Business, Ideology and Freedom

Critics Press Companies on Internet Rights Issues

In an indication of growing tensions between human rights advocates and American Internet and technology companies doing business in countries with repressive regimes, a group of two dozen fund management firms and investment analysts issued a joint statement yesterday urging businesses to adopt policies addressing freedom of expression.

[…] Microsoft and Google have been criticized for filtering keywords like “human rights” and “democracy” from their search engine results in China. Cisco has been criticized because its router hardware and software form the backbone of China’s Internet, and the Chinese government has been able to use Cisco’s technology to filter Web traffic within the country and conduct surveillance of Internet users there.

“We sent letters, we tried to phone them,” said Julien Pain, the head of the Internet freedom desk at Reporters Without Borders, a Paris-based press freedom group, referring to the organization’s attempts to discuss free-speech issues with various technology companies. “And none of them ever replied to us.”

The group, which organized and helped draft yesterday’s announcement, turned to “socially responsible” investment firms in an attempt to reach shareholders. […]

[…] Mary Osako, a Yahoo spokeswoman, said yesterday that the company took these issues seriously. “We balance legal requirements,” she said, “against our strong belief that our long-term involvement in China contributes to the continued modernization of the country.” Even so, [Domini Social Investments’ general counsel and director of shareholder advocacy Adam] Kanzer said, a trade-off is being made between “making money and a person going to prison for expressing their viewpoint.”

Related: Just Googling It Is Striking Fear Into Companies

Hollywood and Its Fiscal Problems

Can Hollywood Evade the Death Eaters?

But that’s not what is giving [Warner Brothers Pictures head of production Jeff] Robinov fits. It’s the amount of time he spends trying to figure out which films will attract moviegoers. The industry is in the midst of a major shift as people increasingly turn to video games, big-screen televisions and the Internet for entertainment; movie attendance in the United States is down 8 percent for the year.

“Something is changing in the movie experience,” Mr. Robinov said in an interview at his office on the Warner lot last month. “Is it piracy? Is it commercials? Is it the availability of movies? Or are we not creating enough things to drive people out of the home? My biggest fear is having a movie that deserves to be seen, but is not.”

[…] “Marketing costs are just skyrocketing, and if we don’t address this we are going to put ourselves out of business,” said Dawn Taubin, the president of Warner Brothers Pictures’ domestic theatrical marketing, speaking about the industry.

Consider this: the average cost to market a film domestically in 2004 was $34 million, roughly half the $64 million average price tag to make one, according to the Motion Picture Association of America. Blockbusters cost even more to market: as much as $60 million domestically and $125 million worldwide.

[…] But perhaps the biggest driver of changes in marketing is the speed at which DVD’s are coming to store shelves. Some DVD’s are now arriving in stores less than four months after a movie hits theaters. Instead of creating two campaigns – one for the theater and another for home video – Warner is considering whether to consolidate its marketing operations under one umbrella.

So why the slowdown [in DVD sales] now? Some analysts suggest that studios should have been better at forecasting demand. Late adopters of the DVD technology are more likely to rent than buy DVD’s, while consumers who bought DVD players early on already own many of the discs they want. The market is flooded with products. According to the DVD Release Report, an industry newsletter, 50,936 titles have already been released on DVD, with an additional 1,055 to be released by the end of next March.

[…] Movies earn money in several ways: first at the theater, then on DVD and later through sales to network and cable television. But with digital downloads or video-on-demand, studios increase their ability to offer consumers a menu of movies, television shows and games at different times and for a variety of prices. The trick is to explore new, potentially lucrative ways of digital delivery while keeping theater owners and DVD retailers happy.

“The business is made much more complex by windows and audiences that are fragmenting,” Mr. Meyer said. “The story for the next 10 years is how content is going to adapt. You won’t find your audience in any one place anymore.”

Telecomm Legislation and Public Access TV

Proposed Legislation May Affect Future of Public-Access Television

Now, though, the future of the channels deemed “electronic soapboxes” in 1972 by the Federal Communications Commission is uncertain, as proposed legislation about how the telecommunications industry is regulated winds its way through Congress.

The main concern for public-access advocates is that the law preserve the ability of municipalities to negotiate franchise agreements for cable television. Those agreements pay for the public-access programs and allow municipalities to determine how many channels they want and allow public access programmers like Manhattan Neighborhood Network to train nonprofit groups to produce their own shows. The proposed legislation varies in its specifics, but several bills aim to allow more video-services competition – easing the way for telephone companies to compete for the franchises – and minimize regulations for franchises. Advocates of the legislation say that the fears of the demise of public access are exaggerated and that some local control of franchises is written into the bills.

