webcoder.info(web); //

Turns out there's a lot of vulnerable systems out there:

Many of the two terabytes (2,000 gigabytes) worth of replies Moore received from 310 million IPs indicated that they came from devices vulnerable to well-known flaws, or configured in a way that could to let anyone take control of them.

On Tuesday, Moore published results on a particularly troubling segment of those vulnerable devices: ones that appear to be used for business and industrial systems. Over 114,000 of those control connections were logged as being on the Internet with known security flaws. Many could be accessed using default passwords and 13,000 offered direct access through a command prompt without a password at all.

[...]

The new work adds to other significant findings from Moore’s unusual hobby. Results he published in January showed that around 50 million printers, games consoles, routers, and networked storage drives are connected to the Internet and easily compromised due to known flaws in a protocol called Universal Plug and Play (UPnP). This protocol allows computers to automatically find printers, but is also built into some security devices, broadband routers, and data storage systems, and could be putting valuable data at risk.

If one is to understand what caused this big BitTorrent dispute, one has to understand a few key things.

First, BitTorrent is a data transfer protocol, just like HTTP or FTP. It was invented more than a decade ago by Bram Cohen and one of its first public applications was shifting around completely legal recordings of music concerts.

“Early tests used losslessly compressed audio files from Etree, a fan community where people could upload self-recorded concert footage by artists who allowed recordings. That kickstarted it all,” Cohen told TorrentFreak during the protocol’s 10 year anniversary celebrations.

Cohen made BitTorrent public – anyone could use it – and soon people all over the web were using it to shift files. Almost inevitably people used the protocol to transfer material protected by copyright, just as they had used – and continue to use – HTTP and FTP to do the same.

But while HTTP and FTP continued on their own, BitTorrent and creator Bram Cohen were later to become part of BitTorrent Inc., a company setup to create solutions for shifting files around the Internet. They own products such as file-transfer client uTorrent and the recently announced Dropbox alternative Sync.

What BitTorrent Inc. does not own, crucially, is the BitTorrent protocol itself. That creation is open source and anyone can use it, totally for free.

BitTorrent is a software tool, and just as I could foolishly break the law here by using HTTP to distribute text saying something maliciously untrue about someone I don’t like, anyone can use the BitTorrent protocol to do the same with copyrighted material. Tim Berners-Lee has no responsibility to stop me, and BitTorrent Inc. – well, you know where this is going.

But despite BitTorrent Inc’s lack of responsibility and entirely legal business model, yesterday a Hollywood exec told The Wrap that doing business with the company is like doing “a deal with the devil.”

Here’s why. In addition to their software tools, BitTorrent Inc. are increasingly teaming up with artists and movie creators who want to build awareness of their products and generate revenues through new distribution models. One of those partners is entertainment company Cinedigm, who are teaming up with BitTorrent Inc. to distribute an exclusive video promoting Arthur Newman, an upcoming romantic comedy starring Colin Firth and Emily Blunt.

The exec, who chose to comment anonymously, suggests that the partnership is bad for the movie industry and that by working with BitTorrent Inc., Cinedigm are somehow being manipulated.

“It’s great for BitTorrent and disingenuous of Cinedigm,” the executive said. “The fact of the matter is BitTorrent is in it for themselves, they’re not in it for the health of the industry and Cinedigm is being used as their pawn.”

The exec doesn’t offer any detail on the reasoning behind his comments, but one could argue that ALL companies makes deal for their own good, and Hollywood are no exception. They were supporters of SOPA and didn’t care much for its effects on the Internet. But of course, that’s their business and they are completely entitled to go about it in a legal manner of their choosing, just like BitTorrent Inc. are.

However, the suspicion here is that the exec is upset that this Cinedigm deal brings further respectability to BitTorrent Inc. – and by extension BitTorrent overall – at a time when the company is campaigning hard to dispel the myth that it is responsible for millions of illicit transfers every day.

And believe us, BitTorrent Inc. are working very hard indeed.

Recent discussions between the company and TorrentFreak left us with no illusions that they do not want to be associated with piracy whatsoever and that they want to be judged on their own achievements, not the work of Internet pirates. And who can blame them for wanting to control their own identity and destiny?

Nevertheless, there is a simple fact that cannot be disputed. The words BitTorrent, torrent, torrent site and torrent client are massively and historically associated with online piracy and it is going to take a long-term herculean effort to educate the masses to even the basics, such as those outlined in this article. The anonymous exec thinks BitTorrent Inc. can do more.

“I really missed [BitTorrent Inc] being at the forefront of the piracy issue,” he said. “I don’t remember them going, ‘Naughty, naughty, don’t use our technology for that.’ They don’t give a shit,” he said.

