Archive for July, 2008

Steven Spielberg’s Director’s Cut

Sunday, July 27th, 2008
Published: July 27, 2008
HOW did Hollywood lose Steven Spielberg?
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Frazer Harrison/Getty Images, for A.F.I.

Steven Spielberg is seeking a backer outside Hollywood. Way outside.

Late last month, DreamWorks, the boutique movie studio that Mr. Spielberg co-founded in 1994, let it be known that it had found a way to exit its unhappy three-year marriage with Paramount Pictures. Reliance ADA Group, a Mumbai conglomerate, was nearing a deal to give the dream workers $550 million to form a new movie company. That Mr. Spielberg and his business partner David Geffen had found an investor wasn’t surprising. Mr. Spielberg is a superstar. DreamWorks had made it clear for months — via public comments and private grousing fed into the Hollywood grapevine — that they hated being part of Paramount and were going elsewhere as soon as it was contractually allowed. But there was still an element of shock: Hollywood could not come up with a rich enough deal for Mr. Spielberg, the most bankable director in the business and a “national treasure”? His last movie alone, “Indiana Jones and the Kingdom of the Crystal Skull,” has sold $743 million in tickets and is still playing in theaters around the world. For that matter, there wasn’t anybody on Wall Street willing to write a blank check for the guy with “Jaws” and “Jurassic Park” on his résumé? The pending deal with Reliance underscores some realities about Mr. Spielberg — mainly that he has become so expensive that few public companies can afford him. Mr. Spielberg’s standard deal, on par with other blue-chip talent, is 20 percent of a movie’s gross from the first ticket sold, although he agreed to a somewhat less aggressive paycheck on the latest “Indiana Jones” installment to offset its high budget. And there’s another whisper coming from Hollywood’s highest echelons. It’s a sensitive topic — and one that Mr. Spielberg’s associates find hugely insulting — but one that bears consideration: How long before the A-list director, at 61, is a little, well, Jurassic? SUCH talk is rooted in sour-grapes justifications for losing Mr. Spielberg to Reliance, his allies say, noting his huge list of projects on the horizon. Among them are potential blockbusters like “Transformers: Revenge of the Fallen,” which he will produce. He’s also pursuing more cerebral projects like an Abraham Lincoln film with a script written by the “Angels in America” playwright Tony Kushner. Even so, Mr. Spielberg’s representatives had been talking with potential backers for months, said three people involved who requested anonymity for fear of angering the powerful director. The Spielbergians had casual chats with companies including Sony and the News Corporation. Hollywood-friendly banks like JPMorgan Chase and Goldman Sachs were also in the mix. Hollywood’s seeming inability to close a deal with Mr. Spielberg highlights the shift toward a more corporate, buttoned-down movie business. Just a few years ago, bragging rights often drove business decisions. Steven Spielberg is available? Back up the money truck. We want that jewel in our crown no matter what the cost. And studio bosses could justify such ego-driven loss leaders: In the entertainment business, talent draws talent. Associates of Mr. Spielberg say they have not seriously entertained any Hollywood overtures, something corroborated by Ron Meyer, the president of NBC Universal. “We have not been given the opening to be in business with DreamWorks,” said Mr. Meyer, adding that the studio would jump at the chance given “the opportunity and the right deal.” But now that the big studios are all firmly embedded in big corporations, profit margins are the obsession. Add in skyrocketing star salaries and ballooning marketing costs, which have hammered margins, and pop go the sweetheart deals. “Big names don’t carry the same weight they used to,” said Harold L. Vogel, an independent media analyst. DVDs also have a starring role in the reluctance to take on risk. After years of blistering growth, domestic DVD sales fell 3.2 percent last year to $15.9 billion, according to Adams Media Research, the first annual drop in the medium’s history. While DVDs are still a big business, any decline is cause for great concern, because DVD sales can account for as much as 70 percent of revenue for a new film. When DVDs were soaring, studios had an incentive to own projects outright. Recently, they’ve been going the other way, trying to share ownership to protect themselves. Indeed, the DVD situation combined with other business challenges — the arrival of widespread Internet streaming being one of the thorniest — has studios so panicked that all their executives chatter about these days is mitigating risk. Hardly a time to double down on a fat deal with Mr. Spielberg. Studios are also increasingly focused on out-of-the-park franchise films that sell overseas. The DreamWorks slate is a little patchy — namely because Mr. Spielberg and Stacey Snider, the company’s chief executive, believe in delivering a mix of prestige films and blockbusters. Along with “Norbit,” the sophomoric Eddie Murphy smash that sold $159 million in tickets, come films like “Things We Lost in the Fire,” a drama starring the Oscar-winner Halle Berry that sold about $8.4 million in tickets. Chip Sullivan, a corporate spokesman for DreamWorks, declined to comment. He said Ms. Snider was on vacation and unavailable. Mr. Spielberg, via a spokesman, declined to comment. Bruce Ramer, the director’s longtime lawyer (Mr. Spielberg named the mechanical shark in “Jaws” after him), also declined to comment. As for Wall