|10-03-10, 06:59 AM||#1|
Join Date: May 2001
Location: New England
Peer-To-Peer News - The Week In Review - March 13th, '10
"It doesn't matter how many sites are blocked, how many families are snooped on or how many customers are disconnected, music fans who want to can and will get the content they want online for free." – Andrew Heaney
"Scientific examination of the subject has found that as the use of porn increases, the rate of sex crimes goes down." – Milton Diamond
"This Parliament will not sit back silently while the fundamental rights of millions of citizens are being negotiated away behind closed doors. We oppose any 'legislation laundering' on an international level of what would be very difficult to get through most national legislatures or the European Parliament." – Stavros Lambrinidis
March 13th, 2010
File-Sharing Clampdowns Won't Stop P2P Music Downloads
Four in five music fans will find new web outlets
Digital music fans will not be deterred by filesharing clampdowns introduced by the Digital Economy Bill, a survey by broadband service provider Talk Talk has found. Instead, eighty percent of the 18-to-34-year olds said they would defy lawmakers and continue accessing music for free.
Rather than curtail their filesharing activities, if the Digital Economy Bill is passed and p2p detection becomes widespread, they will move to new, undetectable means of accessing and sharing music.
While 18 to 34-year-olds were the most adamant about their intentions to continue accessing music for free, 71 percent of all survey respondents, regardless of their age, said they will do so. As a result, says Talk Talk, the proposals contained in the Digital Economy Bill, will be "an ultimately futile deterrent".
The Bill, which is currently being debated in Parliament and may become law within weeks, aims to protect copyright owners such as music publishers and artists. Under a "three strikes rule" proposed by Lord Mandelson, anyone found to be downloading or distributing music or videos to which they do not own the copyright may be prosecuted for doing so.
The "three strikes" rule refers to warnings given to the individual to curtail their p2p activities. If they don't stop doing so after having been warned, they may have their broadband connection suspended or cut off. As yet, the length of the connection suspension has not been defined and many industry commentators believe it is an empty threat.
Nevertheless, the majority of Talk Talk's customers who admitted to routinely downloaded music for free, said they will continue to do so once the Digital Economy Bill becomes law and will simply disguise their online activity using widely available tools. Furthermore, two thirds of survey respondents said they would not start buying music for download and would not purchase music they had already acquired for free. If they bought any music at all, it would be two percent or less of the total amount of music they have.
In fact, Talk Talk believes the legislation will simply end up penalising broadband users and put the onus on them to prove they haven't contravened file sharing rules. "The Bill reverses the core principles of natural justice by requiring customers to prove their innocence," says Andrew Heaney, TalkTalk's director of strategy and regulation.
The ISP has warned its customers to tighten up their Wi-Fi networks to ensure people can't piggyback on their wireless networks and use their bandwidth to download content. Under the Digital Economy Bill rules the person paying for the broadband subscription will be liable for whatever it is used for, regardless of whether they are the person downloading or distributing content.
Talk Talk says it's not consumers who are at fault but music distribution methods and the music industry's reluctance to accept the consumers expect to be able to access online content for free.
"It doesn't matter how many sites are blocked, how many families are snooped on or how many customers are disconnected, music fans who want to can and will get the content they want online for free", says Heaney.
NSFW: Hey, America! Our Draconian Copyright Law Could Kick Your Draconian Copyright Law’s Ass
I’ve always had mixed feelings about the DMCA.
On the one hand, as an author, I like that it gives me a way to stop illegal copies of my work being distributed in the US, so ensuring that I can continue to make a living without having to get a proper job. On the other hand, as an occasional journalist, I hate that it can also be used by trigger-happy lawyers to prevent certain embarrassing documents entering the public domain.
Thus conflicted, it was with some trepidation that I received news from the old country that Gordon Brown’s government is getting ready to enact its very own version of the DMCA. Called the Digital Economy Bill (DEB), the new statute aims – amongst other things – to halt the rising tide of intellectual property theft on the Internet. But unlike the DMCA, its reach won’t be limited to national borders: any site anywhere in the world that’s accessible from the UK needs to obey the law or else it’s liable to find itself blocked from the entire country. I’m not kidding, this is China-level enforcement.
The bill originated in the House of Lords (our second law-making chamber) where it’s being tweaked and plucked, with various clauses added and removed – before being sent to the Commons (our first chamber) for debate and a final vote. Here in a nut are the key clauses as it currently stands:
Firstly, if the law passes, ISPs will be obliged to keep track of all allegations of illegal file-sharing made by copyright owners. These complaints will be used to produce an list of “persistent offenders” (subscribers who had received more than, say, 50 complaints about them) which will be made available on request to the copyright owners. The list will be anonymised, with subscribers identified only by a reference number, but copyright owners can then apply to the British courts to subpoena the names and addresses of the subscribers involved. Copyright owners can then take legal action directly, claiming substantial damages for each violation. The government is also able to take action: demanding that ISPs cut off internet access from households identified as persistent offenders.
A second – and even more controversial – clause was bolted on by members of the House of Lords in response to the claim that over 35% of copyright breaches occur not through P2P sharing, but rather through media hosts like YouTube and file locker services like Rapidshare. The new amendment will give the courts the power to demand that British ISPs block access to any site that knowingly and unlawfully hosts copyright material. That’s not just sites hosted in the UK but any site anywhere in the world. As with the DMCA, the ISP won’t be liable until they are notified of the illegal content (the ’safe harbor’ defence) providing they then take immediate steps to block the sites hosting them. If, however, the ISPs refuse to act, they will be liable to the full legal costs of the copyright owner. But unlike the DMCA, the amended bill contains absolutely no penalties for copyright owners who file bogus or spurious claims. The effects are about as chilling as can be: it is in the copyright owners’ interests to make as many claims as they like, and in the ISP’s interests to immediately block every site they’re notified of in order to avoid potentially huge legal costs.
Opponents of the bill point out that most cases will never come to court as ISPs will roll over immediately, as they frequently do under DMCA in the US. But the opponents don’t stop there. Hell, they don’t really stop anywhere. Between the amended blocking clause which could, in theory, see sites like YouTube blocked from the UK – and the potential for having one’s entire house disconnected from the web, the DEB has come in from a veritable gale of criticism, much of it vented right here in the blogosphere. Who’d have thunk it?
TechCrunch’s own Devin Coldewey notes that the “persistent offenders” list won’t just affect domestic file-sharers. Internet cafes, hotels and anywhere else that offers public wi-fi access could find themselves taken offline if their customers are found to be swapping copyright files. If anything, these public access points are even more at risk as it doesn’t take many teenagers using your cafe to rack up 50 copyright violations: this despite there being no way for the establishments to police what their customers are doing online. As Boing Boing’s Cory Doctorow put it, almost entirely without hyperbole, “UK Digital Economy Bill will wipe out indie WiFi hotspots in libraries, unis, cafes“
In fact Doctorow is one of the bill’s harshest critics, writing numerous posts about its dangers. Not only is he vehemently opposed to the persistent offenders clause but he also rails against the site-blocking amendment, arguing that it will essentially ban file lockers from the UK, even when much of the content hosted on them is perfectly lawful. In response to Doctorow and his ilk, thousands of UK web users have signed petitions opposing the bill. Even members of parliament have come out to publicly attack the proposed measures – as Tom Watson MP told me on Twitter: “Enshrining net filtering at ISP level scares me half to death…. Law has to have a starting point. This isn’t it. Copyright reform for the internet age should be Step One. Rip it up. Start again.”
A clusterfuck, then. A total shit show, even more draconian than the DMCA and even more packed to the gills with chilling effects. There’s an election coming up in the UK and the government is apparently anxious that the law be pushed through before then, but to do so would be a travesty – instead the bill should be scrapped and revisited in the next parliament.
Or at least that was my first thought. Then I actually read the bill.
And, you know what, it’s actually not that bad.
For a start, the first point of contention – the compilation of a persistent offenders list, and the potential banning of them from accessing the Internet – isn’t quite as unfair as it sounds. Despite Doctorow’s claim that “your entire family [can] be cut off from the net if anyone who lives in your house is accused of copyright infringement, without proof or evidence or trial”, there are actually multiple points at which evidence comes into play, and the accused file-swapper is given a chance to defend themselves. The bill requires the creation of an independent tribunal body to hear claims of unfairness arising from the new laws, and alleged infringers have not one but two rights of appeal to the tribunal. With each alleged breach, the new law demands that the ISP send a letter to the subscriber putting the allegations and the evidence to them.
Only once a significant number of breaches have been alledged (the drafters of the bill suggest 50) will the subscriber be added to the persistent offenders list. Again, they will be notified. Only at this point can the copyright owner appeal to the court – using a law that has been around for 36 years – to get the name and address of the offender. Even then, though, they won’t be taken to court. Instead, the copyright owner has to send the subscriber yet another letter (this will be their 52nd) warning them that legal action is imminent if they don’t stop. It’s only then that legal action will be taken, leading to a possible fine and – only at the extreme end of the scale – their Internet access being disconnected.
The second point of contention – the blocking of file-sharing sites – is still pretty bad, but again it’s not quite what some commentators [*cough* Cory *cough*] suggest with headlines like “Lords seek to ban web-lockers (YouSendIt, etc) in the UK“. Yes, the courts will have the power to require ISPs to block sites that egregiously host copyrighted files. But they can only do so if the site involved has refused to remove the copyrighted files – a last resort against foreign file lockers who ignore British court injunctions. More importantly it’s also a power that the British courts have had since the 2002 E-Commerce Directive Regulations (with ISP’s being similarly liable for inaction): the new legislation simply creates a DMCA-style process for making take-down requests easier to issue.
After several hours of reading – not just the proposed new law but also all of the existing copyright law, plus the current World Intellectual Property Organisation Treaty (the UK is a signatory) and also hundreds of pages of discussion around all of the above – a few things became clear…
For one thing, many of those opposing the bill don’t seem to be opposed to the bill itself so much as they’re opposed to the entire notion of copyright law, particularly when it’s used by “greedy record companies” or “rich recording artists”. As one commenter put it on the Guardian: “If you want to be solely a ‘recording artist’ and find you’ve been caught short – tough. No one owes you a living. You’ve been rendered obsolete by technology (not me) and you either adapt or fade away like so many other industries.” The only copyright law that people like that will accept is one that lets them steal whatever they like.
Far be it from me to suggest that Cory Doctorow has an anti-copyright agenda, but there’s no doubt he’s the world’s leading proponent of the ‘give everything away free and reap the tangential rewards’ model of intellectual property protection. Creative Commons might work perfectly for a man who makes his living writing and speaking about how he gives things away free, but it’s not always the answer for musicians, authors and filmmakers who don’t have that particular sideline. And I say that as an author who just gave his last book away under a Creative Commons license and who isn’t going to go broke any time soon.
Whatever Doctorow’s biases, headlines like “UK Digital Economy Bill will wipe out indie WiFi hotspots in libraries, unis, cafes” or “Leaked UK government plan to create ‘Pirate Finder General’ with power to appoint militias, create laws” do nothing to encourage rational debate. In fact, they’re curiously reminiscent of “Obamacare will kill grandma” claims from Republicans in the US. Why debate facts when you can drive people to your way of thinking through scary headlines?
And yet, shrill objections aside, it’s equally clear that the Digital Economy Bill has its fair share of potential problems. There’s not a huge amount of new law in the bill, but there are a whole bunch of new processes – new takedown notices, persistent offender lists etc – all of which will need to work properly from day one. In the British government’s haste to rush it through before the upcoming election, there’s a huge risk of passing a bad statute which will prove impossible to enforce.
Most clear of all though is that, beyond a general call to “scrap the bill and start again” (again: paging the Republicans), none of the opponents of the bill are suggesting a credible alternative. For all of our fears of “chilling effects” the fact is that the Internet is shitting all over the intellectual property rights of the UK creative industries (industries which account for 7.9% of the nation’s GDP). Existing law offers almost all of the protections required by copyright owners, but it’s too slow and costly to enforce in the face of widespread online infringement. A shake-up of the enforcement process is much needed – not just to protect fat cat record companies, but also to ensure the livelihoods of thousands of musicians, authors, filmmakers, photographers, artists and the rest who contribute to our cultural landscape. To those people, the effects of an online copyright free-for-all are just as chilling. If the DEB isn’t the right bill , then it is beholden on those attacking it to suggest an alternative.
1) My parents run a business that offers free wi-fi to their customers. I know it’s impossible for them to act as copyright police and so, alarmed by the proposed bill, they’ll likely choose to close down their wi-fi hotspots. To avoid that, the law needs to distinguish between domestic and business internet users when it comes to the persistent infringers clause. For domestic users, the 50-strikes and you’re out clause – and the disconnection threat – should stand: it’s a powerful deterrent, and there are plenty of points at which householders can appeal. For businesses and public wi-fi providers, the disconnection threat should be dropped entirely – it’s clearly a disproportionate punishment – but the fine should remain. In both cases, though, the burden should rest on the copyright owner to prove complicity in the infringement. Domestically, this is as simple as proving multiple breaches from the same IP address – there is a duty on the homeowner to lock down their wi-fi and to know what is happening under their roof, especially after receiving multiple notifications. For businesses, though, the copyright owner should face the (almost impossible) task of showing that the business owner is knowingly permitting copyright breaches on their premises. They’ll basically have to send private detectives round and catch the owner in the act – something only worth doing in extreme cases.
2) The current site-blocking amendment should be dropped entirely. Instead it should be replaced with a virtual carbon copy (quelle irony) of the DMCA’s takedown procedures, but with even more severe punishments for copyright owners who file spurious claims. If an alleged infringer files a counter-notice but the copyright owner decides not to then pursue legal action, the former should be immediately entitled to claim damages against the latter, set at a fixed amount (say £250 – a little under $400) for every day each affected file was offline. In the case of entire sites being blocked, these damages could be enormous. The result: copyright owners will have a costly disincentive against filing spurious claims.
3) Finally, and most importantly, the bill should be abandoned until the next parliament. Rushing through legislation is almost never a good idea – and it’s not like it’s going to be a vote winner, either for this government or the next one. With the full lobbying force of the creative industries behind a new law, there’s virtually no chance that it won’t be passed in the next twelve months so MPs should take the next few months to revise it, to consult with experts, to explain it to critics and generally to ensure that everything that can be done to make it fair has been done.
The UK’s creative industries generate £112.5 billion in revenue for the British economy. The Digital Economy Bill should be passed, and it should be passed soon. But more than all of that, it should be passed right.
Controversial Digital Economy Bill Amendment Follows Lobbyists' Draft
Text added to digital economy bill that could block sites such as YouTube echoes almost word for word a suggestion from the BPI
A controversial amendment to the digital economy bill that could block sites such as YouTube is copied almost word-for-word from a draft written by the BPI, which lobbies on behalf of the British music industry.
The BPI confirmed on Thursday that it drafted a letter which was circulated to government and opposition peers containing a suggested draft amendment to the 1988 Copyright, Designs and Patent Act. Earlier this month the Liberal Democrat peer Lord Clement-Jones added the text into the digital economy bill almost exactly as provided as part of amendment 120a.
However, the suggested changes – which won approval from peers and will now be considered by the House of Commons – have come under fire from the heads of the four biggest internet service providers in the UK, as well as the UK chiefs of companies including Google, eBay and Yahoo, who said yesterday that they threatened freedom of speech and could lead to British websites being blocked without due judicial process.
In response, the BPI said that the amendment a "clear and sensible" way to deal with illegal downloading – but not that it had been the source of the draft version.
Today a spokesman for the BPI insisted that the organisation was not embarrassed at the disclosure of the source of the amendment.
"This was a suggestion that we made to the government in 2009, with this wording. This version of the proposal was sent to the government and also to the opposition parties. The government decided it wanted to go a different way. The opposition parties, while not fully agreeing with it, saw it as a good framework for what they wanted to put down," the spokesman said. "We have consistently said that the digital economy bill should have sensible measures to deal with peer-to-peer file sharing."
The BPI's proposed amendment, in a letter dated 8 January, is almost identical to the version put forward by Lord Clement-Jones on 3 March. The key difference is the addition in Clement-Jones's version of questions about national security, and of tests to see whether the blocking of a site infringes human rights and freedom of speech, and whether an ISP has tried to "facilitate legal access to content".
Jim Killock, head of the Open Rights Group, a pressure group on digital rights which opposes the amendment, said that it was understandable that a lobby group such as the BPI would try to draft legislation – but that the Lords were at fault for not querying the source and intention of the amendment more closely.
"The BPI has got every right to do this," said Killock. "The question is why the politicians have said in such a complicated arena that they will take the BPI's ideas wholesale without consulting anybody else."
Killock said that ORG, Consumer Focus and Liberty had all provided draft legislation and notes to politicians for the bill - but that theirs took the form of "probing amendments", whose purpose was to show weaknesses in the draft bill which could then be revised.
"It's the politicians who have been irresponsible here. It shows that they're taking the BPI far too seriously," Killock said.
The BPI spokesman responded: " We made a proposal on this – and as is quite common – used statutory language to convey our point. This is something that all sides in the digital economy debate do." He defended the addition of the amendment to the draft bill: "[the peers] made changes to our proposal which was then tabled by them, debated fully in the House of Lords, before being agreed and made part of the bill."
MPs Let Copyright Owners Write the Law on Internet File Sharing
BPI, the organisation that represents music publishers, appears to have drafted the controversial Amendment 120a to the Digital Economy Bill put forward by Conservative and Liberal Democrat party lords.
The Open Rights Group, an organisation that opposes the bill, has published a document that purports to be the BPI's alternative to Clause 17, which deals with the prevention of illegal online file-sharing.
Shadow Digital Britain minister Jeremy Hunt told Computer Weekly that the amendment "needed more work" to stop it from producing "unintended consequences".
He said the Tories would continue to support the amendment, which is opposed by the government, because it would help to make the internet a viable marketplace.
Jim Killock, executive director of the Open Rights Group, said it was "totally irresponsible" for parliamentarians to include a major proposal from one part of industry in a bill without consultation.
"This proposal, drafted by the BPI, could produce backdoor web censorship and unjustified blocks on websites," he said. "That is what happens when only one side of a problem gets to influence the debate: and that is why we also have disconnection proposed as a punishment."
Killock said disconnection of families, advocated by the BPI, would damage innocent people's education, businesses and work, while giving extreme protections for copyright holders.
"Something very fundamental has gone wrong in this debate. We have a bill which is a complete mess, and large parts of it should be scrapped right now."
Both Clause 17 and Amendment 120a were condemned by the internet community and human rights activists. The CEOs of Google, BT, eBay and other leading internet companies and telecommunications operators have warned that the proposals would have a chilling effect on free speech.
They also said the measure would harm the operation of the internet in the UK and elsewhere, without stopping illegal file-sharing. As such, they were contrary to the aims of the bill, one of which is to maximise access to and use of the internet via high speed broadband.
BPI was unavailable for comment.
UK Digital Economy Bill Likely to be Pushed Through Before Election
Senior industry figures expect controversial measures against illegal filesharing to become law before general election
The digital economy bill will become law before Parliament is dissolved at the beginning of April ahead of a likely general election in May, senior media industry figures believe.
That will usher in controversial laws enabling rights owners to cut off or restrict internet access for users who download films and music illegally.
The bill contains measures designed to combat piracy. If it becomes law it will compel internet service providers including Carphone Warehouse and Virgin Media to pass on information about persistent offenders to rights holders.
It is currently in the House of Lords and about to get its third reading, when peers get the chance to table final amendments to the legislation.
One of the most contentious parts of the controversial digital economy bill was voted down by the House of Lords – only to be replaced by a clause that campaigners say is even more draconian. The Liberal Democrats forced through a surprise amendment to the bill's notorious clause 17. Instead of new powers that threatened sweeping alterations to British copyright law, the Lib Dems added a clause that gives a high court judge the right to issue an injunction against a website accused of hosting a "substantial" amount of copyright-infringing material, potentially forcing the entire site offline.
After the Lords, the bill will then go the House of Commons in a fortnight's time. If it proceeds to its second reading by early April, when an election is widely expected to be called, it could enter the statute book before parliament rises.
After an election is called, the Commons and the Lords normally spend a few days passing legislation that has not finished its passage through parliament in a process known as the "wash up". At this stage the government can only get measures through with opposition support and bills, or clauses of bills, that are opposed by the Tories will almost certainly be dropped.
One senior industry source said: "The government deserves credit for pushing through a proposal that is not a votewinner. They recognise that the creative industries are a huge asset for the country."
The Conservatives have said they will torpedo the bill unless the government reverses a bid to push through "independently financed news consortia", which will make regional news to be shown on ITV1, and ministers are likely to have to drop these provisions from the bill if they want to get the rest of it on to the statute book.
Australia Comes Clean on ACTA Role
No intention of changing Australian law.
The Australian Government has no intention of changing its domestic laws to harmonise with an international treaty on copyright, according to a spokesman for the Department of Foreign Affairs and Trade (DFAT).
Questioned by iTnews on Australia's role in the ACTA (Anti Counterfeiting Trade Agreement), the DFAT spokesman said Australian negotiators are only participating in the talks in the hope that other parties to the agreement will meet existing Australian standards.
Advocates such as the Electronic Frontier Foundation (EFF) and Australia's own Internet Industry Association (IIA) have long held fears that the ACTA will seek to introduce a global system of copyright protection that compels Internet Service Providers (ISPs) to take responsibility for the actions of their subscribers - to the extent of cutting them off after three warnings.
In the latest leak from the ACTA talks, several parties called for ISPs to be forced to hand over customer details at the request of a rights holder, without any mention of legal oversight from a court or police.
In its responses to iTnews, the Australian Government has acknowledged that "the aim of the internet provisions in the ACTA is to encourage ISPs to deter copyright piracy over the internet."
But that will not require legislative changes in Australia, the DFAT spokesman said.
Crucially, "Australia already has a high standard of IP protection (including a safe harbour scheme) that many others are yet to meet, and seeks an agreement capable of broad acceptance. The Government does not seek to drive change in domestic law through ACTA."
Further, the Government is not compelled to sign the treaty should the 27 parties to it reach an agreement.
"A decision will be taken on whether to join the treaty when it is finalised and only after further public and Parliamentary scrutiny," the spokesman said.
Legislative change is being sought in particular by the film industry, after its trade group AFACT lost a key court case in the Federal Court in which it accused ISP iiNet of authorising copyright infringement on its network by not preventing it. This case is now the subject of an appeal.
"Australia's existing laws encourage ISPs and copyright owners to work together to deter copyright infringements, and provide a possible model for the ACTA," the DFAT spokesman said.
"Under Australia's current laws, there is no requirement for ISPs to monitor the activities of internet users or to supply customer details without a court order."
No secrets here
DFAT also challenged the assertion that the ACTA discussions have been held under a veil of secrecy, telling iTnews that the Australian Government's hands were tied in terms of providing a running commentary. DFAT itself has attempted to be as transparent as possible under the limits of the agreement.
"The Australian Government is committed to transparency for ACTA negotiations, within the parameters of confidentiality usual in trade negotiations and established in ACTA by a confidentiality agreement," the spokesman said. "Release of the text by Australia is not possible under the terms of its participation in negotiation.
"We support continuing efforts to ensure transparency in consultation with negotiating partners."
The spokesman recommended concerned citizens keep watch on the DFAT website, several pages of which are used to "ensure that all Australian stakeholders have equal access to information about ACTA negotiations and contentious issues."
The spokesman also noted that DFAT has invited submissions on Australia's participation in ACTA negotiations since late 2007, and still has an open door to "any stakeholder requesting a briefing."
European Parliament Joins ACTA Protests
Officials call for more MEPs to sign declaration against ACTA secrecy
Four members of the European Parliament have launched a public protest against the Anti Counterfeiting Trade Agreement (ACTA), registering their discontent with secret negotiations undertaken by the European Union, the US and other leading countries since 2007.
Only a select number of European Commission (EC) members have been involved in negotiating ACTA, but leaked documents show that the trade agreement contains controversial proposals for disconnecting illegal downloaders from the internet.
The final terms of ACTA are due to be agreed this year. The European Parliament has asked the EC for access to the secret documents before, but its requests have always been denied.
The four MEPs that have formed the '12/2010 against ACTA' declaration argue that the openness of the internet should be preserved, and that ACTA could severely harm freedom of expression, net neutrality and the right to a fair trial.
The MEPs are French socialist Françoise Castex, German liberal Alexander Alvaro, Greek socialist Stavros Lambrinidis, and the Czech Christian Democrat Zuzana Roithová.
The declaration was accepted by the European Presidency two weeks ago and will be open for all MEPs to sign after a translation period.
The four MEPs have been joined by digital rights groups across Europe in calls for citizens to get in touch with their MEP to urge them to sign the written declaration.
Digital rights groups, trade unions and other non-governmental organisations have previously argued for the ACTA negotiations to be made more transparent, but their voices have so far been ignored. The inclusion of MEPs in the protest is likely to add more weight to the cause.
The written declaration defines boundaries that should not be crossed by ACTA negotiators, emphasising that internet service providers should not be made liable for actions undertaken by their users or be compelled to monitor and filter their networks.
The text is in line with recent warnings from the European Data Protection Supervisor, which said that ACTA threatened data privacy.
"The adoption of the written declaration will send a strong message to the Commission and Member States that the European Parliament will not let EU citizens' freedoms be undermined by opaque diplomatic negotiations," said Jérémie Zimmermann, co-founder of French digital rights group La Quadrature du Net.
"Every citizen and non-governmental organisation concerned about ACTA can participate by calling MEPs and urging them to sign the declaration."
Meanwhile Jim Killock, executive director for the UK Open Rights Group, insisted that ACTA needs to be made transparent in order to determine whether consumer rights are under threat.
"The European Parliament should have been involved in the negotiations," he said. "I suggest UK citizens get in contact with their MEPs to discuss the issue."
However, the ACTA clause relating to internet disconnection is likely to be less significant to UK citizens as the government's Digital Economy Bill proposes similar 'three strikes' laws that would see repeat illegal file-sharers cut off the internet. A new amendment to the Bill may also see certain web sites outlawed.
Parliament Threatens Court Action on Anti-Piracy Treaty
The European Parliament defied the EU executive today (10 March), casting a vote against an agreement between the EU, the US and other major powers on combating online piracy and threatening to take legal action at the European Court of Justice.
The Anti-Counterfeiting Trade Agreement (ACTA), which began in Geneva two years ago, is a plurilateral trade agreement to establish international standards on intellectual property rights.
According to former trade negotiators, countries attempted to clinch an agreement under the banner of the World Intellectual Property Organisation (WIPO), but as members could not agree, like-minded nations formed ACTA.
Participants in the last round of talks in Mexico included Australia, Canada, the European Union (represented by the European Commission), Spain in its capacity as EU presidency holder, an unnamed EU member state, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States.
The next talks are scheduled to take place in April, in Wellington, New Zealand, and in Geneva in June.
A strong majority of MEPs (663 against and 13 in favour) today voted against the Anti-Counterfeiting Trade Agreement (ACTA), arguing that it flouts agreed EU laws on counterfeiting and piracy online.
In addition, the Parliament's decision today states that MEPs will go to the Court of Justice if the EU does not reject ACTA rules, including cutting off users from the Internet "gradually" if caught stealing content.
Though MEPs cannot participate in the ACTA talks, without the consent of the European Parliament, EU negotiators will have to go back to the drawing board and come up with a compromise.
Four MEPs from across national and party lines - Alexander Alvaro, Stavros Lambrinidis, Zuzana Roithova and Françoise Castex, dubbed the four ACTA musketeers - have launched a petition against the agreement, which has collected 31 signatures so far.
NGOs, academics and trade bodies that have studied leaks from the trade talks say the agreement would pave the way for network providers to introduce "US-style draconian" ways to penalise piracy.
ACTA leaks have shown that the agreement would not introduce a so-called 'three strikes' rule – cutting off users from networks after three attempts at piracy – but would allow Internet Service Providers (ISPs) to introduce other measures, provided the consumer is informed of the penalties in the contract, argues La Quadrature du Net.
EuroISPA, the Brussels trade body for network providers, says that recent leaks from the European Council indicate the EU is considering US proposals on combating piracy which include "criminal sanctions, US-style notice and take-down and monitoring of a user's Internet traffic and services".
Though EU Trade Commissioner Karel de Gucht reassured MEPs at a debate yesterday that the EU was not considering all of the measures in the ACTA text, EuroISPA argues this contradicts the most recent leaks coming from the EU and the US.
"The Commission has provided no reassurance that it will not introduce the penalties outlined in the ACTA leaks," Andrea d'Inneco from EuroISPA told EurActiv.
Commission officials participating in the talks have signed a non-disclosure agreement and have been reluctant to divulge much information from the talks.
A high-ranking official told EurActiv that rumours saying ACTA would rewrite rules on the liability of Internet service providers for pirated content on their networks were untrue.
EU rules, which were agreed upon after lengthy negotiations last year, say that ISPs are mere conduits of information and are not liable for pirated content if they take measures to remove that content, the official explained.
The Commission official said this would still be the pretext of EU law and that ACTA would not alter the European safeguards.
In a statement released today, MEPs Lambrinidis (S&D, Greece), Castex (S&D, France), Alvaro (ALDE, Germany) and Roithova (EPP, Czech Republic) "deeply regret the fact that the Council is continuing its secretive stance, despite the entry into force of the Lisbon Treaty, which stipulates that the European Parliament should have full and immediate access to information at all stages of international negotiations".
"This Parliament will not sit back silently while the fundamental rights of millions of citizens are being negotiated away behind closed doors. We oppose any "legislation laundering" on an international level of what would be very difficult to get through most national legislatures or the European Parliament," added Lambrinidis.
"Building on this milestone towards democratic transparency, citizens must urge MEPs to sign the written declaration in order to oppose measures in ACTA that endanger the open nature of the Internet," said Jérémie Zimmermann, spokesperson for citizens' advocacy group La Quadrature du Net.
Obama Reiterates Support For Finishing ACTA
President Obama Thursday reiterated his administration's commitment to enacting the Anti-Counterfeiting Trade Agreement, aimed at curbing global piracy, despite a vote by the European Parliament this week calling for greater transparency in the deal's negotiations.
During remarks at the Export-Import Bank's annual conference, the president discussed the need to "aggressively protect" U.S. intellectual property.
"There's nothing wrong with other people using our technologies, we welcome it -- we just want to make sure that it's licensed, and that American businesses are getting paid appropriately," Obama said. "That's why [the Office of the U.S. Trade Representative] is using the full arsenal of tools available to crack down on practices that blatantly harm our businesses, and that includes negotiating proper protections and enforcing our existing agreements, and moving forward on new agreements, including the proposed Anti-Counterfeiting Trade Agreement."
Mark Esper, executive vice president of the U.S. Chamber of Commerce's Global IP Center, applauded the president for highlighting the importance of IP protection "as well as singling out the need for a strong Anti-Counterfeiting and Trade Agreement that will raise the bar on enforcement standards and improve cooperation between nearly forty countries."
But the ACTA negotiations have been criticized by public interest groups and some lawmakers for lacking transparency. They have pointed in particular to the fact that a public draft of the agreement has not been released.
By an overwhelming 663-13 vote, the European Parliament passed a resolution Wednesday calling for the European Commission, the European Union's regulatory arm, to release a public draft of the agreement. Public Knowledge President Gigi Sohn said in a statement the parliament's "vote is yet another reminder that ACTA, both in process and in substance, is fatally flawed." On the substance, she noted that some of the leaked documents related to ACTA have shown it appears "to be treading heavily on the rights of Internet users here and abroad."
USTR has said while it supports a transparent process, it must keep some details of the proposed agreement private in order to allow the negotiating parties to engage in a frank exchange of views.
BT Boss Urges Fines for Filesharing Customers
Corporate crusaders for free speech unite
Mandybill Ian Livingston, the boss of Britain's biggest ISP BT, is lobbying for the government's proposed technical sanctions against filesharers to be replaced with fines.
He said suspending internet access for the most persistent copyright infringement, as envisaged by the Digital Economy Bill, could deny those accused a fair hearing.
Instead, Livingston proposed, they could choose to pay a penalty or fight in court. Under the bill, people who dispute accusations of infringement could take their case to a new tribunal rather than the courts.
The cash raised by fines could be used to "create a fund" to "get some good, rather than getting some hurt out of people infringing copyright", Livingston said.
The suggestion marks BT's strongest public intervention in the debate so far and brings him in line with the Open Rights Group, the campaign organisation planning a demonstation against the Digital Economy Bill outside Parliament later this month. It has also said fines would be fairer than temporary suspension.
Separately today, Livingston joined the bosses of TalkTalk, Virgin Media and Orange in a letter to the Financial Times. In it, they criticise last week's amendment to the Digital Economy Bill by Liberal Democrat peers, which would allow copyright holders to injunct ISPs and force blocking of specific web addresses.
It has replaced the government's proposals for reserve powers allowing ministers to extend copyright enforcement without a vote in Parliament. Both measures target the growth in the use of locker services such as Rapidshare to exchange copyright material illegally via the web.
The ISP bosses wrote: "Endorsing a policy that would encourage the blocking of websites by UK broadband providers or other internet companies is a very serious step for the UK to take.
"Put simply, blocking access as envisaged by this clause would both widely disrupt the internet in the UK and elsewhere and threaten freedom of speech and the open internet, without reducing copyright infringement as intended."
The letter is also signed by web firms including Google, Yahoo!, Facebook and eBay.