The suggestion here is that BitTorrent Inc. should take responsibility for what countless millions of people are doing with the BitTorrent protocol, something they not only do not own, but the usage of which they lack the ability to control.

It is misconceptions like these that BitTorrent Inc. will have to overcome in their quest to become accepted just like any other technology company. Getting lured into a debate with Hollywood over piracy control is a minefield that no sensible party should seek to get involved in. Ask Google, the demands are never ending.

Finally, it’s perhaps interesting to note that the word ‘BitTorrent’ has all the power here, but in some respects it’s also the poison. Finding the antidote will be a tough challenge but we know that BitTorrent Inc. has no intentions of giving up.

Source: Anonymous Hollywood Exec Ignites BitTorrent Inc Piracy Controversy

I'm starting to think about my next book, which will be about power and the Internet -- from the perspective of security. My objective will be to describe current trends, explain where those trends are leading us, and discuss alternatives for avoiding that outcome. Many of my recent essays have touched on various facets of this, although I’m still looking for synthesis. These facets include:

1. The relationship between the Internet and power: how the Internet affects power, and how power affects the Internet. Increasingly, those in power are using information technology to increase their power.

2. A feudal model of security that leaves users with little control over their data or computing platforms, forcing them to trust the companies that sell the hardware, software, and systems -- and allowing those companies to abuse that trust.
3. The rise of nationalism on the Internet and a cyberwar arms race, both of which play on our fears and which are resulting in increased military involvement in our information infrastructure.
4. Ubiquitous surveillance for both government and corporate purposes -- aided by cloud computing, social networking, and Internet-enabled everything -- resulting in a world without any real privacy.
5. The four tools of Internet oppression -- surveillance, censorship, propaganda, and use control -- have both government and corporate uses. And these are interrelated; often building tools to fight one as the side effect of facilitating another.
6. Ill-conceived laws and regulations on behalf of either government or corporate power, either to prop up their business models (copyright protections), fight crime (increased police access to data), or control our actions in cyberspace.
7. The need for leaks: both whistleblowers and FOIA suits. So much of what the government does to us is shrouded in secrecy, and leaks are the only we know what's going on. This also applies to the corporate algorithms and systems and control much of our lives.

On the one hand, we need new regimes of trust in the information age. (I wrote about the extensively in my most recent book, Liars and Outliers.) On the other hand, the risks associated with increasing technology might mean that the fear of catastrophic attack will make us unable to create those new regimes.

I believe society is headed down a dangerous path, and that we -- as members of society -- need to make some hard choices about what sort of world we want to live in. If we maintain our current trajectory, the future does not look good. It's not clear if we have the social or political will to address the intertwined issues of power, security, and technology, or even have the conversations necessary to understand the decisions we need to make. Writing about topics like this is what I do best, and I hope that a book on this topic will have a positive effect on the discourse.

The working title of the book is Power.com -- although that might be too similar to the book Power, Inc. for the final title.

These thoughts are still in draft, and not yet part of a coherent whole. For me, the writing process is how I understand a topic, and the shape of this book will almost certainly change substantially as I write. I’m very interested in what people think about this, especially in terms of solutions. Please pass this around to interested people, and leave comments to this blog post.

In 2012 copyright holders asked Google to remove a staggering 51.4 million links to allegedly infringing webpages. By the end of the year Google was removing around half a million links per day.

Recovering from a small lull over the Christmas / New Year period, rightsholders were back with a vengeance in 2013.

After a somewhat jittery start, in the week starting February 11 rightsholders asked for the removal of 3,790,409 URLs, smashing the previous weekly record of 3,502,153 set December 17 last year.

But even this new record was eclipsed March 11 with a record 4,043,382 takedown requests.

However, just because a takedown is requested, it doesn’t mean that Google always complies.

In December 2012, Google began providing additional detail on requests it refuses to process. Now the search giant is back with a new addition to its Transparency Report which reveals on a daily basis a selection of copyright holders and anti-piracy companies that have been told that their requests will not be honored.

The latest set of results dated yesterday feature URLs which allegedly link to Saturday’s big UFC event in Montreal which featured Georges St-Pierre and Nick Diaz.

Underneath each item is a line which states “Requested to be removed in request XXXXXX”, which is actually a convenient link to the actual takedown request listed in Google’s Transparency Report.

The main request, 535215, shows that anti-piracy outfit MiMTiD asked for 60 URLs to be removed. Google removed 32 but refused to process 17, with the rest pending. Exact reasons for the refusals are not provided, but a check of some of the URLs listed reveals that they don’t exist on the target site and/or Google’s search.

While this particular sample doesn’t appear to show any blatantly stupid takedowns, those that can be described in such terms can be found on a daily basis. These would often be submitted and forgotten, but now they have an opportunity to appear prominently on Google’s “featured” list for everyone to see.

There are some great examples, such as this one sent by the Federation Against Copyright Theft on behalf of the BBC. It requests the takedown of links to the BBC show Wonders of the Solar System. As can be seen in the screenshot below, among a selection of torrent sites FACT also asked Google to censor the page that advertises the show on the BBC’s own website.

The poor BBC were also targeted by anti-piracy company Audiolock. This outfit was concerned that the UK’s leading TV broadcaster was providing links to a pirated copy of The View’s album “Cheeky for a Reason“, but when in fact it only published a review. Google refused to remove the link, fortunately.

And going deeper into this particular takedown request from Audiolock shows that if it wasn’t for Google’s diligence then the band’s online presence would have suffered even more damage. The request from the anti-piracy outfit asked Google to remove 28 links to allegedly infringing content but the search engine rejected 98% as wrongful.

They include: Removing links to the band’s actual music on iTunes, Amazon and Spotify, removing links to the album’s Wikipedia page, and censoring album reviews on almost two dozen sites including The Guardian, Independent, Metro, Drowned in Sound, Contact Music and NME.

The embarrassing thing for the anti-piracy groups is that Google’s tools allow you to keep digging to see exactly how far the rabbit hole goes and how awful it smells at the end. So we did.

It turns out that Audiolock have another customer called Hospital Records, which is one of the world’s most-loved Drum and Bass labels. In this takedown request for 25 URLs, Google denied 84%. Why? Well, Audiolock again tried to remove the label’s music from iTunes, Spofity and eMusic, and attempted to censor a whole bunch of legitimate reviews on some of the best Drum and Bass sites around.

But perhaps the most head-shakingly awful one of all can be found here, in which Audiolock tries (unsuccessfully) to take down legitimate tracks from electronic music store TrackitDown, a company which also runs its own successful music anti-piracy company. In fact, TrackitDown have been targeted by Audiolock on several occasions on behalf of at least five different labels.

After noticing the Google takedown, last week we reported on the plight of Torrentz, whose torrent-less homepage was removed from Google following a DMCA takedown from Paramount. We can report that Google reevaluated the report and concluded that the site’s homepage could be reinstated with immediate effect.

Google not only deserves praise for its Transparency Report but apparently its diligence in stopping takedowns that have the potential to damage artists, whose labels think they are handing over money to anti-piracy outfits in order to achieve completely the opposite.

Source: Google Further Highlights Wrongful DMCA Takedowns

Barely a week passes without yet another website being taken down because somebody objected to its existence. This would have been conceptually unthinkable two decades ago, but the copyright monopoly has encroached on civil liberties to a degree many haven’t realized.

Let’s return to the idea of the analog letter. It embodies much of what we cherish about freedoms of speech and expression. A key aspect of the letter is the concept of the messenger immunity – the idea that the mailman is never responsible for the contents of a carried message.

To illustrate how throughly fundamental this principle is, consider that the largest distributor of narcotics in pretty much every country is that country’s postal services. Yet, nobody would dream of holding the postal services as such responsible for the fact that some people use it to transport contraband – the responsibility for this rests solely with those who send narcotics through the mail, not with the mail system itself.

If a random director of a country’s postal service were called on this fact in a discussion panel, they would respond, “Well, that is indeed a problem. But it’s not our problem, nor should it be.” And they would be right.

For some reason, this fundamental principle of law doesn’t apply online, which is yet another sign the policymakers don’t seem to believe the Internet is for real, a lack of understanding that the net is actually a part of the real world.

This is a result of skilled lobbying from copyright monopoly extremists who have been talking to policymakers – policymakers who are at such a level of digital literacy that they get their e-mails printed for them by secretaries. (I wish I was making this up, but I’m not.) The result is a mishmash of laws with so-called Safe Harbors – implying that they would protect the messenger immunity – but where these laws are actually the exact opposite of Safe Harbors, as they introduce conditions for the immunity.

More specifically, the messenger is only immune as long as nobody has objected to their carrying the message. Most infamously, this is the case in the United States’ disastrous DMCA law, a mechanism that has gradually and partially crept into EU courts as well through a number of precedents.

When so-called Safe Harbors are conditional, and you risk liability for not killing the message, the correct business decision is almost always to drop the message and not risk liability – it is not the messenger’s responsibility to safeguard freedom of speech as such: it is their responsibility to run a business, and this is as it should be.

This is part of a deliberate conflation between business interests and civil liberties, and gradually letting business interests supersede civil liberties just because they are exercised online. That is not acceptable. Freedoms of speech were never safeguarded as a business interest. They were always safeguarded as an overriding political and civil liberties interest; it was never a particular entrepreneur’s responsibility to shoulder the responsibility of protecting freedom of speech for an entire nation.

Unfortunately, this has left us without anybody who takes responsibility for freedom of speech. The feeling that this was somebody’s intended result subtly creeps under your skin.

The very purpose of freedom of speech is to give everybody the ability to say things that aren’t popular. You never needed a constitutional protection to say that unicorns, kittens, and rainbows are pretty.

Freedom of speech is the freedom to state anything for any reason with the intent of conveying a message, either to a specific recipient or to the public at large. Successful political speech (which doesn’t have to include spoken words just to be called “speech”) more often than not points at somebody else’s expression and puts it in a new light.

At this point, copyright monopoly extremists are never late to claim that freedom of expression only is the freedom to state your own expressions, not a freedom to broadcast other people’s expressions. To put it in technical terms, this argument is utter bullshit.

When I sing “Happy Birthday” to somebody, it is trivial to observe that I do so to express a message of my own at the recipient, despite the fact that the song is under copyright monopoly, which is what is implied by the garbage of “somebody else’s expression”.

We are currently without a functioning legal protection of freedom of speech online, as Internet Service Providers get threatened the instant something is communicated that somebody else doesn’t like. If this had been the case when postal services were created, we would not have postal services today – nor the telephone, nor the Internet.

Messenger immunity is fundamental, and we need to fix this. It must be unconditional.

Source: Who Protects Freedom Of Speech When It Isn’t Profitable To Do So?

All disruptive technologies upset traditional power balances, and the Internet is no exception. The standard story is that it empowers the powerless, but that's only half the story. The Internet empowers everyone. Powerful institutions might be slow to make use of that new power, but since they are powerful, they can use it more effectively. Governments and corporations have woken up to the fact that not only can they use the Internet, they can control it for their interests. Unless we start deliberately debating the future we want to live in, and information technology in enabling that world, we will end up with an Internet that benefits existing power structures and not society in general.

We've all lived through the Internet's disruptive history. Entire industries, like travel agencies and video rental stores, disappeared. Traditional publishing -- books, newspapers, encyclopedias, music -- lost power, while Amazon and others gained. Advertising-based companies like Google and Facebook gained a lot of power. Microsoft lost power (as hard as that is to believe).

The Internet changed political power as well. Some governments lost power as citizens organized online. Political movements became easier, helping to topple governments. The Obama campaign made revolutionary use of the Internet, both in 2008 and 2012.

And the Internet changed social power, as we collected hundreds of "friends" on Facebook, tweeted our way to fame, and found communities for the most obscure hobbies and interests. And some crimes became easier: impersonation fraud became identity theft, copyright violation became file sharing, and accessing censored materials -- political, sexual, cultural -- became trivially easy.

Now powerful interests are looking to deliberately steer this influence to their advantage. Some corporations are creating Internet environments that maximize their profitability: Facebook and Google, among many others. Some industries are lobbying for laws that make their particular business models more profitable: telecom carriers want to be able to discriminate between different types of Internet traffic, entertainment companies want to crack down on file sharing, advertisers want unfettered access to data about our habits and preferences.

On the government side, more countries censor the Internet -- and do so more effectively -- than ever before. Police forces around the world are using Internet data for surveillance, with less judicial oversight and sometimes in advance of any crime. Militaries are fomenting a cyberwar arms race. Internet surveillance -- both governmental and commercial -- is on the rise, not just in totalitarian states but in Western democracies as well. Both companies and governments rely more on propaganda to create false impressions of public opinion.

In 1996, cyber-libertarian John Perry Barlow issued his "Declaration of the Independence of Cyberspace." He told governments: "You have no moral right to rule us, nor do you possess any methods of enforcement that we have true reason to fear." It was a utopian ideal, and many of us believed him. We believed that the Internet generation, those quick to embrace the social changes this new technology brought, would swiftly outmaneuver the more ponderous institutions of the previous era.

Reality turned out to be much more complicated. What we forgot is that technology magnifies power in both directions. When the powerless found the Internet, suddenly they had power. But while the unorganized and nimble were the first to make use of the new technologies, eventually the powerful behemoths woke up to the potential -- and they have more power to magnify. And not only does the Internet change power balances, but the powerful can also change the Internet. Does anyone else remember how incompetent the FBI was at investigating Internet crimes in the early 1990s? Or how Internet users ran rings around China's censors and Middle Eastern secret police? Or how digital cash was going to make government currencies obsolete, and Internet organizing was going to make political parties obsolete? Now all that feels like ancient history.

It's not all one-sided. The masses can occasionally organize around a specific issue -- SOPA/PIPA, the Arab Spring, and so on -- and can block some actions by the powerful. But it doesn't last. The unorganized go back to being unorganized, and powerful interests take back the reins.

Debates over the future of the Internet are morally and politically complex. How do we balance personal privacy against what law enforcement needs to prevent copyright violations? Or child pornography? Is it acceptable to be judged by invisible computer algorithms when being served search results? When being served news articles? When being selected for additional scrutiny by airport security? Do we have a right to correct data about us? To delete it? Do we want computer systems that forget things after some number of years? These are complicated issues that require meaningful debate, international cooperation, and iterative solutions. Does anyone believe we're up to the task?

We're not, and that's the worry. Because if we're not trying to understand how to shape the Internet so that its good effects outweigh the bad, powerful interests will do all the shaping. The Internet's design isn't fixed by natural laws. Its history is a fortuitous accident: an initial lack of commercial interests, governmental benign neglect, military requirements for survivability and resilience, and the natural inclination of computer engineers to build open systems that work simply and easily. This mix of forces that created yesterday's Internet will not be trusted to create tomorrow's. Battles over the future of the Internet are going on right now: in legislatures around the world, in international organizations like the International Telecommunications Union and the World Trade Organization, and in Internet standards bodies. The Internet is what we make it, and is constantly being recreated by organizations, companies, and countries with specific interests and agendas. Either we fight for a seat at the table, or the future of the Internet becomes something that is done to us.

This essay appeared as a response to Edge's annual question, "What *Should* We Be Worried About?"

The file-sharing landscape has often been described as a hydra. Take one site down, and several new ones will take its place.

Blocking or censoring sites and files may have a short-lived effect, but it does very little to decrease the availability of pirated content on the Internet.

Researchers from Boston’s Northeastern University carried out a study to see how effective various anti-piracy measures are. They monitored thousands of files across several popular file-hosting services and found, among other things, that DMCA notices are a drop in the ocean.

The researchers show that file-hosting services such as Uploaded, Wupload, RapidShare and Netload disable access to many files after receiving DMCA takedown notices, but that this does little to decrease the availability of pirated content.

Similarly, the researchers find evidence that the Megaupload shutdown did little to hinder pirates. On the contrary, the file-hosting landscape became more diverse with uploaders spreading content over hundreds of services.

“There is a cat-and-mouse game between uploaders and copyright owners, where pirated content is being uploaded by the former and deleted by the latter, and where new One-Click Hosters and direct download sites are appearing while others are being shut down,” the researchers write.

“Currently, this game seems to be in favour of the many pirates who provide far more content than what the copyright owners are taking down,” they conclude.

The study also looked at the number of sites where copyrighted content is available. The researchers scraped the popular file-hosting search engine FilesTube and found that there were nearly 10,000 distinct domain names and 5,000 IP-addresses where alleged pirate content was hosted.

For example, a search for “dvdrip” returned results on 1,019 different domains using 702 distinct IP-addresses.

From the above the researchers conclude that anti-piracy measures aimed at reducing the availability of pirated content are less effective than often suggested. A more fruitful approach, they argue, may be to take away their ability to process payments, through PayPal or credit card processors.

This is already happening widely, especially with file-hosting services that offer affiliate programs. However, as the researchers rightfully note there are also many perfectly legitimate file-hosting services that operate within the boundaries of the law and can’t be simply cut off.

The researchers end with the now common mantra that when it comes to online piracy, innovation often trumps legislation.

“Given our findings that highlight the difficulties of reducing the supply of pirated content, it appears to be promising to follow a complementary strategy of reducing the demand for pirated content, e.g., by providing legitimate offers that are more attractive to consumers than pirating content.”

Source: Censoring Pirate Sites Doesn’t Work, Researchers Find

For many years payment processors have dealt with both file-hosting and BitTorrent sites without asking too many questions, but last year things began to change.

Rightsholders and anti-piracy companies have been putting companies like PayPal under increasing pressure to stop processing funds for sites that have become associated with copyright-infringing activities, whether those sites operate legitimately or not.

Stirred up by people such as those behind the StopFileLockers campaign and rightsholders including IFPI and BREIN for example, slowly but surely processors have been making it more and more difficult for file-sharing related sites to do business with them.

Many sites have had their funds frozen by PayPal – in some cases tens of thousands of dollars – after the company either arbitrarily decided to cease trading with them or after sites refused to comply with PayPal’s terms and conditions.

As previously revealed, PayPal has been demanding access to the back-end of file-hosting websites to examine their customers’ files as a condition of continuing business with them. That demand went too far for file-hoster PutLocker who told us last year that as a matter of confidentiality that would never happen. As a result PayPal froze the company’s funds for 6 months.

But PayPal isn’t stopping there. According to several admins who spoke with TorrentFreak on condition of anonymity, PayPal has been freezing the accounts of private BitTorrent trackers too – and then demanding access to the sites so they can see what goes on there.

Of course, this creates problems. Private sites tend to have invitation systems so in the first instance PayPal has to be either sent an invite or have an account created for them manually. However, once PayPal gains access it is effectively game over for the site’s donation account. There are few private trackers that deal in 100% authorized content and filtering out unauthorized material as PayPal requires would make many of them pointless.

We aren’t sure of the precise numbers but sites have definitely been losing their PayPal accounts in recent months, either after refusing to comply with PayPal’s terms or failing inspections. However, we are informed that there are ways of being creative in order to keep accounts – or at least develop new ones that run in a different direction.

One admin told us that he has plans to shift away from the donation model completely and towards selling products and services to his userbase. At an inflated price (a mug for $25 or VPN for $20 per month etc) he hopes that he can generate enough profit to keep his ship afloat.

“Paraphrasing that dude in Independence Day, do you really think it costs $20,000 for a toilet seat?” he said.

Another source told us he may well run two sites. One will operate as a fully legitimate concern within PayPal’s guidelines and be set up to accept the donations. These funds will then be funneled to the second site to keep it going.

There is another way of keeping PayPal sweet too, but the method is apparently so secretive that our source refused to reveal many details. “Let’s just say if you do let the monkeys at PayPal into your site, passing doesn’t have to be hard if you do the prep work,” we were told.

But despite the creativity, others appear to be destined for no-man’s land. During the past few days TorrentBytes, one of Internet’s oldest private trackers, has announced that due to being unable to process payments it may well close down before the end of the month.

“Recent situations have put the staff team in a very hard position with handling site finances,” an announcement from TorrentBytes begins. “Problem is not lack of donations, but entirely on handling them. As of current every service provider the site has to pay for only accepts PayPal, Credit/Debit cards or direct bank wiring. Only one provider allows bitcoin.”

“Unless we can figure out some realistic and possible way to do site finances completely PayPal free, it seems like the story of TorrentBytes will end very soon after January 2013.”

At the time of writing the site is down and unreachable, possibly temporarily but possibly not. The question is, how many more will join it in 2013?

Source: PayPal Demands Invites to Private BitTorrent Trackers

Infrastructure: The telco industry charges more, kilobyte by kilobyte, for sending a text message from your phone to next door than what it costs to send the same message from Mars to Earth. This is the apex in this series of the dysfunctional telecom market, giving a background to why the telecom industry wants control of the Internet so badly, and is using every conceivable resource to stall, prevent, and delay its resulting economic development.

For the third installment in this series, we focus on text messaging. FoI reader Chris Monteiro suggested that we should describe how it is more expensive to send SMS text messages from your phone, kilobyte by kilobyte, than it is to send the same data from Mars to Earth. That couldn’t possibly be right, we thought, but nobody seemed to have done the math before.

So let’s do the math.

The cost of the Mars Global Surveyor probe was roughly 200 million USD for the satellite and launch, plus 20 million per year. So, 400 million USD. It operated for nine years, transmitting at an assumed average of 42,667 bps. Assuming it transmitted 24/7, that comes down to 42,667 × 3,600 × 24 × 365 × 9 / 8 / 1,024 / 1,024 / 1,024 = 1,410 gigabytes of data at a cost of 400 million dollars, or roughly 284,000 US dollars per gigabyte. That number includes the cost of the actual Mars probe and its launch, as well as the cost of the NASA crew handling its journey to Mars for almost a year before it started transmitting.

The charge for sending an SMS text message next door is about 5 USD cents (let’s use the same currency for simpliticy’s sake). Each text message is 140 bytes. This means that there are 1,024 × 1,024 × 1,024 / 140 = 7.67 million text messages per gigabyte. Multiplying this number by 0.05 gives us that the traffic charge when sending an SMS text message next door is 383,000 US dollars per gigabyte.

(UPDATE: As pointed out in the comments, an SMS text message is 160 characters but 140 bytes, so the cost per gigabyte comes even higher – it was originally and erroneously stated as 336,000 USD per gigabyte based on a 160-byte count. Downstream numbers adjusted accordingly.)

So the situation really is as insane in terms of telco industry overcharging as was suggested: the telcos charge more, kilobyte by kilobyte, to send a text message next door, than it costs to send data from Mars – even when including the cost of the actual Mars probe, its launch, and NASA personnel for ten years!

This is an abysmal failure of free market forces to converge the end price with the cost of production. (To add insult to injury, the practical cost of production is zero in this case, as SMS text messages are sent on unused slots in the wireless control channel.) Just for the sake of argument, let’s calculate what an SMS text message should cost if priced at net connectivity traffic rates.

We observed yesterday that wireline traffic costs at most 0.25 cents per gigabyte to the end-user. Fitting 7.67 million text messages into a quarter of a cent comes down to a production cost of at most 33 nanocents per text message, compared to the five typical cents charged. (Over-the-air traffic costs slightly more, but again, this travels in the control channel.)

Concluding, how do these numbers translate into actual telco profit markup on text service, to evaluate market efficiency? We recall that the profit markup on data roaming is an unbelievable 1,400,000%, and that a healthy, functioning market can sustain profit markups of 5% to 10% in the face of active competition. Comparing 33 nanocents to 5 cents gives us a mind-boggling telco industry profit markup exceeding 15,000,000,000% – fifteen billion per cent – on sending text messages next door. When SMS text messages are sent next state, which are charged at about 50 cents, the profit markup exceeds one hundred billion per cent.

This is not just an abysmal market failure, it is more than that. It is a personal insult to us who have publicly defended the belief of the workings of a free market, this being incontrovertible hard data that the telco industry needs to be politically restrained with a complete absence of humor.

For there are already next-generation companies who will have the side effect of killing the entire telco industry by providing the same services free of charge. From the Estonian Skype (voice services), via the American Google Fiber (wireline net connectivity), to the Spanish Fon (wireless connectivity), these companies are proven sustainable and can provide the entire telco offering free of charge as a baseline service in a completely viable next-generation business model.

No wonder the telco industry is trying its damndest to prevent this generational shift from happening. It’s going to wipe them out. There’s no room for a billion-percent profit markup if your competitor provides a better service for free, and especially so if that competitor will enable a whole suite of new products, services, and jobs that go way beyond the thinking of your own industry.

So it is bad policymaking – no, terrible policymaking – to allow the incumbent telco industries to prevent this economic growth (and their own replacement) by giving them any kind of control of the Internet, like with the upcoming coup attempt at the ITU’s meeting in Dubai, or trusting them politically with Internet rollout.

(End note: With a free market, we are referring to a non-discriminatory market that is optimized for low barriers to entry, and where end prices converge towards cost because of functioning competition. We are not referring to an unregulated market where no rules are enforced by governments, for the simple reason that no such market exists on planet Earth. The comments derailed somewhat around this subject on the last article. As these articles cover important subjects for future policymaking, and they are read in Brussels, please stay on the topic of information policy.)

Infopolicy: All too often, I hear that the copyright industry doesn’t understand the Internet, doesn’t understand the net generation, doesn’t understand how technology has changed. This is not only wrong, it is dangerously wrong. In order to defeat an adversary, you must first come to understand their state of mind, rather than painting them as evil. The copyright industry understands exactly what the Internet is, and that it needs to be destroyed for that industry to stay even the slightest relevant.

Look at the laws being proposed right now. General wiretapping. Mandatory citizen tracking. Excommunication, for Odin’s sake. Sending people into exile. All these laws follow one single common theme: they aim to re-centralize the permission to publish ideas, knowledge, and culture, and punish anybody who circumvents the old gatekeepers’ way beyond proportion.

Having this gatekeeper position – having had this gatekeeper position – teaches somebody what power is, in the worst sense of the word. If you can determine what culture, knowledge, and ideas are available to people – if you are in a position to say yes or no to publishing an idea – then it goes much beyond the power of mere publishing. It puts you in a position to select. It puts you in a position where you get to decide people’s frame of reference. It literally gives you the power to decide what people discuss, feel, and think.

The ability to share ideas, culture, and knowledge without permission or traceability is built into the foundations of the net, just as it was when the Postal Service was first conceived. When we send a letter in the mail, we and we alone determine whether we identify ourselves as sender on the outside of the envelope, on the inside for only the recipient to know, or not at all; further, nobody may open our sealed letters in transit just to check up on what we’re sending.

The Internet mimics this. It is perfectly reasonable that our children have the same rights as our parents did here. But if our children have those same rights, in the environment where they communicate, it makes a small class of industries obsolete. Therefore, this is what the copyright industry tries to destroy.

They are pushing for laws that introduce identifiability, even for historic records. The copyright industry has been one of the strongest proponents of the Data Retention Directive in Europe, which mandates logging of our communications – not its contents, but all information about whom we contacted when and how – for a significant period of time. This is data that used to be absolutely forbidden to store for privacy reasons. The copyright industry has managed to flip that from “forbidden” to “mandatory”.

They are pushing for laws that introduce liability on all levels. A family of four may be sued into oblivion by an industry cartel in a courtroom where presumption of innocence doesn’t exist (a civil proceeding), and they’re pushing for mail carriers to be liable for the contents of the sealed messages they carry. This goes counter to centuries of tradition in postal services, and is a way of enforcing their will extrajudicially – outside the courtroom, where people still have a minimum of rights to defend themselves.

They are pushing for laws that introduce wiretapping of entire populations – and suing for the right to do it before it becomes law. Also, they did it anyway without telling anybody.

They are pushing for laws that send people into exile, cutting off their ability to function in society, if they send the wrong things in sealed letters.

They are pushing for active censorship laws that we haven’t had in well over a century, using child pornography as a battering ram (in a way that directly causes more children to be abused, to boot).

They are pushing for laws that introduce traceability even for the pettiest crimes, which specifically includes sharing of culture (which shouldn’t be a crime in the first place). In some instances, such laws even give the copyright industry stronger rights to violate privacy than that country’s police force.

With these concepts added together, they may finally – finally! – be able to squeeze out our freedom of speech and other fundamental rights, all in order to be able to sustain an unnecessary industry. It also creates a Big Brother nightmare beyond what people could have possibly imagined a decade ago. My undying question is therefore why people waltz along with it instead of smashing these bastards in the face with the nearest chair.

For instance, we hear that ISPs in the United States of America will start to serve the copyright industry in the treatment of its own customers, up until and including a possible exile of them as citizens, and most likely scrapping their right to anonymity for the already-going industry game of sue-a-granny.

This is bound to become a textbook example of bad customer relationships in future marketing books: making sure that your customers can be sued into oblivion by entire industry organizations in a rigged game where they’re not even innocent until proven guilty. Seriously, what were the ISPs thinking?

Today, we exercise our fundamental rights – the right to privacy, the right to expression, the right to correspondence, the right to associate, the right to assemble, the right to a free press, and many other rights – through the Internet. Therefore, anonymous and uncensored access to the Internet has become as fundamental a right itself as all the rights we exercise through it.

If this means that a stupid industry that makes thin round pieces of plastic can’t make money anymore, they can go bankrupt for all I care, or start selling mayonnaise instead.

That’s their problem.

This column was originally published at TorrentFreak.

Google engineers policing governments trying to police Internet

Melissa Harris, Chicago Tribune, October 19, 2012

Abstract: Brian Fitzpatrick is a veteran Google Chicago engineer who majored in Latin but has become an expert in government censorship of the Internet.

Two years ago his team of five engineers, all working in Chicago, began tallying and helping publish the number and types of government requests Google receives to remove content from its products or turn over information about users.

Thanks to this team, we now know that online censorship comes from dictatorships and democracies alike.

For decades TV companies lived in the moment, transmitting TV shows at a certain time and date and expecting their customers to adapt to their predetermined schedules. Be around when the show airs, be around for the repeat, or miss it forever, the business model used to dictate.

Technologies such as VHS and more recently home hard disc recorders went some way to bridging the accessibility gap but these days customers increasingly want everything “on demand”, at a time and place of their choosing, not one dictated by a TV company.

To fill this gap in the market, some ISPs such as Elisa and TeliaSonera in Finland are offering their subscribers personal cloud storage. As a TV show is aired it is recorded to the customer’s cloud account, ready to be watched over the Internet at a more convenient time.

The ISPs and their subscribers appear to be happy with the convenience of the services but perhaps unsurprisingly they are now coming under attack from rightsholders.

CIAPC, the anti-piracy group that successfully forced ISPs such as Elisa, TeliaSonera and DNA (around 80% of the Finnish Internet market) to block The Pirate Bay, insists these services are illegal and should be shut down.

“Storage services for TV shows are currently offered by around twenty companies, including major Internet service providers such as Elisa and TeliaSonera,” CIAPC explain. “None of the companies have licenses for the services. This is significant, because the issue concerns around 100 million euros worth of commercial services.”

CIAPC say they wrote to the companies advising them that their services breach copyright law and ordering them to be shut down, but thus far the warnings have gone unheeded. So this week CIAPC reiterated their threats that if the services remain operational, legal action will follow.

“None of the service providers has complied with the requirement of the ban. It appears that a legal solution needs to be considered,” says CIAPC managing director Antti Kotilainen.

The timing of the threats appears to be linked to an announcement last week that the operators of TVkaista, a company offering similar services, had been charged for illegally offering the content of several TV companies without permission.

TVkaista’s CEO and technical director are accused of copyright and intellectual property offenses plus aggravated fraud. The company’s legal adviser is charged with criminal copyright offenses and copyright fraud.

The accused all protest their innocence. They insist that their service is legal under current law which grants their customers a fair use exception for private copying of TV shows for personal use.

The service offered by TVkaista is, however, slightly different to that being offered by Elisa and TeliaSonera. TVkaista records all programs and stores them for a few weeks whether customers ask for them or not. The other services only record TV shows on demand.

CIAPC say that the Copyright Act only permits users to save content such as TV shows, movies and music locally within the home, and these cloud services don’t fit that description.

None of the ISPs are expected to give in without a fight.

Source: Anti-Piracy Group Threatens To Sue ISPs Over TV Show ‘Piracy’