Street, the firm belief in Hollywood is that the arrival of Reliance marks the end of the private equity and hedge fund boom that has propped up the industry. With the capital markets in turmoil, terms have tightened substantially for movie deals. Investors are demanding faster payback schedules, better guarantees and even a say in how movies are made and marketed. None of that is acceptable to the DreamWorks team. Mr. Spielberg, who has directed more than 50 films, also wants to control his own destiny; at this point in his career, say friends, his accomplishments have earned him the right to have 100 percent control over his movies. Autonomy and ownership are paramount, and, at the moment, overseas investors are the most likely to allow Mr. Spielberg to write his own ticket, say studio executives. In some ways, Reliance marks a return to the past. Studios have over the last decade tapped American investors — DreamWorks began with backing from Paul Allen, a founder of Microsoft — but foreign investors, notably Germans, were a big source before that. THE deal with Reliance is not done. People involved in the talks, which are private, say that work is progressing but that no deal is likely to be signed for several weeks. In addition to the $550 million in equity — which may inch higher during negotiations — DreamWorks is seeking access to a $400 million line of debt financing. And Hollywood will still have a chance to nab a piece of the storied director. After negotiations with Reliance wrap up — if they wrap up — Mr. Geffen and Mr. Spielberg will start looking for a distribution deal with one of the big studios, most likely Universal Pictures or 20th Century Fox. Will Mr. Geffen and Mr. Spielberg see a bidding war? Probably, but it depends on what kind of terms they want. Tags:

Weight Drives the Young to Adult Pills, Data Says

Saturday, July 26th, 2008
Published: July 26, 2008
A growing number of American children are taking drugs for a wide range of chronic conditions related to childhood obesity, according to prescription data from three large organizations. The numbers, from pharmacy plans Medco Health Solutions, Express Scripts and the marketing data collection company Verispan, indicate that hundreds of thousands of children are taking medication to treat Type 2 diabetes, high blood pressure, high cholesterol and acid reflux — all problems linked to obesity that were practically unheard-of in children two decades ago. The data, disclosed publicly in recent months or provided at the request of The New York Times, shows that concerns that children will be taking adult medications — heightened recently by a controversial recommendation by a national pediatricians group — are already a reality. This month, the American Academy of Pediatrics said that more children, as young as 8, should be given cholesterol-lowering drugs. The recommendation was quickly attacked by some experts as a license to put children on grown-up drugs. While the drugs do help treat the conditions, some doctors fear they are simply a shortcut fix for a problem better addressed by exercise and diet. Even so, some pharmaceutical companies are developing new versions, including flavored ones, of adult medications for children. While some of the percentage increases in the three analyses are significant, doctors empha-size that prescriptions of these drugs to children still represent less than 1 percent of their sales. Express Scripts and Medco developed estimates of how many children might be taking such drugs by extrapolating their data — involving a total of more than four million children — across the broader population. The companies use different assumptions to reach their estimates, but the data suggests that at least several hundred thousand children are on various obesity-related medications. The greatest increase occurred in drugs for Type 2 diabetes, with Medco’s data showing a 151 percent jump from 2001 to 2007. Medco’s data, released in May, showed that use of drugs to treat acid reflux problems in children, often aggravated by obesity, increased 137 percent over seven years. Its analysis also showed an 18 percent increase in drugs to treat high blood pressure and a 12 percent increase in cholesterol-lowering medications during the seven-year period. Express Scripts found a 15 percent increase over three years in drugs to treat cholesterol and other fats in the blood, a category that is primarily statins. “We were amazed at how quickly the rates of drugs used have climbed,” said Dr. Donna R. Halloran, an assistant professor at St. Louis University who worked on the Express Scripts analysis, presented at a meeting of the American Public Health Association in November. Verispan data recorded a 13 percent increase in high blood pressure prescriptions in the under 19 age group from 2005 to 2007. Its numbers show, however, a less than 1 percent increase during the period in cholesterol-lowering drugs in children. Doctors and some financial analysts have said that less pronounced increases in cholesterol drugs compared with some other medications — seen in all three analyses — reflect a wariness by some doctors about using those drugs in children. Some experts have expressed concern that the increases in many of these obesity-related drugs reflect a systemic failure, with doctors and parents turning to them because they find lifestyle changes too difficult to implement or enforce. “I think a lot of people in pediatrics, myself included, are struggling with what is the right management to do for these kids,” said Dr. Russell L. Rothman, an assistant professor at Vanderbilt University, who recently surveyed doctors and found wide variations in how children were being