The peers behind the amendment have argued that since all major ISPs already block a list of URLs carrying images of child abuse, they have the technical means to comply with injunctions demanding copyright blocking.
"The injunction will only be granted where copyright owners had first requested ISPs to block access to the site and where they had also requested the site operator to stop providing access to the infringing material (either by removing the material itself or removing the ability to access the material)," said Lord Clement-Jones.
Livingston and his fellow ISP chiefs descibed the amendment as "very poor lawmaking".
The BPI, the record label trade association, responded to the criticism this morning by backing the amendment.
"Contrary to the claims in the letter, service providers would in every case be able to ensure that the decision as to whether a site should be blocked is made by the High Court," said chief executive Geoff Taylor.
"The court would be required to consider the extent of legal content on a website, any impact on human rights, and whether the website removes infringing content when requested. So the suggestion that the clause would lead to widespread disruption to the Internet or threaten freedom of speech is pure scaremongering."
File-Sharing Solicitors Under Investigation
Watchdog to investigate Davenport Lyons
The Solicitors Regulation Authority (SRA) has said it will refer a former and existing partner at law firm Davenport Lyons (DL) to the Solicitors Disciplinary Tribunal over claims that it sent ‘bullying’ letters accusing people of illegal file-sharing.
The move follows a decision by the Solicitors Regulation Authority (SRA) to pursue a complaint lodged by Which? that while acting on behalf of a number of copyright holders including Atari and Topware Interactive, DL engaged in 'bullying' and 'excessive' conduct.
Which? also claimed that DL made incorrect assertions about the nature of copyright infringement; ignored the evidence presented in defence; and increased the level of compensation claimed over the period of correspondence. Which? also said the letters stated, incorrectly, that failing to properly secure an internet connection was grounds for legal action.
Deborah Prince, Which’s head of legal affairs, welcomed the SRA’s decision. ‘This is great news. This is a really serious step for these solicitors and for Davenport Lyons generally,’ she said. ‘Had the SRA decided not to pursue our complaint, its decision would have been very serious for the regulation of the legal profession.’
Solicitors will face disciplinary hearing
As a result of the SRA’s ruling Davenport Lyons' former intellectual property partner Brian Miller, and equity partner David Gore may face a hearing with the Solicitors Disciplinary Tribunal (SDT), provided that the SRA accepts the case .
If the case proceeds, it will be heard later this year or early next year. If found guilty, the pair could face a fine, suspension or see them struck off the solicitor's roll.
Thousands have received ‘bullying letter’
Since the letters went out in 2007, thousands of people have received letters accusing them of illegally file-sharing copyrighted material from Davenport Lyons.
The letters demanded £500 compensation in damages and costs for copyright infringements and threatened court action if recipients did not pay the fine or prove their innocence.
Two other solicitors’ firms, ACS Law and Tilly Bailey & Irvine are sending similar letters accusing people of illegally file-sharing material.
‘We really hope that ACS: Law Solicitors and Tilly Bailey & Irvine (TBI) Solicitors take notice of this decision and put the brakes on sending out further letters or engaging in similar conduct,’ said Prince.
File-sharing letters set to continue
Andrew Crossley, sole principal at London law firm ACS: Law said the SRA’s decision would not impact on his file-sharing litigation practice and that he would continue to pursue alleged file-sharers on behalf of his clients.
‘I’m not changing a thing in relation to my file-sharing litigation practice. My processes, practices and procedures are not the same as DLs,’ he said.
‘The fact that the SRA has indicated that Which’s complaint against DL’s is being taken further does not mean to say that a complaint has been upheld against anybody. This particular investigation and the decision to take matters further relates to partners of DLs; it does not relate to me or my firm,’ he added.
‘I will continue to do the work I do for my clients unless and until somebody tells me that I can’t do it anymore. I strongly believe that what I’m doing is compliant; is an appropriate procedure key aspects of which have been reviewed and approved by the High Court; and that I'm conducting my business correctly and in the best interests of my clients.’
‘I am in communication with the SRA, and have been since 8 May 2009 and will continue to assist them fully with their investigation.’
Martin Levinson, Head of Commercial for TBI Solicitors said: ‘We vehemently deny any allegations that our letters are bullying or heavy handed. We endeavour to ensure that the letters comply with the Code of Practice for Pre-Action Conduct in Intellectual Property Disputes (January 2004). We are currently liaising with the Solicitors Regulation Authority and we are satisfied that we have acted appropriately at all times in relation to these claims.’
Pirates Will Cover Their Tracks to Get to Online Treasure
The latest attempt to legislate an end to online music and movie piracy will spark an arms race, according to a figure at the centre of New Zealand internet governance.
Pitted against the pirates is the Copyright Amendment Bill, introduced to Parliament last week, which could see them cut adrift by their internet service providers if they don't mend their ways.
But according to one source who did not want to be named, that will only encourage the illegal file-sharers to cover their tracks so copyright owners won't be able to identify them.
The introduction of the Copyright (Infringing File Sharing) Amendment Bill by Commerce Minister Simon Power is another skirmish in the long-running war between copyright owners - chiefly groups representing the music and movie industries - and the pirates, among whom are millions of the world's young.
Influential voices say it's a war that shouldn't be fought.
Lawrence Lessig, a Harvard law professor, says treating young file-sharers as law-breakers corrodes respect for the law. A better remedy would be coming up with new licensing arrangements for copyright material.
Jordan Carter, internetNZ policy director, says while it's an improvement on the law passed by the Labour-led Government, he doesn't support the bill's provision for suspension of repeat copyright infringers' internet accounts.
On the one hand, it's disproportionate to the crime and on the other it's daft when there's nothing to stop the terminated account-holder signing up with another ISP.
Pirates and copyright owners are already going at each other with an assortment of weapons.
The cutlass of choice for file-sharers is BitTorrent, a sophisticated system for peer-to-peer exchanges of small chunks of large files.
BitTorrent is the latest in a succession of file-sharing methods that are used for legitimate and not-so-legit purposes.
The software's genius is the way it tracks the numerous fragments of a many-megabyte multimedia file and stitches them all back together again, meanwhile uploading to and downloading from dozens of "swarming" computers, or peers, all in pursuit of the same movie or album.
Justice Dennis Cowdroy of the Australian Federal Court described the constituent parts of BitTorrent using suitably swashbuckling imagery in a judgment last month that could prove to be important wherever pirates and copyright owners are doing battle.
"The file being shared in the swarm is the treasure, the BitTorrent client is the ship, the torrent file is the treasure map, the Pirate Bay [website] provides treasure maps free of charge and the tracker is the wise old man that needs to be consulted to understand the treasure map," Cowdroy wrote.
He was giving his ruling in a case brought last year by the Australian Federation Against Copyright Theft (AFACT, whose New Zealand equivalent is NZFACT) against Perth-based ISP iiNet. AFACT, representing 34 film companies, lost the case in which it was claimed iiNet effectively authorised illegal downloads by its subscribers by not stopping them.
Last week AFACT promised to appeal. What wasn't in question was that piracy had taken place.
The significance of the case lies in the court's acceptance of evidence from DtecNet, a Danish company hired by AFACT to track pirates' IP addresses.
Every computer on the internet has an IP address that can usually be linked to the user's ISP. It's harder to link the IP address to a particular ISP account holder.
With its list of illegal downloaders' IP addresses - harvested by masquerading as a pirate - correlated with iiNet account-holder records, DtecNet identified 20 pirates to Cowdroy's satisfaction (he left their names out of his judgment).
IP address evidence has previously been questioned in a number of jurisdictions, says Auckland copyright law specialist Rick Shera, who watched the iiNet case.
DtecNet is in use in New Zealand, he says.
A feature of the bill introduced last week, and which Power wants passed by August, is that ISPs will be required to keep "information" going back 40 days on subscribers' internet use. Exactly what that means is unclear, says David Diprose, copyright policy working party leader of the Telecommunications Carriers' Forum, whose members include large ISPs.
But presumably, armed also with DtecNet data, it opens the way for local copyright owners, such as NZFACT and the Recording Industry Association of New Zealand, to pursue pirates in these waters.
Another thing it is sure to mean is that file-sharers will turn in greater numbers to tools that hide their IP address. Adept as they are at finding illicit treasures on the internet, they'll have no trouble hunting down new weapons with which to fend off the copyright owners.
Oscar Winner Wants Kids and ISPs Targeted to Prevent Piracy
During a keynote speech, Oscar-winning Chariots of Fire producer David Puttnam announced a number of measures he’d like to see taken against piracy. In addition to educating children at an early age that’s it wrong to download copyrighted material, he wants movie camcording outlawed and ISPs held responsible for the activities of their users.
The Film Distributors’ Association (FDA) is the trade body for UK theatrical film distributors. As a member of the UK’s Federation Against Copyright Theft (FACT), FDA is also engaged on-going initiatives to combat film piracy.
FDA president and Oscar-winning Chariots of Fire producer (Lord) David Puttnam recently gave a keynote speech where he called for new measures to be taken against Internet piracy.
One option is the increasingly common targeting of children, with Puttnam suggesting that the concept of intellectual property needs to be “embedded inextricably into the school curriculum.” Children need to be taught that if they want movies in new ways and formats they have to pay for them, he added.
Puttnam said that the FDA-sponsored project to get this information into schools is well underway, with one in five primary schools (that’s 5 to 11 year-olds) having been serviced by the charity set up to distribute pro-movie and pro-copyright information.
While it may be beneficial to educate young people about what copyright is, there are a problem areas. First and foremost is where this information is coming from, i.e interested parties. Since the focus of this information will be aimed at ‘protecting’ its members, in order to maintain a balance, who will tell the children about the drawbacks of restrictive copyright?
Second, we all know that children are like sponges, soaking up information at an amazing rate with an amazing capacity for learning, but should copyright really be taught to the detriment of other subjects in an already intensely crowded curriculum?
Will a 7 year-old really be able to grasp the huge complexities of even basic copyright law? Will he or she be expected to know the difference between, let’s say, the BBC-provided iPlayer service and the dozens of unauthorized sites providing movies and TV shows at the click of a button? Even adults have difficulty telling the difference.
But in the main, will kids care? If an interview we conducted in 2007 is anything to go by, probably not.
Even now, more than 2 years later, although the kid we interviewed is much more aware of what is ‘right and ‘wrong’, she still has no problem with clicking a link and getting media for free. She told me recently that she doesn’t care about how it got there, only that it is. She strongly sees the back issues as not her problem. It’s difficult to blame her – how would we react if some guy in a suit tried to burden us with this stuff at 12 years old?
Along with the educational element to his organization’s work against piracy, Puttnam says he believes that the Digital Economy Bill lacks teeth and more pressure needs to be brought against ISPs.
“One of the mistakes made is allowing the ISPs to pretend they are not part of a retail chain,” said Puttnam. “If you or I wanted to open a chemist shop we would have to pay attention to health and safety and the nature of the products that we sold. We couldn’t just serve anyone, for instance.”
Of course, ISPs are responsible for the product they sell, but they sell bandwidth over which other companies sell products or provide services for which they are responsible.
Continuing the emotive ‘chemist’ analogy, although legally there is a requirement for them to sell safe products, they cannot be held responsible, say, if some pharmaceutical giant makes a huge error and packs poison inside a paracetamol package. Is the pharmacist really expected to open every packet of every medicine he sells checking for something dangerous inside? So why should ISPs be expected to do the same?
In his speech, Puttnam also called for a change in legislation to outlaw the use of camcorders in UK cinemas, something which is currently entirely legal. Despite this legal status, it didn’t stop the FDA from convincing UK charity CrimeStoppers last year to partner in a campaign to encourage the public to be vigilant and help prevent camcording.
Although Puttnam’s speech had its faults, he is absolutely, unequivocally right about one thing. Film content must be made available legally online “in ways consumers want, and at prices they can afford” in order to discourage the use of illicit file-sharing.
This should be the number one priority of the movie and music industries.
When RealNetworks Settled on DVD Copying, We All Lost
Glenn Fleishman is a Seattle journalist who started one of the first Web-hosting companies in 1994, worked for Amazon in 96-97, and then decided he wanted a life. He writes for Publicola, The Economist, and TidBITS, among other publications.
RealNetworks just screwed us all by settling lawsuits in which it might have lost--but which might also have given some new life to fair use for digital media.
The post-RealDVD world means that unless there's a major change to the law surrounding copy protection, there will never be a legal way to perform legal acts of copying or shifting protected movies, music, and games.
Take it from a guy who has a special E Ticket. The major movie studios can never sue me nor four other individuals ever for a variety of media-moving activities that you and 300 million other Americans could be subject to lawsuits over. It's like a superpower. More on how we got this pass later.
The suits in question revolve around RealDVD, software Real introduced in September 2008 that would copy the full contents of a video DVD to a file that could be played back on a Windows system. RealDVD is not a DVD ripper: those programs use one of many methods to strip the Content Scramble System (CSS), the DRM that wraps up DVD content, and other defensive techniques.
CSS and its ilk aren't precisely defended by technology--the standards are too weak or poorly executed--but by law. The much-excoriated Digital Millennium Copyright Act (DMCA) prohibits "circumvention" of software that's designed to prevent copying. Breaking DRM encryption breaks the law.
But Real went through the steps to obtain a license from the DVD Copy Control Association (DCCA), which controls CSS on behalf of the movie industry. RealDVD decrypted the DVD, copied it, and then locked it tight. Up to five PCs licensed by the same person could play back the discs. (Real also broke through a couple of unrelated protection efforts.)
RealNetworks must have calculated that as a company with a large war chest, it could succeed where others didn't dare to tread. As soon as it released RealDVD, it preemptively sued the DCCA and several studios to establish that it had the right to use CSS in the way RealDVD did. The studios and DCCA sued in return, and got software sales halted. The studios won in August 2009; Real appealed.
The settlement on Monday clears all the suits by RealNetworks agreeing to never sell the software again, refund the money to about 2,700 RealDVD purchasers, disable an associated metadata service, and pay $4.5 million to several movie studios, its Rhapsody partner Viacom, and the DCCA to cover legal and other expenses.
Some people may truly hate RealNetworks for its mediocre RealPlayer software (once a technical miracle) that was bundled with poorly disclosed third-party adware programs. But RealDVD was a thin blade trying to shimmy open the door of fair use.
Fair use is a maddeningly ambiguous set of rules enshrined in copyright law that mention nothing whatsoever about personal use and copying. Court decisions have shaped fair-use exemptions to copyright laws. Congress has passed extremely narrow copyright exclusions for personal use as well.
Without testing specific ideas about fair use or copyright scope in court, there's no sure way to know whether your particular software program, Web site, tweet, or steampunk-based laser decrypter isn't in violation. When the MPAA or a studio sues you, you could potentially plow through millions of dollars with no idea of the outcome.
You can always be sued, but you want to make sure that you have some basis on which to defend yourself, especially if the law and court decisions firmly back you up.
As BoingBoing recently reported about its battle with MagicJack, a group without crazily deep pockets can win and recover costs when it has a strong idea it is in the right. (BoingBoing benefitted from the California strategic lawsuit against public participation or SLAPP, which wouldn't apply to software and hardware.)
That what was made the RealDVD suits so exciting, because Real has hundreds of millions of dollars in the bank, and had a pugnacious CEO, Rob Glaser. Glaser faced down Microsoft over unfair competition and got nearly $800 million from the Windows maker. (Glaser was forced out as head of Real a few weeks ago, although he intended to move on after an executive search; he remains chairman of the board and owns nearly 40 percent of the firm.)
Even better, Real wasn't promoting piracy, or the broad right to rip DVDs into an unprotected format and then move them onto all kinds of devices for playback. RealDVD was very very narrow in purpose: can individuals buy software that converts one kind of protected content on a specific physical medium into another, with even stronger encryption?
Back in 2002, I joined a model lawsuit brought by the Electronic Frontier Foundation, what became known as Newmark v Turner (after Craig Newmark of craigslist, one of four other co-plaintiffs). The EFF wanted Newmark v to be joined to a lawsuit originated in 2001 by 28 movie studios, TV production firms, and cable operators against SonicBlue, which made ReplayTV, a digital video recorder that was at one point mildly superior to TiVo.
You may recall the ReplayTV suit, which begat the statement in a magazine interview from then chief executive of Turner Broadcasting that skipping ads was "theft," and that not watching ads was breaking a contract. He said, "There's a certain amount of tolerance for going to the bathroom." The industry later tried to backpedal from these statements.
Our suit was a way to try to establish that consumers had rights in this fight among firms: that time-shifting (recording for later consumption) and space-shifting (moving among devices under our control for personal use) were perfectly acceptable, and that we were in danger of losing such rights. Ad skipping was also part of the suit.
Remarkably, a judge agreed to join us in the fight, to the surprise, we think, of the 28 media firms. That would have been ugly had we gone to trial. We faced some potential (though unlikely) penalties were it to be proved that we had violated copyright in our efforts to establish we had used media fairly.
The media firms had a big problem, though, in that it would have been an ugly public-relations battle to try to paint Craig Newmark, your humble reporter, and three other mild-mannered individuals as horrible scofflaws.
Had we won, we would have enshrined a judicial opinion that would have perhaps emboldened consumer-electronics firms and software makers to create products that put much more control over recorded programs in the hands of consumers.
Instead, SonicBlue went bankrupt and sold its assets to another firm that removed the features in question in 2003. The media firms then dismissed their lawsuit against the companies involved.
Here's where it gets interesting. I had completely forgotten until researching the case to write this editorial that the 28 firms gave Craig, me, and our three fellow plaintiffs a "covenant not to sue" for the acts in question. That essentially nullified the suit because we had no more fear of litigation. (The EFF tried to get the same rights for all ReplayTV owners, just 5,000 people, but failed when the judge wouldn't move the case into class-action status.)
So we are copyright superheroes, with the ability to advance ads in a single click, shift content among hardware, and watch at our leisure! Behold us, and despair, for you will not see our like again.
RealNetworks needs to work with studios, so it settled and paid less than 1 percent of its still-giant cash hoard--last year, the company's cash was of greater value than its market capitalization for several months--to be able to move forward on content licensing.
I can understand why they did it, but it resembles the Google Book Settlement, a massive effort by Google to get a special judicial and settlement right to not be sued for selling works to which the owner cannot be found and to which it does not have assigned rights (so-called orphan works).
If Google succeeds, then no other firm will go through the expensive litigation that allowed Google to reach the point where it can settle and win in cooperation with the Authors Guild and the Association of American Publishers. Google will have a de facto monopoly.
It's unlikely that any other firm with the resources to challenge the media industry will release software or hardware that would allow DVD conversion in a manner that a court could find legal. Real was the last, great hope, because any other similar firm already has multi-million to multi-billion-dollar deals in play. Apple, Microsoft, and others aren't going to release anything that jeopardizes how they work with giant copyright holders.
That leads to the conclusion that in order to make legal copies, you are obliged to be a pirate. Media companies' failure to accommodate the notion that people may have legitimate purposes for making digital copies for their own use dooms them to eternal piracy.
We're all screwed. Well, I'm not, probably. But you are.
The MPAA Says the Movie Business is Great. Unless it's Lousy.
The Motion Picture Association of America issued its annual report on the movie business yesterday -- and to hear the MPAA say it, things have never been better for Hollywood.
In a press release (PDF), the District-based trade group touted the findings of its Theatrical Market Statistics Report:
Considering the crummy state of the economy, any industry would be delighted to have a report card like that.
The funny thing is, you wouldn't know that the movie business was doing so well from other MPAA announcements. Take, for instance, the December press release (PDF) in which MPAA chairman Dan Glickman suggested that unauthorized copies of movies were running the industry into the ground:
Gantman pointed to a study released at the end of 2009 by Adams Media Research that reported a 13 percent drop in U.S. DVD and Blu-ray movie sales, to $8.73 billion. (Blu-ray sales made up roughly $1.1 billion of that total.) That made 2009 the first year since 2002 that movie disc sales fell below U.S. box-office revenues.
But the Adams report, at least as summarized by Reuters, did not cite file-sharing or bootleg copies as reasons for that decline. Instead, it pointed to "the rise of low-cost rental options, such as Coinstar Inc's kiosk chain Redbox, which rents DVDs for $1 a day, and online subscription services such as Netflix."
I'm not saying that the movie industry doesn't have problems, or that people grabbing movies off the Internet without paying for them isn't one of them (though I will note that the best counterattack against file sharing is a good selection of fairly priced movie downloads). But if the MPAA is going to brag about how great it's doing, it seems reasonable to ask that movie studios go to the end of the line of companies seeking help from Washington.
Canada and Broadband: When 'Behind' is Actually Ahead
Ill-founded international comparisons can lend themselves to out-of-date telecom policies
Leonard Waverman and Kalyan Dasgupta
The United States and Canada occupy places somewhere in regulatory purgatory for having - respectively - scrapped the requirement that phone companies share their lines with broadband competitors, or supposedly pursuing such policies only half-heartedly. Conventional wisdom has it that they have consequently fallen behind the rest of the developed world, and this belief seems to be backed up by an abundance of comparative data, combined with calls for re-regulation. Yet many of the voguish comparisons between North America and Europe (which is often held up as a pacesetter) are really comparisons between apples and oranges. Economists with extensive practical experience of telecommunications regulation have already rebutted the Berkman Center report that harshly assessed Canadian broadband performance, but it is also worth pointing out how much room for interpretation there is in broadband comparisons.
The standard take is that Canada is 10th and the United States is 15th among 30 OECD countries in broadband penetration. The OECD measures broadband penetration as the number of broadband lines per 100 persons, and mixes business and residential connections. Residential broadband subscriptions, however, are taken at the household level, not at the individual level. And big businesses often connect several hundred employees with one "line." The United States and Canada have 2.6 individuals per household, compared with 2.2 in Germany and some other European countries. Thus, if North American household sizes fell to German levels, and all households subscribed to broadband, the United Statse and Canada would have an additional seven lines per 100 persons.
Moreover, large businesses account for a larger share of employment in North America than in Europe. In Canada, firms with 500 or more employees account for 43 per cent of total employment, while in Europe, firms with more than 250 workers employ just 33 per cent. Thus there could well be more employees "connected" in North America, although there might be fewer connections. If all large businesses were magically split into two, the number of business broadband lines could be doubled in a fell swoop. The "lines per 100 persons" measure is misleading and less conceptually solid than measures based on household and business adoption rates. Indeed, both business and household adoption rates should be measured separately and in different ways.
True Penetration Rate
Canada has a true broadband penetration rate of close to 70 per cent of households. And North Americans use the Internet somewhat more intensively than do Europeans, according to Cisco Systems data on Internet traffic. Further, business Internet traffic in North America appears to be at levels substantially higher than elsewhere in the world. Sadly, there is little systematic effort by international agencies to measure the intensity of Internet usage.
Instead, we see comparisons of advertised speeds and "price per advertised megabit," which are especially misleading. Advertised broadband speeds vary from actual speeds. In North America, this is largely a result of "network overhead," and is quite modest. In Europe, however, the variation is often dramatic.
Real-world speed testing efforts, while not perfect, tell a dramatically different story from comparisons of advertised speeds. Using real-world data on the amount of time taken to deliver files to end users from its global network of servers, Akamai Technologies reports that the average download speed for Canada was 4.2 megabits a second, against 3.2 Mbps for France, whereas the OECD finds that the average advertised speed from French ISPs was a staggering 51 Mbps. Akamai data ranked the United States and Canada ahead of all the larger European countries, though they trailed an elite group of smaller northern European and East Asian countries. Similarly, Cisco Systems, Oxford University and the University of Oviedo in Spain, put the United States and Canada ahead of France, Germany, Britain, Spain and Italy, and behind only Japan and Korea among the larger countries, in a study measuring broadband quality and leadership.
Not Always As Advertised
Fifty-Mbps speeds (and their prices) are representative of user experience only where advanced fibre and cable networks are widely on offer. Although parts of France have developed impressively in this regard, such networks are accessible to at most 25 per cent of households, and the take-up of high-speed services is very low. Canada is likely soon to have a proportion substantially higher than France's of homes served by advanced fibre and cable networks that can deliver such speeds, thanks in part to the ubiquity of cable networks that are less costly to upgrade. Advertised speeds and price comparisons are apt to be remarkably inconsistent with broadband realities, even when they seem fairly straightforward. In any case, household and business adoption rates and usage levels are good evidence of affordability and availability, and are at least somewhat easier to compare.
Hard data on investment levels and deployment of advanced networks similarly speak for themselves, but don't often figure in blogosphere discussions. Robert Crandall from the Brookings Institution has shown that in recent years, the capital intensity of the wireline operations of the incumbent North American phone companies has significantly exceeded that of their European counterparts. In 2008, Telus's wireline capital expenditures were about 25 per cent of its corresponding revenue, nearly double the ratio for many European incumbents. Likewise, the Wireless Intelligence database shows that between 2004 and 2009, the capital intensity of wireless operators has been 50 per cent higher in North America than in Western Europe.
So it is that in Canada, Rogers, Shaw and Videotron all offer 50- or 100-Mbps services, while Novus (using its own fibre) offers 200 Mbps in Vancouver. Bell Aliant has rolled out an ambitious fibre deployment in parts of its territory. Bell Canada has offered fibre-to-the-node technology since 2005, and has recently stepped up its deployment efforts. On the wireless front, Canada now has three of the most modern "3.5G" (third-and-a-half-generation) networks in the world and has a fourth such network (from Vidéotron) coming online in 2010. Lower adoption rates of wireless and 3G technologies - coupled with a significant distortion in the measurement of wireless penetration - have affected Canada's standing in international comparisons in the past, but accurate measurement combined with dramatic progress in Canadian network deployment will correct this in the coming years.
Canada and the United States share the benefits of having robust cable and telephone networks across the country. As for wireless space, Canada is likely to see four or even five national competitors, where most similarly sized countries have only three consequential competitors. Thus the prospects for competition among cable, telephone and wireless firms in Canada are remarkably good.
Where the Canadian picture looks less favourable, however, is in the mixed signals that the CRTC is still sending on prolonging and extending regulatory policies that may, at best, have made sense in the days when we could not see beyond the old copper-wire telephone network. In present Canadian circumstances of competing land-line and wireless networks all across the country, at a time when the technology is advancing rapidly, such regulations are likely to pose a significant impediment to progress.
If public policy does not stand in the way, Canada can see yet stronger deployment of fibre networks by incumbent telephone companies and responsive investment by the cable companies, echoing developments in the United States.
The U.S. Department of Justice recently filed some comments on the American National Broadband Plan that deserve attention in Canada. These comments point out that the market for broadband services cannot ever resemble a textbook "perfectly competitive" market with multitudes of suppliers. They acknowledge that something approaching an oligopoly of a few suppliers is always of concern in this market, but they are acutely conscious of the limits of market engineering by way of ambitious regulatory solutions. The "chief architect" of the U.S. National Broadband Plan, Blair Levin, has also observed in recent interviews that the circumstances of the North American market are in any case different from those in Europe and Asia, making alleged solutions from those markets particularly difficult to export. Although they are concerned by the reports of a "broadband gap," it appears that U.S. authorities will take measured steps to deal with the genuine problems of low-income and rural residents, rather than performing radical surgery that would rip the heart out of a generally healthy broadband market.
The Next Generation
In fact, Europe as a whole trails the United States severely in the deployment of next-generation broadband infrastructures. This performance gap is far less ambiguous, far more dramatic, far more accurately measured and far more meaningful than most of the measures of penetration rates, speeds, prices, Wi-Fi hotspots, etc. that are doing the rounds. Yet North America's broadband cognoscenti often look upon European regulation with admiring eyes.
International comparisons almost always suffer from limited data and limited comparability, particularly comparisons of prices and speeds. This is why great humility and caution are required in drawing policy conclusions from such comparative data. Regulation curtails economic freedom, which is why a very high standard of evidence is required to justify regulation. It would be quite a novelty if further regulation of broadband services were imposed on the basis of selective international comparisons with countries that by many other measures are doing less well.
100Mbps Broadband May be Closer than You Think
If you're looking forward to a future of streaming movies, gargantuan Internet file exchanges, and other high-bandwidth activities, cheer up.
Broadband service providers in most of the major markets around the country will soon be able to deliver 100 Mbps broadband service with no problem. That's enough to download a music album in as little as 5 seconds, an hour-long TV show in about 30 seconds, and a high-definition movie in roughly 7 minutes 25 seconds. But it's going to cost you.
This should make the Federal Communications Commission's goal of getting 100Mbps service to 100 million homes by 2020 an easily achievable goal. Several weeks ago, FCC Chairman Julius Genachowski said he is making the 100 Mbps to 100 million homes goal a part of the National Broadband Plan that will be presented to Congress next month.
From a technical standpoint, 100 Mbps is achievable today. In fact, Cablevision is already offering a 100 Mbps service, and Comcast, which has been offering 100 Mbps to business customers since September in one test market, is about to launch 100 Mbps service to consumers in several markets in the first half of this year.
Verizon Communications, which has deployed fiber directly to people's homes, doesn't offer 100Mbps service right now, but a company spokesman said such a service will be available soon. And Cox Communications, which is also upgrading its cable network, said it will have 100 Mbps service this year as well in some markets.
The issue is not whether those speeds can be achieved nor is it whether broadband providers can reach 100 million homes with the service in 10 years. Docsis 3.0, which is the next generation of cable networking technology that allows operators to bond digital channels together, can easily provide 100 Mbps or more. Most major cable companies in the U.S. are well on their way to upgrading to this technology. Meanwhile, Verizon has already passed 12.2 million homes with its fiber service, which it claims can offer up to 400Mbps download speeds.
The real issue is whether anyone needs those kinds of speeds, and how much they are willing to pay for it.
"The technology is being deployed today to get to 100 Mbps," said Mike Jude, program manager for Consumer Communication Services at Frost & Sullivan. "So there is a high probability that when the need occurs, it will be available to most subscribers. But like any other technology, such as the Betamax through Blu-ray, early adopters will pay the price."
Indeed, 100Mbps service won't come cheap. Cablevision is charging $100 a month for its service, which some might say is a bargain considering Verizon is charging as much as $145 a month for a 50Mbps service. Other 50Mbps download services from cable operators are similarly expensive. Comcast, Cox Communications, and Time Warner Cable all offer 50Mbps service for about $100 a month.
Comcast won't say how much its 100Mbps residential service will cost yet. The company has been offering the 100Mbps service as part of a pilot program to business customers in St. Paul, Minn., and Minneapolis since September for $369.95 a month. This service includes a suite of Microsoft services as well as Norton Antivirus software for 25 computers.
It's very likely the price of the consumer service will be much less than this, said Cathy Avgiris, senior vice president and general manager of communications and data services for Comcast. She wouldn't elaborate on how much less, but judging from the price of its 50Mbps service, consumers shouldn't expect to pay less than $100 a month, which highlights a crucial question. What kind of consumers would subscribe to a 100 Mbps service?
"I think you can always ask that question when you're looking at cutting edge speeds," Avgiris said. "In 1999, I remember wrestling with the idea of who would jump from a 1.5 Mbps service to 3Mbps service. We've learned as we enable faster experiences online, consumers find applications to use the bandwidth."
Avgiris added that high-definition video will likely be one killer application that drives demand for more bandwidth.
But 100 Mbps is a lot bandwidth. Even though every major ISP on the market except AT&T today offers 50Mbps service in at least a portion of their footprint, the majority of consumers still opt for much slower speed services. In fact, the average consumer subscribes to a service that is between 3Mbps and 6Mbps. In areas where super fast broadband is available, Frost & Sullivan's Jude said the most popular services offer download speeds of about 10Mbps and cost between $40 and $50 a month.
Seth Hogan, vice president of strategy and product management for Cox Communications, which is offering 50Mbps service in areas where it has upgraded its network to Docsis 3.0, said consumers most interested in the top tiers of service are typically early adopters. These are generally tech savvy individuals. Many of these people likely work from home and require higher speed services to share bandwidth-intensive files. Some of these consumers may be gamers. All of them do enough heavy file sharing, play multiperson, real-time games, or watch high-definition video, that they notice the difference in performance when jumping from a 12 Mbps service to a 50 Mbps service.
"Customers, no matter how technical they are, tend to value the ability to go faster," he said. "There are few applications that don't benefit from an increase in speed."
But he also noted that consumers that truly need upper tier services generally live in households where multiple devices are connecting to the Internet at the same time.
"Gone are the days when someone connected a single PC to a cable modem," he said. "Our higher tier customers are usually networked within the home with Wi-Fi and they're connecting a desktop, two or three laptops, a gaming console, Internet photo frame and countless other devices to their home network. And it has a multiplier effect."
This so-called multiplier effect will likely be the main reason most consumers will need to bump up the speed of their broadband service. Individually, today's average broadband speeds can handle most applications. But when these applications run simultaneously, it's easy to see how faster services will be needed. For example, Verizon estimates a regular standard definition home monitoring system with four cameras could use between 2Mbps and 4Mbps of upstream bandwidth. And a high-definition version of that same home monitoring system would require between 6Mbps and 10Mbps of bandwidth to upload. Meanwhile, streaming a high-definition movie could consume between 7Mbps and 8Mbps of bandwidth, depending n the encoding that is used.
Frost & Sullivan's Jude said the killer application for 100Mbps service may not have even been invented yet.
"There could be applications out there that we haven't even dreamed of yet," he said.
That's exactly why Google is planning to build an ultra-high-speed network to test new applications and infrastructure. Last month, the company announced it planned to launch 1 Gigabit per second networks that serve 50,000 to 500,000 individuals across the country. The fiber-based broadband networks will help stimulate innovation for next-generation Web applications, new infrastructure deployment techniques and it would help shape the conversation around broadband policy, the search giant has said. Cities around the country are already looking to partner with Google on these fiber-optic test beds.
