The Iconoclast

Banks, credit card companies, and some Democratic members of Congress are predicting that forthcoming restrictions on Internet gambling will ensnare innocent customers and threaten the viability of e-commerce.

The criticism came at a congressional hearing on Wednesday devoted to the Unlawful Internet Gambling Enforcement Act, enacted in 2006 by a Republican Congress after pressure from social conservatives. The Federal Reserve and the Treasury Department published draft regulations last fall--which financial institutions say will disrupt perfectly legal transactions unless dramatic changes are made before the rules take effect.

Rep. Ron Paul, the libertarian-minded Republican presidential candidate, criticizes Net-gambling restrictions on Wednesday, saying 'people should make their own decisions.'

(Credit: U.S. House of Representatives)

"Consumers will be placed at risk of having lawful transactions blocked," said Rep. Luis Gutierrez, D-Ill., chairman of the House monetary policy and technology subcommittee. "It is easy to see how these regulations, if implemented in their current form, could wreak havoc on electronic commerce in the U.S."

The 2006 law forces banks and other financial intermediaries to police money flows that could be related to Internet gambling. It never received a formal up or down vote in the entire Congress; instead, Republican congressional leaders simply glued it on to an unrelated port security bill that was approved nearly unanimously.

No consensus
The difficulty with the law's approach is that, while banks cooperate internationally to identify terrorist-related funds and drug-related money laundering, there's zero consensus on Internet gambling transactions.

Online betting is perfectly legal ... Read more

A federal judge in New York has dealt the Recording Industry Association of America a setback in its thousands of lawsuits over piracy on peer-to-peer networks.

In a widely anticipated decision, U.S. District Judge Kenneth Karas ruled Monday to reject the RIAA's claim that a Kazaa user who merely "made available" copyrighted music necessarily violated the law. Rather, he said, the RIAA would have to demonstrate that unlawful copying actually took place.

"Plaintiffs' allegations--insofar as plaintiffs wish to hold defendant liable for acts of infringement other than actual downloading and/or distribution--fail to state a claim," Karas wrote.

This is not necessarily fatal to the RIAA's lawsuit against Tenise Barker (referred to as Denise Barker in some court documents) that will continue in the Southern District of New York. That's because the music labels also have alleged that she actually did distribute copyrighted works--meaning that if they can prove that happened, which is more difficult, they can still win.

A few characteristics make this case unusual. First, New York federal judges are viewed as well-versed in copyright law, so Karas' decision is likely to be influential. Second, an unusually large number of outside groups filed briefs, including the U.S. Internet Industry Association, the Motion Picture Association of America, the Electronic Frontier Foundation, and the Computer and Communications Industry Association, meaning the court benefited from a range of views and increasing the importance of this week's decision.

Finally, the Bush administration jumped into the case ... Read more

Remember, folks, it's Al Gore's Internet. We're just using it.

Gore is scheduled to give a keynote speech on April 11 at the RSA Conference in San Francisco. RSA says as many as 17,000 people showed up at last year's conference, and it's reasonable to assume a large chunk of this year's crowd will try to squeeze into Gore's keynote speech. These are security types, engineers, marketers, PR flacks, and so on--many of whom have their own blogs, Flickr accounts, and Twitter feeds where they'll share details about Gore's speech (assuming he says anything interesting).

This cozy, stylish and handsome CNET fleece could be yours: be the first to send along a link to a video of Gore's you-may-not-record-this speech at RSA next month.

Which makes it bizarre that Gore has demanded--as a condition of giving the keynote speech--that press be barred from the room. As Kim Zetter wrote for Wired.com: "Video recordings, broadcasts and photography are also prohibited."

Gore might have gotten away with it a decade ago. And, to be sure, he has the right to negotiate that requirement with RSA. But nowadays, when tech-savvy audience members, who each coughed up some $3,670 for registration, are outfitted with digital cameras and recording devices (including on mobile phones), any speaker who insists on this requirement is foolish or naive.

You decide which category Gore falls into.

This isn't the first time that Gore has ... Read more

Screen snapshot: This now-defunct site is reportedly where an FBI undercover agent posted hyperlinks purporting to be illegal videos. Clicking the links brought a raid from the Feds.

The FBI has recently adopted a novel investigative technique: posting hyperlinks that purport to be illegal videos of minors having sex, and then raiding the homes of anyone willing to click on them.

Undercover FBI agents used this hyperlink-enticement technique, which directed Internet users to a clandestine government server, to stage armed raids of homes in Pennsylvania, New York, and Nevada last year. The supposed video files actually were gibberish and contained no illegal images.

A CNET News.com review of legal documents shows that courts have approved of this technique, even though it raises questions about entrapment, the problems of identifying who's using an open wireless connection--and whether anyone who clicks on a FBI link that contains no child pornography should be automatically subject to a dawn raid by federal police.

Roderick Vosburgh, a doctoral student at Temple University who also taught history at La Salle University, was raided at home in February 2007 after he allegedly clicked on the FBI's hyperlink. Federal agents knocked on the door around 7 a.m., falsely claiming they wanted to talk to Vosburgh about his car. Once he opened the door, they threw him to the ground outside his house and handcuffed him.

AUDIO

News.com daily podcast
Reporter Declan McCullagh talks about the FBI's
hyperlinking tactic for getting child porn ... Read more

Ed Felten is a Princeton University computer scientist who became well-known in technology circles for a paper he co-authored that showed flaws in digital audio watermarks. More precisely, Felten became well-known for the legal threats he received at the time from the Recording Industry Association of America.

Now Sequoia Voting Systems, which is one of the largest e-voting machine manufacturers in the United States, is threatening Felten too.

On Tuesday, Felten posted e-mail he and fellow Princeton professor Andrew Appel received from Sequoia saying:

As you have likely read in the news media, certain New Jersey election officials have stated that they plan to send to you one or more Sequoia Advantage voting machines for analysis. I want to make you aware that if the County does so, it violates their established Sequoia licensing Agreement for use of the voting system. Sequoia has also retained counsel to stop any infringement of our intellectual properties, including any non-compliant analysis. We will also take appropriate steps to protect against any publication of Sequoia software, its behavior, reports regarding same or any other infringement of our intellectual property.

Sequoia also has threatened to sue New Jersey's Union County. County officials backed away from the idea after Sequoia sent them a stiff letter calling the software a "trade secret," according to The Star-Ledger.

The reason the county became concerned in the first place is that mysterious errors showed up in the February presidential primary election. In at least five counties, the paper-tape totals ... Read more

An innocent discussion about Lowenhart chrome wheels, or a cover for clandestine drug transactions? Guess what the DEA thought...

(Credit: Dazz Motorsports)

When police ask a judge to grant a wiretap order, there's no defense lawyer present to raise objections. The judge has a limited amount of information, all provided by the cops and prosecutors, who in theory will take this solemn responsibility seriously and never lie or twist the facts.

Which brings us to U.S. v. Romero, a relatively routine case in Massachusetts in which Alberto Romero and 17 others were charged with conspiracy to manufacture and distribute crack cocaine.

To get a wiretap against the alleged crack cocaine ring, Drug Enforcement Administration agent Joao Monteiro filed an affidavit on July 8, 2005. The only problem is that Monteiro exaggerated an innocent conversation about automobile wheels--to convince a judge to grant a wiretap.

This, in other words, is where theory meets reality.

Here are excerpts from U.S. District Judge Reginald Lindsay's opinion, dated March 7:

That brings me to the question of the claimed selective editing of the transcript of the May 31, 2005 communications between Romero and Willie. Romero claims that intentional, selective editing, together with Agent Monteiro's interpretation, in light of his "training and experience," made innocent conversations about automobile wheels appear to be conversations about drug trafficking.

After reviewing both Romero's and the government's translations of the conversation in question, I conclude that the portion of the transcript included ... Read more

The company behind the proposed .xxx top-level domain, which was rejected after the Bush administration intervened, has been trying to dig up embarrassing government documents through a federal lawsuit.

Make that "was trying." A federal judge on March 12 granted summary judgment to the Bush administration in the Freedom of Information Act lawsuit brought by the ICM Registry.

By way of background, ICM Registry had proposed the porn-friendly .xxx domain in 2004 to the Internet Corporation for Assigned Names and Numbers, four years after ICANN rejected the idea the first time. In June 2005, ICANN approved .xxx--but the Bush administration objected two months later, and ICANN's board subsequently reversed itself by a 9-5 vote.

ICM Registry's Stuart Lawley, an indefatigable entrepreneur who made his fortune by founding a U.K. Internet service provider, didn't give up. He filed a FOIA request to learn how conservative groups pressured the Bush administration, and he released the first round of documents in May 2006. But the State Department and Commerce Department withheld others--claiming they were part of an internal "deliberative process"--and those are the documents at issue in the current lawsuit.