NYTimes: Proposed Legislation May Affect Future of Public-Access Television

Diffusion of the iTunes Video Initiative

Not quite iTunes yet, but the market pull seems to be having an effect: Nets to Offer Replays of Prime-Time Shows [pdf]

CBS and NBC have announced deals to offer replays of prime-time programs for 99 cents per episode, shifting television toward a sales model that gained popularity with downloaded music.

CBS is teaming up with Comcast Corp. and NBC with satellite operator DirecTV to offer the on-demand replays.

Broadband Deployment Data Point

High-Speed Internet Draws Many Renters [pdf]

Internet access is the latest hot amenity, around Washington and the country. Some buildings, like Michaud’s, wire the access in and don’t charge extra. Some buildings buy Internet services at a bulk rate or install scattered WiFi “hot spots,” then offer them to residents, usually at a discount. Other properties simply market certain providers’ services. A smaller number offer building-wide WiFi access for a fee.

“It’s no longer being done to be better than the other guy, but to keep up with the other guy,” said David Cardwell, vice president of capital markets and technology at the National Multi Housing Council.

Life in America

I really had to work hard to avoid using the cliched “k” in the title after reading this: The FBI’s Secret Scrutiny [pdf]

The Connecticut case affords a rare glimpse of an exponentially growing practice of domestic surveillance under the USA Patriot Act, which marked its fourth anniversary on Oct. 26. “National security letters,” created in the 1970s for espionage and terrorism investigations, originated as narrow exceptions in consumer privacy law, enabling the FBI to review in secret the customer records of suspected foreign agents. The Patriot Act, and Bush administration guidelines for its use, transformed those letters by permitting clandestine scrutiny of U.S. residents and visitors who are not alleged to be terrorists or spies.

The FBI now issues more than 30,000 national security letters a year, according to government sources, a hundredfold increase over historic norms. The letters — one of which can be used to sweep up the records of many people — are extending the bureau’s reach as never before into the telephone calls, correspondence and financial lives of ordinary Americans.

Issued by FBI field supervisors, national security letters do not need the imprimatur of a prosecutor, grand jury or judge. They receive no review after the fact by the Justice Department or Congress. The executive branch maintains only statistics, which are incomplete and confined to classified reports. The Bush administration defeated legislation and a lawsuit to require a public accounting, and has offered no example in which the use of a national security letter helped disrupt a terrorist plot.

The burgeoning use of national security letters coincides with an unannounced decision to deposit all the information they yield into government data banks — and to share those private records widely, in the federal government and beyond.

[…] Data mining intensifies the impact of national security letters, because anyone’s personal files can be scrutinized again and again without a fresh need to establish relevance.

“The composite picture of a person which emerges from transactional information is more telling than the direct content of your speech,” said Woods, the former FBI lawyer. “That’s certainly not been lost on the intelligence community and the FBI.”

Ashcroft’s new guidelines allowed the FBI for the first time to add to government files consumer data from commercial providers such as LexisNexis and ChoicePoint Inc. Previous attorneys general had decided that such a move would violate the Privacy Act. In many field offices, agents said, they now have access to ChoicePoint in their squad rooms.

What national security letters add to government data banks is information that no commercial service can lawfully possess.

Related: Parties Split on Data-Protection Bill

More on the Grokster Shutdown

The updated WaPo article offers up a few more details: Legal Pressure Shutters Grokster: [pdf]

Entertainment industry executives called the settlement a milestone in their ongoing legal battles to contain file-sharing, which is used by hundreds of millions of people around the world. The executives hope other services, such as Kazaa, Morpheus and LimeWire, will follow Grokster’s lead.

But whether that will happen is unclear. An attorney for StreamCast Networks Inc., which operates Morpheus, vowed yesterday to continue its legal fight with the entertainment industry. Some services, such as Kazaa, are based overseas and less susceptible to legal pressure in the United States.

And even though Grokster essentially is ending operations, that will not prevent its customers from using the software if they have already downloaded it.

[…] “It’s like the drug war,” said David Israelite, head of the music publishers association. “Your goal is not to get to zero, but to keep fighting for more and more reductions. . . . You go after everybody.”

Grokster Calls It Quits on Sharing Music Files

From the LATimes: Grokster Surrenders to Labels [pdf] – a little positioning for the Holloywood market:

“If Hollywood doesn’t act now, a year from now this decision won’t matter,” said former Grokster President Wayne Rosso, now working on a legal, music-industry-sanctioned file-sharing service called Mashboxx. “Right under everybody’s noses, ultra-fast networks are getting rolled out. Suddenly, a DVD will be downloaded in a matter of seconds.”

At least we also get this:

Some advocates of peer-to-peer networks lamented that the technology had been so demonized by the entertainment industry that it might take years to find a legitimate niche.

Monday’s agreement is “another nail in the coffin for a very, very promising technology,” said Peter Fader, a marketing professor at the University of Pennsylvania’s Wharton School. “It’s sad that [peer-to-peer networking] has been besmirched as equaling illegal.”