Networks such as Google's could help developers come up with new applications that would need 100Mbps connections. And as demand grows for these high-speed services, operators will lower the price of service. Traditionally, when operators upgrade their network speeds, they increase speeds while keeping their basic tiers of service priced the same.
What's interesting to note is that for the past several years, $40 to $50 a month has been the sweet spot for broadband services. No matter how fast the service, over the years most consumers have opted for packages at this price point. As their networks get upgraded, ISPs increase the speed of their services, maintaining the $40 to $50 price point for their mid-level or basic offerings, which typically turn out to be the most popular.
"One thing is certain, every time there has been a net improvement in network capability, applications have quickly evolved to consume it," Jude said. "So when there is sufficient demand for 100Mbps service, prices will adjust to make them more affordable."
This means that today's popular mid-tier 10Mbps service that costs $40 a month could be 2020's 100Mbps service for $40 a month.
FCC Releases Internet Speed Test Tool
The U.S. Federal Communications Commission on Thursday launched a broadband test service to help consumers clock the speed of their Internet.
Located at the site www.broadband.gov, the test is aimed at allowing consumers to compare their actual speeds with the speeds advertised by their providers.
The FCC release follows an FCC meeting in September where officials said that actual speeds were estimated to lag by as much as 50 percent during busy hours.
"The FCC's new digital tools will arm users with real-time information about their broadband connection and the agency with useful data about service across the country," FCC Chairman Julius Genachowski said in a statement.
The FCC is also collecting information about where broadband is not available. Consumers can email the FCC at email@example.com or call the FCC.
(Reporting by John Poirier; Editing by Bernard Orr)
Ubisoft DRM Authentification Server is Down, Assassin's Creed 2 Unplayable
Earlier today, our tips inbox and the official Assassin's Creed 2 forum were set ablaze by incensed owners of the PC version of the aforementioned Italian revenge epic. According to numerous reports from prospective players of the game, Ubisoft's DRM authentification servers have crashed, forcing some players to suffer lengthy login periods when booting up Assassin's Creed 2, and locking some folks out of the game entirely.
A Ubisoft representative responded to a particularly rage-filled forum thread, stating "clearly the extended downtime and lengthy login issues are unacceptable, particularly as I've been told these servers are constantly monitored." The representative added "I'll do what I can to get more information on what the issue is here first thing tomorrow and push for a resolution and assurance this won't happen in the future." We've got a really great suggestion for how to make such an assurance: Find a less abominable DRM policy.
Researchers Find Weakness in Common Digital Security System
The most common digital security technique used to protect both media copyright and Internet communications has a major weakness, University of Michigan computer scientists have discovered.
RSA authentication is a popular encryption method used in media players, laptop computers, smartphones, servers and other devices. Retailers and banks also depend on it to ensure the safety of their customers' information online.
The scientists found they could foil the security system by varying the voltage supply to the holder of the "private key," which would be the consumer's device in the case of copy protection and the retailer or bank in the case of Internet communication. It is highly unlikely that a hacker could use this approach on a large institution, the researchers say. These findings would be more likely to concern media companies and mobile device manufacturers, as well as those who use them.
Andrea Pellegrini, a doctoral student in the Department of Electrical Engineering and Computer Science, will present a paper on the research at the upcoming Design, Automation and Test in Europe (DATE) conference in Dresden on March 10.
"The RSA algorithm gives security under the assumption that as long as the private key is private, you can't break in unless you guess it. We've shown that that's not true," said Valeria Bertacco, an associate professor in the Department of Electrical Engineering and Computer Science.
These private keys contain more than 1,000 digits of binary code. To guess a number that large would take longer than the age of the universe, Pellegrini said. Using their voltage tweaking scheme, the U-M researchers were able to extract the private key in approximately 100 hours.
They carefully manipulated the voltage with an inexpensive device built for this purpose. Varying the electric current essentially stresses out the computer and causes it to make small mistakes in its communications with other clients. These faults reveal small pieces of the private key. Once the researchers caused enough faults, they were able to reconstruct the key offline.
This type of attack doesn't damage the device, so no tamper evidence is left.
"RSA authentication is so popular because it was thought to be so secure," said Todd Austin, a professor in the Department of Electrical Engineering and Computer Science. "Our work redefines the level of security it offers. It lowers the safety assurance by a significant amount."
Although this paper only discusses the problem, the professors say they've identified a solution. It's a common cryptographic technique called "salting" that changes the order of the digits in a random way every time the key is requested.
"We've demonstrated that a fault-based attack on the RSA algorithm is possible," Austin said. "Hopefully, this will cause manufacturers to make a few small changes to their implementation of the algorithm. RSA is a good algorithm and I think, ultimately, it will survive this type of attack."
The paper is called "Fault-based Attack of RSA Authentication." This research is funded by the National Science Foundation and the Gigascale Systems Research Center.
Hackers, Viruses Threaten Online Voting Validity
With the increasing shift from analog to digital, some elections officials are unsurprisingly chomping at the bit to move toward Internet-based voting. Last year, Elections Canada officials mused about the possibility of online voting trials, noting the potential benefits of increasing voter participation, particularly among younger demographics.
More recently, the province of Alberta opened the door to incorporating new technologies into their voting processes as part of an electoral reform package.
New trials would require the approval of a legislative committee, but the province's Chief Electoral Officer acknowledged that online voting may be coming, noting "online voting is something that's on the forefront of people's minds ... people say, 'I can do my banking online, but I can't do my voting online.' "
The enthusiasm for Internet voting is understandable. At first blush, there is a certain allure associated with the convenience of Internet voting, given the prospect of increased turnout, reduced costs and quicker reporting of results. Moreover, since other security sensitive activities such as banking and health care have gravitated online, supporters argue that elections can't be far behind.
Yet before rushing into Internet voting trials, the dangers should not be overlooked.
Democracy depends upon a fair, accurate and transparent electoral process with outcomes that can be independently verified. Conventional voting accomplishes many of these goals – private polling stations enable citizens to cast their votes anonymously, election-day scrutineers offer independent oversight and paper-based ballots provide a verifiable outcome that can be re-counted if necessary.
While technology may someday allow us to replicate these essential features online, many of them are currently absent from Internet voting, which is subject to any number of possible disruptions. These include denial-of-service attacks that shut down the election process, counterfeit websites, phishing attacks, hacks into the election system or the insertion of computer viruses that tamper with election results.
These concerns are based on real-world experience. The Internet Corporation for Assigned Names and Numbers (ICANN), the organization that administers the domain name system, ran an online board of directors election in 2000. The experience was fraught with technical difficulties, leading a reviewer to conclude "the technical weakness in the registration system made it virtually impossible to assess the integrity of the voters' list, the security of the PINs, and secrecy of vote."
More recently, the Netherlands used Internet voting as part of its 2006 parliamentary elections. The online option was an alternative for Dutch citizens working or living abroad. Nearly 20,000 valid Internet votes were received at a cost of approximately 90 euros per Internet voter. Two years later, the country implemented a ban on Internet voting.
The Canadian experience is limited primarily to municipal elections. Several Ontario municipalities have offered Internet-based voting, enabling local residents to vote without leaving their homes. Residents were required to pre-register for Internet voting and were provided with detailed instructions on the technical requirements to "vote anywhere."
Caution on Internet voting appears prudent, since experts have identified a long and costly list of necessary precautions, including random spot checks and post-vote verification programs to preserve anonymity. Given the security risks, opening the door to provincial or federal Internet voting seems premature. In the zeal to increase voter turnout, the reliance on Internet voting could inadvertently place the validity of the election process at risk.
Energizer Bunny's Software Infects PCs
USB battery recharger status software contains Trojan, says US-CERT
The Energizer Bunny infects PCs with backdoor malware, the Department of Homeland Security's US-CERT said Friday.
According to researchers at US-CERT (United States Computer Emergency Readiness Team), software that accompanies the Energizer DUO USB battery charger contains a Trojan horse that gives hackers total access to a Windows PC.
The Energizer DUO, a USB-powered nickel-metal hydride battery recharger, has been discontinued, said Energizer Holdings, which late Friday confirmed that the software contains malicious code. The company has not said how the Trojan made its way into the software, however. "Energizer is currently working with both CERT and U.S. government officials to understand how the code was inserted in the software," Energizer said in a statement.
Energizer's DUO was sold in the US, Latin America, Europe and Asia starting in 2007.
The Windows software included with the charger is designed to show battery-charging status. When the software is installed, it creates the file "Arucer.dll," which is actually a Trojan that listens for commands on TCP port 7777. Upon instructions, the Trojan can download and execute files, transmit files stolen from the PC, or tweak the Windows registry. The Trojan automatically executes each time the PC is turned on, and remains active, even if the Energizer charger is not connected to the machine.
US-CERT urged users who had installed the Energizer software to uninstall it, which disables the automatic execution of the Trojan. Alternately, users can remove the Arucer.dll from Windows' "system32" directory, then reboot the machine.
Both US-CERT and Symantec have published advisories about the Trojan.
Energizer said it has removed the software from its download site, and added that although it had offered similar software for Mac OS X, only the Windows version had been infected.
This isn't the first time that a hardware company has planted malware on unsuspecting customers' PCs. In 2007, Seagate Technology admitted that an unknown number of its hard drives left an Asian manufacturing plant with Trojan horses, while the year before that Apple warned iPod owners that some of the music players carried a Windows virus.
In early 2008, electronic retailer Best Buy confirmed it had sold digital picture frames with attack code that spread to connected PCs.
HTC Phones Pre-installed With Mariposa Bot Client
Security researchers have found that Vodafone, one of the world's larger wireless providers, is distributing some HTC phones with malware pre-installed on them.
The phone, the HTC Magic, runs the Google Android mobile operating system, and is one of the more popular handsets right now. A researcher at Panda Security received one of the handsets recently, and upon attaching it to her PC, found that the phone was pre-loaded with the Mariposa bot client. Mariposa has been in the news of late thanks to some arrests connected to the operation of the botnet.
However, that was not the only malware the Panda researcher found on the phone.
"Interestingly enough, the Mariposa bot is not the only malware I found on the Vodafone HTC Magic phone. There’s also a Confiker and a Lineage password stealing malware. I wonder who’s doing QA at Vodafone and HTC these days," Pedro Bustamante of Panda wrote in a blog post on the incident.
After the researcher plugged the HTC phone into the PC, the Mariposa client began trying to infect other PCs in the local network and also started trying to contact a remote server. The Panda researcher found that the client was not being run by the same group of alleged Spanish hackers who were arrested last week, but by someone named "tnls."
Pre-installing malware on hardware devices such as phones, digital photo frames, USB keys and others has become a favored attack vector for criminals. It simply takes one weak link in the supply chain, which can include dozens of countries around the globe, to plant the malware on thousands or millions of devices.
The main Mariposa botnet was shut down recently, and security researchers have taken control of the botnet's command-and-control channels. The takedown was a large cooperative effort among various security companies, including Panda and Defence Intelligence, and law enforcement agencies, a paradigm that is becoming more common in recent months as experts continue to focus their attention on the massive botnet epidemic.
Researchers at Microsoft, working closely with law enforcement officials, recently shut down the Waledac botnet, a smaller operation that had been peppering user's of Microsoft's Hotmail service with billions of spam messages for some time.
Apache Bug Prompts Update Advice
IT security company Sense of Security has discovered a serious bug in Apache's HTTP web server, which could allow a remote attacker to gain complete control of a database.
Discovered by the company's security consultant Brett Gervasoni, the vulnerability exists in Apache's core "mod_isapi" module. By exploiting the module, an attacker could remotely gain system privileges that would compromise data security.
Users of Apache 2.2.14 and earlier are advised to upgrade to Apache 2.2.15, which fixes the exploit.
According to Sense of Security spokesperson Jason Edelstein, Apache is one of the most popular pieces of web server software used today and the vulnerability was one of the most significant bugs in Apache for years.
"The vulnerability means that you can take complete control of the web server remotely with system privileges — which is the highest privilege on Windows," Edelstein told ZDNet.com.au. "An attacker could gain access to, modify and take away data."
Edelstein advised users running Apache on Windows platforms to upgrade immediately as users have no way of knowing if their web servers have been compromised. The company's security advisory can be accessed here.
"Whilst in the past it was more overt and attackers would deface website pages, they're more likely now to conceal their access to maintain their foothold," said Edelstein, giving examples of attackers potentially exploiting the vulnerability by placing hidden pieces of code to capture credit card details from online transactions and install root kits on compromised websites.
"The latest version is not vulnerable," said Edelstein.
He added that an attacker would need a high degree of technical know-how to successfully exploit the vulnerability.
"You'd need to write a piece of code, a high level piece of code, which is quite difficult to create, and find a condition in the web server," said Edelstein.
"A proof of concept remote exploit has been written by Sense of Security, and it is feasible that others could write a similar exploit to completely compromise a Windows system," said Brett Gervasoni.
Targeted Internet Explorer Zero-Day Attack Announced (CVE-2010-0806)
Earlier today, Microsoft released Security Advisory (981374). This advisory covers CVE-2010-0806, an unpatched vulnerability affecting Internet Explorer versions 6 and 7. This attack appears to be rather targeted at the moment, but as with other unpatched vulnerabilities in the past, this has the potential to explode now that the word is getting out.
McAfee Labs is aware of an attack emanating from the domain topix21century.com (over both http and https). In this attack, vulnerable users are directed to a malicious webpage that downloads and executes a file named notes.exe or svohost.exe (classified as BackDoor-EMN) in drive-by download fashion (visiting the page is enough to get infected). There are multiple variants of this trojan involved. Notes.exe creates two copies of itself in the %temp% directory, and drops a DLL file. This DLL file is injected into Internet Explorer and provides remote access to an attacker.
The backdoor allows an attacker to perform various functions on the compromised system, including uploading & downloading files, executing files, and terminating running processes. Infected systems may attempt to communicate with the domain notes.topix21century.com over https.
File names related to this attack include:
* 20100307.htm (CVE-2010-0806 exploit)
* bypasskav.txt (part of exploit obfuscation code)
o notes.exe (backdoor installer)
+ note.exe (backdoor installer copy)
+ clipsvc.exe (backdoor installer copy)
# wshipl.dll (backdoor)
+ rsvm.exe (backdoor installer)
# wshipnotes.dll (backdoor)
Preliminary product coverage is as follows:
* McAfee DAT files (antivirus): Coverage will be provided for known exploits as Exploit-CVE-2010-0806 and known payloads as BackDoor-EMN in the 5916 DAT files, releasing March 10.
* McAfee VirusScan Enterprise Buffer Overflow Protection: Generic Buffer Overflow Protection is expected to cover future exploits.
* McAfee Host Intrusion Prevention: Generic Buffer Overflow Protection is expected to cover future exploits.
* McAfee Network Security Platform: The sigset releasing March 9 contains coverage under the signature “HTTP: Microsoft Internet Explorer Code Execution Vulnerability”.
* McAfee Vulnerability Manager: The FSL/MVM package of March 9 includes a vulnerability check to assess if your systems are at risk.
* McAfee Web Gateway (formerly Webwasher): TrustedSource has coverage for domains and IP addresses that the malware contacts.
* McAfee Firewall Enterprise (formerly Sidewinder): TrustedSource has coverage for domains and IP addresses that the malware contacts.
* McAfee SiteAdvisor, SiteAdvisor Plus, SiteAdvisor Enterprise: TrustedSource has coverage for domains and IP addresses that the malware contacts.
McAfee Labs is investigating this attack further and will continue to monitor any related activity closely.
Kaspersky: Apple is Blocking iPhone Security Software
Eugene Kaspersky has claimed Apple is blocking attempts to bring third-party security software to the iPhone.
Speaking exclusively to PC Pro, the CEO of Kaspersky Lab claimed Apple has repeatedly refused to deliver the software development kit (SDK) necessary to design security software for the phone.
"We have been in contact for two years with Apple to develop our anti-theft software, [but] still we do not have permission," said Kaspersky.
Kaspersky already offers security software for Symbian and Windows Mobile phones, and will soon offer applications for both BlackBerry and Android. And although he admits the risk of viruses infecting the iPhone is "almost zero", he claims that securing the data on the handset is critical, especially as iPhones are increasingly being used for business purposes.
"Are you OK to lose your address list?" The Russian asked. "I'm not. It's a risk to lose the data. Anti-theft is a major component [of Kaspersky's software]."
"I don't want to say Apple's is the wrong way of behaving, or the right way," Kaspersky added. "It's just a corporate culture - it wants to control everything".
Apple was unavailable for comment at the time of publication.
End of Apple's reign?
Kaspersky claimed Apple's closed-shop approach will eventually see the company knocked off its smartphone pedestal. "If Apple doesn't change its mind, it will lose market share and become a niche player."
He said Apple's repeating the mistakes it made in the computer market, where it lost out to Microsoft, which encouraged developers to write for the Windows platform. "Apple has a three-year timeframe to become the new Microsoft," he said. "If I were Steve Jobs, I'd spend those three years building a software community around Apple."
Mobile Phone Allows Boss to Snoop
Researchers have produced a mobile phone that could be a boon for prying bosses wanting to keep tabs on the movements of their staff.
Japanese phone giant KDDI Corporation has developed technology that tracks even the tiniest movement of the user and beams the information back to HQ.
It works by analysing the movement of accelerometers, found in many handsets.
Activities such as walking, climbing stairs or even cleaning can be identified, the researchers say.
The company plans to sell the service to clients such as managers, foremen and employment agencies.
"Technically, I think this is an incredibly important innovation," says Philip Sugai, director of the mobile consumer lab at the International University of Japan.
"For example, when applied to the issue of telemedicine, or other situations in which remotely monitoring or accessing an individual's personal movements is vital to that service.
"But there will surely be negative consequences when applied to employee tracking or salesforce optimisation."
Until now, mobile phone motion sensors were capable of detecting only repetitive movements such as walking or running.
The KDDI system, is able to detect more complex behaviour by using analytical software - held on a server back at base - to match patterns of common movements.
For example, the KDDI mobile phone strapped to a cleaning worker's waist can tell the difference between actions performed such as scrubbing, sweeping, walking an even emptying a rubbish bin.
The aim of the new system, according to KDDI, is to enable employees to work more efficiently and managers to easily evaluate their employees' performance while away from the office.
"It's part of our research into a total ubiquitous technology society, and activity recognition is an important part of that," said Hiroyuki Yokoyama, head of web data research at KKDI's research labs in Tokyo.
"Because this technology will make central monitoring possible with workers at several different locations, businesses especially are very interested in using such technology to improve the efficiency of their workers.
"We are now at a stage where we can offer managers a chance to analyse more closely the behaviour of staff."
KDDI says it is in talks with a Japanese employment agency that specialises in contract cleaners and security and is interested in deploying the new technology.
"Of course there are privacy issues and any employers should really enter into an agreement with employees before using such a system," Mr Yokoyama told BBC News.
"But this is not about curtailing employees' rights to privacy. We'd rather like to think our creation more of a caring, mothering system rather than a Big Brother approach to watching over citizens."
It is not the first time remote spying technology has been enlisted by employers to keep an eye on their workforce in Japan or elsewhere.
Lorry drivers are regularly monitored through mobile phones in Japan, while salespeople have been regularly tracked by their employers using GPS since it was introduced to Japanese mobiles in 2002.
Critics of such systems accuse the makers of pandering to an over-controlling, Big Brother-type managerial class and say that with this new technology there comes the increased opportunity for abuse.
"This is treating people like machines, like so many cattle to be monitored and watched over," Kazuo Hizumi, a leading human rights lawyer, told BBC News.
"New technology should be used to improve our lives not to spy on us.
"It beggars belief that a prominent company such as KDDI could come up with such a surveillance system. It's totally irresponsible."
Japan had a very poor record on human rights, privacy issues and consumer rights, said Mr Hizumi.
For this reason, he said, invasive technologies were readily accepted as there was little debate on their possible impact to be found in the media in Japan or among its people.
"I'm afraid ordinary citizens don't care about this lack of rights. Consequently because of technology like this, Japan is heading for the Dark Ages," said Mr Hizumi.
New "Smart Meters" for Energy Use Put Privacy at Risk
The ebb and flow of gas and electricity into your home contains surprisingly detailed information about your daily life. Energy usage data, measured moment by moment, allows the reconstruction of a household's activities: when people wake up, when they come home, when they go on vacation, and maybe even when they take a hot bath.
California's PG&E is currently in the process of installing "smart meters" that will collect this moment by moment data—750 to 3000 data points per month per household—for every energy customer in the state. These meters are aimed at helping consumers monitor and control their energy usage, but right now, the program lacks critical privacy protections.
That's why EFF and other privacy groups filed comments with the California Public Utilities Commission Tuesday, asking for the adoption of strong rules to protect the privacy and security of customers' energy-usage information. Without strong protections, this information can and will be repurposed by interested parties. It's not hard to imagine a divorce lawyer subpoenaing this information, an insurance company interpreting the data in a way that allows it to penalize customers, or criminals intercepting the information to plan a burglary. Marketing companies will also desperately want to access this data to get new intimate new insights into your family's day-to-day routine–not to mention the government, which wants to mine the data for law enforcement and other purposes.
This isn't just a California issue. Many threats to the privacy of the home—where our privacy rights should be strongest—were detailed in a 2009 report for the Colorado Public Utility Commission. The federal government has been promoting the smart grid as part of its economic stimulus package, and last year, EFF and other groups warned the National Institute of Standards and Technology about the privacy and security issues at stake. For example, security researchers worry that today’s smart meters and their communications networks are vulnerable to a variety of attacks. There are also questions of reliability, as PG&E faces criticism from California customers who have seen bills skyrocket after the installation of the new "smart meters." Unsurprisingly, California legislators are questioning the rapid rollout. Texas customers are also complaining.
There are far more questions than answers when it comes to this new technology. While it's potentially beneficial, it could also usher in new intrusions into our home and private life. The states and the federal government should ensure that energy customers get the protection they deserve.
China to Punish Hackers, Says No Google Complaint
China has pledged to punish hackers who attacked Google if there is evidence to prove it, but said it has yet to receive any complaint from the world's top search engine.
Google sent shockwaves across business and political circles in January when it declared it would stop censoring Chinese search results, and threatened to pull out of China -- the world's largest online community with 384 million users at the end of last year -- over hacking and censorship concerns.
Google had never filed a report to the Ministry of Industry and Information Technology over the cyber attacks or sought negotiations, Vice Minister Miao Wei was quoted as saying by state news agency Xinhua late on Saturday.
"If Google has had evidence that the attacks came from China, the Chinese government will welcome them to provide the information and will severely punish the offenders according to the law," Miao said.
"We never support hacking attacks because China also falls victim to hacking attacks," he said.
Google also never informed the ministry that it was planning to withdraw from China, Miao added, speaking on the sidelines of the annual session of parliament.
"If Google decides to continue its business in China and abides by China's laws, it's welcome to stay," he said, vowing to continue providing a sound investment environment for foreign investors and protect their legitimate rights.
"If the company chooses to withdraw from the Chinese market, it must go through certain procedures according to the law and regulations and deal with customers' problems that may arise."
A Google spokesman was not immediately available for comment.
Last Friday Minister of Industry and Information Technology Li Yizhong said China was in consultations with Google to resolve the issue. Li did not elaborate.
The dispute about Internet censorship has added to tensions over issues ranging from trade and the Chinese currency, to U.S. arms sale to self-ruled Taiwan, which Beijing claims as its own, and a recent meeting between U.S. President Barack Obama and Tibet's exiled spiritual leader, the Dalai Lama.
The hacking issue made headlines again in late February after reports in the Western media that the attacks had been traced to two schools in China, and the writer of the spyware used had been identified as a Chinese security consultant in his 30s with government links.
The Chinese government has denied Google's accusation that the hackers were based in China, calling the claim "groundless.
(Reporting by Ben Blanchard and Benjamin Kang Lim; Editing by Bill Tarrant)
Minister: Google Must Obey Laws to Stay
Internet giant Google must obey Chinese law if it still wishes to continue to operate in the country, said Li Yizhong, Minister of Industry and Information Technology.
"If Google still plans to continue its operations in China, it must abide by Chinese laws and respect the wills of Chinese Internet users," the minister told reporters on Monday during a plenary session of the annual legislative meeting at the Great Hall of the People.
When asked whether authorities are still in discussions with Google on Internet restrictions in China, the minister declined to respond.
"On this matter, Google knows it best itself," the minister said.
The defiant California-based Internet search company revealed plans to cease operations in China on January 18, saying it no longer wishes to be under the pressure of China's Internet restrictions.
Former TSA Analyst Charged with Computer Tampering
He allegedly tried to tamper with databases that track possible terrorists
A U.S. Transport Security Administration analyst has been indicted with tampering with databases used by the TSA to identify possible terrorists who may be trying to fly in the U.S.
Douglas James Duchak, 46, was indicted by a grand jury Wednesday with two counts of damaging protected computers. According to a federal indictment, Duchak tried to compromise computers at the TSA's Colorado Springs Operations Center (CSOC) on Oct. 22, 2009, seven days after he'd being given two weeks notice that he was being dismissed. He was also charged with tampering with a TSA server that contained data from the U.S. Marshal's Service Warrant Information Network.
He "knowingly transmitted code into the CSOC server that contained the Terrorist Screening Database, and thereby attempted intentionally to cause damage to the CSOC computer and database," prosecutors said Wednesday in a press release.
Duchak, who had been with the TSA for about five years at the time, was responsible for keeping TSA servers up-to-date with information received from the terrorist screening database and the United States Marshal's Service Warrant Information Network.
If convicted, Duchak faces 10 years in prison.
He was expected to make his initial appearance in federal court in Denver Wednesday.
‘Cavalier’ GCHQ Online Spy Centre Loses 35 Laptops
Centre also struggling to keep up with national cyber threats
GCHQ lost 35 laptops in one year, potentially containing highly sensitive data.
The UK’s electronic spy centre was today lambasted by MPs for having a “cavalier” attitude to data security. The centre is responsible for tracking the electronic communications of terrorists.
In a new report, the Commons Intelligence and Security Committee expressed concern that GCHQ appeared to be entirely unaware whether or not the computers, lost in 2008, contained top secret information on people posing an imminent security threat to the country.
The MPs said GCHQ’s “haphazard” monitoring system was the cause of its lack of awareness on what data was on the machines. GCHQ acknowledged “the state of the records” to the Guardian newspaper, but said there was so far no evidence the material had ended up in the wrong hands. The organisation has changed security policies to better track laptops.
GCHQ was also criticised for centring all of its main IT infrastructure in one place, in Cheltenham, meaning “vulnerabilities remain”. However, it was unable to find the funding for a new backup datacentre.
The security services as a whole were again criticised for their handling of the abandoned Scope secret intelligence programme, on which at least £24 million has been lost. The programme had been intended to link up information in between the Home Office, the Serious Organised Crime Agency, and the security agencies.
The government is in continued negotiations with its contractor, reported in a number of trade journals as IBM, over the matter. IBM had not returned calls for comment at the time of writing.
A new reduced programme called Collaboration in the Intelligence Community (Clic), with an unnamed supplier, is progressing. It aims to provide secure desktops and messaging, and shared workspaces.
The other intelligence and security services are also investing in new IT. The main Security Service is expanding its datacentre with four new server rooms, and transforming its desktop estate, networks, and business resilience. But having been criticised for its business continuity arrangements, “serious risks” remain, the MPs said. They did not elaborate.
Meanwhile, the Secret Intelligence Service, which has a backup site, was struggling to ensure safe, interception-proof, transfer of information to that site in spite of efforts made. It was also criticised for not practising those procedures, as well as for problems with internal information management.
The MPs' report largely covers the seven months to July last year. It was delayed since then because it had to be cleared by prime minister Gordon Brown first.
Kim Howells MP, chairman of the committee, expressed “disappointment” that “the prime minister is publishing this report eight months after the reporting period concluded”, making it “considerably out of date”.
Throughout the report, asterisks cover up sensitive information.
Outside Company Uncovers New Mexico State Data Exposure
A company that monitors the Internet for unauthorized exposure of information recently informed New Mexico State University that data about 300 students had appeared on a computer unaffiliated with the university. Tiversa, a risk mitigation company, notified the institution that it had detected information, including Social Security numbers, related to New Mexico State students on a computer with peer-to-peer file sharing software.
The university contracted with the vendor to determine the type of data exposed and the extent of that exposure, according to Shaun Cooper, associate vice president and CIO. "Through our investigation with Tiversa, we learned that a faculty member teaching a course in 2006 had transferred a student data file for course reporting purposes to a teaching assistant's laptop via e-mail. After the teaching assistant left [the university] in 2007, peer-to-peer file sharing software was installed on the teaching assistant's laptop. Eventually, the student data file was accessed via the file sharing software, without the computer owner's knowledge."
The university contacted the former teaching assistant, who deleted the file from the laptop, Cooper said. It also issued a cease-and-desist letter to the owner of the computer to which the file had been transferred. "The order legally forbids the computer owner from possessing the file that contains the NMSU students' information," Cooper said.
New Mexico State also sent letters to the students whose data may have been compromised and provided them with information about actions they could take to deal with identity theft.
In the years since that data was taken off campus, New Mexico State has implemented several measures to safeguard the personal information of students, faculty, and staff including: the elimination of Social Security numbers from daily business transactions with students; doing more security training with staff and faculty; implementing policies such as requiring that university data be deleted from personal computers when faculty, staff, and students leave NMSU employment; and prohibiting New Mexico State data from being stored on portable or removable electronic media.
"Along with NMSU's faculty and administration, I sincerely regret this incident of unauthorized student data exposure," Cooper said. "We want to assure the entire university community that we place the highest priority on safeguarding all personal information and that we will continue to upgrade our technology and evaluate our policies to make sure that personal data remains secure."
US is Malicious Server Leader, Says AVG
The US plays host to the largest number of malicious web servers, according to a study released by anti-malware company AVG.
The research, based on an analysis of threats reported over the last six months via AVG's LinkScanner Web security product, found that 44% of compromised or malicious servers are hosted in the US. This number far exceeded the next most popular places for malicious servers, Germany and China, which accounted for just 5% each.
Malicious servers were found in almost 4600 locations throughout the US, the research revealed.
"The results of this study shatters the myth that malicious code is primarily hostsed in countries where crime laws are less developed," said Karel Obluk, chief technology officer at AVG. He added that half of the domains found on the malicious servers were up for making the problem very transparent.
"This makes perfect sense since the USA is a primary target market for the criminals and has a rich and mature Internet infrastructure making the threats both highly accessible and cheap," he continued.
The number of servers in the US may have dropped for a while following the takedown of the McColo rogue ISP in November 2008. The organization, which was associated with command-and-control servers for botnets including Rustock, was taken down after US journalists worked with researchers to gather evidence that it was being used for online crime. Spam levels decreased dramatically after the takedown, although they rose steadily afterwards, and reached the levels seen prior to a takedown within the year.
In its Security Intelligence Report for January through June 2009, Microsoft found that the US was roughly half way down the table in terms of the number of phishing sites per 1000 Internet hosts. It lagged behind locations including Canada, Russia, and parts of the Middle East, which had a higher density. It also fell in the middle in terms of the density of malware distribution sites per 1000 Internet hosts in the first half of 2009, and the same was true for drive-by download sites. However, it is worth noting that unlike the AVG research, these figures were presented on a per-capita basis.
As with analyses of malicious servers in other countries, AVG pointed out that location is separate from intent. Even though many servers are hosted in the US, it doesn't mean that the criminals controlling them are based in the same location.
In other news, AVG signed a deal with peer-to-peer filesharing company LimeWire. Its antivirus software will be incorporated into LimeWire Pro, the premium version of its filesharing software package. LimeWire will scan all files downloaded via its peer-to-peer network before it allows them to be used.
Use Cash And Enjoy Privacy? You’re A Terrorist
Government ad running on British radio station tells public to report people who close their curtains as potential suicide bombers
Paul Joseph Watson
A new government commercial currently running on one of Britain’s most popular radio stations is selling one thing – fear – by encouraging Londoners to report their neighbors as terrorists if they use cash, enjoy their privacy, or even close their curtains.
The advertisement, produced in conjunction with national radio outlet TallkSport, promotes the “anti-terrorist hotline” and encourages people to report individuals who don’t talk to their neighbors much, people who like to keep themselves to themselves, people who close their curtains, and people who don’t use credit cards.
“This may mean nothing, but together it could all add up to you having suspicions,” states the voice on the ad, before continuing “We all have a role to play in combating terrorism” (we’re all indentured stasi informants for the government).
“If you see anything suspicious, call the confidential anti-terrorist hotline….if you suspect it, report it,” concludes the commercial.
A more recent campaign encouraged citizens to study the contents of each others’ trash and report anything suspicious, as well as to grass up individuals who glanced at the millions of CCTV cameras that line every major street in the country. Staring back at big brother is a sign of terrorism, according to the British government. People who use mobile phones, cameras and computers were also labeled suspected terrorists.
Why Ad Blocking is Devastating to the Sites You Love
Did you know that blocking ads truly hurts the websites you visit? We recently learned that many of our readers did not know this, so I'm going to explain why.
