Megaupload claims it is beyond the reach of US criminal law

by Timothy B. Lee - May 30 2012, 1:27pm PDT

Megaupload, a corporation whose file-sharing business was effectively destroyed by a January indictment, has asked a Virginia judge to dismiss the case against it. It argues that because it is not based in the United States and has no offices there, it is not subject to US criminal law.

The company notes that the law requires that when a corporation is indicted, notice of the indictment must be served on an officer of the corporation and sent to the corporation's last known US address. But Megaupload is not based in the United States and has never had offices there, making it impossible for the government to comply with this requirement.

Indeed, the firm says, the judge himself acknowledged the government's procedural difficulties during an April 13 hearing. "Megaupload is a criminal defendant, a corporate entity who has not been served with a summons," the judge said. "So, they are kind of hanging out there, and that’s an issue that maybe we need to talk about as well."

"A corporation such as Megaupload cannot be brought within the jurisdiction of this Court for criminal proceedings absent its consent," the company argues.

Megaupload attorney Ira Rothken tells Ars he believes that if the case against Megaupload is dismissed, all orders against the company—including those freezing the firm's assets—would be vacated. However, the individual defendants would still face criminal charges.

Asset thaw

In a related filing, Megaupload founder Kim Dotcom and his co-defendants have requested that the government unfreeze the funds they need to fund their defense. In the process, they offered a preview of some of the legal arguments they are likely to raise if the case ever reaches a courtroom.

The government's indictment "seeks criminal forfeiture of 'at least' $175 million," the filing says. "This represents the total revenues generated by Megaupload during its entire corporate existence. Thus, the premise of the Government’s forfeiture request is that Megaupload never earned a single penny that was not criminal under U.S. law."

And there are several reasons some of Megaupload's funds could be legal even if the company or its founders are ultimately found guilty of some of the counts against them. These include "noninfringing use of its service," "use that occurred wholly outside the United States and beyond reach of U.S. law," and "infringing use within the United States as to which Defendants nonetheless qualify for a statutory safe harbor or lacked requisite criminal intent." In any of those cases, forfeiture of Megaupload's funds would be inappropriate, Dotcom's lawyers argue.

The filing also emphasizes a point that seems likely to emerge as the centerpiece of Dotcom's legal argument: that inducing copyright infringement—a civil-law, judge-invented concept—cannot give rise to criminal liability.

"Patent law, from which the Grokster Court borrowed the 'inducement' rule... is exclusively civil in nature," the brief states. "There is no such thing as criminal liability for patent infringement."

But instead of letting Hollywood file its own civil case against Megaupload, "the Government has stepped in to transmogrify the doctrine of secondary infringement, as fashioned by the courts for civil copyright cases, into a crime and to wield its prosecutorial pretrial powers to snuff out an innovative technology," Dotcom's lawyers write. In doing so, the government risks "upsetting the essential balance that Congress and the Supreme Court have taken such care to strike and maintain."

The brief also argues that the government's shuttering of Megaupload violates the First Amendment, that its technology is capable of non-infringing use, and that the indictment effectively, and improperly, attempts to apply US copyright laws outside the borders of the United States.

Rookie cop takes heat for arresting off-duty officer

It’s an impaired driving case like thousands of others except it involves a rookie Toronto police officer who crossed the thin blue line and paid the price.

Const. Andrew Vanderburgh was “harassed and berated” by fellow officers because on Nov. 28, 2009, he arrested and charged an off-duty police constable with impaired driving and having a blood-alcohol level over 80 milligrams, according to an internal police disciplinary ruling.

Some officers also allegedly called Vanderburgh a “rat,” Justice Paul Reinhardt wrote in a pre-trial ruling.

On Tuesday, Vanderburgh was in Old City Hall court to testify at Breton Berthiaume’s long-delayed impaired driving trial. He declined to comment except to say that while he does not regret charging a fellow officer, the fallout has been difficult.

Berthiaume, a Halton Region officer, has pleaded not guilty.

Also in court was Const. Suhail Khawaja, who accompanied Vanderburgh in his squad car the evening of the arrest.

That night, Vanderburgh and Khawaja went to Berthiaume’s home in High Park after a 911 caller reported seeing someone driving erratically on the Don Valley Parkway, and had recorded the licence plate number.

The officers took Berthiaume to neighbouring 22 Division, the closest station where a breath technician was present, and required him to give breath samples.

Some officers there “took exception to a police officer being charged or investigated,” Crown Attorney Mary-Anne Mackett told court Tuesday, providing an overview of the convoluted 2½-year-old case.

Reinhardt, who is no longer the judge in the Berthiaume case, said in his pre-trial ruling that disclosure he reviewed alleged Khawaja “refused to assist Constable Vanderburgh in the arrest and preparation of paperwork at 22 Division.”

“Constable Khawaja is purported to have stated on more than one occasion that evening to different informants that he wanted nothing to do with the arrest of a fellow police officer,” Reinhardt wrote.

Vanderburgh, meanwhile, continued to pay a price.

After Berthiaume was released, Vanderburgh drove a marked police vehicle back to his division and was followed by a 22 Division cruiser driven by Const. James Little.

Little pulled him over and gave him a ticket for allegedly disobeying a red light, which was later dismissed. Last year, Little pleaded guilty to one count of discreditable conduct under the Police Services Act.

Little chose “to disregard his professional obligations and embark on a course of retaliatory action against a colleague performing his sworn, lawful duty,” Supt. Robin Breen wrote in his ruling.

“He abused his position to express his personal displeasure about his colleague’s arrest of an off-duty police officer.” Little was docked 20 days’ pay.

Two other officers, including a staff sergeant who failed to intervene, were disciplined in the incident. One was also docked 20 days’ pay, the other 15.

“Those penalties are at the upper end and reflect seriousness of what happened and demonstrate the determination of the service to hold people accountable in a meaningful way,” Toronto police spokesman Mark Pugash said Tuesday.

Pugash said the names of the two other officers cannot be disclosed because they were dealt with at the divisional level. However, Reinhardt’s pre-trial ruling referred to incomplete police disclosure records of Khawaja’s “misconduct” on Nov. 28, 2009. Berthiaume’s impaired driving trial, meanwhile, has been put over until Feb. 18 when he plans to represent himself after firing his lawyer. He remains on active duty with the Halton force.

Reading Lolita in Montreal: Canada Doesn’t Want More Journalists

By Bhaskar Sunkara

There weren’t any bright lights or stress positions, but it was definitely an interrogation. Crossing over to Canada yesterday, I had the unusual experience of being detained for a few hours.

It started off innocently enough. I filed off a Montreal-bound Greyhound bus at the border with a few dozen others to go through customs. As usual, I was paid extra addition. Security officials may notice me, because I look suspiciously Muslim, but it’s a small price to pay for having enough melanin to pull-off a salmon-colored blazer.

Reasonably, a border official asked me why I was visiting Canada. Mostly sightseeing, I said. Did I know anyone in the city? Sure, I had a few friends who went to McGill. That struck the agent as bizarre. How could someone from New York know people in Quebec? Did I use the internet? Umm, what? Was I carrying more than $10,000 in cash? I wish. Does that mean I should search your things for that money? Next time, I’ll save my charm for a more receptive audience.

It was all going well enough, though, until I was asked what I did for a living. I said that I just graduated from university on Sunday. Oh, so you’re unemployed? That’s where they got me. My precarious employment is a point of personal pride. Of course, I wasn’t unemployed. I do administrative work and write on occasion. Probably should’ve left out that last part. I was whisked away from my lovely new bus friends.

I had assumed that Canada’s law enforcement would be like Vermont’s. Only, I’ve never been to Vermont, so I suppose I had assumed Canada’s cops would be like the cast and crew of Super Troopers. I was mistaken. Two different officers greeted me in the next room and went through my baggage. Clothes and personal effects, one book— Reading Lolita in Tehran—and two magazines, a copy of In These Times and Jacobin.

The guard flipped through Jacobin easily enough, admired our art, and took it to be some type of smarmy cultural publication. All good there. Reading Lolita in Tehran did, however, raise eyebrows. A burly cop asked me why I had that book. I said I was re-reading it and mentioned what the book was about. He didn’t really get it. Why so much interest in Tehran? How many times have you been to Iraq? What? Never. I held back a smile, mostly because this guy was armed and terrifying.

The other agent, now done examining my roll of dental floss, flipped through the copy of In These Times, and saw my name on the masthead. So you’re a big time journalist? You must be embedded in the student movement, right?

This was the surprise and, to be honest, it was kind of refreshing. For the first few years of my adult life, I’ve dealt with extra screenings at airports and crossings, mostly outside the United States, particularly in the European countries I’ve visited. It was due to my race. My first hour in Canada was like that. Now I was being harassed because I was a leftist going to possibly talk to people in a country terrified of a militant left-wing movement. And I was a “known journalist.” I couldn’t wait to brag to my friends.