treated. “You see elevated blood pressure, or elevated sugars, or elevated cholesterol and you try exercise and diet and you don’t see any improvement,” Dr. Rothman said. “I worry that some providers and some families are looking for the quick fix, and are going to want to start medication immediately.” Some pediatricians say they have been treating children with statins for several years. Dr. David Collier, director of a pediatric weight management center at East Carolina University in Greenville, N.C., an area where 45 percent of the children are overweight, is among doctors who support the recent recommendations that statins may be warranted in some children as young as 8. “We have been using statins for two or three years now,” he said. One of his statin patients, he said, was a 6-year-old girl. Dr. Collier, who describes his location as “right smack dab in the middle of the stroke belt,” believes that aggressive therapy is needed to prevent a health crisis. “It’s hard to overstate the size of the problem,” he said. Dr. Francine R. Kaufman remembers a patient, a 13-year-old girl, whose weight had ballooned to 267 pounds. The teenager appeared destined for the same fate as her grandmother, who lost a leg to Type 2 diabetes. “To control her high blood sugar level, her high blood pressure, and her high cholesterol, this young girl left my office with five medications,” Dr. Kaufman, a pediatric endocrinologist in Los Angeles, told a Senate subcommittee last week during hearings on obesity in children. The girl stood out as unusual more than 10 years ago, but children with the same array of problems are increasingly seen in the diabetes center where she practices at Children’s Hospital Los Angeles, Dr. Kaufman said. Diet and exercise are tried first, but “lifestyle is really tough,” Dr. Kaufman said. Some of her patients live in neighborhoods without grocery stores and attend schools that do not offer physical education programs. “They deserve to be treated,” Dr. Kaufman said. “I think the slant from most of the media is that pediatricians are jumping to put kids on medications. That’s not true at all. Since lifestyle is so difficult, we have no other choice but to go to pharmacotherapy.” At Camp Pocono Trails, a weight loss camp in Reeders, Pa., that enrolls about 700 children each summer, owner Tony Sparber said that campers are arriving with medications, a pharmacopeia that include statins and diabetes medications. “You just look at these kids’ medical forms,” Mr. Sparber said. “You see kids with some very high-risk numbers. Cholesterol in the high 200s.” Experts say that the trend could balloon health care costs. As many as 30 percent of children nationwide are overweight. And children who start such medication often rely on the drugs for a lifetime and are prone to health problems as adults. Despite a push by the Food and Drug Administration to foster drug studies in children, many experts believe that many clinical studies in children have not been extensive enough. And adult doses are often not correct for children. The agency publishes a list of drugs for which pediatric versions are needed. So far, the size of the pediatric market is not big enough to make it profitable for companies to make special children’s formulas of drugs for disorders that commonly go along with obesity and high-fat diets. That appears to be changing. Madeira Therapeutics, based in Leawood, Kan., is formulating a liquid statin for children that will be sold in either grape, cherry or bubblegum flavor, according to the company’s chief executive, Peter R. Joiner. Madeira became interested in the drug to treat children with a genetic cholesterol condition, familial hypercholesterolemia, which strikes 1 in 500 children regardless of their diet. The recent American Academy of Pediatrics statement adds to the potential market, according to Mr. Joiner. The company, whose liquid statin may be available by late 2010, is also interested in a liquid oral diabetes medication. “Because of the obesity epidemic in the United States, we see diabetes as another important area for contribution,” Mr. Joiner said. A nonprofit group in Cambridge, Mass., the Institute for Pediatric Innovation, is working to encourage the reformulation of medications for children. Dr. Stephen P. Spielberg, the former dean of Dartmouth Medical School, is leading the effort. “What we’ve learned over the years is that the way in which the body handles medicines, the half life of a medicine, how it’s metabolized, how it’s excreted by the body, does vary, from babies all the way up to adolescents,” Dr. Spielberg said. Hypertension medications present a particular challenge in dosing for children. “Even in clinical trials where adult pills were crushed and such, you often can’t even demonstrate that the medication works,” he added. Medco cautioned that hypertension data can be misleading because some children with attention deficit disorder are treated with hypertension drugs. The most significant increase in the use of drugs for children has been in oral medication for Type 2 diabetes. And some doctors believe much of those prescriptions were “off-label” use of the drug, metformin, to treat prediabetes, which may affect two million children nationwide. But some doctors object to the use of metformin for that purpose in children, even though studies have shown it may prevent diabetes in young adults. “There are no studies like this in children,” said Dr. Tamara S. Hannon, a pediatric endocrinologist at the Children’s Hospital of Pittsburgh. “The argument may be that we know what happens in adults, so the same should happen in children. It’s been proven untrue in several cases in the history of medicine.”