There is an oft-stated misconception that if a user never clicks on ads, then blocking them won't hurt a site financially. This is wrong. Most sites, at least sites the size of ours, are paid on a per view basis. If you have an ad blocker running, and you load 10 pages on the site, you consume resources from us (bandwidth being only one of them), but provide us with no revenue. Because we are a technology site, we have a very large base of ad blockers. Imagine running a restaurant where 40% of the people who came and ate didn't pay. In a way, that's what ad blocking is doing to us. Just like a restaurant, we have to pay to staff, we have to pay for resources, and we have to pay when people consume those resources. The difference, of course, is that our visitors don't pay us directly but indirectly by viewing advertising. (Although a few thousand of you are subscribers, and we thank you all very, very much!)
My argument is simple: blocking ads can be devastating to the sites you love. I am not making an argument that blocking ads is a form of stealing, or is immoral, or unethical, or makes someone the son of the devil. It can result in people losing their jobs, it can result in less content on any given site, and it definitely can affect the quality of content. It can also put sites into a real advertising death spin. As ad revenues go down, many sites are lured into running advertising of a truly questionable nature. We've all seen it happen. I am very proud of the fact that we routinely talk to you guys in our feedback forum about the quality of our ads. I have proven over 12 years that we will fight on the behalf of readers whenever we can. Does that mean that there are the occasional intrusive ads, expanding this way and that? Yes, sometimes we have to accept those ads. But any of you reading this site for any significant period of time know that these are few and far between. We turn down offers every month for advertising like that out of respect for you guys. We simply ask that you return the favor and not block ads.
If you read a site and care about its well being, then you should not block ads (or you subscribe to sites like Ars that offer ads-free versions of the site). If a site has advertising you don't agree with, don't go there. I think it is far better to vote with page views than to show up and consume resources without giving anything in return. I think in some ways the Internet and its vast anonymity feeds into a culture where many people do not think about the people, the families, the careers that go into producing a website. People talk about how annoying advertisments are, but I'll tell you what: it's a lot more annoying and frustrating to have to cut staff and cut benefits because a huge portion of readers block ads. Yet I've seen that happen at dozens of great sites over the last few years, Ars included.
Invariably someone always pops into a discussion like this and brings up some analogy with television advertising, radio, or somesuch. It is not in any way the same; advertisers in those mediums are paying for potential to reach audiences, and not for results. They have complex models which tell them if X number are watching, Y will likely see the ad (and it even varies by ad position, show type, etc!). But they really have no true idea who sees what ad, and that's why it's a medium based on potential and not provable results. On the Internet everything is 100% trackable and is billed and sold as such. Comparing a website to TiVo is comparing apples to asparagus. And anyway, my point still stands: if you like this site you shouldn't block ads. Invariably someone else will pop in and tell me that it's not their fault that our business model sucks. My response is simple: you either care about the site's well-being, or you don't. As for our business model sucking, we've been here for 12 years, online-only. Not many sites can say that.
Let me stop and clarify quickly that I am not saying that we are on the verge of vanishing from the Internet. But we, like many, many sites are greatly affected by ad blocking, and it is a very worrisome trend.
So I'll end this part of the discussion by just reiterating my point: blocking ads hurts the sites you love. Please consider not blocking ads on those sites.
An experiment gone wrong
Starting late Friday afternoon we conducted a 12 hour experiment to see if it would be possible to simply make content disappear for visitors who were using a very popular ad blocking tool. Technologically, it was a success in that it worked. Ad blockers, and only ad blockers, couldn't see our content. We tested just one way of doing this, but have devised a way to keep it rotating were we to want to permanently implement it. But we don't. Socially, the experiment was a mixed bag. A bunch of people whitelisted Ars, and even a few subscribed. And while others showed up to support our actions, there was a healthy mob of people criticizing us for daring to take any kind of action against those who would deny us revenue even though they knew they were doing so. Others rightly criticized the lack of a warning or notification as to what was going on.
We made the mistake of assuming that everyone who is blocking ads at Ars is doing so with malice. As it turns out, only a few people are, and many (most?) indicated you are happy to help out. That's what led to this hopefully informative post.
Our experiment is over, and we're glad we did it because it led to us learning that we needed to communicate our point of view every once in a while. Sure, some people told us we deserved to die in a fire. But that's the Internet! Making its ways into parents' basements since 1991. To those people I say: admit it, you just wish you were half as cool as this guy.
WhitePages.com Halts Ad Networks Over Malware
WhitePages.com has stopped ad networks from delivering ads to its site after they were found to contain fake antivirus malware.
"On Monday morning WhitePages received reports from users [about] malware in the form of a fake antivirus upsell program that we believe originated (against our terms) from a third-party advertising network serving ads on our website, in addition to other websites," a WhitePages spokeswoman said in an e-mail late Tuesday.
"We immediately suspended the networks in question at which time the reports from users subsided," she wrote. "We are working diligently to prevent this from happening in the future."
A representative for the Senate's Committee on Environment and Public Works said on Tuesday that officials were looking at WhitePages.com and Drudge Report as possible sources of malware that had affected Senate computers the day before.
Matt Drudge denied the accusation on his site and accused the committee of politicking. But several CNET readers reported that they too had been hit with the malware when they visited the Drudge Report Web site, a conservative news aggregator that sometimes authors stories too.
Web sites that have ad networks serve their ads are susceptible to malware being distributed on their sites without their knowledge or involvement. Visitors to the Drudge Report, The New York Times, the San Francisco Chronicle, and other Web sites were found to be delivering ads containing malware last year.
The Drudge Report did not return an e-mail seeking comment Wednesday.
Instant Ads Set the Pace on the Web
Time is now on the side of online advertisers.
Advertisers have been able to direct online messages based on demographics, income and even location, but one element has been largely missing until recently: immediacy. Advertisers booked slots in advance, and could not make on-the-fly decisions about what ads to show based on what people were doing on the Web.
Now, companies like Google, Yahoo and Microsoft let advertisers buy ads in the milliseconds between the time someone enters a site’s Web address and the moment the page appears. The technology, called real-time bidding, allows advertisers to examine site visitors one by one and bid to serve them ads almost instantly.
For example, say a man just searched for golf clubs on eBay (which has been testing a system from a company called AppNexus for more than a year). EBay can essentially follow that person’s activities in real time, deciding when and where to show him near-personalized ads for golf clubs throughout the Web.
If eBay finds out that he bought a driver at another site, it can update the ad immediately to start showing him tees, golf balls or a package vacation to St. Andrew’s, Scotland, often called the home of golf. If a woman was shopping, eBay could change the ad’s color or presentation.
“The biggest problem with advertising was that decisions about what ads to show were made way in advance of when they actually appear,” said Brian O’Kelley, the chief executive of AppNexus. “There are a lot of reasons you want to make those decisions as close to when the ads run as possible.”
Compare real-time bidding to, say, billboard advertising. In the real-time process, billboard space would be auctioned off second by second, and tailored to each viewer. Here comes a red Camry, driven by a 40-year-old woman who is on her way from the grocery store: which advertiser will pay the highest price to show her an ad?
“Even throughout the course of a day, information can change pretty dramatically,” said Neal Mohan, vice president for product management at Google. “The more precise you can get in terms of being able to act on it as soon as you get that information, the better it will be.”
While companies have been plugging real-time bidding for a couple of years, industry heavyweights are now behind it. Google introduced its revised DoubleClick Ad Exchange, offering real-time bidding, in September. Yahoo is testing the process on its Right Media Exchange, and Microsoft on its AdECN exchange.
A consumer would barely notice the shift, except that ads might seem more relevant to exactly what they are shopping for. It is another way in which marketers are massaging information — and something that has raised ire in Washington, where the Federal Trade Commission has been holding discussions on tailored advertising.
“The fact that you can be auctioned off in 12 milliseconds or less just illustrates how privacy in this country has rapidly eroded,” said Jeffrey Chester, executive director of the consumer group Center for Digital Democracy.
The bidding is good news for publishers, because advertisers are willing to pay more for targeted ads. In a Google study, publishers received prices on average that were 130 percent higher on ads sold through the DoubleClick exchange, compared with ads sold through networks. United Online, the parent company of sites like Classmates.com, has been working with the company PubMatic to sell its unfilled ad space in real time, and has gotten 50 percent higher prices on those spaces, said Jeremy E. Helfand, the chief sales officer.
Advertisers say real-time bidding cuts down on wasted money. “You can use less media, because you’re using more selected, or more efficient, media,” said Edward Montes, managing director for Havas Digital North America.
AppNexus is one of the companies helping marketers automate their analysis and bidding. AppNexus plans to formally introduce its management platform on Friday, which eBay has been using for more than a year.
Part of AppNexus’s pitch is computing power: an advertiser has to receive an ad impression, analyze it, decide what to bid on it, and decide automatically what ad to show in less than a quarter of a second to avoid slowing down the page-load time. It also lets companies funnel what they know about a Web user into the ads they show that person. EBay, for instance, has files of information on its customers: what they’ve bought, what they’ve searched for, where they live. Previously eBay had to buy a block of ads from a network or exchange, and when someone it recognized showed up, they could partially customize the ad. Now, customers are offered one by one, and eBay — using AppNexus’s automated system — only bids on the ones it thinks are worthwhile.
AppNexus examines a number of factors to figure out who to bid on, and how much to bid. The process makes the most of the real-time information.
One factor is the site the person is visiting: Is this a site that has performed well for eBay? Is the spot where the ad would run an attractive one, or downpage where someone might miss it?
Another is how many ads the person has seen recently.
“You might algorithmically say, ‘This is the 51st ad this person has seen in the last 30 minutes, therefore I’m not going to pay for this impression, because the likelihood they’ll click on it or respond to it is lower,’ ” said Matt Ackley, vice president for Internet marketing and advertising at eBay.
Using data providers like BlueKai or eXelate, AppNexus can add information about what a person’s been doing online.
“It’s a lot about being able to get the right users, but it’s also about passing on certain instances where we don’t think you’re in the market, based on what you’ve been doing in the past hour,” Mr. Ackley said.
Mr. Ackley said he had seen triple-digit increases in return on investment — the ratio of overall sales to overall ad spending — since he began working with AppNexus, though he declined to give specific figures.
Results like that have some marketers and online publishers suggesting real-time bidding might revive a sluggish market. Spending on banner ads declined 2.3 percent in 2009, to $4.76 billion, according to the research firm eMarketer. Meanwhile, spending on search rose 2.2 percent to $10.78 billion.
Until the arrival of real-time bidding, said Mr. Mohan of Google, “the technology hasn’t really been there to deliver on the promise of precise optimization, delivering the right message to the right audience at the right time” in the display world.
“We believe display advertising can be not just a big opportunity for Google, but more importantly, we think that the overall display advertising pie, as it exists online today, can be substantially larger,” Mr. Mohan said.
10 Ways You Might be Breaking the Law with Your Computer
Debra Littlejohn Shinder
Legislation that affects the use of Internet-connected computers continues to grow in its reach and its complexity. To help you avoid any infractions, we’ve revised this list to include new and pending laws and recent rulings.
For many years, the Internet was the “final frontier,” operating largely unregulated — in part because of the jurisdictional nightmare involved in trying to enforce laws when communications crossed not just state lines but also national boundaries. That was then; this is now. Legislation that affects the use of Internet-connected computers is springing up everywhere at the local, state and federal levels. You might be violating one of them without even knowing.
In this article, we’ll take a look at some of the existing laws and some of the pending legislation that can influence how we use our computers and the Internet. Nothing in this article should be construed as legal advice; this is merely an overview of some of the legislation that’s out there, how it has been interpreted by the courts (if applicable), and possible implications for computer users.
Note: This article is also available as a PDF download.
1: Digital Millennium Copyright (DMCA) Act
Most computer users have heard of this law, signed in 1998 by President Clinton, implementing two World Intellectual Property Organization (WIPO) treaties. The DMCA makes it a criminal offense to circumvent any kind of technological copy protection — even if you don’t violate anyone’s copyright in doing so. In other words, simply disabling the copy protection is a federal crime.
There are some exemptions, such as circumventing copy protection of programs that are in an obsolete format for the purpose of archiving or preservation. But in most cases, using any sort of anti-DRM program is illegal. This applies to all sorts of copy-protected files, including music, movies, and software. You can read a summary of the DMCA here.
If you’re a techie who likes the challenge of trying to “crack” DRM, be aware that doing so — even if you don’t make or distribute illegal copies of the copyrighted material – is against the law.
2: No Electronic Theft (NET) Act
This is another U.S. federal law that was passed during the Clinton administration. Prior to this act, copyright violations were generally treated as civil matters and could not be prosecuted criminally unless it was done for commercial purposes. The NET Act made copyright infringement itself a federal criminal offense, regardless of whether you circumvent copy-protection technology and whether you derive any commercial benefit or monetary gain. Thus, just making a copy of a copyrighted work for a friend now makes you subject to up to five years in prison and/or up to $250,000 in fines. This is the law referred to in the familiar “FBI Warning” that appears at the beginning of most DVD movies. You can read more about the NET Act here.
Many people who consider themselves upstanding citizens and who would never post music and movies to a P2P site think nothing of burning a copy of a song or TV show for a friend. Unfortunately, by the letter of the law, the latter is just as illegal as the former.
3: Anti-Counterfeiting Trade Agreement (ACTA)
This treaty is still in negotiation between the United States, European Commission, Switzerland, Japan, Australia, Canada, Jordan, Mexico, Morocco, New Zealand, the Republic of Korea, Singapore, and the United Arab Emirates. The most recent round of negotiations took place in Mexico in January 2010, and the next is scheduled for April 2010 in New Zealand.
As with the DMCA, many regard the ACTA as a workaround for governments to impose regulations and penalties through international treaties that they would not be able to pass into law through their regular legislative processes. ACTA covers a number of areas, including counterfeit products and generic medicines, but the part that affects computer users is the chapter titled “Enforcement of Intellectual Property Rights.”
Although the treaty negotiations are conducted in secret, a leaked document indicated that one provision in the treaty would force ISPs to give information about customers suspected of copyright infringement without requiring a warrant. According to reports, another provision would allow customs agents to conduct random searches of laptops, MP3 players, and cell phones for illegally downloaded or ripped music and movies. Not surprisingly, the Recording Industry Association of America (RIAA) is a supporter of the treaty. The Electronic Frontier Foundation (EFF) opposes it, as does the Free Software Foundation. You can read the EFF’s stance on ACTA here.
4: Court rulings regarding border searches
Most Americans are aware of the protections afforded by the U.S. Constitution’s fourth amendment against unreasonable searches and seizures. In general, this means that the government cannot search your person, home, vehicle, or computer without probable cause to believe that you’ve engaged in some criminal act.
What many don’t know is that there are quite a few circumstances that the Courts, over the years, have deemed to be exempt from this requirement. One of those occurs when you enter the United States at the border. In April 2008, the Ninth Circuit Court of Appeals upheld the right of Customs officers to search laptops and other digital devices at the border (the definition of which extends to any international airport when you are coming into the country) without probable cause or even the lesser standard of reasonable suspicion. The Electronic Frontier Foundation (EFF) and other groups strongly disagree with the ruling. You can read more on the EFF Web site.
Meanwhile, be aware that even though you’ve done nothing illegal and are not even suspected of such, the entire contents of your portable computer, PDA, or smart phone can be accessed by government agents when you enter the Unites States. So if you have anything on your hard drive that could be embarrassing, you might want to delete it before crossing the border.
5: State and federal laws regarding access to networks
Many states have criminal laws that prohibit accessing any computer or network without the owner’s permission. For example, in Texas, the statute is Penal Code section 33.02, Breach of Computer Security. It says, “A person commits an offense if the person knowingly accesses a computer, computer network or computer system without the effective consent of the owner.” The penalty grade ranges from misdemeanor to first degree felony (which is the same grade as murder), depending on whether the person obtains benefit, harms or defrauds someone, or alters, damages, or deletes files.
The wording of most such laws encompass connecting to a wireless network without explicit permission, even if the Wi-Fi network is unsecured. The inclusion of the culpable mental state of “knowing” as an element of the offense means that if your computer automatically connects to your neighbor’s wireless network instead of your own and you aren’t aware of it, you haven’t committed a crime. But if you decide to hop onto the nearest unencrypted Wi-Fi network to surf the Internet, knowing full well that it doesn’t belong to you and no one has given you permission, you could be prosecuted under these laws.
A Michigan man was arrested for using a café’s Wi-Fi network (which was reserved for customers) from his car in 2007. Similar arrests have been made in Florida, Illinois, Washington, and Alaska.
The federal law that covers unauthorized access is Title 18 U.S.C. Section 1030, which prohibits intentionally accessing a computer without authorization or exceeding authorized access. But it applies to “protected computers,” which are defined as those used by the U.S. government, by a financial institution, or used in or affecting interstate or foreign commerce. In addition to fines and imprisonment, penalties include forfeiture of any personal property used to commit the crime or derived from proceeds traceable to any violation. You can read the text of that section here.
In a recent case regarding unauthorized access, a high profile lawsuit was filed against a school district in Pennsylvania by students who alleged that district personnel activated their school-issued laptops in their homes and spied on them with the laptops’ webcams. The FBI is investigating to determine whether any criminal laws were broken. Because the school district owned the computers, there is controversy over whether they had the right to remotely access them without the permission of the users.
6: “Tools of a crime” laws
Some states have laws that make it a crime to possess a “criminal instrument” or the “tool of a crime.” Depending on the wording of the law, this can be construed to mean any device that is designed or adapted for use in the commission of an offense. This means you could be arrested and prosecuted, for example, for constructing a high gain wireless antenna for the purpose of tapping into someone else’s Wi-Fi network, even if you never did in fact access a network. Several years ago, a California sheriff’s deputy made the news when he declared Pringles can antennas illegal under such a statute.
7: Cyberstalking and Cyberbullying laws
Stalking is a serious crime and certainly all of us are in favor of laws that punish stalkers. As Internet connectivity has become ubiquitous, legislatures have recognized that it’s possible to stalk someone from afar using modern technology. Some of the “cyberstalking” laws enacted by the states, however, contain some pretty broad language.
For example, the Arkansas law contains a section titled “Unlawful computerized communications” that makes it a crime to send a message via email or other computerized communication system (Instant Messenger, Web chat, IRC, etc.) that uses obscene, lewd, or profane language, with the intent to frighten, intimidate, threaten, abuse, or harass another person. Some of the lively discussions on mailing lists and Web boards that deteriorate into flame wars could easily fall under that definition. Or how about the furious email letter you sent to the company that refused to refund your money for the shoddy product you bought?
Closely related are the laws against cyberbullying. Such laws have been passed by some states and local governments. In April 2009, the Megan Meier Cyberbullying Prevention Act (H.R. 1966) was introduced in the U.S. Congress. The act would make it a federal crime to “intimidate, harass, or cause substantial emotional distress to another person, using electronic means to support severe, repeated and hostile behavior.” Subcommittee hearings have been held and the bill is continuing through the legislative process.
Opponents of the proposed law point out that the language is open to interpretation, and could be construed to apply to someone who merely gets into heated discussions on a web board or email list. The best policy is to watch your language when sending any type of electronic communications. Not only can a loss of temper when you’re online come back to embarrass you, it could even get you thrown in jail.
8: Internet gambling laws
Like to play poker online or bet on the horse races from the comfort of your home? The federal Unlawful Internet Gambling Enforcement Act of 2006 criminalizes acceptance of funds from bettors — but what about the bettors themselves? Are they committing a crime?
Under this federal law, the answer is no, but some state laws do apply to the person placing the bet. For example, a Washington law passed in 2006 makes gambling on the Internet a felony. The King County Superior Court just recently upheld that law, although challengers have vowed to take it to the Supreme Court. Be sure to check out the state and local laws before you make that friendly online bet.
9: Child pornography laws
We all want to protect children and keep pedophiles away from them, but could you be arrested for possession of child pornography or for exposing children to pornography even though you would never voluntarily indulge in such a thing? Unfortunately, as the laws are written and enforced, the answer is “yes.” In January 2007, a substitute teacher in Norwich, CT, was convicted of four felony pornography charges, although she claimed the offending pictures were the result of pop-ups and that she did not knowingly access the Web sites in question. The conviction was set aside after forensics and security experts examined her hard drive and found the school’s antivirus software was out of date and the computer had no anti-spyware, firewall, or pop-up blocking technology. The teacher ended up pleading guilty to a misdemeanor charge.
Pornographic images of children are illegal to possess. This includes not just photographs of actual children, but also computer-generated pictures and drawings in which no real people are involved and photos of models who are of adult age but look like children. There are many ways such images can get on a computer. Viruses can infect your system and allow another person to remotely access your hard drive. Your computer can be taken over to become a bot, controlled by someone else without your knowledge. Someone can email you an illegal image. You can click a link on a non-pornographic Web site that takes you to a site where the illegal images are displayed, and they’re then downloaded into your Web cache on your hard drive.
In another 2007 case, a 16-year-old was charged with possession of child pornography and got 18 months probation and over a quarter of a million dollars in legal fees, even though he passed polygraph tests in which he denied knowledge of the images and an examination of the hard drive found more than 200 infected files and no firewall.
10: Pro IP Act
Returning to the copyright front, the Prioritizing Resources and Organization for Intellectual Property Act (Pro IP Act), which was signed into law in 2008, imposes stricter penalties for copyright infringement. It created a new position of “copyright enforcement czar” (formally called the Intellectual Property Enforcement Coordinator) in the federal bureaucracy and gives law enforcement agents the right to seize property from copyright infringers.
This may all sound fine in theory, but when you look at the way other seizure and forfeiture laws have been applied (for instance, the ability of drug enforcement officers to seize houses, computers, cars, cash, and just about everything else that belongs to someone tagged as a suspected drug dealer — and in some cases, not returning the property even when the person is acquitted or not prosecuted), it makes many people wary. Read more about the bill here.
Some local jurisdictions have also established seizure authority for piracy. In September 2009, Victoria Espinel was appointed as the first copyright czar. She has asked for public input by March 24, 2010.
RIAA Takes The Cake: Equates File Sharing To Children's Fairy Tale
Something must be in the water over at the RIAA. After first trying to link the Chinese hack of Google to Google's position on copyright and then ridiculously claiming that file sharers were undermining humanitarian aid in Haiti (despite neither being even close to true), now it's resorted to using simplistic fables to try to demonize file sharing. Perhaps it's part of the RIAA's propaganda campaign for school children, but in a recent blog post, RIAA VP Joshua Friedlander compared the file sharing situation to the children's fable Nobody Stole the Pie by Sonia Levitin (by the way, you would think that the RIAA, so concerned about content creators getting paid would at least provide a link to information about that book so you could buy it if you wanted to -- but we'll fix that omission for the RIAA).
You may have heard the story. It's about a bunch of villagers all taking a little nibble of a pie, insisting that just a little bit won't hurt -- and then, of course, the entire pie is gone, and everyone claims that it was "Not I" who ate the pie.
Yes, it's a wonderful fable that you should read to your children in nursery school. But, for the adults who actually understand basic economics, it's clear that the situation the RIAA is facing has absolutely nothing to do with the situation described in the book. So let's fast forward from nursery school to econ 101, and perhaps educate the RIAA a bit.
The reason the pie story functions the way it does is because the pie is a scarce and limited resource. As such, each time someone takes, it means that there is less for others. It's a zero-sum game. In contrast, with a digital file, the content is abundant and an infinite resource. Each time someone makes a copy, rather than less for everyone, there's actually more for everyone. You're actually growing the pie. Neat!
The problem the RIAA and its labels face is not everyone nibbling on the pie. It's that it has always focused on selling pie at greatly inflated prices, because in the old world, you could only get the pie from a few RIAA-run pie shops. In the new world, with abundant pie, where each copy of a piece of pie expands the pie, suddenly people can get their pie from many other places. And it's been great for pretty much everyone, other than the proprietors of the RIAA pie shops. More musicians are able to get their "pies" out there, since the old pieshop gatekeeper is no longer the bottleneck. More musicians are able to make money since they no longer have to rely on the pieshop to fund their ability to make new flavors of pie.
Now, when you have a market with an abundant resource, that actually tends to open up all sorts of new business models around pie (pie eating contests, pie toppings, pie making lessons, pie crusts, pie tins, etc.). In fact, those business models are working quite well. But the RIAA seems to have become confused about where the pie has gone:
In the music industry, it takes the investment of many peoples' money, effort, and time to create the songs and albums we all get to choose from and enjoy. Since most acts never even reach the breakeven point in sales, music labels need to operate like venture capitalists and count on the successes to subsidize the continued development of many artists and releases that may never break out of the red. And it's easy to ignore the harm being done when you're only stealing one copy.
Music companies continue to develop more ways for fans to enjoy their favorite artists and songs legitimately -- and provide additional sources of revenue. But when more music is obtained illegally, and less money is available to invest in finding, developing, and recording new artists, the resources available for the next round are diminished. So if the investments dry up, and fewer new artists are able to be developed, will filesharers who stole bit by bit look at each other and say it was "Not I" who stole the pie?
Such a nice story. Too bad that it's just as much a children's fiction as the original pie fable. Recent studies have shown that the music industry has been growing, not shrinking over the past few years. It's just that the money is going to different places. Again, the RIAA has a blindspot for all the other places where people can get pie, and how they've build up great business models around it, assuming that if you're not getting pie from an RIAA shopkeeper, then you must be "stealing." But that's like saying every time I order pizza from Domino's, I'm stealing from Pizza Hut. Or, even worse, every time I make my own pizza at home, I'm stealing from Pizza Hut.
The real problem is not different people taking "just a little bit." The people haven't been taking, they've been growing the pie. Massively. And the musicians and record labels who understand this have been growing and profiting nicely. So, seriously, RIAA, let's leave the children's fables where they belong and start focusing on updating your antiquated business model to deal with the twenty-first century.
Pink Floyd Battles EMI in Online Royalties Case
Pink Floyd on Tuesday launched legal action against record label EMI in a case that centres around royalty payments and how music is sold in the digital age.
The group, which signed with EMI over 40 years ago and whose back catalog has been outsold only by that of the Beatles, is disputing how online royalty payments and the marketing of their music are calculated, the Press Association reported.
The band, whose albums include "The Dark Side of the Moon" and "The Wall," is also challenging EMI's ability to "unbundle" their albums and sell individual tracks online.
Robert Howe, Pink Floyd's lawyer, told the High Court in London that a contractual clause "expressly prohibited" such "unbundling," or the selling of tracks other than in their original configuration whether in physical or digital form.
He added that EMI's position was that the prohibition "applies only to the physical product and doesn't apply online."
But that "makes no commercial sense" and was contradicted by the conditions used in the agreement with EMI, Howe argued.
(Reporting by Mike Collett-White, editing by Paul Casciato)
Pink Floyd Wins UK Court Battle With EMI Label
British rock band Pink Floyd won its court battle with EMI on Thursday with a ruling that prevents the record company from selling single downloads on the Internet from the group's concept albums.
The outcome of a dispute over the level of royalties the band received remained unclear, however, as that part of the judgment was held in secret, the Press Association reported. A source close to the band said those talks were "ongoing."
Lawyers said it was the first time a royalties dispute between artists and their record companies had been held in private, after EMI successfully applied for a news blackout for reasons of "commercial confidentiality."
The ruling at London's High Court is the latest blow to EMI, the smallest of the four major record companies, which is seeking new funds to avoid breaching debt covenants.
EMI sought to play down the court's decision.
"The litigation has been running for well over a year and most of its points have already been settled," the company said in a statement.
"This week's court hearing was around the interpretation of two contractual points, both linked to the digital sale of Pink Floyd's music. There are further arguments to be heard and the case will go on for some time."
EMI's owner Terra Firma is also embroiled in a legal dispute with Citigroup over advice and financing the U.S. bank provided to enable it to buy EMI in 2007.
Several top acts, including Pink Floyd and Queen, are reportedly in talks with other labels, following the exodus of the Rolling Stones and Radiohead since Terra Firma took over.
But EMI added in its statement: "We're huge fans of Pink Floyd whose great catalog we have been representing for more than 40 years and continue to represent exclusively and internationally."
Valuable Back Catalog
Pink Floyd's back catalog at EMI has been outsold only by that of the Beatles.
The band, whose albums include "The Dark Side of the Moon" and "The Wall," went to court to challenge EMI's right to "unbundle" their records and sell individual tracks online.
Judge Andrew Morritt accepted arguments by the group that EMI was bound by a contract forbidding it from selling records other than as complete albums without written consent.
The judge said the purpose of a clause in the contract, drawn up more than a decade ago, was to "preserve the artistic integrity of the albums."
Pink Floyd alleged that EMI had allowed online downloads from the albums and parts of tracks to be used as ringtones.
But Elizabeth Jones, representing EMI in court, countered that the word record "plainly applies to the physical thing -- there is nothing to suggest it applies to online distribution."
The judge ordered EMI to pay Pink Floyd's costs in the case, estimated at 60,000 pounds ($90,000), and refused the company permission to appeal.
Pink Floyd's influential and acclaimed body of work is a valuable commodity. Members Roger Waters, David Gilmour and Nick Mason all appeared on the 2009 Sunday Times Rich List with personal fortunes estimated at 85 million, 78 million and 50 million pounds respectively.
(Reporting by Mike Collett-White, editing by Paul Casciato and Mark Trevelyan)
IFPI Report: How Much Are Labels Investing In Music?
A new report from the IFPI (International Federation of the Phonographic Industry) breaks down how much the music industry spends annually investing in their artists. According to the IFPI's data, approximately $5 billion is "invested" in artist rosters, with 30 percent of the labels' revenue spent on artist development and marketing. This includes approximately 16 percent of sales revenue going to A&R, which the IFPI says "exceeds the proportionate research and development expenditure of virtually all other industries."
The IFPI breaks down the costs in "breaking" a new artist, figuring that it takes approximately $1 million to do so in the U.S. and U.K. The breakdown includes the artist's advance, recording, filming three videos, tour support and promotion/marketing.
John Kennedy, IFPI Chairman/CEO says, "Investing in music is the core mission of record companies. No other party can lay claim to a comparable role in the music sector. No other party comes close to the levels of investment committed by record companies to developing, nurturing and promoting talent."
He continues, "One of the biggest myths about the music industry in the digital age is that artists no longer need record labels. It is simply wrong. The investment, partnership and support that help build artist careers have never been more important than they are today. This report aims to explain why. Investing in Music is about how the music business works. It explains the value that music companies add, helping artists to realise a talent that would typically go unrecognised and get to an audience they would otherwise not reach."
"Much of the value added by music companies is invisible to the outside world. Yet it is the investment and advice from labels that enable an artist to build a career in music and which, in turn, creates a beneficial ripple effect throughout the wider music sector."
The report can be found here via the IFPI website.
Pandora Sees a Big Future: Heir to FM
Claire Cain Miller
Tim Westergren recently sat in a Las Vegas penthouse suite, a glass of red wine in one hand and a truffle-infused Kobe beef burger in the other, courtesy of the investment bankers who were throwing a party to court him.
It was a surreal moment for Mr. Westergren, who founded Pandora, the Internet radio station. For most of its 10 years, it has been on the verge of death, struggling to find investors and battling record labels over royalties.
Had Pandora died, it would have joined myriad music start-ups in the tech company graveyard, like SpiralFrog and the original Napster. Instead, with a successful iPhone app fueling interest, Pandora is attracting attention from investment bankers who think it could go public, the pinnacle of success for a start-up.
Pandora’s 48 million users tune in an average 11.6 hours a month. That could increase as Pandora strikes deals with the makers of cars, televisions and stereos that could one day, Pandora hopes, make it as ubiquitous as AM/FM radio.
“We were in a pretty deep dark hole for a long time,” Mr. Westergren said. “But now it’s a pretty out-of-body experience.”
At the end of 2009, Pandora reported and its first profitable quarter and $50 million in annual revenue — mostly from ads and the rest from subscriptions and payments from iTunes and Amazon.com when people buy music. Revenue will probably be $100 million this year, said Ralph Schackart, a digital media analyst at William Blair.
Pandora’s success can be credited to old-fashioned perseverance, its ability to harness intense loyalty from users and a willingness to shift directions — from business to consumer, from subscription to free, from computer to mobile — when its fortunes flagged.
Its library now has 700,000 songs, each categorized by an employee based on 400 musical attributes, like whether the voice is breathy, like Charlotte Gainsbourg, or gravelly like Tom Waits. Listeners pick a song or musician they like, and Pandora serves up songs with similar qualities — Charlotte Gainsbourg to Feist to Viva Voce to Belle and Sebastian. Unlike other music services like MySpace Music or Spotify, now available in parts of Europe, listeners cannot request specific songs.
Though Pandora’s executives say it is focusing on growth, not a public offering, the company is taking steps to make it possible. Last month, it hired a chief financial officer, Steve Cakebread, who had that job at Salesforce.com when it went public.
It is all a long way from January 2000, when Mr. Westergren founded the company. Trained as a jazz pianist, he spent a decade playing in rock bands before taking a job as a film composer. While analyzing the construction of music to figure out what film directors would like, he came up with an idea to create a music genome.
This being 1999, he turned the idea into a Web start-up and raised $1.5 million from angel investors. It was originally called Savage Beast Technologies and sold music recommendation services to businesses like Best Buy.
By the end of 2001, he had 50 employees and no money. Every two weeks, he held all-hands meetings to beg people to work, unpaid, for another two weeks. That went on for two years.
Meanwhile, he appealed to venture capitalists, charged up 11 credit cards and considered a company trip to Reno to gamble for more money. The dot-com bubble had burst, and shell-shocked investors were not interested in a company that relied on people, who required salaries and health insurance, instead of computers.
