September 29, 2006

Making Claims [7:39 pm]

Hollywood Says Piracy Has Ripple Effect

Seeking another weapon in its war on piracy, the movie industry hopes to wow lawmakers today with a study that says the economic impact of illegal DVD and Internet film distribution may be as much as three times what was previously estimated.

[...] The report being released today — which was largely paid for by Armey’s think tank with some funding from NBC Universal and the MPAA — takes the previous study, conducted by consulting firm L.E.K., and applies a model used by the U.S. Bureau of Economic Analysis to calculate the potential ripple effect of those lost sales, factoring in lost jobs, worker earnings and tax revenue.

Given those facts, the study says, movie piracy causes a total lost output for U.S. industries of $20.5 billion per year, thwarts the creation of about 140,000 jobs and accounts for more than $800 million in lost tax revenue.

The Institute for Policy Innovation; the report

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S.W.I.F.T. Monitoring Breaches Privacy [1:35 pm]

Interesting what can happen when you write privacy into your constitution: Belgians Say Banking Group Broke European Rules in Giving Data to U.S.

The Belgian banking consortium Swift breached European privacy rules when it aided a United States antiterrorism program by providing confidential information about money transfers, Belgium’s privacy protection commission concluded Thursday.

“It has to be seen as a gross miscalculation by Swift that it has, for years, secretly and systematically transferred massive amounts of personal data for surveillance without effective and clear legal basis and independent controls in line with Belgian and European law,” the report said.

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“Incentives To Create” — Riiight [12:15 pm]

Too bad they can’t deliver the checks to unknowns like T-Bone Burnett or the Morman Tabernacle Choir: Digital Music Royalty Checks Languish - pdf

The organization created by the recording industry to collect and distribute Internet and satellite radio royalties can’t seem to find these and other artists to whom it owes checks.

Washington-based SoundExchange released a list of 9,000 recording artists with unclaimed royalties in what it described as a last-ditch effort to distribute $500,000 worth of checks to the musicians for digital broadcasts dating from the late ’90s. And the clock is ticking: The artists forfeit the money to SoundExchange if they don’t claim it by Dec. 15.

The release of the list of unpaid artists has become the butt of jokes on industry Internet forums. And the disclosure comes at an inconvenient time for SoundExchange, which is arguing before the Library of Congress that it should remain the exclusive distributor of digital performance royalties that amount to millions of dollars a year.

“It says obviously how well they do their job — which is not well at all,” said Fred Wilhelms, a Nashville lawyer who helps performers and songwriters collect back royalties. “How do you not find the Olsen twins? All you’ve got to do is get off a bus in Salt Lake City and you’ll find the Mormon Tabernacle Choir.”

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The Rest of the Story [8:00 am]

Continuing the question I asked in Is *This* What They Meant When They Spoke of an “MBA President?”, we get to see more of what passes for corporate ethics and responsibility here as Patricia Dunn elects to deny the penalty: H.P. Before a Skeptical Congress

Hewlett-Packard’s former chairwoman and its current leader faced an admonishing and sometimes incredulous House subcommittee on Thursday as they tried to explain why they never questioned the legal foundation of an internal spying operation.

The former chairwoman, Patricia C. Dunn, who authorized the operation but said repeatedly that she was not its supervisor, came under especially harsh scrutiny because she refused to express contrition when invited to do so.

“I get the sense that you still don’t believe that you did anything wrong,” said Representative Cliff Stearns, Republican of Florida. After trying to answer obliquely, Ms. Dunn finally said, “I do not accept personal responsibility for what happened.”

And here I thought there was at least *some* basis for what a CEO salary looks like. Who knew that it was about denying responsibility whenever possible? This is corporate leadership in America today? No wonder we can’t populate Congress with anyone with any guts or integrity, either.

