As those of you who don’t surf the web under a virtual rock are already aware, the “Pirate Bay Four” were found guilty by a Swedish court of “assisting in making copyright content available” back in April. Site operators Peter Sunde, Fredrik Neij, Gottfrid Svartholm, and apparent tech facilitator Carl Lundström have a year in jail to think about what they’ve done, and have a $3.6 million dollar tab for damages to split amongst themselves.  Despite the verdict, the site has continued to operate til present, some 20 million regular users strong.

Throughout the trial, the prosecution contended the sites’ co-founders brought in as much as $4 million per year in advertising revenues, while the defense argued no profits were made – hence any illegal activity was actually on the individual users who chose to participate. In an ironic (or is that hypocritical) twist, it looks like the Pirate Bay is about to be sold for a hefty profit. Details are being finalized at this point, with sources reporting Swedish based “Global Gaming Factory X” putting up somewhere between $7.7 and $7.9 million dollars for the acquisition – making that $3.6 million dollar fine look like chump change. [full text press release, PDF]

So what’s a Swedish company to do with an organization recently convicted of illegal activity by Swedish courts?  Legitimize it, of course. Stick with me for a moment folks, if this business plan doesn’t make any sense to you, you’ve got the jist.

First, Global Gaming chief exec Hans Pandeya, plans to license content from media companies for legal downloads. That’s right – they’re expecting the likes of the Sony and Viacom and Fox and Warner Brothers of the world embrace the namesake Pirate Bay to legally tout their digital wares. No, it’s not deja vu… how’s that business plan working out for you Napster? Surely, those 20 million users in search of free downloads will stick around when the site’s offerings are slashed to near nothing and will suddenly see the light and start paying for it.

Next comes some premium advertising. Pandeya and co hope to raise up to $50 million per year in ad revenues on the newly legit ‘Bay. As of now, the Pirate Bay (and sites like it) have difficulty finding advertisers that will even touch potential breeding grounds for digital theft. Advertisers on display range from bottom feeders to downright scammers, bidding at some of the lowest CPMs on earth. But hey – once it goes legit, everybody will forget the past! Large companies will surely see that same light the users do, and will ignore history to put their highly protected trademarks and reputations all over it. (You might want to turn down your sarcasm detectors if you haven’t already; I’m not responsible if they blow a gasket.)

But lastly, we have a real gem of a business idea. The Pirate Bay is going to get in the Internet services biz. They’re going to take the concept of peer-to-peer and leverage those millions of users’ Internet connections… Users can opt in to a program where they share their existing bandwidth with a peer to peer “cloud.”  Internet service providers can rent capacity on this network when they need short term boosts of bandwidth to handle unusually high loads. This new technology is called “Peerialism” and potential uses might be streaming video during major media events (like the great bandwidth drains earlier this year care of studious employees watching the NCAA Final Four on their work computers.) After all, this distributed model has been used by legitimate researchers to do things like search for aliens and seek out a cure for cancer.  Only here, users will be compensated – financially – for participating. Earnings might be paid out directly, or used within the site to purchase music from the afformentioned licensees.

Cool idea on the bizarro Internet, perhaps. In the real world, the whole idea is perposterous. It’s against the terms of service set by pretty much every single Internet Provider out there. Looking at my own provider’s ToS, I can count at least half a dozen ways this violates my contract. Save yourself the legal jargon – here’s the synopsis, assuming a residential connection. You can’t use the service to make a profit or run a commercial endeavor. You can’t re-sell your connectivity. You can’t redistribute audio/visual content. You can’t charge others in any way shape or form for access to any facet of your service. You get the picture. Ignoring the fact this will either be blocked by your provider or cause your connection to go dark without a refund, it still doesn’t make sense if you consider who the intended customer is: Internet pervice providers. Why again will an ISP essentially buy back the bandwidth it just sold you? It’s like buying a dozen ears of corn at the grocery store and telling your grocer “hey, I just noticed you’re short 12 ears of corn, I’ve got a dozen here you might be interested in!” ISPs already have bandwidth sharing strategies to buy bandwidth from one another when their tubes get clogged… but SURELY they’ll want to go around in circles and buy their own bandwidth back care of their own customers in violation of their own terms of services – from the Pirate Bay, of all places. (OK, you can turn those sarcasm detectors back on, I’m done.)

In summary, so long Pirate Bay. It’s been a good run. And while I’m not a certified financial advisor and you should always read your prospectus first… if Global Gaming Factory X or “Pirate Bay 2.0″ ever goes public, you might want to devise a short sale strategy.

This morning, in an unanimous vote, the U.S. Senate has agreed to delay the government mandated digital television transition. The target has been moved from the original February 17th date to June 12th.

