Oregon Challenges RIAA's Tactics in Music Piracy Claim
The state attorney general is resisting the music labels' demand for consumer identities.
by Jaikumar Vijayan, Computerworld, Saturday, December 01, 2007
(links in the original article on the Computerworld site)
Oregon is fast becoming Ground Zero in the contentious battle between the Recording Industry Association of America (RIAA) and the tens of thousands of consumers it accuses of illegal music sharing.
The state Attorney General's office this week filed an appeal in U.S. District Court in Oregon calling for an immediate investigation of the evidence presented by the RIAA when it subpoenaed the identities of 17 students at the University of Oregon who allegedly infringed music copyrights. It is the second time in a month that Oregon Attorney General Hardy Myers has resisted attempts by the RIAA to force the university to turn over the names of individuals it says shared music illegally.
Officials at the RIAA could not immediately be reached for comment.
"It is a really huge step when the head law enforcement officer of a state wants to investigate the RIAA's evidence-gathering techniques," said Ray Beckerman, a New York-based lawyer who has been defending individuals in RIAA lawsuits.
Myers' move raises fundamental -- and overdue -- questions about the tactics used by the RIAA in its campaign against alleged music pirates, Beckerman said. "The RIAA has been bringing fake copyright infringement lawsuits, the sole purpose of which is to get the names and addresses of John Does," he said. They then drop the case and try to pressure these individuals into settling based on dubious evidence at best, he said.
In a 15-page brief filed Wednesday, Oregon's assistant attorney general, Katherine Von Ter Stegge, said that while it is appropriate for victims of copyright infringement to pursue statutory remedies, that pursuit had to "tempered by basic notions of privacy and due process.
"The record in this case suggests that the larger issue may not be whether students are sharing copyrighted music," the state's brief noted. Rather it is about whether the litigation strategies adopted by the RIAA are appropriate or capable of supporting their claims.
For example, the individual in whose name the subpoena was issued had no first-hand information about the alleged misconduct of the students or the subsequent investigations by the RIAA, the appeal filed by Myers' office noted.
The data mining techniques that the RIAA used also only show that certain copyrighted music files existed along with software that could be used to share these files. But it does not show how the music files were originally obtained or whether the files were actually illegally shared thereafter. As a result, all that was shown was a potential for misuse not actual misuse, the AG noted in court papers.
The brief also questioned whether the RIAA's investigators themselves might have illegally accessed and uploaded private confidential information not related to copyright infringement, that might have been stored on the computers of people being investigated. "Without reciprocal discovery, there is no process to assess precisely how invasive the plaintiffs' investigation was with regard to the John Does named in this suit," the brief said.
The state also questioned whether previous cases suggest that the RIAA may have abused the judicial process by obtaining the identities of suspected copyright infringers and then choosing not to purse litigation. Rather, it used collection firms to leverage payment of "arbitrary sums of money, based on threats and evidence from the data mining." There is no way for the university to find out whether this is true unless the RIAA can be asked about it specifically, the state argued.
Myers' latest salvo comes just a few weeks after an earlier motion was filed asking the court to quash the RIAA subpoena. In that motion, filed Oct. 31 on behalf of the University of Oregon, Myers said that the university was unable to identify 16 of the 17 alleged music pirates based on IP address information provided by the RIAA.
The RIAA has subpoenaed universities and Internet service providers for the identities of individuals it suspects of illegal file sharing. The modus operandi is to send the university -- or service provider -- a list of IP addresses on their networks that the RIAA is targeting. It then demands the identities of the individuals to whom the IP addresses were assigned.
In the Oregon university case, five of the 17 John Does in the RIAA subpoena accessed the copyrighted content in question from double occupancy dorms. That made it hard for the university to know who specifically might have accessed and shared copyrighted information, Myers claimed. The university also could not say whether the alleged copyright infringement had been done by the individuals that the IP addresses had been assigned to, or by others.
This week's brief was filed in response to an RIAA appeal opposing the state's earlier effort to quash the RIAA subpoena.
Sunday, December 30, 2007
The Top 10 Reasons to avoid Satellite Internet - Number 9
No Music streaming, downloading movies, VOIP, or other apps
It's hard to be a 21st-century internet user when the ISP-mindset is 19th-century. As with dialup, these applications won't work on satellite for one reason (FAP) or another (traffic shaping). By the time the ISP comes up with its business model to overcharge its customers through the nose, it's cheaper to do it the old way.
So much for progress and technology.
It's hard to be a 21st-century internet user when the ISP-mindset is 19th-century. As with dialup, these applications won't work on satellite for one reason (FAP) or another (traffic shaping). By the time the ISP comes up with its business model to overcharge its customers through the nose, it's cheaper to do it the old way.
So much for progress and technology.
The Top 10 Reasons to avoid Satellite Internet - Number 10
Weather
Wanna know what I was doing the week before Christmas after the six inches of snow and ice?
In 20-degree weather, I was putting the ladder up to go upon the roof of the house to clean the dish off. Always happens that way. Snow will settle on the dish and then there's no internet access.
Even when it's a sunny day with clear skies, the satellite can drop out of the blue.
And of course, there's always storms and rain and whatever weather-related where the internet connection will inexplicably drop.
Then of course when that happens, you can either wait or call India using the 800-support line.
Wanna know what I was doing the week before Christmas after the six inches of snow and ice?
In 20-degree weather, I was putting the ladder up to go upon the roof of the house to clean the dish off. Always happens that way. Snow will settle on the dish and then there's no internet access.
Even when it's a sunny day with clear skies, the satellite can drop out of the blue.
And of course, there's always storms and rain and whatever weather-related where the internet connection will inexplicably drop.
Then of course when that happens, you can either wait or call India using the 800-support line.
The Myth Of The Bandwidth Crunch Just Won't Die
Techdirt comes through again!
The Myth Of The Bandwidth Crunch Just Won't Die
rom the this-again? dept
A few months back we noticed a trend. Whenever we heard fear mongering reports about the internet running out of capacity, they almost always came from folks who weren't technologists. Instead, they tended to be telco business folks, lobbyists or politicians. When it came to actual technology people who had real experience and real data concerning what was happening on the network, we would see over and over and over and over again that the "threat" of a bandwidth crunch is pretty much a myth. We're not running out of bandwidth, and the ongoing upgrades to the network should be able to handle whatever growth comes along. There's no reason to panic... yet, that's not the message that the telcos want you to hear. After all, it's in their interest to work up fears of internet capacity problems so that politicians will pass legislation providing them with subsidies or other unnecessary benefits.
So, when Broadband Reports pointed us to an op-ed piece in the Boston Globe by a Harvard professor talking about the coming bandwidth crunch and the need to switch to metered pricing (another telco favorite, after they were too clueless to accurately predict that unmetered pricing would lead to more usage), it wasn't difficult to guess that she didn't have a technology background. Instead, it appears her background is entirely in public policy. There's certainly nothing wrong with folks looking at this issue from a public policy position (in fact, it's important). But, before they claim that the internet is running into trouble, shouldn't they look at what those who actually have the data have to say about the matter?
* * * * *
John Doe Comment: Nothing new here, and pretty much what we've said all along. The telco and ISP industry can't create new revenue streams with new forms of business offerings, so they go with the "FAP" (fair access policy) nonsense. So when you can't create, then implement bad and dishonest business models with invented scare strategies like "the internet's running out of bandwidth".
The Myth Of The Bandwidth Crunch Just Won't Die
rom the this-again? dept
A few months back we noticed a trend. Whenever we heard fear mongering reports about the internet running out of capacity, they almost always came from folks who weren't technologists. Instead, they tended to be telco business folks, lobbyists or politicians. When it came to actual technology people who had real experience and real data concerning what was happening on the network, we would see over and over and over and over again that the "threat" of a bandwidth crunch is pretty much a myth. We're not running out of bandwidth, and the ongoing upgrades to the network should be able to handle whatever growth comes along. There's no reason to panic... yet, that's not the message that the telcos want you to hear. After all, it's in their interest to work up fears of internet capacity problems so that politicians will pass legislation providing them with subsidies or other unnecessary benefits.
So, when Broadband Reports pointed us to an op-ed piece in the Boston Globe by a Harvard professor talking about the coming bandwidth crunch and the need to switch to metered pricing (another telco favorite, after they were too clueless to accurately predict that unmetered pricing would lead to more usage), it wasn't difficult to guess that she didn't have a technology background. Instead, it appears her background is entirely in public policy. There's certainly nothing wrong with folks looking at this issue from a public policy position (in fact, it's important). But, before they claim that the internet is running into trouble, shouldn't they look at what those who actually have the data have to say about the matter?
* * * * *
John Doe Comment: Nothing new here, and pretty much what we've said all along. The telco and ISP industry can't create new revenue streams with new forms of business offerings, so they go with the "FAP" (fair access policy) nonsense. So when you can't create, then implement bad and dishonest business models with invented scare strategies like "the internet's running out of bandwidth".
Monday, December 3, 2007
They did it again
A couple of weeks ago, HughesNet degraded their service yet again. Um, their already dialup-over-the-satellite slow connection has gotten even s-l-o-w-e-r.
How do I know this? Gmail used to take me straight into my inbox. Now, it tells me my internet connection is slow and tells me to use the basic HTML version.
HughesNet continues to make their bad business model worse.
Soon it won't be my concern.
Coming soon ----> The Top 10 Reasons to avoid Satellite Internet Snakeoil.
How do I know this? Gmail used to take me straight into my inbox. Now, it tells me my internet connection is slow and tells me to use the basic HTML version.
HughesNet continues to make their bad business model worse.
Soon it won't be my concern.
Coming soon ----> The Top 10 Reasons to avoid Satellite Internet Snakeoil.
Tuesday, November 13, 2007
Um, how's that "capitalism" stuff go again?
From the Techdirt files . . . . .
Service Providers Can't Be Honest With Themselves, So How Can They Be Honest With You?
from the self-realization-time dept
Last week I was wondering why the various mobile operators couldn't just be honest to customers in explaining the limitations of various service plans. A report had come out saying that people were sick and tired of service providers lying about service and features -- and it seemed to me that a company that was honest would get a lot of customers as a result of that honesty. Of course, this also came only a few days after we were wondering why Comcast couldn't come out and give an honest explanation for why it was jamming certain types of packets. Blogger Tom Lee from the Manifest Density blog, has responded to both things (though, incorrectly refers to Techdirt as being anti-telco, which we're not at all -- we're anti-telco-stupidity, which is quite different), making a very perceptive point. He basically says that it's impossible for any of these service providers to be honest with customers because doing so would require them to first admit the truth to themselves: they're just commodity dumb pipe providers, and all their efforts at pretending to be something more are pretty much meaningless. Until they can admit that (and Lee's assertion is they won't admit that), they can't be honest with customers. There's definitely a large chunk of truth in there, and it explains part of what the problem is -- but I still don't think that precludes service providers from being a lot more honest, even as they try to provide additional value-added services that might not matter. Being honest and transparent with customers is a good marketing idea for these companies, especially as they're being challenged to be anything more than a commodity dumb pipe provider. Being honest can actually be a part of their differentiated appeal to customers.
Service Providers Can't Be Honest With Themselves, So How Can They Be Honest With You?
from the self-realization-time dept
Last week I was wondering why the various mobile operators couldn't just be honest to customers in explaining the limitations of various service plans. A report had come out saying that people were sick and tired of service providers lying about service and features -- and it seemed to me that a company that was honest would get a lot of customers as a result of that honesty. Of course, this also came only a few days after we were wondering why Comcast couldn't come out and give an honest explanation for why it was jamming certain types of packets. Blogger Tom Lee from the Manifest Density blog, has responded to both things (though, incorrectly refers to Techdirt as being anti-telco, which we're not at all -- we're anti-telco-stupidity, which is quite different), making a very perceptive point. He basically says that it's impossible for any of these service providers to be honest with customers because doing so would require them to first admit the truth to themselves: they're just commodity dumb pipe providers, and all their efforts at pretending to be something more are pretty much meaningless. Until they can admit that (and Lee's assertion is they won't admit that), they can't be honest with customers. There's definitely a large chunk of truth in there, and it explains part of what the problem is -- but I still don't think that precludes service providers from being a lot more honest, even as they try to provide additional value-added services that might not matter. Being honest and transparent with customers is a good marketing idea for these companies, especially as they're being challenged to be anything more than a commodity dumb pipe provider. Being honest can actually be a part of their differentiated appeal to customers.
Hushmail is gonna be history
From the Techdirt files......
Hushmail Turns Out To Not Be Quite So Hush Hush
from the privacy-is-an-illusion dept
Many people are familiar with the company Hushmail, who provides encrypted web-based email that the company claims is completely private. In fact, the company makes it clear: "not even a Hushmail employee with access to our servers can read your encrypted e-mail, since each message is uniquely encoded before it leaves your computer." It turns out that isn't quite true. Wired reports that Hushmail handed the feds 12 CDs worth of plain text emails from the service following a court order. The Wired piece goes into great detail concerning what happened here -- and the folks at Hushmail were quite honest about how their service works. Hushmail has two different versions, one which requires a java app to be downloaded, which handles all the encryption locally. The other, more popular one, is entirely web-based, meaning that your passphrase is stored on the server ever so briefly -- and that's how Hushmail was able to access the accounts required in the court order. So, while it's true that Hushmail is mostly secure outside of a court order, the marketing material on the site is at least a little misleading, implying that even in such cases, your email will be encrypted.
From Wired . . . .
Encrypted E-Mail Company Hushmail Spills to Feds
By Ryan Singel November 07, 2007 | 6:39:41 PMCategories: Crime, Hacks and Cracks
Hushmail, a longtime provider of encrypted web-based email, markets itself by saying that "not even a Hushmail employee with access to our servers can read your encrypted e-mail, since each message is uniquely encoded before it leaves your computer."
But it turns out that statement seems not to apply to individuals targeted by government agencies that are able to convince a Canadian court to serve a court order on the company.
A September court document (.pdf) from a federal prosecution of alleged steroid dealers reveals the Canadian company turned over 12 CDs worth of e-mails from three Hushmail accounts, following a court order obtained through a mutual assistance treaty between the U.S. and Canada. The charging document alleges that many Chinese wholesale steroid chemical providers, underground laboratories and steroid retailers do business over Hushmail.
The court revelation demonstrates a privacy risk in a relatively-new, simple webmail offering by Hushmail, which the company acknowledges is less secure than its signature product.
A subsequent and refreshingly frank e-mail interview with Hushmail's CTO seems to indicate that government agencies can also order their way into individual accounts on Hushmail's ultra-secure web-based e-mail service, which relies on a browser-based Java encryption engine.
Since its debut in 1999, Hushmail has dominated a unique market niche for highly-secure webmail with its innovative, client-side encryption engine.
Hushmail uses industry-standard cryptographic and encryption protocols (OpenPGP and AES 256) to scramble the contents of messages stored on their servers. They also host the public key needed for other people using encrypted email services to send secure messages to a Hushmail account.
The first time a Hushmail user logs on, his browser downloads a Java applet that takes care of the decryption and encryption of messages on his computer, after the user types in the right passphrase. So messages reach Hushmail's server already encrypted. The Java code also decrypts the message on the recipient's computer, so an unencrypted copy never crosses the internet or hits Hushmails servers.
In this scenario, if a law enforcement agency demands all the e-mails sent to or from an account, Hushmail can only turn over the scrambled messages since it has no way of reversing the encryption.
However, installing Java and loading and running the Java applet can be annoying. So in 2006, Hushmail began offering a service more akin to traditional web mail. Users connect to the service via a SSL (https://) connection and Hushmail runs the Encryption Engine on their side. Users then tell the server-side engine what the right passphrase is and all the messages in the account can then be read as they would in any other web-based email account.
The rub of that option is that Hushmail has -- even if only for a brief moment -- a copy of your passphrase. As they disclose in the technical comparison of the two options, this means that an attacker with access to Hushmail's servers can get at the passphrase and thus all of the messages.
In the case of the alleged steroid dealer, the feds seemed to compel Hushmail to exploit this hole, store the suspects' secret passphrase or decryption key, decrypt their messages and hand them over.
Hushmail CTO Brian Smith declined to talk about any specific law enforcement requests, but described the general vulnerability to THREAT LEVEL in an e-mail interview (You can read the entire e-mail thread here):
The key point, though, is that in the non-Java configuration, private key and passphrase operations are performed on the server- side.
This requires that users place a higher level of trust in our servers as a trade off for the better usability they get from not having to install Java and load an applet.
This might clarify things a bit when you are considering what actions we might be required to take under a court order. Again, I stress that our requirement in complying with a court order is that we not take actions that would affect users other than those specifically named in the order.
Hushmail's marketing copy largely glosses over this vulnerability, reassuring users that the non-Java option is secure.
Turning on Java provides an additional layer of security, but is not necessary for secure communication using this system[...]
Java allows you to keep more of the sensitive operations on your local machine, adding an extra level of protection. However, as all communication with the webserver is encrypted, and sensitive data is always encrypted when stored on disk, the non-Java option also provides a very high level of security.
