Slashdot points us to the news that the well known online poker playing site UltimateBet.com has been fined $1.5 million as part of an ongoing investigation into what appears to be a rather massive scheme to defraud online poker players by giving some insiders the ability to see all the cards other players held. Over the past year, this story has been building up steam, as the fraud was actually called out by some other players who questioned how certain players had been able to win so much. Using statistical analysis, it was shown to have been close to impossible, without inside knowledge, and the latest report does, indeed, pin some of the blame on a well-known poker player who was an initial "consultant" to one of the companies involved in this mess. If you read the MSNBC link above, you'll see that there are a number of different companies involved, but it sounds as though many are simply shell companies for the same group of people, with attempts to move assets around for a variety of purposes. So, it's not yet entirely clear who was involved beyond the one player named, but more names are expected to be released later this year, as investigators finish up their investigation.

What may be most interesting about the whole ordeal was that it was exposed not by the body charged with actually regulating the online casino, but other players who were able to sniff out the details working together in online forums. Chalk another one up to the wisdom of the crowd.

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We recently wrote about how you should probably be more nervous about the data your ISP is collecting rather than what Google is collecting, because your ISP has access to a lot more data, and the data it has isn't data that you chose to give, as in the case of Google. Plus, ISPs have a long history of selling that data. Now, a new study is showing that most people have no idea that their ISPs track and sell their data, with many believing that an ISP would need to first let them know if they were doing that. In fact, many people are quite concerned about how that data would be used, not realizing that it's already being sold. And, of course, it's not just being sold to ad companies like NebuAd and Phorm, but to website tracking firms like Compete and Hitwise. And, even if that data is sold solely for the purpose of creating trend data, there's no reason that uses can't change over time. For example, the Register is noting that a recent patent lawsuit suggests that trend-tracking research firm Hitwise (which was recently bought by credit giant Experian) may be working on an advertising product as well, that also uses your clickstream data.

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Well, the terrestrial radio companies failed to stop the XM-Sirius merger from a happening with a rather ridiculous campaign against the merger, but that doesn't mean they can't continue to try to cause problems. The latest is that they've convinced Representative Ed Markey to introduce legislation requiring all satellite radio devices to include the ability to play HD Radio (terrestrial radio's attempt to provide a better quality product to compete with satellite). The FCC had just begun investigating whether or not such an HD Radio mandate made sense, but apparently Markey can't wait and is pushing to have the mandate pushed through as law before the FCC can study the issue. Is it worth mentioning that the NAB, the lobbying arm of the terrestrial radio stations (and the group that resorted to all sorts of questionable actions in trying to prevent the Sirius-XM merger), is one of Markey's biggest campaign contributors? Oh, and that XM CEO Mel Karmazin contributed to Markey's campaign back in 2001 (when Karmazin worked for Viacom), but apparently hasn't contributed more recently? Feel free to express your thoughts on the bill with this voting widget (if you're reading in RSS, click through to see it):

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There's an interesting article over at TorrentFreak about how the movie industry in Georgia (the country, not the state) has been negotiating and making deals with various file sharing sites, since there aren't really laws against such sites in the country. The studios are often able to delay movies from appearing on those sites until a few weeks after they hit the theaters by "negotiating" agreements with the sites. Of course, it's expected that the laws will eventually change in favor of the studios, and these negotiations will cease and be replaced by lawsuits. What strikes me as odd, though, is that the studios don't go beyond "negotiating" with these sites. Why not do more to actually embrace the sites? If a movie is posted for download, why not offer additional incentives to actually go to the theater, while promoting the experience of going out to the movies and seeing it on a really big screen, rather than downloading a low quality version for a computer screen. Such incentives could play into the marketing aspect of the movie, offering those who download a discounted ticket to the theater, or a discount on buying the actual DVD, which will contain extras. In other words, target those who clearly want to see the movie, and then offer them real incentives to go out to the theater.

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Slashdot points us to the news that IBM has applied for a patent on a process for identifying markets where there isn't much patent coverage. Yes, think about the recursive silliness here. The application describes a process for looking for so-called "white spaces," where there doesn't appear to be many patents covering a topic in a patent database. Of course, you have to wonder if someone could make the argument that having such a process suggest areas in which to pursue patents would raise questions about whether or not those patents would pass the non-obvious test. Meanwhile, chalk another one up for IBM, which keeps claiming that it's trying to raise the bar on patent quality.