Robert Corn-Revere, an attorney at Davis Wright Tremaine who is representing ICM Registry, said a lawsuit against ICANN for denying the .xxx top-level domain is now possible.

"ICM Registry is planning to examine and pursue all of its legal options," Corn-Revere said Tuesday. "We were waiting to see what the outcome of this FOIA litigation was."

ICM ... Read more

The U.S. House of Representatives on Friday narrowly approved an electronic surveillance expansion without immunization for any telecommunications companies that illegally opened their networks to intelligence agencies.

The 213-197 split, with most Democrats voting in favor of the bill (PDF) and most Republicans opposing it, hardly means that the political tussle over retroactive immunity is over. It now shifts to the Senate, where Majority Leader Harry Reid, a Democrat, said he was "encouraged" to see the House vote.

But the primary obstacle remains President Bush, who has threatened a veto. The White House circulated a statement after the vote calling it a "a significant step backward in defending our country against terrorism" that was "not a serious effort to move the legislative process forward."

Another section that the Republicans dislike is this, which I'll excerpt:

ESTABLISHMENT OF COMMISSION.--There is established in the legislative branch a commission to be known as the "Commission on Warrantless Electronic Surveillance Activities"

The Commission shall ascertain, evaluate, and report upon the facts and circumstances relating to electronic surveillance activities conducted without a warrant between September 11, 2001 and January 17, 2007 (and shall) evaluate the lawfulness of such activities

Especially because the commission would be organized under the legislative branch, and would have subpoena power with the authority to enforce its subpoenas in court, it could result in some embarrassing disclosures about the National Security Agency's surveillance program.

Friday's vote also signals that the political climate has changed since last ... Read more

This is an actual, completely redacted page from the inspector general's report on Section 215.

The FBI has wielded the Patriot Act's extraordinary surveillance powers to unlawfully collect information about American citizens and has resisted some efforts to impose additional privacy safeguards, according to the U.S. Department of Justice's inspector general.

Inspector General Glenn Fine, in a pair of reports released on Thursday reviewing the 2006 calendar year, acknowledged the FBI's top management has been receptive to the points he raised in his first report a year earlier. But he indicated that there was nevertheless resistance to increased oversight and better record-keeping, which would help to prevent further abuses.

The longer of the two reports (PDF) dealt with national security letters, or secret FBI requests -- done without court oversight or approval -- for administrative information that communication providers, credit agencies, or banks might store. The second report (PDF) discusses broader "Section 215" requests for information that can be sent to any individual or company under the Foreign Intelligence Surveillance Act; these, however, must be approved by a judge. (The second report was heavily redacted, with some key pages blacked out.)

Some highlights:

* The FBI tried to whitewash illegal uses of Patriot Act surveillance authority that was intended to be used against terrorists and spies but ended up being used against Americans. FBI officials characterized these unlawful acts as "administrative errors," which Fine said "diminishes their seriousness and fosters a perception that compliance with ... Read more

If you travel across national borders, it's time to customs-proof your laptop.

Customs officials have been stepping up electronic searches of laptops at the border, where travelers enjoy little privacy and have no legal grounds to object. Laptops and other electronic devices can be seized without reason, their contents copied, and the hardware returned hours or even weeks later.

Executives have been told that they must hand over their laptop to be analyzed by border police--or be barred from boarding their flight. A report from a U.S.-based marijuana activist says U.S. border guards browsed through her laptop's contents; British customs agents scan laptops for sexual material; so do their U.S. counterparts.

These procedures are entirely legal, according to court precedents so far. A U.S. federal appeals court has ruled that an in-depth analysis of a laptop's hard drive using the EnCase forensics software "was permissible without probable cause or a warrant under the border search doctrine." One lawsuit is seeking to force the government to disclose what policies it follows.

The information security implications are worrisome. Sensitive business documents can be stored in computers; lawyers may have notes protected by the attorney-client privilege; and journalists may save notes about confidential sources. Regulations like Sarbanes-Oxley, the Health Insurance Portability and Accountability Act, and Gramm-Leach-Bliley may apply. A 2006 survey of business travelers showed that almost 90 percent of them didn't know that customs officials can peruse the contents of laptops and confiscate ... Read more