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Obama Lands in Afghanistan for First Tour of War Zones

Saturday, July 19th, 2008
Published: July 20, 2008
WASHINGTON – Senator Barack Obama arrived in Afghanistan early Saturday morning, opening his first overseas trip as the presumptive Democratic presidential nominee, to meet with American commanders there and later in Iraq to receive an on-the-ground assessment of military operations in the two major U.S. war zones. Mr. Obama touched down in Kabul about 11:45 a.m., according to a pool report released by his aides. In addition to attending briefings with military leaders, he hoped to meet with President Hamid Karzai of Afghanistan before flying to Iraq later in the weekend. His trip was cloaked in secrecy, which advisers said was due to security concerns set forth by the Secret Service. His whereabouts have been unknown since he departed Chicago. He left Andrews Air Force Base near Washington on Thursday afternoon, according to a pool report, and turned up in Afghanistan on Saturday. Before he left the United States, he gave a brief outline of his trip to two pool reporters traveling with him from Chicago to Washington. No reporters accompanied him to Afghanistan. “Well, you know, I’m more interested in listening than doing a lot of talking,” Mr. Obama said. “And I think it is very important to recognize that I’m going over there as a U.S. senator. We have one president at a time, so it’s the president’s job to deliver those messages.” Mr. Obama’s arrival opened a weeklong foreign trip that includes visits to Iraq and two other stops in the Middle East as well as appearances in three European capitals. His tour of Afghanistan and Iraq are part of a Congressional delegation — similar to trips that Senator John McCain, the presumptive Republican nominee, made in the spring — in which he is joined by Senators Chuck Hagel, Republican of Nebraska, and Jack Reed, Democrat of Rhode Island, both of whom have been mentioned as possible vice presidential running mates. The international trip by Mr. Obama is intended to counter Republican criticism — and one advanced by Senator Hillary Rodham Clinton during the Democratic primary campaign — that he has too little experience in foreign affairs to serve as a world leader. His advisers said Mr. Obama chose to begin his trip in Afghanistan because he believes that the region is among the most important foreign policy challenges facing the United States. “Well, I’m looking forward to seeing what the situation on the ground is,” Mr. Obama told reporters on Thursday before he left Washington. “I want to, obviously, talk to the commanders and get a sense, both in Afghanistan and in Baghdad of, you know, what the most, ah, their biggest concerns are. And I want to thank our troops for the heroic work that they’ve been doing.” It is the first trip to Afghanistan for Mr. Obama, a member of the Foreign Relations Committee. This week, he proposed deploying about 10,000 more troops to battle resurgent forces in Afghanistan, a plan intended to shift the American military focus from the Iraq war to what he calls the central fight against terrorism. The proposal has become a centerpiece of Mr. Obama’s foreign policy and a major point of disagreement with Mr. McCain, who maintains that both places are major battlegrounds and disputes Mr. Obama’s suggestion that the war in Iraq has distracted the United States from its efforts in Afghanistan. Mr. McCain has suggested to voters that Mr. Obama lacks the experience to serve as commander in chief. He particularly criticized the Illinois Democrat for not having held a single hearing in his capacity as chairman of the Foreign Relations Committee’s subcommittee on European affairs. “He’s going to go to the American people and say, ‘I want to be commander in chief,’ ” Mr. McCain told reporters on Thursday, “and yet he has been the chairman of the subcommittee that oversights NATO and he has never had a hearing, nor has he ever visited Afghanistan.’ ” But that criticism was dismissed this week by Senator Joseph R. Biden Jr. of Delaware, the chairman of the Foreign Relations Committee, who said issues related to Afghanistan were intentionally being addressed “at the full committee level.” Mr. Obama’s trip is drawing considerable attention in the United States and abroad. It is being carefully choreographed by his campaign strategists to coincide with a new television advertisement in 18 states intended to highlight his ideas on foreign policy and portray him as ready to serve as commander in chief, which is one area where polls show that voters give an edge to Mr. McCain. In addition to visiting Iraq and Afghanistan, Mr. Obama is extending his overseas tour, his first as a presidential candidate, to include a visit to Amman, Jordan, on Monday, followed by stops in Jerusalem, the Palestinian territories, Berlin, France and London. Now that Mr. Obama has decided to take the trip, the McCain campaign is not sure what to make of it. Jill Hazelbaker, the communications director for Mr. McCain, offered a hint of the Republican criticism of the trip on Thursday by dismissing it as “the first-of-its-kind campaign rally overseas.” But Mr. McCain sought to temper the message, saying: “I’m glad he