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It was definitely surprising to see Apple trying to enforce an NDA to stop iPhone developers from talking about their applications, so it's nice to see Apple (for once!) respond to the backlash by dropping the NDA. However, the company's explanation for why it had the NDA in the first place doesn't make much sense:

We put the NDA in place because the iPhone OS includes many Apple inventions and innovations that we would like to protect, so that others don't steal our work. It has happened before. While we have filed for hundreds of patents on iPhone technology, the NDA added yet another level of protection. We put it in place as one more way to help protect the iPhone from being ripped off by others.

It's unclear what "inventions and innovations" would be "stolen" (the company probably means infringed, not stolen, obviously) without such an NDA in place. Also, the patents are a separate issue. The whole explanation, frankly, is misleading. The NDA and the patents protect entirely different things in very different ways, and it's difficult to see how the lack of an NDA allows anything to be "ripped off."

Either way, it's good that Apple has recognized that such NDA's significantly limit its developers. It's tough to have much of a developer "community" when said developers are barred from communicating.

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Kevin Kelly's latest post tackles a pretty common subject around here, about how the most important thing in a business model is getting attention, and from there, the money will follow. It's a response to those who insist that everything needs to be paid for up front. The problem is that that doesn't work when no one understands why they should give you any money. In some ways, it's just another way of saying the phrase that obscurity is a much bigger threat than piracy. As with most of Kelly's writings, it's a worthwhile read. I'm hopeful that he'll take this further and start to note how attention is very much a part of the economic equation as well, because attention is a very important scarce good.

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We've discussed in the past the importance of orphan works legislation, which would make it possible for people to use content on which the copyright holder cannot be found. The amount of "orphan" content out there, that simply cannot be used, is staggering. An orphan works bill makes a tremendous amount of sense. Unfortunately, some content creators whipped up supporters into a frenzy, at times by lying about what the bill actually included, leading to a push to block the legislation. Those folks should be happy: while the Senate did pass the legislation, the House is letting it die, at least until after the election this November. There is no rational argument that I can see for not allowing this legislation to pass. The argument that this allows companies to "steal" the works of various artists is clearly untrue. The legislation requires a full search for the creator, and if the creator later turns up, they can get paid. This is necessary legislation to actually put tons of locked up content back to good use, and it's a shame that it was killed by the misleading complaints from folks who prefer to limit our cultural heritage by lying about what the bill would do.

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Remember a couple months ago, when Warner Music's Edgar Bronfman complained that the makers of video games like Guitar Hero and Rock Band should be paying more for the music they used? He claimed, incorrectly, that the games were "entirely dependent" on the record labels' content. That was wrong, and totally downplayed the fact that the video games were actually adding value to the music. Now it appears that the maker of Guitar Hero, Activision, is hitting back. The company's CEO is pointing out how much being in those games has helped bands, suggesting that its really the record labels that are getting too good of a deal:

"When you look at the impact [the game] can have on an Aerosmith, Van Halen or Metallica, it's really significant -- so much so that you sort of question whether or not, in the case of those kinds of products, you should be paying any money at all and whether it should be the reverse. The bulk of our consumers will tell you they're not purchasing the products based on the songs that are included, they're purchasing based on how fun the songs are to play when they're playing them."

He's exactly right. The content industry always seem to over estimate how much "value" the content provides and almost totally ignore the value provided by anyone else in the value chain. It's going to be interesting to see what happens over the next few months, but I would bet that the video game companies have the stronger hand here, and despite Bronfman's statements, the record labels really understand that.

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Another day, another awful legal ruling about file sharing. This time, coming out of Germany. A German court has told file hosting company Rapid Share that it needs to proactively screen and monitor all content hosted on its site and remove any infringing files. The company already uses a hash method to screen out infringing files its been alerted to and employs six people who monitor for infringement, but the court has said that's not enough. Specifically, it notes (correctly) that an uploader need only change a file slightly to avoid the hash filter -- but then somehow makes the leap to suggesting that this becomes Rapid Share's liability. It's yet another case where judges seem to not understand where liability should lie. It should be common sense that liability lies with the user who's doing the actual infringing, rather than the platform provider -- but it seems to get mixed up way too often. Of course, in the grand scheme of things, this will have almost no impact as people will simply migrate to other sites instead.

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