They asked me if I had two identities. No, of course not. How come you have all these medical cards that say “Swamy Sunkara” on them? I tried to explain the United States’ employer-based health care system and how young people under a certain age were under their parent’s coverage. You know a lot about this, are you political?

The irony was striking. The system I was explaining was a stark reminder of America’s weak social safety net. It was foreign to the Canadian border officials, who were admittedly not too bright, but it was one of the reasons why so many were marching in the streets of Montreal – to halt the neoliberal offensive. The border officials didn’t want me to join the protesters, but they also didn’t want my health care.

I was taken to another room, where I was met with an agent of higher rank. Hour two approaches. He questions me about my being a writer and asks me who I’m going to interview in Montreal. I’m not sure, I tell him. I’ll probably just take the easy route and write about getting detained at the border instead.

Where was I staying in Montreal? A hostel? Come now, I’m classier than that – a hotel. Where? I had to pull up the information on my phone. He seemed satisfied. Then: We’re not going to let you through unless I can take a look through your phone and see who you have been contacting.

I don’t keep texts from activists. I also delete any sensitive emails, so I agreed. They looked through my phone for an hour and spent lots of time on Google. They were cautious, but maybe they have a reason to be afraid. Downtown Montreal is the scene of a continuous class struggle, with constant demonstrations that show no sign of slowing down. The government has its hands full with the activists, journalists, and intellectuals they already have. Why would they want more radicals in the country?

Finally, the verdict: You can enter the country, but you have to leave on Thursday. I wasn’t granted a visa, but rather a visitor’s pass. Avoid the bad protest elements, stick to the girls at McGill instead, kid. And don’t write while you’re in Canada.

Soda Ban May Hit The Big Apple

By Amir Khan

NYC residents may soon be unable to buy big gulps. In an effort to curb obesity, New York City's Mayor Bloomberg is seeking a ban on oversized sodas in restaurants, movie theaters and stadiums, officials said on Wednesday.

"Obesity is a nationwide problem, and all over the U.S., public health officials are wringing their hands saying, 'Oh, this is terrible,'" Mayor Bloomberg told the New York Times. "New York City is not about wringing your hands; it's about doing something. I think that's what the public wants the mayor to do."

The ban would restrict the sale of sodas to no more than 16-ounces, and would apply to both fountain and bottled drinks. It would not apply to diet sodas, fruit juices, dairy or alcoholic drinks. Sodas sold at grocery and convenience stores would be exempt as well. Establishments that skirt the ban would face a $200 fine.

The Health Department will propose the ban at a June 12 meeting as the latest health initiative under Mayor Bloomberg. The city banned sodas from vending machines in schools in 2003 and banned trans-fats in 2006. In 2008, the city mandated calorie counts be posted on menus in restaurants, according to Bloomberg News.

Once the proposal is introduced, the health department will open it up to three months of public comments before voting on the measure. Restaurants would then have six months to comply with the bill.

The New York City Beverage Association derided the proposal.

"There they go again," Stefan Friedman, spokesman for the New York City Beverage Association, told the Wall Street Journal. "The New York City Health Department's unhealthy obsession with attacking soft drinks is again pushing them over the top. The city is not going to address the obesity issue by attacking soda because soda is not driving the obesity rates."

Friedman also said that the bill would have no effect on the obesity ate, as there has not been any conclusive evidence that soda leads to weight gain.

"It's time for serious health professionals to move on and seek solutions that are going to actually curb obesity," he said. "These zealous proposals just distract from the hard work that needs to be done on this front."

But Mayor Bloomberg said the ban wouldn't restrict how much soda a person could drink.

"Your argument, I guess, could be that it's a little less convenient to have to carry two 16-ounce drinks to your seat in the movie theater rather than one 32 ounce," he told the New York Times. "I don't think you can make the case that we're taking things away."

Woman fined for blowing whistle into phone

A 61-year-old German woman has been fined €800 for blowing a whistle down the telephone at a call-centre worker and damaging her hearing - after she got fed up with constant cold-calls to her house.

The unnamed woman from Pirmasens in the western state of Rhineland-Palatinate told a judge in a local court that she was so annoyed by the unending stream of calls from marketing companies last August that she snapped and blew a whistle into the receiver.

She was hoping just to deter the company from calling her again, but ended up giving herself a criminal record - and the female call-centre employee long-term hearing problems and tinnitus due to the effort she put into the high-pitched blast.

Finding her guilty of bodily harm, the judge fined the 61-year-old €800.

She initially appealed the fine but decided to pay it shortly before a hearing scheduled for Tuesday.

Toward a bill of rights for mobile computer owners

There are four rights that people purchasing computers should enjoy:

1. Installation of arbitrary applications on the device. If the user wishes to, they should not be limited to what is included in one particular proprietary "app store."
2. Access to the phone OS at the root/superuser/hypervisor/administrator level. If consumers wish to examine the low-level code that is running in their pockets, to check for invasions of privacy, run the anti-virus software of their choice, join VPNs, install firewalls, or just tinker with their operating systems, phone and device companies have no legitimate basis for preventing this.
3. The option to install a different OS altogether. If people want to install Linux on their iPhones, Boot to Gecko on their Windows phones, or just run a different version of Android on their Android phones, the company that sold them the hardware must not prevent them. Using a cryptographic bootloader to defend against malware is a fine idea, but there must be a way to reconfigure this security mechanism to (1) allow an alternative OS to be installed; and (2) to offer the same cryptographic protections for the alternative OS.
4. Hardware warranties that are clearly independent of software warranties. Apple denies warranty coverage to users who have jailbroken their iPhones. While nobody is asking Apple to support jailbroken or modified software, it is inexcusable that the company threatens not to cover, say, a faulty screen, if the customer has chosen to modify the software on their device.

2012 United States Government Terrorist Identification Chart

Cyber bullies and stalkers often get away because of lack of evidence

By REGINA LEE

PETALING JAYA: “It wasn't me.” That's the most common response from people when a hate or threatening message is traced to their Facebook or Twitter or any other Internet account.

The Malaysian Communications and Multimedia Commission says it is almost legally impossible to take action if all that a person has to do is to deny any responsibility.

“Think of the victims. People who have been slandered or whose lives have been threatened,” commission chairman Datuk Mohamed Sharil Mohamed Tarmizi said, adding that many a time cyber bullies and stalkers who often use “the cloak of anonymity” have got away because of lack of evidence.

“As more of the young are connected online, who is going to watch over these kids when there are real people who want to harm them?” he said in an interview on the amendment to the Evidence Act passed by the Dewan Rakyat last month.


Answering critics who said the amendment was unfair in pushing the burden of proof to the accused, he said that owners of Internet accounts where hate messages had originated could easily rebut charges against them if they were innocent.

“For example, if you can produce witnesses to say that you were nowhere near your computer or any other communicating device at the time the message was sent out, you can get off,” Sharil said.

He added: “It is not easy nailing offenders to the charge. Sometimes you can find evidence and sometimes you can't.

“At least now (with the amendment), a flat denial (from the accused) cannot work anymore.”

The amendment to Section 114(a) of the Evidence Act includes the following stipulations:

> If your name, photograph or pseudonym appears on any publication depicting yourself as the author, you are deemed to have published the content.

> If a posting comes from your Internet or phone account, you are deemed to be the publisher unless the contrary is proved.

> If you have the control or custody of any computer which published any material, you are presumed to be the publisher unless proven otherwise.

Asked if the amendment infringed on Internet users' personal liberties, Sharil said the authorities would still have to carry out rigorous and thorough investigations before charging anyone.

“Then there is the trial processs to go through,” he added.

He admitted that the conviction rate of suspected cyber offenders was very low.

From 2009 to 2011, 625 cases of people making obscene or offensive comments via the Internet or phone were investigated.

Only 16 were brought to court and just three were convicted.

Minister in the Prime Minister's Department Datuk Seri Nazri Aziz said it was difficult to prosecute offenders before the amendment to the Act.

“It was especially difficult to prosecute offenders because the servers were located overseas.

“Everything was in a mess,” he said, and denied that the amendment was to curb dissent.

“The Government does not want to stifle anyone. But we don't want people to slander or threaten others,” Nazri added.

The Ultimatum Game

What can The Ultimatum Game tell us about how people cooperate?

Sometimes games have a lot to teach us about human nature, other times they're just games.

One game that some economists and psychologists claim has much to teach us is called The Ultimatum Game.

The game is very simple. It's played between two people who have to decide how to split an amount of money. Let's say it's $100.

One of the two people is randomly chosen to make an offer to the other about how to split the money between them. If the other person accepts this offer then they split it on that basis. But, if the other person rejects it, neither of them gets anything.

That's it.

The reason some economists and psychologists have got excited about it is because of how people behave when they play this game. What you find is that most people make offers of splitting the cash somewhere between 40% and 50%. Generally speaking if an offer is made below about 30% it will be rejected by the other person more often than not.