(Updated: The bill has been voted down in the house. More info at the bottom.)

Media reports have been all over the map, with sources suggesting anywhere from 5 million to 20 million US households are unprepared for the transition.  There have also been reports of as many as 2.5 million on the FCC’s waiting list for their converter box coupon program.  13.5 million coupons have been passed out, but it’s estimated that roughly half have not been used.  The coupons carry a 90 day expiration, and as the unused coupons expire those on the waiting list will get a shot at one.

President Obama has called for an additional $850 million as part of his stimulus package to provide additional funding to the FCC coupon program.

The FCC has of course already auctioned off and collected it’s nearly $20 billion dollars to re-license the wireless spectrum that would have been freed in just 3 weeks.  (Why again, does the FCC need another $850 million of taxpayer’s dollars to cover the coupon shortfall? Anyway…)

Major players AT&T and Verizon will have to wait until June to begin using their newly acquired slice of the airwaves, though this morning’s bill includes a 116 day extension to the end of their original licenses as compensation.

(Shameless plug warning: who needs OTA anyway, when you’ve got Artvoice TV?)

Update, Wednesday Jan 28: Despite the unanimous vote and the support from President Obama, it turns out this bill was not a shoo-in after all. Because the bill had been fast-tracked in the House, it required 2/3rds votet here before reaching the President’s desk; however, this morning it was shot down by a 256 to 168 vote. So it’s not over yet folks. The House may vote next week for a second time on the issue. In the mean time, we can say the great digital delay… has been delayed.

Five years on, and 350,000 lawsuits later, the RIAA (Recording Industry Association of America) announced this morning that the’re finally giving up on small-time file sharers.  Well, sort of.

Wading through the blogosphere (as opposed to wading through the two feet of snow outside), it looks like the story starts here: CNET reports that sources close to the RIAA claim the group’s budget is being slashed and their role reduced. One might assume they face the same problems as any business or organization – a tough economic climate, dwindling sales, and so on. A likely story, but given the fact that those 350,000 lawsuits targeted many innocent individuals, levied disproportionately high penalties to very small time file sharers, and in sum total did next to nothing to curb on-line piracy, maybe the truth is their litigious witch hunt has been a near total failure, and they’re finally acknowledging that.

It’s not all good news for fans of file sharing, as you aren’t off the hook yet.  The RIAA has apparently struck deals with several major ISPs to enact a “3 strikes and you’re out” policy.  So the witch hunt is still on, but instead of slapping you with a lawsuit, the RIAA intends on tattle-taling to your Internet provider instead.  The ones who have agreed to cooperate (and so far, the ISPs in agreement have NOT been named), will likely follow this line of attack: (1) a warning; (2) a second warning coupled with speed reduction and/or possible block of peer to peer traffic, (3) cut off your Internet access all together.

NY State’s own Attorney General Andrew Cuomo apparently played a large role in brokering this deal.  You may remember Cuomo’s campaign to stop on-line child pornography earlier in the year (aka the ISPs campaign to have a good excuse to stop providing Usenet service while making good press yet not actually doing much to stop on-line child pornography)… borrowing a page from that book, we can see the list of ISPs Cuomo has already gotten cooperation from in the past here. I’ll reiterate – the RIAA has not said which ISPs are on board; and this is speculation on my part, but I have a feeling we’ll see a lot of those same names come out as participants.

So the bit of good news is, you probably aren’t going to get sued if you’re caught illegally downloading a couple of songs.  The RIAA also will never know your identity, nor harass or subpoena your ISP to learn your identity.

The bad news? There’s a couple points…

• The RIAA doesn’t need to follow due process anymore. That saves them a lot of lawyers, a lot of time, and a lot of money.  Remember those budget cuts I mentioned?  Probably not relevant; they don’t need the budget to do things this way. No lawyers needed, less in depth investigation needed… any suspicion of somebody? Just fire off an e-mail!
• The RIAA still reserves the right to sue big-time file sharers with large volumes of songs.  They might go after you if you do something particularly irksome as well (careful with those “leaked” pre-release albums, kids!)  There’s no clear line. So while the risk to file sharers has gone down, it hasn’t gone away.
• It looks like enforcement is a the discretion of the ISPs, and it’s the RIAA’s word against yours. No real proof needs to be provided, no appeals process, etc… unless your ISP is nice enough to provide a fair process, you’re probably out of luck, be it rightly or wrongly accused.
• Lastly, it’s just a huge can of worms that probably shouldn’t be opened.  ISPs should be neutral. They provide a service that transmits your data from point A to point B.  They shouldn’t have any business telling you what you can or can’t send from “A” to “B” – if you’re breaking the law, there’s a legal system to deal with it. Does this mean ISPs are going to start spying on your traffic to confirm RIAA complaints?  Does it mean they’re going to do the police work for other industry organizations?  Are ISPs themselves going to take heat if they fail to comply with RIAA requests? Are they going to go beyond cutting off your Internet access and blacklisting you from their services as a group – again, without any sort of legal due process to prove your guilt?  (That’s what they’re looking to do in some European countries, by the way.)  Are they going to apply the connection-slowdown-punishment to other areas at their discretion? Obviously there’s a lot more questions than answers right now, but it doesn’t look good for the pro-net neutrality folks.

Surely this will be an on-going process that we’re all going to have to wait to see how it pans out. It’s a small victory for file sharers.  Potentionally a large loss for privacy and neutrality advocates. Possibly, like the RIAA’s last campaign, a bunch of hot air that gets them nowhere fast. Some day we’ll come up with a way where artists looking to get paid can, and ‘netziens looking for free content can find it without fear… but it’s certainly not today.

Election ‘08 is now in the history books – so I figured it’s time to take a look backward, and a look forward at some relevant headlines.

Hacking Democracy

First, we’ll take a look at one of the best kept secrets of the campaign season, from both sides, care of a Newsweek article published just today.  Over the summer, the FBI had its hands full with simultaneous cyber crime investigations: the hacking of the Obama campaign computer system(s), and the hacking of the McCain campaign computer system(s).  While the intrusions have been acknowledged,  little else has been released or confirmed yet.  At this point, it’s known for sure that the FBI was involved, that “a large number of files” were stolen from the Obama side, and that the attacks came from a “foreign entity” and definitely did not come from the opposing sides.  The McCain campaign systems were intruded on in a similar fashion as the Obama systems, but the extent of the compromise on their side was unmentioned.  The rest is speculation of course: security experts have suggested the attacks likely came from China or Russia, and anyone’s best guess is that the goal of such an intrusion was to gain an inside line on procedures and policies used by the campaigns for a leg up in future dealings with the to-be president. (H/T to Newsweek)

This of course wasn’t the only politically motivated cyber-crime this campaign season – I’m sure many recall the Sarah Palin e-mail intrusion back in September.  Though it’s significance is near nil at this point, we’ll remember it as the day our servers felt the shock wave of a web traffic explosion.  If anyone is still interested: David Kernell, a college student in Tennessee, and the son of Tennessee democratic representiative Mike Kernell, was indicted by grand jury in late October.  His trial begins on December 16th, and faces up to 5 years and fines.  Not so “anonymous” now, eh David?  A court has also ordered the e-mails in both of governor Palin’s Yahoo! accounts be preserved for further investigation.

Another dishonorable mention is the state of Ohio election information and registration website that also came under attack, and experienced some brief downtime in late October.  (H/T to Reuters)

Technology Promises

I also want to give a nod back to another item I’ve talked about here: Science Debate 2008.  We’ve got a list of policies and action-items promised to us from pre-president-elect Obama in the realm of technology.  I’ll be saving a copy and keeping score for the next four to eight years.

Along the same lines is Obama’s “Blueprint for Change” video on technology issues.  Maybe you missed it?  Don’t feel bad; for whatever reason, this wasn’t released until the night before the election, effectively burying it in the rest of the 11th hour buzz.

Hi-Tech Election Day Coverage

Election night itself was a grand display of technology as well.  CNN debuted it’s new “hologram” technology – much to the chagrin of pocket protector pencil neck purists who are still complaining two days later that the effect isn’t actually a hologram.  “True” hologram or not, I personally found it a bit silly.  We’ll see if CNN or others bother with this technique down the road.

Ratings speak volumes though, and CNN enjoyed second place of 14 major networks covering the event with 12.3 million viewers.  ABC was the victor, at just over 13 million viewers.  In all, it’s estimated about 71 million viewers tuned in on Tuesday to watch the results unfold.  As impressive at it sounds, it’s still over 25 million shy of this year’s past Super Bowl.  Apparently the world’s couch potatoes are still more interested in the Patriots than in patriotism. (Nielsen’s complete ratings here.)

Nielsen also kept an eye to the web to gauge coverage ratings in cyberspace.  There’s a comprehensive list here if interested; CNN, MSNBC and Yahoo! News being the top three destinations for surfers on Tuesday. The official campaign sites also received a boost on Tuesday, with Obama’s site receiving 1.2 million unique visitors, and McCain’s site receiving 479,000 unique visitors.

The Future

Lastly, let’s look ahead to some new developments that will affect us going forward.

While not related to presidential politics per se, this is still a governmental policy decision that flew under the radar with all the elections buzz, that could mean huge developments in the wireless arena.  On Tuesday, the FCC approved a measure to free up “white spaces” for unlicensed (read: free but regulated) use.  In short, this means unused areas of the wireless spectrum in the general area of digital TV transmissions can be used by consumer devices.  This coveted piece of intangible mathematical electromagnetic real estate means higher bandwidth (faster) transmission of information to and from consumer devices, at greater distances than the current public bands allow.  It’s been a long fought battle mostly centered around issues of interference with licensed bands (at least, that’s the PR friendly argument – it’s probably been a long fought battle because telecommunications companies have sunk billions into competing technologies that may have just been rendered obsolete.)  To appease the interference complaints (some of which are probably valid), devices will have to be extremely smart: they’ll be required to be GPS aware, and to communicate over the Internet with a central database to announce their position and ask permission for an interference free frequency.  There’s a loophole for less intelligent devices, though they’ll have to pass some pretty rigorous interference tests.  You can read more here.  Dell claims to have laptops with “white space radio” already in the works that you can learn about here.

The last “bit” we have to pass on is some news about some technology related appointments to the Obama transition team.  Named to the team include Google philanthropy officer Sonal Shah, and Julius Genchowski who is a former IAC executive and former chief council to former FCC chairman Reed Hundt.  Rumors abound about Google CEO Eric Schmidt may be in the running for U.S. Chief Technology Advisor as well.

By today we’re well aware that the e-mails posted were legitimate, as the McCain campaign has made a statement regarding the situation, and an investigation is under way.

The Register is reporting the investigation may be relatively easy to conclude.  The attacker attempted to cover their tracks using ctunnel.com, a proxy service.  This way, when Yahoo searches their logs, the visits would have appeared from ctunnel.com, rather than the address information of the person(s) who had broken in to the account.  It just so happens that ctunnel.com logs connections for situations such as this, and thanks to screen shots showing a large portion of the ctunnel.com URL in the address bar of the web browser, it’s going to be pretty easy to match that to the log files.

Anyway, now that the dust has settled some, I thought maybe I’d take a few moments to respond to the slew of comments and hatemail about the Pailin e-mails.  It doesn’t seem many understand the nature of the situation, and mainstream media is having a field day with spin and framing the story for whoever candidate they’re biased to.  So here’s my thoughts:

(more…)

With the flip of a giant 7-foot tall symbolic switch, FCC chairman Kevin Martin and mayor Bill Saffo officially announced the city of Wilmington, North Carolina as the first to make the transition from analog to digital TV.  This switch is mandated by the government this coming February, 17, 2009, and Wilmington has graciously volunteered to be the nation’s guinea pig.  (More coverage on the Wilmington switch here.)  Digital TV will provide better quality picture and sound, but the transition won’t be without some headaches.

So this had me thinking – if Wilmington is already there, where does Buffalo stand?

There’s millions of dollars allocated to raise public awareness on the switch in the coming months – so expect to hear more about it.  There’s also over a billion dollars allocated to help you cope… and a lot of them have gone un-spent so far.

Here’s a couple tips and things you want to know if you haven’t gotten up to speed on the switch to digital yet.

(more…)

Blogs have been buzzing over the past few weeks since Microsoft’s announcement of their deal with Jerry Seinfeld as Windows Vista’s new poster boy.  (Well, by “buzzing” I mean mostly joking, and mocking.)  A comedian whose prime was when Windows 95 was cutting edge, to team up with a man who’s about as exciting and photogenic as taking snapshots with the lens cap still on seemed like an unlikely team to bail out the sinking ship that is U.S.S. Vista… I’m no marketing expert, but it seemed like a queer choice.  Not that there’s anything wrong with that.

Well folks, the first of many TV spots is up on YouTube.  Check it out.  It’s a commercial about nothing.

Am I alone when I say… “uhhhhhh”….?  Windows is moist and delicious?  This is the hip new advertising campaign supposed to sway Apple-curious consumers who are intrigued by the “Mac vs. PC” ads?

What kind of weed do you think they have in Redmond?  I think the marketing team got into the programmer’s stash.

Several sources are reporting this morning that Bloomberg accidentally ran a lengthy obituary for Apple C.E.O. Steve Jobs on their newswire.

It’s common for news agencies to prepare obituaries ahead of time for prominent public figures, so that all the biographical background work is done – just slap a date and cause of death on there and they’re good to go. It’s NOT common however, to publish them before the person actually dies!  Ooops!

Bloomberg retracted the obituary rather quickly, but if you’re curious about what the press will have to say about Jobs when he does actually die, you can take a peek at a saved copy here.