But can the feds force Hushmail to modify the Java applet sent to a particular user, which could then capture and sends the user's passphrase to Hushmail, then to the government?
Hushmail's own threat matrix includes this possibility, saying that if an attacker got into Hushmail's servers, they could compromise an account -- but that "evidence of the attack" (presumably the rogue Java applet) could be found on the user's computer.
Hushmail's Smith:
[T]he difference being that in Java mode, what the attacker does is potentially detectable by the user (via view source in the browser).
"View source" would not be enough to detect a bugged Java applet, but a user could to examine the applet's runtime code and the source code for the Java applet is publicly available for review. But that doesn't mean a user could easily verify that the applet served up by Hushmail was compiled from the public source code.
Smith concurs and hints that Hushmail's Java architecture doesn't technically prohibit the company from being able to turn over unscrambled emails to cops with court orders.
You are right about the fact that view source is not going to reveal anything about the compiled Java code. However, it does reveal the HTML in which the applet is embedded, and whether the applet is actually being used at all. Anyway, I meant that just as an example. The general point is that it is potentially detectable by the end-user, even though it is not practical to perform this operation every time. This means that in Java mode the level of trust the user must place in us is somewhat reduced, although not eliminated.
The extra security given by the Java applet is not particularly relevant, in the practical sense, if an individual account is targeted. (emphasis added) [...]
Hushmail won't protect law violators being chased by patient law enforcement officials, according to Smith.
[Hushmail] is useful for avoiding general Carnivore-type government surveillance, and protecting your data from hackers, but definitely not suitable for protecting your data if you are engaging in illegal activity that could result in a Canadian court order.
That's also backed up by the fact that all Hushmail users agree to our terms of service, which state that Hushmail is not to be used for illegal activity. However, when using Hushmail, users can be assured that no access to data, including server logs, etc., will be granted without a specific court order.
Smith also says that it only accepts court orders issued by the British Columbia Supreme Court and that non-Canadian cops have to make a formal request to the Canadian government whose Justice Department then applies, with sworn affidavits, for a court order.
We receive many requests for information from law enforcement authorities, including subpoenas, but on being made aware of the requirements, a large percentage of them do not proceed.
To date, we have not challenged a court order in court, as we have made it clear that the court orders that we would accept must follow our guidelines of requiring only actions that can be limited to the specific user accounts named in the court order. That is to say, any sort of requirement for broad data collection would not be acceptable.
I was first tipped to this story via the Cryptography Mailing List, and Kevin, who had been talking with Hushmail about similar matters involving another case, followed up with Smith. We both agree Hushmail deserves credit for its frank and open replies (.pdf). Such candor is hard to come by these days, especially since most ISPs won't even tell you how long they hold onto your IP address or if they sell your web-surfing habits to the highest bidders.
Hushmail Turns Out To Not Be Quite So Hush Hush
from the privacy-is-an-illusion dept
Many people are familiar with the company Hushmail, who provides encrypted web-based email that the company claims is completely private. In fact, the company makes it clear: "not even a Hushmail employee with access to our servers can read your encrypted e-mail, since each message is uniquely encoded before it leaves your computer." It turns out that isn't quite true. Wired reports that Hushmail handed the feds 12 CDs worth of plain text emails from the service following a court order. The Wired piece goes into great detail concerning what happened here -- and the folks at Hushmail were quite honest about how their service works. Hushmail has two different versions, one which requires a java app to be downloaded, which handles all the encryption locally. The other, more popular one, is entirely web-based, meaning that your passphrase is stored on the server ever so briefly -- and that's how Hushmail was able to access the accounts required in the court order. So, while it's true that Hushmail is mostly secure outside of a court order, the marketing material on the site is at least a little misleading, implying that even in such cases, your email will be encrypted.
From Wired . . . .
Encrypted E-Mail Company Hushmail Spills to Feds
By Ryan Singel November 07, 2007 | 6:39:41 PMCategories: Crime, Hacks and Cracks
Hushmail, a longtime provider of encrypted web-based email, markets itself by saying that "not even a Hushmail employee with access to our servers can read your encrypted e-mail, since each message is uniquely encoded before it leaves your computer."
But it turns out that statement seems not to apply to individuals targeted by government agencies that are able to convince a Canadian court to serve a court order on the company.
A September court document (.pdf) from a federal prosecution of alleged steroid dealers reveals the Canadian company turned over 12 CDs worth of e-mails from three Hushmail accounts, following a court order obtained through a mutual assistance treaty between the U.S. and Canada. The charging document alleges that many Chinese wholesale steroid chemical providers, underground laboratories and steroid retailers do business over Hushmail.
The court revelation demonstrates a privacy risk in a relatively-new, simple webmail offering by Hushmail, which the company acknowledges is less secure than its signature product.
A subsequent and refreshingly frank e-mail interview with Hushmail's CTO seems to indicate that government agencies can also order their way into individual accounts on Hushmail's ultra-secure web-based e-mail service, which relies on a browser-based Java encryption engine.
Since its debut in 1999, Hushmail has dominated a unique market niche for highly-secure webmail with its innovative, client-side encryption engine.
Hushmail uses industry-standard cryptographic and encryption protocols (OpenPGP and AES 256) to scramble the contents of messages stored on their servers. They also host the public key needed for other people using encrypted email services to send secure messages to a Hushmail account.
The first time a Hushmail user logs on, his browser downloads a Java applet that takes care of the decryption and encryption of messages on his computer, after the user types in the right passphrase. So messages reach Hushmail's server already encrypted. The Java code also decrypts the message on the recipient's computer, so an unencrypted copy never crosses the internet or hits Hushmails servers.
In this scenario, if a law enforcement agency demands all the e-mails sent to or from an account, Hushmail can only turn over the scrambled messages since it has no way of reversing the encryption.
However, installing Java and loading and running the Java applet can be annoying. So in 2006, Hushmail began offering a service more akin to traditional web mail. Users connect to the service via a SSL (https://) connection and Hushmail runs the Encryption Engine on their side. Users then tell the server-side engine what the right passphrase is and all the messages in the account can then be read as they would in any other web-based email account.
The rub of that option is that Hushmail has -- even if only for a brief moment -- a copy of your passphrase. As they disclose in the technical comparison of the two options, this means that an attacker with access to Hushmail's servers can get at the passphrase and thus all of the messages.
In the case of the alleged steroid dealer, the feds seemed to compel Hushmail to exploit this hole, store the suspects' secret passphrase or decryption key, decrypt their messages and hand them over.
Hushmail CTO Brian Smith declined to talk about any specific law enforcement requests, but described the general vulnerability to THREAT LEVEL in an e-mail interview (You can read the entire e-mail thread here):
The key point, though, is that in the non-Java configuration, private key and passphrase operations are performed on the server- side.
This requires that users place a higher level of trust in our servers as a trade off for the better usability they get from not having to install Java and load an applet.
This might clarify things a bit when you are considering what actions we might be required to take under a court order. Again, I stress that our requirement in complying with a court order is that we not take actions that would affect users other than those specifically named in the order.
Hushmail's marketing copy largely glosses over this vulnerability, reassuring users that the non-Java option is secure.
Turning on Java provides an additional layer of security, but is not necessary for secure communication using this system[...]
Java allows you to keep more of the sensitive operations on your local machine, adding an extra level of protection. However, as all communication with the webserver is encrypted, and sensitive data is always encrypted when stored on disk, the non-Java option also provides a very high level of security.
But can the feds force Hushmail to modify the Java applet sent to a particular user, which could then capture and sends the user's passphrase to Hushmail, then to the government?
Hushmail's own threat matrix includes this possibility, saying that if an attacker got into Hushmail's servers, they could compromise an account -- but that "evidence of the attack" (presumably the rogue Java applet) could be found on the user's computer.
Hushmail's Smith:
[T]he difference being that in Java mode, what the attacker does is potentially detectable by the user (via view source in the browser).
"View source" would not be enough to detect a bugged Java applet, but a user could to examine the applet's runtime code and the source code for the Java applet is publicly available for review. But that doesn't mean a user could easily verify that the applet served up by Hushmail was compiled from the public source code.
Smith concurs and hints that Hushmail's Java architecture doesn't technically prohibit the company from being able to turn over unscrambled emails to cops with court orders.
You are right about the fact that view source is not going to reveal anything about the compiled Java code. However, it does reveal the HTML in which the applet is embedded, and whether the applet is actually being used at all. Anyway, I meant that just as an example. The general point is that it is potentially detectable by the end-user, even though it is not practical to perform this operation every time. This means that in Java mode the level of trust the user must place in us is somewhat reduced, although not eliminated.
The extra security given by the Java applet is not particularly relevant, in the practical sense, if an individual account is targeted. (emphasis added) [...]
Hushmail won't protect law violators being chased by patient law enforcement officials, according to Smith.
[Hushmail] is useful for avoiding general Carnivore-type government surveillance, and protecting your data from hackers, but definitely not suitable for protecting your data if you are engaging in illegal activity that could result in a Canadian court order.
That's also backed up by the fact that all Hushmail users agree to our terms of service, which state that Hushmail is not to be used for illegal activity. However, when using Hushmail, users can be assured that no access to data, including server logs, etc., will be granted without a specific court order.
Smith also says that it only accepts court orders issued by the British Columbia Supreme Court and that non-Canadian cops have to make a formal request to the Canadian government whose Justice Department then applies, with sworn affidavits, for a court order.
We receive many requests for information from law enforcement authorities, including subpoenas, but on being made aware of the requirements, a large percentage of them do not proceed.
To date, we have not challenged a court order in court, as we have made it clear that the court orders that we would accept must follow our guidelines of requiring only actions that can be limited to the specific user accounts named in the court order. That is to say, any sort of requirement for broad data collection would not be acceptable.
I was first tipped to this story via the Cryptography Mailing List, and Kevin, who had been talking with Hushmail about similar matters involving another case, followed up with Smith. We both agree Hushmail deserves credit for its frank and open replies (.pdf). Such candor is hard to come by these days, especially since most ISPs won't even tell you how long they hold onto your IP address or if they sell your web-surfing habits to the highest bidders.
This week in fuckwit history . . . .
HughesNet degraded their service yet again. Now your internets are even s-l-o-w-e-r. Now the average is about 1-1/2 minutes to load a page when you click your mouse.
Fuckwit Nation marches on.
I wonder about HughesNet CEO. Is "clueless" a job prerequisite.
Fuckwit Nation marches on.
I wonder about HughesNet CEO. Is "clueless" a job prerequisite.
Wednesday, October 31, 2007
HughesNet & Sandvine (traffic shaping)
Sandvine lists DirecTV as a customer on the website. One can reasonably conclude that HughesNet also uses Sandvine to enforce its FAP ("Fair Access Policy" aka imposing traffic caps on the user).
Wiki has a writeup on Sandvine.
"....Controversy
Sandvine is reportedly used by Comcast to reduce the impact of BitTorrent and other P2P traffic, but does so by sending forged RST packets rather than traffic shaping. This interferes with other network protocols, and potentially violates network neutrality as well as fraud laws on the part of the ISP. Recently, Comcast customers have also reported an inability to use Google because forged RST packets are also interfering with HTTP access to google.com [2], which has further angered users.[3]..."
Wiki has a writeup on Sandvine.
"....Controversy
Sandvine is reportedly used by Comcast to reduce the impact of BitTorrent and other P2P traffic, but does so by sending forged RST packets rather than traffic shaping. This interferes with other network protocols, and potentially violates network neutrality as well as fraud laws on the part of the ISP. Recently, Comcast customers have also reported an inability to use Google because forged RST packets are also interfering with HTTP access to google.com [2], which has further angered users.[3]..."
HughesNet & Deceptive Marketing
There oughta be a law. Oh wait, there is. It's called Truth-In-Advertising.
From the Wiki (links on the website) . . . .
....
Commercials
Throughout its history, HughesNet has run a series of television commercials featuring actress Margaret Easley. Each time the name of the service has changed, a new commercial has been filmed. The central message of each commercial is fairly consistent, stating to viewers that anyone in the continental United States can have Internet access and "all you need is a clear view of the southern sky." Most of the commercials are 60 seconds in length, but there have also been 30-second variants as well as 30-minute infomercial-length variants which are broadcast both on normal DirecTV channels as well as on DirecTV channel 227, a channel that DirecTV uses solely for its own infomercials.
One of the commercials had a demonstration of the service with web pages moving very fast, but if one looked at the program bar of IE, it says it is working offline. This means that they weren't connecting to the Internet when loading the pages, but browsing from their cache. As of May 2006, an older DirecWay commercial is hosted and viewable on Margaret Easley's website.
From the Wiki (links on the website) . . . .
....
Commercials
Throughout its history, HughesNet has run a series of television commercials featuring actress Margaret Easley. Each time the name of the service has changed, a new commercial has been filmed. The central message of each commercial is fairly consistent, stating to viewers that anyone in the continental United States can have Internet access and "all you need is a clear view of the southern sky." Most of the commercials are 60 seconds in length, but there have also been 30-second variants as well as 30-minute infomercial-length variants which are broadcast both on normal DirecTV channels as well as on DirecTV channel 227, a channel that DirecTV uses solely for its own infomercials.
One of the commercials had a demonstration of the service with web pages moving very fast, but if one looked at the program bar of IE, it says it is working offline. This means that they weren't connecting to the Internet when loading the pages, but browsing from their cache. As of May 2006, an older DirecWay commercial is hosted and viewable on Margaret Easley's website.
Tuesday, October 30, 2007
US Corporations are Laughable
From Techdirt . . . .
Comcast Will Fire Employees For Admitting That Comcast Uses Sandvine?
from the what-are-you-hiding? dept
We still can't figure out why Comcast doesn't just come right out and admit what it's doing in jamming certain kinds of traffic. It's not like it's a secret any more -- and the longer Comcast tries to play dumb on this, the worse it looks for the company. The oddest part, though, is that Comcast won't even admit that it's using Sandvine's traffic shaping equipment -- even though Sandvine clearly lists Comcast as a customer and has used them as a reference customer in news articles. Even worse, though is that Comcast has apparently now issued a bunch of ridiculous talking points to customer service reps about this issue. Apparently, the customer service folks are being told that if they deviate from the script, they risk getting terminated. The script even includes how to respond to a point blank question about Sandvine, refusing to admit what appears to be public knowledge at this point. It's not at all clear what Comcast thinks it gains in acting this way. It seems to have only made an awful lot of customers quite angry at the company. Lucky for Comcast, though, that the US broadband market is such a disaster many customers have nowhere else to go.
Comcast Will Fire Employees For Admitting That Comcast Uses Sandvine?
from the what-are-you-hiding? dept
We still can't figure out why Comcast doesn't just come right out and admit what it's doing in jamming certain kinds of traffic. It's not like it's a secret any more -- and the longer Comcast tries to play dumb on this, the worse it looks for the company. The oddest part, though, is that Comcast won't even admit that it's using Sandvine's traffic shaping equipment -- even though Sandvine clearly lists Comcast as a customer and has used them as a reference customer in news articles. Even worse, though is that Comcast has apparently now issued a bunch of ridiculous talking points to customer service reps about this issue. Apparently, the customer service folks are being told that if they deviate from the script, they risk getting terminated. The script even includes how to respond to a point blank question about Sandvine, refusing to admit what appears to be public knowledge at this point. It's not at all clear what Comcast thinks it gains in acting this way. It seems to have only made an awful lot of customers quite angry at the company. Lucky for Comcast, though, that the US broadband market is such a disaster many customers have nowhere else to go.
Traffic Shaping and HughesNet
Last week, if you have HughesNet as your dialup-over-the-satellite ISP, you noticed your speeds took a hit. This week, you'll notice if you have any pages with multiple picture files (ie. jpg, png), your page load times will literally take minutes (PLURAL and MORE than a few minutes).
All part of HughesNet "traffic shaping" strategy to try to get you to upgrade from the overpriced $60/mth service to something more expensive.
Where Japan and other countries are providing more bandwidth for less cost, the US has allowed corporations to do the exact opposite.
This is why the US competive edge was lost. This is why investors are looking at other places to do business instead of the US.
Something tells me all the MBAs running companies these days think it's a license to run the business in the ground and run their customers off.
Something tells me that strategy is working.
All part of HughesNet "traffic shaping" strategy to try to get you to upgrade from the overpriced $60/mth service to something more expensive.
Where Japan and other countries are providing more bandwidth for less cost, the US has allowed corporations to do the exact opposite.
This is why the US competive edge was lost. This is why investors are looking at other places to do business instead of the US.
Something tells me all the MBAs running companies these days think it's a license to run the business in the ground and run their customers off.
Something tells me that strategy is working.
Friday, October 26, 2007
From the billionaire columnist who earned his money the old fashioned way....he married it.
And who's pretty much of a no-talent otherwise. The closest he's been to work is when his chauffer drives him to the office. Wonder what the real estate heiress saw in him anyway?