is going to Iraq. I am glad he is going to Afghanistan. It’s long, long overdue if you want to lead this nation.” Robert Gibbs, a senior campaign strategist for Mr. Obama, dismissed that suggestion. He said the trip was rooted in substance, rather than politics. “The trip is not at all a campaign trip, a rally of any sort,” Mr. Gibbs told reporters on Friday. He said Mr. Obama would hold “a series of substantive meetings with our friends and our allies to talk about the common challenges that we face and the national security dangers for the 21st century.” In the next week, Mr. Obama is scheduled to meet several foreign leaders, including German Chancellor Angela Merkel, British Prime Minister Gordon Brown, French President Nicolas Sarkozy, Jordan’s King Abdullah, Israeli Prime Minister Ehud Olmert and President Shimon Peres and Palestinian President Mahmoud Abbas. Tags:

iPhone Users Plagued by Software Problems

Saturday, July 12th, 2008
Published: July 12, 2008
SAN FRANCISCO — For many people on Friday, the iPhone was the iCan’t. Apple suffered extensive network gridlock Friday morning, as many of the six million users of the original iPhone tried to upgrade to new software while the first buyers of the new iPhone 3G were trying to activate their purchases. The setback was a classic example of the problems that can follow when complex systems have single points of failure. In this case, the company appeared to almost invite the problems by having both existing and new iPhone owners try to get through to its systems at the same time. “There are certainly lessons in preparedness,” said Richard Doherty, a consumer electronics industry consultant who is president of the Envisioneering Group in Seaford, N.Y. He compared the day with Christmas morning, “the acid test for many years” for electronics companies because customers contact them in droves after opening presents and trying to get gadgets to work. The problems led to slow-moving lines of would-be iPhone 3G purchasers at Apple and AT&T stores, while current iPhone users found that their phones had stopped working when they tried to upgrade them to the latest software. The iPhone must connect to Apple servers through the iTunes program for authentication before it will function again after a software upgrade. Apple did not comment publicly on the problems, but privately executives acknowledged the missteps and said the combination of the software upgrades and new iPhone 3G owners trying to complete their activation swamped the company’s servers. At Apple and AT&T stores on Friday morning, employees began telling buyers to take their new iPhones home and activate them there. A year ago, when the original iPhone went on sale, customers performed the activation at home. But Apple and its cellphone partners changed the process this time, in part because the carriers are partially subsidizing the cost of the phones, so they are eager to make sure that phone buyers are locked into a contract. Many of the original iPhones were bought in the United States and then taken overseas for use on foreign carriers. A number of industry executives have said that the change in policy was intended to reduce the number of phones that were bought and then modified for use on unauthorized cellular networks. Early indications were that the company was facing strong demand for the new phones. In many cases the customers were existing iPhone users looking to upgrade to the iPhone 3G model. Apple’s stores opened at 8 a.m. At the store in downtown San Francisco at 11:30 a.m., there was still a line of more than 300 customers stretching down one block and around the corner waiting for iPhones. Some customers said they had hired placeholders to stand overnight in line. Mark Siegel, a spokesman for AT&T, Apple’s cellular partner in the United States, said the company had experienced extraordinary demand and that most of its stores nationwide were sold out of the iPhone during the day. He said he had heard reports that some customers were already camped out in front of stores waiting for the next shipment of iPhones on Saturday, but he could not identify a particular store. Mr. Siegel said the rush of customers and upgrades had overwhelmed Apple’s servers, and that he sympathized with the company’s predicament. “Apparently the iTunes system has just been overwhelmed by demand and Apple is working very hard to get this fixed,” he said. He acknowledged that part of the problem was the new policy of requiring authorization in the stores. In a related issue, customers had problems with Apple’s switchover from its .Mac Web service to a new service called MobileMe that is intended to seamlessly share information between Macintosh computers and the iPhone. Apple’s stumble was an unusual one for a company that has taken pains in recent years to become more customer-oriented. The technology blog Gizmodo dubbed it the iPocalypse. When the original iPhone was introduced, AT&T took the blame for most of the early service problems. Sergio Martinez, an editor at Teak Motion Visuals in San Francisco, said in an e-mail message that he had run into trouble with the software upgrade. “Like everyone else across the world, I have had no luck upgrading,” he wrote. “Bill Gates must be enjoying this one.”