The Ultimatum Game has been pointed to as a way of showing that humans are economically irrational. Why do people reject an offer of 25% of the total pot? If the pot is $100 then they are choosing between getting $25 or nothing at all. So why do they choose nothing at all?

The answer seems to be that people generally find offers below 30% to be insulting. It's insulting that the other person should suggest such a derisory sum, even when it's free money. So they prefer to have nothing and punish the other person's greed. And remember the other person is losing $75 in this case whereas I'm only losing $25.

To the economist what players in the simplest version of this game are forgetting is that it's a one-shot deal. It doesn't matter if you aren't fair, because the other person can't get back at you. All you need to do is work out the minimum offer that's likely to be accepted.

So really what the Ultimatum game is showing is that most people act fairly, or at least want others to see them acting in a fair way. In addition, any unfair behaviour is punished by the recipient of the offer.

Only an economist would argue that this is evidence of human irrationality. Acting fairly, or at least appearing to act fairly is a highly rational custom in a society in which we have to work together. Cheats, as they say, do not prosper.

So does The Ultimatum Game really tell us anything about human nature or is just further proof of how difficult it is to model human behaviour?

The optimist might say it tells us that people are mostly just and fair--or at least want to appear that way.

The pessimist, though, might say that people are being selfish because they have to make a judgement, consciously or not, about what offer will be accepted. Remember that it's in the offerer's interests to have his offer accepted or he won't get any money at all.

What it certainly shows is how many psychological complexities can be drawn out of a very simple game like this.

Berkeley Police Chief calls on officers to track down son's stolen iPhone in Oakland

By Kristin J. Bender

BERKELEY -- When Berkeley police Chief Michael Meehan's son's cell phone was stolen in January, 10 police officers were sent to track it down, with some working overtime at taxpayer expense, police said Monday.

A police report about the theft of the teen's iPhone from a school locker was never written and the Oakland Police Department was never notified that officers on the department's drug task force were in North Oakland knocking on doors looking for the phone. Three detectives and a sergeant each logged two hours of overtime.

"If your cell phone was stolen or my cell phone was stolen, I don't think any officer would be investigating it," said Michael Sherman, vice chairman of the Berkeley Police Review Commission, a city watchdog group. "They have more important things to do. We have crime in the streets."

The excessive use of resources comes at a time when Meehan, 50, is under intense scrutiny for his actions over the last several months. The city is spending $20,000 to make sure its police department's media policies are up to speed after the chief was widely criticized for sending a sergeant to a reporter's home about 1 a.m. on March 9 to ask for changes to an online story. The Berkeley police union criticized the move, saying Meehan's actions "do not represent the will, spirit or sentiment of the membership of the Berkeley Police Association" and called for an independent investigation.

The city has paid Rennie Sloan Holtzman Sakai law firm in San Francisco roughly $25,000 to investigate Meehan's move that March night. The results of that probe have not been released.

On Jan. 11, Meehan son, a freshman at Berkeley High School, found that his iPhone, equipped with the Find My iPhone tracking software, was gone from his unlocked gym locker. The boy alerted his father and Meehan pulled out his own cell phone and showed a property crimes detective sergeant the real time movement of the stolen phone.

Given the active signal of the stolen phone, the detective sergeant took his team to try to locate it. As the signal was moving into the city of Oakland, the detective sergeant called the drug task force to ask for some additional assistance and members of that team offered to help, said Sgt. Mary Kusmiss, department spokeswoman.

Meehan did not respond to a request for comment.

The four sergeants followed the signal to the area of 55th and San Pablo avenues in North Oakland, where they contacted residents at several homes looking for the phone. It was never located.

When a reporter, working on a tip, asked about the missing phone 10 weeks ago, a police report could never be located. When more questions from news reporters surfaced last week about the incident, Kusmiss released a statement Monday about the theft and the chain of events that followed. Kusmiss said the lack of a report was an "oversight that came to our attention when researching (reporters) questions."

Sherman took issue with that.

"At minimum there should have been a police report. If a department is going to put people onto an investigation, they should have a police report,'' he said.

Kusmiss said it's not "uncommon" for patrol officers to track a stolen phone if they get an active signal while on the streets.

"It depends on the circumstances. If we had an active phone or laptop or tablet signal, there may be occasion when a group of officers would get overtime to work an in-progress crime," she said.

Oakland police would not comment on the case other than to say that many police agencies work in the city everyday and there are no set standards that mandate that outside agencies alert Oakland police when officers are within city limits.

"Depending on the type of law enforcement activity, sometimes agencies will, as a professional courtesy, notify Oakland if they are doing some type of law enforcement action where they might need assistance," Oakland police spokeswoman Officer Johnna Watson said.

Half Of PC Users Are Pirates, Says Study

One in four UK computer users have installed unlicensed software, says BSA
by Max Smolaks 0

Over half of PC users worldwide have admitted to using pirate software last year, according to a study by the trade group Business Software Alliance (BSA).

BSA’s ninth annual Global Software Piracy Study has shown a sharp increase in software piracy, especially among emerging economies. In the UK, more than one in four programs users installed in 2011 were unlicensed.

Flying the Jolly Roger

In a survey of around 15,000 computer users from a total of 33 countries around the world, 57 percent admitted to using pirated software, up from 42 percent the year before. The BSA estimates that the global annual cost of software piracy has reached $63.4 billion (£40b).

UK is firmly below the global average, with just 27 percent of computer users admitting they have acquired software illegally last year. This translates into an approximate £1.2 billion loss by the software industry.

According to the study, young men are much more likely to use unlicensed software than any other demographic. 28 percent of professed software pirates in the UK are under 34 years old, and 79 percent are male.

“As the UK enters a double-dip recession, it has never been more important to protect the creative industry’s intellectual property and its vital contribution to the economy. However, to do so we need to fundamentally change the way we view and acquire software,” says Julian Swan, director of compliance marketing at BSA EMEA.

The study discovered that more than three quarters (77 percent) of UK PC users surveyed do not think the risk of getting caught is an effective deterrent to software piracy.

According to the UK law, the maximum amount of damages the software developers can claim is equivalent to the cost of the software license. The BSA is calling for a stronger damages law, including double damages, to stop the increase in illegal software use.

The study has also found that computer users in emerging markets are more likely to use pirated software than in mature ones – 68 percent against 24 percent respectively.

By its sheer scale, China has the most troubling piracy problem. Its illegal software market was worth nearly £5.5 billion in 2011 versus a legal market of less than £1.7 billion.

Walking the plank

According to BSA, on average only 20 percent of software pirates consider current enforcement measures a sufficient deterrent to their activities.

“It is clear that the fight against software piracy is far from over. Although emerging markets are of the greatest concern, the problem is still persisting in mature markets, in which one in four admit to using pirated software. One of the more troubling issues is that business decision makers purchase some legitimate copies but then turn a blind eye to further (illegal) installations for new users, locations and devices,” said Robin Fry, commercial services partner at DAC Beachcroft.

“Although, the legal framework currently in place in the UK generally serves the software industry well, readily accessible enforcement could be improved. As an organisation we endeavour to assist our members in protecting their products and take to task those who illicitly seek to exploit them. However, the existing legislative process can be unduly wieldy – so much so that many businesses, and enforcement agencies, are put off,” commented Julian Heathcote Hobbins, general counsel at Federation Against Software Theft.

“It is all very well having the IP rights in place, but unless we can improve the practical enforcement measures, the effectiveness of the laws will be blunted,” he added.

We should note that the previous BSA reports have been criticised by some members of the industry as “propaganda”.

BSA has recently exercised its power by working out a settlement worth £10,000 with the Blackpool-based company George Morrison over its illegal use of Microsoft and Autodesk products.

Congressmen Seek To Lift Propaganda Ban

Propaganda that was supposed to target foreigners could now be aimed at Americans, reversing a longstanding policy. “Disconcerting and dangerous,” says Shank.

An amendment that would legalize the use of propaganda on American audiences is being inserted into the latest defense authorization bill, BuzzFeed has learned.

The amendment would “strike the current ban on domestic dissemination” of propaganda material produced by the State Department and the Pentagon, according to the summary of the law at the House Rules Committee's official website.

The tweak to the bill would essentially neutralize two previous acts—the Smith-Mundt Act of 1948 and Foreign Relations Authorization Act in 1987—that had been passed to protect U.S. audiences from our own government’s misinformation campaigns.

The bi-partisan amendment is sponsored by Rep. Mac Thornberry from Texas and Rep. Adam Smith from Washington State.

In a little noticed press release earlier in the week — buried beneath the other high-profile issues in the $642 billion defense bill, including indefinite detention and a prohibition on gay marriage at military installations — Thornberry warned that in the Internet age, the current law “ties the hands of America’s diplomatic officials, military, and others by inhibiting our ability to effectively communicate in a credible way.”

The bill's supporters say the informational material used overseas to influence foreign audiences is too good to not use at home, and that new techniques are needed to help fight Al-Qaeda, a borderless enemy whose own propaganda reaches Americans online.

Critics of the bill say there are ways to keep America safe without turning the massive information operations apparatus within the federal government against American citizens.

“Clearly there are ways to modernize for the information age without wiping out the distinction between domestic and foreign audiences,” says Michael Shank, Vice President at the Institute for Economics and Peace in Washington D.C. "That Reps Adam Smith and Mac Thornberry want to roll back protections put in place by previously-serving Senators – who, in their wisdom, ensured limits to taxpayer–funded propaganda promulgated by the US government – is disconcerting and dangerous."

“I just don’t want to see something this significant – whatever the pros and cons – go through without anyone noticing," says one source on the Hill, who is disturbed by the law. According to this source, the law would allow "U.S. propaganda intended to influence foreign audiences to be used on the domestic population."

The new law would give sweeping powers to the State Department and Pentagon to push television, radio, newspaper, and social media onto the U.S. public. “It removes the protection for Americans,” says a Pentagon official who is concerned about the law. “It removes oversight from the people who want to put out this information. There are no checks and balances. No one knows if the information is accurate, partially accurate, or entirely false.”

According to this official, “senior public affairs” officers within the Department of Defense want to “get rid” of Smith-Mundt and other restrictions because it prevents information activities designed to prop up unpopular policies—like the wars in Iraq and Afghanistan.

Critics of the bill point out that there was rigorous debate when Smith Mundt passed, and the fact that this is so “under the radar,” as the Pentagon official puts it, is troubling.

The Pentagon spends some $4 billion a year to sway public opinion already, and it was recently revealed by USA Today the DoD spent $202 million on information operations in Iraq and Afghanistan last year.

In an apparent retaliation to the USA Today investigation, the two reporters working on the story appear to have been targeted by Pentagon contractors, who created fake Facebook pages and Twitter accounts in an attempt to discredit them.

(In fact, a second amendment to the authorization bill — in reaction to the USA Today report — seeks for cuts to the Pentagon’s propaganda budget overseas, while this amendment will make it easier for the propaganda to spread at home.)

The evaporation of Smith-Mundt and other provisions to safeguard U.S. citizens against government propaganda campaigns is part of a larger trend within the diplomatic and military establishment.

In December, the Pentagon used software to monitor the Twitter debate over Bradley Manning’s pre-trial hearing; another program being developed by the Pentagon would design software to create “sock puppets” on social media outlets; and, last year, General William Caldwell, deployed an information operations team under his command that had been trained in psychological operations to influence visiting American politicians to Kabul.

The upshot, at times, is the Department of Defense using the same tools on U.S. citizens as on a hostile, foreign, population.

A U.S. Army whistleblower, Lieutenant Col. Daniel Davis, noted recently in his scathing 84-page unclassified report on Afghanistan that there remains a strong desire within the defense establishment “to enable Public Affairs officers to influence American public opinion when they deem it necessary to "protect a key friendly center of gravity, to wit US national will," he wrote, quoting a well-regarded general.

The defense bill passed the House Friday afternoon.

What Filesharing Studies Really Say – Conclusions and Links

By Drew Wilson

We’ve just finished out lengthy series on what file-sharing studies really have to say about file-sharing. The series has drawn quite a lot of attention, so, we felt the need to cap off this series with some final thoughts and a list of links to all the studies and more.

First, for those wanting a complete list with sources, here it is:

(We would like to note that our sources of these studies very likely differs from the ones mentioned below)

Part 1 – Litigation a Failure?:
Study: Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions
Year: 2006
Journal: Journal of Law and Economics
Source (PDF)

Part 2 – P2P Has No Effect on Music Sales
Study: Don’t blame the P2P file-sharers: the impact of free music downloads on the purchase of music CDs in Canada
Year: 2010
Journal: Journal of Evolutionary Economics
Source (Paywalled)

Part 3 – RIAA Suppresses Innovation
Study: How industry associations suppress threatening innovation: the case of
the US recording industry
Year: 2011
Journal: Technology Analysis & Strategic Management
Source (Paywalled)

Part 4 – MPAA Preserving its Oligopoly
Study: Hollywood versus the Internet: the media and entertainment industries in a digital and networked economy
Year: 2006
Journal: Journal of Economic Geography
Source (Paywalled)

Part 5 – Producers Lose Less Than $2 Per Album
Study: Music file sharing and sales displacement in the iTunes era
Year: 2010
Journal: The Wharton School, University of Pennsylvania
Source (PDF)

Part 6 – Lower Prices, Not Enforcement is Key
Study: Unauthorized file-sharing and the pricing of digital content
Year: 2004
Journal: Economic Letters
Source (Paywalled)

Part 7 – Piracy Increases Producers Profits
Study: Turning Piracy into Profits: a Theoretical Investigation
Year: 2010
Journal: Department of Economics of the University of Bologna
Source (Paywalled)

Part 8 – Supply of Music Has Not Shrank Because of Napster
Study: Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster
Year: 2011
Journal: The Carlson School and Department of Economics University of Minnesota and NBER
Source (PDF)

Part 9 – ‘Graduated Response’ Laws Failed to Strike a Balance
Study: Toward a Regulatory Model of Internet Intermediary Liability: File-Sharing and Copyright Enforcement
Year: 2011
Journal: Northwestern Journal of International Law & Business
Source (Paywalled)

Part 10 – FileSharing’s Growing Popularity
Study: A View of the Data on P2P File-sharing Systems
Year: 2008
Journal: Journal of the American Society for Information Science and Technology
Source (Paywalled)

Part 11 – Public Performance Profits Skyrocketing
Study: Supply Responses to Digital Distribution: Recorded Music and Live Performances
Year: 2005
Journal:
Source (Free to view!)

Part 12 – Media Industry Must Adapt
Study: The Impact of Illegal Peer-to-Peer File Sharing on the Media Industry
Year: 2010
Journal: California Management Review
Source (PDF)

Part 13 – Lower Prices Decreases Filesharing and Increases Sales
Study: Estimating consumer preferences for online music services
Year: 2010
Journal: Applied Economics
Source (Paywalled)

Part 14 – File-Sharing Litigation Never Worked in Asia Either
Study: A Legal and Cultural Comparison of File-Sharing Disputes in Japan and the Republic of Korea and Implications for Future Cyber-Regulation
Year: 2008
Journal: Colombian Journal of Asian Law
Source (Paywalled)

Part 15 – People Who Download Buy More
Study: Measuring the Effect of File Sharing on Music Purchases
Year: 2006
Journal: Journal of Law and Economics
Source (PDF)

Part 16 – Focus on Adaptation, Not Shuttering P2P
Study: Peer-to-Peer File Sharing and the Market for Digital Information Goods
Year: 2010
Journal: Journal of Economics & Management Strategy
Source (PDF)

Part 17 – Culture and Ethics of FileSharing
Study: Ethical Decisions About Sharing Music Files in the P2P Environment
Year: 2008
Journal: Journal of Business Ethics
Source (Paywalled)

Part 18 – Yet Another Study Recommending Adaptation
Study: Investigating the User Behavior of Peer-to-Peer File Sharing Software
Year: 2011
Journal: International Journal of Business and Management
Source (Free to view!)

Part 19 – Biggest Threat to the Recording Industry? The Recording Industry
Study: The Music Market in the Age of Download
Year: 2007
Journal: Fondazione Eni Enrico Mattei
Source (PDF)

We should also point out that the 20th study that was found in the initial sweep of searching for studies was already previously covered here on ZeroPaid. That study found that losses due to file-sharing are statistically indistinguishable from zero. You can find a copy of that study in full by following the links.

We would also like to add a few more studies that was previously covered here on ZeroPaid. One study we covered in 2010 which file-sharers are big content spenders. Another study which corroborates with another study in our series said that former Mininova users flocked to other sites after it went legit. An additional study in 2010 said that artists revenues were up 66%. In 2009, a study found that artists earned more in a file-sharing world. So, the total here is 24 studies.

Claims and Facts About File-Sharing

Since this series was a response to a study used to promote SOPA, we decided to revisit out article to look back at some of our immediate responses to it in light of this large amount of data.

Claim:
One of the claims the Phoenix study that we picked up was that finding a legal framework to stop infringement online has proven to sell politically.

