Intellectual Property
Mandate For Watermarking Technology Raises Questions
by Sarah Lai Stirland
A computer science professor sparked off a feisty debate last week when he reported that some proposed mandated technical specifications in a controversial House copyright protection bill are protected by confidentiality contracts.
But a representative of the company that designed the specifications, responding to Princeton Computer Science Professor Edward Felten's criticisms, downplayed the assertions.
Last Monday, Felten blasted Veil Interactive Technologies for asking him to pay a $10,000 fee and sign a confidentiality agreement before he could investigate its watermarking system. Consumer electronics manufacturers would have to implement the system into their products if a bill introduced in the House last December becomes law.
Felten said he was shocked by the requirement because he feels that the merits of the technology should be debated before it becomes a mandate.
But Scott Miller, the company's executive vice president of business development, said the company is willing to provide an executive summary of test results of the system to anyone who wants them. He added that the details of the system are available through its publicly available patents published by the Patent and Trademark Office. Further details of its system are proprietary, he noted.
"It would be counterproductive to give our roadmap and blue print out to the public before it's legislated," he said.
The debate between the professor and the technology company executive are sure to be just the beginning of a fiery discussion this year. The Motion Picture Association of America has called this issue as top on its legislative to-do list for 2006. The movie group has said Congress must enact legislation that would close the so-called "analog hole."
The term refers to the practice of converting analog content into digital format without embedded copy-protection instructions. Hollywood studios are concerned about the potential for piracy via the hole.
The chairman and top Democrat of the House Judiciary Committee in December introduced H.R. 4569, a bill that aims to fill the gap by mandating specific technologies that consumer electronics manufacturers would have to adopt to prevent unauthorized copying.
The Consumer Electronics Association, public interest group Public Knowledge and the Business Software Alliance all have voiced strong reservations about the idea of legislation mandating specific technological solutions to closing the gap.
Felten, as well as representatives of the consumer electronics industry, has said that one part of the legislation mandates the implementation of little-understood technology, the costs of which are unknown. The system is a watermarking system called the VEIL Encoding Rights Assertion Mark System, made by Veil Interactive Technologies in St. Louis. Veil is the only firm that makes it.
In an interview, Miller said the VEIL technology has been successfully deployed in the marketplace, as well as tested for effectiveness. But one well-placed technology industry insider who has participated in copyright debates between the entertainment and technologies industries said he was not aware of Veil Interactive ever formally explaining to any consumer electronics companies how its watermarking system works.
Digital Convergence
Global Group Differs Approach To Harmonization
by William New, for Technology Daily
ROME -Industries experiencing rapidly converging communications, information technology and content issues met Monday to explain how they could benefit if governments and others take the right steps.
But despite calls for global cooperation by speakers at the Jan. 30-31 conference on digital content held by the Organization for Economic Cooperation and Development, the agreements may have ended there. Most industry and government sources said governments should take a minimal approach to regulation and let technology and courts protect content. But consumer groups and academics asked for government help to ensure their access to knowledge was protected.
Lucio Stanca, Italian minister for innovation and technologies, said "it seems that the center of gravity is shifting to content." He called for a "global approach" to promoting digital content, and highlighted new opportunities from "cross-industry convergence and alliances."
Several speakers, including Stanca and Rita Hayes, deputy director general of the World Intellectual Property Organization, highlighted the importance of intellectual property rights protection for maximizing digital content's contribution to the economy. Stanca said there must be harmonization of national-level protection regimes. Hayes outlined WIPO's involvement in digital content issues and in the standardization of digital rights management technologies.
OECD Secretary-General Donald Johnston highlighted his group's involvement in digital content, including education, e-government and science. "The digital revolution has changed the very heart of the human endeavor," he said.
FCC Commissioner Michael Copps called on participants to proceed with a "sense of humility" in seeking new solutions to the digital divide, technical convergence, regulation, deregulation, or consumer protection. "None of us is in a position to preach to others," he said.
Copps said governments should not "pick winners and losers" among technologies, but rather should regulate with "sufficient clarity, stability and predictability" to allow competition to prosper. He further urged that Internet governance be left open to industry, and said government should help ensure advanced technologies reach those living rurally, with disabilities, or with limited incomes.
Chin Dae-Jae, Korean minister of information and communication, described factors making Korea the world leader in the adoption of high-speed Internet access. He cited high density dwellings, incentives for take-up by hotels and other public spaces, fixed-rate Internet access and interest by consumers in digital content, especially online games.
Phil Bowyer, deputy secretary general of the Union Network International, called for broadband to be a universal service. He said it is an idea so economically unpopular that proposing it at the business conference is "like waving garlic at Dracula."
Debates also targeted the copyright industry's efforts to deploy anti-piracy technologies and various business models for delivering content. James Love of the Consumer Project on Technology said it would be very harmful to consumers if deployment were fully effective.
But Ted Shapiro of the Motion Picture Association's European office said a return on investment is necessary to innovate and distribute content. Luca di Mauro of Sky Italia said the problem is not with content creation but with the bottleneck of distribution.
Debates also broke out over the rise and future of Web logs. One speaker referred to blogging as "the invasion of amateurs." But Mark Cooper of Consumers International countered that it is actually, "the expulsion of gatekeepers."
Telecom
Cable Transmission Deals Emerge As New Hill Battle
by David Hatch
Retransmission consent deals between broadcast television stations and cable operators are emerging as a new front in the battle on Capitol Hill to overhaul the nation's communications laws.
On the eve of two Senate Commerce hearings on video issues, the American Cable Association held a Monday press conference calling for substantive changes to retransmission laws that have been in place for more than a decade. "Retransmission abuse is rampant and disproportionately harming" small and rural cable operators, said association President and CEO Matt Polka. He will present his case directly to the panel on Tuesday when he testifies at a video content hearing.
A 1992 cable law allows TV stations to elect either mandatory cable carriage known as "must carry" or retransmission, a negotiated agreement in exchange for carriage. The provisions were designed to enhance localism, the notion that communities should be served by locally broadcast stations available free to all viewers.
But speakers Monday asserted that broadcasters are taking advantage of retransmission consent to make excessive financial and programming demands from cable operators. They added that the competitive landscape has changed as satellite TV providers make increased inroads in rural areas without the same carriage obligations.
"In our short history, we experienced consistent, firsthand broadcaster abuse" of the rules, said David Keefe, CEO of Atlantic Broadband, a Massachusetts-based cable provider serving many rural citizens in the mid-Atlantic region. He said broadcasters have demanded exorbitant fees and carriage of unpopular cable channels owned by their parent companies in exchange for retransmission. He and another cable executive said rising fees are undermining their ability to upgrade their systems and deploy broadband.
Gary Arlen, president of Arlen Communications, said broadcasters in rural markets should be paying cable operators -- and not the other way around --for carriage. "The payment equation runs the wrong way," said Arlen, whose firm released an ACA-commissioned study Monday on the impact of retransmission consent. "The economic value brought to broadcasters by cable carriage is routinely overlooked," said economist John Casey, referring to increased advertising revenue resulting from viewership gains. Casey co-authored the report.
But the National Association of Broadcasters is firing back. In a Jan. 27 letter to Senate Commerce Chairman Ted Stevens, R-Alaska, newly installed NAB President and CEO David Rehr argued that consumers benefit from the existing rules by accessing broadcast channels through subscription video services. "Retransmission consent is fair," the letter says, explaining that cable systems benefit by carrying heavily watched broadcast stations that consumers demand. The letter acknowledges that stations gain from cable's audience reach.
ACA and its allies want Congress to overhaul retransmission consent. They are seeking changes to network non-duplication rules and exclusive contracts that bar cable operators from carrying TV stations located outside their markets. Another demand is that cable systems be permitted to offer stand-alone broadcast tiers which satellite TV providers now offer. Relaxing such restrictions would give cable operators more leverage in negotiating with broadcasters, they said. ACA also wants policymakers to adopt new retransmission rules governing digital TV broadcasters.
Lobbying
Cable Rolls Out Ad Campaign, Views On Video Franchises
by Drew Clark
The National Cable and Telecommunications Association rolled out a new multimillion dollar television and print advertising campaign Monday designed to showcase the industry's hardscrabble roots and its "honorable" and entrepreneurial role in the nation's culture and economy.
The campaign, dubbed "A Great American Success Story," attempts to showcase positive attributes about the cable industry. It lays the groundwork for a long-ranging role in telecommunications policy debates.
"Lots of people love to beat up on cable," association CEO Kyle McSlarrow said at a press briefing introducing the advertisements, a five-minute video documentary and a new logo for the association.
"My view is that, if anything, this industry has been too modest [in] patting ourselves on the back," McSlarrow said. "We are investing tens of billions in infrastructure, we are deploying new technologies and creating jobs in America."
McSlarrow forcefully repeated the cable industry's objection to the Bell companies' ability to obtain national video franchises without agreeing to "build-out" requirements that they serve all or a large portion of an area's residents.
"The argument you are hearing from AT&T is that if Congress would just act, we are ready to go," McSlarrow said, referring to the Bell companies' request for national video authority.
"They went to Congress in 1996 ... to get into video. What they asked for is exactly what they got," he said. "Congress gave them four different pathways to get into video," but for years, the Bells balked at investing. "We rolled out and invested the $100 billion plus," he said.
McSlarrow said the cable industry was open to franchising positions that he called "reasonable."
"To the extent that people have a concern that new entrants can enter the market, let's deal with that head on" through a proposal that he dubbed a "shot clock."
If a Bell and a municipality are deadlocked after 30 days of negotiating for franchise authority, a federal law could dictate that the new entrant "get one with exactly the same term the incumbent has."
If the new entrant got a franchise with more favorable terms and conditions, the existing cable company's franchise would need to be modified changed, he said. "There out to be a level playing field, so they can all march forward together."
In addition to touting the technical and business accomplishments of cable's founding generation, the five-minute documentary pokes fun at the Bell companies, which it describes as "just plodding through life," and broadcasters.
Referring to cable, the documentary begins: "She was born from a rag-tag group of dreamers, scrappers, who felt there should be more coming from a TV than three repetitive channels with a scratchy, pasty picture."
It also previews tag lines that McSlarrow said would be fleshed out with policy arguments in coming months.
Among the phrases that cable used to describe itself were: "cable plays by the rules," "cable's in our communities, and wants to be there," "cable's available to all," and cable "risked billions in private capital."
Telecom
FCC Panel Convenes Katrina Communications Probe
by Michael Martinez
The FCC on Monday opened an independent panel investigation into the effect of Hurricane Katrina on the nation's communications systems.
The panel, which includes members from private and public organizations, has been charged with providing the agency with a list of recommendations by June 15 on how to improve the nation's emergency response and communications systems.
Panel Chairwoman Nancy Victory said the investigation would be split into three working groups focusing on infrastructure resiliency, recovery coordination and procedures and emergency communications. The working groups will conduct their own research and collect testimony in between the full panel's meetings before the final report's June deadline.
"This is going to be a very intensive effort," Victory said.
In a taped message to the members of the panel, Democratic Commissioner Michael Copps said it is crucial not to let the investigation become a superficial matter. He reminded the panel about communication problems that confounded rescue workers and law enforcement during the Sept. 11, 2001 terrorist attacks.
"Concrete actions to fix our communications systems have been a long time coming -- too long. We saw the results of communications failures on 9/11, over four years ago. We saw them again during the East Coast blackout, and then more recently with the hurricanes. This time, we dare not fail in our emergency planning efforts," Copps said.
Copps also stressed the importance of allowing a broad range of voices to be heard during the investigation. He specifically asked panelists to pay attention to the needs of the disabled, who have no direct representation on the panel.
"There are a lot of stakeholders in New Orleans and along the Gulf Coast whose lives were permanently affected by Katrina and the other storms," he said. "They not only deserve to be heard, they need to be heard."
Martin noted that the panel includes representation from minority groups like the National Association for the Advancement of Colored People. He also said there would be opportunities for groups not included on the panel to provide testimony to the working groups, and that the commission would keep the process as open as possible.
According to Martin, the FCC already is examining methods to ensure that Spanish-speaking communities have better access to emergency alerts, and that disabled communities will be considered in the investigation.
"Whether or not they're actually included in that whole panel doesn't indicate that the commission isn't committed to making sure that the disability community continues to have access to emergency alerts," Martin said.
Panelists also weighed in on which specific issues they would like to see resolved by the investigation.
Kevin Beary, the sheriff in Orange County, Fla., said panel members will need to get their egos "out of the closet" to objectively evaluate what happened during last year's storm season. Beary said they cannot skip steps by talking about making advanced technologies interoperable before they prove that they operate at all.
Louisiana State Police Deputy Superintendent Joseph Booth said he believed the panel would have to answer very basic questions about the capability of local and national emergency communications systems before moving forward to advanced discussions.
Net Governance
ICANN and VeriSign Tweak Settlement Deal
by Randy Barrett
The Internet's governing organization and the world's top domain-name registrar revised a controversial legal settlement Sunday.
The Internet Corporation for Assigned Names and Numbers and VeriSign, which runs the .com domain, tweaked an agreement reached last November ending an ongoing legal battle over the creation of new services. The original deal sparked widespread disapproval among registries. Many of them complained it gave VeriSign too much money and leverage.
The criticism led ICANN management to rework parts of the agreement with VeriSign in hopes of winning final approval by its board.
"After entering into a diligent round of negotiations with ICANN staff and granting these additional concessions to address feedback from the Internet community, VeriSign has advised ICANN that this proposal represents its last, best offer to settle the pending litigation," said ICANN on its Web site.
The revised settlement requires VeriSign to pay ICANN a lump sum of $625,000 to help defray operating costs. It also eliminates a 50 cent per domain name pass-through fee that registries disliked. Also new is a cap on price increases that VeriSign may charge downstream domain resellers. The original agreement would have enabled the company to raise fees up to 7 percent per year. VeriSign may now raise prices four out of the six years of the contract.
"This revised settlement agreement represents the best efforts of both VeriSign and ICANN to resolve differences that have been present for several years," said the company in a statement. "We are hopeful that this agreement will be approved so ICANN, VeriSign and the entire Internet community can focus on strengthening the Internet infrastructure and expanding the Internet globally."
The deal also maintains VeriSign's right to a "presumptive renewal" of the .com domain registry when the latest contract ends. Critics have been particularly unhappy with this arrangement, contending the deal gives too much power to VeriSign.
VeriSign spokesman Tom Galvin confirmed that the updated settlement is the final offer the company will make.
While many registrars are still looking over the fine print, Elliot Noss, CEO of Tucows, was sanguine after looking over the agreement. "I think I'm cautiously optimistic," he said.
Noss is particularly concerned with how price hikes are handled and the issue of data rights. "I need to examine deeper how price increases would be implemented," he said.
Network Solutions Inc., which formerly was owned by VeriSign, panned the revised deal on several accounts.
"Allowing VeriSign to raise registry fees for the .com domain by 7 percent in four out of six years without cost justification, and without any reasonable opportunity ever for the contract to be rebid elsewhere, would put the Internet community at risk by eliminating competition for the .com registry," said NSI Chief Policy Counsel Jonathon Nevett.
Security
DHS Discusses Procurement Strategy For Border Security
by Chris Strohm, GovExec.com
The Homeland Security Department plans to award a contract by September for a border security system that integrates technology, infrastructure, personnel and processes.
The department will issue a solicitation in March or April for the first phase of the Secure Border Initiative, and will award a contract to a prime contractor by the end of the fiscal year, DHS Deputy Secretary Michael Jackson said during an industry day Thursday.
Called SBInet, the first phase is focused on physical security improvements along the nation's borders -- specifically the border with Mexico where the majority of illegal immigrants enter the country. Later phases for the initiative will focus on improving interior enforcement and developing a guest worker program for migrants to legally enter the country.
"We are looking for the type of integrated team that will work with us in an aggressive, fast, innovative cycle to do this job right," Jackson said. "For the entire time that we've been engaged over years in trying to enforce the border, we have never -- in my view -- had a credible plan for taking on control of the entire southwest border."
The Secure Border Initiative is intended to replace and expand on previous border security efforts, namely the Integrated Surveillance Intelligence System and America's Shield Initiative.
Jackson appealed to industry representatives to pitch ideas that have been proven to work, rather than concepts that will need time and testing.
"There is a large open swath, a big open door, for a short period of time in which we hope to invite the smartest people in this country to help us think through this important public policy objective," Jackson said.
States
Economist Recommends Data Centers for Austin
by Kimberly Reeves, for Technology Daily
The data center industry is in the midst of a short economic burst, and Austin should position itself to take advantage of a three-year window of opportunity, economist Angelos Angelou told an Austin City Council subcommittee last week.
A combination of factors -- accounting and health laws, consolidation within the financial sector and corporate mega mergers -- has driven a spike in the need for data centers. At least 100 companies currently are seeking data center sites across the country, and three or four of those are looking toward Austin. The town already houses data centers for Oracle, Home Depot and Dell, Angelou said.
Data centers have not been on Austin's radar screen. Instead, the city has concentrated its efforts on attracting technology-related companies in the semiconductor, peripheral and biotechnology sectors. During a presentation to the Council Committee for Emerging Technology and Telecommunications, Angelou said data centers are the hot technology sector right now, but the spike will be brief and not likely be repeated soon.
"We probably have 60 companies that will locate data centers within the next 18 months and another 60 to 85 over the next two to three years," Angelou said. "This is the front end of the growth. In fact, this is the fastest growing tech business right now, but it will not exist two to three years from now. If the city is to become interested in this sector, they need to target it now."
Hot city markets for data centers -- Washington, New York and Santa Clara, Calif. -- traditionally have been driven by the economy. Washington has government. New York City has finance and Santa Clara has technology. What the next generation of data centers need to have, however, are reasonable electricity costs, fiber connectivity and a skilled labor pool, Angelou said.
Markets also need to be out of harm's way. Houston and Miami are literally off the map for most companies scouting sites because of the threat of events such as Hurricane Katrina. For most companies, even Orlando is not far enough away, Angelou said.
The Austin City Council has considered a Samsung or a Dell to be the kind of business it wants to attract -- companies that will bring an array on vendors and clients.
Angelou said data centers have their own benefits. Companies typically make an investment in data center infrastructure that is $100 million per 100,000-square-feet of raised floor construction, plus another $300 million to $500 million in equipment and technology. That technology will turn over, and be replaced, every three years. While the data center may employ only 50 to 100 people, annual salaries are at least $60,000, Angelou said.
If Austin wants to attract data centers, Angelou recommends a data center park, one that is well equipped to handle multiple data centers. Marketing specifically to the power and technology needs of the center will be important in this round of site selection, he said.
Correction
An article that appeared in the Jan. 27 PM Edition reported that the Government Accountability Office had ruled that CDW Government violated the Trade Agreements Act. GAO's ruling is more accurately characterized as sustaining a protest of an award to CDWG on the grounds that the company had failed to certify that the products it offered complied with the act.
Today's Feature:
Issue of the Week
There are strong signs that President Bush will discuss innovation, education and healthcare information technology in his upcoming State of the Union speech Tuesday night.
Every Monday, read the Issue of the Week by Technology Daily staff
E-briefs
Telecom: The inability for Bell companies to obtain national video franchises costs consumers $8.2 billion for just one year of foregone competition, and that amount rises each year, according to a study released Monday by the Phoenix Center for Advanced Legal and Economic Public Policy Studies. In spite of increasing video competition to the cable companies from AT&T and Verizon, "actual market entry faces a significant barrier in the form of local franchise requirements that are delaying entry and could postpone competition for a substantial period of time," according to the study, by authors George Ford and Thomas Koutsky. The costs stem from higher prices when cable companies lack an effective competitor, according to the study. The toll accumulates over the years, such that four years' of delay would cost consumers $30 billion, the study found. The foregone savings could be even greater, given that recent surveys show cable companies slashing prices in areas with Bell competition.
Privacy: The nation's third largest wireless carrier, Sprint Nextel, said Monday that it is suing Florida-based All Star Investigations to protect its customers' privacy. Like a raft of similar suits launched by its competitors last week, Sprint Nextel's suit charges that All Star's Web sites obtain its customers' call-log information illegally. All Star then sells the data. Sprint Nextel said last week that it is suing 1st Source Information Specialists, with similar allegations. Verizon Wireless and T-Mobile launched suits against Web sites engaging in similar practices last week.
White House: White House Press Secretary Scott McClellan said Monday that the White House needs to "work together to renew the PATRIOT Act." He was responding to a question about the administration's agenda for 2006. The comment could signal a shift in stance to the president's willingness to negotiate over key provisions of the 2001 anti-terrorism law before Congress acts to make the expiring provisions of the legislation permanent. Sixteen provisions of the law are scheduled to expire Feb. 3 if Congress does not act. Another extension of the expiring provisions could be in the works, and it is on the House Rules Committee's agenda for debate Tuesday. The president has blamed Democrats for blocking re-authorization of the expiring provisions, and has indicated that he is not willing to negotiate further changes to the contested provisions.
Telecom: Philadelphia officials on Monday said the city is about to put the finishing touches on a 10-year contract with Earthlink to provide a municipal wireless network. AP reports that the contract will go before the City Council for final approval next month. According to Philadelphia Chief Information Officer Dianah Neff, Earthlink will own the network under the contract and will charge a $9 wholesale rate to providers selling high speed Internet access to users throughout the city. The network will cover 135 square miles, making it the largest municipal broadband network in the country. City officials hope to keep the residential monthly rate for broadband access under $20. Neff said users will be able to plug in by springtime next year.
Business: Symantec, McAfee, Trend Micro, ICSA Labs and Thompson Cyber Security Labs on Monday announced steps designed to improve anti-spyware products. The participants are collaborating to develop standards for the testing of anti-spyware software to eliminate confusion and make it easier for consumers to make sound purchases. "Few product testers currently document their test samples or methodology, and many use very small sets in their testing environments," the companies said. "As a result, there is no distinguishable benchmark for comparison of anti-spyware product vendors, leaving customers unclear as to the most effective products and solutions," they added. Larry Bridwell of ICSA Labs said in a statement that there is considerable confusion about how best to combat spyware. "This agreement is an important first step in maturing the industry to the point where it can effectively combat the proliferation of spyware on behalf of customers," he said.