From Techdirt . . . .
Old Fogeyism Isn't That Surprising
from the kids-these-days dept
Last week Thomas Friedman penned a silly column claiming that Internet-based activism doesn't "count" as real political engagement. "Activism can only be uploaded, the old-fashioned way — by young voters speaking truth to power, face to face, in big numbers, on campuses or the Washington Mall. Virtual politics is just that — virtual," he says. As various people have pointed out, this is complete nonsense. I engaged in some campus activism in college in the late 1990s, and I have trouble even imagining how students coordinated their activities in the pre-email days. Blogs have proven an incredibly potent force for rooting out and publicizing injustice. And I'm sure the technologies that have evolved since I graduated are just as valuable to campus activists. Obviously, online activism by itself doesn't accomplish anything, but by the same token neither do telephone calls or newspaper columns. Rather, these are all tools that activists can use to coordinate their activities more efficiently. Many of the people who sign up for candidates' Facebook groups do go to the candidates' rallies or volunteer for their campaigns.
However, I think we shouldn't be too hard on Friedman. After all, it's pretty common for older people to complain about young people and their new-fangled ways of doing things. There are journalism professors who believe that you have to publish on paper to "count" as a serious journalist. There were lots of people who looked down their noses at Internet dating when it began, and some people still sneer at efforts to improve the online matchmaking process. And of course, there are books arguing that volunteer-driven content like Wikipedia is destroying our culture by undermining traditional ways of organizing information. Most of these arguments are silly, obviously, but it's not that hard to understand where they're coming from. If you've spent decades thinking about an activity in a particular way (if, say, you've been a print journalist for 30 years) you're going to have deeply-ingrained assumptions about how that activity is supposed to be done. And so when people start doing it a different way, it's inevitably going to seem incomprehensible and weird. So while I think Friedman's wrong, I don't think Friedman's being particularly obtuse. He's just fallen prey to garden-variety old fogeyism.
From Techdirt . . . .
Old Fogeyism Isn't That Surprising
from the kids-these-days dept
Last week Thomas Friedman penned a silly column claiming that Internet-based activism doesn't "count" as real political engagement. "Activism can only be uploaded, the old-fashioned way — by young voters speaking truth to power, face to face, in big numbers, on campuses or the Washington Mall. Virtual politics is just that — virtual," he says. As various people have pointed out, this is complete nonsense. I engaged in some campus activism in college in the late 1990s, and I have trouble even imagining how students coordinated their activities in the pre-email days. Blogs have proven an incredibly potent force for rooting out and publicizing injustice. And I'm sure the technologies that have evolved since I graduated are just as valuable to campus activists. Obviously, online activism by itself doesn't accomplish anything, but by the same token neither do telephone calls or newspaper columns. Rather, these are all tools that activists can use to coordinate their activities more efficiently. Many of the people who sign up for candidates' Facebook groups do go to the candidates' rallies or volunteer for their campaigns.
However, I think we shouldn't be too hard on Friedman. After all, it's pretty common for older people to complain about young people and their new-fangled ways of doing things. There are journalism professors who believe that you have to publish on paper to "count" as a serious journalist. There were lots of people who looked down their noses at Internet dating when it began, and some people still sneer at efforts to improve the online matchmaking process. And of course, there are books arguing that volunteer-driven content like Wikipedia is destroying our culture by undermining traditional ways of organizing information. Most of these arguments are silly, obviously, but it's not that hard to understand where they're coming from. If you've spent decades thinking about an activity in a particular way (if, say, you've been a print journalist for 30 years) you're going to have deeply-ingrained assumptions about how that activity is supposed to be done. And so when people start doing it a different way, it's inevitably going to seem incomprehensible and weird. So while I think Friedman's wrong, I don't think Friedman's being particularly obtuse. He's just fallen prey to garden-variety old fogeyism.
Liar liar pants on fire
From techdirt . . . .
Associated Press Confirms That Comcast Blocks Some BitTorrent Traffic; Despite Comcast Denials
from the someone's-not-being-totally-honest-here... dept
Back in August, there was a report that Comcast was throttling certain types of BitTorrent traffic making it difficult to impossible to seed a download. In response, Comcast vehemently denied this was happening, despite many people saying they were experiencing it. Specifically, Comcast said: "the company doesn't actively look at the applications or content that its customers download over the network. But Comcast does reserve the right to cut off service to customers who abuse the network by using too much bandwidth." The EFF went and spoke with Comcast and got the same story. However, with so many people reporting the same thing, some were wondering how truthful Comcast was. Now the Associated Press has done their own investigation (trying to transfer the Bible since it's in the public domain) and found that Comcast is clearly blocking the ability to upload completed files via BitTorrent, inserting a message to a computer trying to upload a file pretending to be from the downloading computer, telling it to stop sending. This seems to go against what Comcast originally said, though when the AP asked for a comment, Comcast subtly changed it's story. Rather than saying it doesn't look at applications or content, now it says: "Comcast does not block access to any applications, including BitTorrent." No, it doesn't block "access" but it does limit the functionality greatly (including perfectly legitimate uses of BitTorrent) without letting people know about it.
Associated Press Confirms That Comcast Blocks Some BitTorrent Traffic; Despite Comcast Denials
from the someone's-not-being-totally-honest-here... dept
Back in August, there was a report that Comcast was throttling certain types of BitTorrent traffic making it difficult to impossible to seed a download. In response, Comcast vehemently denied this was happening, despite many people saying they were experiencing it. Specifically, Comcast said: "the company doesn't actively look at the applications or content that its customers download over the network. But Comcast does reserve the right to cut off service to customers who abuse the network by using too much bandwidth." The EFF went and spoke with Comcast and got the same story. However, with so many people reporting the same thing, some were wondering how truthful Comcast was. Now the Associated Press has done their own investigation (trying to transfer the Bible since it's in the public domain) and found that Comcast is clearly blocking the ability to upload completed files via BitTorrent, inserting a message to a computer trying to upload a file pretending to be from the downloading computer, telling it to stop sending. This seems to go against what Comcast originally said, though when the AP asked for a comment, Comcast subtly changed it's story. Rather than saying it doesn't look at applications or content, now it says: "Comcast does not block access to any applications, including BitTorrent." No, it doesn't block "access" but it does limit the functionality greatly (including perfectly legitimate uses of BitTorrent) without letting people know about it.
Well......
From Techdirt . . . .
What Else Is Comcast Jamming? Gnutella? Lotus Notes?
from the might-help-to-be-a-little-transparent dept
After the AP confirmed that Comcast was clearly blocking some aspects of Bittorrent, Comcast continued to issue its oddly worded denial statement about how it doesn't specifically block access to any application or content. Of course, that can mean different things to different people, and as the EFF is discovering, perhaps Comcast is being half-truthful in saying it doesn't specifically pick on BitTorrent trafffic. However, that's only because it's doing similar kinds of blocking on other types of traffic, such as content using Gnutella or even Lotus Notes. The EFF has been running a variety of tests and has found that Comcast appears to send forged reset packets for Gnutella, and it points to someone else who found the same thing for Lotus Notes.
Of course, Comcast can do what it wants on its network, but to deny it and not be even remotely transparent about it is pretty questionable (and potentially a violation of FTC rules). Once again, this is the type of thing that wouldn't happen if there were true competition in the broadband market. If people knew that Comcast was arbitrarily cutting off what they could do on their network with no indication (and, actually, actively hiding the fact that they were doing so) many people would look for alternatives. The only problem is that there often aren't any alternatives. Even in the cases where there are, the alternatives often include one other player: a telco like AT&T who seems to be gearing up to do the same thing as Comcast in blocking certain types of content online. It really is a simple question, though: why won't Comcast tell its own customers what it's blocking? When you find out that the company is blocking completely legitimate applications and services with no recourse (or even information admitting it), it's really quite troublesome.
What Else Is Comcast Jamming? Gnutella? Lotus Notes?
from the might-help-to-be-a-little-transparent dept
After the AP confirmed that Comcast was clearly blocking some aspects of Bittorrent, Comcast continued to issue its oddly worded denial statement about how it doesn't specifically block access to any application or content. Of course, that can mean different things to different people, and as the EFF is discovering, perhaps Comcast is being half-truthful in saying it doesn't specifically pick on BitTorrent trafffic. However, that's only because it's doing similar kinds of blocking on other types of traffic, such as content using Gnutella or even Lotus Notes. The EFF has been running a variety of tests and has found that Comcast appears to send forged reset packets for Gnutella, and it points to someone else who found the same thing for Lotus Notes.
Of course, Comcast can do what it wants on its network, but to deny it and not be even remotely transparent about it is pretty questionable (and potentially a violation of FTC rules). Once again, this is the type of thing that wouldn't happen if there were true competition in the broadband market. If people knew that Comcast was arbitrarily cutting off what they could do on their network with no indication (and, actually, actively hiding the fact that they were doing so) many people would look for alternatives. The only problem is that there often aren't any alternatives. Even in the cases where there are, the alternatives often include one other player: a telco like AT&T who seems to be gearing up to do the same thing as Comcast in blocking certain types of content online. It really is a simple question, though: why won't Comcast tell its own customers what it's blocking? When you find out that the company is blocking completely legitimate applications and services with no recourse (or even information admitting it), it's really quite troublesome.
Smart. Obviously not in the U.S.
From Techdirt . . . .
How Embracing Piracy Jumpstarted Brazilian Music
from the oh-look-at-that... dept
One of the more amusingly wrong statements from the RIAA and its supporters is the idea that piracy is killing the music industry. Those who say that without being able to sell music there would be less music out there are flat out wrong, and we seem to see more proof of it every day. There's more music being produced today than ever before and it's often because of file sharing -- the very thing the industry honchos want you to believe is killing the industry. For natural experiments, we've pointed in the past to places like China and Jamaica. In China, where "piracy" is rampant, the music industry is thriving. Musicians have learned to use the piracy to help promote themselves so they can sell more concert tickets at higher prices. They also realized that companies would often pay for the creation of new music, so that it could be used to boost brand recognition of products. Meanwhile, in Jamaica, musicians competed to make better versions of songs, using the same "riddims," but adding their own singing over them. While in an RIAA-inspired world, the "riddim" creators would get upset, in Jamaica it's been great for them. The most popular riddims turn their creators into stars who are in high demand to create new riddims from musicians who are eager to be the first to create their own songs on top of the new riddims from the hottest riddim creators.
Now it looks like we can add Brazil to the list of natural examples. There, the tecnobrega music scene is on fire thanks to musicians embracing piracy. They don't just look the other way, they actively encourage it. Musicians burn their own CDs and rush them down to street vendors, begging them to sell them (without the musicians getting any cut at all). Those musicians also upload MP3s and email them to popular DJs who make mixtapes (similar to the US hiphop mixtape scene). Just like in China, the artists realize that they need to use so-called "piracy" to help them get more publicity. "Piracy is the way to get established and get your name out. There's no way to stop it, so we're using it to our advantage," according to one tecnobrega star, Gabi Amarantos. Contrary to what the RIAA and it supporters would tell you, the lack of copyright respect hasn't hurt the tecnobrega space at all -- it's made it explode. It's allowed many more musicians to make a decent living from music than via a traditional model and it means that much more technobrega music is being produced. In other words, all the stories about how a lack of copyright creates less music are, once again, provably wrong. Yet, of course, the RIAA and its supporters will continue to repeat the lie. In fact, the National Anti-Piracy Association in Brazil says that tecnobrega is a problem because it "makes light of piracy." It's not "making light" of piracy -- it's making money from piracy.
How Embracing Piracy Jumpstarted Brazilian Music
from the oh-look-at-that... dept
One of the more amusingly wrong statements from the RIAA and its supporters is the idea that piracy is killing the music industry. Those who say that without being able to sell music there would be less music out there are flat out wrong, and we seem to see more proof of it every day. There's more music being produced today than ever before and it's often because of file sharing -- the very thing the industry honchos want you to believe is killing the industry. For natural experiments, we've pointed in the past to places like China and Jamaica. In China, where "piracy" is rampant, the music industry is thriving. Musicians have learned to use the piracy to help promote themselves so they can sell more concert tickets at higher prices. They also realized that companies would often pay for the creation of new music, so that it could be used to boost brand recognition of products. Meanwhile, in Jamaica, musicians competed to make better versions of songs, using the same "riddims," but adding their own singing over them. While in an RIAA-inspired world, the "riddim" creators would get upset, in Jamaica it's been great for them. The most popular riddims turn their creators into stars who are in high demand to create new riddims from musicians who are eager to be the first to create their own songs on top of the new riddims from the hottest riddim creators.
Now it looks like we can add Brazil to the list of natural examples. There, the tecnobrega music scene is on fire thanks to musicians embracing piracy. They don't just look the other way, they actively encourage it. Musicians burn their own CDs and rush them down to street vendors, begging them to sell them (without the musicians getting any cut at all). Those musicians also upload MP3s and email them to popular DJs who make mixtapes (similar to the US hiphop mixtape scene). Just like in China, the artists realize that they need to use so-called "piracy" to help them get more publicity. "Piracy is the way to get established and get your name out. There's no way to stop it, so we're using it to our advantage," according to one tecnobrega star, Gabi Amarantos. Contrary to what the RIAA and it supporters would tell you, the lack of copyright respect hasn't hurt the tecnobrega space at all -- it's made it explode. It's allowed many more musicians to make a decent living from music than via a traditional model and it means that much more technobrega music is being produced. In other words, all the stories about how a lack of copyright creates less music are, once again, provably wrong. Yet, of course, the RIAA and its supporters will continue to repeat the lie. In fact, the National Anti-Piracy Association in Brazil says that tecnobrega is a problem because it "makes light of piracy." It's not "making light" of piracy -- it's making money from piracy.
Um. . . .not us
I don't understand it. Crooks used to be smarter.
From Techdirt . . . .
Comcast Still Dancing Around Its Content Jamming Operations; What's Wrong With Admitting It?
from the shhhh,-it's-a-secret-that-everyone-knows dept
With the news coming out that Comcast's broadband jamming operations actually interfere with other apps as well, Comcast is now trying to respond to the complaints in every way other than telling people what it is that they're doing, which at this point really does appear to be the only sensible response. Comcast went to Reuters (since it was AP who confirmed the original story) and repeated the carefully worded claim that Comcast is not blocking any kind of traffic. Of course, people aren't saying that it's completely blocking any traffic -- just that it's quietly pulling some background tricks to slow down certain types of traffic without letting its customers know. That's the key part, and it's the same complaint that people have had for years with Comcast concerning its fuzzy bandwidth caps. The company advertises unlimited service, but if it's not unlimited, why not come out and explain what the limitations are? It seems only fair.
Perhaps an answer comes from Tim Lee, who was invited to a conference call today with Comcast to help "clear up" the misperceptions Comcast feels are being spread in the media about its actions. The only problem is that Comcast doesn't clear up anything. It basically admits to the traffic shaping but says it can't tell people that it's doing that, as it could help them get around the shaping. Well, sorry, too late for that. Besides, what's wrong with simply telling people what the limitations are and then going after the violators for terms of service breaches? In being so secretive and misleading about it, all it's doing is causing many more people to get upset with Comcast and think that they're being targeted (even if they're not). It's a ridiculous PR situation for Comcast to be in -- and it could be solved easily enough if Comcast stopped beating around the bush, stopped giving gobbledy-gook doublespeak responses that don't actually answer the questions people are asking and simply told people what they're doing and why. It really is that simple. If the company has a legitimate reason for doing what it's doing (and some people say there is) then why not explain that?
From Techdirt . . . .
Comcast Still Dancing Around Its Content Jamming Operations; What's Wrong With Admitting It?
from the shhhh,-it's-a-secret-that-everyone-knows dept
With the news coming out that Comcast's broadband jamming operations actually interfere with other apps as well, Comcast is now trying to respond to the complaints in every way other than telling people what it is that they're doing, which at this point really does appear to be the only sensible response. Comcast went to Reuters (since it was AP who confirmed the original story) and repeated the carefully worded claim that Comcast is not blocking any kind of traffic. Of course, people aren't saying that it's completely blocking any traffic -- just that it's quietly pulling some background tricks to slow down certain types of traffic without letting its customers know. That's the key part, and it's the same complaint that people have had for years with Comcast concerning its fuzzy bandwidth caps. The company advertises unlimited service, but if it's not unlimited, why not come out and explain what the limitations are? It seems only fair.
Perhaps an answer comes from Tim Lee, who was invited to a conference call today with Comcast to help "clear up" the misperceptions Comcast feels are being spread in the media about its actions. The only problem is that Comcast doesn't clear up anything. It basically admits to the traffic shaping but says it can't tell people that it's doing that, as it could help them get around the shaping. Well, sorry, too late for that. Besides, what's wrong with simply telling people what the limitations are and then going after the violators for terms of service breaches? In being so secretive and misleading about it, all it's doing is causing many more people to get upset with Comcast and think that they're being targeted (even if they're not). It's a ridiculous PR situation for Comcast to be in -- and it could be solved easily enough if Comcast stopped beating around the bush, stopped giving gobbledy-gook doublespeak responses that don't actually answer the questions people are asking and simply told people what they're doing and why. It really is that simple. If the company has a legitimate reason for doing what it's doing (and some people say there is) then why not explain that?