In March 2004, he made his 348th pitch seeking backers. Larry Marcus, a venture capitalist at Walden Venture Capital and a musician, decided to lead a $9 million investment.
“The pitch that he gave wasn’t that interesting,” Mr. Marcus said. “But what was incredibly interesting was Tim himself. We could tell he was an entrepreneur who wasn’t going to fail.”
Mr. Westergren took $2 million of it and called another all-hands meeting to pay everyone back. The next order of business: focus the service on consumers instead of businesses, change the name and replace Mr. Westergren as chief executive with Joe Kennedy, who had experience building consumer products at E-Loan and Saturn. Pandora’s listenership climbed, and in December 2005, it sold its first ad.
But in 2007, Pandora got news that threatened most of its revenue. A federal royalty board had raised the fee that online radio stations had to pay to record labels for each song. “Overnight our business was broken,” Mr. Westergren said. “We contemplated pulling the plug.”
Instead, Pandora hired a lobbyist in Washington and recruited its listeners to write to their representatives. “A lot of these users think they’re customers of the cause rather than users per se,” said Willy C. Shih, a professor at Harvard Business School who has written a case study on Pandora. “It’s a different spin on marketing.” The board agreed to negotiations and after two years settled on a lower rate.
Some music lovers dislike Pandora’s approach to choosing music based on its characteristics rather than cultural associations. Slacker Radio, a competitor with three times as many songs but less than a third of Pandora’s listeners, takes a different approach. A ’90s alternative station should be informed by Seattle grunge, said Jonathan Sasse, senior vice president for marketing at Slacker. “It’s not just that this has an 80-beat-a-minute guitar riff,” he said. “It’s that this band toured with Eddie Vedder.”
Yet in 2008, Pandora built an iPhone app that let people stream music. Almost immediately, 35,000 new users a day joined Pandora from their cellphones, doubling the number of daily signups.
For Pandora and its listeners, it was a revelation. Internet radio was not just for the computer. People could listen to their phone on the treadmill or plug it into their car or living room speakers.
In January, Pandora announced a deal with Ford to include Pandora in its voice-activated Sync system, so drivers will be able to say, “Launch my Lady Gaga station” to play their personalized station based on the music of that performer. Consumer electronics companies like Samsung, Vizio and Sonos are also integrating Pandora into their Blu-ray players, TVs and music systems.
“Think about what made AM/FM radio so accessible,” said Mr. Kennedy, Pandora’s chief. “You get into the car or buy a clock for your nightstand and push a button and radio comes out,” he said. “That’s what we’re hoping to match.”
A Dream for Music, but Labels’ Nightmare
THE Apple iPad, which goes on sale April 3, will access video, applications and Web sites wirelessly — no cords or cables needed. But to move your trusty old music collection onto this wonder gadget and take it with you to work, or on vacation, you’ll have to pull out a U.S.B. sync cable, plug the device into your PC and transfer those music files over.
It’s kind of a hassle, and it becomes worse when you buy a song on the tablet and then want to make sure it’s on your other devices as well. Apple could probably ditch the idea of synching altogether, if it only had the kind of Internet music service that everyone anticipates but which has not yet caught on: what techies call music in the cloud.
Such a service lets people store their music collections on the Web — all those Beatles CDs and Blondie albums we ripped over the last two decades — and then stream the songs to any computer, phone, tablet or the coming wave of Internet-connected radios.
The music labels themselves love the idea of bringing people’s music collections into the cloud, particularly because it might make consumers excited about buying music again. The number of people downloading digital music dipped slightly last year from 2008, according to the NPD Group.
So moving our music into the cloud and piping it to any device, on demand, should be easy, right? Actually, there could be several hurdles. But first, let’s acknowledge that the very idea of music ownership may be outdated. A whole new generation of music lovers are opting to pay for unlimited “jukebox in the sky” subscription services like Mog and Rhapsody, which let them play any song, whenever they want, to an increasingly wide range of devices.
But if the music industry wants to preserve what is now the more profitable business, in which people actually pay for and own a copy of an individual song or album, it must first work out practical and affordable licensing terms with tech companies that want to develop cloud music services.
Michael Robertson, an online music entrepreneur, says he doesn’t believe that such economical licensing agreements are possible. In 2000, his former company MP3.com opened a service to let people play any song on the Web if they could prove they owned it. The site, which settled lawsuits brought by major record labels, was eventually acquired by Vivendi Universal.
“Music companies want consumers to pay more,” Mr. Robertson said. “They consider a copy in the cloud, played multiple times, to essentially be a song that has been bought multiple times.”
Mr. Robertson now runs a service called MP3tunes. Customers who take the time to upload their digital music to his servers — the first two gigabytes of storage are free — can then play the music on any computer, iPhone or Android device, and even on a selection of Internet radios and the Nintendo Wii.
There’s just one problem, as the labels see it. Because Mr. Robertson is just giving consumers a way to listen to music they already own, he never believed he needed licenses from the labels. (He cites the Digital Millennium Copyright Act, which allows consumers to make digital copies of material they own.) EMI, one of the major music labels, stepped forward for the industry and sued MP3tunes over this approach in 2007. The case is pending.
Executives at music labels like Warner Music, the Universal Group and Sony Music say they are willing to offer reasonable licensing terms for cloud music. “We are definitely looking for the next wave of innovation to improve the quality of service that consumers are getting from legitimate music offerings,” says one executive, who did not want to be identified because private licensing conversations were continuing.
This executive eagerly pointed to a company called Catch Media, which has licenses from all of the major labels and many of the independent ones for just this kind of service.
Based in Jerusalem and Los Angeles, Catch Media is building a registration, tracking and clearinghouse system to give consumers legal access to their music anytime and anywhere across a variety of devices. Mark Segall, its business development adviser, says the company will soon announce which music companies will use the technology but suggests that consumers will have to pay a “convenience fee” for streaming their music from the Web, comparable to charges at an A.T.M.
Won’t people balk at paying again to listen to R.E.M. songs they have owned since the 1980s? Catch Media hopes not.
A FINAL obstacle to this vision of cloud music is the issue of interoperability. Music stored on the servers of one company should play on phones and devices made by another.
But will it? Apple, which bought the streaming music service Lala last year, has plans to move people’s iTunes collections into the cloud later this year. Considering that it costs a small amount of money to store and stream a song to a device, and that Apple’s business is based on selling its own hardware, Apple is likely to balk at letting people stream music to, say, Android phones.
In that respect, Google, Amazon.com or even some unknown start-up might actually be a better shepherd of our music collections into the cloud. But they, too, will have to play nice with others.
“In two years there will be a giant tanker truck coming from Asia loaded with $30 devices that will go on every nightstand and plug right into the cloud,” Mr. Robertson said. “The music system that allows those devices to freely interoperate with your media — songs, video, even photos — is going to win. There’s just no question.”
At Last -- The Full Story Of How Facebook Was Founded
The origins of Facebook have been in dispute since the very week a 19-year-old Mark Zuckerberg launched the site as a Harvard sophomore on February 4, 2004.
Then called "thefacebook.com," the site was an instant hit. Now, six years later, the site has become one of the biggest web sites in the world, visited by 400 million people a month.
The controversy surrounding Facebook began quickly. A week after he launched the site in 2004, Mark was accused by three Harvard seniors of having stolen the idea from them.
This allegation soon bloomed into a full-fledged lawsuit, as a competing company founded by the Harvard seniors sued Mark and Facebook for theft and fraud, starting a legal odyssey that continues to this day.
New information uncovered by Silicon Alley Insider suggests that some of the complaints against Mark Zuckerberg are valid. It also suggests that, on at least one occasion in 2004, Mark used private login data taken from Facebook's servers to break into Facebook members' private email accounts and read their emails--at best, a gross misuse of private information. Lastly, it suggests that Mark hacked into the competing company's systems and changed some user information with the aim of making the site less useful.
The primary dispute around Facebook's origins centered around whether Mark had entered into an "agreement" with the Harvard seniors, Cameron and Tyler Winklevoss and a classmate named Divya Narendra, to develop a similar web site for them -- and then, instead, stalled their project while taking their idea and building his own.
The litigation never went particularly well for the Winklevosses.
In 2007, Massachusetts Judge Douglas P. Woodlock called their allegations "tissue thin." Referring to the agreement that Mark had allegedly breached, Woodlock also wrote, "Dorm room chit-chat does not make a contract." A year later, the end finally seemed in sight: a judge ruled against Facebook's move to dismiss the case. Shortly thereafter, the parties agreed to settle.
But then, a twist.
After Facebook announced the settlement, but before the settlement was finalized, lawyers for the Winklevosses suggested that the hard drive from Mark Zuckerberg's computer at Harvard might contain evidence of Mark's fraud. Specifically, they suggested that the hard drive included some damning instant messages and emails.
The judge in the case refused to look at the hard drive and instead deferred to another judge who went on to approve the settlement. But, naturally, the possibility that the hard drive contained additional evidence set inquiring minds wondering what those emails and IMs revealed. Specifically, it set inquiring minds wondering again whether Mark had, in fact, stolen the Winklevoss's idea, screwed them over, and then ridden off into the sunset with Facebook.
Unfortunately, since the contents of Mark's hard drive had not been made public, no one had the answers.
But now we have some.
Over the past two years, we have interviewed more than a dozen sources familiar with aspects of this story -- including people involved in the founding year of the company. We have also reviewed what we believe to be some relevant IMs and emails from the period. Much of this information has never before been made public. None of it has been confirmed or authenticated by Mark or the company.
Based on the information we obtained, we have what we believe is a more complete picture of how Facebook was founded. This account follows.
And what does this more complete story reveal?
We'll offer our own conclusions at the end. But first, here's the story:
"We can talk about that after I get all the basic functionality up tomorrow night."
In the fall of 2003, Harvard seniors Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra were on the lookout for a web developer who could bring to life an idea the three say Divya first had in 2002: a social network for Harvard students and alumni. The site was to be called HarvardConnections.com.
The three had been paying Victor Gao, another Harvard student, to do coding for the site, but at the beginning of the fall term Victor begged off the project. Victor suggested his own replacement: Mark Zuckerberg, a Harvard sophomore from Dobbs Ferry, New York.
Back then, Mark was known at Harvard as the sophomore who had built Facemash, a "Hot Or Not" clone for Harvard. Facemash had already made Mark a bit of a celebrity on campus, for two reasons.
The first is that Mark got in trouble for creating it. The way the site worked was that it pulled photos of Harvard students off of Harvard's Web sites. It rearranged these photos so that when people visited Facemash.com they would see pictures of two Harvard students and be asked to vote on which was more attractive. The site also maintained a list of Harvard students, ranked by attractiveness.
On Harvard's politically correct campus, this upset people, and Mark was soon hauled in front of Harvard's disciplinary board for students. According to a November 19, 2003 Harvard Crimson article, he was charged with breaching security, violating copyrights, and violating individual privacy. Happily for Mark, the article reports that he wasn't expelled.
The second reason everyone at Harvard knew about Facemash and Mark Zuckerberg was that Facemash had been an instant hit. The same Harvard Crimson story reports that after two weeks, "the site had been visited by 450 people, who voted at least 22,000 times." That means the average visitor voted 48 times.
It was for this ability to build a wildly popular site that Victor Gao first recommended Mark to Cameron, Tyler, and Divya. Sold on Mark, the Harvard Connection trio reached out to him. Mark agreed to meet.
They first met in the early evening on November 30 in the dining hall of Harvard College's Kirkland House. Cameron, Tyler, and Divya brought up their idea for Harvard Connection, and described their plans to A) build the site for Harvard students only, by requiring new users to register with Harvard.edu email addresses, and B) expand Harvard Connection beyond Harvard to schools around the country. Mark reportedly showed enthusiastic interest in the project.
Later that night, Mark wrote an email to the Winklevoss brothers and Divya: "I read over all the stuff you sent and it seems like it shouldn't take too long to implement, so we can talk about that after I get all the basic functionality up tomorrow night."
The next day, on December 1, Mark sent another email to the HarvardConnections team. Part of it read, "I put together one of the two registration pages so I have everything working on my system now. I'll keep you posted as I patch stuff up and it starts to become completely functional."
These two emails sounded like the words of someone who was eager to be a part of the team and working away on the project. A few days later, however, Mark's emails to the HarvardConnection team started to change in tone. Specifically, they went from someone who seemed to be hard at work building the product to someone who was so busy with schoolwork that he had no time to do any coding at all.
December 4: "Sorry I was unreachable tonight. I just got about three of your missed calls. I was working on a problem set."
December 10: "The week has been pretty busy thus far, so I haven't gotten a chance to do much work on the site or even think about it really, so I think it's probably best to postpone meeting until we have more to discuss. I'm also really busy tomorrow so I don't think I'd be able to meet then anyway."
A week later: "Sorry I have not been reachable for the past few days. I've basically been in the lab the whole time working on a cs problem set which I"m still not finished with."
Finally, on January 8:
Sorry it's taken a while for me to get back to you. I'm completely swamped with work this week. I have three programming projects and a final paper due by Monday, as well as a couple of problem sets due Friday. I'll be available to discuss the site again starting Tuesday.
I"m still a little skeptical that we have enough functionality in the site to really draw the attention and gain the critical mass necessary to get a site like this to run…Anyhow, we'll talk about it once I get everything else done.
So what happened to change Mark's tune about HarvardConnection? Was he so swamped with work that he was unable to finish the project? Or, as the HarvardConnection founders have alleged, was he stalling the development of HarvardConnection so that he could build a competing site and launch it first?
Our investigation suggests the latter.
As a part of the lawsuit against Facebook and Mark Zuckerberg, the above emails from Mark have been public for years. What has never been revealed publicly is what Mark was telling his friends, parents, and closest confidants at the same time.
Let's start with a December 7th (IM) exchange Mark Zuckerberg had with his Harvard classmate and Facebook cofounder, Eduardo Saverin.
"They made a mistake haha. They asked me to make it for them."
Former PayPal CEO Peter Thiel gets a lot of credit for being the first investor in Facebook, because he led the first formal Facebook round in September of 2004 with a $500,000 investment at a $5 million valuation. But the real "first investor" claim to fame should actually belong to a Harvard classmate of Mark Zuckerberg's named Eduardo Saverin.
To picture Eduardo, what you need to know is that he was the kid at Harvard who would wear a suit to class. He liked to give people the impression that he was rich -- and maybe somehow connected to the Brazilian mafia. At one point, in an IM exchange, Mark told a friend that Eduardo -- "head of the investment society" -- was rich because "apparently insider trading isn't illegal in Brazil."
Eduardo Saverin wasn't directly involved with Facebook for long: During the summer of 2004, when Mark moved to Palo Alto to work on Facebook full time, Eduardo took a high-paying internship at Lehman Brothers in New York. While Mark was still at Harvard, however, Eduardo appears to have bankrolled Facebook's earliest capital expenses, thus becoming its initial investor.
In January, however, Mark told a friend that "Eduardo is paying for my servers." Eventually, Eduardo would agree to invest $15,000 in a company that would, in April 2004, be formed as Facebook LLC. For his money, Eduardo would get 30% of the company.
Eduardo was also involved in Facebook's earliest days, as a confidant of Mark Zuckerberg.
In December, 2003, a week after Mark's first meeting with the HarvardConnection team, when he was telling the Winklevosses that he was too busy with schoolwork to work on or even think about HarvardConnection.com, Mark was telling Eduardo a different story. On December 7, 2003, we believe Mark sent Eduardo the following IM:
Check this site out: www.harvardconnection.com and then go to harvardconnection.com/datehome.php. Someone is already trying to make a dating site. But they made a mistake haha. They asked me to make it for them. So I'm like delaying it so it won't be ready until after the facebook thing comes out.
This IM suggests that, within a week of meeting with the Winklevosses for the first time, Mark had already decided to start his own, similar project--"the facebook thing." It also suggests that he had developed a strategy for dealing with his would-be competition: Delay developing it.
"I feel like the right thing to do is finish the facebook and wait until the last day before I'm supposed to have their thing ready and then be like look yours isn't as good"
A few weeks after the initial meeting with the HarvardConnection team, after Mark sent the IM to Eduardo Saverin talking about developing "the facebook thing" and delaying his development of HarvardConnection, Mark met with the HarvardConnection folks, Cameron, Tyler, and Divya, for a second time.
This time, instead of meeting in the dining hall of Mark's residential hall, Kirkland House, the four met in Mark's dorm room. Divya is said to have arrived late.
In Kirkland House, the dorm rooms aren't laid out in cinder-block-cube style: Mark's room had a narrow hallway connecting it to his neighbor's. As Cameron and Tyler sat down on a couch in Mark's room, Cameron spotted something in the hallway. On top of a bookshelf there was a white board. It was the kind Web developers and product managers everywhere use to map out their ideas.
On it, Cameron read two words, "Harvard Connection." He got up to go look at it. Immediately, Mark asked Cameron to stay out of the hallway.
Eventually Divya arrived and the four of them talked about plans for Harvard Connection. One feature Mark brought up was designed to keep more popular and sought-after Harvard Connection users from being stalked and harassed by crowds of people.
In this second meeting, Mark still appeared to be actively engaged in developing Harvard Connection. But he never showed the HarvardConnection folks any site prototypes or code. And they didn't insist on seeing them.
During the weeks in which Mark was juggling the two projects in tandem, he also had a series of IM exchanges with a friend named Adam D'Angelo (above).
Adam and Mark went to boarding school together at Phillips Exeter Academy. There, the pair became friends and coding partners. Together they built a program called Synapse, a music player that supposedly learned the listener's taste and then adapted to it. Then, in 2002 Mark went to Harvard and Adam went to Cal Tech. But the pair stayed in close touch, especially through AOL instant messenger. Eventually, Adam became Facebook's CTO.
Harvard Yard at WinterThrough the Harvard Connection-Facebook saga and its aftermath, Mark kept Adam apprised of his plans and thoughts.
One purported IM exchange seems particularly relevant on the question of how Mark distinguished between the two projects--the "facebook thing" and "the dating site"--as well as how he was considering handling the latter:
Zuck: So you know how I'm making that dating site
Zuck: I wonder how similar that is to the Facebook thing
Zuck: Because they're probably going to be released around the same time
Zuck: Unless I fuck the dating site people over and quit on them right before I told them I'd have it done.
Zuck: Like I don't think people would sign up for the facebook thing if they knew it was for dating
Zuck: and I think people are skeptical about joining dating things too.
Zuck: But the guy doing the dating thing is going to promote it pretty well.
Zuck: I wonder what the ideal solution is.
Zuck: I think the Facebook thing by itself would draw many people, unless it were released at the same time as the dating thing.
Zuck: In which case both things would cancel each other out and nothing would win. Any ideas? Like is there a good way to consolidate the two.
D'Angelo: We could make it into a whole network like a friendster. haha. Stanford has something like that internally
Zuck: Well I was thinking of doing that for the facebook. The only thing that's different about theirs is that you like request dates with people or connections with the facebook you don't do that via the system.
Zuck: I also hate the fact that I'm doing it for other people haha. Like I hate working under other people. I feel like the right thing to do is finish the facebook and wait until the last day before I'm supposed to have their thing ready and then be like "look yours isn't as good as this so if you want to join mine you can…otherwise I can help you with yours later." Or do you think that's too dick?
D'Angelo: I think you should just ditch them
Zuck: The thing is they have a programmer who could finish their thing and they have money to pour into advertising and stuff. Oh wait I have money too. My friend who wants to sponsor this is head of the investment society. Apparently insider trading isn't illegal in Brazil so he's rich lol.
"I'm going to fuck them."
Eduardo Saverin and Adam D'Angelo were not the only people Mark discussed his Harvard Connection - Facebook situation with. We believe he also had many IM exchanges about it with relatives and a close female Harvard friend.
In January 2004, Mark met with the Winklevoss brothers and Divya Narendra for what would be the last time. The meeting was on January 14, 2004, and it was held at the same place Mark met with the HarvardConnection team for the first time -- in the dining hall of Mark's residence, Kirkland House.
By this point, Mark's site, thefacebook.com, wasn't complete, but he was working hard on it. He'd arranged for Eduardo Saverin to pay for his servers. He had already told Adam that "the right thing to do" was to not complete Harvard Connection and build TheFacebook.com instead. He had registered the domain name.
He therefore had a choice to make: Tell Cameron, Tyler and Divya that he wanted out of their project, or string them along until he was ready to launch thefacebook.com.
Mark sought advice on this decision from his confidants. One friend told him, in so many words, you know me. I don't ever think anyone should do anything bad to anybody.
Mark and this friend also had the following IM exchange about how Mark planned to resolve the competing projects:
Friend: So have you decided what you're going to do about the websites?
Zuck: Yeah, I'm going to fuck them
Zuck: Probably in the year
And so, it appears, he did. (In a manner of speaking).
On January 14, 2004, Mark Zuckerberg met with Cameron, Tyler, and Divya for the last time. During the meeting at Kirkland House, Mark expressed doubts about the viability of HarvardConnection.com. He said he was very busy with personal projects and school work and that he wouldn't be able to work on the site for a while. He blamed others for the site's delays.
He did not say that he was working on his own project and that he was not planning to complete the HarvardConnection site.
After the meeting, Mark had another IM exchange with the friend above. He told her, in effect, that he had wimped out. He hadn't been able to break the news to Cameron and Tyler, in part, he said, because he was "intimidated" by them. He called them "poor bastards."
So then what happened?
Three days earlier, on January 11, 2004, Mark had registered the domain THEFACEBOOK.COM.
On February 4, he opened the site to Harvard students.
On February 10, Cameron Winklevoss sent Mark a letter accusing him of breaching their agreement and stealing their idea.
In late May, after going through two more developers, Cameron, Tyler and Divya launched HarvardConnection as ConnectU, a social network for 15 schools.
On June 10, 2004, a commencement speaker mentioned the amazing popularity of Mark's site, thefacebook.com.
In the summer of 2004, Mark moved to Palo Alto to work on Facebook full time and soon received a $500,000 investment from Peter Thiel.
In September 2004, HarvardConnection, now called ConnectU, sued Mark Zuckerberg and the now-incorporated "Facebook" for allegedly breaching their agreement and stealing their idea.
In February 2008, Facebook and ConnectU agreed to settle the lawsuit.
In June 2008, ConnectU appealed the settlement in California's ninth district, accusing Facebook of trading its stock without disclosing material information. This appeal is on-going.
The $65 million question
When we described the specifics of this story to Facebook, the company had the following comment:
"We’re not going to debate the disgruntled litigants and anonymous sources who seek to rewrite Facebook’s early history or embarrass Mark Zuckerberg with dated allegations. The unquestioned fact is that since leaving Harvard for Silicon Valley nearly six years ago, Mark has led Facebook's growth from a college website to a global service playing an important role in the lives of over 400 million people."
On the latter point, we agree. What Mark Zuckerberg has accomplished with Facebook over the past six years has been nothing short of amazing.
So, having revisited the founding of Facebook with additional information, what do we conclude?
First, we have seen no evidence of any formal contract between Mark Zuckerberg and the Winklevosses in which Mark agreed to develop Harvard Connection.
Second, any agreement the parties may have had--as well as most of the purported IMs and emails we have reviewed from the period--appear to have been at the level of, as Judge Ware described them, "dorm-room chit-chat." (Albeit interesting and entertaining chit-chat.)
Third, only a week after beginning development of Harvard Connection, which he referred to as "the dating site," Mark had begun work on a separate project -- "the facebook thing." Mark appears to have considered the products as competing for the attention of the same users, but he also appears to have regarded them as different in some key ways.
Fourth -- and because of this foreseen competition -- Mark does appear to have intentionally strung along the Harvard Connection folks with the goal of making his project, thefacebook.com, have a more successful launch.
Bottom line, we haven't seen anything that makes us think that, whatever Mark did to the Harvard Connection folks, it was worth more than the $65 million they received in the lawsuit settlement. In fact, this seems like a huge sum of money considering that the entire dispute took place over two months in 2004 and that, in the six years since, Mark has built Facebook into a massive global enterprise.
That said, in the course of our investigation, we also uncovered two additional anecdotes about Mark's behavior in Facebook's early days that are more troubling. These episodes -- an apparent hacking into the email accounts of Harvard Crimson editors using data obtained from Facebook logins, as well as a later hacking into ConnectU -- are described in detail here.
MPs Urge Facebook to Add Child Protection Button
Harriet Harman says MPs are "taking action" to make Facebook adopt the UK's CEOP online protection scheme for children - although the site has argued it is not needed
Labour’s deputy leader Harriet Harman told the house of Commons that ministers would be urging Facebook to adopt a child protection button designed for the UK - even though Facebook argues that it would be counter productive.
“We need swift action on this,” said Ms Harman, when an MP raised the question of Facebook during questions on future Commons business, according to a Press Association report. Labour’s Madeline Moon asked Ms Harman whether the government can “ensure that Facebook uses the CEOP alert”- a button which allows children to report suspicious activity directly to the Child Exploitation and Online Protection centre (CEOP), which was promoted in a government online safty campaign last month.
“I would strongly agree with you and this is the view of ministers as well, not least the Home Secretary (Alan Johnson). Action is being taken in this respect,” Ms Harman said - clearly implying that ministers would be getting in touch with Facebook to urge the use of the CEOP button.
Although the button has been adopted by online sites Bebo and others, Facebook argues that it is a UK-centric tool which would not work well alongside the reporting buttons it already has: “The safety of Facebook users is our top priority,” said a Facebook spokesperson. “We have reporting buttons on every page and continue to invest heavily in creating the most robust reporting system to support our 400 million users. We work closely with police forces in the UK and around the world and have trained staff on two continents giving 24 hour support in 70 languages.”
The site has maintained this stance since November, when it told the BBC that such buttons have actually proved ineffective when it tried them in the past, actually decreasing the number of abuse reports.
The issue of children’s safety online has been in the spotlight over the past week, after Peter Chapman (33) was convicted for murdering 17-year-old Ashleigh Hall. Chapman had got in touch with Hall via Facebook, leading to criticisms from some senior police officers over the dangers of social networking sites.
This was closely followed by allegations from the Daily Mail that teenagers on Facebook were approached “in seconds” by men asking for sexual favours. The allegation was withdrawn, but Facebook is considering suing the Daily Mail.
The Home Secretary is quoted in another Daily Mail article as saying that he “can’t see any reason why” the site does not have the Ceop button - the lack of which is “putting children at risk” according to the Mail.
Facebook has faced criticism from several directions about its attitude to online protection. Its founder Mark Zuckerberg suggested that users do not expecct privacy in online services.
On a smaller scale, some users have expressed doubts about the value of Facebook’s social interaction, prompting some religious users to “give up Facebook for Lent“.
Online Censorship More Sophisticated, Report Finds
Repressive regimes have stepped up efforts to censor the Internet and jail dissidents, Reporters Without Borders said in a study out Thursday.
China, Iran and Tunisia, which are on the group's "Enemies of the Internet" list, got more sophisticated at censorship and overcoming dissidents' attempts to communicate online, said Reporters Without Borders' Washington director, Clothilde Le Coz.
Meanwhile, Turkey and Russia found themselves on the group's "Under Surveillance" list of nations in danger of making the main enemies list.
Although Zimbabwe and Yemen dropped from the surveillance list, that was primarily because the Internet isn't used much in either country, rather than because of changes by the governments, Le Coz said.
Reporters Without Borders issued the third annual report ahead of Friday's World Day Against Cyber Censorship, an awareness campaign organized by the Paris-based group.
Le Coz said repressive regimes seemed to be winning a technological tussle with dissidents who try to circumvent online restrictions. She said some U.S. technology companies have been aiding the regimes by selling equipment and filtering software that could be used for such censorship.
One sign of hope: Google's public threats to leave China if the Silicon Valley powerhouse cannot reach a deal that lets the company offer search results there free of censorship.
"A year from now, I would be happy to tell you that Google opened the path," Le Coz said. "That's a bit idealistic."
In fact, she worries that more democratic nations would be joining the list.
Australia is among the countries under the group's surveillance for its efforts to require Internet service providers to block sites that the government deems inappropriate, including child pornography and instructions in crime or drug use. Critics are worried that the list of sites to be blocked and the reasons for doing so would be kept secret, opening the possibility that legitimate sites might be censored.
Govt Internet Filter Going Live is Sad Day for NZ
The Department of Internal Affairs has admitted that the internet filter is now operational and is already being used by ISPs Maxnet and Watchdog. It appears that Maxnet have not told their customers that they are diverting some of their internet traffic to the government system to be filtered.
Thomas Beagle, spokesperson for Tech Liberty, “We’re very disappointed that the filter is now running, it’s a sad day for the New Zealand internet.”
The DIA refuses to say which other ISPs will be joining the filter, claiming the right to negotiate in secret. Tech Liberty understands that Telstra Clear, Telecom and Vodafone have said they will implement the filter, with Orcon, Slingshot and Natcom saying that they won’t.
David Zanetti, technical spokesperson for Tech Liberty, “We fear that the filter will reduce the stability of the internet in New Zealand. It is a single point of failure, introduces a new and very tempting target for hackers, and by diverting traffic will cause issues with modern internet applications.”
Tech Liberty is concerned about the expansion of government powers represented by the filter. It establishes the principle that the government can choose to arbitrarily set up a new censorship scheme and choose which material to block, with no reference to existing law. Even worse, the list of what is filtered is kept secret, in direct contrast to the rest of New Zealand’s censorship regime where the Chief Censor must publish decisions banning offensive material.
The US government has recently spoken out against government filtering of the internet, with Secretary of State Hilary Clinton saying that “Those who disrupt the free flow of information in our society, or any other, pose a threat to our economy, our government and our civil society.” She then said that the US is committed to helping people to circumvent government internet filtering.
About Tech Liberty Tech Liberty is dedicated to protecting people’s rights in the areas of the Internet and technology. We make submissions on public policy, help to educate people about their rights, and defend those whose rights are being infringed.
Computer Use Doesn't Make Kids Fat: Report
Children who spend long periods in front of the television run a far higher risk of being overweight than those spending a long time in front of computer, a new survey of Lund school children has shown.
The study was conducted by school nurse Pernilla Garmy, who reviewed the answers provided in a questionnaire sent out to all primary school children in the southern Swedish town.
"The results are conclusive," she told local newspaper Metro Skåne.
The study shows that the risk of being overweight is directly affected by whether there was a television in the room, whereas long periods spent in front of the computer had no bearing on a child's weight.
One theory for the survey results posits that using a computer demands more activity from a user -- who may be chatting or playing games -- than watching television, a passive exercise that lends itself to snacking.
Paging Dr. Benway
DIY Pixel Qi Kits
Mary Lou Jepsen
Just a quick note to say the DIY kits from our distributor will be available towards the end of Q2. We will be announcing with them prior to distrbution. Thanks for your patience.
One of the reasons I’m personally committed to doing this goes back to my One Laptop per Child experience and girls in a poor rural part of Nigeria who helped us test the early beta-laptop builds. In their school they had slanted desks bolted to benches with 4-5 kids per desk/bench combo. When any kid fidgeted or bumped all the laptops would fall on the concrete floors. The laptops were designed to be rugged and didn’t break usually, but in this early build one of the cables to the touchpad/keyboard was 1mm too short and could become “unseated”. This meant the keyboard and the touchpad would no longer work unless something was done.
Luckily: An 11 year old girl decided to open a laptop hospital. Unfortunately the boys really missed out here, because in this part of Nigeria “everyone knows” only girls work at hospitals, she eventually recruited girls as young as 5 to help out in the hospital. This group of girls armed with screwdrivers starting taking apart the laptops and reseating the cables. Sometimes they’d change out a screen, or a speaker. They learned about the hardware of their laptops. They got to see what was inside. They got better and better at fixing things by learning as they went.
Ministers of Education had a tough time believing that these girls could fix the hardware, so they would visit – to see it with their own eyes – and start thinking differently about maintenance of hardware. We kept preaching that ownership was the best way to assure maintenance.
Yet, most people are scared to change their laptop screen. It’s only slightly more difficult than changing a lightbuld: it’s basically 6 screws, pulling off a bezel, unconnecting the old screen and plugging this one in. That’s it. It’s a 5 minute operation.
Let's Talk About the 1995 NEWSWEEK Piece That Says the Internet Will Fail
What's the most wrong you've ever been?
I mean really wrong. Not, like, getting-the-capital-of-Illinois wrong. Not predicting-the-Mets-to-win-the-World-Series wrong. I am talking wrong wrong, a realm of inaccuracy known not even by Columbus (when he thought he'd reached the Indies) or the guys who thought New Coke was a good idea.
What I'm saying is that there's wrong ... and then there’s Clifford Stoll’s NEWSWEEK essay about the Internet from 1995.
Let's get this over with. Here is a list of things Stoll calls "baloney" on—each and every one of which has a thriving utility in 2010:
* interactive libraries
* multimedia classrooms
* electronic town meetings
* virtual communities
* taking a computer to the beach
* getting books and newspapers online
* e-commerce, online shopping, and e-payments
* booking airline tickets and restaurant reservations
Stoll also complains at length that it is nigh on impossible to use this Internet contraption to find the date of the Battle of Trafalgar. The headline—THE INTERNET? BAH!—reads as if Montgomery Burns was working the NEWSWEEK copy desk that night. And so on. You get the idea.