Laurie J. Flynn contributed reporting.
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Google Told to Turn Over User Data of YouTube

Friday, July 4th, 2008
Published: July 4, 2008
SAN FRANCISCO — A federal judge has ordered Google to turn over to Viacom its records of which users watched which videos on YouTube, the Web’s largest video site by far. The order raised concerns among YouTube users and privacy advocates that the video viewing habits of tens of millions of people could be exposed. But Google and Viacom said they were hoping to come up with a way to protect the anonymity of the site’s visitors. Viacom also said that the information would be safeguarded by a protective order restricting access to the data to outside lawyers, who will use it solely to press Viacom’s $1 billion copyright suit against Google. Still, the judge’s order, which was made public late Wednesday, renewed concerns among privacy advocates that Internet companies like Google are collecting unprecedented amounts of private information that could be misused or fall unexpectedly into the hands of third parties. “These very large databases of transactional information become honey pots for law enforcement or for litigants,” said Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology. For every video on YouTube, the judge required Google to turn over to Viacom the login name of every user who had watched it, and the address of their computer, known as an I.P. or Internet protocol address. Both companies have argued that I.P. addresses alone cannot be used to unmask the identities of individuals with certainty. But in many cases, technology experts and others have been able to link I.P. addresses to individuals using other records of their online activities. The amount of data covered by the order is staggering, as it includes every video watched on YouTube since its founding in 2005. In April alone, 82 million people in the United States watched 4.1 billion clips there, according to comScore. Some experts say virtually every Internet user has visited YouTube. Google and Viacom said they had had discussions about ways to further protect users’ anonymity, but as of Thursday evening the two companies had yet to agree on how to do that. “We are investigating techniques, including anonymization, to enhance the security of information that will be produced,” said Michael D. Fricklas, Viacom’s general counsel. Mr. Fricklas said Viacom would not have direct access to the data, and that its use would be strictly limited by the court order. Viacom would not, for example, chase down users who had illegally posted clips from “The Colbert Report.” “The information that is produced by Google is going to be limited to outside advisers who can use it solely for the purpose of enforcing our rights against YouTube and Google,” Mr. Fricklas said. In a letter sent Thursday, Google’s lawyers pressed their counterparts at Viacom to accept a more limited set of data. “We request that plaintiffs agree that YouTube may redact user names and I.P. addresses from the viewing data in the interests of protecting user privacy,” wrote David H. Kramer, a partner at Wilson Sonsini Goodrich & Rosati. In a response, a Viacom lawyer wrote that Viacom was “committed to working with Google” on the privacy issue. Interestingly, Google has rejected demands by privacy groups for more stringent protections for I.P. address records, saying that in most cases the addresses cannot be used to identify users. Yet Google argued that YouTube viewing data should be kept from Viacom, in part, to protect the privacy of its users. Judge Louis L. Stanton of the Southern District of New York, who is presiding over Viacom’s lawsuit against Google and YouTube, referenced Google’s past statements on I.P. addresses to conclude that its “privacy concerns are speculative.” “It is an ‘I told you so’ moment,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington. Other privacy advocates said they welcomed Viacom’s commitment to limit its use of the information, but they remained concerned about user rights. “Users should have the right to challenge and contest the production of this deeply private information,” said Kurt Opsahl, senior staff lawyer at the Electronic Frontier Foundation, an online civil liberties group. That right is protected by the federal Video Privacy Protection Act, Mr. Opsahl added. Congress passed that law in 1988 to protect video rental records, after a newspaper disclosed the rental habits of Robert H. Bork, then a Supreme Court nominee. Mr. Opsahl also said that even records that did not include a user’s login name and I.P. address might be able to be associated with specific people. In 2006, after AOL released for research purposes the search records of thousands of anonymous