Think tank: More broadband regulation may be needed
From Benton . . . .
Think tank: More broadband regulation may be needed
Information Technology and Innovation Foundation president says higher speeds and lower prices for broadband won't develop without government help
By Grant Gross, IDG News Service
Competition may not fix problems with broadband speed and cost in the United States, because of the high cost of entry into the market, the leader of a technology think tank said Friday.
Many policymakers in Washington, D.C., call for competition to cure issues with broadband value and build-out, but they don't recognize that the cost of building out competing networks may make broadband a natural monopoly or duopoly, said Robert Atkinson, president of the Information Technology and Innovation Foundation (ITIF).
"It's a mistake for policymakers to assume that if they simply 'push the competition lever,' all the problems with broadband policy will be solved," wrote Atkinson, in an ITIF paper. "The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure."
Atkinson and some other speakers at an ITIF broadband policy forum argued that the U.S. may need more broadband regulations to achieve higher speeds and lower prices. Atkinson suggested a balance between competition and stronger enforcement of consumer protection and antitrust laws. Another option would be to mandate open pipes, but Atkinson said that type of regulation isn't appropriate in the U.S. right now.
Not everyone agreed that more regulation was appropriate. The suggestion that broadband is a natural monopoly or duopoly "as an economist gives me the willies," said John Mayo, professor of economics, business and public policy at Georgetown University.
A government-supported monopoly in the traditional telephone market didn't work, Mayo said. He recalled an old Bell Atlantic billboard saying something to the effect of, "We don't sell you what you think you want; we sell you what we know you need."
Broadband is still a relatively new technology and the broadband business model is still evolving, Mayo said. The industry doesn't need government regulation while it's still developing.
Other speakers complained that U.S. residents get lower speeds for higher prices than many residents of Europe and the Far East. But Mayo noted that prices have been falling. "No matter how you measure it ... it's more affordable today than it's ever been," he said.
Speakers at the forum noted that broadband policy is becoming an issue in the U.S. presidential campaign. This month, Sen. Hillary Clinton, the Democratic presidential front-runner, outlined a broadband policy that would include tax incentives for broadband carriers to move into rural and other underserved areas. Clinton also called for public and private partnerships to help roll out broadband and for the U.S. Federal Communications Commission to develop better data about where broadband is available.
Several other candidates have talked about broadband as well, including Republican front-runner Rudy Giuliani, noted Jonathan Sallet, a partner in the Washington communications firm, the Glover Park Group.
But many policymakers in Washington have recently taken a hands-off approach to broadband, thinking "let's create a neutral platform and just let stuff happen," added Steven Weber, a professor of political science at the University of California Berkeley. But just letting stuff happen isn't working to push broadband in many sectors, including health care, he said.
"I don't think that argument is completely adequate to most people," he said.
Correction: Due to a reporting error, this story as originally posted contained incorrect information regarding broadband regulation options presented by a policymaker. The article was amended on Oct. 22, 2007.
The Role of Competition in a National Broadband Policy
By Robert D. Atkinson
October 2007
Read the full text of this report (PDF)
There is perhaps no issue more central to the debate about broadband policy than the state of and role of competition. Indeed, the issue of competition drives many of the debates over broadband, including net neutrality, wireless spectrum auctions, municipal broadband, and unbundling proposals. Although some advocates claim that the current state of broadband competition is more than adequate, others decry market conditions and seek proactive public policies to spur more competition. Yet almost everyone involved in broadband policy in the United States agrees that regardless of the current state of competition, more competition is better. The stated reason is that more competition leads to lower prices, higher speeds, broader deployment, more innovation, and better customer service.
Yet, the Washington consensus in favor of more broadband competition ignores the fact that broadband displays natural monopoly or duopoly characteristics. Because of the nature of the broadband industry, there are significant tradeoffs between more competition and goals of efficiency, innovation, low prices, and higher speeds and broader deployment. Thus, it’s a mistake for policymakers to assume that if they simply “push the competition lever,” all the problems with broadband policy will be solved. Some problems will recede, but others are likely to emerge. The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure.
This paper starts by reviewing the affordability of broadband in the United States. It then postulates two starkly different views toward broadband competition: the “engineers’ view” and the “economists’ view.” Finally, it reviews the four main policy options toward broadband competition: 1) keep the same number of “pipes”; 2) spur the deployment of more pipes; 3) force incumbents to open up existing pipes to competitors, and 4) regulate “duopoly” pipes. Although each policy track will achieve some benefits, each also brings with it costs and risks. Policymakers need to balance the desire for more competition to enhance consumer welfare in the broadband realm with the need for the most efficient broadband industry structure.
Read the full text of this report (PDF)
Think tank: More broadband regulation may be needed
Information Technology and Innovation Foundation president says higher speeds and lower prices for broadband won't develop without government help
By Grant Gross, IDG News Service
Competition may not fix problems with broadband speed and cost in the United States, because of the high cost of entry into the market, the leader of a technology think tank said Friday.
Many policymakers in Washington, D.C., call for competition to cure issues with broadband value and build-out, but they don't recognize that the cost of building out competing networks may make broadband a natural monopoly or duopoly, said Robert Atkinson, president of the Information Technology and Innovation Foundation (ITIF).
"It's a mistake for policymakers to assume that if they simply 'push the competition lever,' all the problems with broadband policy will be solved," wrote Atkinson, in an ITIF paper. "The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure."
Atkinson and some other speakers at an ITIF broadband policy forum argued that the U.S. may need more broadband regulations to achieve higher speeds and lower prices. Atkinson suggested a balance between competition and stronger enforcement of consumer protection and antitrust laws. Another option would be to mandate open pipes, but Atkinson said that type of regulation isn't appropriate in the U.S. right now.
Not everyone agreed that more regulation was appropriate. The suggestion that broadband is a natural monopoly or duopoly "as an economist gives me the willies," said John Mayo, professor of economics, business and public policy at Georgetown University.
A government-supported monopoly in the traditional telephone market didn't work, Mayo said. He recalled an old Bell Atlantic billboard saying something to the effect of, "We don't sell you what you think you want; we sell you what we know you need."
Broadband is still a relatively new technology and the broadband business model is still evolving, Mayo said. The industry doesn't need government regulation while it's still developing.
Other speakers complained that U.S. residents get lower speeds for higher prices than many residents of Europe and the Far East. But Mayo noted that prices have been falling. "No matter how you measure it ... it's more affordable today than it's ever been," he said.
Speakers at the forum noted that broadband policy is becoming an issue in the U.S. presidential campaign. This month, Sen. Hillary Clinton, the Democratic presidential front-runner, outlined a broadband policy that would include tax incentives for broadband carriers to move into rural and other underserved areas. Clinton also called for public and private partnerships to help roll out broadband and for the U.S. Federal Communications Commission to develop better data about where broadband is available.
Several other candidates have talked about broadband as well, including Republican front-runner Rudy Giuliani, noted Jonathan Sallet, a partner in the Washington communications firm, the Glover Park Group.
But many policymakers in Washington have recently taken a hands-off approach to broadband, thinking "let's create a neutral platform and just let stuff happen," added Steven Weber, a professor of political science at the University of California Berkeley. But just letting stuff happen isn't working to push broadband in many sectors, including health care, he said.
"I don't think that argument is completely adequate to most people," he said.
Correction: Due to a reporting error, this story as originally posted contained incorrect information regarding broadband regulation options presented by a policymaker. The article was amended on Oct. 22, 2007.
The Role of Competition in a National Broadband Policy
By Robert D. Atkinson
October 2007
Read the full text of this report (PDF)
There is perhaps no issue more central to the debate about broadband policy than the state of and role of competition. Indeed, the issue of competition drives many of the debates over broadband, including net neutrality, wireless spectrum auctions, municipal broadband, and unbundling proposals. Although some advocates claim that the current state of broadband competition is more than adequate, others decry market conditions and seek proactive public policies to spur more competition. Yet almost everyone involved in broadband policy in the United States agrees that regardless of the current state of competition, more competition is better. The stated reason is that more competition leads to lower prices, higher speeds, broader deployment, more innovation, and better customer service.
Yet, the Washington consensus in favor of more broadband competition ignores the fact that broadband displays natural monopoly or duopoly characteristics. Because of the nature of the broadband industry, there are significant tradeoffs between more competition and goals of efficiency, innovation, low prices, and higher speeds and broader deployment. Thus, it’s a mistake for policymakers to assume that if they simply “push the competition lever,” all the problems with broadband policy will be solved. Some problems will recede, but others are likely to emerge. The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure.
This paper starts by reviewing the affordability of broadband in the United States. It then postulates two starkly different views toward broadband competition: the “engineers’ view” and the “economists’ view.” Finally, it reviews the four main policy options toward broadband competition: 1) keep the same number of “pipes”; 2) spur the deployment of more pipes; 3) force incumbents to open up existing pipes to competitors, and 4) regulate “duopoly” pipes. Although each policy track will achieve some benefits, each also brings with it costs and risks. Policymakers need to balance the desire for more competition to enhance consumer welfare in the broadband realm with the need for the most efficient broadband industry structure.
Read the full text of this report (PDF)
Web 2.0 Summit: U.S. Becoming Less Relevant In Global, Internet Economy
From Benton . . . .
Web 2.0 Summit: U.S. Becoming Less Relevant In Global, Internet Economy
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%, according to Morgan Stanley research.
By Antone Gonsalves
InformationWeek
The United States is losing its clout in the global economy and the Internet as other countries develop faster growing markets, a financial analyst said Thursday at the Web 2.0 Summit.
In a speech on technology trends, Mary Meeker, managing director of Morgan Stanley's global technology research team, said the U.S. has become less relevant over the years to the global economy.
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%. While this has been good news for other countries, it hasn't been a favorable trend for the U.S.
"The good news for the global economy is we're less relevant, the bad news is we're less relevant," Meeker said.
Going forward within the U.S., the country's current woes related to the subprime mortgage market "should not be underestimated" and it could have a serious impact on the U.S. GDP.
In terms of the Internet -- especially in technologies key to Web 2.0 success -- the fastest growth is in non-U.S. markets. For example, Germany leads the e-commerce market, China leads in online gaming, South Korea leads in broadband, Japan leads in mobile payments, the United Kingdom leads in online advertising, Brazil and South Korea lead in social networking, and the Philippines leads in micro-transactions via SMS.
America is not totally out of the picture. Online advertising is growing at a healthy clip in the U.S., growing 26% this year to 10% of the total ad market, or $21 billion, Meeker said. The total U.S. advertising market this year is expected to grow by 4%. By 2012, online advertising is expected to make up 17% of the total ad spend in the U.S.
As to the growing importance of new Internet companies, Meeker pointed to the number of social networks and other Web 2.0 properties that weren't in the top 10 rankings in terms of traffic in 2005, but are this year. Those companies include YouTube, No. 4; Live.com, No. 5; Facebook.com, No. 7; Orkut.com, No. 8; Wikipedia.org, No. 9; and Hi5.com, No. 10, according to Alexa Global Traffic Rankings.
Meeker's presentation is available online.
Web 2.0 Summit: U.S. Becoming Less Relevant In Global, Internet Economy
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%, according to Morgan Stanley research.
By Antone Gonsalves
InformationWeek
The United States is losing its clout in the global economy and the Internet as other countries develop faster growing markets, a financial analyst said Thursday at the Web 2.0 Summit.
In a speech on technology trends, Mary Meeker, managing director of Morgan Stanley's global technology research team, said the U.S. has become less relevant over the years to the global economy.
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%. While this has been good news for other countries, it hasn't been a favorable trend for the U.S.
"The good news for the global economy is we're less relevant, the bad news is we're less relevant," Meeker said.
Going forward within the U.S., the country's current woes related to the subprime mortgage market "should not be underestimated" and it could have a serious impact on the U.S. GDP.
In terms of the Internet -- especially in technologies key to Web 2.0 success -- the fastest growth is in non-U.S. markets. For example, Germany leads the e-commerce market, China leads in online gaming, South Korea leads in broadband, Japan leads in mobile payments, the United Kingdom leads in online advertising, Brazil and South Korea lead in social networking, and the Philippines leads in micro-transactions via SMS.
America is not totally out of the picture. Online advertising is growing at a healthy clip in the U.S., growing 26% this year to 10% of the total ad market, or $21 billion, Meeker said. The total U.S. advertising market this year is expected to grow by 4%. By 2012, online advertising is expected to make up 17% of the total ad spend in the U.S.
As to the growing importance of new Internet companies, Meeker pointed to the number of social networks and other Web 2.0 properties that weren't in the top 10 rankings in terms of traffic in 2005, but are this year. Those companies include YouTube, No. 4; Live.com, No. 5; Facebook.com, No. 7; Orkut.com, No. 8; Wikipedia.org, No. 9; and Hi5.com, No. 10, according to Alexa Global Traffic Rankings.
Meeker's presentation is available online.
Comcast blocks some Internet traffic
From MSNBC . . . . .
Comcast blocks some Internet traffic
Tests confirm data discrimination by number 2 U.S. service provider
Matthew Elvey, a Comcast subscriber in the San Francisco area who has noticed BitTorrent uploads being stifled, acknowledged that the company has the right to manage its network, but said he disapproves of its method.
By Peter Svensson
NEW YORK - Comcast Corp. actively interferes with attempts by some of its high-speed Internet subscribers to share files online, a move that runs counter to the tradition of treating all types of Net traffic equally.
The interference, which The Associated Press confirmed through nationwide tests, is the most drastic example yet of data discrimination by a U.S. Internet service provider. It involves company computers masquerading as those of its users.
If widely applied by other ISPs, the technology Comcast is using would be a crippling blow to the BitTorrent, eDonkey and Gnutella file-sharing networks. While these are mainly known as sources of copyright music, software and movies, BitTorrent in particular is emerging as a legitimate tool for quickly disseminating legal content.
The principle of equal treatment of traffic, called "Net Neutrality" by proponents, is not enshrined in law but supported by some regulations. Most of the debate around the issue has centered on tentative plans, now postponed, by large Internet carriers to offer preferential treatment of traffic from certain content providers for a fee.
Comcast's interference, on the other hand, appears to be an aggressive way of managing its network to keep file-sharing traffic from swallowing too much bandwidth and affecting the Internet speeds of other subscribers.
Number two provider
Comcast, the nation's largest cable TV operator and No. 2 Internet provider, would not specifically address the practice, but spokesman Charlie Douglas confirmed that it uses sophisticated methods to keep Net connections running smoothly.
"Comcast does not block access to any applications, including BitTorrent," he said.
Douglas would not specify what the company means by "access" — Comcast subscribers can download BitTorrent files without hindrance. Only uploads of complete files are blocked or delayed by the company, as indicated by AP tests.
But with "peer-to-peer" technology, users exchange files with each other, and one person's upload is another's download. That means Comcast's blocking of certain uploads has repercussions in the global network of file sharers.
Comcast's technology kicks in, though not consistently, when one BitTorrent user attempts to share a complete file with another user.
Each PC gets a message invisible to the user that looks like it comes from the other computer, telling it to stop communicating. But neither message originated from the other computer — it comes from Comcast. If it were a telephone conversation, it would be like the operator breaking into the conversation, telling each talker in the voice of the other: "Sorry, I have to hang up. Good bye."
Matthew Elvey, a Comcast subscriber in the San Francisco area who has noticed BitTorrent uploads being stifled, acknowledged that the company has the right to manage its network, but disapproves of the method, saying it appears to be deceptive.
"There's the wrong way of going about that and the right way," said Elvey, who is a computer consultant.
All types of content
Comcast's interference affects all types of content, meaning that, for instance, an independent movie producer who wanted to distribute his work using BitTorrent and his Comcast connection could find that difficult or impossible — as would someone pirating music.
Internet service providers have long complained about the vast amounts of traffic generated by a small number of subscribers who are avid users of file-sharing programs. Peer-to-peer applications account for between 50 percent and 90 percent of overall Internet traffic, according to a survey this year by ipoque GmbH, a German vendor of traffic-management equipment.
"We have a responsibility to manage our network to ensure all our customers have the best broadband experience possible," Douglas said. "This means we use the latest technologies to manage our network to provide a quality experience for all Comcast subscribers."
The practice of managing the flow of Internet data is known as "traffic shaping," and is already widespread among Internet service providers. It usually involves slowing down some forms of traffic, like file-sharing, while giving others priority. Other ISPs have attempted to block some file-sharing application by so-called "port filtering," but that method is easily circumvented and now largely ineffective.
Comcast's approach to traffic shaping is different because of the drastic effect it has on one type of traffic — in some cases blocking it rather than slowing it down — and the method used, which is difficult to circumvent and involves the company falsifying network traffic.
