European Electronic Communications Package moves closer to UK transposition

The UK government is preparing to transpose Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (the Framework) into UK law. The Framework is a new regulatory package that will affect how service providers supply email, telecommunications and internet access services, but it seems to have received very little attention.

The Framework consists of five related Directives:

  • the “Framework” Directive (2002/21/EC);
  • the “Access” Directive (2002/19/EC);
  • the “Authorisation” Directive (2002/20/EC);
  • the “Universal Service” Directive (2002/22/EC); and
  • the “E-Privacy” Directive (2002/58/EC).

Several provisions from the Framework are worth noting briefly. (Further detail can be found in a recent discussion paper of the Department for Business Innovation & Skills, entitled Implementing the Revised EU Electronic Communications Framework.)

Security and integrity of computer networks

First, the Access Directive includes a number of provisions which impose new obligations on service providers to meet security and availability standards, and to notify certain network breaches to competent authorities. Article 13a provides as follows:

Article 13a Security and integrity  Read more »

WikiLeaks roundup: a selection of the best analysis

The WikiLeaks controversy continues to capture headlines and provoke vitriol from governments around the world. Most reactions, however, have been surprisingly unsophisticated. Commentators repeatedly conflate WIkiLeaks the platform with its spokesperson, Julian Assange (who is, whatever your opinion of the man, largely irrelevant), assume the platform’s actions are unlawful (probably not — and this is the very question to be determined), or believe that shutting down WikiLeaks will stop the leaks (it won’t).

US Senators have called for pressure to be placed on American companies to abandon WIkiLeaks, and for media outlets to be criminally investigated, while others have called for Assange’s prosecution and even assassination. France has called for the site to be banned from French servers (good luck). Assange has been detained on what will probably turn out to be trumped-up sex charges. Geoffrey Robertson QC and a specialist team from Doughty Chambers have stepped in to fight extradition.  Read more »

Google bookstore: closed platform or platform innovator?

Has openness become a mere buzzword?

I’m not arguing that “openness” is a bad thing in the tech business. What I’m saying is that it is not an unmitigated virtue, and it’s not necessarily the first thing people should care about when they’re shopping for a product. I’m glad that Google has introduced its new bookstore, because the e-book industry would obviously benefit from more competition. But I’d be even happier if Google wasn’t touting half-closed openness as its store’s main selling point. In the absence of real openness, Google ought to have something that Amazon doesn’t: more books, cheaper books, prettier books, books with more functions, more reviews of books, better recommendations, some kind of social-networking integration—something, anything, that would distinguish it from the bookselling herd. Calling something “open” isn’t enough, especially when it’s actually closed.

Survey finds free internet downloads primary music source for teenagers

A survey of 47 000 teenage internet users has found found that 33 per cent nominated ”downloading from the internet without paying” as their primary source of music. While this doesn’t necessarily imply piracy, it looks pretty grim for the content industries, and lends weight to previous surveys suggesting that a majority of adults had engaged in file-sharing at some point. According to iiNet, 50 per cent of ISP traffic is now BitTorrent, and 97 per cent of BitTorrent trackers deal in copyright works.

In a survey of more than 47,000 of its members worldwide, the site, which caters to 13 to 18-year-olds, found 28 per cent of the 574 Australians who responded nominated ”downloading from the internet without paying” as their primary source of music. That compared with 37 per cent who purchase music online and 20 per cent who buy CDs.

Australian teenagers are even more law-abiding when it comes to movies, with just 26 per cent admitting they ”at least sometimes” download or stream movies, compared with a global average of 46 per cent.

British ISPs to face regulatory pressure over internet pornography

Representatives of the Her Majesty’s government will meet with ISPs and lobbyists to discuss whether, and how, access to internet pornography should be controlled.

The meeting comes days after Tory backbencher Claire Perry said the availability of such materials is like ‘a fire is burning out of control’. The Member wants mandatory access controls on 18+ material, and called upon ISPs to provide them. Although details were unclear, it looks like some kind of mandatory ISP-level blocking system, subject to an opt-in after age verification.

Assuming, for sake of argument, that this is justified (and it may not be), who should implement the access controls? Ed Vaizey commented that he had ‘a huge amount of sympathy’ for Perry’s request. Does this signal a new era of content regulation in the United Kingdom? Sadly, it would not be at all unprecedented.

In other censorship-related news, a copy of the so-called ‘Google blacklist’ (keywords that will not autocomplete in the main search box) has been leaked (NSFW).

The Great Cyberheist: Inside the life of an identity thief

The New York Times has a fantastic writeup of the criminal activities and investigation of Alberto Gonzalez, a black-hat hacker who masterminded the TJX and Heartland Payment Systems credit card data breaches and who was sentenced to 20 years’ imprisonment earlier this year. The story has a cinematic, but slightly tragic quality:

At the same time that Gonzalez was stealing all this bank-card data, he was assembling an international syndicate. His favored fence was a Ukrainian, Maksym Yastremskiy, who would sell sets of card numbers to buyers across the Americas, Europe and Asia and split the proceeds with him. Gonzalez hired another EFnet friend, Jonathan Williams, to cash out at A.T.M.’s across the country, and a friend of Watt’s in New York would pick up the shipments of cash in bulk sent by Williams and Yastremskiy. Watt’s friend would then wire the money to Miami or send it to a post-office box there set up by James through a proxy. Gonzalez established dummy companies in Europe, and to collect payment and launder money he opened e-gold and WebMoney accounts, which were not strictly regulated (e-gold has since gone out of business). He also rented servers in Latvia, Ukraine, the Netherlands and elsewhere to store the card data and the software he was using for the breaches. Finally, he joined up with two Eastern European hackers who were onto something visionary. Known to him only by their screen names, Annex and Grig, they were colluding to break into American card-payment processors — the very cash arteries of the retail economy.

Ed Vaizey clarifies UK government's position on net neutrality

The recent controversy about Ed Vaizey’s purported abandonment of network neutrality was probably overhyped. In Parliament today, Andrew Smith (Labor MP, East Oxford) asked the following question:

To ask the Secretary of State for Business, Innovation and Skills if he will make it his policy to ensure that internet service providers do not discriminate against competitors and new entrants in the speed at which websites and services reach their customers.

To which the Honourable Member replied:

The Government expect all internet service providers (ISPs) providing an internet access service-both fixed and mobile-to offer all legal content. Consumers should always be able to access any legal content or service they want to and content providers and applications should be able to access consumers. ISPs should not be able to discriminate unfairly against services or users. That means no blocking or discriminatory degradation of services or applications for commercial reasons.

There is not yet any evidence that discriminatory practices are emerging, or that there is a problem with regards to how ISPs or networks manage the traffic that flows over them (something they all engage in for technical reasons to deliver the best possible service to consumers). And this is enforced by the initial responses to Ofcom’s recent consultation on the issue.  Read more »

The blocking barb in today's Pirate Bay appeal

As has been widely reported, the three co-founders of file-sharing website The Pirate Bay have lost their appeal before the Stockholm Court of Appeal against criminal convictions imposed in April 2009.

The Court upheld the trio’s convictions for contributory copyright infringement and increased the collective financial sanctions from $2m to 46 million kroner (USD$6.5m), largely on the basis of the recording industry’s evidence, which was accepted to a greater extent than by the trial judge.

The Court reasoned that ‘The Pirate Bay has facilitated illegal file-sharing in a way that results in criminal liability for those who run the service. For the three defendants the court of appeal believes it is proven that they participated in these activities in different ways and to varying degrees’. Curiously, they were liable to pay the fine in equal amounts.

The really interesting barb in yesterday’s decision is the reaction by the British Phonographic Industry spokesperson, who demanded that English ISPs ‘act responsibly and stop providing unfettered access to this criminal website’. The idea that ISPs could ever come under a duty to block access to a third party website that enables contributory infringement is, of course, absurd, but if these comments are anything to go by, it’s something that ISPs will face increasing pressure to do.

Bankers as intermediaries and the tension between regulation and profit

Financial intermediaries are little more than rent seekers, says a thought-provoking article in this week’s New Yorker magazine:

One is the role of financial intermediaries, such as banks. Rather than seeking the most productive outlet for the money that depositors and investors entrust to them, they may follow trends and surf bubbles. These activities shift capital into projects that have little or no long-term value, such as speculative real-estate developments in the swamps of Florida. Rather than acting in their customers’ best interests, financial institutions may peddle opaque investment products, like collateralized debt obligations. Privy to superior information, banks can charge hefty fees and drive up their own profits at the expense of clients who are induced to take on risks they don’t fully understand—a form of rent seeking. “Mispricing gives incorrect signals for resource allocation, and, at worst, causes stock market booms and busts,” Woolley wrote in a recent paper. “Rent capture causes the misallocation of labor and capital, transfers substantial wealth to bankers and financiers, and, at worst, induces systemic failure. Both impose social costs on their own, but in combination they create a perfect storm of wealth destruction.”

Network neutrality dead in the UK?

Ed Vaizey, the Secretary of State for Business, Innovation and Skills, has made comments in a speech which suggest that he favours abandonment of the neutrality (non-discrimination) principle in internet traffic management. The comments have, perhaps rightly, triggered an avalanche of vitriolic abuse.

It is worth setting out the Minister’s remarks in full:

The issues here are complex. People don’t even agree what is meant by net neutrality. It is a term which means different things to different people.

At the heart of this debate, however, is the extent to which traffic should be managed on the Internet, and more
specifically whether ISPs should ever have the right to favour one content provider over another, particularly for commercial reasons.

That seems a fair, if simplistic summary of the central issue. Vaizey went on to identify three principles that he thinks should ‘guide the debate’:

First, openness — Consumers should always have the ability to access any legal content or service. Content and service providers should have the ability to innovate and, most importantly, to reach end users.

Secondly, transparency — This is a fundamental principle … [P]roviders must present information about their
service, including the nature and extent of their traffic management policies and their impact on service quality in a
clear, visible and easy to understand form for all their customers.  Read more »