Most Americans are not in the habit of sending around 15-year-old NEWSWEEK columns, but they make an exception for Stoll. This is an essay that will not die—the only thing worse for a writer than an essay that no one remembers. Stoll's "Bah!" lives on in tweets—"a hilarious cane-waving Newsweek article from '95. Can't stop laughing"—and blog posts and never-ending e-mail chains. FW: FW: FW: FW: FW: fwd: fwd: Newsweek on why the internet will fail - bananas!! In March 2008, the piece received 3,663 Diggs. Decca Records didn't get this much heat for passing on the Beatles.
It's getting to be a little much. Our Mark Coatney, who is something of a living rebuttal to Stoll in that he mans NEWSWEEK's Twitter and Tumblr feeds all day, blogged about this last week, after seeing a NEWSWEEK/Internet/1995/morons tweet for the umpteenth time. "While this does crack us up," Coatney wrote, "... in many ways, Cliff Stoll wasn't wrong. The Internet really did suck then, and it really was a huckster’s paradise. But the fatal flaw in his argument was his assumption that it was never going to get any better." Today, undoubtedly, we all have beliefs about the future of the digital age that would seem hilarious when viewed from 2025.
Now, what does Stoll have to say about all of this? Oh, right, I can use the Internet to find out. The answer is that he is being a good sport. He saw his folly highlighted on Boing Boing last week, and contributed this comment:
Time To Start Taking The Internet Seriously
"In short: it's time to think about the Internet instead of just letting it happen."
Introduction: Our Algorithmic Culture
By John Brockman
Edge was in Munich in January for DLD 2010 and an Edge/DLD event entitled "Informavore" — a discussion featuring Frank Schirrmacher, Editor of the Feuilleton and Co-Publisher of Frankfurter Allgemeine Zeitung, Andrian Kreye, Feuilleton Editor of Sueddeutsche Zeitung, Munich; and Yale computer science visionary David Gelernter, who, in his 1991 book Mirror Worlds presented what's now called "cloud computing."
The intent of the panel was to discuss — for the benefit of a German audience — the import of the recent Frank Schirrmacher interview on Edge entitled "The Age of the Informavore." David Gelernter, who predicted the Web, and who first presented the idea of "the cloud", was the scientist on the panel along with Schirrmacher and Kreye, Feuilleton editors of the two leading German national newspapers, both distinguished intellectuals.
As a result of the panel, Schirrmacher has commissioned Gelernter to write a regular column for FAZ, which was inaugurated with this essay, published by FAZ in a German translation on March 1st ("Der Mann, der das 'World Wide Web' erst möglich gemacht hat.")
Those of us involved in communicating ideas need to re-think the Internet. Here at Edge, we are not immune to such considerations. We have to ask if we're kidding ourselves by publishing 10,000+ word pieces to be read by people who are limiting themselves to 3" ideas, i.e. the width of the screen of their iPhones and Blackberries.
Many of the people that desperately need to know, don't even know that they don't know. Book publishers, confronted by the innovation of technology companies, are in a state of panic. Instead of embracing the new digital reading devices as an exciting opportunity, the default response is to disadvantage authors. Television and cable networks are dumbfounded by the move of younger people to watch TV on their computers or cell-phones. Newspapers and magazine publishers continue to see their advertising model crumble and have no response other than buyouts.
Take a look at the photos from the recent Edge annual dinner and you will find the people who are re-writing global culture, and also changing your business, and, your head. What do Evan Williams (Twitter), Larry Page (Google), Tim Berners-Lee (World Wide Web Consortium), Sergey Brin (Google), Bill Joy (Sun), Salar Kamangar (Google), Keith Coleman (Google Gmail), Marissa Mayer (Google), Lori Park (Google), W. Daniel Hillis (Applied Minds), Nathan Myhrvold (Intellectual Ventures), Dave Morin (formerly Facebook), Michael Tchao (Apple iPad), Tony Fadell (Apple/iPod), Jeff Skoll (formerly eBay), Chad Hurley (YouTube), Bill Gates (Microsoft), Jeff Bezos (Amazon) have in common? All are software engineers or scientists.
So what's the point? It's a culture. Call it the algorithmic culture. To get it, you need to be part of it, you need to come out of it. Otherwise, you spend the rest of your life dancing to the tune of other people's code. Just look at Europe where the idea of competition in the Internet space appears to focus on litigation, legislation, regulation, and criminalization.
The Internet is no topic like cellphones or videogame platforms or artificial intelligence; it's a topic like education. It's that big. Therefore beware: to become a teacher, master some topic you can teach; don't go to Education School and master nothing. To work on the Internet, master some part of the Internet: engineering, software, computer science, communication theory; economics or business; literature or design. Don't go to Internet School and master nothing. There are brilliant, admirable people at Internet institutes. But if these institutes have the same effect on the Internet that education schools have had on education, they will be a disaster.
It is just about 10 years since Edge and FAZ co-published Gelernter's June, 2000 manifesto, "A Second Coming", which was widely read and debated. I expect nothing less for this powerful and provocative piece by one of the leading visionaries of the cybersphere. I welcome comments and look forward to a rich Reality Club discussion.
1. No moment in technology history has ever been more exciting or dangerous than now. The Internet is like a new computer running a flashy, exciting demo. We have been entranced by this demo for fifteen years. But now it is time to get to work, and make the Internet do what we want it to.
2. One symptom of current problems is the fundamental puzzle of the Internet. (Algebra and calculus have fundamental theorems; the Internet has a fundamental puzzle.) If this is the information age, what are we so well-informed about? What do our children know that our parents didn't? (Yes they know how to work their computers, but that's easy compared to — say — driving a car.) I'll return to this puzzle.
3. Here is a simpler puzzle, with an obvious solution. Wherever computers exist, nearly everyone who writes uses a word processor. The word processor is one of history's most successful inventions. Most people call it not just useful but indispensable. Granted that the word processor is indeed indispensable, what good has it done? We say we can't do without it; but if we had to give it up, what difference would it make? Have word processors improved the quality of modern writing? What has the indispensable word processor accomplished?
4. It has increased not the quality but the quantity of our writing — "our" meaning society's as a whole. The Internet for its part has increased not the quality but the quantity of the information we see. Increasing quantity is easier than improving quality. Instead of letting the Internet solve the easy problems, it's time we got it to solve the important ones.
5. Consider Web search, for example. Modern search engines combine the functions of libraries and business directories on a global scale, in a flash: a lightning bolt of brilliant engineering. These search engines are indispensable — just like word processors. But they solve an easy problem. It has always been harder to find the right person than the right fact. Human experience and expertise are the most valuable resources on the Internet — if we could find them. Using a search engine to find (or be found by) the right person is a harder, more subtle problem than ordinary Internet search. Small pieces of the problem have been attacked; in the future we will solve this hard problem in general, instead of being satisfied with windfalls and the lowest-hanging fruit on the technology tree.
6. We know that the Internet creates "information overload," a problem with two parts: increasing number of information sources and increasing information flow per source. The first part is harder: it's more difficult to understand five people speaking simultaneously than one person talking fast — especially if you can tell the one person to stop temporarily, or go back and repeat. Integrating multiple information sources is crucial to solving information overload. Blogs and other anthology-sites integrate information from many sources. But we won't be able to solve the overload problem until each Internet user can choose for himself what sources to integrate, and can add to this mix the most important source of all: his own personal information — his email and other messages, reminders and documents of all sorts. To accomplish this, we merely need to turn the whole Cybersphere on its side, so that time instead of space is the main axis.
7. In the last paragraph I wrote "each Internet user"; but users of any computing system ought to have a simple, uniform operating system and interface. Users of the Internet still don't.
8. Practical business: who will win the tug of war between private machines and the Cloud? Will you store your personal information on your own personal machines, or on nameless servers far away in the Cloud, or both? Answer: in the Cloud. The Cloud (or the Internet Operating System, IOS — "Cloud 1.0") will take charge of your personal machines. It will move the information you need at any given moment onto your own cellphone, laptop, pad, pod — but will always keep charge of the master copy. When you make changes to any document, the changes will be reflected immediately in the Cloud. Many parts of this service are available already.
9. Because your information will live in the Cloud and only make quick visits to your personal machines, all your machines will share the same information automatically; a new machine will be useful the instant you switch it on; a lost or stolen machine won't matter — the information it contains will evaporate instantly. The Cloud will take care that your information is safely encrypted, distributed and secure.
10. Practical business: small computers have been the center of attention lately, and this has been the decade of the cellphone. Small devices will continue to thrive, but one of the most important new developments in equipment will be at the other end of the size spectrum. In offices and at home, people will increasingly abandon conventional desktop and laptop machines for large screen computers. You will sit perhaps seven feet away from the screen, in a comfortable chair, with the keyboard and controls in your lap. Work will be easier and eyestrain (which is important) will decrease. Large screen computers will change the shape of office buildings and create their own new architecture. Office workers will spend much of their time in large-screen computer modules that are smaller than most private offices today, but more comfortable. A building designed around large-screen computers might have modules (for example) stacked in many levels around a central court; the column whose walls consist of stacked modules might spiral helically as it rises….
11. The Internet will never create a new economy based on voluntary instead of paid work — but it can help create the best economy in history, where new markets (a free market in education, for example) change the world. Good news! — the Net will destroy the university as we know it (except for a few unusually prestigious or beautiful campuses). The net will never become a mind, but can help us change our ways of thinking and change, for the better, the spirit of the age. This moment is also dangerous: virtual universities are good but virtual nations, for example, are not. Virtual nations — whose members can live anywhere, united by the Internet — threaten to shatter mankind like glass into razor-sharp fragments that draw blood. We know what virtual nations can be like: Al Qaeda is one of the first.
12. In short: it's time to think about the Internet instead of just letting it happen.
13. The traditional web site is static, but the Internet specializes in flowing, changing information. The "velocity of information" is important — not just the facts but their rate and direction of flow. Today's typical website is like a stained glass window, many small panels leaded together. There is no good way to change stained glass, and no one expects it to change. So it's not surprising that the Internet is now being overtaken by a different kind of cyberstructure.
14. The structure called a cyberstream or lifestream is better suited to the Internet than a conventional website because it shows information-in-motion, a rushing flow of fresh information instead of a stagnant pool.
15. Every month, more and more information surges through the Cybersphere in lifestreams — some called blogs, "feeds," "activity streams," "event streams," Twitter streams. All these streams are specialized examples of the cyberstructure we called a lifestream in the mid-1990s: a stream made of all sorts of digital documents, arranged by time of creation or arrival, changing in realtime; a stream you can focus and thus turn into a different stream; a stream with a past, present and future. The future flows through the present into the past at the speed of time.
16. Your own information — all your communications, documents, photos, videos — including "cross network" information — phone calls, voice messages, text messages — will be stored in a lifestream in the Cloud.
17. There is no clear way to blend two standard websites together, but it's obvious how to blend two streams. You simply shuffle them together like two decks of cards, maintaining time-order — putting the earlier document first. Blending is important because we must be able to add and subtract in the Cybersphere. We add streams together by blending them. Because it's easy to blend any group of streams, it's easy to integrate stream-structured sites so we can treat the group as a unit, not as many separate points of activity; and integration is important to solving the information overload problem. We subtract streams by searching or focusing. Searching a stream for "snow" means that I subtract every stream-element that doesn't deal with snow. Subtracting the "not snow" stream from the mainstream yields a "snow" stream. Blending streams and searching them are the addition and subtraction of the new Cybersphere.
18. Nearly all flowing, changing information on the Internet will move through streams. You will be able to gather and blend together all the streams that interest you. Streams of world news or news about your friends, streams that describe prices or auctions or new findings in any field, or traffic, weather, markets — they will all be gathered and blended into one stream. Then your own personal lifestream will be added. The result is your mainstream: different from all others; a fast-moving river of all the digital information you care about.
19. You can turn a knob and slow down your mainstream: less-important stream-elements will flow past invisibly and won't distract you, but will remain in the stream and appear when you search for them. You can rewind your lifestream and review the past. If an important-looking document or message sails past and you have no time to deal with it now, you can copy the document or message into the future (copy it to "this evening at 10," say); when the future arrives, the document appears again. You can turn a different knob to make your fast-flowing stream spread out into several slower streams, if you have space enough on your screen to watch them all. And you can gather those separate streams back together whenever you like.
20. Sometimes you will want to listen to your stream instead of watching it (perhaps while you're driving, or sitting through a boring meeting or lecture). Software will read text aloud, and eventually will describe pictures too. When you watch your high-definition TV, you might let the stream trickle down one side of the screen, so you can stay in touch with your life.
21. It's simple for the software that runs your Lifestream to learn about your habits; simple to figure out which emails (for example), or social updates, or news stories, you are likely to find important and interesting. It will therefore be easy for software to highlight the stream elements you're apt to find important, and let the others rush by quickly without drawing your attention.
22. Lifestreams will make it even easier than it is today for software to learn the details of your life and predict your future actions. The potential damage to privacy is too large and important a problem to discuss here. Briefly, the question is whether the crushing blows to privacy from many sources over the last few decades will make us crumple and surrender, or fight harder to protect what remains.
23. The Internet's future is not Web 2.0 or 200.0 but the post-Web, where time instead of space is the organizing principle — instead of many stained-glass windows, instead of information laid out in space, like vegetables at a market — the Net will be many streams of information flowing through time. The Cybersphere as a whole equals every stream in the Internet blended together: the whole world telling its own story. (But the world's own story is full of private information — and so, unfortunately, no human being is allowed to hear it.)
24. Ten years ago I wrote about the growing importance of lifestreams. Last year, the technology journalist Erik Schonfeld asked in a news story whether a certain large company "can take the central communication model of social networks — the lifestream — and pour it back into its IM clients." (The story was headlined "Bebo Zeroes In On Lifestreaming For The Masses.") "Lifestreaming" is a word that is now used generically, and streams are all over the net. Ten years ago I described the computer of the future as a "scooped-out hole in the beach where information from the Cybersphere wells up like seawater." Today the spread of wireless coverage and the growing power of mobile devices means that information does indeed well up almost anywhere you switch on your laptop or cellphone; and "anywhere" will be true before long.
25. From which we learn that (a) making correct predictions about the technology future is easy, and (b) writers should remember to put their predictions in suitably poetic language, so it's easy to say they were right.
25. If we think of time as orthogonal to space, a stream-based, time-based Cybersphere is the traditional Internet flipped on its side in digital space-time. The traditional web-shaped Internet consists (in effect) of many flat panels chaotically connected. Instead of flat sites, where information is arranged in space, we want deep sites that are slices of time. When we look at such a site onscreen, it's natural to imagine the past extending into (or beyond) the screen, and the future extending forward in front of the screen; the future flows towards the screen, into the screen and then deeper into the space beyond the screen.
26. The Internet is no topic like cellphones or videogame platforms or artificial intelligence; it's a topic like education. It's that big. Therefore beware: to become a teacher, master some topic you can teach; don't go to Education School and master nothing. To work on the Internet, master some part of the Internet: engineering, software, computer science, communication theory; economics or business; literature or design. Don't go to Internet School and master nothing. There are brilliant, admirable people at Internet institutes. But if these institutes have the same effect on the Internet that education schools have had on education, they will be a disaster.
27. Returning to our fundamental riddle: if this is the information age, what do our children know that our parents didn't? The answer is "now." They know about now.
28. Internet culture is a culture of nowness. The Internet tells you what your friends are doing and the world news now, the state of the shops and markets and weather now, public opinion, trends and fashions now. The Internet connects each of us to countless sites right now — to many different places at one moment in time.
29. Nowness is one of the most important cultural phenomena of the modern age: the western world's attention shifted gradually from the deep but narrow domain of one family or village and its history to the (broader but shallower) domains of the larger community, the nation, the world. The cult of celebrity, the importance of opinion polls, the decline in the teaching and learning of history, the uniformity of opinions and attitudes in academia and other educated elites — they are all part of one phenomenon. Nowness ignores all other moments but this. In the ultimate Internet culture, flooded in nowness like a piazza flooded in sea water, drenched in a tropical downpour of nowness, everyone talks alike, dresses alike, thinks alike.
30. As I wrote at the start of this piece, no moment in technology history has ever been more exciting or dangerous than "now." As we learn more about now, we know less about then. The Internet increases the supply of information hugely, but the capacity of the human mind not at all. (Some scientists talk about artificially increasing the power of minds and memories — but then they are no longer talking about human beings. They are discussing some new species we know nothing about. And in this field, we would be fools to doubt our own ignorance.) The effect of nowness resembles the effect of light pollution in large cities, which makes it impossible to see the stars. A flood of information about the present shuts out the past.
31. But — the Internet could be the most powerful device ever invented for understanding the past, and the texture of time. Once we understand the inherent bias in an instrument, we can correct it. The Internet has a large bias in favor of now. Using lifestreams (which arrange information in time instead of space), historians can assemble, argue about and gradually refine timelines of historical fact. Such timelines are not history, but they are the raw material of history. They will be bitterly debated and disputed — but it will be easy to compare two different versions (and the evidence that supports them) side-by-side. Images, videos and text will accumulate around such streams. Eventually they will become shared cultural monuments in the Cybersphere.
32. Before long, all personal, familial and institutional histories will take visible form in streams. A lifestream is tangible time: as life flashes past on waterskis across time's ocean, a lifestream is the wake left in its trail. Dew crystallizes out of the air along cool surfaces; streams crystallize out of the Cybersphere along veins of time. As streams begin to trickle and then rush through the spring thaw in the Cybersphere, our obsession with "nowness" will recede, the dykes will be repaired and we will clean up the damaged piazza of modern civilization.
33. Anyone who has ever looked through a telescope at the moon close-up has seen it drift out of sight as the earth slowly spins. In the future, the Cybersphere will drift too: if you have investigated one topic long enough for your attention to grow slack and your mind to wander, the Net will respond by letting itself drift slowly into new topics, new domain: not ones with obvious connections to the topic you've been studying; new topics that have deep emotional connections to the previous ones, connections that will no doubt make sense only to you.
34. The Internet today is, after all, a machine for reinforcing our prejudices. The wider the selection of information, the more finicky we can be about choosing just what we like and ignoring the rest. On the Net we have the satisfaction of reading only opinions we already agree with, only facts (or alleged facts) we already know. You might read ten stories about ten different topics in a traditional newspaper; on the net, many people spend that same amount of time reading ten stories about the same topic. But again, once we understand the inherent bias in an instrument, we can correct it. One of the hardest, most fascinating problems of this cyber-century is how to add "drift" to the net, so that your view sometimes wanders (as your mind wanders when you're tired) into places you hadn't planned to go. Touching the machine brings the original topic back. We need help overcoming rationality sometimes, and allowing our thoughts to wander and metamorphose as they do in sleep.
35. Pushing the multi-mega-ton jumbo jet of human thought-style backwards a few inches, back in the direction of dream logic, might be the Internet's greatest accomplishment. The best is yet to be.
Former NSA Tech Chief: I Don't Trust the Cloud
RSA Conference hears warnings about trusting cloud services
The former National Security Agency technical director told the RSA Conference he doesn't trust cloud services and bluntly admonished vendors for leaving software vulnerabilities unpatched sometimes for years.
Speaking for himself and not the agency, Brian Snow says that cloud infrastructure can deliver services that customers can access securely, but the shared nature of the cloud leaves doubts about attack channels through other users in the cloud. "You don't know what else is cuddling up next to it," he says.
The Cloud Security Survival Guide
Snow was speaking as a member of the annual cryptographers panel at RSA Conference. Another panelist said he doesn't trust clouds either, but his reluctance was based upon worry about what NSA might be up to.
Adi Shamir a computer science professor at Israel's Weizmann Institute of Science and also the "S" in the RSA encryption algorithm, warned against trusting cloud computing services for the same reason he suspects the confidentiality of transmissions over telecom networks and the Internet. He says the phone systems are secure, but that major crossroads in their networks are tapped by the NSA. "There's a pipe out of the back of an office at AT&T in San Francisco to NSA," he said.
Government access to assets entrusted to public cloud providers will be similar, he says. He suspects in some cases cloud providers will be companies influenced by government spy agencies, similar to the way Crypto AG security gear gave the NSA backdoor access to encrypted messages sent by foreign governments that had bought the gear. "Please don't use Crypto AG," he said.
On another topic, Snow said many commercial applications and security products contain known flaws or shortcomings that users accept without understanding them or analyzing them thoroughly. That trust is similar to the trust investors had in unsound Wall Street derivative investment products, he said. Just as the country's financial markets melted down last year, he said network security could face a "trust-bubble meltdown".
He alluded to a 17-year-old Microsoft vulnerability that went unpatched. Fixing such problems before they are exploited gives vendors a commercial advantage, so they should do so. "Fix vulnerabilities before you first smell an attack," he said. "End of message."
Also during the panel, Snow acknowledged that cryptographers for the NSA have been losing ground to their counterparts in universities and commercial security vendors for 20 years but still maintain the upper hand in the sophistication of their crypto schemes and in their ability to decrypt.
"I do believe NSA is still ahead, but not by much -- a handful of years," said Snow, the former technical director for the agency. "I think we've got the edge still."
He said that in the 1980s there was a huge gap between what the NSA could do and what commercial encryption technology was capable of. "Now we are very close together and moving very slowly forward in a mature field," Snow said.
The NSA has a deep staff of Ph.D. mathematicians and other cryptographic experts to work on securing traffic and breaking codes, and also has another key advantage. "We cheat. We get to read what [academics] publish. We do not publish what we research," he said.
Whitfield Diffie -- the Diffie in Diffie-Hellman key exchange -- said the NSA lead might have to do with the fact that some cryptography problems are out of bounds for academics, such as nuclear command and control platforms. "It would be illegal, expensive and frustrating to do," said Diffie, who sat on the cryptographers' panel. Any work done privately would be immediately be classified and the researchers would be unable to discuss it publicly or claim credit, he said.
Plus the demands of commercial cryptography don't allow for the thoroughness of refinement that is the hallmark of NSA work, he said. There are practical issues -- such as developing products quickly that can be sold to business as valuable assets -- that NSA doesn't face.
Snow's claim of NSA superiority seemed to rankle. He noted that when the titles of papers in NSA technical journals were declassified up to 1983, there were none that included public key encryption. "That demonstrates that NSA was behind," Shamir said.
But Snow said that perhaps the topic was written about, only under another name. When technologies are developed separately in parallel, the developers don't necessarily use the same terms for them, he said.
Internet Access 'a Human Right'
Almost four in five people around the world believe that access to the internet is a fundamental right, a poll for the BBC World Service suggests.
The survey - of more than 27,000 adults across 26 countries - found strong support for net access on both sides of the digital divide.
Countries such as Finland and Estonia have already ruled that access is a human right for their citizens.
International bodies such as the UN are also pushing for universal net access.
"The right to communicate cannot be ignored," Dr Hamadoun Toure, secretary-general of the International Telecommunication Union (ITU), told BBC News.
"The internet is the most powerful potential source of enlightenment ever created."
He said that governments must "regard the internet as basic infrastructure - just like roads, waste and water".
"We have entered the knowledge society and everyone must have access to participate."
The survey also revealed divisions on the question of government oversight of some aspects of the net.
Web users questioned in South Korea and Nigeria felt strongly that governments should never be involved in regulation of the internet. However, a majority of those in China and the many European countries disagreed.
In the UK, for example, 55% believed that there was a case for some government regulation of the internet.
The finding comes as the UK government tries to push through its controversial Digital Economy Bill.
As well as promising to deliver universal broadband in the UK by 2012, the bill could also see a so-called "three strikes rule" become law.
This rule would give regulators new powers to disconnect or slow down the net connections of persistent illegal file-sharers. Other countries, such as France, are also considering similar laws.
Recently, the EU adopted an internet freedom provision, stating that any measures taken by member states that may affect citizen's access to or use of the internet "must respect the fundamental rights and freedoms of citizens".
In particular, it states that EU citizens are entitled to a "fair and impartial procedure" before any measures can be taken to limit their net access.
The EU is also committed to providing universal access to broadband. However, like many areas around the world the region is grappling with how to deliver high-speed net access to rural areas where the market is reluctant to go.
Analysts say that is a problem many countries will increasingly have to deal with as citizens demand access to the net.
The BBC survey found that 87% of internet users felt internet access should be the "fundamental right of all people".
More than 70% of non-users felt that they should have access to the net.
Overall, almost 79% of those questioned said they either strongly agreed or somewhat agreed with the description of the internet as a fundamental right - whether they currently had access or not.
Countries such as Mexico, Brazil and Turkey most strongly support the idea of net access as a right, the survey found.
More than 90% of those surveyed in Turkey, for example, stated that internet access is a fundamental right - more than those in any other European Country.
South Korea - the most wired country on Earth - had the greatest majority of people (96%) who believed that net access was a fundamental right. Nearly all of the country's citizens already enjoy high-speed net access.
The survey also revealed that the internet is rapidly becoming a vital part of many people's lives in a diverse range of nations.
In Japan, Mexico and Russia around three-quarters of respondents said they could not cope without it.
Most of those questioned also said that they believed the web had a positive impact, with nearly four in five saying it had brought them greater freedom.
However, many web users also expressed concerns. The dangers of fraud, the ease of access to violent and explicit content and worries over privacy were the most concerning aspects for those questioned.
A majority of users in Japan, South Korea and Germany felt that they could not express their opinions safely online, although in Nigeria, India and Ghana there was much more confidence about speaking out.
The Dark Side of the Web
Google sees only a fraction of the content that appears on the internet. Stuart Andrews finds out what's lurking in the deep web
When Google indexes so many billions of web pages that it doesn’t even bother listing the number any more, it’s hard to imagine that much lies beyond its far-reaching tentacles.
Beneath, however, lies an online world that few know exists. It’s a realm of huge, untapped reserves of valuable information containing sprawling databases, hidden websites and murky forums. It’s a world where academics and researchers might find the data required to solve some of mankind’s biggest problems, but also where criminal syndicates operate, and terrorist handbooks and child pornography are freely distributed.
At the same time, the underground web is the best hope for those who want to escape the bonds of totalitarian state censorship, and share their ideas or experiences with the outside world.
Interested? You’re not alone. The deep web and its “darknets” are a new battleground for those who want to uphold the right to privacy online, and those who feel that rights need to be sacrificed for the safety of society. The deep web is also the new frontier for those who want to rival Google in the field of search. Take a journey with us to the other side of the internet.
Deep webs, the dark web and darknets
The first thing to grasp is that, while the elements that make up this other web have aspects in common, we’re not talking about a single, unified entity. Those in the know will often talk in terms of the deep or invisible web, darknets and the dark web, and you might think these are all the same thing. In fact, they’re separate phenomena, albeit linked by common themes, properties or interests.
The deep web isn’t half as strange or sinister as it sounds. In computer-science speak, it refers to those portions of the web that, for whatever reason, have been invisible to conventional search engines such as Google.
The majority of this deep web is made up of dynamically created pages and database entries that are accessible only through manual completion of an HTML form. A smaller proportion has been accidentally or purposefully made inaccessible to Google’s crawlers, while other areas sit behind password-protected or subscription-only sites.
Make no mistake, the deep web is huge. Michael Bergman’s pioneering 2001 study, The Deep Web: Surfacing Hidden Value, estimated that it accounted for 7,500TB of data at a time when search engines could index only 19.
Even the more conservative estimates in a 2007 paper written by Google’s Jayant Madhavan, Alon Halevy and colleagues, suggests that there are more than 25 million different sources of deep web content, many of which are huge repositories.
“There is a prevailing sense in the database community that we missed the boat with the WWW,” the Google paper concluded. “The over-arching message of this paper is that a second boat is here, with staggering volumes of structured data, and that boat should be ours.”
Treasures of the deep
“There’s a lot of legitimate and valuable content in the deep web,” said Dr Juliana Freire, the leader of a University of Utah project, DeepPeep, which aims to make deep web content more accessible.
“For example, there are several scientific data sets (such as the Sloan Digital Sky Survey and the Center for Coastal Margin Observation & Prediction), documents and databases, and these are useful to society and have many important applications.”
For Freire, exposing this data and giving researchers the tools to share and analyse it could be a key step for the evolution of science. DeepPeep is far from alone. Next-generation search engines such as Kosmix and info-driven harvesters such as BrightPlanet are working hard to pull data from the deep, while Google now has its own automated deep web search program in place.
There’s nothing necessarily secretive about the majority of this hidden content. When asked if the deep web harbours criminal or illicit activities, Dr Freire explains that “underworld” content is just as likely to be found on the “surface web”, and describes the deep web as “a more benign place” than some imagine. There are, however, areas that are more intentionally secretive, and this is where the deep becomes the dark.
Liam O Murchu, a security expert at Symantec’s Security Technology and Response team (STAR), believes there are three tiers of criminal operating online. The least serious, and most common, will operate in plain sight, on forums that can be found with a conventional search engine.
Beyond this, there are more serious – and paranoid – cybercriminals who “may only work in environments that they consider secure, for example, invite-only forums or secure private chat channels”. These forums will be “harder to find, often by word of mouth in other forums, or by invitation only or via ‘vetting’ and will not be indexed in search engines”. For a higher level of secrecy, however, there’s the third option: the darknet.
Exploring the anonymous web
Often associated with small file-sharing networks, the term darknet refers to any closed, private network that operates on top of the more conventional internet protocols. To join these hidden internets, all you need to do is install a program, such as Freenet or I2P, and browse away, secure in the knowledge that you’re almost impossible to trace.
Freenet is effectively a shadow of the web, with its own sites, forums and email services. A related service, TOR (The Onion Router), provides tools to set up hidden services, including websites, which will be anonymous within TOR and inaccessible from the outside.
Technically, these applications are ingenious. Freenet operates as a network of decentralised nodes, with each system on the network contributing bandwidth.
Since Freenet sites don’t sit on servers, but on data stores spread throughout the network, they can’t be taken down, and because each communication between one computer and another is routed through other nodes, with each one only “knowing” the address of the next node and that of the last, Freenet’s users can maintain high levels of anonymity.
On Freenet, nobody knows who you are, or what you’re looking at. Each system also contributes hard disk space, which is occupied by a data cache containing chunks of heavily encrypted data that the program can reassemble into Freenet forums and sites.
A trip through Freenet can be unsettling. It isn’t hard to find sites offering hard-core porn or such charming tomes as The Terrorist’s Handbook, Arson Around with Auntie ALF and the Mujahideen Poisons Handbook, along with copyrighted software, video and music to download.
And while we didn’t come across any child pornography during our time on Freenet (for obvious reasons, we didn’t look), it’s widely acknowledged that it can be found.
Freenet was the brainchild of a young Irish computer scientist, Ian Clarke, who came up with the idea during his studies at the University of Edinburgh in the mid-1990s. He wanted to “build a communication tool that would realise the things that a lot of people thought the internet was – a place where you could communicate without being watched, and where people could be anonymous if they wanted to be”.
Built by a global team of developers, more than two million people have downloaded Freenet, and the network has up to 10,000 concurrent users at peak times. Clarke has evidence that Freenet has been distributed in heavily censored regions such as China, and that it’s used as a vehicle for free speech and safe communication.
But does this justify its use as a vehicle for child porn or inflammatory material? “The post is used more widely by paedophiles than Freenet is, yet nobody would talk seriously about shutting down the Royal Mail,” Clarke retorts. “While there will be content, such as child pornography, that we wish didn’t exist, we feel that the benefits, such as the freedom to communicate, that are provided by Freenet greatly outweigh the risks.”
Steven J Murdoch, a security specialist at the University of Cambridge and a member of the TOR project, would doubtless agree. By bouncing communications through a distributed network of relays, TOR both hides the source of your internet traffic – your IP address – and the destination: the site you’re visiting.
Like Freenet, TOR is used by dissidents living under oppressive regimes to counteract IP-based censorship and to preserve their anonymity. It’s also used by law-enforcement agencies, journalists and those – such as corporate whistleblowers or abused wives talking to a support group – who need to cover their tracks.
The application is easy to download, and can be switched on with nothing more than a browser plugin.
Like Ian Clarke, Murdoch doesn’t shirk from the accusation that TOR can be used for illicit purposes. As with any technology, “bad people will use it, and TOR and other anonymous communication networks are really no exception in this regard”.
For Murdoch, the overall benefit to society is greater, however, “not only because the bad users are a small proportion, but also because the people who are willing to break the law already have the ability to get reasonable anonymous communications”.
It’s a view echoed by Symantec’s Liam O Murchu. “One property that all cybercriminals desire is anonymity online. Then, even if their activity is monitored, their identity still remains hidden.” However, he adds that, “this doesn’t mean that closed networks should be banned, of course, because there are perfectly legitimate reasons for legal groups to use them”.
There’s another issue with services such as Freenet, I2P and TOR that might make some users uncomfortable: as the whole technology relies on routing traffic through the various nodes on the network, your system and your internet connection will inevitably be used to transmit content – albeit in an unreadable and encrypted form – that you might find objectionable.
Worse still, Freenet will use the cache on your hard disk to store and serve it. “There is potential that, on your computer, there would be a hold of material like that sitting on your hard disk,” Ian Clarke explains, “but it would be in a form that you couldn’t access, even if you wanted to.
Certainly, for some people, they view that as a reason not to use Freenet, but a higher percentage realise that they’re providing a service to people, and that while, yes, some material like that will be on it, they can’t be held responsible.”
Policing the darknet
Do these applications and services make things more difficult for those investigating, say, child abuse? “To a degree,” a spokesperson for the UK’s Child Exploitation and Online Protection Centre (CEOP) told us. “We are aware of darknets, closed networks and closed forums, and how offenders are using them to communicate, but we can and we do use everything within our power to track down these people.”
It’s also worth pointing out that services such as TOR are in active use by law-enforcement and intelligence agencies. After all, it’s hard to investigate criminal networks if your IP address marks you as a cop.
Of course, it isn’t only ordinary criminals who have adopted the dark web. Terrorist organisations, too, are looking at it as an alternative to more easily monitored forms of internet communication. In 2007, Mark Burgess, director of the World Security Institute in Brussels, warned that “too much focus on closing down websites could also be counter-productive, since it likely forces terrorist websites to go underground to the so-called ‘deep’ or hidden web”.
It looks like this warning was justified. In an article written for the Combating Terrorism Center at the US Military Academy, West Point, Dr Manuel R Torres Soriano, professor of political science at the University of Seville, explains how Islamic terrorists have responded to the constant closure of propaganda websites by going underground.
They’ve adopted the practices of internet pirates by using file-hosting websites and forum software to maintain a web presence. Online terrorists have also been known to use TOR (its use is covered in some Jihadist FAQs), and have even created their own secrecy tools, such as the Mujahideen Secrets encryption tool.
However, the same techniques being used to mine the deep web for information can also make life harder for the terrorists. In 2007, a team led by Hsinchun Chen of the University of Arizona unveiled a project, DarkWeb, which now tracks terrorist activity across the surface and deep webs.
Where previously various counter-terrorist and law-enforcement agencies worked piecemeal on infiltrating and extracting information from websites and forums, DarkWeb is designed to root out terrorist groups and, in Chen’s words, “exhaustively collect their content”.
Over the past eight years, DarkWeb has collected close to two million files, documents, videos and messages, logged them and made them accessible to intelligence agencies and research bodies across the world. If these organisations want to investigate a threat or try out new theories, they no longer have to trawl the deep web themselves. Instead, “they can take a look at that collection and study it in a more systematic and data-driven manner,” said Chen.
As far as Chen is concerned, however, darknets and closed forums aren’t a major concern. “In general, 95 to 99% [of terrorist content], is really in the open area,” he explains. For terrorists, moving to “somewhere more secretive, like a darknet, isn’t so interesting because they won’t be able to recruit or touch or influence a large number of their target audience”.
The Internet Watch Foundation – the UK industry body charged with removing paedophile content from the web – makes a similar point about child abuse. “The majority of content still comes from big, commercial enterprises,” a spokesperson told us, “and they need to be out there on the open web.”
In fact, Dr Chen argues that terrorists are more likely to make use of familiar forms of communication. “We’ve done a lot of work in websites, forums and even on YouTube, and now we’re doing a lot of exploration in Second Life, because we need to monitor the more fluid and more dynamic web environments that are more difficult to look at.”
In short, there’s some dark stuff going on in the deep, dark portions of the web, but don’t get too hung up on it. After all, there’s plenty of equally dark stuff still floating on the surface.
Virgin Media to Trial Broadband Over Telegraph Poles
British cable operator Virgin Media is testing a new technology to deliver ultrafast broadband over telegraph poles which could allow it to extend its reach to another 1 million homes.
Virgin, which is looking to cement its advantage in delivering faster broadband over slower copper-based rivals, said it was launching a trial in a Berkshire village to deliver 50 Mb broadband along with its television service.
Virgin Media has already announced plans to extend its fiber optic network by 500,000 new homes. It currently passes 12.6 million homes with an underground network and said it had identified more than 1 million homes in parts of Britain which could benefit from deployment over telegraph poles.
"This unique trial will allow us to understand the possibilities of aerial deployment and may provide an exciting new way to extend next generation broadband services," Chief Executive Neil Berkett said.
Virgin said the government was considering a change in planning guidelines which would be needed to enable large scale overhead deployment.
It believes the combination of overhead poles and underground ducts could enable Virgin to roll-out next-generation digital services to rural communities, a key demand by the government.
(Reporting by Kate Holton; editing by Paul Sandle)
Opera Rolls Out Mobile Browser for Android
Opera Software unveiled on Thursday a version of its Mini mobile browser for use on cellphones running on Google's Android software.
Opera Mini is the world's most widely used browser on cellphones, ahead of Apple's iPhone browser, as Opera benefits from its wide offering across all key platforms, according to web statistics firm Statcounter.
Google's Android, introduced only in late 2008, won 4-5 percent of the smartphone market last year, and several top handset vendors like LG Electronics and Motorola are increasingly focusing on using it.
(Reporting by Tarmo Virki)
Is Google TV the Wave of the Future?
Google wants in on the TV business. How badly? It's not quite clear yet. For a year now, the search giant has been working on a new service that incorporates conventional TV and Internet content, reports The Wall Street Journal. It would run on TV set-top boxes that are connected to the Internet and use Google software. Users will be able to search through and create lineups of content from TV and web video services like YouTube. Though Google won't comment on the initiative, it has reportedly partnered with Dish Network, a satellite TV provider with about 14-million subscribers. Could Google TV takeoff? Here's what business and technology writers think:
* May Succeed Where Others Have Failed, writes Jessica Vascellaro at The Wall Street Journal: "Previous efforts to access Internet programming on TV sets have failed to catch on, partly because they required consumers to purchase extra hardware. By working directly with an operator like Dish and its hardware, Google could avoid the such issues."
* Very Promising, writes Sam Diaz at ZDNet: "Linking Web content and traditional TV programming into a searchable database for viewing is a smart idea. Eventually, TV programming will be funneled through the Internet instead of cable and satellite systems. Viewers will need a way to not only find programming but discover new ones, as well. I imagine search will be one of those new ways of discovering programming."
* Don't Hold Your Breath, writes Devindra Hardawar at VentureBeat "Even if all of the cable and satellite providers decide to jump on Google’s TV search service, it will likely be some time before we see it in our living rooms. Rolling out the service would require replacing current set-top boxes, which is something that traditionally happens at a snail’s pace."
* Never Gonna Work, writes Douglas McIntyre at Daily Finance: "Google is up against the fact that the majority of set-top boxes in the U.S. are distributed and controlled by major telecom companies, particularly AT&T and Verizon, which have fiber-to-the-home products, and the largest cable companies including Comcast and Time Warner Cable. It is not clear why these firms would want to do business with Google. They have their own advertising sales forces and would hardly want to join the search firm's online TV ad bidding service. Bidding services tend to drive down ad prices by allowing marketers to search for the cheapest rates."
* Lots of Competition Here, notes Daniel Ionescu at PC World: "Notably, Google tech rivals Microsoft and Apple have been making forays into the TV market for years with their own Internet-linked products such as the Windows Media Center and Apple TV. TiVo has also introduced last week a Web-enabled set-top box, which will bring cable programming and streaming content from Internet to TV screens."
Can a Mouse Cut the Cable?
THERE are certain timeless truths about people who don’t own a television, chief among them that they love to tell you they don’t own a television.
These days, they are still out there, but they have rivals in the realm of zealotry: people who do watch television — sometimes plenty of it — but don’t own a cable box.
Those who belong to this crowd are only too happy to remind you that they can watch most of what you watch, but don’t pay $60 a month or more for the privilege. They will explain gleefully how they (legally, for the most part) circumvent the cable companies. And they are becoming more voluble, as cable bills rise and technology improves.
“I tell everybody at my workplace about it all the time,” said Sundance McClure, a Web developer from Lakeside, Calif., who canceled his cable service nine months ago when the cost inched toward $100 a month.
Whenever colleagues talk about what they watch on TV, he said, “I always tell them, ‘Yeah, well, you know, we don’t have to pay for any of that.’ ”
Whether this makes Mr. McClure popular at the office does not seem to be the point. He gains pleasure from watching hours of television a day with the help of PlayOn, a $40 software download that aggregates Internet content and streams it to his Xbox 360, a game console attached to his TV.
It’s impossible to quantify how many people have ditched their cable service, and the cable providers are eager to paint them as a minority fringe. But with devices like Xbox and Apple TV and software like Boxee making it easy to stream Internet content to a television, mention the phenomenon in just about any gathering, and someone is likely to pipe up about his or her way of watching cable free. And, yes, by and large they do enjoy making other people jealous.
“The two questions I get asked most often are, one, ‘Do you really save that kind of money?’ and two, ‘Can you really see everything that you want?’ ” said Gerald Ortega, who has been proudly documenting his divorce from cable since July 2008 on his blog, Replace Television. “And the answer to both of those is yes.”
And no. Though you shouldn’t expect a cable-cord cutter to volunteer this information, a monthly bill is not the only thing you must do without. Because they command hefty advertising rates, few sporting events are streamed live. Premium channels like HBO and Showtime also keep their original programming behind a pay wall, since they rely largely on subscriber revenue. So a rabid football or “True Blood” fan who decides to dump cable had better have some very hospitable neighbors (preferably, ones with a premium package).
There are various and baffling reasons that some shows are available online and some are not (it has everything to do with contracts and money and nothing to do with technology). A show’s Web site will usually indicate whether episodes are available online or on DVD.
Charles Redell, a magazine reporter in Seattle, learned this the hard way when he invited friends over last year for an annual book swap on what turned out to be Super Bowl Sunday. Suddenly he wasn’t bragging about how he uses DVDs and Hulu.com to watch “Dexter” and “The Office” on his laptop.
“A couple of our friends are really into football, and we had no idea it was on,” he said. Fortunately, before any friendships were severed, an Internet search turned up a live, illegal feed of the game from China on Justin.TV, a video streaming site.
Nonsubscribers may also find themselves playing catch-up when news breaks. Although there are plenty of places to find the latest news online, it’s hard to find the sort of narrated news program that people expect when they turn on the television. “The election last November was a bit of a nail biter,” said Mr. Ortega, the blogger, “and Michael Jackson’s death kind of came out of nowhere.”
But it’s precisely this off-the-grid lifestyle that some people find so alluring. Lauren Reinhold, a stay-at-home mother in Lawrence, Kan., canceled her cable service largely to reduce the amount of advertising her children saw. She started a Facebook group for cord cutters to share tips and cheer one another on.
“We’re kind of pioneers,” she said. “The easy thing to do is to have cable, so you’ve got to do things a little bit differently and be a little bit tech-savvy.”
Social media can actually pose a problem for people without cable: because they must wait for shows to be available on the Web or DVD, they sometimes must avoid sites like Twitter and Facebook, which are minefields of episode spoilers.
“For certain things, like the ‘Mad Men’ finale, I just had to stay offline completely till I was able to watch it,” said Laura Barganier, a 24-year-old publicist on the Upper East Side who has gone without cable since January 2008. Still, she never misses an episode of “Gossip Girl” and has lately gotten into MTV’s “Jersey Shore,” both of which she watches on her computer anytime after the shows first appear on television.
Cable executives say they are not worried. Setting up a cable-free life is still too daunting for most people, since most of the work-arounds involve a lot more than just grabbing the remote (assuming you can find it under the sofa cushions).
“We don’t consider it a threat to our business,” said Maureen Huff, a spokeswoman for Time Warner Cable. “Being able to watch TV on the Internet is not new.”
Without question, the cost of watching television is going up: The average household cable bill in the United States hit $64 a month in 2009, up from $47.50 in 2004, according to Leichtman Research Group, which specializes in media research.
Even so, most cord cutters are “really just a bizarre breed of people, usually in New York or San Francisco, who don’t watch a lot of television in the first place,” said Bruce Leichtman, the president of the New Hampshire-based group.
The numbers back him up. The multichannel video industry, which includes cable and satellite providers, added 1.7 million new subscribers in the last three quarters of 2009 — not exactly boom times for discretionary income among Americans.
Some cord cutters think of themselves as taking power away from cable companies, much the way people without land lines have upended the telecommunications industry. But Alan Wurtzel, the president of research at NBC Universal, rejects the analogy.
“You can do everything you need to with a cellphone,” he said. “But the fact is you can’t duplicate a conventional television experience online.”
Mr. Ortega concedes that the life is not for everyone. “As an American, you grow very accustomed to sitting on the sofa and grabbing the remote and just flipping through channels,” he said. “And you can’t really do that when you’re Net-based.”
For some people, life without cable proves too difficult. Baratunde Thurston, a comedian and editor at The Onion, got rid of his cable service in 2008 to save money but resubscribed after he started hosting “Popular Science’s Future Of” on the Science Channel — a show that is not available online.
“I literally got cable again to watch myself on television,” he said, adding, “I feel like I’ve let the movement down.”
At the Last Minute, a Disney-Cablevision Truce
Brian Stelter and Brooks Barnes
The Oscar statuette became a pawn in a public brawl between the Walt Disney Company and Cablevision on Sunday, a dispute that prevented more than three million viewers from watching the beginning of the Academy Awards show until a tentative agreement restored the signal 14 minutes into the telecast.
The accord ended a high-stakes game of brinkmanship between the two companies that was the latest in a string of recent feuds between media giants over transmission fees.
Early Sunday morning, Disney pulled the signal on WABC, its flagship station in the New York area, as it pressed its case for payments from Cablevision. The pre-Oscar interviews, the red carpet show and the opening monologue by Alec Baldwin and Steve Martin were all blacked out.
But the two companies said they had finally found some common ground at 8:44 p.m. Eastern time, the same time that the signal for WABC was restored. Suddenly, Cablevision customers who had spent the day scrambling to watch the show saw the actress Penelope Cruz walking up on stage to present the first award.
Still, the deal came too late for many Cablevision subscribers, who had already made alternative plans. Some held impromptu viewing parties with satellite-equipped friends, some searched for bars showing the Oscars, and some tried in vain to watch via the Internet.
In separate statements, both sides heralded the end of the stalemate. Cablevision said: “We are very grateful to our customers for their support and pleased to welcome ABC back.” Disney said the deal “recognizes the fair value of ABC7.”
But people familiar with the deal said the terms were still quite tentative, and one ABC executive cautioned that “if Cablevision doesn’t honor the deal points, we’re right back where we started.”
Disney said it was restoring the WABC signal “while we work to complete our negotiations.” The companies did not disclose the terms of the deal.
Another person familiar with the deal said talks between the parties were rather vigorous until Saturday afternoon, when it became evident that WABC would stop transmitting to Cablevision. Talks resumed in earnest Sunday afternoon as the awards show swiftly approached, the person said.
The people spoke on the condition of anonymity because they were not authorized by the companies to comment on the record.
Most retransmission disputes come down to the wire, but few end with an actual blackout of a channel. Yet that is what happened for nearly 21 hours on Sunday, a demonstration of the hard-nosed tactics by both media companies.
Cable providers have long paid substantial fees to carry cable-only channels like ESPN and TNT, but have paid nothing to carry traditional broadcast channels — a situation that the cash-starved broadcast networks have wanted to change. The decline of the TV advertising market has “accelerated that push,” Derek Baine, a cable industry analyst for SNL Kagan, said Sunday.
Disney first blocked its signal from Cablevision’s system just after midnight Sunday morning, prompting some cable customers to buy over-the-air TV tuners, modern day versions of rabbit ears, to ensure that they could watch the Academy Awards without interruption. Others heeded ABC’s advice to sign up for one of Cablevision’s competitors.
In the long run, even switching to another television service may not have solved the problem. Though this fight pits Disney and Cablevision, the battle is bigger than those two companies, and promises to spread across the country to other cable providers and stations. “We’re going to see more and more of these disputes,” Mr. Baine said.
ABC started by asking for up to $1 per subscriber a month for its local signal, though people briefed on the matter say that was a negotiating maneuver and the target price is closer to 60 cents a subscriber. Cablevision is said to have offered an unknown fraction of that. At an impasse, ABC threatened to pull the plug.
It was a high-stakes move for Robert A. Iger, Disney’s chief executive: he was potentially taking his No. 1 affiliate in the country out of more than three million homes on ABC’s highest-rated day of the year. (Only championship football is more popular than the Academy Awards among American TV viewers.)
Mr. Iger was under pressure to stand his ground. If he had failed to win concessions from Cablevision, it would have been virtually impossible to push for so-called retransmission payments when ABC contracts come due with bigger distributors. In that context, his decision to cut off Cablevision may have represented a willingness to take a short-term loss in return for a longer-term gain.
The looming fight, in fact, was foreshadowed on Saturday when Time Warner Cable, the nation’s second largest cable provider, told its customers that for them, ABC was “not at risk... yet.”
“With your support we will fight programmers who request excessive price increases,” Time Warner Cable said in an e-mail message to customers. Its contract negotiations with ABC are expected to take place this summer, ahead of an end-of-August deadline.
In the public battle between Cablevision and ABC, both of the media behemoths tried to position themselves as champions of the little guy. In commercials and Twitter messages, Cablevision invoked Mickey Mouse and Disney conjured up the “Dolan family dynasty,” referring to the family that controls Cablevision.
The fight continued into Sunday, after Cablevision subscribers woke up to find that they could not watch ABC’s public affairs program “This Week.” WABC stepped up the pressure by directing Cablevision customers to “ditch Cablevision and switch to a provider that cares about them.”
As affected viewers vented their anger online, the two parties sought public good will. WABC said Sunday afternoon that it had submitted a new contract proposal to Cablevision. But the cable provider’s response — a call for arbitration, which some lawmakers have urged — was rejected by the station.
Among Cablevision’s rivals, Verizon was the most aggressive about using the spat to steal market share. On Friday Verizon started offering a $75 gift card to any Cablevision customer who switched to its competing FiOS service and bought print, radio and television ads to promote the offer.
Verizon also mobilized a battalion of employees from surrounding states to install its FiOS service for new customers as quickly as possible. A Verizon spokeswoman, Heather Wilner, said many new customers were able to get FiOS installed within hours; the typical wait time is days.
Ms. Wilner said she could not confirm blog reports that calls to its new service center quadrupled over the weekend. “Our phones have certainly been ringing, and we’re offering as many same-day installs as possible,” Ms. Wilner said.
After the WABC signal was restored Sunday night, local politicians lined up to applaud the two companies. Some suggested that a review of the federal rules regarding retransmission was in order.
The spat left some viewers with bad impressions of both ABC and Cablevision. It was evident to viewers like John Christon, a graphic designer in Brooklyn, that ABC was using the Oscars as leverage in the negotiations, which he said “is about as mature as a kindergartner not sharing with someone he is angry with.”
Bill Carter contributed reporting.
Comcast-NBCU Merger: How the Regulators Will Decide
"Good morning, this hearing will come to order, and we welcome all. I notice that there are a few people in the room," declared Senator Jay Rockefeller (D-WV). "We're here to discuss consumers—they're the good guys, right? The people we try to protect."
The Senator's comment about a "few people in the room" was sarcastic, of course. The hall was filled because the subject was, once again, the proposed merger of Comcast and NBC Universal—this one held on Thursday under the auspices of the Senate Commerce, Science, and Transportation Committee.
The union—in which Comcast would control 51 percent of the new media entity and present owner General Electric with the rest—has already received at least four contentious Capitol Hill sessions, the most famous being Senator Al Franken's (D-MN) dressing down of Comcast and NBC in February. This latest was relatively low key. But for Ars readers who want to follow the story, it was useful because both the Chair of the Federal Communications and a representative from the Department of Justice outlined how their respective agencies will each evaluate the deal.
As Assistant Attorney General Christine A. Varney explained, step one in these big mergers is for the parties to file an outline of their plans with the Federal Trade Commission and the Department of Justice under the Hart-Scott Rodino Act. Most are reviewed for anti-trust problems in 30 days. But "some transactions require a closer look for us to make an informed judgment about their likely competitive effects," Varney explained. And so the DOJ makes a "second request" for more information.
During the second request period, the DOJ asks for more documents and data, interviews competitors with and customers of the merger seekers, and consults with economists and lawyers on the matter. The process is strictly confidential, Varney added. "Customers and industry participants with views about a transaction should know that the law places significant, meaningful restrictions on our ability to disseminate information provided to us during our merger investigations," she warned.
In fact, the DOJ can't even share confidential information with the FCC. But the merger applicants often sign waivers allowing both sides to view the same documents.
If after the usual period of several months the DOJ decides that the venture doesn't violate antitrust laws, it says so. If not, the department's attorneys have to file a lawsuit asking a Federal court to stop the transaction. At that point, merger applicants often try to negotiate a settlement that will satisfy the DOJ's concerns while allowing them to consummate the union.
"Accordingly, our investigations are conducted not only with an eye toward litigating, but also in light of the reality that we often obtain a solution that protects competition without resort to a contested litigation," Varney told the Senate.
The Federal Communications Commission will also review the Comcast/NBC merger, but using a different set of yardsticks, the agency's Chair Julius Genachowski told the Senate, as per section 310(d) of the Communications Act:
"No construction permit or station license, or any rights thereunder, shall be transferred, assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such permit or license, to any person except upon application to the Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby."
How will the FCC define the "public interest, convenience, and necessity" in this case? "Specifically with respect to television programming," Genachowski explained, "the Commission’s goals include a vibrant and healthy marketplace, guided by the well-settled Communications Act values of competition, diversity, localism, and a deep respect for the First Amendment."
If that laundry list of criteria sounds a little vague, at least the FCC will conduct a much more open investigation of this proposed merger than the Justice Department. The Commission invites public comments on the question and its staff investigates the proposal.
This has its up and down sides. The union of Sirius and XM satellite radio was a case in agency contrast. The FCC launched a year-and-a-half proceeding on whether to allow the two services to merge, during which hundreds of companies, public interest groups, and trade associations noisily weighed in on the matter. Meanwhile the DOJ ran a quiet investigation—then, with almost no fanfare, published its analysis of the impact of the merger on its website. The FCC eventually gave Sirius XM its blessing, but the process was quite an ordeal.
Finally, when the Chair of the FCC thinks he's got three out of five Commissioner votes for the proposed deal, he instructs the staff to write up a draft order offering conclusions.
Longer than warranted
In the case of this proposed merger, Genachowski seemed to have the Sirius-XM and AT&T-BellSouth merger applications in mind as he spoke to the Senate.
"In the past, some have expressed concerns about whether FCC review of some transactions has taken longer than the circumstances warranted," he acknowledged. "Some have also questioned in particular cases whether the Commission’s processes were sufficiently open and reflected a sufficiently thorough analysis of the relevant data and issues."
Genachowski promised the Senate that an invitation for public comments on the Comcast/NBC deal will be issued "soon." What does he think of the proposed merger? "An important part of our responsibility at the Commission is to ensure that communications industry transactions do not enable firms to frustrate innovation or raise prices ultimately paid by consumers," the FCC's boss declared.
That was as much opinion as the senators got from the Commission this time around. As for the DOJ's Varney, she promised to be as "transparent as possible," within "the confines of our confidentiality obligations." Those are the rules of the game, which it appears will begin quite soon.
A Futures Site to Bet Real Money on Movies
Think that this spring’s “Robin Hood” movie will be a blockbuster at the box office? Next week you will be able to put your money on it.
Cantor Futures Exchange, a subsidiary of Cantor Fitzgerald, expects to open an online futures market next month that will allow studios, institutional and average moviegoers to place bets on the box-office revenue of Hollywood’s biggest releases. Late last week, the company learned from regulators that customers could start funding their accounts on March 15.
“I’ve worked in the futures industry for a long time,” said Richard Jaycobs, the president of Cantor Exchange, a subsidiary of Cantor Fitzgerald, who has worked with derivative markets and the cotton exchange. “And none of the products has the overall appeal that this does. This just has a tremendous potential audience.”
Betting on the success of Hollywood releases has long been a parlor game for moviegoers. In 2001, Cantor Fitzgerald bought the Web site HSX.com (for “Hollywood Stock Exchange”), where users can place bets with play money on a film’s box-office success; smart traders win little more than satisfaction. Mr. Jaycobs said that he hopes to lure a sizable portion of that site’s 200,000 active users to the real futures exchange.
But buyers beware: If “Avatar” is any indication, the public isn’t always so wise about Hollywood fortunes. Most users of HSX.com predicted a flop, and if those users had placed real money on the Cantor exchange, they would have taken a serious hit.
In the real market, contracts on the Cantor exchange will trade at $1 for every $1 million a movie is expected to bring in — a figure determined by traders — at the domestic box office during its first few weeks in theaters. So if “Robin Hood” is expected to bring in $100 million in its opening weeks, a single contract could be bought for $100 by a trader who thinks Russell Crowe’s role in the movie will drive sales far above expectations. If that trader guesses right, and the movie sells $150 million in tickets, the trader makes $50.
Mr. Jaycobs said the metric used — domestic box-office receipts — “is as simple as it can possibly be.” He hopes the business will attract also professional and institutional investors. If a movie distributor, for example, screens a movie it has backed and thinks sales will beat expectations, the company can take an even bigger financial stake in the movie by buying contracts for it. The possible mix of investors — Hollywood insiders and moviegoers at large — creates an interesting laboratory, said P. Clark Hallren, a managing partner at Clear Scope Partners, a financial adviser to entertainment businesses who advises Veriana Networks, a company that is planning its own futures trading operation.
“Who knows more about the movie, the studio who made the movie or the public, who says I’m going to go see it or not see it?” he said.
Cantor expects to open the exchange shortly after April 20, when it hopes to get final regulatory approval from the Commodity Futures Trading Commission, the government agency that oversees futures markets. The box-office receipts will be based on figures provided by Rentrak, a company that can provide almost real-time sales data.
As in other futures markets, investors will also sell — or “short” — contracts. If a distributor thinks a movie it is backing will struggle at the box office, the company can sell contracts in the futures market. If the distributor shorts a $100 contract and the movie grosses $50 million, the distributor will make $50, thereby limiting the company’s total losses from a film.
Conflict of interest issues are handled by limiting the amount a company can hedge through the exchange, so that a distributor could never make more money by betting against a film through futures than by having that film succeed in theaters.
“The nature of the futures business is that many of the traders are in the business they’re investing in,” said R. David Gary, a spokesman for the trading commission. If an investor in agriculture sees that bad weather is going to lower the yield, he said, it is possible to hedge that investment by shorting a crop in the futures market.
Veriana Networks, a privately owned media and technology company, plans to operate a competing trading exchange, called Trend Exchange, in Chicago after receiving regulatory approval, which the company expects later this month. Trend Exchange, however, will work only with professional and institutional investors and build the market slowly, said Rob Swagger, Veriana’s chief executive, describing his business as the “tortoise” in the race.
Mr. Swagger said that demand and recent developments, including the advent of electronic trading and audited box-office figures, had provided the opportunity to create the new market.
Hollywood investors have long hedged their risks, buying insurance against bad weather during outdoor filming, for example. But reducing the risk of poor box-office results has been much tougher, said Alice P. Neuhauser, an adviser to Veriana who manages entertainment assets for Kushner-Locke, a film and television distributor in Beverly Hills, Calif.
These new markets, she said, present Hollywood investors with “an opportunity to acquire a contract to minimize the downside risk.” Or, she said, “you can double-down on an investment that you think is going to do well.”
The new markets also present an opportunity for people and companies to put their money into a movie project that they otherwise had no opportunity to invest in, she said.
Arguments Against Dolphin Slaughter
Andrew C. Revkin
Louis Psihoyos, the former National Geographic photographer who won an Oscar on Sunday for “The Cove,” his first documentary film, sat down for a conversation with me at the Asia Society on Tuesday on various aspects of the ongoing slaughter of dolphins in Japan and his team’s work exposing the serving of Sei whale meat at The Hump, a sushi restaurant in Santa Monica, Calif. Here’s video of the discussion:
Among other things, Mr. Psihoyos predicted that Japan would be more likely to shut down the seasonal capture and killing of thousands of dolphins because of the human health implications of eating dolphin meat — which the film shows is laced with high levels of mercury — than because of complaints about cruelty in the killing of the marine mammals, which the film captures in wrenching detail.
“I don’t think we are going to win this issue in Japan on an animal rights issue,” he said. “To me, we are going to win it on the humanitarian reasons. It is a crime against humanity when people are serving poison as food.”
He also discussed the connection between the dolphin killing and the booming worldwide business of marine mammal shows at aquariums and zoos that prompts the dolphin roundups in the first place (the animals that are killed are those not bought in auctions for live dolphin shows).
He said the film is not meant to be an attack on the Japanese, but a way of simply informing them of the threat posed by the mercury in the meat. “Just look at the film,” he said. “This isn’t an indictment against the Japanese people. We want to give them the information that they don’t have readily available.”
But I noted that the core of the film is still about humans’ relationship with other species, and that the fundamental ethical arguments about which we choose to kill, and how we kill them, are still a prime challenge — whether we’re discussing bison or dolphin or the great whales being shot with exploding harpoons at sea. Here’s a bit of video included in “The Cove” that illustrates the level of mental acuity of dolphins:
I asked Carl Safina, the marine biologist, ocean campaigner and author, whether he thought utilitarian or ethical arguments dominated the film. Here’s what he said:
With small high-definition cameras and the power of the Web, anyone — from a community activist to a journalism student — can now document and disseminate imagery on issues that matter. Also, activists have recruited enough supporters (Bob Barker buying a ship for the Sea Shepherd Conservation Society, for instance) that they can patrol the vast southern ocean tracking Japan’s whaling fleet when the media, and even other governments, are unable to do so. In the end, as I’ve been saying lately, it appears that traditional media are a shrinking wedge of the expanding pie of global electronic storytelling. “The Cove” is an example of someone creatively filling the void.
Police Get Webcam Pictures in School Spy Case
Two IT employees at Pennsylvania's Lower Merion School District have been put on administrative leave, and pictures taken from Webcams on school-issued computers have been turned over to the local police department, according to the attorney of one of the employees now on leave.
Attorney Charles Mandracchia, who represents school district information coordinator Carol Cafiero, told Philadelphia TV station Fox 29 that that "they had a private Web site for some of these pictures for the Lower Marion Police Department to view and they were the only ones who could view it."
In February, the family of Blake Robbins, a 15-year-old student at Harriton High School filed a civil complaint in federal court against the district for allegedly using the Webcam on his school-issued laptop to take a photo of the student while he was at home. The district contends that cameras were only activated if a laptop had been reported lost or stolen. The district has since stopped using the tracking software to activate Webcams.
Speaking about his client and Michael Perbix, the other suspended IT staff member, Mandracchia said, "It was their duty to turn on the camera, but they would only do that if they received a request from the two high schools." He also said the pictures were "taken by the computer itself...every 15 minutes once the computer was open, but it was only supposed to be done if the computer was lost or stolen."
Marc Neff, the attorney for Perbix, told the TV station, "Every time a tracking device was activated, it was activated at the request of an administrator or another IT person. The district has admitted activating the Webcam tracking system 42 times.
The software used at the time, called LANRev, has since been acquired by Absolute Software, which has changed its name and removed the ability to remotely turn on Webcams. Absolute publishes LoJack for Laptops and Computrace, which can be used to locate stolen laptops but only after a police report has been filed and only by Absolute's own technicians--not its customers, according to a company spokesperson.
Main Line Media News quoted a district statement that said, "Placing [Cafiero and Perbix] on administrative leave with pay is not a reflection of any wrongdoing on their part. It is a standard, prudent step in an investigation such as this one and it occurred in conjunction with the start of the review process nearly two weeks ago."
Choose Your Future: Free Software, or Masking Tape on Your Kid's Webcam
Appalled by the Lower Merion School District's remote monitoring of students? Help the Free Software Foundation build a wiki database of school districts that provide students with laptops, so that we can campaign against mandatory, proprietary laptops.
The case of administrators in the Lower Merion School District (LMSD) spying on students through mandatory, school-provided laptops struck a chord with bloggers (Boing Boing, Gizmodo) and traditional news outlets (NPR, Reuters). The most in-depth source on this so far has been Stryde's investigation. We have two reactions (one emotional and one more circumspect) and a plan to fight this trend, for which we'll need your help.
Our first reaction--the emotional one--is to just marvel at how bad this is. How in the world did we get here? From a former student's comment on Digg:
"As a recent graduate of Harriton, I thought I could shed some light on the situation. These laptops were 2.0ghz 2gb Macbooks issued out to all the students for the entire year to do whatever they wanted and this was the 2nd year of the program. The webcam couldn't be disabled due to tough security settings. Occasionally we would notice that the green light was on from time to time but we just figured that it was glitching out as some macbooks do sometimes. *Some few covered it up with tape and post its because they thought the IT guys were watching them. I always thought they were crazy and that the district, one of the more respectable ones within the state, would never pull some shit like this. I guess I was wrong*" (emphasis ours).
High school students start covering their webcams with tape because they can't trust their computers. And then it turns out that what seemed like paranoia to some was completely well-founded.
Our second reaction--the more circumspect one--is that the real scandal here is the mandatory imposition of computers that students don't control. This may not be as lurid a violation of freedom as a remote-activated webcam in a teenager's bedroom, but it is the most central. Once people use computers they don't completely control, that provides both a technical basis and a social/political slippery slope for sleazy sysadmins leering at your kids--or any other violation you can imagine.
And to be completely clear, when we say "computers they don't control" we aren't just talking about computers with DRM, backdoors, and monitoring software. Any computer running Windows, Mac OS X, Flash, or any proprietary software is a computer that you don't control. This includes not just laptops and desktops, but also things like a Kindle, an iPhone, or an iPad.
When the software on your computer is proprietary, then you can't know whether the light is coming on because of a glitch or because the camera is actually running. You can't tell if your hard drive is spinning because you're using it, or because someone else is using it. Only free software gives you the freedom to find the answers to these questions.
So what future will we as a society choose? A future based on free software, or one where high school students have to cover their webcams with tape?
If you're with us, here's the plan. We want to create a listing of all school systems that provide every student with a laptop. Then we want to know what software the laptops run, if students are prohibited from using their own computers running free software, and if the provided laptops have any additionally nasty characteristics (beyond simply including proprietary software) like locked out features or remote monitoring software.
We'll be organizing around this wiki page. Once we get enough data (but we need your help to do this!) we'll start running campaigns to get the different school districts to change their policy to promote (or at least allow) software freedom.
Spying laptops remind us of the young adult sci-fi Little Brother by Cory Doctorow, which explores the idea of the panopticon high school (and how one might fight it) in an exciting and very readable way. And Cory Doctorow just ran a great guest editorial from a recent high school student on his blog BoingBoing: Seen Not Heard. The use of technology to limit and violate students' freedoms is widespread and growing, partly because what goes on in high schools is extremely opaque to anybody not in them.
Help us reveal where abuses are happening, and work to undo them.
Google’s Computing Power Betters Translation Tool
In a meeting at Google in 2004, the discussion turned to an e-mail message the company had received from a fan in South Korea. Sergey Brin, a Google founder, ran the message through an automatic translation service that the company had licensed.
The message said Google was a favorite search engine, but the result read: “The sliced raw fish shoes it wishes. Google green onion thing!”
Mr. Brin said Google ought to be able to do better. Six years later, its free Google Translate service handles 52 languages, more than any similar system, and people use it hundreds of millions of times a week to translate Web pages and other text.
“What you see on Google Translate is state of the art” in computer translations that are not limited to a particular subject area, said Alon Lavie, an associate research professor in the Language Technologies Institute at Carnegie Mellon University.
Google’s efforts to expand beyond searching the Web have met with mixed success. Its digital books project has been hung up in court, and the introduction of its social network, Buzz, raised privacy fears. The pattern suggests that it can sometimes misstep when it tries to challenge business traditions and cultural conventions.
But Google’s quick rise to the top echelons of the translation business is a reminder of what can happen when Google unleashes its brute-force computing power on complex problems.
The network of data centers that it built for Web searches may now be, when lashed together, the world’s largest computer. Google is using that machine to push the limits on translation technology. Last month, for example, it said it was working to combine its translation tool with image analysis, allowing a person to, say, take a cellphone photo of a menu in German and get an instant English translation.
“Machine translation is one of the best examples that shows Google’s strategic vision,” said Tim O’Reilly, founder and chief executive of the technology publisher O’Reilly Media. “It is not something that anyone else is taking very seriously. But Google understands something about data that nobody else understands, and it is willing to make the investments necessary to tackle these kinds of complex problems ahead of the market.”
Creating a translation machine has long been seen as one of the toughest challenges in artificial intelligence. For decades, computer scientists tried using a rules-based approach — teaching the computer the linguistic rules of two languages and giving it the necessary dictionaries.
But in the mid-1990s, researchers began favoring a so-called statistical approach. They found that if they fed the computer thousands or millions of passages and their human-generated translations, it could learn to make accurate guesses about how to translate new texts.
It turns out that this technique, which requires huge amounts of data and lots of computing horsepower, is right up Google’s alley.
“Our infrastructure is very well-suited to this,” Vic Gundotra, a vice president for engineering at Google, said. “We can take approaches that others can’t even dream of.”
Automated translation systems are far from perfect, and even Google’s will not put human translators out of a job anytime soon. Experts say it is exceedingly difficult for a computer to break a sentence into parts, then translate and reassemble them.
But Google’s service is good enough to convey the essence of a news article, and it has become a quick source for translations for millions of people. “If you need a rough-and-ready translation, it’s the place to go,” said Philip Resnik, a machine translation expert and associate professor of linguistics at the University of Maryland, College Park.
Like its rivals in the field, most notably Microsoft and I.B.M., Google has fed its translation engine with transcripts of United Nations proceedings, which are translated by humans into six languages, and those of the European Parliament, which are translated into 23. This raw material is used to train systems for the most common languages.
But Google has scoured the text of the Web, as well as data from its book scanning project and other sources, to move beyond those languages. For more obscure languages, it has released a “tool kit” that helps users with translations and then adds those texts to its database.
Google’s offering could put a dent in sales of corporate translation software from companies like I.B.M. But automated translation is never likely to be a big moneymaker, at least not by the standards of Google’s advertising business. Still, Google’s efforts could pay off in several ways.
Because Google’s ads are ubiquitous online, anything that makes it easier for people to use the Web benefits the company. And the system could lead to interesting new applications. Last week, the company said it would use speech recognition to generate captions for English-language YouTube videos, which could then be translated into 50 other languages.
“This technology can make the language barrier go away,” said Franz Och, a principal scientist at Google who leads the company’s machine translation team. “It would allow anyone to communicate with anyone else.”
Mr. Och, a German researcher who previously worked at the University of Southern California, said he was initially reluctant to join Google, fearing it would treat translation as a side project. Larry Page, Google’s other founder, called to reassure him.
“He basically said that this is something that is very important for Google,” Mr. Och recalled recently. Mr. Och signed on in 2004 and was soon able to put Mr. Page’s promise to the test.
While many translation systems like Google’s use up to a billion words of text to create a model of a language, Google went much bigger: a few hundred billion English words. “The models become better and better the more text you process,” Mr. Och said.
The effort paid off. A year later, Google won a government-run competition that tests sophisticated translation systems.
Google has used a similar approach — immense computing power, heaps of data and statistics — to tackle other complex problems. In 2007, for example, it began offering 800-GOOG-411, a free directory assistance service that interprets spoken requests. It allowed Google to collect the voices of millions of people so it could get better at recognizing spoken English.
A year later, Google released a search-by-voice system that was as good as those that took other companies years to build.
And late last year, Google introduced a service called Goggles that analyzes cellphone photos, matching them to a database of more than a billion online images, including photos of streets taken for its Street View service.
Mr. Och acknowledged that Google’s translation system still needed improvement, but he said it was getting better fast. “The current quality improvement curve is still pretty steep,” he said.
Google Reluctant to Release Info in Viacom Case
Google, the search company that uncovers much of the world's information for its customers, is embroiled in a fight to keep information about itself under wraps for at least a while longer.
The owner of YouTube, which is defending itself against a $1 billion copyright lawsuit filed by entertainment giant Viacom, has asked a federal court to keep documents filed in the case under seal for another three months.
On Friday, Viacom and Google filed for summary judgment, claiming that there's enough undisputed evidence for the judge to rule in each party's favor. Supporting documents were also filed. U.S. District Judge Louis Stanton is expected to rule on when the documents are to be unsealed within the next few days.
For three years now, Google and Viacom have exchanged hundreds of thousands of pages of deposition transcripts, e-mails, and other data during a lengthy discovery process. Most of the information has been kept under seal, thanks to a protective order, which was negotiated and agreed to by both sides. Now, Viacom wants to unseal all but the most sensitive of trade secrets within two weeks and Google wants to wait until June 4. Google says it would be a "logistical nightmare" to release information piecemeal before the sides finish arguing their cases.
Courts typically prefer to keep records open to the public, but there are exceptions, most often in criminal or civil cases involving national security. In civil suits, some material can be kept under seal in order to protect trade secrets. What's not clear is why the material in the Viacom vs. Google case is under seal.
Initially, both Google and Viacom agreed to a protective order, which barred public access to many documents in the case. Why has Viacom suddenly changed its mind? In the filings from Friday, Viacom said it believes the law strictly requires that summary motion papers be unsealed. Some legal experts agree.
"YouTube (which is owned by Google) is probably right that its proposed procedure (of releasing documents) would be more efficient for the parties and the court. But so what?" wrote Ben Sheffner, an entertainment lawyer, who blogs about online copyright issues. "The common law and First Amendment right of access to court documents exists for the public--not the parties or the court."
Sheffner argues that the law on this point "could not be clearer." The public has an "immediate" right of access to documents once they are filed for summary judgment, he wrote. In documents filed Friday, Google said that the question of waiting to file documents until it makes sense to disclose has never been addressed by the courts--in other words, Google believes it's up to Stanton to decide.
In papers Viacom filed on Friday--that weren't under seal--the parent company of MTV and Paramount Pictures provided a brief and general outline of points its lawyers plan to cover during arguments before Stanton over the next three months.
Viacom plans to discuss what YouTube's policies and practices were regarding copyright and piracy before Google acquired the Web's largest video-sharing site in October 2006; the financial benefit realized by Google and YouTube from "illegal clips;" and YouTube and Google's ability to "help clean up the site of pirated clips."
Viacom also said its case will cover "the extent to which YouTube engaged in infringing activities and practices beyond the storage and display of uploaded clips."
It's not entirely clear to what activities Viacom is referring. A Viacom spokesman declined to comment. Last fall, sources close to the case told CNET that Viacom had found information that indicated YouTube employees uploaded copyrighted materials and that managers there knew about it and chose not to remove the infringing content. Google said at the time that the characterizations of the evidence were "wrong, misleading, or lack important context."
On the other hand, Google said in court papers last year that it has information that shows Viacom employees uploaded videos to YouTube and Viacom managers allowed them to remain on the site for "promotional and business reasons."
In October, CNET published some of the deposition that Google CEO Eric Schmidt gave Viacom lawyers. As he was questioned by Viacom attorneys, Schmidt said Google paid a $1 billion premium for YouTube because the company was hot property and wanted to make sure it outbid competitors.
More recently, sources told CNET that Viacom also possesses documents that show David Eun, who oversaw Google's content partnerships until leaving for AOL last month, strongly recommended in 2006 that Google's leadership not acquire YouTube. According to the sources, Eun believed YouTube was too great a legal liability. Eun, through an AOL spokeswoman, declined to comment.
If all this occurred and if YouTube employees uploaded copyrighted films, music, or television shows, such revelations may prove embarrassing for Google and could be a blow to the company's legal defense.
CBS Radio Offers First HD Quadcast Station
CBS Radio has announced the launch of The FAN Sports Network, the first four-channel HD radio digital multicast station in the country. WJFK-FM, 106.7 The Fan is now offering sports followers in the Washington, D.C. area subscription free access to CBS Radio's other sports stations in the Northeast, including Baltimore’s WJZ-FM (HD-2), New York’s WFAN (HD-3) and Philadelphia’s WIP (HD-4). Historically, WFAN pioneered the all-sports format in 1987, and WIP debuted soon thereafter. In November 2008, CBS launched 105.7 The Fan, Baltimore’s first FM sports station, and WJFK introduced its 24/7 sports format to D.C. residents in July 2009.
"This industry milestone is a great way to further promote and distribute the premier programming on CBS Radio's exclusive portfolio of sports radio stations," stated CBS Radio VP of Programming Chris Oliviero. "Washington D.C. is home to a diverse range of sports fans, many originally from other parts of the Northeast, making WJFK an ideal home for this breakthrough quadcast. We're thrilled to offer local audiences various opinions and insights from the best sports stations up and down the East Coast."
Commented Boomer Esiason, co-host of morning drive on WFAN, "I’ve witnessed first hand the enthusiasm for sports in the D.C. Metro area – not just for the local teams but the entire landscape of professional and college sports. Being able to interact and re-connect with the fans is a great way to expand the dialogue and debate that makes sports radio so unique." WJFK’s Lavar Arrington added, "Having spent many years of my football career in New York and Pennsylvania I’m very familiar with WFAN and WIP and know they put out great programming – even if I didn’t always agree with what they were saying. Hopefully they’ll be kind to me now that they are broadcasting in my hometown."
Harris Broadcast Communications provided CBS Radio with the complete transmission system to support this inaugural HD-4 station. Through the use of the HPX30 transmitter, WJFK is able to broadcast its sports quadcast within the new FCC-authorized power level with clear digital reception.
"CBS is pushing the envelope out yet again with the first ever use of HD4 capability. Sports talk radio is huge in Washington, New York, Philadelphia and Baltimore, and we are thrilled how CBS is leveraging that popularity via HD Radio Technology," said Bob Struble, President/CEO, iBiquity Digital Corp. "This will be a natural place for advertisers to connect with the avid sports fans living in the D.C. market who enjoy following the teams and unique radio personalities throughout the northeast corridor."
Cyber-Bullying Cases Put Heat on Google, Facebook
The Internet was built on freedom of expression. Society wants someone held accountable when that freedom is abused. And major Internet companies like Google and Facebook are finding themselves caught between those ideals.
Although Google, Facebook and their rivals have enjoyed a relatively "safe harbor" from prosecution over user-generated content in the United States and Europe, they face a public that increasingly is more inclined to blame them for cyber-bullying and other online transgressions.
Such may have been the case when three Google executives were convicted in Milan, Italy on February 24 over a bullying video posted on the site -- a verdict greeted with horror by online activists, who fear it could open the gates to such prosecutions and ultimately destroy the Internet itself.
Journalist Jeff Jarvis suggested on his influential BuzzMachine blog that the Italian court, which found Google executives guilty of violating the privacy of an autistic boy who was taunted in the video, was essentially requiring websites to review everything posted on them.
"The practical implication of that, of course, is that no one will let anyone put anything online because the risk is too great," Jarvis wrote. "I wouldn't let you post anything here. My ISP (Internet Service Provider) wouldn't let me post anything on its services. And that kills the Internet."
A seemingly stunned Chris Thompson, writing for Slate, said simply: "The mind reels at this medieval verdict."
'Policemen of the Internet'
And Matt Sucherman, a Google vice president and general counsel, wrote in a blog post that the company was "deeply troubled" by the case, saying it "attacks the very principles of freedom on which the Internet is built."
Legal experts have been more sanguine, saying the verdict in Milan will most likely end up an outlier -- unable to stand the scrutiny even of the Italian appeals courts, never mind setting legal precedents elsewhere.
But in sentencing the executives to six-month suspended jail terms, the court may have seized on a growing desire to hold Internet companies responsible for the content posted by users.
"I actually think that this is probably not a watershed moment because the Google convictions violate European law and ultimately they will be overturned," said John Morris, general counsel for the Washington, D.C.-based Center for Democracy and Technology.
"Having said that, yes we are quite worried about the trend in other countries to suggest Internet service providers and Web sites should be the policemen of the Internet," Morris said.
If the trend takes hold, it could put the companies on the defensive, forcing them to spend more time defending such cases or fending off calls to restrict content in some way.
China polices the web and demands cooperation from web companies, while the United States has stuck up for Internet freedom in the face of censorship by more repressive governments.
But social pressure often comes from the ground up, as Facebook recently found out in Australia.
In that case Facebook pages set up in tribute to two children murdered in February, 8-year-old Trinity Bates and 12-year-old Elliott Fletcher, were quickly covered with obscenities and pornography, prompting calls for the social network to be more accountable for its content.
"To have these things happen to Facebook pages set up for the sole purpose of helping these communities pay tribute to young lives lost in the most horrible ways adds to the grief already being experienced," Queensland Premier Ann Bligh wrote to Facebook founder and CEO Mark Zuckerberg in a letter released to the Australian media.
The 'Myspace Suicide'
"I seek your advice about whether Facebook can do anything to prevent a recurrence of these types of sickening incidents," Bligh said in the letter.
A Facebook spokeswoman responded that the popular social network, which has more than 400 million users worldwide, had rules to check content and that any reports of hate or threats would be quickly removed.
"Facebook is highly self-regulating and users can and do report content that they find questionable or offensive," the spokeswoman, Debbie Frost, said.
Calls for prosecution of cyber-bullying first reached a peak with the case of a suburban mother accused of driving a love-lorn 13-year-old girl, Megan Meier, to suicide in 2006 by tormenting her with a fake MySpace persona.
Lori Drew, the mother of a girl with whom Meir had quarreled, was found guilty of misdemeanor federal charges in a case dubbed the "MySpace Suicide" in the U.S. media, but a judge later dismissed her conviction on the grounds that the prosecution was selective the law unconstitutionally vague.
But Meier's death and a series of child exploitation cases linked to News Corp's MySpace brought pressure on the site to increase its security measures and may have cost it in its apparently losing rivalry with Facebook for social network dominance.
Such issues point to the business risks for the likes of Google and Facebook as they seek to reconcile demands for accountability with the impossibility of monitoring everything posted on their sites.
"We are a society that expects companies and people of authority to take responsibility, not only for their own actions but for the actions of those beneath them," said Karen North, director of the Annenberg Program on Online Communities at the University of Southern California.
"The difficulty is, we've created an Internet culture where people are invited to put up content, but the responsibility falls in both directions," North said. "(On the Internet) we all share the responsibility to monitor the content that we find and for our societal standards to be maintained."
(Editing by Peter Henderson and Cynthia Osterman)
Reader: Steve Jobs Says No Tethering Between iPad and iPhone
Steve Jobs appears to have fired off a tersely worded email reply to a user in Sweden who asked whether the WiFi-only iPad could be tethered to the iPhone: "No."
Jezper Söderlund of the Swedish website Slashat.se reports that he sent Apple's chief executive an email identifying himself as an Apple customer before adding, "I'm also awaiting the release of the iPad. However, I have one question: Will the wifi-only version somehow support tethering thru my iPhone?"
The full email headers Söderlund forwarded to AppleInsider appear to indicate that Jobs sent his one word reply at 8:30 AM from his iPhone.
Whether one can tether
Apple currently supports Bluetooth and USB (but not WiFi) tethering to share an iPhone's 3G mobile signal with another computer in iPhone 3.x software. However, enabling the feature requires approval from the carrier.
AT&T does not allow iPhone tethering in the US, nor do some other iPhone carriers in other regions. Well over a year ago in late 2008, AT&T executive Ralph De La Vega said that iPhone tethering was coming "soon."
Apple introduced the technical capacity to tether with the iPhone 3.0 firmware in mid 2009, but AT&T failed to deliver any progress in approving an iPhone tethering plan for its subscribers throughout 2009, and has yet to even provide an update on when that will happen.
Tethering the iPad to an iPhone
In order to use iPhone tethering from a Mac or PC, the computer must be able to connect to the iPhone via USB or Bluetooth, and must support a network connection over that interface.
While the iPad includes Bluetooth hardware, it is not yet known if it will support a network uplink connection over Bluetooth (known as a "Wireless iAP"). The iPhone OS does not currently enable this as a feature so it is doubtful the iPad will, particularly given Jobs flat out "no" answer to tethering. Bluetooth support in iPhone OS devices is also limited in many other respects.
Being able to access an iAP within the iPhone OS (a "reverse tether") would allow iPhone, iPod touch, and iPad users to connect to and share an iPhone or computer's Internet access via Bluetooth, rather than only over a mobile EDGE/3G network or over WiFi hotspot. That's not currently possible.
The iPhone OS also offers no support for "reverse tethering" over USB, shutting down the other avenue for connecting an iPad to an iPhone with tethering enabled. The iPhone OS also does not support acting as a gateway to share its mobile Internet access over WiFi to other computers, even though iPhone OS devices can all access any WiFi hotspot.
Apple has made no comments about the iPad's ability to tether its 3G access (allowing a computer to share the iPad's mobile access data plan), likely because it is not intended to do so. The data plan on the iPad is priced so much lower than most general purpose 3G dongle plans that it appears clear that AT&T does not expect users to be sharing it for general use from other computers.
Multitaksing a Go for iPhone 4.0, Say Sources
May borrow Mac interface concepts
The iPhone 4.0 firmware will definitely feature multitasking, claim several sources. Apple is said to have developed a "full-on solution" to multitasking, although no details have been leaked on how problems like battery life, memory use and processor consumption will be handled. The interface for switching between apps is also being kept in the dark, partly because it has a "way to go" before it nears final form.
It is nevertheless claimed by AppleInsider contacts that the task manager will be based on interface technology in Mac OS X, which could potentially refer to the basic Command-Tab switcher, or something like Expose.
Multitasking is one of the most frequently requested features for the iPhone, as the technology has long been on other smartphones, notably those based on Windows Mobile. Apple has been extremely concerned about preserving speed and battery life, however, and currently limits multitasking to first-party apps such as the phone dialer and the iPod. Users cannot, for example, stream Internet radio and play a game at the same time, or even start a radio app and then return to a first-party app.
The change in policy is likely related to improving hardware specifications. Rumors propose that the next iPhone -- likely to ship in June or July -- could use a variant of the A4 processor found in the iPad. Apple could also conceivably increase the amount of available RAM on the iPhone to ensure rapid switching times.
German Publisher in Row with Apple Over Pin-Ups in iPhone App
Conflict sparks debate about online censorship and highlights Apple's control over software platform
The International Federation of the Periodical Press (FIPP) is considering making a complaint to Apple over the computer firm's request that German publisher Springer censor the naked girls on one of its iPhone apps.
Springer-owned tabloid Bild's "Shake the Bild Girl" app allows iPhone users to undress a model. Each time the user shakes the phone, the girl strips an item of her clothing. While Bild features naked women daily in its pages, Apple ruled that the girls in its iPhone app should wear bikinis.
The Association of German Magazine Publishers (VDZ) asked FIPP last week to approach Apple over the issue. FIPP is debating the issue, but has no further comment at the moment.
The VDZ chief executive, Wolfgang Fuerstner, has warned that Apple's move might represent a move towards censorship. In an interview with the German magazine Der Spiegel he said: "Publishers can't sell their soul just to get a few lousy pennies from Apple." Bild Digital CEO Donata Hopfen agreed: "Today they censor nipples, tomorrow editorial content."
Apple asks publishers of general interest apps to respect its US "no nipples" policy. In November, German weekly Stern's app was dropped from the App Store due to an erotic photo gallery.
When Apple approached Bild in January, the publisher censored the PDF version of the paper programmed for the iPhone.
According to Doepfner, Springer is Apple's second biggest client worldwide after Google. And Springer makes good money via Apple. The "Shake the Bild Girl" app costs €1.59 a month and can be topped up with a PDF of the printed Bild for €3.99 a month. Springer's head of public affairs, Christoph Keese, said that the iPhone apps launched Bild and its other newspaper Die Welt have sold a total of more than 100,000 units.
Apple's intervention has made it clear to publishers that they find themselves in a new role in a digital world.
When Apple announced at the end of Feburary that it would "remove any overtly sexual content from the App Store", publishers had to follow that request. It is Apple that has final control over its platform, not the publishers.
It's Time to Declare War Against Apple's Censorship
The App Store censorship horse may have been beaten to death, but mainstream German media—whose iPhone applications have been censored by Apple because of its content—are not surrendering. I'm glad. In fact, I hope they win this war.
The censorship problem is not only about the 5,000 titillating apps that fell down in flames after Apple's latest puritanic raid. Except for apps from well known slippery-when-wet publishing houses like Playboy, that raid closed the smutty graphic category entirely. The censorship problem goes a lot deeper than that, and it has affected mainstream publications already.
Freedom of the Press
The polemic in Germany started when Apple took down Stern's iPhone app without notice. Stern—a very large weekly news magazine—published a gallery of erotic photos as part of its editorial content. It wasn't gratuitous: It was just part of the material published in the magazine itself, integrated in their usual sections.
The entire app was taken down, according to the Spiegel, and publisher Gruner + Jahr had to eliminate that content in order for the application to go up to the store again. They learnt their lesson, since they haven't published any other material that may offend Apple's "moral police"—as the German press calls it.
Then came Bild, a large daily newspaper printed by publishing powerhouse Axel Springer AG. Bild also distributes its content through a dedicated iPhone application. This app gives access to its sections from a central springboard. Last December, they released a new mini-app called Bild-Girl, which shows a woman moaning and getting rid of her clothes every time you shake the iPhone with your free hand.
Apple didn't take that well and asked Bild to put a bikini on the girl. Bild complied. But now Apple also wants Bild to censor the naked girl that comes in the PDF version of the printed newspaper, which is accessible from the Bild application too. Apple is trying to force them into censoring their publication, even while the women are pre-emptively censored: Their nipples are pixelated and unrecognizable in the iPhone-distributed PDF document.
That's when the Bild editors went ballistic.
It Can Get Worse
I don't blame them, because I'm going fucking ballistic at this stage of the proceedings too. How Apple can force Bild to change their editorial content? Or putting it another way: If Gizmodo decides to release an iPhone application tomorrow, would Apple take it down whenever we publish a NSFW post that shows nipples?
Probably they would, if they receive enough complaints. (We receive some from time to time, so it's not out of the question). What about magazines, books, or comic books—like Watchmen and other adult graphic novels—that contain explicit sexual descriptions or graphics? Would those be censored too in the future, if enough people think it's politically incorrect?
What about other content? Like Bild Digital's CEO Donata Hopfen says: "Today they censor nipples, tomorrow editorial content." The Association of German Magazine Publishers agree, and they have asked the International Federation of the Periodical Press to make a complaint to Apple. I agree too: This is just not about the nipples. If Apple had established a firm set of rules about tits and pink beforehand, there wouldn't be any problem. But this censorship is completely arbitrary and unexpected.
How? Imagine Gawker develops an iPod/iPad application, one that gives access to Gizmodo.com, Gawker.com and all its publications—except Fleshbot, for obvious reasons. Now imagine that we get the scoop of the Next Big Thing from Steve Jobs, and decide to publish it in the app. Would Apple send another letter threatening us to take down the app, perhaps? Would Apple have banned an hypothetical Gawker app when Gizmodo uncovered Steve Jobs' health problems?
I don't think that's a crazy thought. In fact, knowing how things work, I think it's entirely possible.
And it doesn't have to be about Apple or tits. There are plenty of applications that have been deemed blasphemous or offensive by Apple, and banned from publication. Would publications showing a caricature of Prophet Mohamed be taken down as well? That would get Phil Schiller plenty of complaint letters.
I don't really know what Apple may do in these cases. And that's the problem. The fact is that they forced Stern and Bild to do change their editorial content decisions, and anyone or anything could be next. Apple is a corporation and they can do whatever they want, after all. In fact, that's the argument of the people who defend these decisions: It's Apple's prerogative to do whatever the hell they want with their store.
But knowing that the Apple iPhone-iPod-iPad triumvirate is the largest mobile application platform in the world—practically owning the category—couldn't that be considered an abuse of quasi-monopoly power? I have no idea. I will leave that question to the lawyers of the Association of German Magazine Publishers. And the lawyers of the International Federation of the Periodical Press.
And if indeed things get any worse, I hope the lawyers at the European Union, and hopefully some commission at the United States' Senate will give us the answer. [VDZ and Bild (Google Translated) via Spiegel]
Florida Will Block Tax Credits for Entertainment Industry if Movie or TV Show has Gay Characters
The lengths to which the anti-gay forces will go are really stunning sometimes. In Florida, a tax credit for the entertainment industry will be forbidden if the movie or t.v. show has gay characters:
Maybe Anita Bryant should head the Florida entertainment commission. It's feeling like the 70s again. And, one does wonder what the recently married (to a woman) Governor of Florida, Charlie Crist, thinks about this legislation.
Here's the original report from the Palm Beach Post:
New Site Unmasks Chatroulette Players
I have a confession to make. I’m addicted to Chatroulette, the buzz-generating Web site created by a Russian teenager that pairs anonymous strangers with one another in a video chat room.
For me, Chatroulette offers a welcome break from the daily digital footprints I leave across the Web on sites like Twitter, Facebook and Google Buzz, where every comment, tweet and “like” is tied back to my real-world identity. Chatroulette is designed to be comfortably anonymous, and it also has the sheen of nostalgia. It’s reminiscent of my earliest encounters with the Internet – firing off messages about schoolwork and television shows in AOL chat rooms and chattering with my World of Warcraft guildmates about their families, jobs and weekend plans.
But now a service called Chatroulette Map, a mashup of the site with Google Maps, is peeling back some of the anonymity of the users cruising through the site.
Chatroulette Map,which first bubbled up on blogs like Laughing Squid, grabs screenshots of people using the service and, using their IP address and geolocation tools, plots their location on a global map. (Note: Some images may not be work-safe.)
On one hand, Chatroulette Map offers a riveting snapshot of the people who are trying out the service. But on the other, it strips away some of the voyeuristic appeal of being able to peer into a random stranger’s home and life without revealing much information about yourself.
Of course, playing Chatroulette is not without some risk. My colleague Nick Bilton aptly described it as “speed-dating tens of thousands of perfect strangers — some clothed, some not.” The upside to Chatroulette Map is that some of those users might think twice about getting unclothed, making the service more family-friendly and less jarring for its users.
On the other hand, the service raises privacy concerns for people using Chatroulette. A recent update on Chatroulette Map reads: ”We’ve decided, at least for the time being, to hide IP & host information as some user-identifiable information was found in some entries.”
I’ve reached out to the creators of Chatroulette Map for comment and will update if they respond.
Porn: Good for Us?
Scientific examination of the subject has found that as the use of porn increases, the rate of sex crimes goes down.
Pornography. Most people have seen it, and have a strong opinion about it. Many of those opinions are negative—some people argue that ready access to pornography disrupts social order, encouraging people to commit rape, sexual assault, and other sex-related crimes. And even if pornography doesn’t trigger a crime, they say, it contributes to the degradation of women. It harms the women who are depicted by pornography, and harms those who do not participate but are encouraged to perform the acts depicted in it by men who are acculturated by it. Many even adamantly believe that pornography should become illegal.
Alternatively, others argue that pornography is an expression of fantasies that can actually inhibit sexual activity, and act as a positive displacement for sexual aggression. Pornography offers a readily available means of satisfying sexual arousal (masturbation), they say, which serves as a substitute for dangerous, harmful, and illegal activities.
Some feminists even claim that pornography can empower women by loosening them from the shackles of social prudery and restrictions.
But what do the data say? Over the years, many scientists have investigated the link between pornography (considered legal under the First Amendment in the United States unless judged “obscene”) and sex crimes and attitudes towards women. And in every region investigated, researchers have found that as pornography has increased in availability, sex crimes have either decreased or not increased.
It’s not hard to find a study population, given how widespread pornography has become. The United States alone produces 10,000 pornographic movies each year. The Free Speech Coalition, a porn industry–lobbying group, estimates that adult video/DVD sales and rentals amount to at least $4 billion per year. The Internet is a rich source, with 40 million adults regularly visiting porn Web sites, and more than one-quarter of regular users downloading porn at work. And it’s not just men who are interested: Nelsen/Net reports that 9.4 million women in the United States accessed online pornography Web sites in the month of September 2003. According to the conservative media watchdog group Family Safe Media, the porn industry makes more money than the top technology companies combined, including Microsoft, Google, Apple, and Amazon.
No correlation has been found between exposure to porn and negative attitudes towards women.
To examine the effect this widespread use of porn may be having on society, researchers have often exposed people to porn and measured some variable such as changes in attitude or predicted hypothetical behaviors, interviewed sex offenders about their experience with pornography, and interviewed victims of sex abuse to evaluate if pornography was involved in the assault. Surprisingly few studies have linked the availability of porn in any society with antisocial behaviors or sex crimes. Among those studies none have found a causal relationship and very few have even found one positive correlation.
Despite the widespread and increasing availability of sexually explicit materials, according to national FBI Department of Justice statistics, the incidence of rape declined markedly from 1975 to 1995. This was particularly seen in the age categories 20–24 and 25–34, the people most likely to use the Internet. The best known of these national studies are those of Berl Kutchinsky, who studied Denmark, Sweden, West Germany, and the United States in the 1970s and 1980s. He showed that for the years from approximately 1964 to 1984, as the amount of pornography increasingly became available, the rate of rapes in these countries either decreased or remained relatively level. Later research has shown parallel findings in every other country examined, including Japan, Croatia, China, Poland, Finland, and the Czech Republic. In the United States there has been a consistent decline in rape over the last 2 decades, and in those countries that allowed for the possession of child pornography, child sex abuse has declined. Significantly, no community in the United States has ever voted to ban adult access to sexually explicit material. The only feature of a community standard that holds is an intolerance for materials in which minors are involved as participants or consumers.
In terms of the use of pornography by sex offenders, the police sometimes suggest that a high percentage of sex offenders are found to have used pornography. This is meaningless, since most men have at some time used pornography. Looking closer, Michael Goldstein and Harold Kant found that rapists were more likely than nonrapists in the prison population to have been punished for looking at pornography while a youngster, while other research has shown that incarcerated nonrapists had seen more pornography, and seen it at an earlier age, than rapists. What does correlate highly with sex offense is a strict, repressive religious upbringing. Richard Green too has reported that both rapists and child molesters use less pornography than a control group of “normal” males.
Now let’s look at attitudes towards women. Studies of men who had seen X-rated movies found that they were significantly more tolerant and accepting of women than those men who didn’t see those movies, and studies by other investigators—female as well as male—essentially found similarly that there was no detectable relationship between the amount of exposure to pornography and any measure of misogynist attitudes. No researcher or critic has found the opposite, that exposure to pornography—by any definition—has had a cause-and-effect relationship towards ill feelings or actions against women. No correlation has even been found between exposure to porn and calloused attitudes toward women.
There is no doubt that some people have claimed to suffer adverse effects from exposure to pornography—just look at testimony from women’s shelters, divorce courts and other venues. But there is no evidence it was the cause of the claimed abuse or harm.
Ultimately, there is no freedom that can’t be and isn’t misused. This can range from the freedom to bear arms to the freedom to bear children (just look at “Octomom”). But it doesn’t mean that the freedom of the majority should be restricted to prevent the abuses of the few. When people transgress into illegal behavior, there are laws to punish them, and those act as a deterrent. In the United States, where one out of every 138 residents is incarcerated, just imagine if pornography were illegal—there’d be more people in prison than out.
Until next week,
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Jack Spratts' Week In Review is published every Friday. Submit letters, articles, press releases, comments, questions etc. in plain text English to jackspratts (at) lycos (dot) com. Submission deadlines are Thursdays @ 1400 UTC. Please include contact info. The right to publish all remarks is reserved.
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