The "Net Neutrality" debate erupted in 2005, when AT&T Inc. suggested it would like to charge some Web companies more for preferential treatment of their traffic. Consumer advocates and Web heavyweights like Google Inc. and Amazon Inc. cried foul, saying it's a bedrock principle of the Internet that all traffic be treated equally.
To get its acquisition of BellSouth Corp. approved by the Federal Communications Commission, AT&T agreed in late 2006 not to implement such plans or prioritize traffic based on its origin for two and a half years. However, it did not make any commitments not to prioritize traffic based on its type, which is what Comcast is doing.
The FCC's stance on traffic shaping is not clear. A 2005 policy statement says that "consumers are entitled to run applications and services of their choice," but that principle is "subject to reasonable network management." Spokeswoman Mary Diamond would not elaborate.
Opposition
Free Press, a Washington-based public interest group that advocates Net Neutrality, opposes the kind of filtering applied by Comcast.
"We don't believe that any Internet provider should be able to discriminate, block or impair their consumers ability to send or receive legal content over the Internet," said Free Press spokeswoman Jen Howard.
Paul "Tony" Watson, a network security engineer at Google Inc. who has previously studied ways hackers could disrupt Internet traffic in manner similar to the method Comcast is using, said the cable company was probably acting within its legal rights.
"It's their network and they can do what they want," said Watson. "My concern is the precedent. In the past, when people got an ISP connection, they were getting a connection to the Internet. The only determination was price and bandwidth. Now they're going to have to make much more complicated decisions such as price, bandwidth, and what services I can get over the Internet."
Several companies have sprung up that rely on peer-to-peer technology, including BitTorrent Inc., founded by the creator of the BitTorrent software (which exists in several versions freely distributed by different groups and companies).
Ashwin Navin, the company's president and co-founder, confirmed that it has noticed interference from Comcast, in addition to some Canadian Internet service providers.
"They're using sophisticated technology to degrade service, which probably costs them a lot of money. It would be better to see them use that money to improve service," Navin said, noting that BitTorrent and other peer-to-peer applications are a major reason consumers sign up for broadband.
BitTorrent Inc. announced Oct. 9 that it was teaming up with online video companies to use its technology to distribute legal content.
Affecting others
Other companies that rely on peer-to-peer technology, and could be affected if Comcast decides to expand the range of applications it filters, include Internet TV service Joost, eBay Inc.'s Skype video-conferencing program and movie download appliance Vudu. There is no sign that Comcast is hampering those services.
Comcast subscriber Robb Topolski, a former software quality engineer at Intel Corp., started noticing the interference when trying to upload with file-sharing programs Gnutella and eDonkey early this year.
In August, Topolski began to see reports on Internet forum DSLreports.com from other Comcast users with the same problem. He now believes that his home town of Hillsboro, Ore., was a test market for the technology that was later widely applied in other Comcast service areas.
Topolski agrees that Comcast has a right to manage its network and slow down traffic that affects other subscribers, but disapproves of their method.
"By Comcast not acknowledging that they do this at all, there's no way to report any problems with it," Topolski said.
Comcast blocks some Internet traffic
Tests confirm data discrimination by number 2 U.S. service provider
Matthew Elvey, a Comcast subscriber in the San Francisco area who has noticed BitTorrent uploads being stifled, acknowledged that the company has the right to manage its network, but said he disapproves of its method.
By Peter Svensson
NEW YORK - Comcast Corp. actively interferes with attempts by some of its high-speed Internet subscribers to share files online, a move that runs counter to the tradition of treating all types of Net traffic equally.
The interference, which The Associated Press confirmed through nationwide tests, is the most drastic example yet of data discrimination by a U.S. Internet service provider. It involves company computers masquerading as those of its users.
If widely applied by other ISPs, the technology Comcast is using would be a crippling blow to the BitTorrent, eDonkey and Gnutella file-sharing networks. While these are mainly known as sources of copyright music, software and movies, BitTorrent in particular is emerging as a legitimate tool for quickly disseminating legal content.
The principle of equal treatment of traffic, called "Net Neutrality" by proponents, is not enshrined in law but supported by some regulations. Most of the debate around the issue has centered on tentative plans, now postponed, by large Internet carriers to offer preferential treatment of traffic from certain content providers for a fee.
Comcast's interference, on the other hand, appears to be an aggressive way of managing its network to keep file-sharing traffic from swallowing too much bandwidth and affecting the Internet speeds of other subscribers.
Number two provider
Comcast, the nation's largest cable TV operator and No. 2 Internet provider, would not specifically address the practice, but spokesman Charlie Douglas confirmed that it uses sophisticated methods to keep Net connections running smoothly.
"Comcast does not block access to any applications, including BitTorrent," he said.
Douglas would not specify what the company means by "access" — Comcast subscribers can download BitTorrent files without hindrance. Only uploads of complete files are blocked or delayed by the company, as indicated by AP tests.
But with "peer-to-peer" technology, users exchange files with each other, and one person's upload is another's download. That means Comcast's blocking of certain uploads has repercussions in the global network of file sharers.
Comcast's technology kicks in, though not consistently, when one BitTorrent user attempts to share a complete file with another user.
Each PC gets a message invisible to the user that looks like it comes from the other computer, telling it to stop communicating. But neither message originated from the other computer — it comes from Comcast. If it were a telephone conversation, it would be like the operator breaking into the conversation, telling each talker in the voice of the other: "Sorry, I have to hang up. Good bye."
Matthew Elvey, a Comcast subscriber in the San Francisco area who has noticed BitTorrent uploads being stifled, acknowledged that the company has the right to manage its network, but disapproves of the method, saying it appears to be deceptive.
"There's the wrong way of going about that and the right way," said Elvey, who is a computer consultant.
All types of content
Comcast's interference affects all types of content, meaning that, for instance, an independent movie producer who wanted to distribute his work using BitTorrent and his Comcast connection could find that difficult or impossible — as would someone pirating music.
Internet service providers have long complained about the vast amounts of traffic generated by a small number of subscribers who are avid users of file-sharing programs. Peer-to-peer applications account for between 50 percent and 90 percent of overall Internet traffic, according to a survey this year by ipoque GmbH, a German vendor of traffic-management equipment.
"We have a responsibility to manage our network to ensure all our customers have the best broadband experience possible," Douglas said. "This means we use the latest technologies to manage our network to provide a quality experience for all Comcast subscribers."
The practice of managing the flow of Internet data is known as "traffic shaping," and is already widespread among Internet service providers. It usually involves slowing down some forms of traffic, like file-sharing, while giving others priority. Other ISPs have attempted to block some file-sharing application by so-called "port filtering," but that method is easily circumvented and now largely ineffective.
Comcast's approach to traffic shaping is different because of the drastic effect it has on one type of traffic — in some cases blocking it rather than slowing it down — and the method used, which is difficult to circumvent and involves the company falsifying network traffic.
The "Net Neutrality" debate erupted in 2005, when AT&T Inc. suggested it would like to charge some Web companies more for preferential treatment of their traffic. Consumer advocates and Web heavyweights like Google Inc. and Amazon Inc. cried foul, saying it's a bedrock principle of the Internet that all traffic be treated equally.
To get its acquisition of BellSouth Corp. approved by the Federal Communications Commission, AT&T agreed in late 2006 not to implement such plans or prioritize traffic based on its origin for two and a half years. However, it did not make any commitments not to prioritize traffic based on its type, which is what Comcast is doing.
The FCC's stance on traffic shaping is not clear. A 2005 policy statement says that "consumers are entitled to run applications and services of their choice," but that principle is "subject to reasonable network management." Spokeswoman Mary Diamond would not elaborate.
Opposition
Free Press, a Washington-based public interest group that advocates Net Neutrality, opposes the kind of filtering applied by Comcast.
"We don't believe that any Internet provider should be able to discriminate, block or impair their consumers ability to send or receive legal content over the Internet," said Free Press spokeswoman Jen Howard.
Paul "Tony" Watson, a network security engineer at Google Inc. who has previously studied ways hackers could disrupt Internet traffic in manner similar to the method Comcast is using, said the cable company was probably acting within its legal rights.
"It's their network and they can do what they want," said Watson. "My concern is the precedent. In the past, when people got an ISP connection, they were getting a connection to the Internet. The only determination was price and bandwidth. Now they're going to have to make much more complicated decisions such as price, bandwidth, and what services I can get over the Internet."
Several companies have sprung up that rely on peer-to-peer technology, including BitTorrent Inc., founded by the creator of the BitTorrent software (which exists in several versions freely distributed by different groups and companies).
Ashwin Navin, the company's president and co-founder, confirmed that it has noticed interference from Comcast, in addition to some Canadian Internet service providers.
"They're using sophisticated technology to degrade service, which probably costs them a lot of money. It would be better to see them use that money to improve service," Navin said, noting that BitTorrent and other peer-to-peer applications are a major reason consumers sign up for broadband.
BitTorrent Inc. announced Oct. 9 that it was teaming up with online video companies to use its technology to distribute legal content.
Affecting others
Other companies that rely on peer-to-peer technology, and could be affected if Comcast decides to expand the range of applications it filters, include Internet TV service Joost, eBay Inc.'s Skype video-conferencing program and movie download appliance Vudu. There is no sign that Comcast is hampering those services.
Comcast subscriber Robb Topolski, a former software quality engineer at Intel Corp., started noticing the interference when trying to upload with file-sharing programs Gnutella and eDonkey early this year.
In August, Topolski began to see reports on Internet forum DSLreports.com from other Comcast users with the same problem. He now believes that his home town of Hillsboro, Ore., was a test market for the technology that was later widely applied in other Comcast service areas.
Topolski agrees that Comcast has a right to manage its network and slow down traffic that affects other subscribers, but disapproves of their method.
"By Comcast not acknowledging that they do this at all, there's no way to report any problems with it," Topolski said.
Comcast impersonates users' computers to block internet file sharing
The Raw Story . . . .
Comcast impersonates users' computers to block internet file sharing
Comcast subscribers have been complaining since last summer that the country's second-largest Internet service provider is deliberately cutting off peer-to-peer file sharing. Now a study by the Associated Press has confirmed those reports.
Peer-to-peer networks can be used for unauthorized distribution of copyrighted materials but also have many legitimate uses. File-sharing is now estimated to account for as much as 90% of Internet traffic, and many ISP's attempt to preserve bandwidth by slowing it down.
The Associated Press found that Comcast is using an even more drastic method, which can prevent file-sharing almost entirely by sending fake messages to both computers involved in a peer-to-peer transaction, telling them to drop the connection.
Comcast is not blocking its subscribers' downloads, only their uploads. This means that non-Comcast subscribers all over the world who seek to access those files may be the ones hardest hit.
Posters at the technology geek website Slashdot generally believe that the real problem lies in the fact that ISP's have over-promoted bandwidth-intensive services beyond what the current infrastructure can handle and are now trying to artificially limit the use of those same services rather than acknowledging the need for upgrades.
Comcast impersonates users' computers to block internet file sharing
Comcast subscribers have been complaining since last summer that the country's second-largest Internet service provider is deliberately cutting off peer-to-peer file sharing. Now a study by the Associated Press has confirmed those reports.
Peer-to-peer networks can be used for unauthorized distribution of copyrighted materials but also have many legitimate uses. File-sharing is now estimated to account for as much as 90% of Internet traffic, and many ISP's attempt to preserve bandwidth by slowing it down.
The Associated Press found that Comcast is using an even more drastic method, which can prevent file-sharing almost entirely by sending fake messages to both computers involved in a peer-to-peer transaction, telling them to drop the connection.
Comcast is not blocking its subscribers' downloads, only their uploads. This means that non-Comcast subscribers all over the world who seek to access those files may be the ones hardest hit.
Posters at the technology geek website Slashdot generally believe that the real problem lies in the fact that ISP's have over-promoted bandwidth-intensive services beyond what the current infrastructure can handle and are now trying to artificially limit the use of those same services rather than acknowledging the need for upgrades.
Taking a Whack Against Comcast
Taking a Whack Against Comcast
The insulting idea that, as Shaw puts it, "they thought just because we're old enough to get Social Security that we lack both brains and backbone."
So, after stewing over it all weekend, on the following Monday, she went downstairs, got Don's claw hammer and said: "C'mon, honey, we're going to Comcast."
Did you try to stop her, Mr. Shaw?
"Oh no, no," he says.
Hammer time: Shaw storms in the company's office. BAM! She whacks the keyboard of the customer service rep. BAM! Down goes the monitor. BAM! She totals the telephone. People scatter, scream, cops show up and what does she do? POW! A parting shot to the phone!
"They cuffed me right then," she says.
Her take on Comcast: "What a bunch of sub-moronic imbeciles."
Being a responsible newspaper, we must note that this is a misdemeanor, a crime, a completely inappropriate way of handling a business dispute.
Noted.
Who among us has not longed for a hammer in this age of incompetent "customer service representatives," of nimrods reading from a script at some 800-number location, of crumbs-in-their-beards plumbing installation people who tell you they'll grace you with their presence between 12 and 3, only never to show? And you'll call and call and finally some outsourced representative slings a dart at a calendar and tells you another guy will come back between 10 and 2 next Thursday? And when this guy comes, pants halfway down his behind, he'll tell you he brought the wrong part?
And there is nothing, nothing you can do.
Until there! On the horizon! It's Hammer Woman, avenger of oppressed cable subscribers everywhere! (Cue galloping "Lone Ranger" theme.)
"I scared the tar out of some people, at least," she says. "It had never occurred to me to take a hammer to a phone company before, but I was just so upset. . . . After I hit the keyboard, I turned to this blonde who had been there the previous Friday, the one who told me to wait for the manager, and I said, ' Now do I have your attention?' "
It wasn't all fun.
"My blood pressure went up around my ears. I started hyperventilating. They had to call the rescue squad and put me on a litter."
By the time it was over, she recalls, there were an ambulance, two police cruisers and a sergeant's car in the parking lot. Shaw received a three-month suspended sentence for disorderly conduct, a $345 fine in restitution and a year-long restraining order barring her from the Comcast office.
"Truly a unique and inappropriate situation," says Beth Bacha, a vice president for Comcast. She says company policy forbids disclosure of clients' records, but did say their files note that the service record wasn't exactly what Shaw has indicated. Besides, "nothing justifies this sort of dangerous behavior."
Bacha noted that Comcast has more than 25 million customers, the overwhelming majority of which are very satistified with their service.
Manassas police spokesman Sgt. Tim Neumann says there have been other police calls to that Comcast office, but he doesn't know what prompted them.
Bob Garfield, who runs ComcastMustDie.com, wrote last week he was happy the site had become an outlet for "so much deep-seated rage," but hoped customers would "keep the hammer assaults down to a bare minimum."
From what we can tell, Mona Shaw is not, actually, a raving lunatic armed with construction tools.
She is a nice lady who lives in a nice house. She and Don are both retired from the Air Force (she was a registered nurse). They have been married 45 years. She is secretary of the local AARP, secretary of a square-dancing club and takes in strays for the local animal shelter (they have seven dogs at the moment). She has a heart condition. She lifts weights at a local gym. The couple attend a Unitarian Universalist church.
Police gave her the hammer back, though she swears she's content to ride off into the sunset of True Crime Stories in America, never again to go Com-smash-tic on her local cable provider.
She does, however, finally, have phone service
The insulting idea that, as Shaw puts it, "they thought just because we're old enough to get Social Security that we lack both brains and backbone."
So, after stewing over it all weekend, on the following Monday, she went downstairs, got Don's claw hammer and said: "C'mon, honey, we're going to Comcast."
Did you try to stop her, Mr. Shaw?
"Oh no, no," he says.
Hammer time: Shaw storms in the company's office. BAM! She whacks the keyboard of the customer service rep. BAM! Down goes the monitor. BAM! She totals the telephone. People scatter, scream, cops show up and what does she do? POW! A parting shot to the phone!
"They cuffed me right then," she says.
Her take on Comcast: "What a bunch of sub-moronic imbeciles."
Being a responsible newspaper, we must note that this is a misdemeanor, a crime, a completely inappropriate way of handling a business dispute.
Noted.
Who among us has not longed for a hammer in this age of incompetent "customer service representatives," of nimrods reading from a script at some 800-number location, of crumbs-in-their-beards plumbing installation people who tell you they'll grace you with their presence between 12 and 3, only never to show? And you'll call and call and finally some outsourced representative slings a dart at a calendar and tells you another guy will come back between 10 and 2 next Thursday? And when this guy comes, pants halfway down his behind, he'll tell you he brought the wrong part?
And there is nothing, nothing you can do.
Until there! On the horizon! It's Hammer Woman, avenger of oppressed cable subscribers everywhere! (Cue galloping "Lone Ranger" theme.)
"I scared the tar out of some people, at least," she says. "It had never occurred to me to take a hammer to a phone company before, but I was just so upset. . . . After I hit the keyboard, I turned to this blonde who had been there the previous Friday, the one who told me to wait for the manager, and I said, ' Now do I have your attention?' "
It wasn't all fun.
"My blood pressure went up around my ears. I started hyperventilating. They had to call the rescue squad and put me on a litter."
By the time it was over, she recalls, there were an ambulance, two police cruisers and a sergeant's car in the parking lot. Shaw received a three-month suspended sentence for disorderly conduct, a $345 fine in restitution and a year-long restraining order barring her from the Comcast office.
"Truly a unique and inappropriate situation," says Beth Bacha, a vice president for Comcast. She says company policy forbids disclosure of clients' records, but did say their files note that the service record wasn't exactly what Shaw has indicated. Besides, "nothing justifies this sort of dangerous behavior."
Bacha noted that Comcast has more than 25 million customers, the overwhelming majority of which are very satistified with their service.
Manassas police spokesman Sgt. Tim Neumann says there have been other police calls to that Comcast office, but he doesn't know what prompted them.
Bob Garfield, who runs ComcastMustDie.com, wrote last week he was happy the site had become an outlet for "so much deep-seated rage," but hoped customers would "keep the hammer assaults down to a bare minimum."
From what we can tell, Mona Shaw is not, actually, a raving lunatic armed with construction tools.
She is a nice lady who lives in a nice house. She and Don are both retired from the Air Force (she was a registered nurse). They have been married 45 years. She is secretary of the local AARP, secretary of a square-dancing club and takes in strays for the local animal shelter (they have seven dogs at the moment). She has a heart condition. She lifts weights at a local gym. The couple attend a Unitarian Universalist church.
Police gave her the hammer back, though she swears she's content to ride off into the sunset of True Crime Stories in America, never again to go Com-smash-tic on her local cable provider.
She does, however, finally, have phone service
The smartest guys in the room
From Techdirt . . . .
Exploiting Telco Regulations For Free Calls And For Profit (Lots And Lots Of Profit)
from the so-easy,-it's-almost-criminal... dept
Earlier this year, we wrote about how suddenly a bunch of "free" calling services were popping up that all seemed to use phone numbers in Iowa. This included a service that would let you call an Iowa number and from there call anywhere in the world for free as well as a variety of "free conference calling" services. All of these systems were actually exploiting some legacy telco regulations, that were officially designed to help rural telcos get extra money to build out more rural service. Basically, the government allowed rural telcos to charge high termination fees to other telcos when calls from their lines terminated on one of the rural telco's lines. So, if you had AT&T and called your cousin in Iowa who had some small rural telco, AT&T would actually have to pay that telco some charge per minute, with the idea being that the telcos would use that money to invest in infrastructure. Of course, the infrastructure they invested in wasn't exactly building more lines to wire up others in the town, but in VoIP systems so they could reroute calls in to anywhere else, and then team up with various online sites to get as many calls as possible routed through those systems. Then they could just sit back and collect the millions of dollars rolling in from telcos. Broadband Reports points us to an article at the Wall Street Journal going into more details about how this happened -- and how the FCC is now scrambling a bit to see if there's a way they can stop it. In the meantime, the WSJ piece notes that while the telcos have been told by the FCC that they have to keep connecting these calls, they've simply stopped paying any of the termination fees as they await the results of the various lawsuits. Of course, all that's done for now is made the various free conference call services switch to other rural telcos in other states. Eventually, though, they'll run out of other states to go to (or the regulators will finally realize how their regulations are being exploited) and the little regulatory exploit will go away.
Exploiting Telco Regulations For Free Calls And For Profit (Lots And Lots Of Profit)
from the so-easy,-it's-almost-criminal... dept
Earlier this year, we wrote about how suddenly a bunch of "free" calling services were popping up that all seemed to use phone numbers in Iowa. This included a service that would let you call an Iowa number and from there call anywhere in the world for free as well as a variety of "free conference calling" services. All of these systems were actually exploiting some legacy telco regulations, that were officially designed to help rural telcos get extra money to build out more rural service. Basically, the government allowed rural telcos to charge high termination fees to other telcos when calls from their lines terminated on one of the rural telco's lines. So, if you had AT&T and called your cousin in Iowa who had some small rural telco, AT&T would actually have to pay that telco some charge per minute, with the idea being that the telcos would use that money to invest in infrastructure. Of course, the infrastructure they invested in wasn't exactly building more lines to wire up others in the town, but in VoIP systems so they could reroute calls in to anywhere else, and then team up with various online sites to get as many calls as possible routed through those systems. Then they could just sit back and collect the millions of dollars rolling in from telcos. Broadband Reports points us to an article at the Wall Street Journal going into more details about how this happened -- and how the FCC is now scrambling a bit to see if there's a way they can stop it. In the meantime, the WSJ piece notes that while the telcos have been told by the FCC that they have to keep connecting these calls, they've simply stopped paying any of the termination fees as they await the results of the various lawsuits. Of course, all that's done for now is made the various free conference call services switch to other rural telcos in other states. Eventually, though, they'll run out of other states to go to (or the regulators will finally realize how their regulations are being exploited) and the little regulatory exploit will go away.
Who says they don't have a sense of humor?
From Techdirt.....
Botched Software Install Means LA Teachers Not Getting Paid (Or Getting Paid Too Much) For Months
from the nice-work,-if-you-can-get-it dept
It always amazes us when we hear about big software systems that organizations pay millions (or sometimes hundreds of millions) for end up making life a lot worse. Remember when the Federal Technology Service (irony alert) spent a ton on a system that required 15 steps to save a document. Or the system that turned processes that used to take minutes into ones that took weeks. Then there was the city of Tacoma, where the city spent $51 million of taxpayer money on a new budgeting system that couldn't create a budget. It looks like we can add the Los Angeles Unified School District to the batch. They're in the middle of a big ERP project that apparently has been screwing up how much teachers are paid for months with no clear end in sight. The district claims that most of the problems are with teachers getting overpaid, but some were underpaid and others not paid at all apparently.
There certainly are many such installations that work just fine, so you have to wonder what the folks doing the installation and integration work did wrong when you hear about these stories -- and whether or not they're still getting paid the full amount (apparently $55 million to systems integrators Deloitte Consulting in this case). The real kicker, though is how long the problem has been going on and how much longer it's expected to continue. There have been errors at least as far back as June and potentially earlier (the article isn't clear). While the district keeps saying it'll get better "next month" prior to the latest payroll, the district also issued the following statement: "Tomorrow is payday for certified employees. We will have payroll errors tomorrow and the majority of those problems will be overpayments. I urge anyone who thinks they may have been overpaid to not spend the money, as overpayment errors will need to be corrected by the end of the year." By the end of the year? Ouch.
Botched Software Install Means LA Teachers Not Getting Paid (Or Getting Paid Too Much) For Months
from the nice-work,-if-you-can-get-it dept
It always amazes us when we hear about big software systems that organizations pay millions (or sometimes hundreds of millions) for end up making life a lot worse. Remember when the Federal Technology Service (irony alert) spent a ton on a system that required 15 steps to save a document. Or the system that turned processes that used to take minutes into ones that took weeks. Then there was the city of Tacoma, where the city spent $51 million of taxpayer money on a new budgeting system that couldn't create a budget. It looks like we can add the Los Angeles Unified School District to the batch. They're in the middle of a big ERP project that apparently has been screwing up how much teachers are paid for months with no clear end in sight. The district claims that most of the problems are with teachers getting overpaid, but some were underpaid and others not paid at all apparently.
There certainly are many such installations that work just fine, so you have to wonder what the folks doing the installation and integration work did wrong when you hear about these stories -- and whether or not they're still getting paid the full amount (apparently $55 million to systems integrators Deloitte Consulting in this case). The real kicker, though is how long the problem has been going on and how much longer it's expected to continue. There have been errors at least as far back as June and potentially earlier (the article isn't clear). While the district keeps saying it'll get better "next month" prior to the latest payroll, the district also issued the following statement: "Tomorrow is payday for certified employees. We will have payroll errors tomorrow and the majority of those problems will be overpayments. I urge anyone who thinks they may have been overpaid to not spend the money, as overpayment errors will need to be corrected by the end of the year." By the end of the year? Ouch.
News from around the intertubes (2)
From Techdirt . . . . .
Musicians Don't Need Venture Capitalists Any More
from the do-it-yourself dept
I just heard Tyler Cowen, one of my favorite econobloggers, on the public radio program On the Media discussing Radiohead's name-your-own-price model for its latest album. (The segment starts around 38:20 in this MP3) He makes a number of good points, but I think he overestimates the importance of the recording industry in the coming years. He says: "When you go back to this core function of discovering new music, lending the money to the people who produce that music, taking the chance, and then getting the product out there and publicizing it, the labels offer very important value, and the Internet is not a substitute." In the pre-Internet world, this was a reasonable description of the recording industry's role. Publishing a new album was a risky endeavor because you had to cover the fixed costs of recording the album, pressing several thousand copies, shipping them to retail stores, and undertaking an expensive nationwide promotional campaign. If an album fell short, the label risked losing tens of thousands of dollars.
The Internet changes all that. Online distribution costs almost nothing, promotion can be done at very low cost using a variety of online tools, and even recording has gotten a lot cheaper thanks to digital technology. As a result, there's little or no up-front cost to releasing an album. (Beyond the costs of writing songs and practicing them, which most bands do long before they get their first contract) That means there's no longer any reason to have record label executives picking and choosing music on behalf of fans. Instead, every band's music can be made available to everyone, and the fans themselves can "discover" the bands they like.
The labels may still have some valuable expertise finding and promoting good bands. But that's the role of an editor or agent, not the quasi-venture-capitalist role they played in the pre-Internet world. And it's a role in which they're going to have a lot more competition than they're used to, because lots of people enjoy finding and promoting good music; many of them even do it for free. Cowen says that new acts will be hurt by this trend because they won't get "big-dollar support from the major labels" to promote their albums. But as the Internet gives bands and fans a variety of new and sophisticated ways to find one another, "big-dollar support" simply won't be as important as it used to be. (Indeed, some musicians are already finding that television exposure matters more than the support of a big label) People will find new music via online word-of-mouth, the recommendations of trusted music reviewers, and a variety of sophisticated recommendation algorithms. "Big-dollar support" never hurts, but truly talented bands will have no trouble building a fan base without it. And a lot of bands will choose to go it alone so they don't have to give up creative control or a share of their revenues.
Musicians Don't Need Venture Capitalists Any More
from the do-it-yourself dept
I just heard Tyler Cowen, one of my favorite econobloggers, on the public radio program On the Media discussing Radiohead's name-your-own-price model for its latest album. (The segment starts around 38:20 in this MP3) He makes a number of good points, but I think he overestimates the importance of the recording industry in the coming years. He says: "When you go back to this core function of discovering new music, lending the money to the people who produce that music, taking the chance, and then getting the product out there and publicizing it, the labels offer very important value, and the Internet is not a substitute." In the pre-Internet world, this was a reasonable description of the recording industry's role. Publishing a new album was a risky endeavor because you had to cover the fixed costs of recording the album, pressing several thousand copies, shipping them to retail stores, and undertaking an expensive nationwide promotional campaign. If an album fell short, the label risked losing tens of thousands of dollars.
The Internet changes all that. Online distribution costs almost nothing, promotion can be done at very low cost using a variety of online tools, and even recording has gotten a lot cheaper thanks to digital technology. As a result, there's little or no up-front cost to releasing an album. (Beyond the costs of writing songs and practicing them, which most bands do long before they get their first contract) That means there's no longer any reason to have record label executives picking and choosing music on behalf of fans. Instead, every band's music can be made available to everyone, and the fans themselves can "discover" the bands they like.
The labels may still have some valuable expertise finding and promoting good bands. But that's the role of an editor or agent, not the quasi-venture-capitalist role they played in the pre-Internet world. And it's a role in which they're going to have a lot more competition than they're used to, because lots of people enjoy finding and promoting good music; many of them even do it for free. Cowen says that new acts will be hurt by this trend because they won't get "big-dollar support from the major labels" to promote their albums. But as the Internet gives bands and fans a variety of new and sophisticated ways to find one another, "big-dollar support" simply won't be as important as it used to be. (Indeed, some musicians are already finding that television exposure matters more than the support of a big label) People will find new music via online word-of-mouth, the recommendations of trusted music reviewers, and a variety of sophisticated recommendation algorithms. "Big-dollar support" never hurts, but truly talented bands will have no trouble building a fan base without it. And a lot of bands will choose to go it alone so they don't have to give up creative control or a share of their revenues.
News from around the intertubes . . . .
From Techdirt. . . .
Bands Rushing To Ditch Labels And Embrace Free; Are The Floodgates Opening?
from the tipping-point dept
We've only been predicting that music would eventually go free for about a dozen years, but it feels like we may be nearing a tipping point among musicians recognizing this simple truth as well, kicked off by last week's Radiohead announcement. Suddenly, similar announcements seem to be coming fast and furious. Apparently both Oasis and Jamiroquai are interested in following Radiohead's lead and the Charlatan's (managed by a member of Oasis) is already doing the same. On top of that, Trent Reznor proudly announced today that Nine Inch Nails is now free from its record label contract. Will.i.am, from the band The Black Eyed Peas, announced "the new distributor is your niece" in discussing how he plans to promote his new solo album.
There are two key things to note in all of this. First, all these bands feel the need to ditch big record labels to do this (and, no, that doesn't mean that small bands without recording contracts can't succeed this way too). This is a sad state of affairs for the record labels -- because there still should be a place for them in helping to promote and market a band, even if they're giving away the music for free. It's just that they're not venture capitalists any more and bands don't need help in distributing content -- two businesses the record labels insist they're in. What's really sad here is how clueless the record labels remain to this reality. In a Reuters article about the Radiohead move, a record industry insider mistakenly claims that this trend is going to hurt the music business because bands will rush out singles instead of albums. Apparently that insider only read the first half of the details of what Radiohead is doing (as well as what others are doing). They're doing exactly the opposite. They've put together a whole "discbox" with lots of extras to make it more compelling to buy. Will.i.am specifically made his latest album a "cohesive story" to encourage people to buy the whole album. Reznor purposely tried to make his CD as cool as possible (it changes colors when you play it in a CD player) to encourage people to buy it -- even as he tells people at concerts to download his songs.
That brings up the second key point. For all the whining about "free" music, the complainers keep missing the fact that free is only a part of the business model. This seems to be the thing that people get most confused about when we discuss business models around free music. They get stuck on free and assume that if something's free, there's no way to make money. But, all of these bands are showing exactly the opposite is true. The Times Online has a story incorrectly headlined "The day the music industry died" discussing these exact changes, but as you read the details, the music industry is doing just fine -- it's just the folks in the recording industry who are in trouble. Musicians are raking in record revenue from concerts -- and the artists are realizing that the free music only helps generate more interest in those concerts. Listen to Alan McGee from Oasis and the Charlatans, saying that giving away the music for free was a can't miss proposition: "We increase our fan base, we sell more merchandise, more fans talk about the band and we get more advertising and more films (soundtracks). More people will get into the the Charlatans and will probably pay the money to see the show. I presume it will double the gig traffic, maybe even treble it."
In other words, more bands are recognizing exactly what a bunch of folks knew was inevitable at least a decade ago. Unshackle the music, give it away free, and use it to make a lot of other stuff a lot more valuable, and there's plenty of money to be made. The only sad part in all of this is that the record labels have been not just blind to the idea -- they've actively tried to discredit anyone who pointed it out to them.
Bands Rushing To Ditch Labels And Embrace Free; Are The Floodgates Opening?
from the tipping-point dept
We've only been predicting that music would eventually go free for about a dozen years, but it feels like we may be nearing a tipping point among musicians recognizing this simple truth as well, kicked off by last week's Radiohead announcement. Suddenly, similar announcements seem to be coming fast and furious. Apparently both Oasis and Jamiroquai are interested in following Radiohead's lead and the Charlatan's (managed by a member of Oasis) is already doing the same. On top of that, Trent Reznor proudly announced today that Nine Inch Nails is now free from its record label contract. Will.i.am, from the band The Black Eyed Peas, announced "the new distributor is your niece" in discussing how he plans to promote his new solo album.
There are two key things to note in all of this. First, all these bands feel the need to ditch big record labels to do this (and, no, that doesn't mean that small bands without recording contracts can't succeed this way too). This is a sad state of affairs for the record labels -- because there still should be a place for them in helping to promote and market a band, even if they're giving away the music for free. It's just that they're not venture capitalists any more and bands don't need help in distributing content -- two businesses the record labels insist they're in. What's really sad here is how clueless the record labels remain to this reality. In a Reuters article about the Radiohead move, a record industry insider mistakenly claims that this trend is going to hurt the music business because bands will rush out singles instead of albums. Apparently that insider only read the first half of the details of what Radiohead is doing (as well as what others are doing). They're doing exactly the opposite. They've put together a whole "discbox" with lots of extras to make it more compelling to buy. Will.i.am specifically made his latest album a "cohesive story" to encourage people to buy the whole album. Reznor purposely tried to make his CD as cool as possible (it changes colors when you play it in a CD player) to encourage people to buy it -- even as he tells people at concerts to download his songs.
That brings up the second key point. For all the whining about "free" music, the complainers keep missing the fact that free is only a part of the business model. This seems to be the thing that people get most confused about when we discuss business models around free music. They get stuck on free and assume that if something's free, there's no way to make money. But, all of these bands are showing exactly the opposite is true. The Times Online has a story incorrectly headlined "The day the music industry died" discussing these exact changes, but as you read the details, the music industry is doing just fine -- it's just the folks in the recording industry who are in trouble. Musicians are raking in record revenue from concerts -- and the artists are realizing that the free music only helps generate more interest in those concerts. Listen to Alan McGee from Oasis and the Charlatans, saying that giving away the music for free was a can't miss proposition: "We increase our fan base, we sell more merchandise, more fans talk about the band and we get more advertising and more films (soundtracks). More people will get into the the Charlatans and will probably pay the money to see the show. I presume it will double the gig traffic, maybe even treble it."
In other words, more bands are recognizing exactly what a bunch of folks knew was inevitable at least a decade ago. Unshackle the music, give it away free, and use it to make a lot of other stuff a lot more valuable, and there's plenty of money to be made. The only sad part in all of this is that the record labels have been not just blind to the idea -- they've actively tried to discredit anyone who pointed it out to them.
In case you missed it.....
On Monday, October 22nd, your HughesNet speed was reduced (again). You are now seeing traffic shaping in action.
Now it takes anywhere from 30 seconds to 1-1/2 minutes from the time you click "Enter" until your page is fully loaded for you to see (um, latency has nothing to do with it folks, never did).
Yep. Dialup-over-the-satellite internet speeds. Slower by the day.
But your monthly price stayed the same.
The ass-backwards mentality of the HughesNet business model continues.
Now it takes anywhere from 30 seconds to 1-1/2 minutes from the time you click "Enter" until your page is fully loaded for you to see (um, latency has nothing to do with it folks, never did).
Yep. Dialup-over-the-satellite internet speeds. Slower by the day.
But your monthly price stayed the same.
The ass-backwards mentality of the HughesNet business model continues.
Saturday, October 13, 2007
Excuse me while I chuckle...
I'd say with the coming oil crisis and Wal-Mart's rolling warehouses on wheels, Wal-Mart may be headed the way of the dinosaur in the next 5-10 years. I mean afterall, they make their living selling stuff and it takes an enormous fleet of over-the-road trucks (who get maybe 10-15 mpg at best) to move that stuff to all those stores. They have no future. ;)
From Techdirt . . . .
Wal-Mart Broadband Looks A Lot Less Impressive Than First Envisioned
from the not-quite-what-you-expected dept
Three years ago, we discussed the possibility that Wal-Mart could eventually enter the broadband business. At the time, the discussion was around Wal-Mart using its massive network of stores to act as WiMax access points, coating much of the nation with wireless internet access. The idea didn't seem likely for a variety of reasons, and with the news that Wal-Mart actually is entering the broadband space, we can easily see why the WiMax plan never made sense for Wal-Mart. Rather than taking the route suggested three years ago, Wal-Mart is simply partnering with Hughes to resell satellite broadband access. As many people know, satellite broadband access is the last refuge for the broadband addict who simply has no other choice. The speeds aren't great, the latency is a huge pain, and the reliability is often a problem. So, there are already some hurdles to overcome. Second, unlike the original suggestion, Wal-Mart appears to have nothing to do with the offering, other than slapping its brand on it (and even then it's not entirely clear from the article how the service will be branded). That means that Wal-Mart won't be able to have much say in how the service is run. Even if the stories of Wal-Mart losing its technology edge are overrated, this deal is going to involve existing infrastructure and existing service models -- meaning that it won't shake up the industry very much at all. Basically, what was envisioned three years back was Wal-Mart routing around other providers and offering up something entirely new, which it could control. Three years later, the best the company can do is piggyback its brand on a weak legacy offering. That's hardly going to shake up the industry.
From Techdirt . . . .
Wal-Mart Broadband Looks A Lot Less Impressive Than First Envisioned
from the not-quite-what-you-expected dept
Three years ago, we discussed the possibility that Wal-Mart could eventually enter the broadband business. At the time, the discussion was around Wal-Mart using its massive network of stores to act as WiMax access points, coating much of the nation with wireless internet access. The idea didn't seem likely for a variety of reasons, and with the news that Wal-Mart actually is entering the broadband space, we can easily see why the WiMax plan never made sense for Wal-Mart. Rather than taking the route suggested three years ago, Wal-Mart is simply partnering with Hughes to resell satellite broadband access. As many people know, satellite broadband access is the last refuge for the broadband addict who simply has no other choice. The speeds aren't great, the latency is a huge pain, and the reliability is often a problem. So, there are already some hurdles to overcome. Second, unlike the original suggestion, Wal-Mart appears to have nothing to do with the offering, other than slapping its brand on it (and even then it's not entirely clear from the article how the service will be branded). That means that Wal-Mart won't be able to have much say in how the service is run. Even if the stories of Wal-Mart losing its technology edge are overrated, this deal is going to involve existing infrastructure and existing service models -- meaning that it won't shake up the industry very much at all. Basically, what was envisioned three years back was Wal-Mart routing around other providers and offering up something entirely new, which it could control. Three years later, the best the company can do is piggyback its brand on a weak legacy offering. That's hardly going to shake up the industry.
Friday, October 5, 2007
This will catch on in the rural areas of the USA and . . . .
at some point, HughesNet and the rest of the ovrepriced dial-up-over-the-satellite internet providers will see their paying customer base disappear. A kind self-fulfilling prophecy since they falsely claimed too many people use their service which caused them to ration it in the first place.
You Can't Get There From Here: The myth of bandwidth scarcity and can Team Cringely really make it to the Moon?
By Robert X. Cringely
Several years ago I wrote a column describing a system I had thought up for sharing Internet hotspots that I called WhyFi. Among the readers of that column were some entrepreneurs in Spain who went on to start the hotspot sharing service called FON, which now has more than 190,000 participating hotspots. Those Spaniards have been quite generous in attributing some of their inspiration to my column. And now this week FON signed a deal with British Telecom that promises to bring tens of thousands more FON hotspots to the UK and beyond. This isn't FON's first deal with a big broadband ISP -- they already have contracts with Speakeasy and Time Warner Cable in the U.S. among others -- but it is one of the biggest and points to an important transformation taking place in the way people communicate.
These FON deals remind me of President Lincoln's original Emancipation Proclamation from 1863, which I'm sure you'll recall didn't free ALL the slaves, just those in the rebellious states of the Confederacy. BT is not the largest mobile phone company in the UK, though it IS the largest ISP, so offering the ability for customers to make free or very cheap VoIP calls using FON software running on their home routers or that of another participating BT Fusion customer works well to tie those customers to BT ISP service, where the future of telephony clearly lies. It's good for customers, sure, and I am happy for them, but the reason BT and others do these deals is because it is BAD for their larger mobile competitors.
This is exactly why T-Mobile -- a smaller U.S. mobile carrier -- sells combined GSM/VoIP phones in the U.S. and the other carriers don't. T-Mobile, with no landline customers and no consumer ISP service, can only improve its U.S. business one way, by attracting more mobile customers from other carriers. Adding VoIP capability, while it may hurt mobile revenue a little, also costs T-Mobile almost nothing to provide, so its customer-attracting capability is justified. For exactly the same reason T-Mobile is happy to accept iPhone users who prefer to not use AT&T: it costs T-Mobile nothing more in support (because the phones are effectively unsupported) and costs AT&T mobile customers.
These games are played over and over by communication service companies of all kinds, and at the heart of it all is a big lie -- that bandwidth is scarce.
Bandwidth is not scarce. America and the world are bound by more fiber that is dark than is lighted. If backbones needed to be 10 times larger than they currently are, they quickly could be. On a local basis, the cost of provisioning a 1.5-megabit, 6-megabit, or 24-megabit DSL connection is essentially the same to the ISP, meaning the "bigger" pipes are vastly more profitable and that's all.
Bandwidth scarcity isn't peculiar to the United States, it is just managed differently overseas. You can get a 100-megabit-per-second Internet connection for $12 per month in Korea, sure, but it won't access most non-Korean Internet services any faster than a U.S. DSL or cable Internet connection could. There are few data resources anywhere, in fact, that can be accessed at such line speeds because it isn't in the economic interest of the ISP to make that much bandwidth available. It could be done fairly cheaply, but then who would pay more for a faster line?
Profit is to be found not just in pleasing dissatisfied customers, but in dissatisfying them in the first place so they will then pay to be pleased.
This isn't just a retail phenomenon, either. This week IBM announced to its workers that it is selling its network services business to AT&T. Will this please customers? Probably not. Will it put them in a position where they will pay extra to be pleased? Probably.
To this point AT&T has been just one of IBM's telecommunication service providers, but it has the noteworthy distinction of being by far the most expensive. Handing over the business to AT&T will not save IBM customers any money. IBM intends to continue to provide the same communication services to its customers, though now through AT&T, and AT&T says it expects to gain $1 billion in sales. Those sales have to come from somewhere, and in this case they will come from taking business from lower-cost providers.
What the deal WILL do for IBM is get 2,200 workers off the books cheaply (that $80 million charge against earnings AT&T is taking for the deal will mainly go for picking up the underfunded pension obligations of the transferred IBM workers). It will be good for the workers, too, because they'll be going to a company with a real benefits package and a solid pension plan.
But it won't be good for customers, whose charges will only go up if an IBM sales commission will now be pasted atop overpriced services that were, in the past, often sold at a loss. AT&T is not in the business of selling at a loss. This will have the effect for IBM customers of firmly defying the trend toward lower communication service costs, which maybe was AT&T's whole intent in the first place.
Whatever the cockeyed logical basis of this transaction, it will do nothing to change the deliberate bandwidth scarcity problem that plagues businesses and consumers alike worldwide. The only way to solve THAT problem is by taking back ownership of our own last-mile connections and creating a true competitive marketplace for backbone services. It's a move that would pay for itself almost instantly, but I doubt that it will ever be allowed to happen.
(entire article at site)
You Can't Get There From Here: The myth of bandwidth scarcity and can Team Cringely really make it to the Moon?
By Robert X. Cringely
Several years ago I wrote a column describing a system I had thought up for sharing Internet hotspots that I called WhyFi. Among the readers of that column were some entrepreneurs in Spain who went on to start the hotspot sharing service called FON, which now has more than 190,000 participating hotspots. Those Spaniards have been quite generous in attributing some of their inspiration to my column. And now this week FON signed a deal with British Telecom that promises to bring tens of thousands more FON hotspots to the UK and beyond. This isn't FON's first deal with a big broadband ISP -- they already have contracts with Speakeasy and Time Warner Cable in the U.S. among others -- but it is one of the biggest and points to an important transformation taking place in the way people communicate.
These FON deals remind me of President Lincoln's original Emancipation Proclamation from 1863, which I'm sure you'll recall didn't free ALL the slaves, just those in the rebellious states of the Confederacy. BT is not the largest mobile phone company in the UK, though it IS the largest ISP, so offering the ability for customers to make free or very cheap VoIP calls using FON software running on their home routers or that of another participating BT Fusion customer works well to tie those customers to BT ISP service, where the future of telephony clearly lies. It's good for customers, sure, and I am happy for them, but the reason BT and others do these deals is because it is BAD for their larger mobile competitors.
This is exactly why T-Mobile -- a smaller U.S. mobile carrier -- sells combined GSM/VoIP phones in the U.S. and the other carriers don't. T-Mobile, with no landline customers and no consumer ISP service, can only improve its U.S. business one way, by attracting more mobile customers from other carriers. Adding VoIP capability, while it may hurt mobile revenue a little, also costs T-Mobile almost nothing to provide, so its customer-attracting capability is justified. For exactly the same reason T-Mobile is happy to accept iPhone users who prefer to not use AT&T: it costs T-Mobile nothing more in support (because the phones are effectively unsupported) and costs AT&T mobile customers.
These games are played over and over by communication service companies of all kinds, and at the heart of it all is a big lie -- that bandwidth is scarce.
Bandwidth is not scarce. America and the world are bound by more fiber that is dark than is lighted. If backbones needed to be 10 times larger than they currently are, they quickly could be. On a local basis, the cost of provisioning a 1.5-megabit, 6-megabit, or 24-megabit DSL connection is essentially the same to the ISP, meaning the "bigger" pipes are vastly more profitable and that's all.
Bandwidth scarcity isn't peculiar to the United States, it is just managed differently overseas. You can get a 100-megabit-per-second Internet connection for $12 per month in Korea, sure, but it won't access most non-Korean Internet services any faster than a U.S. DSL or cable Internet connection could. There are few data resources anywhere, in fact, that can be accessed at such line speeds because it isn't in the economic interest of the ISP to make that much bandwidth available. It could be done fairly cheaply, but then who would pay more for a faster line?
Profit is to be found not just in pleasing dissatisfied customers, but in dissatisfying them in the first place so they will then pay to be pleased.
This isn't just a retail phenomenon, either. This week IBM announced to its workers that it is selling its network services business to AT&T. Will this please customers? Probably not. Will it put them in a position where they will pay extra to be pleased? Probably.
To this point AT&T has been just one of IBM's telecommunication service providers, but it has the noteworthy distinction of being by far the most expensive. Handing over the business to AT&T will not save IBM customers any money. IBM intends to continue to provide the same communication services to its customers, though now through AT&T, and AT&T says it expects to gain $1 billion in sales. Those sales have to come from somewhere, and in this case they will come from taking business from lower-cost providers.
What the deal WILL do for IBM is get 2,200 workers off the books cheaply (that $80 million charge against earnings AT&T is taking for the deal will mainly go for picking up the underfunded pension obligations of the transferred IBM workers). It will be good for the workers, too, because they'll be going to a company with a real benefits package and a solid pension plan.
But it won't be good for customers, whose charges will only go up if an IBM sales commission will now be pasted atop overpriced services that were, in the past, often sold at a loss. AT&T is not in the business of selling at a loss. This will have the effect for IBM customers of firmly defying the trend toward lower communication service costs, which maybe was AT&T's whole intent in the first place.
Whatever the cockeyed logical basis of this transaction, it will do nothing to change the deliberate bandwidth scarcity problem that plagues businesses and consumers alike worldwide. The only way to solve THAT problem is by taking back ownership of our own last-mile connections and creating a true competitive marketplace for backbone services. It's a move that would pay for itself almost instantly, but I doubt that it will ever be allowed to happen.
(entire article at site)
Thursday, October 4, 2007
From the Ministry of Love
From ARS Technica . . . .
AT&T threatens to disconnect subscribers who criticize the company
By Ken Fisher
AT&T has rolled out new Terms of Service for its DSL service that leave plenty of room for interpretation. From our reading of it, in concert with several others, what we see is a ToS that attempts to give AT&T the right to disconnect its own customers who criticize the company on blogs or in other online settings.
In section 5 of its legal ToS, AT&T stipulates the following:
"AT&T may immediately terminate or suspend all or a portion of your Service, any Member ID, electronic mail address, IP address, Universal Resource Locator or domain name used by you, without notice, for conduct that AT&T believes (a) violates the Acceptable Use Policy; (b) constitutes a violation of any law, regulation or tariff (including, without limitation, copyright and intellectual property laws) or a violation of these TOS, or any applicable policies or guidelines, or (c) tends to damage the name or reputation of AT&T, or its parents, affiliates and subsidiaries."
Translation: "conduct" that AT&T "believes" "tends to damage" its name, or the name of its partners, can get you booted off the service. Note the use of "tends to damage": the language of the contract does not require any proof of any actual damage.
The story, which surfaced at the venerable Slashdot, has many people outraged and is being discussed as a prime example of why net neutrality is needed. I think that puts the cart before the horse, however. Here's why.
There's nothing which guarantees that what AT&T is doing here is either legal or what the company intends. This wouldn't be the first time that poorly thought-out legal language made it into a contract used by a major corporation. Why are we thinking it's an oversight? Simple: we believe that AT&T isn't misguided enough to expect to be able to squash First Amendment rights with a ToS contract without losing both face and their cozy legal status.
As an Internet service provider, AT&T itself is protected from lawsuits relating to the distribution of illegal materials online because they are excused from having to monitor and police their own networks from such activity. They are also protected against what their users say and do online. For instance, if I'm an AT&T customer and I posted damaging comments about Vodafone using AT&T's service, Vodafone can't go after AT&T just because they're my (fictional) ISP. Yet if AT&T begins to monitor and police its own network to protect its own corporate identity, the company will be setting itself up for lawsuits from parties looking for the same protections as AT&T grants itself. In this way, AT&T has to tread reasonably.
Even more important, should AT&T ever attempt to exercise this contractual "right," it will do far more harm to its "name" than the user(s) in question could have ever done... if what's shut down is just a regular user expressing typical criticism of a corporation. The backlash would be intense, to say the least.
We've requested clarification of the issue, but we'd also like to note that AT&T also reserves the right to disconnect users with "insecure" computers, and we've not heard of this happening, either. It may be nothing more than a toothless scare tactic, or it may be focused on something more insidious than mere criticism of the company. As it is currently worded, however, plenty of AT&T customers are concerned, if my inbox is any estimation.
AT&T threatens to disconnect subscribers who criticize the company
By Ken Fisher
AT&T has rolled out new Terms of Service for its DSL service that leave plenty of room for interpretation. From our reading of it, in concert with several others, what we see is a ToS that attempts to give AT&T the right to disconnect its own customers who criticize the company on blogs or in other online settings.
In section 5 of its legal ToS, AT&T stipulates the following:
"AT&T may immediately terminate or suspend all or a portion of your Service, any Member ID, electronic mail address, IP address, Universal Resource Locator or domain name used by you, without notice, for conduct that AT&T believes (a) violates the Acceptable Use Policy; (b) constitutes a violation of any law, regulation or tariff (including, without limitation, copyright and intellectual property laws) or a violation of these TOS, or any applicable policies or guidelines, or (c) tends to damage the name or reputation of AT&T, or its parents, affiliates and subsidiaries."
Translation: "conduct" that AT&T "believes" "tends to damage" its name, or the name of its partners, can get you booted off the service. Note the use of "tends to damage": the language of the contract does not require any proof of any actual damage.
The story, which surfaced at the venerable Slashdot, has many people outraged and is being discussed as a prime example of why net neutrality is needed. I think that puts the cart before the horse, however. Here's why.
There's nothing which guarantees that what AT&T is doing here is either legal or what the company intends. This wouldn't be the first time that poorly thought-out legal language made it into a contract used by a major corporation. Why are we thinking it's an oversight? Simple: we believe that AT&T isn't misguided enough to expect to be able to squash First Amendment rights with a ToS contract without losing both face and their cozy legal status.
As an Internet service provider, AT&T itself is protected from lawsuits relating to the distribution of illegal materials online because they are excused from having to monitor and police their own networks from such activity. They are also protected against what their users say and do online. For instance, if I'm an AT&T customer and I posted damaging comments about Vodafone using AT&T's service, Vodafone can't go after AT&T just because they're my (fictional) ISP. Yet if AT&T begins to monitor and police its own network to protect its own corporate identity, the company will be setting itself up for lawsuits from parties looking for the same protections as AT&T grants itself. In this way, AT&T has to tread reasonably.
Even more important, should AT&T ever attempt to exercise this contractual "right," it will do far more harm to its "name" than the user(s) in question could have ever done... if what's shut down is just a regular user expressing typical criticism of a corporation. The backlash would be intense, to say the least.
We've requested clarification of the issue, but we'd also like to note that AT&T also reserves the right to disconnect users with "insecure" computers, and we've not heard of this happening, either. It may be nothing more than a toothless scare tactic, or it may be focused on something more insidious than mere criticism of the company. As it is currently worded, however, plenty of AT&T customers are concerned, if my inbox is any estimation.
Nothing new . . . Japan ahead . . . USA behind
From the NY times . . . .
Unlike U.S., Japanese Push Fiber Over Profit
By KEN BELSON
Yukari Haruzono, a computer game enthusiast in Tokyo, waited Sunday for an upgrade while her daughter, Yuho, 6, played. She pays $55 a month to be able to download data at high speeds.
TOKYO — The United States may be the world’s largest economy, but when it comes to Internet connections at home, many Americans still live in the slow lane. By contrast, Japan is a broadband paradise with the fastest and cheapest Internet connections in the world.
Nearly eight million Japanese have a fiber optic line at home that is as much as 30 times speedier than a typical DSL line.
But while that speed is a boon for Japanese users, industry analysts and some companies question whether the push to install fiber is worth the effort, given the high cost of installation, affordable alternatives and lack of services that take advantage of the fast connections.
Indeed, the stock price of Nippon Telegraph and Telephone, which has two-thirds of the fiber-to-the-home market, has sunk because of concerns about heavy investments and the deep discounts it has showered on customers. Other carriers have gotten out of the business entirely, even though it is supported by government tax breaks and other incentives.
The heavy spending on fiber networks, analysts say, is typical in Japan, where big companies disregard short-term profit and plow billions into projects in the belief that something good will necessarily follow.
Matteo Bortesi, a technology consultant at Accenture in Tokyo, compared the fiber efforts to the push for the Shinkansen bullet-train network in the 1960s, when profit was secondary to the need for faster travel. “They want to be the first country to have a full national fiber network, not unlike the Shinkansen years ago, even though the return on investment is unclear.”
“The Japanese think long-term,” Mr. Bortesi added. “If they think they will benefit in 100 years, they will invest for their grandkids. There’s a bit of national pride we don’t see in the West.”
Such a strategy may seem anathema in the United States, where companies like AT&T and Verizon Communications, the market leader with 1.1 million fiber subscribers, are under intense pressure from investors to justify their capital spending plans. And analysts note that the Bush administration has largely stood on the sidelines rather than provide financial incentives to promote fiber services.
“While you might not want to replicate the same pathway as other countries, we are falling seriously behind,” said Charles H. Ferguson, author of “The Broadband Problem.”
Mr. Ferguson said the substandard American broadband infrastructure shaved as much as 1 percent off the nation’s potential productivity growth. Faster broadband services would allow telecommuters to use better videoconferencing equipment and more easily share multimedia documents, he said.
But even without Japan’s tax incentives, N.T.T. and some other Japanese companies say that selling fiber lines makes sense because their older copper networks need to be replaced anyway, and because they have to develop services to offset the decline in revenue from traditional phone lines.
And while acknowledging that initial investments are expensive, N.T.T. and KDDI, the second-largest phone company, expect to recoup some of their money by selling additional products, like Internet phone and television services, that are delivered over fiber lines. They also expect electronics companies to produce an array of products that rely on fiber networks, including high-definition videoconferencing equipment and medical devices that can instantly relay X-rays between hospitals.
“The cost of installing the service will continue to go down by leaps and bounds,” said Kazuhiko Ogawa, general manager of the network strategy section at N.T.T. “In the future, we will establish a lot of alliances and applications that will combine stability and reliability.”
But while millions of users have signed up for fiber connections, far fewer have bought additional services.
For Yukari Haruzono, an online game enthusiast, a high-speed fiber line is the difference between surviving and thriving in the game EverQuest.
“I play every night and on weekends, and it’s much faster and more stable than other broadband,” said Ms. Haruzono, who pays about $55 a month for service that lets her download data at speeds up to 100 megabits a second, roughly what Verizon offersin the United States. “All my friends have fiber connections, too, because they are gamers.”
But Ms. Haruzono, who has a fiber line from KDDI, buys her phone service from another company. She and other users were alarmed by technical glitches that shut down N.T.T.’s Internet phone service for several hours this year. She buys her television from the satellite provider SkyPerfect.
Over all, only about half of N.T.T.’s fiber customers sign up for Internet phone service in addition to their broadband, and just over 43,000 also subscribe to a video plan. In the United States, nearly half of Verizon’s fiber customers also get a television package, and nearly all of them use its phone service.
Japanese carriers have been slow to sell bundles of services because they face some competition from cable providers, their natural rivals.
Just 20 percent of Japanese households subscribe to a pay television service from a cable or satellite provider.
By contrast, Cablevision, Comcast and other American cable providers have been selling phone services that have helped them take millions of customers from Verizon, AT&T and other phone companies. Verizon and AT&T have retaliated by selling their own television services.
Japanese phone companies have been unable to follow suit because of a law that limits their role in the broadcasting business. As a result, N.T.T. resells programming from SkyPerfect. This gives N.T.T. less flexibility to create new services. Customers also receive no discount from N.T.T. and two different bills.
Analysts question whether users are being sold broadband lines with more speed than they need, particularly people who just check e-mail and an occasional Web site.
“Consumers buy what they think is neat and cool,” said Jim Weisser, a telecommunications consultant in Tokyo, “and 100 megabits per second is a nice round number and sure sounds fast.” But “it’s probably more speed that typical users will need for some time,” he said.
Some companies are betting that users are more interested in mobility than speed. EMobile, for instance, sells data cards for laptops and handsets that can send and receive data about as fast as a home DSL line. The unlimited data plan sells for about 5,000 yen ($43) a month, and an additional 1,500 yen buys a DSL line for a home computer.
Eric Gan, the company’s president, said this was a superior business model because the wireless network was cheaper to set up than fiber. “We aren’t losing money with fiber to the home,” he said. “We give you a big pipe for voice and everything else that is all-you-can-eat.”
Still, N.T.T. and KDDI show no sign of backing away from their fiber plans. Their priority is seeking out the apartment buildings that fill Japan’s crowded cities, offering many potential customers in one place.
Like Verizon, they have had to sign right-of-way agreements with landlords, a time-consuming process. Then they face the task of persuading individual homeowners to sign up.
“In general, people are positive about the fiber service,” said Osamu Kobayashi, a telecommunications analyst at Standard & Poor’s. “But the growth rate should slow because they’ve already gone after the condominiums and early adopters. Now, they have to go after the single homes.”
N.T.T. is also developing a dedicated fiber optic network that will provide the backbone for an array of commercial services. At its showroom in central Tokyo, it has a system that helps small-town doctors by relaying images of cell slides, X-rays and other medical data to pathologists in well-staffed city hospitals. Doctors can control the lens on the microscope to focus, zoom in and so on.
Nearby is a rubber mat developed by Hitachi that, when placed on a mattress, monitors a person’s pulse, blood pressure and other data, then relays it to a nurse or family member. Panasonic has developed radio-frequency tags that schoolchildren can carry. As they pass antennas placed outside schools and other locations, signals are sent back to parents who can be assured of their children’s safety.
N.T.T. hopes that these services, which rely on fast, dependable connections, will attract customers to its network and help solve some of the country’s larger social challenges, like the aging population, even if the payoff is not so soon in coming.
“It’s a once-in-a-century transformation,” Mr. Ogawa of N.T.T. said. “There will be more people using services who weren’t on the network before.”
Unlike U.S., Japanese Push Fiber Over Profit
By KEN BELSON
Yukari Haruzono, a computer game enthusiast in Tokyo, waited Sunday for an upgrade while her daughter, Yuho, 6, played. She pays $55 a month to be able to download data at high speeds.
TOKYO — The United States may be the world’s largest economy, but when it comes to Internet connections at home, many Americans still live in the slow lane. By contrast, Japan is a broadband paradise with the fastest and cheapest Internet connections in the world.
Nearly eight million Japanese have a fiber optic line at home that is as much as 30 times speedier than a typical DSL line.
But while that speed is a boon for Japanese users, industry analysts and some companies question whether the push to install fiber is worth the effort, given the high cost of installation, affordable alternatives and lack of services that take advantage of the fast connections.
Indeed, the stock price of Nippon Telegraph and Telephone, which has two-thirds of the fiber-to-the-home market, has sunk because of concerns about heavy investments and the deep discounts it has showered on customers. Other carriers have gotten out of the business entirely, even though it is supported by government tax breaks and other incentives.
The heavy spending on fiber networks, analysts say, is typical in Japan, where big companies disregard short-term profit and plow billions into projects in the belief that something good will necessarily follow.
Matteo Bortesi, a technology consultant at Accenture in Tokyo, compared the fiber efforts to the push for the Shinkansen bullet-train network in the 1960s, when profit was secondary to the need for faster travel. “They want to be the first country to have a full national fiber network, not unlike the Shinkansen years ago, even though the return on investment is unclear.”
“The Japanese think long-term,” Mr. Bortesi added. “If they think they will benefit in 100 years, they will invest for their grandkids. There’s a bit of national pride we don’t see in the West.”
Such a strategy may seem anathema in the United States, where companies like AT&T and Verizon Communications, the market leader with 1.1 million fiber subscribers, are under intense pressure from investors to justify their capital spending plans. And analysts note that the Bush administration has largely stood on the sidelines rather than provide financial incentives to promote fiber services.
“While you might not want to replicate the same pathway as other countries, we are falling seriously behind,” said Charles H. Ferguson, author of “The Broadband Problem.”
Mr. Ferguson said the substandard American broadband infrastructure shaved as much as 1 percent off the nation’s potential productivity growth. Faster broadband services would allow telecommuters to use better videoconferencing equipment and more easily share multimedia documents, he said.
But even without Japan’s tax incentives, N.T.T. and some other Japanese companies say that selling fiber lines makes sense because their older copper networks need to be replaced anyway, and because they have to develop services to offset the decline in revenue from traditional phone lines.
And while acknowledging that initial investments are expensive, N.T.T. and KDDI, the second-largest phone company, expect to recoup some of their money by selling additional products, like Internet phone and television services, that are delivered over fiber lines. They also expect electronics companies to produce an array of products that rely on fiber networks, including high-definition videoconferencing equipment and medical devices that can instantly relay X-rays between hospitals.
“The cost of installing the service will continue to go down by leaps and bounds,” said Kazuhiko Ogawa, general manager of the network strategy section at N.T.T. “In the future, we will establish a lot of alliances and applications that will combine stability and reliability.”
But while millions of users have signed up for fiber connections, far fewer have bought additional services.
For Yukari Haruzono, an online game enthusiast, a high-speed fiber line is the difference between surviving and thriving in the game EverQuest.
“I play every night and on weekends, and it’s much faster and more stable than other broadband,” said Ms. Haruzono, who pays about $55 a month for service that lets her download data at speeds up to 100 megabits a second, roughly what Verizon offersin the United States. “All my friends have fiber connections, too, because they are gamers.”
But Ms. Haruzono, who has a fiber line from KDDI, buys her phone service from another company. She and other users were alarmed by technical glitches that shut down N.T.T.’s Internet phone service for several hours this year. She buys her television from the satellite provider SkyPerfect.
Over all, only about half of N.T.T.’s fiber customers sign up for Internet phone service in addition to their broadband, and just over 43,000 also subscribe to a video plan. In the United States, nearly half of Verizon’s fiber customers also get a television package, and nearly all of them use its phone service.
Japanese carriers have been slow to sell bundles of services because they face some competition from cable providers, their natural rivals.
Just 20 percent of Japanese households subscribe to a pay television service from a cable or satellite provider.
By contrast, Cablevision, Comcast and other American cable providers have been selling phone services that have helped them take millions of customers from Verizon, AT&T and other phone companies. Verizon and AT&T have retaliated by selling their own television services.
Japanese phone companies have been unable to follow suit because of a law that limits their role in the broadcasting business. As a result, N.T.T. resells programming from SkyPerfect. This gives N.T.T. less flexibility to create new services. Customers also receive no discount from N.T.T. and two different bills.
Analysts question whether users are being sold broadband lines with more speed than they need, particularly people who just check e-mail and an occasional Web site.
“Consumers buy what they think is neat and cool,” said Jim Weisser, a telecommunications consultant in Tokyo, “and 100 megabits per second is a nice round number and sure sounds fast.” But “it’s probably more speed that typical users will need for some time,” he said.
Some companies are betting that users are more interested in mobility than speed. EMobile, for instance, sells data cards for laptops and handsets that can send and receive data about as fast as a home DSL line. The unlimited data plan sells for about 5,000 yen ($43) a month, and an additional 1,500 yen buys a DSL line for a home computer.
Eric Gan, the company’s president, said this was a superior business model because the wireless network was cheaper to set up than fiber. “We aren’t losing money with fiber to the home,” he said. “We give you a big pipe for voice and everything else that is all-you-can-eat.”
Still, N.T.T. and KDDI show no sign of backing away from their fiber plans. Their priority is seeking out the apartment buildings that fill Japan’s crowded cities, offering many potential customers in one place.
Like Verizon, they have had to sign right-of-way agreements with landlords, a time-consuming process. Then they face the task of persuading individual homeowners to sign up.
“In general, people are positive about the fiber service,” said Osamu Kobayashi, a telecommunications analyst at Standard & Poor’s. “But the growth rate should slow because they’ve already gone after the condominiums and early adopters. Now, they have to go after the single homes.”
N.T.T. is also developing a dedicated fiber optic network that will provide the backbone for an array of commercial services. At its showroom in central Tokyo, it has a system that helps small-town doctors by relaying images of cell slides, X-rays and other medical data to pathologists in well-staffed city hospitals. Doctors can control the lens on the microscope to focus, zoom in and so on.
Nearby is a rubber mat developed by Hitachi that, when placed on a mattress, monitors a person’s pulse, blood pressure and other data, then relays it to a nurse or family member. Panasonic has developed radio-frequency tags that schoolchildren can carry. As they pass antennas placed outside schools and other locations, signals are sent back to parents who can be assured of their children’s safety.
N.T.T. hopes that these services, which rely on fast, dependable connections, will attract customers to its network and help solve some of the country’s larger social challenges, like the aging population, even if the payoff is not so soon in coming.
“It’s a once-in-a-century transformation,” Mr. Ogawa of N.T.T. said. “There will be more people using services who weren’t on the network before.”
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