: for money, or to prevent you from competing with them. Startups are too poor to be worth suing for money. And in practice they don't seem to get sued much by competitors, either. They don't get sued by other startups because (a) patent suits are an expensive distraction, and (b) since the other startups are as young as they are, their patents probably haven't issued yet. [3] Nor do startups, at least in the software business, seem to get sued much by established competitors. Despite all the patents Microsoft holds, I don't know of an instance where they sued a startup for patent infringement. Companies like Microsoft and Oracle don't win by winning lawsuits. That's too uncertain. They win by locking competitors out of their sales channels. If you do manage to threaten them, they're more likely to buy you than sue you.

When you read of big companies filing patent suits against smaller ones, it's usually a big company on the way down, grasping at straws. For example, Unisys's attempts to enforce their patent on LZW compression. When you see a big company threatening patent suits, sell. When a company starts fighting over IP, it's a sign they've lost the real battle, for users.

A company that sues competitors for patent infringement is like a a defender who has been beaten so thoroughly that he turns to plead with the referee. You don't do that if you can still reach the ball, even if you genuinely believe you've been fouled. So a company threatening patent suits is a company in trouble.

When we were working on Viaweb, a bigger company in the e-commerce business was granted a patent on online ordering, or something like that. I got a call from a VP there asking if we'd like to license it. I replied that I thought the patent was completely bogus, and would never hold up in court. "Ok," he replied. "So, are you guys hiring?"

If your startup grows big enough, however, you'll start to get sued, no matter what you do. If you go public, for example, you'll be sued by multiple patent trolls who hope you'll pay them off to go away. More on them later.

In other words, no one will sue you for patent infringement till you have money, and once you have money, people will sue you whether they have grounds to or not. So I advise fatalism. Don't waste your time worrying about patent infringement. You're probably violating a patent every time you tie your shoelaces. At the start, at least, just worry about making something great and getting lots of users. If you grow to the point where anyone considers you worth attacking, you're doing well.

We do advise the companies we fund to apply for patents, but not so they can sue competitors. Successful startups either get bought or grow into big companies. If a startup wants to grow into a big company, they should apply for patents to build up the patent portfolio they'll need to maintain an armed truce with other big companies. If they want to get bought, they should apply for patents because patents are part of the mating dance with acquirers.

Most startups that succeed do it by getting bought, and most acquirers care about patents. Startup acquisitions are usually a build-vs-buy decision for the acquirer. Should we buy this little startup or build our own? And two things, especially, make them decide not to build their own: if you already have a large and rapidly growing user base, and if you have a fairly solid patent application on critical parts of your software.

There's a third reason big companies should prefer buying to building: that if they built their own, they'd screw it up. But few big companies are smart enough yet to admit this to themselves. It's usually the acquirer's engineers who are asked how hard it would be for the company to build their own, and they overestimate their abilities. [4] A patent seems to change the balance. It gives the acquirer an excuse to admit they couldn't copy what you're doing. It may also help them to grasp what's special about your technology.

Frankly, it surprises me how small a role patents play in the software business. It's kind of ironic, considering all the dire things experts say about software patents stifling innovation, but when one looks closely at the software business, the most striking thing is how little patents seem to matter.

In other fields, companies regularly sue competitors for patent infringement. For example, the airport baggage scanning business was for many years a cozy duopoly shared between two companies, InVision and L-3. In 2002 a startup called Reveal appeared, with new technology that let them build scanners a third the size. They were sued for patent infringement before they'd even released a product.

You rarely hear that kind of story in our world. The one example I've found is, embarrassingly enough, Yahoo, which filed a patent suit against a gaming startup called Xfire in 2005. Xfire doesn't seem to be a very big deal, and it's hard to say why Yahoo felt threatened. Xfire's VP of engineering had worked at Yahoo on similar stuff-- in fact, he was listed as an inventor on the patent Yahoo sued over-- so perhaps there was something personal about it. My guess is that someone at Yahoo goofed. At any rate they didn't pursue the suit very vigorously.

Why do patents play so small a role in software? I can think of three possible reasons.

One is that software is so complicated that patents by themselves are not worth very much. I may be maligning other fields here, but it seems that in most types of engineering you can hand the details of some new technique to a group of medium-high quality people and get the desired result. For example, if someone develops a new process for smelting ore that gets a better yield, and you assemble a team of qualified experts and tell them about it, they'll be able to get the same yield. This doesn't seem to work in software. Software is so subtle and unpredictable that "qualified experts" don't get you very far.

That's why we rarely hear phrases like "qualified expert" in the software business. What that level of ability can get you is, say, to make your software compatible with some other piece of software-- in eight months, at enormous cost. To do anything harder you need individual brilliance. If you assemble a team of qualified experts and tell them to make a new web-based email program, they'll get their asses kicked by a team of inspired nineteen year olds.

Experts can implement, but they can't design. Or rather, expertise in implementation is the only kind most people, including the experts themselves, can measure. [5]

But design is a definite skill. It's not just an airy intangible. Things always seem intangible when you don't understand them. Electricity seemed an airy intangible to most people in 1800. Who knew there was so much to know about it? So it is with design. Some people are good at it and some people are bad at it, and there's something very tangible they're good or bad at.

The reason design counts so much in software is probably that there are fewer constraints than on physical things. Building physical things is expensive and dangerous. The space of possible choices is smaller; you tend to have to work as part of a larger group; and you're subject to a lot of regulations. You don't have any of that if you and a couple friends decide to create a new web-based application.

Because there's so much scope for design in software, a successful application tends to be way more than the sum of its patents. What protects little companies from being copied by bigger competitors is not just their patents, but the thousand little things the big company will get wrong if they try.

The second reason patents don't count for much in our world is that startups rarely attack big companies head-on, the way Reveal did. In the software business, startups beat established companies by transcending them. Startups don't build desktop word processing programs to compete with Microsoft Word. [6] They build Writely. If this paradigm is crowded, just wait for the next one; they run pretty frequently on this route.

Fortunately for startups, big companies are extremely good at denial. If you take the trouble to attack them from an oblique angle, they'll meet you half-way and maneuver to keep you in their blind spot. To sue a startup would mean admitting it was dangerous, and that often means seeing something the big company doesn't want to see. IBM used to sue its mainframe competitors regularly, but they didn't bother much about the microcomputer industry because they didn't want to see the threat it posed. Companies building web based apps are similarly protected from Microsoft, which even now doesn't want to imagine a world in which Windows is irrelevant.

The third reason patents don't seem to matter very much in software is public opinion-- or rather, hacker opinion. In a recent interview, Steve Ballmer coyly left open the possibility of attacking Linux on patent grounds. But I doubt Microsoft would ever be so stupid. They'd face the mother of all boycotts. And not just from the technical community in general; a lot of their own people would rebel.

Good hackers care a lot about matters of principle, and they are highly mobile. If a company starts misbehaving, smart people won't work there. For some reason this seems to be more true in software than other businesses. I don't think it's because hackers have intrinsically higher principles so much as that their skills are easily transferrable. Perhaps we can split the difference and say that mobility gives hackers the luxury of being principled.

Google's "don't be evil" policy may for this reason be the most valuable thing they've discovered. It's very constraining in some ways. If Google does do something evil, they get doubly whacked for it: once for whatever they did, and again for hypocrisy. But I think it's worth it. It helps them to hire the best people, and it's better, even from a purely selfish point of view, to be constrained by principles than by stupidity.

(I wish someone would get this point across to the present administration.)

I'm not sure what the proportions are of the preceding three ingredients, but the custom among the big companies seems to be not to sue the small ones, and the startups are mostly too busy and too poor to sue one another. So despite the huge number of software patents there's not a lot of suing going on. With one exception: patent trolls.

Patent trolls are companies consisting mainly of lawyers whose whole business is to accumulate patents and threaten to sue companies who actually make things. Patent trolls, it seems safe to say, are evil. I feel a bit stupid saying that, because when you're saying something that Richard Stallman and Bill Gates would both agree with, you must be perilously close to tautologies.

The CEO of Forgent, one of the most notorious patent trolls, says that what his company does is "the American way." Actually that's not true. The American way is to make money by creating wealth, not by suing people. [7] What companies like Forgent do is actually the proto-industrial way. In the period just before the industrial revolution, some of the greatest fortunes in countries like England and France were made by courtiers who extracted some lucrative right from the crown-- like the right to collect taxes on the import of silk-- and then used this to squeeze money from the merchants in that business. So when people compare patent trolls to the mafia, they're more right than they know, because the mafia too are not merely bad, but bad specifically in the sense of being an obsolete business model.

Patent trolls seem to have caught big companies by surprise. In the last couple years they've extracted hundreds of millions of dollars from them. Patent trolls are hard to fight precisely because they create nothing. Big companies are safe from being sued by other big companies because they can threaten a counter-suit. But because patent trolls don't make anything, there's nothing they can be sued for. I predict this loophole will get closed fairly quickly, at least by legal standards. It's clearly an abuse of the system, and the victims are powerful. [8]

But evil as patent trolls are, I don't think they hamper innovation much. They don't sue till a startup has made money, and by that point the innovation that generated it has already happpened. I can't think of a startup that avoided working on some problem because of patent trolls.

So much for hockey as the game is played now. What about the more theoretical question of whether hockey would be a better game without checking? Do patents encourage or discourage innovation?

This is a very hard question to answer in the general case. People write whole books on the topic. One of my main hobbies is the history of technology, and even though I've studied the subject for years, it would take me several weeks of research to be able to say whether patents have in general been a net win.

One thing I can say is that 99.9% of the people who express opinions on the subject do it not based on such research, but out of a kind of religious conviction. At least, that's the polite way of putting it; the colloquial version involves speech coming out of organs not designed for that purpose.

Whether they encourage innovation or not, patents were at least intended to. You don't get a patent for nothing. In return for the exclusive right to use an idea, you have to publish it, and it was largely to encourage such openness that patents were established.

Before patents, people protected ideas by keeping them secret. With patents, central governments said, in effect, if you tell everyone your idea, we'll protect it for you. There is a parallel here to the rise of civil order, which happened at roughly the same time. Before central governments were powerful enough to enforce order, rich people had private armies. As governments got more powerful, they gradually compelled magnates to cede most responsibility for protecting them. (Magnates still have bodyguards, but no longer to protect them from other magnates.)

Patents, like police, are involved in many abuses. But in both cases the default is something worse. The choice is not "patents or freedom?" any more than it is "police or freedom?" The actual questions are respectively "patents or secrecy?" and "police or gangs?"

As with gangs, we have some idea what secrecy would be like, because that's how things used to be. The economy of medieval Europe was divided up into little tribes, each jealously guarding their privileges and secrets. In Shakespeare's time, "mystery" was synonymous with "craft." Even today we can see an echo of the secrecy of medieval guilds, in the now pointless secrecy of the Masons.

The most memorable example of medieval industrial secrecy is probably Venice, which forbade glassblowers to leave the city, and sent assassins after those who tried. We might like to think we wouldn't go so far, but the movie industry has already tried to pass laws prescribing three year prison terms just for putting movies on public networks. Want to try a frightening thought experiment? If the movie industry could have any law they wanted, where would they stop? Short of the death penalty, one assumes, but how close would they get?

Even worse than the spectacular abuses might be the overall decrease in efficiency that would accompany increased secrecy. As anyone who has dealt with organizations that operate on a "need to know" basis can attest, dividing information up into little cells is terribly inefficient. The flaw in the "need to know" principle is that you don't know who needs to know something. An idea from one area might spark a great discovery in another. But the discoverer doesn't know he needs to know it.

If secrecy were the only protection for ideas, companies wouldn't just have to be secretive with other companies; they'd have to be secretive internally. This would encourage what is already the worst trait of big companies.

I'm not saying secrecy would be worse than patents, just that we couldn't discard patents for free. Businesses would become more secretive to compensate, and in some fields this might get ugly. Nor am I defending the current patent system. There is clearly a lot that's broken about it. But the breakage seems to affect software less than most other fields.

In the software business I know from experience whether patents encourage or discourage innovation, and the answer is the type that people who like to argue about public policy least like to hear: they don't affect innovation much, one way or the other. Most innovation in the software business happens in startups, and startups should simply ignore other companies' patents. At least, that's what we advise, and we bet money on that advice.

The only real role of patents, for most startups, is as an element of the mating dance with acquirers. There patents do help a little. And so they do encourage innovation indirectly, in that they give more power to startups, which is where, pound for pound, the most innovation happens. But even in the mating dance, patents are of secondary importance. It matters more to make something great and get a lot of users.

Apple vs. Me
Jason D. O'Grady

Would you ever want to be on the business end of legal action from a company with US$9 billion in cash? What about being targeted for deletion by one of most powerful multi-national corporations in the world? What if a company with US$14 billion in revenue and 14,000 employees wanted a piece of your ass?

Welcome to my world.

On December 13, 2005 Apple filed suit against "Does 1-20" in a Santa Clara California court. The company obtained a court order that allows it to issue subpoenas to PowerPage (and AppleInsider) for the names of the "Does" who allegedly leaked information. A nice Christmas card from the company that I have loved and supported for years.

But Apple didn't subpoena me directly, they instead set their legal sights on the low hanging fruit - my ISP - a small company that was handling my email and Web hosting in addition to a few other clients. What's sad about Apple's approach here was that their attorneys attempted to intimidate a small host/developer/ISP with legal threats that look pretty daunting when coming from a company with US$14B in revenue on their balance sheet.

At issue was a series of stories that I ran in October 2004 about an upcoming product that was in development. Was it the next great PowerBook? Maybe the a red hot iPod? Maybe a killer new version of the OS? Nah. The stories about a FireWire breakout box for GarageBand, code-named "Asteroid." Yawn.

After the subpoenas were issued the Electronic Frontier Foundation (EFF) approached me and offered to defend me pro bono, arguing that the anonymity of my sources are protected by the same laws that protect sources who leak information to journalists.

A Santa Clara County judge decided that journalists and their sources lose constitutional protection when they publish information that a business classifies as a "trade secret." The irony here is that a large corporation can claim that their cafeteria menu is a "trade secret" then sue your ass off if you post it on your blog. The EFF filed a petition to have that decision overturned. (You can read the details of the case on the EFF Web site.)

On April 20, 2006 the Electronic Frontier Foundation (EFF) will have that petition heard by the California Court of Appeal. The purpose of the hearing is so that a judge can decide whether the Santa Clara County court made a mistake when it refused to protect my rights under the First Amendment.

A friend made one of the best analogies about the situation that I've heard: He told me that the reason why a house cat doesn't eat you is because it's smaller than you. He went on to say that if the cat was larger than you it sure as hell would eat you. It appears that Apple used to be a small, friendly cat and now (thanks in large part to the success of the iPod) it's a whole lot bigger - and starting to eat people. "Tiger" indeed.

My position on the Asteroid postings is that I didn't steal the information and I didn't ask for it. Someone volunteered it to me and it looked credible, so I posted it. It wasn't marked confidential, trade secret or any such thing but it looked legit to me, so I ran it. When Apple later asked me to remove it, I complied.

Apple feels that independent online journalists are not protected by the First Amendment of the U.S. Constitution and that a journalists confidential communications and sources should be exposed to them or any large corporation that doesn't like what they publish - at will. I think that this is completely wrong on several levels.

Here's why you should be scared:

This case is not about me, it's not about Apple and it's not about the technology industry. It's about the First Amendment. If we don't have a free press and protection under the First Amendment large corporations can sue any journalist publishing something that they don't agree with. The last time I checked, this was the United States of America - not communist China - and we are protected by a wonderful document called The Constitution.

Imagine if Apple wanted to raid your email in-box then sue you for saying something they didn't like. Something has to be done to protect the press from paranoid corporations bent on controlling the media. This case doesn't affect me, it affects every citizen in the United States.

Blogger and fellow at Harvard's Berkman Center, Derek Slater, wrote on Thursday that the lower court's decision threatens all journalists.

"EFF petitioned to correct the trial court's manifest error and restore the previously well-settled constitutional protections for a journalist's confidential information, upon which the practice of journalism and the freedom of press depend."

This decision will have a profound affect on the rights to free speech we all enjoy. Support the EFF and bloggers rights.

But don't take my word for it, read the Amicus Briefs filed in this case by several industry luminaries, including:

- Jack M. Balkin, professor of Constitutional law and the First Amendment and Director of The Information Society Project at Yale Law School.
- Eugene Volokh, professor of law at UCLA School of Law, where he teaches and writes about First Amendment law.
- A. Michael Froomkin, professor of Law at the University of Miami School of Law and well-known expert on issues of Internet governance.
- Julian Dibbell, contributing editor at Wired magazine
- Rebecca MacKinnon, journalist, media consultant, blogger and former CNN correspondent and Bureau Chief in Beijing and Tokyo.
- Glenn Harlan Reynolds, law professor at the University of Tennessee, publisher of InstaPundit and writer for MSNBC and The Wall Street Journal.
- Jay Rosen, NYU faculty member, press critic and writer whose primary focus is the media's role in a democracy.
- Scott Rosenberg, Senior Editor of Technology at Salon.com.

Some of the organizations that have supported me in this case include:

- The Associated Press
- The Hearst Corporation
- Los Angeles Times Communications
- The San Jose Mercury News
- The Copley Press
- The Mcclatchy Company
- Gawker Media Inc.
- Society Of Professional Journalists
- The First Amendment Project


Run Windows and Mac OS Both at Once
David Pogue

ONLY a week ago, Apple released what seemed like an astonishing piece of software called Boot Camp. This program radically rewrote the rules of Macintosh-Windows warfare — by letting you run Windows XP on a Macintosh at full speed.

Now, some in the Cult of Macintosh were baffled by the whole thing. Who on earth, they asked, wants to pollute the magnificence of the Mac with a headache like Windows XP?

Back in the real world, though, there was plenty of interest. Lots of people are tempted by the Mac's sleek looks and essentially virus-free operating system — but worry about leaving Windows behind entirely. Others would find happiness with Apple's superb music, photo and movie-making programs — but have jobs that rely on Microsoft Access, Outlook or some other piece of Windows corporate-ware.

Even many current Mac fans occasionally steal covert glances over the fence at some of the Windows-only niceties they thought they'd never have, like QuickBooks Online, AutoCad for architects, high-end 3-D Windows games, or the occasional bullheaded Web site that requires Internet Explorer for Windows.

Few could have guessed that only days later, Boot Camp would be eclipsed by something even better.

Boot Camp remains a free download from Apple.com. It's a public beta, meaning it's not technically finished. It's available only for Mac models containing an Intel chip. (So far that's the 2006 Mac Mini, iMac and MacBook Pro laptop.)

The uncomplicated installation process takes about an hour, and entails burning a CD, inserting a Windows XP installation CD (not included), and waiting around a lot.

Then you designate either Mac OS X or Windows as your "most of the time" operating system. You can also choose an operating system each time you start up the computer.

If you choose Windows, then by golly, you're in Windows. You can install and run your favorite Windows programs — speech recognition, business software, even games — and, incredibly, they run as fast and well as they ever did.

Correction: they run faster than they ever did. Most people comment that an Intel Mac runs Windows faster than any PC they've ever owned. And if the Windows side ever gets bogged down with viruses and spyware, you can flip into Mac OS X and keep right on being productive.

Boot Camp's problem, though, is right there in its name: You have to reboot (restart) the computer every time you switch systems. As a result, you can't copy and paste between Mac and Windows programs. And when you want to run a Windows program, you have to close everything you were working on, shut down the Mac, and restart it in Windows — and then reverse the process when you're done. You lose two or three minutes each way.

NO wonder, then, that last week, the corridors of cyberspace echoed with the sounds of high-fiving when a superior solution came to light. A little company called Parallels has found a way to eliminate all of those drawbacks — and to run Windows XP and Mac OS X simultaneously.

The software is called Parallels Workstation for Mac OS X, although a better name might be No Reboot Camp. It, too, is a free public beta, available for download from parallels.com. You can pre-order the final version for $40, or pay $50 after its release (in a few weeks, says the company).

Parallels, like Boot Camp, requires that you supply your own copy of Windows. But here's the cool part: with Parallels, unlike Boot Camp, it doesn't have to be XP. It can be any version, all the way back to Windows 3.1 — or even Linux, FreeBSD, Solaris, OS/2 or MS-DOS. All of this is made possible by a feature of Intel's Core Duo chips (called virtualization) that's expressly designed for running multiple operating systems simultaneously.

In the finished version, the company says, you'll be able to work in several operating systems at once. What the heck — install Windows XP three times. If one becomes virus-ridden, you can just delete it and smile.

But before your head explodes, consider the most popular case: running one copy of Windows XP on your Mac.

Suppose you're finishing a brochure on your Mac, and you need a phone number from your company's Microsoft Access database. You double-click the Parallels icon, and 15 seconds later — yes, 15 seconds — Windows XP is running in a window of its own, just as you left it. You open Access, look up and copy the contact information, click back into your Mac design program, and paste. Sweet.

Using Boot Camp, you'd restart the computer in Windows, look up the number — but then what? Without the ability to copy and paste, what would you do with the phone number once you found it? Write it on an envelope?

Parallels is very fast — perhaps 95 percent as fast as Boot Camp. (It's definitely not a software-based emulator like Microsoft's old, dog-slow Virtual PC program.) It's even fast enough for video games, although not the 3-D variety; for now, those are still better played in Boot Camp.

So if Parallels' side-by-side scheme is so superior, should Apple just fold up its little Boot Camp tent and go home? It's much too soon to say. Turns out Apple's and Parallels' definitions of "beta" differ wildly.

The Boot Camp beta feels finished and polished. Parallels, on the other hand, is obviously a labor of love by techies who are still novices in the Macintosh religion of simplicity. Its installation requires fewer steps than Boot Camp (there's no CD burning or restarting the Mac), but even its Quick Installation Guide is filled with jargon like "virtual machine" and "image file." (Parallels says it's completely rewriting its guides.)

The dialogue boxes look a little quirky, too. And to get the best features — like copying and pasting between operating systems and enlarging the Windows window to nearly full-screen size — you're supposed to install something called Parallels Tools. They ought to be installed automatically.

Even then, as of the current version (Beta 3), some features are missing in the Windows side: your U.S.B. jacks won't work, for example, and DVD's won't play (CD's do). Sometimes, beta really means beta.

Note, too, that while it's easy to copy text between Mac OS X and Windows programs, copying files and folders is trickier. You don't actually see a Windows "hard drive," as you do when using Mac OS X with Boot Camp. To drag icons back and forth, you have to share the "Mac" and the "PC" with each other over a "network" that you establish between them. Things sure get weird fast when you're running two computers in one.

Now, if you're a Mac fan, knowing that you can run Windows software so easily in Mac OS X might make your imagination run wild with possibilities. One of them, unfortunately, is a buzz killer of epic proportions: If such a feat becomes effortless, will the world's software companies lose their incentive to write Mac versions of their programs?

No one can say. But if that fate can be avoided, then the Uni-Computer will be a win-win-win. The Mac will be known as the computer that can run nearly 100 percent of the world's software catalog. Microsoft will sell more copies of Windows. Consumers will enjoy the security, silent operation and sophisticated polish of the Mac without sacrificing mission-critical Windows programs.

Apple, no doubt, is also gleefully contemplating the reaction of the masses when they experience Mac OS X and Windows side by side, day in and day out. Its Web site makes the point without much subtlety: "Windows running on a Mac," it says, is "subject to the same attacks that plague the Windows world. So be sure to keep it updated with the latest Microsoft Windows security fixes." Ouch!

So in the course of seven days, the brilliant but technical Windows-on-Mac procedure written by a couple of hackers last month — OnMac.net — has become obsolete, and two more official ways to do the unthinkable have been born. You can use Boot Camp (fast and feature-complete, but requires restarting) or, in a few weeks, the finished version of Parallels (fast and no restarting, but geekier to install, and no 3-D games).

Can't decide? Then install both. They coexist beautifully on a single Mac.

Either that, or just wait. At this rate of change and innovation, something even better is surely just another week away.

What Killing Politicians Has to Do with Computing
Thom Holwerda

I'm from the Netherlands. That may sound like a weird statement to start a column with-- don't worry, at the end of this week's Sunday Eve Column you'll understand why I put my nationality so bluntly up front.

You see, being Dutch implies a few things. Besides it implying you are a know-it-all, it also implies a certain pride in knowing that in your country, everybody is legally equal, whether he or she be black, white, or polka dot; whether he or she be heterosexual, homosexual, or both; whether he or she be a rich banker, a hard working carpenter, or a chronic patient of whatever disease unemployed at home. That equality stems from the first article of the Dutch Constitution [.pdf], which states:

"All who are in The Netherlands, will in equal cases be treated as equals. Discrimination on the grounds of religion, way of life, political orientation, race, sex, or any other ground, is prohibited."

This is the very basis on which this little country is built. This 1st Article can be seen shining through Dutch society everywhere; be it same-sex marriage, euthanadicsia, or our liberal (but very successful) drug policies.

However, there's enough to complain about too, of course. And this brings me to two Dutch people who complained a lot, in the past few years, and got murdered because of it. You have all heard about them; politician Pim Fortuyn, and film maker Theo van Gogh. Even though I highly disagreed with both of them on fundamental issues, I respected, and still respect them, for their guts, honesty, and openness. They were not afraid to say what they thought, even though they had to pay for it with their lives.

You might not realise it, but in the tech world today, there's something going on that bears a striking resemblance to the above cases. It might not be as far-fetching on a personal level (as in, nobody is getting murdered), but if you break the three cases (the two murders in The Netherlands, and the case I'm currently talking about) down to their bare essentials, they are practically the same.

Pim Fortuyn got murdered because of what he said. Someone, and in The Netherlands we all know his name, murdered someone else because he did not agree with him. In essence, the murderer attacked the very concept of democracy. The killer got what he deserved, a life sentence, but that of course does not reverse the suffering he has caused among Fortuyn's family, and his followers.

Theo van Gogh also got murdered because of his opinions. He made films which spouted critique, and because of that, he was murdered. His murderer also got a life sentence, but again, this does not bring Theo van Gogh back to his family and friends.

And the case in the tech world is about the same. Certain websites, certain individuals and journalists, have said certain things which a certain company didn't like. These websites, individuals, and journalists got their hands on information which wasn't supposed to be out yet; new products, future plans for the company, you name it. For the company in question, secrecy and mystery concerning its products is part of its marketing campaign, and as such, anything that dispels that secrecy and mystery is considered dangerous to sales and thus to shareholders.

Hence, this company is doing something which, as I said, on the personal level might not compare in any way to what the two murderers have done, but in purpose and results is the same: to silence people, to stymie the concept of free speech, not only of the said individuals, but also of any individuals who in the future might have information they want to share.

You all know, by now, who I'm talking about. I'm talking about the tech world's teddy bear, the goody two-shoes of computing, the big innocent of .mp3 players: Apple Computer. Apple is trying to silence people, trying to work its butt around free speech, just because the company itself is failing in keeping information from leaking to the outside world.

The deal is this: Apple lets its employees sign an NDA. People break this NDA by giving information under that NDA to certain websites such as AppleInsider and ThinkSecret. Apple then wanted those websites to disclose their sources, to "tell mom", so to speak, because websites do not deserve the same protections as the "legitimate press". They succeeded.

But what constitutes as the "legitimate press"? A university degree? Publication method? Number of readers?

And that is where the problem lies. In the modern day world of the internet and blogging, anyone can be a journalist. Every blog, no matter how small or insignificant, is a little newspaper in its own right. Therefore, they deserve the exact same protection as the New York Times or De Volkskrant. Charles Cooper of CNET News.com put it best:

"The real subtext is this: Apple is directed by a collection of control freaks who would have found themselves quite at home in the Nixon White House. The big difference being that reporters had the constitutional freedom to report on the Nixon White House."


Later this month, Apple will face an appeal on behalf of blogs and online journalists, who demand the same protection from subpoenas that the "legitimate press" enjoys.


As managing editor of OSNews.com, and as Dutchman who experienced first-hand what attacking the freedom of speech can lead to, I am very, very, deeply worried about the current chain of events in this case. Apple is attacking the freedom of speech as well as the freedom of press, and they must not succeed in doing so.

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The Videotape Recorder Turns 50

Routine NAB preview event showcased revolutionary technology
James E. O'Neal

In an age when video cameras and recording devices are virtually everywhere, it's difficult to believe that it wasn't always possible to walk into a Wal-Mart or Best Buy store with $50 and leave with a new video recorder.

The science of magnetically recording video images is so mature today that it's taken completely for granted, but that was not always the case. Television broadcasting as we know it appeared in the mid-1930s. Video recording technology lagged by another 20 years.


Imagine a large meeting room 50 years ago filled with 200 people assembled for a more or less routine briefing. The only thing slightly out of the ordinary is a video camera trained on the speaker and some monitors sprinkled around the room. However, television is no longer a stranger and the presence of even large tube-type cameras of that era had become fairly routine.

The event was a Saturday pre-NAB (then the National Association of Radio and Television Broadcasters) meeting of CBS affiliate owners and managers. The setting was the Normandie Lounge in Chicago's Conrad Hilton, the speaker was William Lodge, CBS engineering vice president and the date was April 14, 1956.

During his remarks, Lodge mentioned a new technological breakthrough, but was not specific. At the conclusion of his address, he remained at the podium. As the crowd began to murmur and break up, the video monitors went from black to an image of Lodge. Only this time, Lodge was still making his presentation, not standing silently.

This was a seeming impossibility, as the only means for preserving video images was kinescope recording, a process in which a special motion picture camera photographed a television monitor. When the recording was finished, the film had to be removed and sent away for developing. Under normal circumstances, this could take hours.

The crowd, realizing that they were experiencing something very unusual, became hushed and locked onto the monitors, viewing an image of Lodge that was indistinguishable from the video seen just moments before. Again, this was quite uncanny, as even the best "kine" had a distinctive look that set it apart from the live video it had captured.

Then a curtain opened, revealing a strange machine and four individuals hovering around it. The crowd couldn't restrain itself and amid cheers, whistles, back slappings and applause, began pushing and pressing in around the world's first video recorder and part of the team that had made it possible. Some even stood in chairs to get a better look at the device that was making this miracle possible.

That was the scene 50 years ago this month.

Practical video recording had been born. The machine was the Ampex Mark IV VTR prototype, which was to become the VRX-1000, the great-granddad of all video recorders. It was the star of the convention and even though Ampex had set a selling price of $45,000 for production models (more than $320,000 in 2006 dollars), orders were written that week for more than 70 machines. (Market research conducted prior to the show indicated that there would be a demand for no more than a dozen globally.)

CBS got the first delivery and put it on the air in late November that year to air the West Coast feed of "Douglas Edwards and the News."

This eliminated the requirement for Edwards to have to repeat his broadcast for the Pacific Time Zone. However, as the video recording technology was so new, CBS made kinescope recordings as backup and had them at the ready "just in case" during the first month of the new machine's use.

Recording of video goes back to the late 1920s when television pioneer John Logie Baird made recordings of his 30 line images on ordinary 78 rpm phonograph records. What was so special about the Ampex recorder and why did it take so long to come to market?

Those who can't remember a world without VTRs perhaps have little comprehension of the tremendous technical challenges involved in electronically recording television images. To put the problem in perspective, magnetic audio recording evolved over several decades and by the late 1940s was fairly mature when Ampex introduced its first audio machine.

To capture and reproduce high-quality audio, a recording device needs to have a passband of some 20 Hz to 18,000 Hz, or about 10 octaves. To record acceptable video, this had to be stretched to 18 octaves.

Other groups had been working on video recording schemes for at least five years prior to the success of Ampex. All relied on pulling tape past fixed heads at high speeds.

The BBC's efforts resulted in a machine known as VERA (Vision Electronic Recording Apparatus). It moved 1/2-inch tape at 16 feet per second, with a 21-inch reel of tape providing a mere 15 minutes of recording time. Video response was capped off at 3 MHz and heavy leather gloves to provide assistance with reel braking were part of the operator's toolset.

Another U.S. group established by Jack Mullin, the engineer who introduced audio tape recording to America, and funded by singer Bing Crosby, also devised a longitudinal video recorder. This machine spread the video across multiple tracks on a 1-inch tape running at a mere 120 inches per second. It made pictures, but as the response topped off at a bit over 1.5 MHz, it really wasn't up to broadcast applications.

Not one to be left out or outdone, RCA's David Sarnoff mandated that his R&D people build a video recorder. In a rather questionable move, the top audio engineer there, Harry Olson, was given the job. Even though RCA held a patent on rotary head recording, Olson simply tried to scale up a conventional audio transport to do the job.

His first machine used 1/2-inch tape pulled at 30 feet per second. It took 7,200 feet of tape to provide four minutes of recording time and the pictures were not much better than those of the other groups. As relatively crude as the kinescope recording process was, none of these video recording technologies could equal its quality, storage time and ease in handling.

Ampex engineers early on saw the futility of longitudinal recording for video and based their efforts on a rotating head design first patented for audio in 1938 by an Italian inventor. The Ampex work was kept under wraps, and due to changing economics, was actually terminated at one point. This group consisted of Charles Ginsburg, the team leader; Charles Anderson, FM expert; Ray Dolby, then an engineering student and later a household name in the audio field; Shelby Henderson, master machinist and model maker; Alex Maxey, the mechanical genius behind the rotary head design, and Fred Pfost, who solved the problem of making practical high-speed recording heads.

In addition to discarding high-speed longitudinal tape movement for achieving the necessary writing speed, the Ampex team also realized that FM offered some advantages not available with conventional recording technology, and could possibly help in squeezing those additional octaves onto tape. Research was started on an FM system that smacked of heresy--the carrier frequency was very near the highest modulating frequency and conventional wisdom dictated that the carrier frequency must be at least 10 times that frequency.

The carrier frequency was dictated by available tape head technology and this rather revolutionary FM system resulted in some mathematically interesting consequences (sidebands which could fold over into the desired signals). Nevertheless, the thing worked, and worked better than any AM signal system could have, producing a greatly improved S/N ratio and compressing the necessary 18 octaves into the space of three.

The video recorder shown to the crowds in Chicago, and destined to set the standard for all video recording, used a special 3M 2-inch tape, a four-head quadraplex or "quad" rotating head assembly and pulled tape along at a sane 15 inches per second. It could provide up to 90 minutes of recording time and recorded the full 4.2 MHz bandwidth needed for 525-line television.

Far From Perfect

These early machines were bulky (they could not fit through an ordinary doorway), weighed more than 1,000 pounds and the scores of vacuum tubes used consumed a very substantial amount of electricity.

An external supply of compressed air and a vacuum system were necessary for operation. Operational costs were extremely high by today's standards. An hour's worth of 2-inch tape cost hundreds of dollars and the life of the machine's video recording head assembly was measured at best in just a few hundred hours. This figure was sometimes much lower and head refurbishment costs amounted to $1,000 or more.

The recorders were finicky and required a highly skilled operator and a fairly intensive setup and adjustment period before each use. A great deal of heavy maintenance and specialized tools were needed to keep them operational.

Video was not instantly available, as the machines took several seconds to get up to speed and stabilize. This required care on the part of operators and TDs in making sure that the requisite back timing and pre-roll were done. Due to mechanical differences in the rotating head assemblies, none of the early machines produced recordings that were really fully interchangeable.

The networks got around this by making sure that the head assembly used for recording also did the playback. This had to be carried out in the extreme if a show was recorded in Los Angeles and then played back in New York. In such cases, the video head was removed from the recorder and shipped along with the tape. Still, the convenience and video quality made the machine an instant success.

RCA saw the handwriting and scrubbed their longitudinal recorder R&D work, licensed Ampex technology and shortly rolled out their own quad machine, the TRT-1. RCA was the only other serious competitor to Ampex and in the years that followed, a tech war of sorts evolved between the companies.

Improvements were fast and numerous: air bearing heads, rotary transformers to replace slip rings, time base correction technologies, color recording, genlockable servo systems, high band recording, velocity compensation, electronic editing, better head alloys, low-noise tape coatings, vacuum column tape handling... the list of these "one-up-manships" continued right on up until the end of 2-inch recording developments in the 1970s.

Ampex's quad design endured for well over 20 years, until it was gradually displaced by 1-inch type "C" helical scan technology.

An incredible 50 years later, there are some quad machines out there still at work. According to Pat Johnston, director of project management for AheadTek, his company is rebuilding about 200 quad heads per year.

RCA is now just a dimming memory in the broadcasting landscape. Ampex continued to build new VTR models into the dawning of the digital age, but was essentially out of broadcast video recording by the end of the millennium. The company name still exists in connection with data recording and archival storage technology, but isn't seen much in television stations anymore.

With the advent of digital television and the DVD and hard-drive video recording that it spawned, videotape use is on the wane. Some of the biggest producers of magnetic tape pulled out of the market years ago. The phrases "tapeless television station" and "the end of tape" entered the vernacular at least 10 years ago.

With the exception of data cartridges for archival recording, these prognostications may well may come to pass. Even that application appears shaky, as data packing advances in optical disc recording methodologies seem destined to surpass what can be done with magnetic storage.

For decades, video recording quality has been such that it is indistinguishable from live video. Recording devices have become so reliable and commonplace that no one is excited in the least by the words "video recording."

Still there are a few remaining from that crowd, who, 50 Aprils ago, witnessed the first demonstration of real video recording and who remember the electricity and shivers of excitement that went with it. There are many more that recall their initial encounter with videotape and the fascination that came with it--the solid snap as the guide shoe engaged; the pleasing, almost musical "buzz" produced by that massive, yet very delicate, rotary head assembly spinning at its 14,400 rpm rate; and the smell of the tape coating as the heads literally tore into it.

An early video recording textbook described the rotary head recording process as one in which the head's pole pieces "created a localized dimple, moving across the tape." Actually, something far more profound happened as the heads moved. They froze time and left behind moving images for future generations to witness and enjoy. They also launched a business that has become the single largest element in broadcasting and a technology that has become an integral part of hundreds, if not thousands of other businesses.

What Was It Like?

There is a special kind of captivation or fascination that goes along with being witness to an event destined to have historic significance.

John T. Moore, the youngest witness to the Wright brothers accomplishment in December 1903 was reported to have run down the beach at Kitty Hawk yelling at the top of his lungs to anyone listening, "They done it! They done it! Damned if they ain't flew."

This atmosphere was certainly present that Saturday in April 1956 when Ampex showed the world it had perfected a video recorder.

If anyone should know what the situation was like in the Hilton's Normandie Lounge, it would have to be Charles Anderson, one of the Ampex VTR design team members who was there with the Mark IV machine. As Anderson described it:

"The (CBS) affiliates meeting was in the Normandie Lounge, the foyer of a ballroom. We were in an alcove there with the machine, behind a curtain. No one knew we were there. CBS had cameras and monitors scattered around the lounge, but that was nothing unusual.

"There were a lot of people in the room and on cue we started to record. Bill Lodge was explaining to the group that there was something new they wanted to show. On another cue, we rewound the tape and started playing it back.

"All of a sudden, there was a deafening silence.

"Did we screw up somehow?

"Then came a roar. The curtain was opened and people started to swarm back around the machine. Before we knew it, we were knee deep in people."

Anderson recalled that Charles Ginsburg, Fred Pfost and Phil Gumby were with him that day.

"That machine was demo-ed a lot. It was a very successful show for the network. That night, Ginsburg and I went out with Blair Benson from CBS to the Blue Angel to celebrate. Ginsburg was dancing on the tabletop."

Pfost also recalled the silence that initially ensued once the playback started.

"There was total silence for about 15 seconds. Then people began to realize what they were looking at. It made such an impression on me that I get tears in my eyes telling the story. People screamed and clapped for probably 10 minutes."

After that presentation finally ended, Ampex executives realized from the reaction of the crowd that the company had a hit on its hands. The CBS demonstration had been just that--a closed-door session for invited guests. It was hastily decided to rent hotel space to exhibit the VTR for the balance of the show. Anderson remembers that part of the experience as not being so euphoric:

"Very early the next morning [Sunday], the VP was on the phone with orders to move the videotape machine. We weren't at our best from the night before, but we went ahead and moved it there. From then on there was a steady stream of people throughout the rest of the show."

Pfost also recalled relocating the recorder.

"After the demo we took the machine up to the fourth or fifth floor in the hotel. For the rest of the show that room was totally full. At the end of the week, the orders for machines amounted to more money than Ampex had been doing in a whole year. We went back [to Redwood City] and had to figure out how to build all these machines."

Ray Dolby stayed behind in Redwood City to demonstrate video recording for members of the press and Ampex executives. The reaction was similar to that in Chicago, according to Dolby.

"Everyone was enthusiastic, there was a lot of applause and laughing and clapping... but on the other hand, you have to remember this was an engineering lab, not a plush hotel room, as they had in Chicago," he said.

Even so, sales orders were being written on an almost non-stop basis. According to one source, Ampex ran out of sales forms and was writing orders on any scrap of paper they had at hand.

The Problem with Internet-Based Movie Downloads
TDG Research

The Announcement

As most of you know by now, Monday was a 'watershed moment' in the brief history of online video: six major Hollywood studios announced plans to sell movies over the Internet - not rentals, mind you, but purchases of full-length movies in digital format that a consumer can download and watch any time they chose.

The Model

Two online movie services, Movielink and CinemaNow, will offer consumers a variety of movie titles for purchase and download. Movielink's initial offering spans 300 titles, while CinemaNow will offer around 75 titles (again, these are just initial offerings). Pricing for new movies is expected to be between 20 and 30 dollars per download, while older titles would cost 10 dollars or more.

So Why Won't This Work?

There are a myriad of reasons why this model will prove ineffective and thus require a significant overhaul within the first 12 months of operation. For the purposes of this essay, I'll discuss only three of these reasons.

1. Paying $.99 for a song/$2.50 for a TV program is not analogous to spending 20-30 dollars for a digital copy of a movie.

The studios are only too eager to point to the success of iTunes as proof of concept and to validate market timing. After all, Apple is looking to fill iTunes with a huge library of full-length Hollywood movie downloads, so why shouldn't Movielink and CinemaNow do the same thing? As many of Apple's new media competitors will tell you, that kind of logic can get you in a lot of trouble (and in a hurry).

No doubt the success of iTunes (both from a business model and consumer perspective) offers telling insights into the future of Internet media. In my opinion, the most relevant insight for new media purveyors is the one Movielink and CinemaNow are ignoring even before they sell their first download: determine the lowest price point needed to sustain the business model, and then go one step lower. This holds for almost any Internet vendor, but certainly applies to novel Internet-based media services.

Among the primary reasons consumers use the Internet for shopping is price: in most cases you can get the same item online for much less than you would pay at a retail store. Why pay 2X for a book at Barnes & Noble when you can get the same book at Amazon.com for 1X? Why pay $16 for a new CD at Best Buy when you can get the same 10 songs for $.99 each at iTunes? Why pay 30 dollars for a movie download when you can get the same movie on DVD for 15 dollars at Target? Oops, that didn't work out so well...

Little wonder this strategy appears so counter-intuitive. Movielink and CinemaNow are (a) rationalizing their new services by appealing to a business model which is but dangerously analogous to their own, yet (b) ignoring one of the key assumptions that has made this business model such a success (that is, pricing their content below that of comparable retail products).

2. Usage of these digital movie files is restricted. For example, Movielink allows consumers to download the file, copy it onto a DVD, and download the DVD content to two separate PCs. However, this DVD copy cannot be played on a regular DVD player. CinemaNow is even more restrictive, only allowing the digital movie file to be played on one PC - no copies of any kind allowed.

Are these folks brain dead? Why would I pay twice the price of a DVD to go through the hassle of downloading a digital movie file that can only be viewed on a PC? Think of the collective mindset, the group-think behind this strategy. The studios either (a) believe they can convert their current audience of online movie renters (those who pay 2 to 5 dollars for a rental download) to online movie buyers (at 20-30 dollars a pop); (b) believe that they can attract a new audience of users who, though they are not current online movie renters, will be eager to spend as much as 30 dollars for a digital movie file they can only view on their PC; or (c) don't care if these efforts succeed or fail in the short-term because the end game is about incrementally building a web brand to allow the studios to bypass the TV network owners and sell directly to the consumer.

Hmm....The first two possibilities border on the delusional, especially as the sales model is currently articulated. The third possibility, however, seems to make some sense - at least it did when Movielink and CinemaNow were first set up a few years ago. At that time, most observers believed that the studios were simply carving out a long-term position, preparing for the day when Internet movie distribution became an attractive business model.

Well, it seems the studios believe that the future started on April 3, 2006: no longer content with "short-term positioning" and online rental services, they are convinced it's time to roll a full-on purchase model. This negates the third possibility, leaving us to choose between the first two absurd possibilities, both of which find the studios convinced that this pricing model will work. As previously stated, I give them less than 12 months to radically alter the pricing scheme - and they will.

Final Thoughts

For most of the consumers who use these services, the PC monitor will be the viewing screen. According to Movielink, only 15% of its rental customers currently view their movies on a TV, while one-third use a laptop and the remaining 50% or so use a desktop computer. It seems, then, that being restricted to watching a movie on a PC monitor should not (in-and-of-itself) discourage consumers from purchasing a movie download - so goes the argument.

But if you asked these same consumers if they would rather (a) experience their 30 dollar movie download on a PC monitor, or (b) enjoy their 15 dollar DVD on the flat-panel TV and home theater system sitting in the family room, virtually all of them would prefer the latter. Watching movies on a PC monitor is a last-resort for die-hard PC addicts, not a first-resort for consumers who enjoy watching movies on their TV and who already have number of (less expensive) options for buying movies.

If you want me to use the PC as an entertainment conduit, and the PC monitor as a viewing screen, you've got to (a) make the experience more unique and compelling than my traditional media experiences, or (b) make it virtually risk-free by setting the cost of this new media experience well below my traditional media experiences.

The strategies of Movielink and CinemaNow fail on both accounts. First, the content they offer will not be uniquely compelling (at least not to a large audience) and the movie titles will (not surprisingly) look very similar to what I will see at my local retail store. Second, the 30 dollar price tag is SIGNIFICANTLY HIGHER than a DVD from my local retail store yet I am limited my ability to view this content on devices other than the PC. In other words, you're asking me to take on a greater risk (higher cost for lesser experience) to try out this new media service.

These sticking points (among others) will confine the use of such services to a niche-within-a-niche - a small group of consumers who already rent movies from these services and are willing to try the purchase option.

Free Music? Aggies Sign On For Program
Lanita Withers

Students at N.C. A&T can download music for a price that jibes with any college student’s budget: free.

A&T is one of about 35 campuses nationwide where Ruckus, a digital music service exclusive to college students, is offered. The service — which offers 1.5 million songs — provides a law-abiding alternative to illegal file sharing.

The service is available to on- and off-campus Aggies for free.

Other features, such as the ability to upload the music onto a digital music player or to download movies, are available for a fee.

The company is looking to provide service to more universities in the UNC system, said Brad Vaughn, the vice president of campus sales for Ruckus. East Carolina

University also has the service, according to the company’s Web site.

In recent years, colleges and universities have made efforts to curtail copyright infringement on campus.

The UNC system launched a pilot program in 2004 testing several file-sharing programs on a number of campuses. Ruckus was previewed at A&T. The pilot has since ended, but Marlow Hinton, director of information technology at A&T, said about 1,100 students used the service.

"The students really enjoyed it," he said. "They gained a lot of insight about the functionality of a music service and being able to use one legally was certainly (appealing) to them."

Universities in the UNC system have taken different approaches to sharing legal file-sharing options with students, said David Harrison, associate vice president for legal affairs with the UNC system.

In some instances, the schools themselves have entered into an agreement, he said, noting that Appalachian State University recently signed up with Ruckus.

"Other places have said: 'We’re not going to pay for it. Students, you have to pay for it. This is how you can get it,’" he said.

A&T educates incoming students on do’s and don’t’s of downloading, Hinton said.

Copyright infringement is something that is still a concern.

A national survey issued earlier this month by the University of Richmond’s Intellectual Property Institute found that 34 percent of college students illegally downloaded music from free peer-to-peer networks.

Some of the sites students visit to download music are like back alleys, Harrison said, with lots of viruses and data theft. Alternatives such as Ruckus or iTunes are more secure, he said.

The goal is to "get our kids to get out of habit of peer to peer and into the habit of legitimate services," Harrison said.

The Recording Industry Association of America, a trade group , has been involved in efforts to sue college students for copyright infringement.

"Offering students legal music options is a key first step in turning the tide of illegal songlifting on campus," Cary Sherman, the RIAA’s president, said in an e-mail sent by a spokeswoman for the group. "We applaud the universities that have undertaken this important step. We also know that offering a legal alternative alone often won’t reduce the financial burden of excessive peer-to-peer traffic or protect students who download illegally from getting caught."

Laptop Thieves Descend Upon Wireless Cafes

Grab-and-run robbers find pricey computers easy to resell
Jaxon Van Derbeken

A San Francisco finance manager stopped in at a Mission District cafe and was tapping on his laptop as he enjoyed his coffee just before noon on a Thursday. Suddenly, he was under siege.

"I looked up, and I saw this guy leaning into me as if he was asking a question,'' he said. "I leaned forward, and out of the corner of my eye, I saw someone fiddling with the computer cord. I tried to stand up, and as I stepped back, he stabbed me in the chest.''

The attack marked a violent turn in a wave of crime that has hit the city -- the "hot spots" frequented by wireless laptop users are becoming hot spots for laptop robberies.

The 40-year-old San Francisco victim of the March 16 attack suffered a partially collapsed lung and was hospitalized for six days. The two suspects fled with his Apple PowerBook, worth $2,500.

"This poor guy, who got stabbed, all he did was kind of stand up ... and almost instantaneously the guy stabbed him,'' said Inspector Robert Lynch of the San Francisco police robbery detail. "The whole thing was over in 15 seconds.''

Police say normally quiet cafes are becoming hunting grounds for laptop bandits.

"Now that we have these hot zones, people are bringing laptops out in the street, using them in public cafes,'' said police Lt. John Loftus of the robbery detail.

San Francisco police statistics show a disturbing trend. Just 18 laptop computer robberies were logged in 2004, but the figure jumped to 48 last year. There were 18 as of the end of March, a pace that could surpass 70 crimes this year.

"It's a changing culture, and crime is following it,'' Loftus said. "To the criminal element, this is a valuable piece of equipment that they can quite easily cash in on -- even otherwise law-abiding people are tempted to buy $3,000 laptops for $200 to $300 on the street.''

"Where else do you have a thousand-dollar item sitting on a table in a coffee shop?''

So far, San Francisco appears to the only major Bay Area city to be hit by the problem. San Jose has been hit by laptop thefts, but it has yet to experience many of the robberies. "We haven't seen it yet,'' said Sgt. Nick Muyo of the San Jose police.

Palo Alto hasn't had any, and Berkeley, another hot area for Internet cafes, had only one such crime about a year ago, investigators said. Oakland police investigators had not heard of any such crimes, either.

San Francisco's Western Addition area has been hard hit this year, with 11 robberies so far. Park Station Capt. John Ehrlich, who oversees the area, said he has met with the community, giving the message that people need to fasten down their computers and back up their data.

The victim in San Francisco's Mission Creek Cafe stabbing, who requested that his name not be used, said since he was attacked, his friends from New York have urged him to go back there. It's safer, they say.

"I was lucky. It was the only place he could have stabbed me where it didn't hit a heart or other organ,'' he said. Still, he said, his chest cavity filled with blood. As for the information on his laptop, he wisely had backed it up on a disk after he heard a friend had lost data.

Lynch said a videotape at the cafe was not much use in the investigation, and police have little to go on.

"One (suspect) was roughly 15, one was roughly 20, that was it -- it's really frustrating,'' Lynch said.

Lynch said stolen computers are sold on the street and even over the Internet. "They go to U.N. Plaza, where it's like a stolen-goods bazaar. All you have to do is drive by, you see them out there.''

Lynch said people working on the high-priced computers are easy targets.

"You walk by any Starbucks and you see people with a laptop, it's so tempting for the crooks. They walk in, right on top of the person, and the person has all their attention on the laptop. They snatch it right out from underneath their fingertips.

"The word is out with crooks in general,'' Lynch said.

Some cafes have taken precautions, installing security leashes for laptops and even posting employees to act as observers at doors. Lynch said a leash would prevent some thefts. But posting someone at the door could be risky. Lynch said that in Europe, video monitors are posted and signs warn patrons that they are being watched.

Lynch said resisting can be risky.

"It's a tough call -- I would fight to maintain my laptop, but you run the risk of ending up like this guy, getting stabbed.''

"We don't need to scare people,'' Loftus emphasized. "People just need to be careful with their laptops.''

Police are considering using police decoys in hard-hit areas.

"It's hard to do a stakeout,'' Capt. Ehrlich said, "because it's not happening with any regularity in time or place.''

Besides, such operations are costly in resources, he said. "It's a lot of lattes.''

Nominees Picked for New Emmy for PC and Hand-Held Shows
Laura M. Holson

Two years ago, few entertainment executives would have guessed that the performances of a sexy female detective, a 40-something single guy ordering a steak sandwich and Madonna as a college professor would be worthy of an Emmy.

But those are among the nominees for the first Emmy award to be given by the National Academy of Television Arts and Sciences for outstanding original programming for computers, cellphones and other hand-held devices, including the video iPod.

The academy, which is best known for handing out the Daytime Emmy Awards, announced the nominees on Monday and will name a winner on April 22.

The category was created in November to draw attention to rapidly growing interest in mobile content that consumers have been quick to embrace. The chief executive of the academy, Peter O. Price, said 74 entries were received — including those from newspapers, magazines and movie studios — the most ever in any category.

"In this digital world, everyone is capable of launching video programming," said Mr. Price, whose organization is an affiliate of the Academy of Television Arts and Sciences, which hands out the prime-time Emmys.

To be sure, big media companies were well represented. One of the six nominees was "24: Conspiracy," a series for cellphones based on the television hit "24" and produced by Fox Mobile Entertainment, a division of the News Corporation while another nominee was MTV's mtvU "Stand In," where famous people teach a university class for a day.

The eclectic group of stand-in teachers included Madonna as well as former Prime Minister Shimon Peres of Israel and the musician Kanye West.

Another Emmy nominee was America Online, which produced "Live 8 on AOL," a selection of live concert music from performances before the G-8 summit last year.

But lesser-known video creators are getting recognition as well. These include "Sophie Chase," an online series based on an attractive detective; "Stranger Adventures," a weekly interactive game where participants get e-mail messages and watch live-action video to help solve a puzzle; and "It's JerryTime!," created by two brothers from Massachusetts, Orrin and Jerry Zucker.

"It's JerryTime!" is based on Jerry's life. "I've been telling these stories to Orrin for years," said Mr. Zucker, whose "Who's That Guy?!" episode was nominated. For the Web, Jerry talks about events in his life that Orrin animates. Jerry then composes the score. Still, Orrin said, joking, it can be challenging to work with his brother.

"Sometimes," he said, "it is even difficult to get us to agree."

Library of Congress Picks 50 Recordings

A high school band plays Beethoven. President Calvin Coolidge delivers his inaugural address. Fats Domino turns ''Blueberry Hill,'' a hit for big-band leader Glenn Miller, into a rock 'n' roll classic.

They're among the 50 records that the Library of Congress has deemed worthy of preservation this year.

''The National Recording Registry represents a stunning array of the diversity, humanity and creativity found in our sound heritage, nothing less than a flood of noise and sound pulsating into the American bloodstream,'' Librarian of Congress James H. Billington said in announcing the choices for 2006.

The library took the occasion to announce a rare find: a 1940 jam session featuring tenor saxophonist Lester Young, The night club couldn't be positively identified, said Gene DeAnna, head of the library's recorded sound section, but it may have been the Village Vanguard in downtown Manhattan.

''It wasn't Carnegie Hall,'' DeAnna said at a news conference. ''At one point you can hear the MC announcing, 'The chili con carne is ready, if anyone wants to order it.'''

Loren Schoenberg, executive director of the Jazz Museum in Harlem, compared it to finding a Shakespeare sonnet or a short story by Ernest Hemingway.

The library also announced that it had recently received 186 test pressings of records made in the late 1950s or early 1960s, among them 25 songs by bluesman Robert Johnson. The pressings, donated by blues collector Tom Jacobsen, were used to make the first Johnson reissue anthology, ''King of the Delta Blues,'' which influenced the Rolling Stones and other groups.

The Modesto, Calif., High School band did well in competitions of the 1920s and 1930s. Few high school bands were recorded until the late 1940s, making the Modesto school's 1930 version of Beethoven's ''Egmont Overture'' a rarity.

Coolidge, known as a man of few words, spoke for 47 minutes in the first broadcast inaugural address. A circuit of 21 radio stations was put together for the event in 1925.

Domino recorded his relaxed version of ''Blueberry Hill,'' adding Creole cadences, in Los Angeles in 1956. He was inspired by a Louis Armstrong version of the song, which Miller had taken to No. 1 in 1940.

Other rock classics being inducted include Jerry Lee Lewis' ''Whole Lotta Shakin' Goin' On'' and Buddy Holly's ''That'll Be the Day,'' both from 1957; the Jimi Hendrix Experience's ''Are You Experienced?'' from 1967; and Sonic Youth's landmark noise-rock album ''Daydream Nation,'' from 1988.

Other sounds to be preserved include a radio broadcast by Clem McCarthy of Joe Louis' first-round knockout of Max Schmeling in 1938. The audience was estimated at 70 million. ''The symbolism of an African-American defeating a citizen of the political state that proclaimed the superiority of the white race was lost on no one,'' the library commented.

Samuel Barber's ''Adagio for Strings'' was performed the same year by the NBC Symphony, led by Arturo Toscanini. The library noted that the work has been called the ''American anthem for sadness and grief.''

Every year since 2000, the library has registered recordings ''that are culturally, historically or aesthetically important and/or inform or reflect life in the United States.'' Last year it unveiled newly discovered tapes of Thelonious Monk and John Coltrane from 1957, a discovery that yielded one of the top-selling jazz CDs of 2005.

Are Illegal Downloads On The Way Out?
Nate Anderson

When not producing reports about the state of software piracy in China, the Business Software Alliance (BSA) produces reports about the state of software piracy among children. Their newest report is interesting because it claims that children (ages 8 to 18) are now downloading significantly less music, movies, and software than they were only two years ago.

The study shows that 57 percent of all respondents said that they have never downloaded media from the Internet without paying for it, up from 40 percent in 2004. In every area that the study examined, there has been a sharp drop in the last two years. Gaming downloads among children declined from 32 percent to 25 percent, movie downloads fell from 17 percent to 10 percent, and music downloads plummeted significantly, from 53 percent in 2004 to 32 percent today.

This sounds like great news all around for content creators, but there's a fairly big hitch: downloading increases with age. While most eight-year-olds don't download music, for instance (only nine percent do so), most 18-year-olds do (52 percent). The same trend can be seen in most categories, leading the BSA to argue that "as kids grow older, they begin to view cyberspace as a virtual 'wild, wild West'."

As with many BSA statistics, it's not clear that these are truly representative of the total situation. A recent report from research firm Big Champagne, for instance, found that P2P usage has doubled in the last two years, not declined. As even the BSA admits, as kids grow older, they download much more material. To argue that these statistics signal a "winning of the war" is a pretty tenuous claim, but it does provide some evidence that attitudes among the children are shifting.

The report's fact sheet also shows that most kids care only about consequences, not whether their actions are right or wrong. The greatest worry among those who download software and media is not guilt or getting in trouble with parents, but contracting a virus or spyware. About 40 percent of kids, in fact, don't believe that downloading such material is "always wrong." (Intriguingly, 16 percent of these same kids also don't believe that plagiarizing text from Internet sources without credit is always wrong, which goes a long way toward explaining the rise in Internet plagiarism.)

So how is the BSA going to counter such attitudes among children? It is—seriously—going to employ a small weasel (insert your own joke here).

"BSA also today launched a new website, www.cybertreehouse.com, designed exclusively for young people to learn about appropriate computer usage in a fun and informative way. The site includes Garret the Ferret, BSA's cyber-champion mascot, leading kids through games and activities that illustrate smart cyber behavior."

If you'd like to see what your kids might be receiving, you can check out Garret's copyright adventures in this brief comic that shows kids just how "uncool" copyright violations are. By the way, if you didn't know that corporations could pay to get their message out to kids without going through you first, note that this comic was distributed as a "sponsored supplement" to Weekly Reader that your child may well have received at school.

Pentium Computers Vulnerable To Cyberattack

Security experts warn of that and other risks at CanSecWest/core 06
Michael Arnone

The built-in procedure that Intel Pentium-powered computers use to blow off their digital steam could put users in hot water by making the machines vulnerable to cyberattacks, computer security researchers announced at the CanSecWest/core06 conference last week.

When the processor begins to overheat or encounters other conditions that could threaten the motherboard, the computer interrupts its normal operation, momentarily freezes and stores its activity, said Loïc Duflot, a computer security specialist for the French government’s Secretary General for National Defense information technology laboratory.

Cyberattackers can take over a computer by appropriating that safeguard to make the machine interrupt operations and enter System Management Mode, Duflot said. Attackers then enter the System Management RAM and replace the default emergency-response software with custom software that, when run, will give them full administrative privileges.

Every computer that runs on x86 chip architecture may be vulnerable to this attack, including the millions of computers that the U.S. government and industry use, said Dragos Ruiu, the conference organizer. He is a Canadian computer security consultant for businesses, governments and the U.S. military.

CanSecWest is an informal annual gathering for hard-core code gurus who create the software that businesses and governments use. The conference presented the latest in what hackers — both helpful and malicious — are doing in IT security, said Eric Byres, a member of the research faculty at the British Columbia Institute of Technology.

A growing number of cyberattacks are targeting Web applications, an area of concern widely discussed during the conference. That ties in to the rapid spread of voice-over-IP technology.

“Have vendors even heard of Web application security?” asked Nicolas Fischbach, senior manager for network engineering security at COLT Telecom, who gave a presentation on VOIP security issues.

VOIP vendors are so driven to beat the competition to market and include new features that they have no idea how to write secure Web applications, he said. He predicted it will take years for such applications to be made secure retroactively.

Among the numerous topics presented at the conference, IPv6 has the most long-term significance because it will probably still be in use 50 years from now, Ruiu said.

IPv6 has 128-bit addresses, a huge step up from IPv4’s 32-bit addressing scheme. That means IPv6 could provide millions of unique addresses for each person on Earth, along with “every toaster, door and window,” said van Hauser, an alias for the security team leader at n.runs, a German security company, and founder of The Hacker’s Choice, a hacker group.

With all those IP addresses, IPv6 resists most traditional worm attacks that rely on randomly finding active addresses, said van Hauser. IPv6 users must enable IP security protocols, he warned, because without them, attackers can use IPv6’s hierarchical structure to get immediate access to Domain Name Servers and other critical system components.

Microsoft, EU Clash Over Windows Innovation

Microsoft and the European Commission will clash in court over innovation and intellectual-property rights when the software giant appeals a 2004 antitrust decision, according to court papers seen by Reuters.

Microsoft wants to turn around the Commission's decision that it abused the dominance of its Windows system to muscle out rivals who did not have enough detail of the operating system to create efficient software that could run with it.

Europe's top antitrust authority ordered the company to share information, so-called protocols, so that other software makers could compete.

In a one-week hearing at the European Union's second-highest court starting on April 24, Microsoft will argue that rivals were always able to make interoperable software and that the Commission's demands threaten Microsoft's intellectual-property rights.
Microsoft will essentially argue that it should not have to give away its intellectual property, having spent effort and money inventing it, only because it became successful.

"Microsoft relies on the fact that its communication protocols are technologically innovative and are covered by intellectual-property rights," the document said.

"Microsoft had designed its Windows server operating systems from the outset to interoperate with non-Microsoft server operating systems," it added.

But the Commission says the behavior of companies must change, if their products dominate the market, and that not all of Microsoft's protocols are innovative.

More than 90 percent of the world's personal computers use Microsoft's Windows operating system.

"Nothing in the file shows that the communication protocols in relation to which Microsoft will have to disclose specifications contain innovations," the document said, laying out the Commission's arguments.

While Microsoft argues that the protocols are "valuable trade secrets," the Commission says the company is blurring the line between trade secrets and intellectual-property rights.

"(The) fact that trade secrets can be assigned or transferred does not mean that they constitute intellectual property," the document said.

The Commission will reiterate its original decision that rivals are not able to make interoperable software.

It will reject five alternative ways set forward by Microsoft to achieve this, saying these methods had already been dismissed in the original decision.

Microsoft Helped Write Oklahoma Computer Law

Knock, knock. Who's there?
Nick Farrell

THE GOOD people of Oklahoma asked Microsoft to help the State write a new law banning spyware, and the results are amazing.

Apparently the state was so impressed with Vole’s work on the law it plans to bring it before its government for debate under the fairly harmless title "Computer Spyware Protection Act House" Bill 2083.

The law is amazing, not only because it is probably the first written overtly by a major company without bothering with the tedious problem of lobbying, but because… well it is written by Microsoft, what do you think could go wrong?

Under the law, people could be fined a million dollars for using viruses or surreptitious computer techniques to break into someone’s computer without that person’s knowledge and acceptance. OK so far.

Now because Microsoft knows that it sometimes need to get information from their users for upgrades, it has put in a clause to allow software companies to do this. Basically the Vole law demands that a software company licence agreement tells you the sort of data they are taking.

The problem is that if you agree, you give the company you bought upgradable software the freedom to come onto your computer for "detection or prevention of the unauthorized use of or fraudulent or other illegal activities in connection with a network, service, or computer software, including scanning for and removing computer software prescribed under this act."

In other words if you install Vista, Microsoft can come in, snoop around your computer see if you are doing anything illegal and delete it.

Vole can also read your email. More here.

Blogosphere Suffers Spam Explosion
Joris Evers

Boing Boing would allow its readers to leave comments and engage in a discussion on the wildly popular blog, if it weren't for spam.

The editors of the technology and pop culture blog took down the comment option about two years ago. Back then, they wanted to put an end to abusive comments, personal attacks on the Boing Boing crew and some spam. Today, their reason for not bringing it back is simpler: an explosion in junk comment posts on blogs.

"It is like pollution," said Mark Frauenfelder, the founder and co-editor of Boing Boing, who also writes a personal blog at MadProfessor.net. "It reminds me of visible smog, because it obscures what you want to be looking at. You have to waste brain cycles to filter it out, or, if you own a blog, you have to go through extraordinary measures to keep it out."

While technology and legislation may have made spam in e-mail manageable, there is still some way to go when it comes to keeping it out of blogs, people in the industry said. There is some software dedicated to blocking unwanted posts, and there are efforts under way to reduce the economic incentive behind them. But at the same time, spammers are coming up with ways to trick filters or to fool bloggers into allowing the spam.

Keeping out unwanted messages costs bloggers time and bother, at the very least. If it's a commercial blog, it may also cost money for a filtering service. And beyond that, there's a cost to the blog services, which have to develop spam-blocking technology.

Most spam postings on blogs look a lot like unwanted commercial e-mail. Many of them advertise gambling Web sites, online adult entertainment or drugs such as Viagra. The spam operations that target blogs are typically the same ones that send junk e-mail, experts said.

The Mad Professor blog attracts about 3,000 visitors daily, Frauenfelder said. He gets about 20 spam messages a day, which he deletes manually. All comments arrive in his e-mail in-box first. The spam level noticeably started going up earlier this year, he said.

"It is a major hassle," Frauenfelder said. "It is just getting worse and worse. My fantasies of violent revenge against spammers become more lurid every week."

Frying comment spam
Several providers of blogging software and services have introduced filtering to combat the spam problem. Akismet charges enterprise bloggers $200 and upwards a month for its filtering service, for example. "Pro-bloggers," or individuals who make money from their blogs, are asked to pay $5 a month. Some plug-in tools, like Spam Karma, are available for a donation. Many blog hosters have developed their own blocking tools, too.

Frauenfelder uses Six Apart's Movable Type software for his blogs. He does use the filtering features it offers, but spam still gets through, he said.

But Robert Scoble, whose "Scobleizer--Microsoft Geek Blogger" is hosted on the WordPress.com service, said he is happy with the filtering there.

The Scobleizer blog gets around 10,000 visits a day, and about 400 comments are left on the blog daily. Of those, 100 are spam, Scoble said. Most of these are flagged correctly. However, there are also false positives, valid reader comments identified as unwanted postings, he said.

No spam issue
One company that is trying to develop advanced filtering technologies is Culver City, Calif.-based Weblogs Inc., which runs more than 90 commercial blogs, including the popular Engadget site.

"We've built technology to solve the problem, we invest in updating it, and our 160-plus bloggers manage the few spams that get through," Weblogs CEO Jason Calacanis said. "The only spam that can really get through our defenses are the ones that are hand-rolled by a person, and we catch most of those."

Other techniques for limiting blog spam tackles the problem from the other end, making it more of a process to post. Hosters can require visitors to register or use e-mail validation. For example, Weblogs sends the reader an e-mail containing a link that needs be clicked before their comment is posted.

Automated spam software may be thwarted by challenging the commenter to type in wavy or nonstandard text in a box, called a "captcha." Bloggers often can also choose to moderate all submissions, which means approving them for posting one by one. That, however, can be a lot of work for the administrator on popular blogs.

With the right technology in place, blog spam is not a major issue, Calacanis said. "If you want to solve it, you have to make your site harder to spam than the other blogs out there. It is sort of like having The Club (an antitheft device) in your car. It's not perfect, but if you have The Club and next car doesn't, the thief moves on to the next car," he said.

But as with unwanted e-mail, spammers are trying out ways to circumvent these barriers. "I don't think comment spam is under control," Scoble said. Increasingly, junk postings are camouflaged to look like valuable comments, but contain spam links, he noted.

"It used to be pretty blatant: three graphs of porn links," Scoble said. "Some of the latest spam that I have been getting is stuff like: 'I love your blog' and 'Keep it up!'" Instead of linking to a blog, there is a link to a gambling or porn, he said. "People are approving spam, because they are getting fooled by the spammers."

Tricking Google
While junk e-mail is purely an advertisement, creating spam messages on blogs has an additional motive: tricking Internet search engines. Google and other sites arrange search results in part by a Web page's link popularity with other sites. More links to a site can boost a site's ranking--and more important, its traffic.

"The prime actor that made this behavior valuable was Google, which created economics around links," said Anil Dash, vice president of professional products at Six Apart. "Links on the Web have almost direct monetary value because of Google's PageRank system."

Moreover, search engines deem a link on a blog more valuable than one on just any Web site, because of the interlinking bloggers do. Spammers abuse the comment forums to get instant credibility with search engines.

"There are at least dozens of people who have made the economic equation and are developing software to do spamming," Dash said. "The first spammers were manually typing in: 'Here's a link to this site.' Now there is fairly sophisticated and sometimes even commercial software for spamming on both e-mail and blog comments."

Early last year, Google announced a special tag for hyperlinks that tells the search engine to not score the link. Some blog services and software have adopted this "nofollow" to take some of the benefit out of manipulating search rankings by abusing blogs.

The spam is undermining an integral part of blogs. Without feedback, a blog is merely a glorified press release, Mike Cornfield, an adjunct professor in political management at George Washington University, told CNET News.com earlier this year.

"I think it hurts blogs when they have to turn off their comments," Calacanis said. "Large blogs have had to turn off comments a couple of times--we've even turned them off for a day or two during massive spam attacks."

Boing Boing, though, is probably the "saddest or biggest example," Calacanis said, noting that it was taking more time and expense to manage the comments then manage the blogging on the site.

Comments aren't about to return to Boing Boing, Frauenfelder said, though he does appreciate the value of reader input. "But whenever we think about it, we see comment spam as so much of a problem," he said. Boing Boing attracts 400,000 visitors daily. "That would be thousands of comment spams a day," he said.

Spam fighting efforts have focused on keeping blogs clean, for readers and bloggers to enjoy. But spammers are doing an end-run around those shields and taking the fight to the broader Web by joining the blogosphere.

"We have seen them move from sending comments and trackbacks to creating fake blogs," Six Apart's Dash said.

Now Showing: Declining Sales at Theater Snack Bars

As more people decide to stay away from movie houses, the drop in attendance is being felt by makers of food for concession stands.
John Horn

Moviegoers tend to stuff themselves full of salty popcorn and sweet candy. When people start steering clear of the multiplex — as audiences have done for three straight years — the manufacturers of those theater snacks are the ones left with a sour taste in their mouths.

Much has been made of how declining movie admissions and box-office grosses have clipped the earnings of movie studios and film exhibitors. But audience apathy also is taking a bite out of the oft-overlooked concession business. Particularly hard hit are those companies that rely on movie theaters for the bulk of their sales.

"It's kind of scary. It's been going downhill for three years," says Paul Bonfiglio, whose Summit Food Enterprises has had to lay off nearly a third of its employees because of steadily worsening sales for its movie theater candy line, which includes P.J. Gummi Bears. Adds Norm Krug, the chairman of the Nebraska farmers cooperative Preferred Popcorn, "Our sales are going down pretty directly with attendance."

As the movie theater industry's annual convention came to a close here Thursday, organizers tried to characterize the box-office slump as more media propaganda than business predicament. Hollywood studios were on hand to offer sneak peeks of the animated features "Cars" and "Over the Hedge" and clips from such live-action fare as "Superman Returns," "Mission: Impossible III" and "Poseidon," all in an effort to rally interest in the upcoming slate of movies.

But on the trade show floor of ShoWest, as the annual convention of theater owners is known, candy and popcorn peddlers trying to drum up business for their products were decidedly uninspired.

It probably doesn't help that theater owners have been raising the prices of those same Gummi Bears and buckets of popcorn in response to the downturn — an astronomical markup that the concession suppliers never see. (Just $30 worth of raw popcorn can translate into as much as $3,000 in sales at the movie theaters.)

"I don't think that raising prices at the concession stand is the way to do it," said Frank Liberto, whose Ricos Products Co. introduced the chips-and-cheese nacho snack at movie theaters nearly 30 years ago.

Several concession makers fear that such price hikes may cause more moviegoers to stop buying snacks at the multiplex and sneak cheaper, store-bought food into the venue.

An audience survey released last week by Nielsen Analytics found that more than 36% of moviegoers polled said they were going to fewer films because "concessions are too expensive." (The top reasons for staying away: high ticket prices and bad movies.)

John Fithian, president of the National Assn. of Theatre Owners, said movie concessions were fairly priced when compared with theme parks and other out-of-home entertainment options. Were it not for concessions, Fithian said, "ticket prices would be twice as high."

Fithian said he was unaware of any study that tracked overall theater concession spending. The National Assn. of Concessionaires did not return telephone calls seeking comment.

For many exhibitors, concession sales can mean the difference between profit and loss and often total more than a third of a chain's box-office revenue. Exhibitors generally return about half of all box-office receipts to movie studios as film rental fees. Conversely, they keep the majority of candy counter income; concession profit margins can run above 85%.

At Regal Entertainment Group, the nation's largest theater chain, with more than 6,200 screens, concession sales last year generated $659.8 million in revenue, more than a quarter of Regal's total income. But Regal was one of the only publicly held chains to show healthy growth for what are often unhealthy snacks.

AMC Entertainment Inc., which runs nearly 5,700 screens, sold $313.9 million worth of hot dogs, soda, popcorn and candy in its most recent three quarters, down 8% from the comparable period a year earlier, when concession revenue totaled $341.8 million. Carmike Cinemas Inc., operator of nearly 2,500 screens, said concession revenue in its last six months was $75.1 million, compared with $82.1 million in the comparable period in 2004, down 9%. Carmike's spending on concessions during those six months slid even faster, from $9.1 million to $8 million, a 12% drop.

Even though Regal's concession sales were up in its most recent fiscal year, the average amount of concessions sold per customer over the last three years has not kept pace with the rise in average ticket prices.

Domestic theater admissions fell nearly 9% last year to 1.4 billion tickets sold, the third consecutive year of decline. After the 1.64 billion admissions in 2002, the turnstile slowed to 1.57 billion tickets in 2003 and 1.54 billion tickets in 2004, the Motion Picture Assn. of America said.

That's why popcorn merchants see few kernels of good cheer. Weaver Popcorn Co. said its theater sales had fallen about 10% over the last several years. But because the company also makes microwave popcorn, it benefits when film fans choose to stay home and rent DVDs instead and cook their own snacks.

"If people are not going to theaters, we can still have people [eating] popcorn at home," said Jim Labas, Weaver's concession representative.

In an attempt to boost slumping sales for the 41 farmers who are part of his cooperative, Preferred Popcorn's Krug has been pushing popcorn in theaters as distant as Japan, India and Russia. The box-office drop "has caused us to be more aggressive in foreign markets," Krug said.

J&J Snack Foods Corp. said only a tiny piece of sales for its snack products (Minute Maid Soft Frozen Lemonade and the new CinnaPretzel, among others) came from theaters. Still, the company feels the downturn.

"We count every penny," said Jerry Law, a J&J Snack Foods representative at ShoWest. "Last year was a bad year. We'll see what kind of movies they have for this summer."

Few theater concessionaires are having as difficult a time as Bonfiglio of Summit Foods. As theater sales for Gummi Bears have slumped, and some of Summit's exclusive theater deals have been voided by exhibition industry consolidation, the company was forced last year to lay off 10 of its 33 employees.

Summit is introducing an array of new theater candies, including Bulls-Eye caramels, and moving into retail stores such as Walgreens to try to improve its fortunes. But Bonfiglio is not convinced that the only thing ailing Hollywood is a recent crop of regrettable releases; he worries moviegoing as a social habit may be disappearing. "There are so many other vehicles for entertainment," he said.

Not all the ShoWest vendors said the slowing sales had hurt their bottom lines.

American Licorice Co., the makers of Red Vines, relies on theaters for 10% of its business and hasn't noticed weakening returns because of the box-office drop. The people behind Dippin' Dots, a snack made from frozen ice cream pellets, say their product's novelty has helped maintain profit. "We just keep growing," said Doug Barwig, manager of western operations.

And Ricos Products' Liberto said that although movie sales "have been softening," the company was diversified enough — it sells nachos at Wal-Mart stores and to theaters as distant as Dubai — to avoid an earnings hit.

Where some see lemons, others see lemonade — or, at least, fruit smoothies. Steve Nilforoushan says that what theaters and their patrons really need is a healthy alternative to all those salty and sugary rations.

Appearing at the convention for the first time, Nilforoushan was launching Smoovies, a frozen drink filled with bananas, strawberries and no high-fructose corn syrup. Nilforoushan says his concoctions would cost just over $1 for exhibitors to make, and retail for as much as $6.50 — a healthy profit for theaters, he says, but not a wallet-gouging increase over what such drinks cost in smoothie stores.

"Look around here. Everything is junk food," Nilforoushan said, surveying the ShoWest tradeshow floor. "Movie attendance doesn't really worry me, because the graph for growth in the smoothie industry is going up exponentially."

Christians Sue for Right Not to Tolerate Policies

Many codes intended to protect gays from harassment are illegal, conservatives argue.
Stephanie Simon

Ruth Malhotra went to court last month for the right to be intolerant.

Malhotra says her Christian faith compels her to speak out against homosexuality. But the Georgia Institute of Technology, where she's a senior, bans speech that puts down others because of their sexual orientation.

Malhotra sees that as an unacceptable infringement on her right to religious expression. So she's demanding that Georgia Tech revoke its tolerance policy.

With her lawsuit, the 22-year-old student joins a growing campaign to force public schools, state colleges and private workplaces to eliminate policies protecting gays and lesbians from harassment. The religious right aims to overturn a broad range of common tolerance programs: diversity training that promotes acceptance of gays and lesbians, speech codes that ban harsh words against homosexuality, anti-discrimination policies that require college clubs to open their membership to all.

The Rev. Rick Scarborough, a leading evangelical, frames the movement as the civil rights struggle of the 21st century. "Christians," he said, "are going to have to take a stand for the right to be Christian."

In that spirit, the Christian Legal Society, an association of judges and lawyers, has formed a national group to challenge tolerance policies in federal court. Several nonprofit law firms — backed by major ministries such as Focus on the Family and Campus Crusade for Christ — already take on such cases for free.

The legal argument is straightforward: Policies intended to protect gays and lesbians from discrimination end up discriminating against conservative Christians. Evangelicals have been suspended for wearing anti-gay T-shirts to high school, fired for denouncing Gay Pride Month at work, reprimanded for refusing to attend diversity training. When they protest tolerance codes, they're labeled intolerant.

A recent survey by the Anti-Defamation League found that 64% of American adults — including 80% of evangelical Christians — agreed with the statement "Religion is under attack in this country."

"The message is, you're free to worship as you like, but don't you dare talk about it outside the four walls of your church," said Stephen Crampton, chief counsel for the American Family Assn. Center for Law and Policy, which represents Christians who feel harassed.

Critics dismiss such talk as a right-wing fundraising ploy. "They're trying to develop a persecution complex," said Jeremy Gunn, director of the American Civil Liberties Union's Program on Freedom of Religion and Belief.

Others fear the banner of religious liberty could be used to justify all manner of harassment.

"What if a person felt their religious view was that African Americans shouldn't mingle with Caucasians, or that women shouldn't work?" asked Jon Davidson, legal director of the gay rights group Lambda Legal.

Christian activist Gregory S. Baylor responds to such criticism angrily. He says he supports policies that protect people from discrimination based on race and gender. But he draws a distinction that infuriates gay rights activists when he argues that sexual orientation is different — a lifestyle choice, not an inborn trait.

By equating homosexuality with race, Baylor said, tolerance policies put conservative evangelicals in the same category as racists. He predicts the government will one day revoke the tax-exempt status of churches that preach homosexuality is sinful or that refuse to hire gays and lesbians.

"Think how marginalized racists are," said Baylor, who directs the Christian Legal Society's Center for Law and Religious Freedom. "If we don't address this now, it will only get worse."

Christians are fighting back in a case involving Every Nation Campus Ministries at California State University. Student members of the ministry on the Long Beach and San Diego campuses say their mission is to model a virtuous lifestyle for their peers. They will not accept as members gays, lesbians or anyone who considers homosexuality "a natural part of God's created order."

Legal analysts agree that the ministry, as a private organization, has every right to exclude gays; the Supreme Court affirmed that principle in a case involving the Boy Scouts in 2000. At issue is whether the university must grant official recognition to a student group that discriminates.

The students say denying them recognition — and its attendant benefits, such as funding — violates their free-speech rights and discriminates against their conservative theology. Christian groups at public colleges in other states have sued using similar arguments. Several of those lawsuits were settled out of court, with the groups prevailing.

In California, however, the university may have a strong defense in court. The California Supreme Court recently ruled that the city of Berkeley was justified in denying subsidies to the Boy Scouts because of that group's exclusionary policies. Eddie L. Washington, the lawyer representing Cal State, argues the same standard should apply to the university.

"We're certainly not going to fund discrimination," Washington said.

As they step up their legal campaign, conservative Christians face uncertain prospects. The 1st Amendment guarantees Americans "free exercise" of religion. In practice, though, the ground rules shift depending on the situation.

In a 2004 case, for instance, an AT&T Broadband employee won the right to express his religious convictions by refusing to sign a pledge to "respect and value the differences among us." As long as the employee wasn't harassing co-workers, the company had to make accommodations for his faith, a federal judge in Colorado ruled.

That same year, however, a federal judge in Idaho ruled that Hewlett-Packard Co. was justified in firing an employee who posted Bible verses condemning homosexuality on his cubicle. The verses, clearly visible from the hall, harassed gay employees and made it difficult for the company to meet its goal of attracting a diverse workforce, the judge ruled.

In the public schools, an Ohio middle school student last year won the right to wear a T-shirt that proclaimed: "Homosexuality is a sin! Islam is a lie! Abortion is murder!" But a teen-ager in Kentucky lost in federal court when he tried to exempt himself from a school program on gay tolerance on the grounds that it violated his religious beliefs.

In their lawsuit against Georgia Tech, Malhotra and her co-plaintiff, a devout Jewish student named Orit Sklar, request unspecified damages. But they say their main goal is to force the university to be more tolerant of religious viewpoints. The lawsuit was filed by the Alliance Defense Fund, a nonprofit law firm that focuses on religious liberty cases.

Malhotra said she had been reprimanded by college deans several times in the last few years for expressing conservative religious and political views. When she protested a campus production of "The Vagina Monologues" with a display condemning feminism, the administration asked her to paint over part of it.

She caused another stir with a letter to the gay activists who organized an event known as Coming Out Week in the fall of 2004. Malhotra sent the letter on behalf of the Georgia Tech College Republicans, which she chairs; she said several members of the executive board helped write it.

The letter referred to the campus gay rights group Pride Alliance as a "sex club … that can't even manage to be tasteful." It went on to say that it was "ludicrous" for Georgia Tech to help fund the Pride Alliance.

The letter berated students who come out publicly as gay, saying they subject others on campus to "a constant barrage of homosexuality."

"If gays want to be tolerated, they should knock off the political propaganda," the letter said.

The student activist who received the letter, Felix Hu, described it as "rude, unfair, presumptuous" — and disturbing enough that Pride Alliance forwarded it to a college administrator. Soon after, Malhotra said, she was called in to a dean's office. Students can be expelled for intolerant speech, but she said she was only reprimanded.

Still, she said, the incident has left her afraid to speak freely. She's even reluctant to aggressively advertise the campus lectures she arranges on living by the Bible. "Whenever I've spoken out against a certain lifestyle, the first thing I'm told is 'You're being intolerant, you're being negative, you're creating a hostile campus environment,' " Malhotra said.

A Georgia Tech spokeswoman would not comment on the lawsuit or on Malhotra's disciplinary record, but she said the university encouraged students to debate freely, "as long as they're not promoting violence or harassing anyone."

The open question is what constitutes harassment, what's a sincere expression of faith — and what to do when they overlap.

"There really is confusion out there," said Charles C. Haynes, a senior scholar at the First Amendment Center, which is affiliated with Vanderbilt University. "Finding common ground sounds good. But the reality is, a lot of people on all sides have a stake in the fight."

Meet Hollywood's New Hitmaker — Starbucks Coffee

Hollywood's doors are open for Nikkole Denson, the woman who selects which movies Starbucks will help to promote.
Lorenza Muñoz

Nikkole Denson's name is quickly becoming as familiar in Hollywood as the tall decaf Frappuccinos and caramel macchiatos her company brews up each morning for the town's unemployed actors and aspiring screenwriters.

Two years ago, Denson was one of hundreds of unknown development executives pitching movie projects. Now that she is Starbucks Corp.'s liaison to Hollywood, the same executives who once spurned her are courting her, hoping the coffee chain can become the kind of marketing juggernaut for movies that it has been for music.

"The tables have really turned and it feels great," she said. "All I had to say was 'Starbucks' and the doors were opened."

Denson, 35, whose title is director of business development for Starbucks Entertainment, is charged with sifting through scores of movies to find the ones Starbucks will help market in its 8,300 North American stores.

Starting Tuesday, Starbucks will promote her first pick, Lionsgate's "Akeelah and the Bee," to millions of customers via messages on such media as coffee-cup sleeves. The feel-good drama, which is being released in theaters April 28, chronicles the story of an African American girl in Los Angeles who overcomes a tough neighborhood and bad schools to become a national spelling bee champ.

Starbucks customers won't be seeing horror movies or mindless teen comedies promoted in their local stores. Instead, Denson's mission is to find uplifting, inspirational stories along the lines of "Akeelah," most likely from independent companies such as Lionsgate or studio specialty divisions.

Starbucks founder Howard Schultz, who is well connected in Hollywood with a board seat at DreamWorks Animation SKG, said the company had no plans to finance movie production. But, he added, Starbucks will continue developing entertainment-related ventures, with films a natural extension of the company's successful music venture.

"We can help customers discover entertainment," said Schultz, sitting in his modest office overlooking the Port of Seattle, where shipments of Starbucks coffee are unloaded.

What got Hollywood's attention was how Starbucks turned into hits such albums as Ray Charles' Grammy award-winning "Genius Loves Company." Studio executives now know that a barista's recommendation alongside a latte is as good as gold.

"What they have done with music illustrates that they are a place where they can create buzz," said Toby Emmerich, president of production at New Line Cinema Corp.

"How many other retail environments do you enter five times a week? People used to talk about television shows at the water cooler. But water coolers don't happen anymore. Now you have Starbucks."

Without Starbucks, Lionsgate executives feared that "Akeelah" risked being pigeonholed as a niche film because of its all-black cast, meaning it might not have gotten the exposure it deserved.

"It is a mainstream movie," said Mike Paseornek, head of production for Lionsgate. "But it would have been harder to sell it as one without Starbucks' putting that stamp on."

Denson considered more than 100 movies as Starbucks' first effort, but "Akeelah" struck a personal chord. She had grown up in a tough Oakland neighborhood, the only child of a single mother who worked hard to save enough money to send Denson to private primary schools.

"There is a little bit of Akeelah in everybody," said Denson, who had tried unsuccessfully to develop the script herself. The movie, she said, shows that "you can do things that a lot of folks don't necessarily think you can do. Whether it's going to law school or going to a spelling bee, it's a great inspiration. "

Denson, a petite woman with piercing dark eyes, had planned a career as a civil rights lawyer, graduating from the University of San Francisco law school after undergraduate work at UC Davis.

After stints at several nonprofit firms, Denson grew restless and moved to Los Angeles, landing a job as production assistant for a Paramount television show in 1996.

Three years later, she was offered the chance to build the fledgling movie division of Laker great Earvin "Magic" Johnson, who has his own ventures with Schultz and Starbucks. Denson helped produce such films as Fox Searchlight Pictures' romantic comedy "Brown Sugar" and put her lawyerly skills to work negotiating partnerships with the likes of 24-Hour Fitness and Coors beer.

Denson was lured to Starbucks in 2004 by Ken Lombard, her onetime boss at Johnson's company. Schultz had hired Lombard to oversee Starbucks' entertainment division, where he spearheaded the launch of the company's Hear Music Coffeehouses and a Hear Music Channel on XM Satellite Radio.

"She has a tremendous amount of integrity and the ability to not really be influenced by whoever is in the room," Lombard said.

Coaxing people into going to a movie theater could prove more challenging than selling them a CD at the store counter. And though every Hollywood studio would like its movie backed by Starbucks, most have blanched at the hard bargain the company drives.

For "Akeelah," Starbucks is a producer on the film, although it did not put any money into the production. Starbucks will sell the film on DVD and receive a share of the film's profit.

Denson plans to relocate this summer from Seattle to Los Angeles with the Starbucks entertainment division, returning to Hollywood with considerably more clout than when she left.

Her stint at Starbucks central in Seattle has made her so enamored of her employer that friends tease her about having substituted "drinking the Kool-Aid" for the coffee.

Near her cubicle, employees chat on purple velvet lounge chairs and participate in "coffee tastings" every week. The butternut-squash-colored walls and soft pine floors mask the reality of being in the nerve center of a multibillion-dollar global corporation.

Though Denson prefers chai tea lattes, her staff drinks French-press coffee during meetings. She proudly shows off a black "coffee master" apron hanging on her desk and will eagerly discuss the difference in taste between arabica beans from Guatemala and those from Kenya.

"I am as excited about the next Frappuccino flavor as I am about my next project," Denson said. "It's a unique culture."

Denson is optimistic that the Starbucks culture she has so fully embraced will translate into film dollars.

"We have begun to be tastemakers," she said. "We have earned our customers' trust with the music and we are looking to earning their trust again with film…. We are looking to becoming an entertainment destination."

DVD Chips to Comply with Content Protection License

This is a press release that we just got direct from the Motion Picture Association. It will be interesting to see what will be the mandated acceptable technology put into place exactly that will not expose DVDs to "piracy." Of course I still fully believe that ripping DVD content that I own for my personal usage is something that should be fully allowable, especially when you are trying to find an accessible space for a couple hundred of them. Anyway, while this is all interesting, do not expect the "end of the world." Still it is quite possible that we will see some fallout and some associated costs passed on to consumers.

**Court Orders World's Second Largest DVD Chip Maker To Comply With Content Protection License**
Press Release

Los Angeles -- The Motion Picture Association of America, Inc. (MPAA) today announced that its member companies have successfully resolved yet another breach of contract lawsuit involving non-compliant DVD chips that enable piracy. This is the sixth such lawsuit that has concluded with a court-ordered injunction mandating a DVD chip manufacturer to adhere to the content security features of the CSS license. With the new injunction against Sunplus Technology Co., Inc., the world’s second largest DVD chip manufacturer, all of the major DVD chip manufacturers are now bound by court order to honor the CSS license. The studios now plan to focus greater attention on other products, such as DVD players, that may also violate the license and expose copyrighted material to piracy. Investigations have been underway for months, and the studios are considering appropriate enforcement action.

"Protecting content through the security features that are required by the CSS license is critical to ensuring that creative works are not illegally reproduced. Every company that has signed the CSS license must honor its terms by making secure products that protect DVDs from piracy,” said Dan Robbins, Chief Technology Counsel for the MPAA. "Like any business, we must work to enforce the mechanisms that protect our product, and we will continue to do so.”

The CSS license has provided the baseline protection that enables film studios to provide consumers with over 45,000 DVD titles. The motion picture studios are third-party beneficiaries of the CSS license and may enforce it against licensees who fail to honor its terms.

A federal interagency report published in 2004 estimated that counterfeit and pirated goods, including those of copyrighted works, cost the American economy $250 billion a year. The MPAA estimates its member companies lost $3.5 billion in 2004 due to piracy of hard goods alone, not including losses due to Internet-based activities. A Smith Barney study released in 2003 predicted the movie industry would lose up to $5.4 billion in 2005 due to piracy, including Internet piracy. Working with law enforcement around the world, the MPAA seized more than 76 million illegal discs last year.

For more information, please contact: Kori Bernards - MPAA Los Angeles - (818) 995-6600

Hack Attack: Build Your Own DVR
Adam Pash

Ever since TiVo came around, I was eager to jump on the time shifting bandwagon. After all, nothing makes a productivity junkie happier than turning an hour-long show into forty minutes. But for all its loyal fan base, TiVo never seemed like the right fit for me.

For my money, time, and, let’s be honest, the gratification of a solid DIY project, I’m a big proponent of building your own digital video recorder (DVR). TiVo is pretty good at what TiVo does, but imagine a world where you can also tweak your TiVo to do anything you can do with any other computer.

With all the potential controversy and uncertainty surrounding TiVo firmware upgrades, the time to build your own DVR has never been better. With your own DVR, you can get all the benefits of a TiVo and more without the recurring cost for subscription. This week, I’m going to show you how simple it is to turn your computer into a DVR. After that, I’ll show you a few ways that I use my DVR to take it beyond TiVo.

Whether you’re using your current PC, repurposing an old one, or going all out on a dedicated DVR to put under your TV, you can get so much more out of your own DVR than you could ever get out of a TiVo.

NOTE: Keep in mind that the setup I used here is far from the only way to go. After struggling for a while with how to put together an article that would work for everyone, I decided that I would just go ahead and describe how I do things. The main purpose of this article is to provide an introduction to the world of DIY DVRs, hopefully planting the seed for the possibility of a world beyond TiVo. On the other hand, if you do choose to take a route similar to the route I’ve chosen, this should provide you with a good starting point.
What you need

In order to put together your own DVR, you really only need to add two things to any given computer:
A TV capture card
DVR software

Add the preceding two components to any PC and you’ve got yourself a solid, fully-functional DVR; it doesn’t get much more simple than that.
Choosing a capture card

First things first. If you’re going turn your TV into a DVR, you need a capture card. A capture card is a USB or PCI device that you install on your computer that allows you to plug your TV cable into your computer the same way you would your TV.

There are plenty of cards available, but I’ve had great experience with the Hauppauge PVR-150, the entry card in the Hauppauge line of cards. To ease the load on your CPU, the Hauppauge PCI cards do the video encoding on the card, meaning TV recording will take up very few CPU cycles (perfect for an older PC). After you’ve bought it, you are of course going to have to install your PCI card (the Hauppauge PVR-150 is the card I installed in this feature), which is easy enough to do.
Finding the right software

There are a lot of great software options for homebrew PVRs, like SageTV (Windows and Linux, $80), MythTV (Linux, free), GB-PVR (Windows, free), BeyondTV (Windows, $70), and Freevo (Linux, free), to name a few of the most popular.

Although MythTV is probably the most powerful of these programs (and it’s free), when all was said and done I chose SageTV for its feature set, stability, and Windows/Linux support. Aside from its very active support forums, you can also get support directly from a real company, which is always a nice option. Out of the box, SageTV installs as easily as any Windows program, and configuring your capture card with SageTV is a breeze.

Basically, if you’re looking for a quick and easy, no hassle PVR software, SageTV fits the bill. In short, your PVR will be up and running in no time. [1] However, keep in mind that one of the great parts about building a homebrew PVR is that you do have the option to tweak and fiddle to your heart’s content. If that’s the case, there’s a lot more you can do with SageTV.

Extending SageTV

The following are all tweaks I’ve made to my DVR. Some are specific to SageTV, while others (Remote control tweaking and Commercial skipping) can be used with nearly any DVR software.
Customize your SageTV: If you’re not happy with the default UI of SageTV, there are some beautiful user-designed packages that are easy to install. The best one I’ve found is called SageMC16x9.
Commercial skipping: Automatic commercial detection and skipping is another great feature that’s pretty easy to get up and running, but there are a few different routes you can take. The easiest option is to use the ComSkip program, but you may also want to try Show Analyzer.
Remote control tweaking: SageTV gives you a lot of flexibility for tweaking how your remote control works with SageTV, but there’s a lot you can do to tweak your IR remote to work with any program on your computer by editing the irrremote.ini file. After all, it wouldn’t be much of a DVR if you had to head for your mouse and keyboard every time you want to use a different program. Since virtually every Windows program has keyboard shortcuts that allow for mouseless navigation, you can easily setup your remote to control them. For example, the Hauppauge remote can handle pretty much any keyboard combination.
Launch external programs: With SageMC16x9, you’ve got an added menu option to launch external programs (check post #99). This feature can come in particularly handy if you want to launch your favorite emulator, video game, DVD player, or batch script, again, without heading for your keyboard/mouse.

The cool part about putting together your own DVR is that you’re only limited by your imagination, so with a little tweaking you can put together a DVR that perfectly fits your needs. If you’ve already built your own DVR, let us in on your setup. TiVo users, fight back! What can your TiVo do that my DVR can’t? Add your thoughts to the comments or send an email to tips at lifehacker.com.
Adam Pash is an associate editor of Lifehacker. His special feature Hack Attack appears every Tuesday on Lifehacker. Subscribe to the Hack Attack RSS feed to get new installments in your newsreader.

[1] If you’re looking to take the same route I did, SageTV offers some excellent packages at their online store, bundling, for example, the PVR-150 capture card and the SageTV software at a discount.

Google Defends Cooperation With China
Joe McDonald

Google Inc. CEO Eric Schmidt on Wednesday defended the search engine's cooperation with Chinese censorship as he announced the creation of a Beijing research center and unveiled a Chinese-language brand name.

Google is trying to raise its profile in China after waiting until January to launch its Chinese-language site Google.cn. Activists have criticized the company for blocking searches for material about Taiwan, Tibet, democracy and other sensitive issues on the site.

"We believe that the decision that we made to follow the law in China was absolutely the right one," Schmidt said at a news conference.

He said Google had to accept restrictions in order to serve China, which has the world's second-largest population of Internet users after the United States, with more than 111 million people online.

Schmidt also announced the creation of a research center in Beijing that he said should have 150 employees by mid-2006 and "eventually thousands of people." He said the center is meant to create products for markets worldwide, though he said planning was still in such an early stage that he didn't know what they might be.

Schmidt was speaking at a ceremony to announce Google's Chinese-language brand name - "Gu Ge," or "Valley Song," which the company says draws on Chinese rural traditions to describe a fruitful and rewarding experience.

Talking to reporters later, Schmidt said Google's managers were stung by criticism that they accepted Chinese censorship, but said they haven't lobbied Beijing to change its rules.

"I think it's arrogant for us to walk into a country where we are just beginning to operate and tell that country how to operate," he said.

Asked whether Google might try to persuade Beijing to change its restrictions, Schmidt said he didn't rule anything out, but said it hasn't tried to change such limits elsewhere. He noted that Google's site in Germany is barred from linking to Nazi-oriented material.

"There are many cases where certain information is not available due to local law or local custom," he said.

Schmidt said China accounts for only a small portion of Google's revenues because the company has only recently obtain a license to allow it to carry local advertising. But he said the company expects China to be an important part of its future business.

One possible Google project in China would be to make Chinese books available online in digital form or to use translation software to produce English-language editions, Schmidt said.

He said the Beijing technical center could quickly become Google's biggest outside the United States, surpassing its European lab in Zurich, Switzerland.

Chinese universities "are now churning out a very large number of very, very good programmers," he said. "So we are moving quickly now to hire the best and the brightest."

Torrent Sites Advance

The evolution of P2P download websites has shown some interesting trends. As the copyright enforcers succeed in closing down site after site in a futile attempt to kill P2P, the file sharing population will migrate - not only to better sites, but also to more efficient P2P networks.

After the premier eDonkey hashlink site Sharereactor died 2 years ago, there were no other ED2K sites that ever approached its level of popularity. Although the bulk of Sharereactor 'regulars' migrated to ShareConnector, propelling that site to the top spot, it still only grew to a fraction of Sharereactor's size. After ShareConnector was shut down a few months later, no other ED2K site has yet attained more than a very small following.

Because the ED2K network population has continued to grow since ShareReactor's closure, this would suggest that an increasing proportion of ED2K users do not use hashlink sites, but instead take their chances on using the client's network search engine to find files. Network searching is a much riskier method than using verified link sites, due to the increasing number of bogus files being spewed out by anti-P2P hired guns such as MediaSentry and OverPeer. However, because the ED2K network supports file searches, release sites are not critical, as they are with BitTorrent.

In stark contrast to ED2K, the online BitTorrent community has rebounded since the closure of mega-site Suprnova, which left the BitTorrent community wondering where to go or what to do next. After the brief ill-fated fling with the eXeem, the over-hyped spyware-infected application that promised to become "the new BitTorrent", the community returned to its roots and re-absorbed itself in both new and existing torrent sites.

Over time, several popular sites absorbed the Suprnova refugees and more - growing to nearly the size of Suprnova at its peak. Mininova is currently the largest torrent site, with a size that even exceeds that of the once-mighty Suprnova. That's quite an impressive feat for a website that only got started shortly after Suprnova's closure in December 2004.

Although the accuracy of Alexa's statistics might be a subject of debate, this suggests that mininova has become the first torrent site to match Suprnova's size. There is one major difference, though: during Suprnova's reign, it was the undisputed king of the torrent sites and there were no others that challenged its dominance. Today, however, the Torrent community is spread across many websites, and there are several sites actively competing with front-runner Mininova, including The Pirate Bay and TorrentSpy.

Although the total population of the BitTorrent "network" is hard to determine, this data suggests that the number of users has continued to increase steadily, with the closure of a dominant torrent site such as Suprnova being just a relatively minor blip in the long-term trend. The copyright cartel's attacks have resulted in a stronger, more diversified BitTorrent community - one which is harder to disrupt with a site takedown, and potentially safer for users than P2P networks that enable users to reveal their list of shared files.

The message is clear: BitTorrent is here to stay and stronger than ever.

DJ Typing Style Used To Securely Distribute Music
John Leyden

A technique used by Bletchley Park cryptographers to identify operators is being applied to distribute musical recordings to DJs securely using the internet.

During World War II, code breakers found that they could identify particular German Enigma operators by their particular style of typing code or Fist. SRI International (http://www.sri.com), a research spun out of Stanford University, found the same approach could you used to identify modern-day typists. US company BioPassword (http://www.biopassword.com) is attempting to commercialise the technology, creating a system that could uniquely identify individuals on the basis of how they type around nine samples of an eight to 16-keystroke password.

Online digital media distribution company, Musicrypt (http://www.musicrypt.com/), has applied this technology to incoporate biometrics in its Digital Media Distribution System (DMDS). The first application of DMDS replaces the (expensive) physical distribution of new musical recordings by record companies internally and to radio stations by a secure online distribution system. Musicrypt picked the technology in preference to more recognised forms of biometric authentication - such as fingerprint readers - because it could be used from any computer without any additional hardware, Computerworld reports.

Musicrypt's technology is used to distribute approximately half of all new music releases to radio stations in Canada. Canada's three largest broadcasters, Corus Radio, Rogers Media Broadcasting, and Standard Radio, have adopted Musicrypt’s Digital Media Distribution System (DMDS) as an exclusive means to distribute musical files electronically. Musicrypt expended into the US last year. Its technology has been installed at radio stations representing over 35 broadcast chains. In March the firm said its technology had delivered over 3,200 tracks to more than 2.5m destinations.


Olive Works 400GB Into Opus Digital Music Centre
Tony Smith

Olive has announced the latest version of its latest high-end digital music separate, this time called the Opus and equipped with a 400GB hard drive - enough, the company claims, to hold 660 uncompressed CDs, 1,100 ripped using lossless compression, or 7,230 albums ripped to 128KBps MP3 files.

Past Olive products were developed and made in Germany by Hermstedt, but Olive claims the new model was "designed and custom-made in the USA". In addition to the much bigger storage capacity - up from 80GB and 160GB from, respectively, the Olive Symphony/Hermstedt Hifidelio and Olive Musica/Hermstedt Hifidelio Pro - there are now for Texas Instruments Burr-Brown 24-bit digital-to-analogue converters with 8x oversampling fed by a separate temperature-compensated crystal oscillator and driven by a linear power supply.

Like Musica/Symphony/Hifidelio, Opus has a CD drive ready to play or rip your music collection - and burn custom CDs. There are USB ports to hook up an iPod and copy songs across to the portable player. The unit has 802.11g Wi-Fi and a four-port 10/100Mbps Ethernet switch on board, ready to stream music to and from remote systems such as Macs, PCs and Hermstedt's ST-64 remote controller and speaker combo.

Track details are displayed on the range's usual seven-line, 400 x 160, four-greyscale LCD. Ripped songs are immediately compared to the built-in 2m-track song-title database to populate ID tags.

Olive said the Opus will ship early this month for $2999. It's available in black or silver.

Sonos Slims Wireless Music Playback Box
Tony Smith

Sonos will this month cut the price of its multi-room digital music system. Its latest ZonePlayer wireless playback device, the ZP80, provides the same core functionality as Sonos' ZP100. However, to get the price - and the size - down, Sonos has stripped out the integrated amplifier used to drive speakers directly from the ZonePlayer.

The ZP80 provides RCA output and auto-detection input connectors, a pair of digital audio output ports - optical and co-ax - and two Ethernet connectors, down from the four on the ZP100.

The player can handled music encoded in the MP3, WMA, AAC, Ogg, Audible, Apple Lossless, FLAC, WAV and AIFF, but as yet there's no support for songs protected using either Microsoft or Apple's DRM technologies. It will pull songs from shared folders on Windows XP/2K, Mac OS X and NAS systems.

The ZP80 fits in with existing Sonos digital music networks. Standalone boxes will be priced at around £269, but for new customers the company is bundling a pair of ZP80s and its colour-screen, iPod-like wireless controller for £779. On its own, the controller, which can select the music playing on any one of up to 32 ZonePlayers on a given network, costs £319. Prices include VAT.

The ZP80 is set to ship in the UK and Europe on 27 April.


Slim Devices Squeezebox 3 Network Music Player
Tony Smith

I first reviewed Slim Devices' network music player, the Squeezebox, in April 2004. We're not quite two years on from that, but the machine has already undergone two major revisions: first, in March 2005, an upgrade of its networking capabilities and audio engine, and then, just seven months later, a complete case redesign...

I didn't get a chance to check out the Squeezebox 2, and since the Squeezebox 3 upgrade is largely cosmetic, this review is as much about the second-generation product as the third. But it's fair to stay with the new, stylish design, Squeezebox is finally ready for prime time. It's no longer a cute toy for the techies and early adopters, but a quality item ready to sit at the heart of any modern home's music system.

So what's changed? Since Squeezebox's debut, the product has gained Ethernet networking in addition to the wireless connectivity offered since day one. Wireless support has been updated to the latest 802.11g spec, with support for the latest security techniques, including WPA 2. It's now got two antennae and both have been put inside the box.

Gone too is the squat, set-top box look, replaced by an upright design in aluminium and shiny plastic that's frankly more assertive, particularly the black version - there's also a white model. It looks like consumer electronics kit should. The old Squeezebox was far from ugly, but the new one is far, far more stylish, fitting in smoothly with either a modern metallic-look hi-fi or a stack of older, black separates.

Squeezebox 3 sits back at a slight angle, held up by a fixed tubular metal stand. Above it are arrayed the ports: 3.5mm headphone socket, stereo RCA jacks, a digital optical output and a digital co-axial connector, the Ethernet port, and the power pin.

The front of the device is split 50:50 between a brushed aluminium panel and a Ray Ban-black visor behind which sits the familiar crisp, bluey-green, 320 x 32 vacuum fluorescent display. It remains eminently readable across a room, which is more than you can say for a docked iPod - especially if it's a Nano. The Squeezebox uses the same kind of horizontally scrolling user interface, albeit with only one line shown at a time, and I found it spry and responsive.

As before, Squeezebox utilises its own server app running on a Windows, Mac or Linux box to link the player to your music collection. The first time you run SlimServer in conjunction with a Squeezebox, it will index your songs, so you may find they're not all available to you immediately, but it's not too long before they are. While the initial index is being assembled, I found the Squeezebox to be frequently unresponsive and slow, but once the process was complete I had no trouble getting it to do what I wanted. The moral of the story: leave your Squeezebox alone while it's indexing, especially if you have a large music collection.

Once it knows what songs are available, Squeezebox quickly displays the tracks you can play, browsed by genre, artist, album, etc, or located using the first two three characters of the title, composer, band name and so on. Switching songs was effortless and - post indexing - there was no sense of lag between pressing a button on the remote and seeing the result on the screen, or hearing it blast out of the speakers.

Slim Devices makes the SlimServer code available to all, so it's gained a wide array of additional features, most accessed through its HTML front-end. It allows you to control the player and change settings remotely, but most folk will be able to leave it running in the background. The Squeezebox itself can now be augmented with software plug-ins, with an RSS feed reader and even a cute Squeezebox version of Tetris ready to help you pass the time.

All this suggests a strong link to a host computer, but Squeezebox 3 doesn't become redundant if you turn your Mac off or you leave your PC at work. The box can talk to Slim Devices' own SqueezeNetwork servers, using them to relay internet radio streams to your Squeezebox. There's a lag, of course, but unless you're using the station to check the time, that shouldn't matter. In any case, the Squeezebox itself can tell you the hour and the date. There's even an alarm clock.

The upshot is a system you can use all the time, though you still have to use your computer to set up SqueezeNetwork. This is the easiest way to add specific stations' stream URLs to the player, but you can enter them usng the web interface. Slim Devices has added a small selection of suggested stations to get you started.

Squeezebox separate Internet Radio and SqueezeNetwork menu items, which is unnecessary and confusing - which do you use? Slim Devices needs to integrate these near-identical options. Recursion lovers will be interested to know the Internet Radio menu is duplicated within the SqueezeNetwork menu.

Squeezebox has always been focused on music, and it's refreshing that there's been no attempt to shoehorn video in, just for the sake of it, though I'm sure its time will come. While the original model was aimed at the MP3 user, the latest version has support for AAC - made popular in the intervening time by Apple's iTunes - and it's gain the ability to decode compressed formats like Apple Lossless, FLAC, Ogg and WMA, all without the need to do a software decode then stream uncompressed audio across the network. Alas, there's still no DRM support, but on the Apple side at least, that's not Slim Devices' fault.

Squeezebox 2 introduced a new audio processing system centred on a 24-bit Texas Instruments Burr-Brown digital-to-analogue converter (DAC) that's said to be one of the best in the business. Both the DAC and the line-out amplification stages have their own linear power regulators, and the Squeezebox generates a full 6V line-out signal. The result: a signal to noise ratio of over 100dB and a total harmonic distortion of under -93.5dB (0.002 per cent).

That's the audiophile-friendly numbers out of the way - for the rest of us, it means the sound quality is as good as it gets. You're limited by the fidelity of the compressed source material and, of course, whatever audio equipment you connect your Squeezebox output ports to. Streaming over MP3 tracks and Radio Paradise (http://www.radioparaside.com/) internet radio streams to my separates system was a joy. Smooth transmission and excellent audio reproduction made it a real pleasure to use.

Ditto the set-up, which apart from the aforementioned indexing period, was entirely smooth. Choose your WLAN - or LAN, of course - enter your access passphrase and you're away. The box will scan the network for running SlimServers, and connect accordingly.

Re-connection to your SlimServer - it's on your notebook, for instance, and you've taken it out of the building since you last used your Squeezebox - is fast, and so is switching between songs. The search system is quick, and the mobile phone-style text-entry system will not only be immediately familiar to anyone who sends text messages, but thanks the remote control's large, well-spaced keys is easy to use.

With no controls on the Squeezebox itself, you'll need to keep the remote handy. It's the weakest part of the package, having a light, slightly cheap feel. But it's eminently useable, the keys are sensibly laid out and there are short-cut buttons to most commonly viewed menu items.

Squeezebox 3 costs $299 (£172), which is a snip. There's even an Ethernet-only version for $249 (£143). I did ponder a docked iPod as an alternative way of making all my digital music instantly accessible via my hi-fi, but it's way more expensive, and no one else can use it if I happen to be out and about with my portable music player. And there's no way I can sit on my sofa and see what's on the docked iPod's display - with Squeezebox it's no problem at all. And with the SlimDevices product you can send songs from your archive to multiple Squeezeboxes around your home. It's not quite up there with Sonos for large-scale multi-room set-ups, but then it's cheaper. You pay your money, you take your choice.

Flaws? If it can't find an active SlimServer, Squeezebox defaults to its set-up screen, not its internet radio facility, which makes for a less consumer-friendly experience. I understand why it does this - maybe there's a network problem - but I think the box should be more savvy and save the user some button presses. Is the most recently used WLAN up and running? Yes, so get an IP address and either log straight into SqueezeNetwork or go to the Internet Radio section. Only if there's no internet connectivity should it default to a set-up page.

I also experienced some network configuration oddities, but I believe they were due to the fact I kept taking my notebook on and off the WLAN with the effect that the Squeezebox kept having to deal with different IP addresses. None of it stopped me from playing music, either from SqueezeNetwork or my computer. A fixed system - or at least a fixed IP address - makes more sense and is a more likely usage scenario.

Slim Devices' Squeezebox remains the best network music system I've tried, delivering exceptional functionality and superb audio quality at a very reasonable, affordable price. It's platform agnostic, working as well on Macs and Linux PCs as it does on Windows machines, and with SqueezeNetwork, it doesn't even need a computer to connect through, at least not once the account set-up's done. The server software is simple to use and as unobtrusive as you want. It supports a fine array of formats, though it's going to have to address the DRM problem sooner or later. And, did I mention it looks fantastic?

Thoroughly recommended.

Slim Devices Squeezebox 3
Summary Excellent sound quality, cross-platform support, eminently affordable price. Looks great too...
Rating 98%
Price $299 (wired and wireless); $249 (wired only)
More info The Squeezebox product page (http://www.slimdevices.com/pi_overview.html)


A Few From March

Apple TV: Wait And Sue
Ashlee Vance

For worse, the online media market continues to fracture into the haves and the have nots - those that have partnered with Apple and those that have not.

Media companies baffling the public with their ineptitude is nothing new. Apple had to drag the labels kicking and screaming to iTunes. Now, Apple has had to show the mogul crowd how to do a subscription service right by this week offering a discount on TV shows (The Daily Show and The Colbert Report) and letting consumers keep their programs. Why Napster, Real and the RIAA think making music disappear at the end of an expensive subscription will prove attractive is anyone's guess.

With that in mind, the media giants who have partnered with Apple - particularly for TV downloads - must thank God that Steve Jobs exists.

The pigopolists would never figure this stuff out on their own. They would never have agreed to meet in one place - iTunes - without the charismatic Jobs showing them the way. Companies like ABC and NBC would have taken years to push their TV shows onto the interweb at a somewhat sensible price.

And it's not like Apple does all that fantastic job of the media delivery in the first place. Apple refuses to open iTunes content to cheaper, non-iPod portable music players. In addition, it hasn't bothered to set up a proper channel for the TV shows, opting instead for a wee link on its Music Store. The format of the TV sales site itself pretty much sucks as you have to fight with iTunes to get descriptions of individual episodes. And, we reckon, the prices for the shows - $1.99 - are a bit high given that the regular, old advertising model on the tube delivers just a few cents per person in revenue to the networks. Why not cut us a break and cut the price down to $1.00 per episode? Have a heart.

Such gripes, however, remain trivial when you look at what the competition has to offer.

CBS, for example, made the mistake of partnering with Google. To this day, you can only buy two episodes of CSI - the most popular show on TV - from Google. You can buy zero episodes of CSI from CBS.

Beyond that, the Google Video Store looks like it was designed by a hemorrhaging five-year-old with a predilection for the small box of crayons and bad code.

While CBS executives scratch their bums wondering why they believed that rocking BusinessWeek story about Google, Apple has teamed with Comedy Central to sell episodes of The Daily Show and The Colbert Report as part of a discounted, quasi-subscription package.
The day the bundled cable died

We'll all look back on this deal as the day that TV delivery changed in earnest.

Apple has managed to repeat its tradition not of discovering something new but of doing something obvious first.

Plenty of MP3s players existed before the iPod. Apple just made the obvious better design and the obvious better store and backed it up with the obvious better marketing. That's not to say this is easy. It's just obvious.

Similarly, pushing TV via the internet isn't a new idea. Doing it well is an obvious path to a promising business.

Apple receives great praise for moving at a turtle's pace when the rest of the industry moves at a crippled turtle's pace.

Beyond adding some real glamour to the downloadable TV show market, the Daily Show show deal spells the beginning of the end of bundled cable. We're not going to go BusinessWeek on you and suggest that Apple will somehow undermine decades of TV development overnight. Not at all.

Consumers, however, will grow more and more loathe of the idea behind bundled cable as a result of Apple's work. The subscription price for The Daily Show - $9.99 for 16 episodes - still seems high. But you can imagine a day when you pick, say, 10 TV shows for that price. Apple downloads them for you, burns them to a DVD and off you go.

TV networks could make these packages more attractive by selling longer, commercial-free versions of the shows.

To compete well in the next five or so years, on-demand cable must go a similar route and free up its programming.

If not, it seems Apple will saunter into the TV market and become a major, major player. For unexplained reasons, no one seems to want to do this kind of work themselves. They'd rather let Jobs own them and then bitch about it.

Flounder first, sue later. That, after all, is the Hollywood way.

We imagine that a couple of up-starts will rise and give Apple a real challenge at their own game. That tends to be the way technology-heavy markets operate. Such variety should be welcomed.

If this doesn't happen, the media companies will only have themselves to blame for allowing Apple to control their TV shows as well as their music. Don't depend on a company as woefully inept as Google. Create a joint venture capital arm to develop independent media warehouses. Invent something great and give it away via open source. Do something. Do anything. Just don't whine about your own ineptitude. We've grown so very tired of that.

Universal Music Chief Blasts Slashdot
Andrew Orlowski

DMF The president of Universal Music Group's digital division, Larry Kenswil, dipped into Slashdot to illustrate the kind of laggards who are holding up progress in digital music.

How did he figure that out, exactly?

Kenswil was speaking at the Digital Music Forum in New York, earlier today, where we're in town to take the pulse of the industry. The RIAA director drew attention to three groups he called "pie throwers".

One group was manufacturers - such as Samsung and Helix - who he highlighted for producing hybrid MP3 players and satellite radios that record the streams. Thanks to a loophole in US copyright law, satellite radio recorders are the next big legal battleground - with Apple believed to be in the advanced stages of adding satellite streams as podcasts to its iTunes store.

"It's a great example of how you can lose it all for everyone if you set out to gain an extra cent for yourself," said Kenswil.

The second group were the telcos, who Kenswil said might threaten to bring in tiered internet pricing. When we asked Larry about this later, he said he still wasn't sure how seriously to take the big telcos hints that they wanted to charge differential pricing. "We're probably neutral on net neutrality right now," he joked.

The final group he referred to as "the utopians".

"It's the capitalism-is-evil crowd, the folks who want stuff for free - and you will find them on Slashdot," he said.

Kenswil quoted, to much appreciative laughter from the music industry audience, a Slashdot author called "albertpacino" for the saying that the music industry had "chosen to be blind about the issue."

Alas, when we tried to check the citation, neither Slashdot nor Google could produce any trace of a user with that name. None of the search engines could locate the phrase "blind about the issue". Kenswil's presentation included the quote reformatted for a PowerPoint presentation - so errors may have crept in as it was transcribed by his staff - or your reporter. Maybe the user cited figured out a way to leave and wipe all trace of his comments behind him - but it's all a little odd.

He was on firmer ground with his evidence when he quoted TechWeb editor Fredric Paul, for an article entitled "Why Everyone Hates the Music Industry", which you can find here (http://www.techweb.com/wire/ebiz/172300219).

And we could have provided him with an even better example: the famous "p2p is leagal its in the air (http://www.theregister.co.uk/2005/10...leagal_letter/)" we received from a Kentucky school.

But Kenswil paid particular attention to the Electronic Frontier Foundation, "zeropaid", and Downhill Battle Labs.

"One wonders if they haven't got anything better to do," mused the Universal executive.

"With all the crap going on in the world, is Sony BMG the worst corporation in the world? Is it worse than the spammers, or the people who write viruses on purpose?" he asked.

"A lot of this is just fund-raising demagoguery. All they're saying is send us the money. But when you ask them what do they think is going to happen to the industry - the answer is some amorphous 'we'll figure it out eventually'".

All good knockabout stuff for his audience - and it's easy enough to find a copyright extremist in diapers to represent the opposition. There's plenty of intelligent discussion on Slashdot.

But Kenswil does, unfortunately, emphasize a depressing aspect of the debate we've often touched upon (http://www.theregister.co.uk/2005/10...sis_no_crisis/), and he goes on to prove the point himself. Which is that extremists from both sides need each other's caricatures, so they can continue to posture for their own base.

The RIAA needs to present us with extremists who think copyright is dead, or who don't value creativity (http://www.theregister.co.uk/2005/07/21/creativity/). In turn these people need an opponent that keeps suing its customers, maintains cartel pricing structures for digital services, and produces irrational arguments against blanket licensing. And, guess what? The RIAA is only too happy to oblige.

Fortunately there is enough material progress, with new services such as Mashboxx and PlayLouder, and sensible talk (largely off the record) to confirm that the extremists of both sides are increasingly irrelevant.

For more reports on the politics of blanket licensing, and the new services, stay tuned.

How The Digital Revolution Screwed Songwriters. Twice.
Andrew Orlowski

DMF DMF This may not be news to most of you, but in light of DiMA's Jonathan Potter blaming music publishers for the sorry state of digital downloads, it's a topical reminder.

Music companies - and we blur the distinction deliberately for the moment, for the sake of simplicity - paid songwriters in two ways. For what they called 'licensing' - for masters and movie soundtracks, for example - the artist took home 50 per cent of the deal. For 'royalties', the artist typically gained or 20 per cent of wholesale or 10 per cent of retail. Along came the digital download services. When the labels cut deals for their catalogs with third parties, they considered it a royalty, rather than a licensing deal. That reduced the amount of money going to songwriters overnight.

Now many of these deals were with wholesalers such as Iris, or Orchard, who are essentially intermediaries in the distribution chain.

To you, a deal between a label and a distributor may look like a wholesale deal, and walk like a wholesale deal, but it doesn't quack like a wholesale deal. The labels regarded it as a retail deal.

So overnight the artists' cut fell from 50 per cent to 10 per cent. Attorney and author Steve Gordon, who was at Sony Music at the time, put it quite succinctly: "It's all about fucking the artist." ®

De-obfuscation: By law, the music collection agencies who operate on behalf of songwriters in the US cannot refuse a license. Getting money from the deal is another question. The big four labels own the major publishers, although this is in a state of flux, with the third and fourth biggest labels (EMI and Warner) looking to merge: they own the two largest publishers, and divestment is a possibility.

BitComet .64 Released
Thomas Mennecke

It's nearly impossible to develop an application or website in the P2P world and not have some controversy or suspicion attached. µTorrent suffered a public relations relapse after its involvement with PeerFactor, while suspicious were raised after ed2k-it.com's change of management. Typically such marks of the beast pass over time, yet they remain an identifiable attribute.

BitComet's turbulent past has actually managed to enhance its popularity. The release of version .60 allowed the client to share peers associated with private trackers with the public BitTorrent population. Although this infuriated private trackers and resulted in BitComet's banishment from many such trackers, it helps exemplify a paradoxal double standard in the BitTorrent community.

The situation was subsequently resolved, with developer RnySmile reverting back to version .59. This version did not contain the bug that allowed the sharing of private peers; however was a technological step backwards from .60. Further resolving the situation, RnySmile upgraded the BitComet application and restoring the features lost in version .60 by releasing .61, .62 and .63.

Contrary to most other P2P development, BitComet continues to set the pace by issuing releases on a consistent basis. Today reinforces BitComet's consistence, as a stable version of .64 has been released. Although mostly cosmetic, there are several core bug fixes that should make this BitTorrent application ever slightly more stable. From the BitComet homepage:

GUI Improved: the optional IE toolbar is removed
GUI Improved: able to read RSS feed
GUI Bugfix: chat user list is removed temporarily
Core Bugfix: fix the bug that the play button doesn't work after click stop button in task preview window
Core Bugfix: fix the bug that unable to seek continuous when preview avi/rm file


Rick Fulkerson lives in Coos Bay, Oregon, where he owns and runs a small computer store north of the city.

But he's also a dedicated amateur movie maker bent on featuring the entertainment cartels as they really are, like in RIAA Porno, among other epics ; )

"One of my main concerns, as I read about the copyright struggles, is what our forefathers intended in the constitution," he told p2pnet a while back.

He was talking about his then latest, Copyright History, and, "They had many of the same copyright debates we have today," he said. "They recognized that individuals who create works of art or inventions needed to have time to make a profit from their work. No one on either side of the issue can dispute it. The constitution guarantees this for a limited time, which was originally seven years from my understanding. This also allows those works to eventually enter the public domain for the enrichment of everyone.

"However, today's mega media giants have tapped into the public domain and profited by it have then locked up those works with their own copyrights.

"This is dangerous and scary to me especially when the governments of the world are embracing these practices.

"I also can't understand why artists support this system."

Fulkerson finally has his own site and we can expect more of his work to show up there, to the continuing embarrassment of the Big Four record labels and Big Six movie studios.

"I've been away for quite a while," he says. "I had a huge family emergency, then dealing with my business. When it rains it pours. I've been checking in, though, and keeping on top of things.

Good to see you back, Ric ; )

Go here to check out his new site. And while you're at it, also have a look at:

RIAA Porn — Say it isn't so!! The music industry has made all kinds of noises about internet pornography and how it subverts our children. This is one argument they use in their attempt to gain control of internet content. Watch this and ask yourself, "do they really care about my kids?"

Copyright History — This short Video gives a brief overview of the intent of copyright law in the U.S constitution and the Entertainment Industry's desire to subvert it. If you don't have the Divx codecs download the larger mpeg file, Copyright History.mpeg.

The Real Pirates —All this constant babbling about pirataes and piracy brings up the question, "who are the real pirates?" Take a look here at industry misinformation and extortion practices and see if teen age children are really hurting industry artists. If you don't have the Divx codecs download the larger Mpeg file, Real Pirates.mpeg.

Music Industry Mafia — This was the first of many videos to come demonstrating the recent history of the orginaized music crime families attempt to stiffle their competition and control the marketplace. It outlines their failed attempt to destroy the digital online music boom by shutting down Napster instead of getting in on the ground floor and embracing it Which (like putting water on a grease fire) just caused filesharing to spread beyond they're control. If you don't have the Divx Codecs then download the mpg file, Music Industry Mafia.mpg

China Internet Group Calls For Censorship
Elizabeth Dalziel

China's official Internet industry association is calling on its members to help the government suppress material deemed subversive or immoral.

"Unhealthy information" online has harmed Chinese children and threatens social stability, the Internet Society of China said in a statement. The 5-year-old group is the government-sanctioned association for Internet service providers and Chinese Web sites.

"We should run our business in a civilized way," said the statement issued Wednesday and reported by the government's Xinhua News Agency. "We should not produce, disseminate and spread information that harms state security, social stability and information that violates laws and regulations and social morality."

The group called for its 2,600 member companies to supervise content, delete "unhealthy" information and oppose acts that undermine "Internet civilization," Xinhua said.

China's communist government encourages Internet use for education and business but tries to block access to sensitive material. The country has the world's second-largest Internet population after the United States with 110 million people online.

The Internet Society statement didn't give any examples of material that members should suppress or say what prompted the appeal.

Chinese online filters have blocked access to foreign sites about Tibet, China's pro-democracy movement, human rights and the banned Falun Gong spiritual movement. The government also launches frequent crackdowns on China-based sites with sexually oriented material.

The release of the society's statement coincided with a visit to Beijing by the chief executive of Google Inc., who defended the search engine's decision to cooperate with government censorship. Activists have criticized Mountain View, Calif.-based Google for blocking access to banned material from its Chinese-language site, Google.cn.

"We believe that the decision that we made to follow the law in China was absolutely the right one," CEO Eric Schmidt said Wednesday at a news conference.

Friction costs

How Immature Production Practices and Poor Quality of Life are Bankrupting the Game Industry
Jason Della Rocca

So much in business is determined by a simple acronym: ROI (return on investment). Obviously enough, as a businessperson, if you make an investment, you'd like to receive a return on that investment. In fact, the need for a return on investment is so pervasive, essentially no decision is made without first measuring it, evaluating it and factoring it against ROI from other opportunities. What's an acceptable ROI? It really depends on the investor. To some, making a modest 5% return is a sound business decision. When we get into the 20% range, many would say that's a no-brainer investment. Where's my checkbook?!

In the game industry, most investments are made into new technologies and tools to ensure games have the latest bells and whistles. Other times, investments are made in areas like licensing rights (e.g., for a longstanding successful movie franchise) or market intelligence. All in all, investments are made in the hopes of generating more revenue: Make more and better products, sell more products, etc.

That's all fine and good, but much of the game industry is ignoring (or is ignorant to) a massive investment opportunity...

Nuts and Bolts
Countless studies performed over decades and across many business sectors have proven time and again that mature project management practices and an emphasis on keeping workers happy can net massive returns. And, we're talking 1,000%-plus massive.

Investing in development practices such as formal code and design inspections, cost and quality estimation tools, and long-range technology planning can bring upwards of 1,000% return on investment over a multi-year time span. Research has shown that improved software practices pay an average ROI of 500% (including false starts) that is sustainable over many years.

A great deal of this return (or more accurately, savings) comes from improving development lifecycle costs. For example, spending more time in early stage planning and prototyping means unexpected changes and rework can be front-loaded in a project - when change is cheap. Formal production methodologies work to avoid changes late in a project, when the trickledown impact can be massive - the dreaded beta crunch.

Returns also come from improved production time and more predictable schedules - the stuff producers dream about. No need to explain the benefits here on the gaming front, with so much riding on a holiday shopping window or simultaneous movie launch.

Another area that drives returns is improved quality. Better and smarter production leads to games with fewer bugs and stronger feature sets. Though this is more subjective to gauge, a less painful production enables developers to infuse the game with more of the "fun bits." More seriously, a front-loaded, iterative pre-production process allows the team to more easily "discover" and fine-tune the fun, as opposed to waiting for everything to miraculously come together at the end of a project.

Lazy Bums
The desired response is, "Where's my checkbook?!" Right?

Wrong. Unlike writing a check to the bank and getting check + x% back in a year, this is the kind of investment that requires work. And most of us are just too lazy. As one anti-motivation poster said eloquently:

"Hard work often pays off over time, but laziness always pays off now."

Additionally, the game industry is so in the dark when it comes to project management, many really can't imagine that another way exists. ("You mean we don't have to crunch from day one?") Indeed, some developers have flatly stated that they had no idea such process improvement tools and techniques - which have been used for years elsewhere in software development - even existed. A related problem is the fact that the game industry has had much success under the current regime, and no one is willing to gamble their career on killing the goose that laid the golden eggs. Well, some are, but they are in the minority...

On a more practical level, a major challenge to widespread adoption of such improvements is that much of the production research and knowledge about their benefits is not directly from the game industry. For one, this means developers are too ready to dismiss the research as irrelevant (certainly, some of it is). But, more pragmatically, they don't have the time or ability to "translate" and apply lessons from other types of projects to games. Moreover, the game industry has an ongoing and rather serious case of xenophobia, manifested in an unwillingness to adopt or in many cases even examine ideas from the "outside." This behavior is less likely the result of arrogance, than from hacker ethic roots and of caution bred by constant battery from outside forces.

On the whole, everyone is still fighting too many fires related to today's milestone to be looking at a longer-term pay off.

Churn and Burn
Of graver concern is the widely held view that developers are replaceable cogs in the machine. With a rampant developer-as-commodity attitude, it's no surprise that more isn't done to invest in workers' long-term careers.

No doubt, any discussion of quality of life or saner production schedules framed in an "I don't want to work hard" context is career suicide. Rather, the industry needs to take an approach that proclaims the ROI potential of happy workers running under smart project management.

Ignoring all the massive ROI potential discussed previously, the reality is that driving staff to the point of burnout is bad business. Humanitarian treatment aside, the friction cost of losing, and subsequently finding, replacing and training someone new ranges from $20,000 to $100,000-plus per head (the total is a mix of direct costs, like recruiting fees and relocation expenses, and indirect costs, like lost productivity during training or loss of tacit knowledge). An entire team walking out at the end of a project is not unheard of. Kudos to the producer who got the project out, but at what expense?

Let's not even get into the massive costs buried in health care expenses and lost productivity due to sick leave.

Inside Out
In a nutshell, there are investments to generate money and investments to save money. Both approaches are viable paths to a healthy and profitable company and industry. In that regard, it would be interesting to measure the game industry's actual profitability. We all know about the vast revenue growth ($10 billion in the U.S.A. and counting), but is the industry as whole turning a profit?

I'd wager that we are breaking even, at best. Too much emphasis has been placed on generating gross revenue (i.e., more and more sales) as opposed to driving for a larger net profit. Spending $1 million to make $10 million is better than spending $35 million to make $40 million (or in some cases 50 to make 40).

At a time when next-gen budgets are at the $15 million mark - on the low end of the scale - executives should be salivating at any opportunity to optimize. Simply put, there is an enormous opportunity to generate profits via more efficient production methodologies and treating development staff as investments as opposed to commodities.

The Bigger Picture
More fundamental is the notion that immature practices and extreme working conditions are bankrupting the industry's passion - the love for creating games that drives developers to be developers.

When the average career length of the game development workforce is just over five years and over 50% of developers admit they don't plan to hang around for more than 10, we have a problem.

How can an industry truly grow, and an art form evolve, if everyone is gone by the time they hit 30?

How can we grow beyond an 11.5% female workforce when the level of commitment expected all but negates any hope of raising a family?

Why does this kind of stuff matter?

Ask yourself what movies would be like if they were created mostly by people with five years of movie-making experience - and were typically male. Spielberg would have checked out way before creating E.T. Same for music, art, books - every art form. J.K. Rowling would never have penned Harry Potter. The examples are countless.

Immature production practices and poor quality of life are stealing the industry's ability to innovate and reinvigorate itself with fresh ideas. It's limiting our ability to attract new and diverse talent. It's robbing us of our experienced creators, who leave us with their hard earned tacit knowledge in tow. It's restricting our ability to reach broader audiences and create games with ever more cultural significance.

Investing in developers' careers is investing in the future viability of the game industry and the continued evolution of the medium of games.

What's the return on that investment?

Jason Della Rocca is the executive director of the International Game Developers Association. (Opinions expressed do not necessarily represent the IGDA.) If the frequency of posts at his personal blog, Reality Panic, is any indication, he works way too much.

Forever and a day

Broussard Updates Duke Nukem Forever Status

The May 2006 issue of Computer Games Magazine, which includes a cover feature previewing 3D Realms and Human Head Studios' long-awaited FPS Prey, has also included fresh information on 3D Realms's epochally long in development Duke Nukem Forever.

The game has been worked on in various forms for almost 10 years, having been originally announced in April 1997, and the update describes the current state of the title, which was viewed at 3D Realms' Texas studios: "mainly just pieces of the game in progress and tech demos", including "an early level, a vehicle sequence, a few test rooms", among others.

Technology-wise, Duke Nukem Forever originally started development on the Quake II engine, before switching to Unreal, and, according to a Wikipedia entry, is now working with a heavily modified custom engine that includes some small elements from earlier iterations of Unreal Engine.

3DR's George Broussard also demonstrated world interactivity that includes Duke standing in front of a computer and emailing the player, if he provides his email address for the game. But, according to the piece, Broussard was bashful, overall, about showing off the game, commenting: "The problem is that when we show it, people are going to be like, 'Yeah, whatever'. Honestly, at this point we just want to finish it."

A recently reported-on Take-Two financial filing shows that the game's long-time publisher has significant interest in the game's completion date, noting: "One other notable payment was the renegotiation of a $6 million charge due [to former publisher GT Interactive, now owned by Atari] upon delivery of the final PC version of Duke Nukem Forever back in March 2005. The epic delay of 3D Realms' shooter has meant that $4.25 million of the final milestone payment has already been paid, alongside the promise of a final $500,000 upon the commercial release of Duke Nukem Forever prior to December 31, 2006."

Further information on the game, alongside the longform Prey preview, is available in the May issue of Computer Games Magazine, more information on which can be seen at the official Computer Games Online website.


One company controls your games – but how much longer?
Allen Varney

Do you buy your electronic games at Wal-Mart? Never mind, doesn't matter. The retail games you buy at GameStop or Best Buy or online are the games Wal-Mart has decided you can buy.

Publisher sales reps inform Wal-Mart buyers of games in development; the games' subjects, titles, artwork and packaging are vetted and sometimes vetoed by Wal-Mart. If Wal-Mart tells a top-end publisher it won't carry a certain game, the publisher kills that game. In short, every triple-A game sold at retail in North America is managed start to finish, top to bottom, with the publisher's gaze fixed squarely on Wal-Mart, and no other.

But how long will that last?

The Power
By consolidating many manufacturing sources and optimizing its supply chain, Wal-Mart has shifted the center of business power from manufacturing to retail. This has forced most American industries to move offshore, but the software business, and electronic games in particular, have been less affected this way. Though selected art resources are increasingly outsourced to India and Southeast Asia, games are largely still produced in relatively small, integral domestic groups. Is this because North American creators understand their audience better than overseas coders? Because the creators here are better skilled? Or is it simply that Wal-Mart customers, who unfailingly seek the lowest prices for food and appliances and shampoo and garden hoses, will still pay high prices for top-line computer games?

For whatever reason, the game business has so far resisted most competition from lower-wage workers overseas. Compared to physical manufacturing, software profit margins remain comfortable and can support professional-class salaries. Yet make no mistake, Wal-Mart's effect remains powerful.

Tom Gilleland, with the indie developer BeachWare (which has sold casino games through Wal-Mart), says, "Wal-Mart is working from a very strong position that enables them to dictate the content of their software product line. Wal-Mart tells the distributor/publishers what they want, and the distributor/publisher goes and finds it, or has a developer make it. They certainly know what their customers want, or they wouldn't have been so successful. They also have a very complicated situation in terms of public image, so they avoid controversial products."

Thus, because of the company's influence, nowadays it is practically impossible to market a game that contains nudity. "We're not going to carry any software with any vulgarity or nudity - we're just not going to do it," Wal-Mart spokesman Tom Williams told Reuters in October 2002.

Developers have produced "special Wal-Mart editions" of some games, such as Duke Nukem 3D and Blood, that delete the two principal bugaboos, nudity and excessive gore. Other developers just sanitize their games across the board. As a Ritual Entertainment developer remarked in an online chat promoting their Heavy Metal: F.A.K.K. 2 game (2000), "There's not much nudity other than statues. Wal-Mart is picky about that. When you have to decide between feeding your family or putting nudity in the game, you choose food."

For the U.S. version of Giants: Citizen Kabuto (2000), Planet Moon put a bikini top on Delphi, the game's topless sea-nymph heroine, after Wal-Mart refused to carry the seminude version. In an effort to gain a Teen rating from the Electronic Software Ratings Board (ESRB), Planet Moon also toned down the language and changed the red blood to green - but the game got a Mature rating anyway. (Soon afterward, a patch that removed the changes mysteriously appeared online.)

Of course, Wal-Mart, like other major retailers, pulled Grand Theft Auto: San Andreas from its shelves after the "Hot Coffee" fiasco. Take-Two Interactive revised that quarter's financial guidance down by $45 million. Wal-Mart has since resumed selling a modified version.

Wal-Mart has shaped the field in other ways. Remember five years ago, when computer game boxes all got smaller? That was Wal-Mart. "Wal-Mart was a significant force in driving videogame producers (and software producers of all kinds) to dramatically reduce the size of their boxes," says Charles Fishman, senior writer for Fast Company magazine and author of the bestselling book The Wal-Mart Effect. "Wal-Mart's goal is to put as much merchandise on the shelves inside a given store-size as possible. By cutting the box size of games and software, Wal-Mart could easily increase the amount of product it displayed by 20 or 30 or 40 percent. More product in the same shelf-space. That's good for Wal-Mart, and good for customers, and maybe even good, ultimately, for game makers. Smaller boxes cost less.

"And Wal-Mart is increasingly interested in the environmental impact of such changes," Fishman says. "If you literally cut the packaging of gaming software and routine software in half, [...] that eventually comes to forests of trees not cut down. This is something Wal-Mart works on consistently, not just in software boxes." Fishman's book opens with a similar story: Wal-Mart eliminated cardboard boxes for deodorants and antiperspirants to save shelf space and money and to reduce waste. (This is part of a larger Wal-Mart environmental initiative.)

More pertinent than the packaging of games is their content. Wal-Mart and other retailers display an ever- decreasing range of game types. More and more, it is difficult-to-impossible to market an adventure game, or a non-Microsoft flight simulator, or a non-Maxis city-builder, or a non-Civilization turn-based strategy game. Did the audiences for these forms simply wither away? No, they're still out there - but they're not sufficiently profitable for big-box retail chains. The commercial range of games shrinks because of the free market's uncompromising pursuit of the majority at the expense of all minority tastes. We see this most clearly in Wal-Mart's signal triumph in game design, Deer Hunter.

The Audience
In the 1990s, Wal-Mart discovered a previously unrecognized demographic: The mass market gamer, who plays while holding a mouse in one hand and a can of beer in the other.

Game designer Harvey Smith wrote in 2002 about his meeting with Robert Westmoreland, "the cool redneck biz exec behind Deer Hunter":
"He claims that he looked at data on how much software Wal-Mart was selling at the time, thought about the average Wal-Mart shopper, thought about what kind of games the average Wal-Mart shopper would want to play (which, with the exception of Bass Fisherman, was at odds with the kinds of games being sold in the store), and then pitched the concept of Deer Hunter. Multiple publishers turned it down, calling it ridiculous in some cases. It cost about $110,000 to make. The franchise has allegedly sold 10 million copies. I bet Robert drives a really nice truck."

Hardcore gamers derided Deer Hunter (1997) and its many imitators because they were dull and looked like crap. (The most recent version, Deer Hunter 2005, looks better.) So what? The games cost $20 and ran on low-end hardware - and their subjects spoke to far more customers than did Quake or Command & Conquer. Programmer Zac Belado wrote at the time, "It's not just computer nerds and simulation freaks that are buying computers and games. Deer Hunter [buyers] haven't seen a product that directly appeals to them, have been largely ignored by the game market (or, worse, ridiculed by games like Redneck Rampage), and have finally proven that they have not only the desire for software products, but the money to pay for them."

Several publishers, running entirely below the industry radar, have found excellent business catering to the Wal-Mart demographic. Clay Dreslough, former executive producer at Midway Games, now runs Sports Mogul Inc. in Middletown, Connecticut. Dreslough's sports management sims, like the new Baseball Mogul 2007, are sold at Wal-Mart, though most of his sales are online. "I think people in the hardcore market are frustrated with Wal-Mart because they might only carry the very top-selling FPS or [MMOG] titles. But for small companies like us, Wal-Mart creates a lot of upside without much downside. That is, even if Wal-Mart drops us one year, we still have other retail outlets, and we still have a strong fan base online.

"I have heard a lot about Wal-Mart hurting the industry and hurting innovation," Dreslough says, "the theory being that you have to write a specific kind of game to get the scarce shelf space at Wal-Mart, and if you don't get into Wal-Mart, you can't be profitable. My experience has been different. I think there's tons of room for innovation without Wal-Mart.

Specifically, even with retail distribution, we still make most of our money online, through downloads of the product and through our popular Baseball Mogul Online. Publishing online, without worrying about the retail market, gives you more flexibility to innovate."

The whole industry is learning that lesson. Game publishers are working hard to create online services that trump Wal-Mart the way iTunes has trumped the music cartels.

The Escape
Many game publishers are already chafing to move to online distribution, not least because it cuts out the used-game market. They also believe online distribution will reduce file sharing - anyway, hope springs eternal.

As national availability of broadband grows, Valve has already started its Steam distribution network. Ritual Entertainment - which ran afoul of Wal-Mart not only for Heavy Metal, but also for its hyper-gory 1998 shooter SiN, is using Steam to distribute its new SiN Episodes, almost as if it had been waiting for online distribution before making a sequel. Lead designer Shawn Ketcherside blogged, "Episodic gaming, because of its faster turnaround, offers the ability to react to consumer feedback (this has been talked about endlessly already), but it also offers flexibility to try new and really innovative ideas. [...] Basically, it's giving all gamers more choice. Gamers can pick and choose titles, options and gameplay that really appeal to them."

All the next-gen consoles embrace online, to varying degrees. Xbox Live is already up and running, and Nintendo has said the Revolution will offer downloads of classic NES games. Sony's PlayStation Network Platform will offer a free service similar to XBox Live.

On a Gamasutra "Question of the Week" feature about digital distribution, most respondents predicted eventual victory for online distribution. BioWare's Rob Bartel wrote, "The shift to digital distribution is coming to all platforms, and we now find ourselves at the start of that lengthy transition. It will be complete within a decade." And where is Wal-Mart then? "The big players in the Digital Distribution Era will be those who own the unified portals that will serve as the digital marketplace, and those who own the big-budget games that will serve as development platforms and delivery mechanisms for future content."

But don't interpret that to mean Wal-Mart will just fade away. The company owes its current supremacy to its embrace of high tech logistics, and that attitude remains strong; Wal-Mart, along with the Defense Department, is the chief force behind the imminent adoption of radio-frequency ID tags (RFIDs or "arphids"). So it's possible Wal-Mart itself might move into online games.

But in the digital distribution era, Bentonville's unquestioned domination of electronic games will still decline.

It's simply too easy to get online without their approval; online is the realm of the infinite shelf. "New opportunities will open up at the micro-studio level," Bartel says, "where small teams, both casual and professional, first-party and third- party, will be able to develop, market and sell compelling gameplay and new intellectual properties within the frameworks created and supported by the larger players."

Then, like the great trusts and monopolies of the early 20th Century, Wal-Mart's dominion will finally fade.

Teenagers Losing Interest in Video Games, Says Survey

Piper Jaffray has announced the results of its 11th bi-annual proprietary research survey on teen spending habits and retail brand perceptions, titled "Taking Stock With Teens", which dealt with fashion and technology but also video game-related questions for North American teenagers.

Senior Retail Analyst Jeff Klinefelter, along with a team of senior research analysts conducted mall research field trips with approximately 700 teens from 12 high schools in nine states across the country and Canada. Additionally, the team surveyed another 1,235 students across the country through a partnership with the national DECA organization in an online survey.

With particular reference to video games, results of the survey point out that 81 percent of surveyed student households have at least one video game platform, and 59 percent of students state that they are occasional game players (playing at least monthly).

Interestingly, almost 80 percent of teens indicated that they intend to spend less time playing video games in 2006 and nearly 70 percent indicated that their interest in playing video games is decreasing.

Vista Won't Show Fancy Side To Pirates
Ina Fried

Windows Vista plans to offer you spiffy new graphics, as long as you're not a pirate.

With the new operating system, Microsoft is offering plenty of new graphics tricks, including translucent windows, animated flips between open programs and "live icons" that show a graphical representation of the file in question.

But before Vista will display its showiest side, known as Aero, it will run a check to make sure the software was properly purchased.

"Those who are not running genuine Windows will not be able to take advantage of the Windows Aero user experience," a Microsoft representative told CNET News.com on Wednesday.

The move is the latest salvo in Microsoft's broad attack on those who use unauthorized copies of its operating system. In the fall of 2004, Microsoft began testing the Windows Genuine Advantage program, designed to verify that a particular copy of Windows is legitimate.

At first an optional program, the piracy check eventually became mandatory for many types of Windows XP downloads, but was not required to run any aspect of the operating system itself. Microsoft has identified reducing piracy as a key way for the company to grow its sales of Windows, which is already used on more than 90 percent of personal computers.

But it's not just pirates who will be blocked from Windows' fanciest graphics. The Aero display also won't be available to those who buy Windows Vista Basic, the low-end consumer version of the operating system. And even those with higher-end versions won't be able to see the fancy graphics if they don't have enough memory, lack sufficient graphics horsepower or have a graphics chip that doesn't support a new Vista driver.

Microsoft has not issued the final hardware requirements for Vista itself, which is due to go on sale to consumers in January. However, the company has issued some guidelines for Aero, as part of a draft product guide that was briefly posted on the Internet this week.

What's needed

To run Aero, a system will need to meet some pretty specific and arcane requirements, including memory bandwidth of at least 1,800MB per second, Microsoft said in the document. The product guide said that Vista would include a tool for measuring this, but Microsoft did not offer further details on how consumers with existing PCs will be able to see if their machines meet the standard.

The system will need a graphics chip with a Vista-specific driver, as well as a varying amount of minimum graphics memory, depending on the size of the monitor. A computer with a single display of 1280-by-1024 pixels or less, for example, must have 64MB of graphics memory. For a larger screen, 256MB may be needed, as well as additional memory for secondary displays.

Flying Aero

To get the best out of Vista's graphics, you'll need at least four things, according to tentative Microsoft guidelines.

1. A legitimate copy of one of Vista's higher-end versions: Home Premium, Business, Enterprise or Ultimate

2. A Vista-specific (WDDM) graphics driver

3. A minimum of 1,800MB per second of graphics memory bandwidth

4. Enough graphics memory (amount needed varies based on monitor size)

Source: Tentative guidelines inadvertently posted online by Microsoft this week.

A PC with shared memory--that is, memory that is used both by the main system and by the graphics chip--can also work with Aero. But it needs to have 1GB of dual-channel memory, with at least 512MB of that memory available to the main system.

Microsoft said that the Aero requirements stated in the product guide are not final. The Redmond, Wash.-based company has so far only released guidelines for machines that will display a logo indicating their Vista-readiness.

"A draft version of the Windows Vista Product Guide was posted inadvertently and includes information that is not yet final," the Microsoft representative said in an e-mail. "To date, we have only provided hardware guidelines as part of our Windows Vista Capable PC efforts. The Windows Vista Capable PC Program provides information to customers about PCs they can buy today that will be able to run Windows Vista."

Those Aero requirements are not easily understood by buyers or computer salespeople, said Michael Cherry, an analyst at market research firm Directions on Microsoft. He said, for example, that he has no idea how much memory bandwidth his computer has. "I wouldn't even know how to begin to measure it."

Cherry said that Microsoft still has work to do to translate these requirements into something that is understandable to the average PC user.

"I don't want to be an electrical engineer to figure this out," he said.

AT&T Seeks to Hide Spy Docs
Ryan Singel

AT&T is seeking the return of technical documents presented in a lawsuit that allegedly detail how the telecom giant helped the government set up a massive internet wiretap operation in its San Francisco facilities.

In papers filed late Monday, AT&T argued that confidential technical documents provided by an ex-AT&T technician to the Electronic Frontier Foundation shouldn't be used as evidence in the case and should be returned.

The documents, which the EFF filed under a temporary seal last Wednesday, purportedly detail how AT&T diverts internet traffic to the National Security Agency via a secret room in San Francisco and allege that such rooms exist in other AT&T switching centers.

The EFF filed the class-action lawsuit in U.S. District Court in Northern California in January, seeking damages from AT&T on behalf of AT&T customers for alleged violation of state and federal laws.

Mark Klein, a former technician who worked for AT&T for 22 years, provided three technical documents, totaling 140 pages, to the EFF and to The New York Times, which first reported last December that the Bush administration was eavesdropping on citizens' phone calls without obtaining warrants.

Klein issued a detailed public statement last week, saying he came forward because he believes the government's extrajudicial spying extended beyond wiretapping of phone calls between Americans and a party with suspected ties to terrorists, and included wholesale monitoring of the nation's internet communications.

AT&T built a secret room in its San Francisco switching station that funnels internet traffic data from AT&T Worldnet dialup customers and traffic from AT&T's massive internet backbone to the NSA, according to a statement from Klein.

Klein's duties included connecting new fiber-optic circuits to that room, which housed data-mining equipment built by a company called Narus, according to his statement.

Narus' promotional materials boast that its equipment can scan billions of bits of internet traffic per second, including analyzing the contents of e-mails and e-mail attachments and even allowing playback of internet phone calls.

While AT&T's open filings did not confirm the details of Klein's statement, they did not dispute the legitimacy of his claims, and the company's filing included a sealed affidavit attesting to the sensitivity of the documents.

The company asked for a hearing Thursday to determine whether the documents could be used in the class-action lawsuit, whether they would be unsealed or whether the EFF would have to return them. The EFF filed a rebuttal, calling that time frame unworkable and accusing AT&T of not following normal court rules.

AT&T's lawyers also told the court that intense press coverage surrounding the case, including Wired News' publication of Klein's statement, was revealing the company's trade secrets, "causing grave injury to AT&T." The lawyers argued that unsealing the documents "would cause AT&T great harm and potentially jeopardize AT&T's network, making it vulnerable to hackers, and worse."

The EFF filed the documents last week under a temporary seal when it asked the judge to force AT&T to stop the alleged internet spying until the case goes to trial.

Klein's statement and documents are the only direct evidence filed so far by the EFF, and without them its case could be weakened.

It is not clear whether AT&T has served legal papers to Klein.

As of last week, Klein was represented by Miles Ehrlich, who until January served as a U.S. attorney in San Francisco, prosecuting white-collar crime. Klein is now also represented by two lawyers from the powerhouse law firm Morrison & Foerster, including James J. Brosnahan, who is best known for representing John Walker Lindh, the Marin County, California, man found fighting for the Taliban in Afghanistan.

The EFF declined to comment on the filing, while AT&T did not return a call seeking comment. The case is Hepting v. AT&T.

Secrets! Get cher genuine Pentagon secrets!

Afghans Selling US Army 'Files'

US forces in Afghanistan are checking reports that stolen computer hardware containing military secrets is being sold at a market beside a big US base.

Shopkeepers at a market next to Bagram base, outside Kabul, have been selling memory drives stolen from the facility, the Los Angeles Times newspaper says.

The disks reportedly contain personal details about US soldiers, military defences and lists of enemy targets.

A US spokesman said an investigation had been ordered into the reports.

Lt Mike Cody said the military was looking into "allegations that sensitive military items are being sold in local bazaars".

"Coalition officials regularly survey bazaars across Afghanistan for the presence of contraband materials, but thus far have not uncovered sensitive or classified items," he said.

The Los Angeles Times report said disks on sale at the market outside Bagram contained the names of allegedly corrupt Afghan officials, reports on enemy targets and details about US defences.

A separate report by the Associated Press news agency appeared to confirm sensitive information could be acquired from the market.

The agency said its reporter bought several disks from the Bagram market, some of which contained confidential information about US soldiers.

One file reportedly described the type of training a group of soldiers had received. Another file is said to have contained a manual for flying the US military's Chinook helicopter.

'Stolen by workers'

According to the reports, the computer drives were on sale alongside other items, apparently also from the Bagram base.

These included US military uniforms and equipment such as compasses and binoculars.

A shopkeeper interviewed by the Associated Press news agency said he was not interested in the worth of the information on the memory drives.

He reportedly said he was selling the items for their value as hardware alone.

"They were all stolen from offices inside the base by the Afghans working there," he told the agency.

"I get them all the time."

Hundreds of Afghans are said to be working as cleaners, labourers and auxiliary staff at the Bagram base.

The base has been used by US forces since their invasion of Afghanistan in 2001.

US and Nato troops are in the country fighting insurgents linked to the ousted Taleban militia.

'Steve Lightspeed' Walks the Line Between Porn Business and Family
David Kesmodel

In the online pornography business, just about everybody has heard of Steve Lightspeed.

He runs an ever-growing network of more than 30 adult Web sites, and throws lavish parties for models and business partners -- at one Las Vegas convention, he hired stunt planes to fly partygoers around.

But few in the porn world know much about Steve Jones, the 39-year-old married father of two behind the Lightspeed persona – and that's the way he wants to keep it.

Outside the industry, Mr. Jones and his wife, who manages the company's books, maintain a low profile. When chatting with strangers at cocktail parties, Mr. Jones says that he's in "Internet marketing" or "computer consulting." The couple also don't tell others in their posh Phoenix neighborhood what they do, and they keep some relatives in the dark.

Of paramount concern, Mr. Jones said, is shielding the couple's grade-school-age children from the industry, as well as any criticism they might encounter. A few years ago, Mr. Jones relocated his family after some neighbors learned of his profession, and forbade their children from playing with his. "It was kind of heartbreaking," Mr. Jones said. He added: "My kids have no clue what we do."

Few Americans dealt with such issues until the late 1990s, when the number of adult Web sites exploded along with the Internet boom. The issues are gaining more attention in the industry. Last year, a couple who operate adult sites launched a group called Parents In Adult to provide support and legal resources for owners of pornographic Web sites. The issues were also the subject of a seminar at a national porn-industry convention this year.

Mr. Jones said he's not ashamed of his vocation. "The problem is public perception," he said. "There's so much misconception about what we do. Everyone thinks we're all involved in every dirty piece of the business. It's really not like that."

Keeping a Low Profile

Trying to lay low is getting tougher for Mr. Jones. His company, Lightspeed Media Corp., has been growing – it now has 15 employees, and is moving into new markets like DVD sales. Last year, Lightspeed Media earned about $5 million in revenue and $1 million in profit, Mr. Jones said.

Mr. Jones and his company are regularly subjects of articles by adult news sites. Such articles generally quote him as Steve Lightspeed, though some have also noted his real name. An entry for "Lightspeed Media Corporation" on Wikipedia, the popular online encyclopedia, identifies Mr. Jones by his real name as the company's founder.

Mr. Jones's effort to stay out of the spotlight is complicated by the type of porn he offers. Lightspeed Media publishes photos and videos of youthful models, and has long used terms such as "barely legal" and "barely 18" in its marketing. Users pay between $30 and $40 a month, depending on how many sites they want to access.

"He's caught a lot of flak because some people feel he makes them look younger than" 18, said Farrell Timlake, president of adult-video publisher Homegrown Video.

Mr. Jones said his standard reply to such criticism is: "I'm sorry my porn stars don't look used up yet." He added: "The federal government says 18 is the legal age, and if they don't like it, they should petition the government."

'A Little Extra Money'

Mr. Jones developed an interest in computers as a teenager, and attended Arizona State University to study computer engineering. But he said he was expelled from the school's engineering department in the fall of 1985 after he was accused of cheating. He said the allegations were related to his tutoring of a female classmate; the school confirmed his attendance, but declined to comment on the circumstances of his departure.

Mr. Jones returned to his home state of Washington, where he earned a degree in computer programming at a trade school. After working for a software company, he launched his own consulting business, which helped retailers set up their computer systems.

By the late 1990s, Mr. Jones was an avid viewer of online porn, and decided to start dabbling in a second career. He placed an advertisement for amateur models in an alternative weekly newspaper in Seattle. He hired three girls and began shooting nude photographs of them in secluded settings around town. "I really had no idea what I was doing," said Mr. Jones. "Our goal was to make a little extra money for our kids' college fund."

In April 1999, he launched his first paid-subscription site, called Lightspeed University (the name "lightspeed" came from an alias Mr. Jones adopted in computer chat rooms in the early 1990s). By 2000, the site was generating enough income that Mr. Jones was able to shut down his consulting business. "He went quickly to the top in an industry where that doesn't happen often," said Lawrence G. Walters, a Florida adult-entertainment lawyer who represents several rival porn sites.

The Lightspeed Persona

Executives in the adult-entertainment industry said Mr. Jones has a reputation for sparing no expense when taking on the Steve Lightspeed persona at conventions.

"He markets his personality," said Scott Coffman, chief executive of AEBN Inc., a large adult-video Web site. "That helps build your brand. Everyone wants to do sort of what Steve does."

The stunt-plane promotion – at a Las Vegas convention a few years ago – cost about $40,000, Mr. Jones said, and earlier this month he sponsored a dodgeball tournament at a gathering in Tempe, Ariz. The bar tab was about $50,000, he said.

"The Steve Lightspeed character is a little bigger than life," said Mr. Jones, who often sports a baseball jersey emblazoned with "Lightspeed" in capital letters. "I heard people say we once raced helicopters down the Las Vegas strip."

Mr. Jones declined to reveal details about his own salary, but said his showmanship often makes him appear wealthier than he is. "I don't have a jet," he said. "I don't have a yacht. I have a nice house. I tell everybody, 'I work for a living.' I don't drive a $100,000 car. I drive an old, beat-up minivan."

When not traveling to promote his business, Mr. Jones says he works seven days a week, often 12 hours a day, focused on marketing and managing relationships with business partners and models. He still photographs some models, he said, but most of that work is done by three staff photographers.

He said he and his wife mostly socialize with others inside the porn business, in part because it avoids the awkwardness of explaining his line of work. "Most of our friends tend to be in the industry," he said. Relationships with family members can also be tricky. Mr. Jones's mother works for Lightspeed Media, handling customer service duties, but he said some relatives don't know about his work and likely wouldn't approve.

Mr. Jones said he has been particularly worried about shielding his children. The Joneses installed software to block illicit content on both of their kids' PCs, and Mr. Jones has password-protected his and his wife's computers. "Being in this industry has made us more sensitive to how available on the Internet this material is to kids," he said.

As his children get closer to adulthood, he said, he'll explain what their parents do. "I wouldn't mind if my kids get involved in this business," he said. Then he added: "Behind the scenes."

The Pirate Party

Who Are We?

We are a newly formed party aiming to pass the four-percent barrier to entry in this fall's general Swedish parliamentary elections. To do this, we need about 225,000 votes.

Our core values are that the right to privacy must be guaranteed, and that copyright and patents hurt culture and innovation, rather than promoting them.

The Right to Privacy

We are quickly progressing toward a society where every citizen is electronically monitored 24 hours a day, in case they do something that is against the will of the politicians.

The latest example of this is the European Union's Data Retention Directive; our minister of justice, Thomas Bodström, has been one of its chief proponents. This directive means that the people who handle your communications will be required by law to track and store information about the calls you make, when you made them, whom to, and exactly where from (cellphones); which SMS messages you send and to whom; the e-mails you send and to whom, et cetera. Only a few weeks passed after this Directive, before Thomas Bodström introduced yet another act for increased covert surveillance powers.

For a society to grow, culturally and technologically, its citizens must be guaranteed the right to a private life. We want to stop, turn back from, and never go back to the current trend.

We also want each citizen to have complete and exclusive control of information pertaining to his or her private life; objective information, such as residential address, and private facts, such as food habits.

Copyrights And Patents

Copyright has been said to be necessary for the creation of culture, and patents have been said to be necessary for innovation to happen. This has been repeated so often, that nobody questions it. We do, and we say that it's just a myth, perpetuated by those who have something to gain from preventing new culture and technology.

When push comes to shove, copyright PREVENTS a lot of new culture, and patents PREVENT a lot of innovation. Above all, today's copyright laws has no balance at all between the creator's economic interests and society's cultural interests: it stands to no reason that somebody needs to be paid for 70 years after their own death.

The Pirate Party wants a right for every citizen to gather, use, derive from, and distribute any culture, knowledge and public information, as long as it is for non-commercial use. Patents are counteracting their original purpose, and need to be abolished completely. Copyrights need to return to a fair and balanced level, so the creator can have a short but long enough time of protection - say, five years - to make money off creative works in commercial environments.

No Other Issues

These two issues are the most important ones to us. In fact, they are so important, that we have chosen to unite on these two issues, and put all our other differences aside.

Therefore, the Pirate Party actively chooses to not hold an opinion on any issue except for these two.


Until next week,

- js.

Current Week In Review

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Jack Spratts' Week In Review is published every Friday. Please submit letters, articles, and press releases in plain text English to jackspratts (at) lycos (dot) com. Include contact info. Submission deadlines are Wednesdays @ 1700 UTC.

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Old 13-04-06, 08:27 PM   #3
Thanks for being with arse
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Big Wheeling Grin

Now Showing: Declining Sales at Theater Snack Bars

As more people decide to stay away from movie houses, the drop in attendance is being felt by makers of food for concession stands.
John Horn

Moviegoers tend to stuff themselves full of salty popcorn and sweet candy. When people start steering clear of the multiplex — as audiences have done for three straight years — the manufacturers of those theater snacks are the ones left with a sour taste in their mouths.

Much has been made of how declining movie admissions and box-office grosses have clipped the earnings of movie studios and film exhibitors. But audience apathy also is taking a bite out of the oft-overlooked concession business. Particularly hard hit are those companies that rely on movie theaters for the bulk of their sales.

"It's kind of scary. It's been going downhill for three years," says Paul Bonfiglio, whose Summit Food Enterprises has had to lay off nearly a third of its employees because of steadily worsening sales for its movie theater candy line, which includes P.J. Gummi Bears. Adds Norm Krug, the chairman of the Nebraska farmers cooperative Preferred Popcorn, "Our sales are going down pretty directly with attendance."
it those damn movie pirates have taken all the gummi bears hostage
and are making them walk the plank one by one !
down to davey jones locker they go..

i beat the internet
- the end boss is hard
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