users, reporters from The New York Times were able to track down one person by analyzing her search queries. Mr. Opsahl said anonymous viewing habits may similarly yield clues about the identity of viewers. Viacom wants the viewing data in part to help it determine the extent to which YouTube’s success was built on the popularity of copyrighted clips that were illegally posted to the site. Outside experts say that without the data it would be virtually impossible to pin that down. Judge Stanton agreed that the information could help Viacom make its case. “A markedly higher proportion of infringing-video watching may bear on plaintiff’s vicarious liability claim, and defendants’ substantial noninfringing use defense,” he wrote. Tags:

Eyes on Inflation, European Bank Raises Rate

Thursday, July 3rd, 2008
Published: July 4, 2008
FRANKFURT — The European Central Bank, spooked by soaring prices for food and fuel, raised interest rates on Thursday, joining several other central banks in battling a global eruption of inflation. With the quarter-point increase, the central bank followed those in Sweden and Norway that raised rates this week, citing inflation. The Federal Reserve in the United States, where short-term interest rates are only half of those in Europe, has so far declined to join them. The European Central Bank’s decision deepens a recent divergence in monetary policy on either side of the Atlantic, ending a long period when it tended to follow the course set by the Fed. But the sharp rise in inflation has put Europe’s bank into a policy bind because it has been accompanied, in recent days, by evidence that the economy here is deteriorating much like that of the United States. Manufacturing activity in the 15 countries that use the euro shrank in June for the first time in three years, according to a survey of European purchasing managers. In Spain and Ireland, where a collapse in housing prices has magnified the problems, there is a real risk of recession. Still, the European Central Bank, hewing to its inflation-fighting mandate, pressed on with the expected increase, lifting the benchmark rate to 4.25 percent from 4 percent. Among other thing, it is intended as a warning to unions not to use higher inflation as a lever to demand hefty pay raises. It was not clear, before an afternoon news conference chaired by the bank’s president, Jean-Claude Trichet, whether the increase would be a one-off gesture or the start of a cycle of tighter monetary policy. Several economists said they doubted the bank could tighten much further, given the parlous economic situation. “The E.C.B. is hiking at a time when confidence is plummeting,” said Thomas Mayer, the chief European economist of Deutsche Bank. “The question is, ‘what do you do when asset prices fall at the same time that consumer prices rise?’ The central bankers seem to have reached the end of the line.” Indeed, the bank has come under intense political pressure in recent days not to tighten credit at such a fragile moment for Europe’s economy. The French president, Nicolas Sarkozy, said higher rates would do little to stem the rising price of oil. Germany’s finance minister, Peer Steinbrück, warned that an increase could further depress growth. The central bank, under Mr. Trichet, has steadfastly rebuffed efforts to influence its policy. But even within its 21-member governing council, the unhealthy combination of inflation and stagnation has opened a split — with inflation hawks calling for a rate increase, while the doves resisted it. The hawks are led by Axel A. Weber, the president of Germany’s Bundesbank, which bequeathed its long tradition of inflation fighting to the European Central Bank. Germany is also an exception among major European countries, in that its economy is still expanding, even if more modestly lately. “It’s clear that Weber convinced Trichet and the majority of the council to go for it,” Mr. Mayer said. “But the weakening growth numbers will lead the others to resist further rate increases.” The position of the hawks was reinforced on Monday with new statistics that showed inflation in Europe rose to an annual rate of 4 percent in June, twice the ceiling set by the European Central Bank. With oil prices continuing to surge — it traded at a new record of$145 a barrel in Asia on Thursday — some economists expect inflation to spike even higher in August, perhaps to 4.25 percent. “There is a genuine question about what to do about inflation that is entirely driven by oil prices,” said Holger Schmieding, chief European economist at Bank of America in London. “One option is to let it filter through the system; the other option is to attack it now.” In raising rates, even at a time of such uncertainty, the European Central Bank has opted for the latter. Tags: