Ever since VoIP first came on the scene, there were fear mongering reports saying that you shouldn't use VoIP because it will get hacked. However, in all these years, we've yet to hear a serious report of VoIP getting hacked -- and, even the scary warnings about VoIP hackers have quieted down. Yet, here we are, with a security company now claiming that 2008 will be the year that VoIP gets hacked. Of course, that security company is also selling a solution to prevent VoIP systems from getting hacked, so perhaps you should take the prediction with a rather large grain of salt. So which is it: is hacking VoIP networks not that easy? Is the fear overblown? Or have we just been lucky?

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The Supreme Court has declined to hear a case regarding whether cell phone companies should be allowed to list taxes as separate line items on customer bills. Apparently, certain state governments have begun passing laws prohibiting companies from listing taxes as separate line-items on customer bills, requiring them instead to build those costs into the base prices they charge consumers. Cell phone companies argue that this makes it impossible for them to establish uniform nationwide pricing because they have to adjust the prices in each state to reflect the varying tax burden. This seems to me to be a pretty clear-cut effort by state governments to avoid scrutiny of the taxes they impose. Voters ultimately end up paying these costs whether they're listed separately on the bill or not, so this seems like little more than an attempt by state legislators to avoid accountability. Taxpayers have every right to know what fraction of their bills are going to the government. With the Supreme Court declining to weigh in on the issue, the issue has gone back to the FCC for further consideration. I hope they'll continue to push for greater transparency. Of course, it should be noted that the companies hands aren't totally clean here. While phone companies should be allowed to list extra fees when they're actually required to hand the money over to the government, we've noted before that they shouldn't be allowed to label as "fees" money they're planning to keep for themselves.

Timothy Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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The press is having a field day with Last.fm's announcement today that it's now offering "free" music. It has the type of "hook" that the press loves. A site that's willing to stream music for free. It's so tempting to tell that story that everyone seems to be missing a few important details. Detail #1: It's not really free. Detail #2: It's nothing new at all. It doesn't let you download music. It merely lets you stream it. And, even then, you're only limited to 3 streams before you can no longer hear that song again without buying it. That sounds quite similar to the program that RealNetworks launched nearly three years ago allowing you to stream 25 songs per month for free. Or how about Napster's program, launched in 2006, which let you stream songs five times for free before asking you to pay up. If anything, the Last.fm deal, with only 3 streams, is a lot more limited than these earlier offerings. And, yet, just as they did with the RealNetworks and Napster deals in years past, the press is raving about this "free music" offering from Last.fm and CBS (owner of Last.fm). The NY Times is incorrectly claiming that Last.fm is "the first company" to do this. Reuters is calling it "free music on demand", completely ignoring the limit of only three streams. The UK's Times Online suggests this somehow is moving the world closer to "legally" listening to free music online. Almost every article on the story has a similar theme, and almost no one seems to note that this isn't really free and it's certainly not particularly different than what's been out there for years. Apparently, if you want gushing press, all you need to do is announce "free" online music, even if the details suggest something entirely different.

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We were rather surprised last year to find out that the LA Times and other Tribune-owned newspapers had started employing web filters for journalists working at the newspaper. The filters were supposed to prevent journalists from visiting "inappropriate" sites, though failed to explain what a reporters was to do if he or she was actually reporting on inappropriate sites -- which should make you realize that there really are no inappropriate sites for a journalist. It looks like new Tribune owner Sam Zell is equally mystified by the policy and wasted little time getting rid of it with the following message:

"I do not see how a member of the Fourth Estate, dedicated to protecting the First Amendment, can censor what its own employees and partners can see. I have instructed that all content filters be removed. You are now exposed to the dangers of You Tube and Facebook. Please use your best judgment."

Somehow I get the feeling that Zell won't be joining the AFP in banning the use of Facebook and Wikipedia as sources.

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Recent research on the security vulnerabilities of a new Dutch fare card system offers important lessons for computer security. The Dutch government spent $2 billion on the system, which has now been demonstrated to have fatal flaws. The researchers disassembled the smart cards used by the system and took high-resolution photographs of the circuitry. This allowed them to reverse-engineer the encryption algorithms being used by the system. As Felten points out, this wouldn't have been a problem if the Dutch had used an open crypto algorithm that has been widely tested and found to be secure. But because the system relied on algorithmic secrecy for security, this could be catastrophic. The algorithm uses a relatively short 48-bit key. This means that once the algorithm is known, it becomes possible to perform a brute-force attack, simply trying all 281 trillion possible keys in parallel until the correct one is found. That requires a non-trivial amount of computing power, but it's well within the capabilities of modern computer hardware. Indeed, this is precisely the approach taken by a Johns Hopkins research group three years ago when they cracked the encryption on the Exxon Mobil Speedpass, which used a 40-bit key. Brute forcing the 40-bit algorithm reportedly took the Hopkins team about 20 minutes, which suggests that -- even ignoring improvements in hardware -- it should be possible to brute force a 48-bit key in under a week. Since they're just deploying the system now and are presumably planning to use it for a decade or more, 48 bits is woefully inadequate. They ought to have used a standard, widely-tested cryptographic algorithm with a significantly longer key size, in order to make brute force attacks impractical.

Timothy Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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As technology starts to develop at a quicker and quicker pace, a generational digital divide has started to form between the children, who are growing up amidst all of this new technology, and their parents, who are left to play catch up. So, though most adults are now familiar with technologies like email (which has been around for decades now), more are starting to use instant messaging and social networking sites like MySpace or Facebook. We're not referring to the so-called "online predators" that have been the subject of numerous tv specials. As mom and dad embrace these technologies, today's youths complain that grown-ups are encroaching upon their "turf" and would prefer that they stay on their side of the generational digital divide. Online youths have been quick to embrace the sites like Facebook as somewhat of a social theater where they where they publicly canoodle with crushes, post pictures of the previous night's escapades, and comment openly on each others' profiles. Now, as adults get hip to the internet, these once private worlds are now at risk of being invaded. Back when these adults were kids, there was never really a fear of their parents invading their parties, or crashing their proms, so now some youths feel it necessary to keep a "grown-up friendly" online presence, thereby ruining the appeal of such sites. It might behoove Facebook to introduce more selective sharing levels, lest their most avid users start to lose interest in actually using the site. That said, this problem of over-sharing is not unique to youths -- for quite some time now, adults have been getting into trouble over their online profiles as well.

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Brian Stelter opens his piece on MySpace on a generally positive note, suggesting he was intending his write-up for the New York Times to be a sympathetic look at the company's relationship to its corporate parent, owned by Rupert Murdoch. But the article ends up painting a picture of a site without a clear vision of its future. In probably the most damning paragraph in the article, an advertising executive says that the MySpace's parent company had envisioned the site as a portal, but that he "thought they would be much further along with that today." For about a decade, websites have tried to mask their lack of focus by labeling themselves portals. A decade ago, that strategy worked pretty well for Yahoo! in 1996, when it had enough content to really make it stand out from the crowd. But it's hard to imagine that a similar strategy will work in 2008. Users have many more choices and more sophisticated tools for finding the content they need, so the attraction of a one-size-fits-all portal is much lower.

I suspect that the fundamental problem is that it just doesn't make much sense for an "old media" company like News Corp. to own a tech startup like MySpace. They key to MySpace's success in the years before the acquisition was precisely that the company didn't need to produce content; users created "content" of their own by swapping messages, posting pictures and music, etc. Social networking sites are fundamentally technology platforms that enable users to share their own content with one another. Trying to produce "original content" for the site is a step in the wrong direction. There's no way they can satisfy the diverse tastes of their millions of users, but they can waste a lot of money trying. And while MySpace focuses on becoming more like the mainstream media, its competitors—especially Facebook—are working feverishly on enhancements to their underlying technology platforms. Meanwhile, the MySpace user experience continues to deteriorate. I regularly get spam from other MySpace users (although this has become less common in recent months), the site is littered with gaudy banner ads, and I encounter error messages a lot more frequently than I do on Facebook. These are the sorts of problems that an 80-year-old newspaper mogul like Murdoch just isn't going to know how to deal with. He is, by all accounts, a brilliant businessman, but he's not a technologist, and it was probably a mistake for him to buy what was fundamentally a technology company.

Timothy Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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This past weekend, David Simon, the executive producer of HBO's The Wire, and a former newspaper reporter, had an opinion piece in the Washington Post decrying the state of the newspaper business, saying:

"Isn't the news itself still valuable to anyone? In any format, through any medium -- isn't an understanding of the events of the day still a salable commodity? Or were we kidding ourselves? Was a newspaper a viable entity only so long as it had classifieds, comics and the latest sports scores? It's hard to say that, even harder to think it. By that premise, what all of us pretended to regard as a viable commodity -- indeed, as the source of all that was purposeful and heroic -- was, in fact, an intellectual vanity."

It's a rather common refrain, but to understand the challenges the newspaper business faces, it's important to dispel some of the myths that are a part of that refrain. The first is a concept that is quite important, but often gets lost: price and value are two separate things. They are not the same. Value drives demand -- but price is set by the intersection of demand and supply. If supply is abundant, it's not going to matter how valuable your product is, price will get pushed towards zero. So, Simon is incorrect in thinking that news isn't valuable or that it was an "intellectual vanity" to think so. News and reporting are valuable. The problem, though, is that it's quite abundant these days, and so the price that people are willing to pay gets pushed towards zero.

That's not necessarily a bad thing. While Simon goes on to complain about the state of news coverage today, the problem isn't that people don't value the news, but that the people who run newspapers haven't figured out how to properly adjust to the marketplace they're facing. We're seeing plenty of evidence that there's lots of money to be made in the news business, for those who understand how the market is changing and how to embrace it. There are plenty of ways to provide news the way people want to consume (and interact with) the news, rather than doing it the same way it was done for decades. It's not that news isn't valuable. It's that newspapers haven't figured out how to adapt to the changing market.

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Jon writes in to tell us about an opinion piece from The Guardian written by Simon Napier-Bell -- a manager for some big name rock bands, including the Yardbirds and Wham! -- giving his historical analysis of how the recording industry killed itself. He notes that it's somewhat systemic. He goes through example after example that shows that the recording industry never recognized that it was in the business of selling everything having to do with the musician, and always through it was just in the business of distribution. He details, in no uncertain terms, the gangster mentality (and connections) of recording industry execs, that were much more focused on exploiting musicians rather than helping them. He digs somewhat into the economics covered by Courtney Love and others. Much of this has been stated elsewhere, but it's yet another reminder that recording industry execs are lying when they talk about how their main focus is to "help artists." If that were true, there were tons of things that the industry would have and should have done differently over the past decade. He also recognizes that there is a place for record labels, but it's a very different one than in the past, and it needs to be focused on selling the scarce goods related to the music, rather than just trying to sell the music itself.

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One of the most common themes of writing about the Internet is that it's going to make geography irrelevant. There's clearly something to this. I'm writing this post in St. Louis, and before it goes live it will be looked over by Mike, who's normally in the Bay Area but is in Scotland this week. Still, Tim Harford has an interesting essay arguing that the Internet can also make geography more important by increasing the value of living in a high-density area. He gives online dating as an example: in the old days, a single guy living in New York might have several million single women to choose from, but with no way to quickly sift through all those options, the New York dating scene wouldn't be noticeably better than other cities. But now, with online dating, people have much more sophisticated tools to sift through the options and find someone who perfectly matches their interests, age, religious and political beliefs, etc, before they ever meet. I've personally noticed the high cost of not living in a major city. I've met a number of people online through a shared interest in technology policy, and almost all of them live in the DC, San Francisco, or New York metropolitan areas. So while the Internet has made it possible for me to write from anywhere, it's also made me more acutely aware of what I'm missing by not living in a larger metro area.

Timothy Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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