See also Salon’s article: Another spying scandal for Capitol Hill

Dunn’s defense — which is based on the supposition that a talented, driven woman could also be obtuse — came shining through as she described in her opening statement to the committee her dealings with an outside investigator, Ron DeLia, who had earlier invoked the Fifth Amendment. “In my two or three conversations with Mr. DeLia,” Dunn said, “I learned that checking telephone records was a standard investigative technique at HP, and that they were drawn from publicly available sources.” In reality, DeLia and his shadowy sub-contractors obtained these records through impersonation and other unethical (if perhaps legal) means.

“I understood that you could call up and get phone records — and it is a common investigative technique,” Dunn also said. As she continued to repeat her innocent assumption during her nearly five hours of testimony, Oregon Republican Greg Walden finally lost his patience. With a note of puzzlement Walden asked, “You thought that I could call up and get your phone records?” Dunn responded, “I thought you could.” Finally, shaking his head with incredulity, he simply inquired, “You’re serious?”

Recognize the strategy? [pdf]

The House Committee hearing WWW site; also, today’s planned hearing — Internet Data Brokers and Pretexting: Who Has Access to Your Private Records?; NYTimes writeup of the HP investigator’s report

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Colleges and Skype [7:30 am]

Skype Skirmishes on Campus

But as Skype expands its reach, some colleges are cracking down, raising questions about a built-in feature that can turn a Skype user’s computer into a relay station, or “node,” for other users, eating a college network’s bandwidth by opening it to serve as host to external connections. San Jose State reached an agreement with Skype to restrict the program’s relay functions this week, becoming the latest in a series of universities to consider limiting or discouraging the program’s use.

“The contentious part about Skype is of course the relay function,” said Kevin Schmidt, campus network programmer at the University of California at Santa Barbara, which banned use of Skype anywhere on its campus other than dormitories last January. Skype’s licensing agreement requires that a user grant the peer to peer program access to the user’s network. “If you’re installing this software, you’re granting use of bandwidth to an outside party. That simply can’t happen,” Schmidt said. Upon implementing the ban, he added, network speeds at UC Santa Barbara noticeably increased.

[...] But the campus fight over Skype has attracted the most attention at San Jose State, where campus officials recently backed off from an announced ban on the administrative network in response to faculty objections. The university had planned to institute the Skype ban — which would not have affected dormitory or library computers — September 14, citing similar concerns to those expressed elsewhere: that Skype’s relay function opens the network to non-university business and that use of Skype “exceeds incidental personal use.”

[...] In addition to letting penny-pinching students make free long-distance calls and potentially reducing business costs for colleges, Skype also serves a crucial academic function, said Steve Sloan, who teaches a class in new media at San Jose State. Sloan uses the program in working with students and in collaborating with educators from across the globe. “Skype is like a common ground, kind of like ‘http’ is a common ground for the Web,” said Sloan, who is in the midst of setting up a Skype call between his students and the author of an assigned book. “In my opinion, not using Skype puts us at a potential competitive disadvantage to other universities, especially as universities are increasingly having to compete in a flat world,” Sloan said.

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September 28, 2006

Dahlia Calls ‘Em Like She Sees ‘Em [6:57 pm]

And she sees something really, really ugly: The blind leading the willing

For the five years since 9/11, we have been in the dark in this country. This president has held detainees in secret prisons and had them secretly tortured using secret legal justifications. Those held in secret at Guantanamo Bay include innocent men, as do those who have been secretly shipped off to foreign countries and brutally tortured there. That was a shame on this president.

But passage of the new detainee legislation will be a different sort of watershed. Now we are affirmatively asking to be left in the dark. Instead of torture we were unaware of, we are sanctioning torture we’ll never hear about. Instead of detainees we didn’t care about, we are authorizing detentions we’ll never know about. Instead of being misled by the president, we will be blind and powerless by our own choice. And that is a shame on us all.

*This* is governing?

See also today’s tilt at the windmill: Photo Finish: How the Abu Ghraib photos morphed from scandal to law

*Sigh* My representative voted against this, and I assume that my senators will as well (they did). But, given that we have a populace that can rouse moral outrage over so many things, why is this bill, corrosive to everything that America stands for, getting a pass?

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“Morpheus Induces:” CA Central District Court [6:09 pm]

U.S. judge rules against Morpheus file-sharing - pdf

In a victory for the entertainment industry, a federal judge has ruled that the Morpheus file-sharing software encourages millions of users to share music, movies and other works without authorization.

U.S. District Judge Stephen Wilson ruled on Wednesday that StreamCast Networks Inc., the distributor of Morpheus, had contributed to massive copyright infringement because it had constructed a business model that relied on massive copyright infringement and did not attempt to block the trading of copyrighted materials.

[...] StreamCast, based in Woodland Hills, California, said it was considering an appeal and maintained that it did not encourage users to infringe on copyrighted works and never intended to do so.

“The court’s ruling is disappointing. StreamCast will consider its options, including appealing the decision,” the company said in a statement.

Their legal site hasn’t been updated to reflect this new development.

LATimes’ Creator of Morpheus Is Found Liable -

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80-20 Rules in Telecom [1:39 pm]

Joseph Turow refers to the 80-20 rule in retail (20% of the customers account for 80% of the revenue); here’s an example that points out why the market is not always the best instrument for allocating resources, particularly when those resources are a little more important than the latest DVD releases: Rural Areas Left in Slow Lane of High-Speed Data Highway

For most businesses, the goal is to attract as many customers as possible. But in the fast-changing telephone industry, companies are increasingly trying to get rid of many of theirs.

[...] Verizon is not alone in its desire to reduce the number of landlines it owns. Big phone and cable companies are reluctant to upgrade and expand their networks in sparsely populated places where there are not enough customers to justify the investment. Instead, they are funneling billions of dollars into projects in cities and suburbs where the prospects for a decent return are higher.

But those projects are unlikely to reach rural areas of Vermont and other states, leaving millions of people in the Internet’s slow lane, just as high-speed access is becoming more of a necessity than a luxury. The United States already lags behind much of the industrialized world in broadband access.

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Zune Pricing Set [9:25 am]

Microsoft sets price for Zune, songs - pdf

Microsoft’s 30-gigabyte Zune will retail for $249.99 — 99 cents higher than the iPod with the same amount of storage — when it goes on sale November 14. Songs available for download at the Zune Marketplace service will cost about 99 cents a song, on par with prices at Apple’s iTunes, Microsoft said.

[...] Microsoft said it needed to put a comparable price on Zune, even if it meant that the company will suffer a loss from the device’s sales this holiday season.

And what the heck are “Microsoft Points?”

For consumers looking to own a song, the Zune Marketplace will sell tracks for 79 Microsoft points. A user can buy 80 Microsoft points for $1 and points will also be redeemable at its online video game store, Xbox Live Marketplace.

Slashdot’s article has some links that explain: Zune — $249.99 On Nov. 14

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September 27, 2006

Cory Doctorow on HDTV-DRM [11:59 am]

High-Definition Video–Bad For Consumers, Bad For Hollywood [via Berlind's CNet blog]

Most extraordinary is the relationship of HD DRM to the world’s largest supply of HD screens: LCD computer monitors. The vast majority of HD-ready, 1080i-capable screens in the world are cheapo computer LCDs. Chances are you’ve got a couple at home right now.

But unless these screens are built with crippleware HDMI or DVI interfaces, they won’t be able to receive high-def signals. DRM standards call these legacy screens, and treat them as second-class citizens.

All this may be enough to scuttle HD’s future. Let’s hope so, for Hollywood’s sake.

Because, you see, HD is also poison for the entertainment industry’s own products. The higher the resolution, the harder it is to make the picture look good. Standard-def programs on high-def screens look like over-compressed YouTube videos, and when you get a high-def program shot by traditional directors, it looks even worse, every flaw thrown into gaudy relief. Have a look at the HD-native episodes of Friends some days — it’s all gaping pores, running pancake makeup, caked-on hairspray, and freakishly thin bodies with giant, tottering heads.

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The Copyright Maze Leads To A New Direction [9:52 am]

Why use the Internet unless you can control the content, right? Deal to Put Live Concerts on Internet Is Dissolved

AOL and a group of entertainment entrepreneurs who created a venture to produce and distribute live concerts on the Internet and elsewhere have dissolved their partnership after just 14 months, executives in the venture said yesterday.

The move to unwind the venture, which was called Network Live, came as its co-founder and chief executive, Kevin Wall, announced that he had struck a new deal to produce live events to be distributed through Microsoft’s online service and, potentially, through products like Xbox. The venture with Microsoft will be called Control Room, he said.

No irony intended in that name, of course……..

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Wonder What “Progress” Is? [9:42 am]

Europe Makes Progress in iTunes Negotiations

European negotiators said they made “surprising progress” in talks today with Apple Computer over easing the restrictions it imposes on users of its iTunes service, by far the dominant seller of downloaded music.

But a full resolution of the dispute could require Apple to make major changes in the iTunes business model.

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House Education Committee Hearing Yesterday [8:21 am]

Press release: Higher Education, Entertainment Industry Witnesses Detail Impact of, Efforts to Combat Internet Piracy on College Campuses; webcast archive of the hearing; eventually, an electronic version of the testimony may be available here, but for now, I need to rely upon Inside Higher Ed’s House Panel Tackles Piracy which at least highlights Terry Fisher’s comments:

But William W. Fisher, director of the Berkman Center for Internet and Society at Harvard University, said that preventing students from illegally downloading is nearly impossible: Once a college has outlawed a filing sharing system, another one comes along that is harder to detect.

Colleges should focus their energy on providing legal alternatives for students, and more than 70 have, Fisher said. In 2003, Pennsylvania State University struck a deal with Napster so that students could have access to a catalogue of copyrighted music. Another option, he said, is for colleges to charge students a mandatory fee that goes toward purchasing music that students in the network can share for free.

[...] Still, Fisher said some colleges are reluctant to get involved in matters of Internet piracy because they are concerned about violating students’ privacy.

Cary Sherman, president of the Recording Industry Association of America, said entertainment industry executives aren’t asking colleges to spy illegally, but rather to work within their boundaries to weed out guilty parties.

I’m sure that’s what we’re all telling ourselves when we talk about warrantless wiretapping, too… (related: Deal Likely on Detainees but Not on Wiretapping)

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Lucky & Flo [8:02 am]

Pigs would have been more apt, particularly for this kind of PR nonsense: DVDs Smell, and That’s a Good Thing for Hollywood - pdf

“There is a scent that comes off the DVD that the dog is absolutely dead-set on finding,” said Neil Powell, a Northern Ireland sniffer dog expert who trained Lucky and Flo. If there’s a scent — whether it’s from DVDs, drugs or explosives — a dog can be trained to sniff it out.

Lucky and Flo can’t distinguish between legitimate and bootleg DVDs, but customs officials can identify smugglers by checking the declarations for the packages that the dogs point out, Malcolm said.

The dogs aren’t actually sniffing out DVDs in a real-world setting, just showing it’s possible. The MPAA, which hopes to loan them to customs officials or private shipping firms, is taking its dog show on the road, to Los Angeles, Mexico, Singapore, Hong Kong, Dubai and Britain.

The world tour even has a Hollywood touch: commemorative “Lucky & Flo K-9 Pirate Smackdown” T-shirts.

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Music Viral Marketing Strategy [7:47 am]

Rap’s Captive Audience - pdf

They have no hope of cracking mainstream radio or MTV with songs like “They Hate Us” or “I’m a Wood,” in which they rap menacingly about blasting enemies with shotguns. Further limiting their commercial prospects, their August album, “The Streets Will Never Be the Same,” boasts of the group’s affiliation with the Woods, a white power prison gang.

So the Arizona-based group’s label is using a viral marketing technique to create word of mouth. Its goal is to connect with an influential constituency of taste makers.

Namely, people behind bars.

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Someone Else Confused About GUBA [7:24 am]

In this commentary, Mark Hachman sees that GUBA’s continuing operation signifies that The MPAA Surrenders in War Against Piracy

It’s a high-profile war, and apparently no expense is being spared. But what about the Web? What if there was an easily accessible source of illegally copyrighted materials, with a search engine, on a site that had participated in a press release with the MPAA itself, touting new automated measures to prevent piracy? Wouldn’t the MPAA see the forest for the trees and quickly crack down on the offender?

As it turns out, apparently not.

I’m talking about, which offers for-pay online rentals and purchases of licensed movies and TV shows, but also archives files published to Usenet, a collection of text-based newsgroups that can hide encodings of copyrighted material often spread across dozens of separate messages.

[...] But here’s the rub: in February, the MPAA filed suit against sites including TorrentSpy and BTHub, arguing that even links to copyrighted content encourage people to download illegally. Meanwhile, Guba happily provides copyrighted content to the public. And the MPAA has utterly lost the moral high ground, if it hadn’t already.

The only conclusion I can draw from this is that the Guba archive is an MPAA-sanctioned supply of copyrighted content. Maybe this is a social experiment, a quiet no-mans-land where users sick of paying $24.99 for a new DVD and studio execs burned out on the Hollywood lifestyle can swap a few bits with the average joe. Seriously, if a site provides downloadable content using an MPAA-approved filtering algorithm to weed out copyrighted content, isn’t that a safe argument that downloaders should be free from liability?

So apologies all ’round, then. I clearly have missed the gaping hole in the MPAA’s position, that of leniency to its partners.

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September 26, 2006

4G Wireless in South Korea [8:44 am]

Wireless Networking May Soon Get Faster. Will Anyone Care?

Skeptics say the biggest danger is that the new system, while an engineering marvel, is not something that consumers will actually use. They say the sort of nationwide wireless networks being envisioned will be expensive to build and that the cost will probably get passed down to users in high fees. Fixed-line access like fiber optics and cable modems, they say, will continue to be cheaper, faster and more reliable.

“Four-G is just much ado about nothing,” said Edward F. Snyder, an analyst at Charter Equity Research. “There’s no business model here, just a lot of marketing and hot air.”

Even proponents are having a hard time defining exactly what they mean by 4G. About the only thing most agree on is speed: to be considered 4G, a network must be able to transmit a gigabit, or 1 billion bits of data, every second. That is fast enough to download an entire movie in under six seconds.

[...] Siavash M. Alamouti, chief technology officer of the service provider business group at Intel, dismisses the contention that consumers will not embrace wireless access to the Internet because they already have fixed-line access.

“That’s like saying you don’t need a cellphone because you have phones at home and in the office,” he said in an interview.

I love how the benchmark for network speed is tied to movie downloads.

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EU Privacy v US SWIFT Monitoring [8:30 am]

Europe Panel Faults Sifting of Bank Data

“We don’t see the legal basis under the European law, and we see the need for some changes,” said Peter Schaar, a German official who leads the panel, in a telephone interview. The group is to deliver a final report this week in Brussels, and Mr. Schaar said he expected it to conclude that the program might violate European law restricting government access to confidential banking records.

Earlier: So What’s Next? and Saw This In The Herald Tribune

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A Couple of Patent Stories, Including An IBM Bombshell [7:36 am]

  • A story of jurisdiction-shopping: So Small a Town, So Many Patent Suits

    What was remarkable about the trial was not the issue being tried or the arguments proffered by each side, but that these big companies — like dozens more from the East and West Coasts — wound up in the Federal District Court here in Marshall, the self-proclaimed Pottery Capital of the World and home to the annual Fire Ant Festival (sponsored by Terminix, the pest-control company).

    More patent lawsuits will be filed here this year than in federal district courts in San Francisco, Chicago, New York and Washington. Only the Central District of California, in Los Angeles, will handle more patent infringement cases.

    On the surface, there is little to recommend Marshall as a locus for global corporations looking to duke it out over who owns the rights to important technology patents. [...]

    [...] What’s behind the rush to file patent lawsuits here? A combination of quick trials and plaintiff-friendly juries, many lawyers say. Patent cases are heard faster in Marshall than in many other courts. And while only a small number of cases make it to trial — roughly 5 percent — patent holders win 78 percent of the time, compared with an average of 59 percent nationwide, according to LegalMetric, a company that tracks patent litigation.

    Those odds are daunting enough to encourage many corporate defendants to settle before setting foot in Marshall. Add to that the fact that jurors here have a history of handing out Texas-sized verdicts to winners. In April, for instance, a Marshall jury returned a $73 million verdict against EchoStar Communications for infringing the patents of TiVo.

  • A move in the “open patent review” movement, and a statement on business method patents: Hoping to Be a Model, I.B.M. Will Put Its Patent Filings Online

    I.B.M., the nation’s largest patent holder, will publish its patent filings on the Web for public review as part of a new policy that the company hopes will be a model for others.

    [...] The policy, being announced today, includes standards like clearly identifying the corporate ownership of patents, to avoid filings that cloak authorship under the name of an individual or dummy company. It also asserts that so-called business methods alone — broad descriptions of ideas, without technical specifics — should not be patentable. [emphasis added!]

    The move by I.B.M. does carry business risks. Patents typically take three or four years after filing to be approved by the patent office. Companies often try to keep patent applications private for as long as possible, to try to hide their technical intentions from rivals.

    “Competitors will know years ahead in some cases what fields we’re working on,” said John Kelly, senior vice president for technology and intellectual property at I.B.M. “We’ve decided we’ll take that risk and seek our competitive advantage elsewhere.”

    [...] I.B.M. used Internet collaboration to develop its new patent policy. More than 50 patent and policy experts from the United States, Europe, Japan and China exchanged views for two months in May and June on a wiki, an online site that can be added to and edited collectively. The resulting document is posted on

    Unrelated, really, but worth noting: BM Asks Court to Toss SCO’s Entire Case

  • A representative of Audible US pointed out that there was an article in the Saturday (2006 Sept 16) NYTimes on the CEO’s fight with patent trolls. You can search the Internet for the text (”Tired of Trolls, a Feisty Chief Fights Back” by Joe Nocera) but, since it’s a TimesSelect article, I can’t post a useful link here. If Audible decides to post the text on their WWW site, I’ll be happy to link to it there.

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“TiVo Tyranny” [7:23 am]

The unexpected roles of new technologies in our cultural life: TiVo Tyranny — The Latest in Self-Loathing - pdf

In other words, if you already feel guilty about your piles of unread Sunday newspapers and New Yorker magazines, there’s a new form of self-loathing: TiVo tyranny. Ever since I got a DVR system, my television has become a source of dread. No longer a symbol of slothful refuge wherein I can while away a few hours watching whatever dreck happens to be on, it is now a taskmaster. My life is not only cluttered with unanswered e-mails, unreturned phone calls and unfinished novels but entire seasons of television shows I feel I should watch but haven’t and probably never will.

[...] Studies — including some conducted, oddly enough, by TiVo — have shown that DVRs do increase the number of hours people spend watching television. But according to Josh Bernoff, principal analyst at Forrester Research, the real news is that DVRs get affluent people to watch more television.

[...] I must not be as affluent as I thought. Caught in the shackles of my own personal TiVo tyranny, my DVR has reduced my viewing hours practically to zero. And it’s not just because the remote control somehow ended up in my car. It’s because turning on the TV is now less about escape than about being confronted with an electronic to-do list. There are the shows I want to watch, the shows I feel I should watch and shows the DVR thinks I should watch based on my prior selections. Faced with this monstrous inventory, the only logical thing to do is turn off the TV.

That’s because with choice comes paralysis and, in turn, convenience usually finds apathy nipping at its heels. In the pre-TiVo era, television was challenging. We had to hunt for something worth watching and, if we found it, we sat still and paid attention. In the same strange way that it’s infinitely more satisfying to hear a favorite song come up unexpectedly on the radio than to play it on a CD, there was a certain beauty to the old-fashioned TV experience. Even if we watched alone, we knew millions of others were watching the same exact thing, at the same exact moment. Even if there was nothing on that we particularly wanted to watch, there was something nice about settling on the best thing we could find and shutting off our brains for a while.

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September 2006
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