Fact:
After our extensive review, we found that, even though there is fierce opposition towards laws such as SOPA and any form of graduated response, the problem isn’t actually political. The problem is that there is no scientific basis for laws such as a “graduated response” or censorship of the Internet. After we examined the studies, there was a general theme that the best approach to dealing with file-sharing was not legal enforcement, but rather, a change in a business model that’s adapted to today’s digital reality. If you wanted to find debate where there was no real consensus, then it’s exactly how the industry is suppose to adapt their business model to the digital environment. While many pointed to price point, some suggested trying to find other ways of selling music like what iTunes has done. In fact, one study suggested that enforcement does not bring back customers by itself, but rather, building a model that is actually palatable so the customers return to you more voluntarily. Even the most pro-enforcement study we came up with said that if you’re going to actually do something like litigation, build a better business model as well, but simply resorting to legal tactics against file-sharers is not necessarily a good idea.

Claim:
Another claim the Phoenix study made was that (in the process of disagreeing that there is a difference between a physical stolen piece of property and an unauthorized download) there is no incentive for producers and artists to make music. In addition, because of the activities of file-sharing, there will be less creative works made available.

Fact:
Let’s cut to the chase. Part 8 of our series explicitly debunked the claim that file-sharing causes the decrease in quantity of music. The authors of that study explicitly state that they found no evidence of any kind that linked any decline in the quantity of music and file-sharing. If there was any decline that happened during the existence of file-sharing, the decline was merely a continuing trend since before Napster.

In addition, numerous studies point to the trend of an increase in profits for artists both before this series and during this series thanks to the sampling effect. In fact, the only evidence that file-sharing is even hurting artists at all points out that it’s only the super rich and super famous top acts in the entire industry that may suffer any sort of loss at all (as seen in part 19 of our series). Again, as far as our series and the previous studies are concerned, not true at all.

Claim:
File-sharing displaces legitimate sales. The evidence points to that.

Fact:
This is a classic case of error by omission. What we found in our investigation was that there are numerous reasons why music sales were in decline in the early 2000′s other than the existence of file-sharing. Explanations included an increase in other entertainment sectors, the unbundling of the music album and returning to the singles model (re: the comments of deadweight losses) and an increasing pressure of the consumers bottom line in the face of todays economic realities. So, judging by the evidence we’ve collected, the evidence does not point in the direction that file-sharing, in and of itself, displace sales, but rather, other factors would also play a role in displacement of sales.

Claim:
Since people can enjoy music that they downloaded, they are taking away from society and therefore placing a tax on society which means file-sharing must be stopped.

Fact:
This model, when compared to all of the models we’ve seen, is completely out to lunch. There’s been plenty of calculations and economic models and non of them say anything like this. The closest we can recall in our series was Part 5 in our series which used the flawed theory of 1 download means one lost sale. While the models suggest that consumers do get something out of downloaded material, the losses still only account for less than $2 per album.

Claim:
The losses experienced by the entertainment industry is entirely the fault of file-sharing (one of the studies cited in the Phoenix study, not the model itself)

Fact:
There are way too many market variables to make such a claim. In fact, to put the entire blame of losses in the industry on file-sharing is completely unfounded. As we already discussed in our wrap-up, not only are there other explanations for any possible losses in the music industry, but there is also a well known and well-documented effect of an increase in music sales thanks to file-sharing.

Claim:
The debate should move forward on how to stop file-sharing and online copyright infringement and that we should “discount the argument that on-line theft of IP causes no harm and therefore no foul.”

Fact:
Trying to legislate your way out of this in ways specifically designed to hamper file-sharing was resoundingly rejected in the studies we looked at. This is merely a business problem, not a legal problem. Even the litigation tactics was, for the most part, discounted as a failure. At best, litigation would only work if there was a viable legal alternative to file-sharing (something that has yet to emerge). In fact, one study specifically looked at the “graduated response” laws (Part 9) and found that, while in theory, it’s a good idea, in practice, they are unfairly favoring the industry and that they lack any consumer protection at all (i.e. protection against false infringement claims). I think if you asked these researchers that looked at file-sharing before 2008, none of them would have said that we should be blocking websites and instituting a three strikes law. In fact, some would have said that there would be technological and innovative damage done in the process.

Additional Observations

In addition to the above, I think it’s fair to say that, going from one study to another, you get that sense of “litigation fails”, “industry should innovate”, “focus on price”, “innovate”, “price”, “price”, “innovate”, “innovate”, “innovate” and then contrast it to what the industry is actually pushing (i.e. three strikes laws and massive censorship), you can almost get that sense that the reaction in the education community would be “now where did that come from?”. You barely, if at all, even get a sense that this is where things should be headed when reading these studies. It’s like these ideas were either completely out of the blue or as a result of ignoring sound science into these matters. Based on all the scientific reasoning, scientific predictions and models and a whole lot more that we got from this series, we shouldn’t even be anywhere near the kinds of debates we are having now with respect to copyright enforcement (yes, not even close). Instead, we should, at minimum, be seriously considering things like an ISP levvy or creating a framework for legal file-sharing or trying to think of services that imitate the file-sharing structure to help artists and the industry make money. It’s like we’ve shunned all science and economics and headed down the road of trying to constrain, restrict and, in some ways, shut down the Internet instead. It really puts into perspective just how shocking idea’s like the “graduated response” or three strikes laws and censoring websites really are.

Also, on a personal note, this study required a substantial amount of hard work. So, if you want to conduct your own research on the sort of magnitude on something like file-sharing, think to yourself if you’ve studied through research papers before. You will find things you don’t understand in research papers and studies unless you focus exclusively in a field of your expertise (and even the, the chances are pretty good that you’ll find something you won’t immediately understand). I hate to discourage anyone, but this kind of thing is not for the faint of heart. Even I, someone who has read through numerous research papers and studies, was really pushing myself throughout this series. Having said that, if you can stomach a large quantity of heavy reading, I think you should be encouraged, if you are able and have access, to find your own research on the topic of file-sharing. Don’t take my analysis, but rather, take the comments made by the papers themselves and try and do some note comparisons to verify the general ideas of what they are saying. That’s the point of a scientific approach – testing everything to make sure they are accurate.

In following the notions of science, we chose to use multiple studies instead of a select few. The reason for this is that we can have a sense of redundancy to make sure that what we were saying was reasonably accurate. If you can have five different ways of measuring a certain economic problem and come to a general consensus of a few basic facts, then you increase your chances of being accurate. Can you test something multiple times and come to the same or very similar conclusions about a question? I think that is a very scientific question and one we more or less used when approaching the issue of file-sharing in this series. Even if there were mistakes along the way on a specific study in this series, the consensus of facts can overcome such issues. In this series, I think we can establish some basic patterns of facts and I don’t think our conclusions about file-sharing are (if they are off to begin with) that far off at all.

Based on my reading of these studies and my years of experience, I think the industry should be focused on making profits, not problems.

Justice Dept. defends public’s constitutional ‘right to record’ cops

The DoJ sent a letter to the attorneys for the Baltimore Police Department.

by Kim Zetter

As police departments around the country are increasingly caught up in tussles with members of the public who record their activities, the U.S. Justice Department has come out with a strong statement supporting the First Amendment right of individuals to record police officers in the public discharge of their duties.

In a surprising letter (PDF) sent on Monday to attorneys for the Baltimore Police Department, the Justice Department also strongly asserted that officers who seize and destroy such recordings without a warrant or without due process are in strict violation of the individual’s Fourth and Fourteenth Amendment rights.

The letter was sent to the police department as it prepares for meetings to discuss a settlement over a civil lawsuit brought by a citizen who sued the department after his camera was seized by police.

In the lawsuit, Christopher Sharp alleged that in May 2010, Baltimore City police officers seized, searched, and deleted the contents of his mobile phone after he used it to record them as they were arresting a friend of his.

Last year, the Baltimore Police Department published a General Order to officers explaining that members of the public have a right to record their activity in public, but the Justice Department said in its 11-page letter this week that the order didn’t go far enough and pointed out several areas where it should clarify and assert more strongly the rights that individuals possess.

The right to record police officers in the public discharge of their duties was essential to help "engender public confidence in our police departments, promote public access to information necessary to hold our governmental officers accountable, and ensure public and officer safety," wrote Jonathan Smith, head of the Justice Department’s Special Litigation Section.

Smith cited the 1991 videotaped assault of Rodney King while he was being beaten by law enforcement officers as an incident that "exemplifies this principle" of public oversight.

"A private individual awakened by sirens recorded police officers assaulting King from the balcony of his apartment," Smith wrote. "This videotape provided key evidence of officer misconduct and led to widespread reform."

He noted that the issue was particularly important in Baltimore, "given the numerous publicized reports over the past several years alleging that BPD officers violated individuals’ First Amendment rights."

The Justice Department’s interference in the local civil case was surprising yet significant in that it put not only Baltimore but also every other city police department around the country on notice that interference in such recordings was unconstitutional. It was sent to Baltimore days after several media and civil rights organizations sent U.S. Attorney General Eric Holder a letter insisting that the Justice Department take action against agencies that arrest people who record officers.

"Since the Occupy Wall Street movement began, police have arrested dozens of journalists and activists simply for attempting to document political protests in public spaces," the letter to Holder stated. "A new type of activism is taking hold around the world and here in the U.S.: People with smartphones, cameras and Internet connections have been empowered with the means to report on public events."

While individual cases didn’t necessarily fall under the Justice Department’s jurisdiction, the letter acknowledged, the suppression of speech was a national problem that had to be addressed at the federal level.

"Freedom of speech, freedom of assembly, and freedom of access to information are vital whether you’re a credentialed journalist, a protester, or just a bystander with a camera," the organizations asserted.

In the document he sent to Baltimore, Smith said that, except under limited circumstances where a person recording police activity engaged in actions that violated the law, jeopardized the safety of a police officer, a suspect, or others, or incited others to violate the law, police officers should not interfere with a recording and should never seize recording devices without a warrant. They should also be advised "not to threaten, intimidate, or otherwise discourage an individual from recording police officer enforcement activities or intentionally block or obstruct cameras or recording devices."

Policies should prohibit officers from destroying recording devices or cameras and deleting recordings or photographs under any circumstances, Smith wrote.

Straight White Male: The Lowest Difficulty Setting There Is

By John Scalzi

I’ve been thinking of a way to explain to straight white men how life works for them, without invoking the dreaded word “privilege,” to which they react like vampires being fed a garlic tart at high noon. It’s not that the word “privilege” is incorrect, it’s that it’s not their word. When confronted with “privilege,” they fiddle with the word itself, and haul out the dictionaries and find every possible way to talk about the word but not any of the things the word signifies.

So, the challenge: how to get across the ideas bound up in the word “privilege,” in a way that your average straight white man will get, without freaking out about it?

Being a white guy who likes women, here’s how I would do it:

Dudes. Imagine life here in the US — or indeed, pretty much anywhere in the Western world — is a massive role playing game, like World of Warcraft except appallingly mundane, where most quests involve the acquisition of money, cell phones and donuts, although not always at the same time. Let’s call it The Real World. You have installed The Real World on your computer and are about to start playing, but first you go to the settings tab to bind your keys, fiddle with your defaults, and choose the difficulty setting for the game. Got it?

Okay: In the role playing game known as The Real World, “Straight White Male” is the lowest difficulty setting there is.

This means that the default behaviors for almost all the non-player characters in the game are easier on you than they would be otherwise. The default barriers for completions of quests are lower. Your leveling-up thresholds come more quickly. You automatically gain entry to some parts of the map that others have to work for. The game is easier to play, automatically, and when you need help, by default it’s easier to get.

Now, once you’ve selected the “Straight White Male” difficulty setting, you still have to create a character, and how many points you get to start — and how they are apportioned — will make a difference. Initially the computer will tell you how many points you get and how they are divided up. If you start with 25 points, and your dump stat is wealth, well, then you may be kind of screwed. If you start with 250 points and your dump stat is charisma, well, then you’re probably fine. Be aware the computer makes it difficult to start with more than 30 points; people on higher difficulty settings generally start with even fewer than that.

As the game progresses, your goal is to gain points, apportion them wisely, and level up. If you start with fewer points and fewer of them in critical stat categories, or choose poorly regarding the skills you decide to level up on, then the game will still be difficult for you. But because you’re playing on the “Straight White Male” setting, gaining points and leveling up will still by default be easier, all other things being equal, than for another player using a higher difficulty setting.

Likewise, it’s certainly possible someone playing at a higher difficulty setting is progressing more quickly than you are, because they had more points initially given to them by the computer and/or their highest stats are wealth, intelligence and constitution and/or simply because they play the game better than you do. It doesn’t change the fact you are still playing on the lowest difficulty setting.

You can lose playing on the lowest difficulty setting. The lowest difficulty setting is still the easiest setting to win on. The player who plays on the “Gay Minority Female” setting? Hardcore.

And maybe at this point you say, hey, I like a challenge, I want to change my difficulty setting! Well, here’s the thing: In The Real World, you don’t unlock any rewards or receive any benefit for playing on higher difficulty settings. The game is just harder, and potentially a lot less fun. And you say, okay, but what if I want to replay the game later on a higher difficulty setting, just to see what it’s like? Well, here’s the other thing about The Real World: You only get to play it once. So why make it more difficult than it has to be? Your goal is to win the game, not make it difficult.

Oh, and one other thing. Remember when I said that you could choose your difficulty setting in The Real World? Well, I lied. In fact, the computer chooses the difficulty setting for you. You don’t get a choice; you just get what gets given to you at the start of the game, and then you have to deal with it.

So that’s “Straight White Male” for you in The Real World (and also, in the real world): The lowest difficulty setting there is. All things being equal, and even when they are not, if the computer — or life — assigns you the “Straight White Male” difficulty setting, then brother, you’ve caught a break.

Reminder To Congress: Cops' Cellphone Tracking Can Be Even More Precise Than GPS

These can now track you just as precisely as GPS, University of Pennsylvania prof Matt Blaze tells Congress.

In the wake of a historic Supreme Court ruling that police can’t use GPS devices planted on a car to track suspects without a warrant, Congress is reconsidering the question of what kinds of location tracking constitute an invasion of privacy. And one privacy and computer security professor wants to remind them that the gadget we all carry in our pockets can track us more precisely than any device merely attached to our car–even without the use of GPS.

On Thursday the House Judiciary Committee held a hearing to discuss a proposed bill to limit location tracking of electronic devices without a warrant, what it’s calling the Geolocational Privacy and Surveillance Act, or the GPS Act. And ahead of that hearing, University of Pennsylvania professor Matt Blaze submitted written testimony (PDF here) that points out that phone carriers, as well as the law enforcement agencies that they share data with, can now use phones’ proximity to cell towers and other sources of cellular data to track their location as precisely or even more precisely than they can with global positioning satellites.

Thanks to the growing density of cell towers and the proliferation of devices like picocells and femtocells that transmit cell signals indoors, even GPS-less phones can be tracked with a high degree of precision and can offer data that GPS can’t, like the location of someone inside a building or what floor they’re on.

“It is no longer valid to assume that the cell sector recorded by the network will give only an approximate indication of a user’s location,” Blaze writes in his testimony. “The gap between the locational precision in today’s cellular call detail records and that of a GPS tracker is closing, especially as carriers incorporate the latest technologies into their networks. As the precision provided by cellular network-based location techniques approaches that of GPS-based tracking technology, cellular location tracking can have significant advantages for law enforcement surveillance operations over traditional GPS trackers.”

Blaze’s testimony contradicts arguments–including one offered at the hearing by John Ramsey, vice president of the Federal Law Enforcement Officers Association–that warrantlessly tracking cell phone locations is somehow different from warrantlessly tracking GPS devices on cars, a practice that was unanimously ruled by the Supreme Court to be a violation of the fourth amendment‘s protection against search and seizure in January.

“Currently with a court order [rather than a warrant,] law enforcement may request the possible location of a particular device from a communications company from their cell tower or cell site information, which enables law enforcment to potentially infer a general area where a particular call originated, not necessarily a precise location,” he said at the hearing. “Cell site information only gives an approximate location, versus a precise or exact location like GPS devices.”

But Blaze calls that idea outmoded. “It’s easy to have a misconception that there’s a hierarchy of location technology that you can order as to how precisely it’s going to locate someone…But the truth is much more muddled than that,” he says. “As the density of cell networks goes up and microcells and pico cells and femto cells fill in dead spots, cell tower data is becoming effectively equivalent to GPS, and in some cases, can locate you when GPS can’t.”

That debate may play a role in shaping how the GPS Act goes forward. The bill currently makes no distinction between different kinds of geolocation techniques, effectively extending the Supreme Court’s ban on warrantless tracking of GPS devices on cars to all electronic tracking.

Senator Al Franken sent a letter to the Department of Justice earlier this month, asking a series of pointed questions including how many individuals’ locations it has tracked in the last five years, how that tracking has changed since the Supreme Court’s ban on tracking cars with GPS, and whether it distinguishes between GPS and cell site tracking data. A group of technology firms known as the Digital Due Process coalition, including Google, Apple, Microsoft and others has also supported reforms to phone-tracking laws.

In April, the American Civil Liberties Union published a trove of documents it obtained with Freedom of Information Requests to hundreds of police departments around the country that showed police frequently tracking cell phones’ locations without warrants and even using devices that impersonate cell towers to gather data directly from phones without requesting it from a carrier.

ACLU lawyer Chris Calabrese points out that the Department of Justice already advises law enforcement agencies in its computer crimes manual that it needs a warrant for GPS data. Given that GPS and cell site tracking are increasingly interchangeable, he says the GPS Act ought to go ahead and outlaw warrantless tracking of cell phones with cell site data, too. “If cell phone tracking is as precise as GPS tracking, it’s hard to see what we’re arguing about,” he says. ” We should just go ahead and require a warrant.”

Met Police uses 'quick' mobile data extraction system against suspects

Police will have immediate access to data on handset

By Antony Savvas

The Metropolitan Police has rolled out a mobile device data extraction system to allow officers to extract data "within minutes" from suspects' phones while they are in custody.

The capability would be particularly useful if the police force were to face a similar situation to the riots last August, which were reportedly coordinated mainly via BlackBerry Messenger (BBM). At the time, there appeared to be confusion around whether or not police could access the data from rioters’ phones, although BlackBerry owner RIM promised to co-operate fully with the police.

The new system being used by the Met is Radio Tactics' ACESO data extraction system across 16 boroughs in the capital.

Ostensibly, the system has been deployed to target phones that are suspected of having actually been used in criminal activity, although data privacy campaigners may focus on potentially wider use.

The deployment is expected to substantially reduce the costs associated with traditional, outsourced methods of processing evidence, which can lead to months of delays, particularly for "low level criminal cases", said the Met.

The ACESO kiosk data extraction system comprises of an intuitive, fully-guided touchscreen desktop data acquisition tool, and will be used by dedicated officers responsible for tackling street crime and burglary.

"Mobile phones and other devices are increasingly being used in all levels of criminal activity," said Stephen Kavanagh, deputy assistant commissioner of the Metropolitan Police.

"When a suspect is arrested and found with a mobile phone that we suspect may have been used in crime, traditionally we submit it to our digital forensic laboratory for analysis."

Kavanagh said the new system located within the boroughs themselves will enable "trained officers to examine devices and gives immediate access to the data in that handset".

He said: "Our ability to act on forensically-sound, time-critical information, from SMS to images contained on a device quickly gives us an advantage in combating crime, notably in terms of identifying people of interest quickly and progressing cases more efficiently."

Around 300 Met officers will be trained to use the system. It is not clear at this stage as to what will happen to the extracted data off a suspect's mobile if he or she is not charged with an offence after being arrested.

Last month a member of Metropolitan Police staff pleaded guilty to the theft of stolen property, including mobile phones, Apple iPods and satellite navigation systems.

Some of the stolen electrical goods contained personal data, the Met said. It insisted however that the force has "rigorous" procedures in place to protect the security of information.

"All staff and officers are given clear instructions and training on the requirement to adhere to the Metropolitan Police security, DPA (Data Protection Act) and FOIA (Freedom of Information) policy at all times, and to ensure any breaches of security are reported," a Met spokesperson said.

FBI seizes activists' anonymous remailer server in bomb threat investigation

Remailer was in chain of U. of Pittsburgh threats, but not the source, say activist owners.

by Sean Gallagher

Agents of the Federal Bureau of Investigations seized a server belonging to an Italian Internet service provider on Thursday as part of an investigation into a series of anonymous bomb threats sent to the University of Pittsburgh. But the groups associated with the operation of the server are calling the seizure an attack on Internet anonymity.

The server that was seized belongs to the Italian political activist Internet service European Counter Network, and hosted a node of the Mixmaster anonymous remailer service. It was seized under a search warrant served on a co-location facility in New York shared by Riseup networks (a "technology collective" that provides secure communciations for activists) and May First/People Link (an Internet co-op). The server also provided e-mail and other services to ECN's users.

According to a statement from Riseup Networks, the server hosted several websites, over 300 e-mail accounts, and as many as 80 e-mail discussion lists—including an Italian "cyber rights" listserv and discussion lists for Mexican migrant, labor and indigenous peoples' rights groups. May First/People Link Director Jamie McClelland said in a statement that "the server seizure is not only an attack against us, but an attack against all users of the Internet who depend on anonymous communication."

Because the server was just one node in the Mixmaster remailer network, which anonymizes e-mails in much the same way that the TOR Network anonymizes website visits, the members of Riseup and May First/People Link say that there's little chance that the FBI will be able to determine the source of the e-mail from forensic analysis of the server. "Taking this server won’t stop these bomb threats," said Riseup spokesperson Devin Thierot-Orr. "The network of anonymous remailers that exists is not harmed by taking this machine. So we cannot help but wonder why such drastic action was taken when authorities knew that the server contained no useful information that would help in their investigation.”

Since the server seizure, the Associated Press reports, at least six more anonymous e-mailed bomb threats have been received by the University of Pittsburgh.

Rand Paul has a quick fix for TSA: Pull the plug

By BURGESS EVERETT

A personal message from Paul (R-Ky.) came atop emails this week from the Campaign for Liberty Vice President Matt Hawes, asking for readers to sign a petition in support of Paul’s “End the TSA” bill. A Paul spokeswoman said that legislation is being finalized next week.

“Every inch of our person has become fair game for government thugs posing as ‘security’ as we travel around the country. Senator Rand Paul has a plan to do away with the TSA for good, but he needs our help,” reads the petition, which also asks signers to “chip in a contribution to help C4L mobilize liberty activists across America to turn the heat up on Congress and end the TSA's abuse of our rights.”

Paul was stopped by the TSA before a flight from Nashville earlier this year, causing him to miss a flight — and a big speech at the March for Life in Washington. Paul referred to the incident in his fundraising email.

“The American people shouldn’t be subjected to harassment, groping, and other public humiliation simply to board an airplane. As you may have heard, I have some personal experience with this, and I’ve vowed to lead the charge to fight back,” Paul wrote at the top of a C4L fundraising pitch, according to blogs that received the email. “Campaign for Liberty is leading the fight to pressure Congress to act now and restore our liberty. It’s time to END the TSA and get the government’s hands back to only stealing our wallets instead of groping toddlers and grandmothers.”

"In 2011 alone, the Transportation Security Administration's 50,000 Transportation Security Officers screened more than 603 million passengers at 450 airports across the country and stopped more than 125,000 prohibited items at airport checkpoint, including over 1,300 firearms," the TSA said in a statement provided to POLITICO. "Eliminating the agency charged with protecting the very system that continues to be a target for potential attack by our adversaries would directly undermine security. While TSA does not comment on pending legislation, it looks forward to working with Senator Paul on sensible proposals for enhancing security and improving the screening experience for passengers."

Paul’s spokeswoman said in an email that in addition to the “End the TSA” legislation, Paul is working on “multiple” TSA bills, including one to privatize the service as well as a passenger bill of rights. Ending the TSA has been a presidential campaign plank of Rand Paul’s father, Rep. Ron Paul (R-Texas), who started the political organization C4L. And last week, Rep. Paul Broun (R-Ga.) called on TSA Administrator John Pistole to step down.

FBI: We need wiretap-ready Web sites - now

CNET learns the FBI is quietly pushing its plan to force surveillance backdoors on social networks, VoIP, and Web e-mail providers, and that the bureau is asking Internet companies not to oppose a law making those backdoors mandatory.

by Declan McCullagh

The FBI is asking Internet companies not to oppose a controversial proposal that would require firms, including Microsoft, Facebook, Yahoo, and Google, to build in backdoors for government surveillance.

In meetings with industry representatives, the White House, and U.S. senators, senior FBI officials argue the dramatic shift in communication from the telephone system to the Internet has made it far more difficult for agents to wiretap Americans suspected of illegal activities, CNET has learned.

The FBI general counsel's office has drafted a proposed law that the bureau claims is the best solution: requiring that social-networking Web sites and providers of VoIP, instant messaging, and Web e-mail alter their code to ensure their products are wiretap-friendly.

"If you create a service, product, or app that allows a user to communicate, you get the privilege of adding that extra coding," an industry representative who has reviewed the FBI's draft legislation told CNET. The requirements apply only if a threshold of a certain number of users is exceeded, according to a second industry representative briefed on it.

The FBI's proposal would amend a 1994 law, called the Communications Assistance for Law Enforcement Act, or CALEA, that currently applies only to telecommunications providers, not Web companies. The Federal Communications Commission extended CALEA in 2004 to apply to broadband networks.

"Going Dark" timeline

June 2008: FBI Director Robert Mueller and his aides brief Sens. Barbara Mikulski, Richard Shelby, and Ted Stevens on "Going Dark."

June 2008: FBI Assistant Director Kerry Haynes holds "Going Dark" briefing for Senate appropriations subcommittee and offers a "classified version of this briefing" at Quantico.

August 2008: Mueller briefed on Going Dark at strategy meeting.

September 2008: FBI completes a "high-level explanation" of CALEA amendment package.

May 2009: FBI Assistant Director Rich Haley briefs Senate Intelligence committee and Mikulsi staffers on how bureau is "dealing with the 'Going Dark' issue.'" Mikulski plans to bring up "Going Dark" at a closed-door hearing the following week.

May 2009: Haley briefs Rep. Dutch Ruppersberger, currently the top Democrat on House Intelligence, who would later co-author CISPA.

September 2008: FBI staff briefed by RAND, which was commissioned to "look at" Going Dark.

November 2008: FBI Assistant Director Marcus Thomas, who oversees the Quantico-based Operational Technology Division, prepares briefing for President-Elect Obama's transition team.

December 2008: FBI intelligence analyst in Communications Analysis Unit begins analysis of VoIP surveillance.

February 2009: FBI memo to all field offices asks for anecdotal information about cases where "investigations have been negatively impacted" by lack of data retention or Internet interception.

March 2009: Mueller's advisory board meets for a full-day briefing on Going Dark.

April 2009: FBI distributes presentation for White House meeting on Going Dark.

April 2009: FBI warns that the Going Dark project is "yellow," meaning limited progress, because of "new administration personnel not being in place for briefings."

April 2009: FBI general counsel's office reports that the bureau's Data Interception Technology Unit has "compiled a list of FISA dockets... that the FBI has been unable to fully implement." That's a reference to telecom companies that are already covered by the FCC's expansion of CALEA.

May 2009: FBI's internal Wikipedia-knockoff Bureaupedia entry for "National Lawful Intercept Strategy" includes section on "modernize lawful intercept laws."

May 2009: FBI e-mail boasts that the bureau's plan has "gotten attention" from industry, but "we need to strengthen the business case on this."

June 2009: FBI's Office of Congressional Affairs prepares Going Dark briefing for closed-door session of Senate Appropriations subcommittee.

July 2010: FBI e-mail says the "Going Dark Working Group (GDWG) continues to ask for examples from Cvber investigations where investigators have had problems" because of new technologies.

September 2010: FBI staff operations specialist in its Counterterrorism Division sends e-mail on difficulties in "obtaining information from Internet Service Providers and social-networking sites."

FBI Director Robert Mueller is not asking companies to support the bureau's CALEA expansion, but instead is "asking what can go in it to minimize impacts," one participant in the discussions says. That included a scheduled trip this month to the West Coast -- which was subsequently postponed -- to meet with Internet companies' CEOs and top lawyers.

A further expansion of CALEA is unlikely to be applauded by tech companies, their customers, or privacy groups. Apple (which distributes iChat and FaceTime) is currently lobbying on the topic, according to disclosure documents filed with Congress two weeks ago. Microsoft (which owns Skype and Hotmail) says its lobbyists are following the topic because it's "an area of ongoing interest to us." Google, Yahoo, and Facebook declined to comment.

In February 2011, CNET was the first to report that then-FBI general counsel Valerie Caproni was planning to warn Congress of what the bureau calls its "Going Dark" problem, meaning that its surveillance capabilities may diminish as technology advances. Caproni singled out "Web-based e-mail, social-networking sites, and peer-to-peer communications" as problems that have left the FBI "increasingly unable" to conduct the same kind of wiretapping it could in the past.

In addition to the FBI's legislative proposal, there are indications that the Federal Communications Commission is considering reinterpreting CALEA to demand that products that allow video or voice chat over the Internet -- from Skype to Google Hangouts to Xbox Live -- include surveillance backdoors to help the FBI with its "Going Dark" program. CALEA applies to technologies that are a "substantial replacement" for the telephone system.

"We have noticed a massive uptick in the amount of FCC CALEA inquiries and enforcement proceedings within the last year, most of which are intended to address 'Going Dark' issues," says Christopher Canter, lead compliance counsel at the Marashlian and Donahue law firm, which specializes in CALEA. "This generally means that the FCC is laying the groundwork for regulatory action."

Subsentio, a Colorado-based company that sells CALEA compliance products and worked with the Justice Department when it asked the FCC to extend CALEA seven years ago, says the FBI's draft legislation was prepared with the compliance costs of Internet companies in mind.

In a statement to CNET, Subsentio President Steve Bock said that the measure provides a "safe harbor" for Internet companies as long as the interception techniques are "'good enough' solutions approved by the attorney general."

Another option that would be permitted, Bock said, is if companies "supply the government with proprietary information to decode information" obtained through a wiretap or other type of lawful interception, rather than "provide a complex system for converting the information into an industry standard format."

A representative for the FBI told CNET today that: "(There are) significant challenges posed to the FBI in the accomplishment of our diverse mission. These include those that result from the advent of rapidly changing technology. A growing gap exists between the statutory authority of law enforcement to intercept electronic communications pursuant to court order and our practical ability to intercept those communications. The FBI believes that if this gap continues to grow, there is a very real risk of the government 'going dark,' resulting in an increased risk to national security and public safety."

Next steps
The FBI's legislation, which has been approved by the Department of Justice, is one component of what the bureau has internally called the "National Electronic Surveillance Strategy." Documents obtained by the Electronic Frontier Foundation show that since 2006, Going Dark has been a worry inside the bureau, which employed 107 full-time equivalent people on the project as of 2009, commissioned a RAND study, and sought extensive technical input from the bureau's secretive Operational Technology Division in Quantico, Va. The division boasts of developing the "latest and greatest investigative technologies to catch terrorists and criminals."

But the White House, perhaps less inclined than the bureau to initiate what would likely be a bruising privacy battle, has not sent the FBI's CALEA amendments to Capitol Hill, even though they were expected last year. (A representative for Sen. Patrick Leahy, head of the Judiciary committee and original author of CALEA, said today that "we have not seen any proposals from the administration.")

Mueller said in December that the CALEA amendments will be "coordinated through the interagency process," meaning they would need to receive administration-wide approval.

Stewart Baker, a partner at Steptoe and Johnson who is the former assistant secretary for policy at Homeland Security, said the FBI has "faced difficulty getting its legislative proposals through an administration staffed in large part by people who lived through the CALEA and crypto fights of the Clinton administration, and who are jaundiced about law enforcement regulation of technology -- overly jaundiced, in my view."

On the other hand, as a senator in the 1990s, Vice President Joe Biden introduced a bill at the FBI's behest that echoes the bureau's proposal today. Biden's bill said companies should "ensure that communications systems permit the government to obtain the plain text contents of voice, data, and other communications when appropriately authorized by law." (Biden's legislation spurred the public release of PGP, one of the first easy-to-use encryption utilities.)

The Justice Department did not respond to a request for comment. An FCC representative referred questions to the Public Safety and Homeland Security Bureau, which declined to comment.

From the FBI's perspective, expanding CALEA to cover VoIP, Web e-mail, and social networks isn't expanding wiretapping law: If a court order is required today, one will be required tomorrow as well. Rather, it's making sure that a wiretap is guaranteed to produce results.

But that nuanced argument could prove radioactive among an Internet community already skeptical of government efforts in the wake of protests over the Stop Online Piracy Act, or SOPA, in January, and the CISPA data-sharing bill last month. And even if startups or hobbyist projects are exempted if they stay below the user threshold, it's hardly clear how open-source or free software projects such as Linphone, KPhone, and Zfone -- or Nicholas Merrill's proposal for a privacy-protective Internet provider -- will comply.

The FBI's CALEA amendments could be particularly troublesome for Zfone. Phil Zimmermann, the creator of PGP who became a privacy icon two decades ago after being threatened with criminal prosecution, announced Zfone in 2005 as a way to protect the privacy of VoIP users. Zfone scrambles the entire conversation from end to end.

"I worry about the government mandating backdoors into these kinds of communications," says Jennifer Lynch, an attorney at the San Francisco-based Electronic Frontier Foundation, which has obtained documents from the FBI relating to its proposed expansion of CALEA.

As CNET was the first to report in 2003, representatives of the FBI's Electronic Surveillance Technology Section in Chantilly, Va., began quietly lobbying the FCC to force broadband providers to provide more-efficient, standardized surveillance facilities. The FCC approved that requirement a year later, sweeping in Internet phone companies that tie into the existing telecommunications system. It was upheld in 2006 by a federal appeals court.

But the FCC never granted the FBI's request to rewrite CALEA to cover instant messaging and VoIP programs that are not "managed"--meaning peer-to-peer programs like Apple's Facetime, iChat/AIM, Gmail's video chat, and Xbox Live's in-game chat that do not use the public telephone network.

If there is going to be a CALEA rewrite, "industry would like to see any new legislation include some protections against disclosure of any trade secrets or other confidential information that might be shared with law enforcement, so that they are not released, for example, during open court proceedings," says Roszel Thomsen, a partner at Thomsen and Burke who represents technology companies and is a member of an FBI study group. He suggests that such language would make it "somewhat easier" for both industry and the police to respond to new technologies.

But industry groups aren't necessarily going to roll over without a fight. TechAmerica, a trade association that includes representatives of HP, eBay, IBM, Qualcomm, and other tech companies on its board of directors, has been lobbying against a CALEA expansion. Such a law would "represent a sea change in government surveillance law, imposing significant compliance costs on both traditional (think local exchange carriers) and nontraditional (think social media) communications companies," TechAmerica said in e-mail today.

Ross Schulman, public policy and regulatory counsel at the Computer and Communications Industry Association, adds: "New methods of communication should not be subject to a government green light before they can be used."