Hollywood Can't Handle Anyone Connecting With Fans... So It Contractually Tries To Stop Them

from the suicide-in-the-making dept

The whole "connect with fans" and give them a "reason to buy" mantra fits with pretty much any kind of content creation -- and absolutely works in the movie industry. We've talked, for example, about the amazing job that Clerks writer/director/filmmaker/actor/funny guy (he recently said he doesn't like being described as "just" a filmmaker) Kevin Smith does in connecting with fans and giving them a reason to buy. Lately, a lot of that has been happening via Twitter, which is great. Except in the minds of the Hollywood studios. Apparently, lots of new studio contracts are including anti-Twitter language, forbidding writers, actors and others from chatting too much about the movies they're working on. Some just talk about "confidentiality breaches" while others forbid saying anything disparaging.

This is the typical Hollywood "control everything" mindset, but totally goes against the way fans want to connect, these days, and will do a lot more to harm these movies than help. People want to follow their favorite actors/directors on the set and know what's going on. It helps get them more excited about the movies, well before they otherwise might have. Shutting them down, just because some studio execs, who have probably never used Twitter, are too paranoid to recognize it as a great promotional vehicle, seems backwards and shortsighted.

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Singer Claims Sony Music 'Pirated' His Songs; Has Police Raid Their Offices

from the all-for-the-artists... dept

One thing that's consistent throughout all of the stories we see concerning the recording industry trying to support its position in lawsuits, and in front of politicians, the press and the public, is that it's doing all of this to help the "artists" it represents. Of course, that's laughable, given just how many stories we've seen of artists screwed over by the major labels. The record labels have never represented the artists' best interests. For yet another example, we head south of the border, where Alejandro Fernandez is claiming that Sony Music "pirated" his music. He used to have a contract with Sony, but when he completed that contract, he moved over to Universal Music. Yet, Sony still prepared to put out a CD of "unreleased material" by Fernandez. Fernandez claims that the works are unauthorized, and even had the police in Mexico raid Sony Music's offices and confiscate the CDs.

All in all, this comes down to a basic contract dispute. Sony Music claims that it has the right to do whatever it wants with any music recorded under the contract. Fernandez claims the rights were limited to seven albums -- which were all done -- and do not extend to material that went unreleased. This sounds similar to the dispute last month, where Morrissey told fans not to buy a new box set that EMI was putting out. Either way, it's yet another example that labels' interests and artists' interests are not aligned.

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Is Creative Commons Bad For Copyright?

from the taking-people-away-from-the-issue dept

Copycense has a rather thought-provoking editorial pondering whether or not Creative Commons is good or bad for copyright. I have to admit that I've long felt similarly about Creative Commons in general. I don't use any of their licenses, because I don't necessarily see the point. We've declared in the past that the content here is free for anyone to do what they want with it, and thus I feel no need for a Creative Commons license. But, at the same time, there were some underlying issues about CC that have bothered me, concerning its continued reliance on copyright as a basis for making it work. I admire the folks behind it and the very idea of using copyright itself to carve out a more reasonable way of dealing with it, but I've always wondered if the use of Creative Commons, while a nice solution for many users, helps to cloud the problems with copyright law. This is the same point Copycense makes, noting that one of the major problems with it is that it takes copyright out of a policy debate, and makes it a contractual issue.

Copycense was okay with this in the past, back when it seemed unlikely that there would ever be a real national debate on copyright, but given recent events in Canada, it seems that such discussions can actually occur:

We conclude now... that the continued use and prominence of Creative Commons licenses actually obscures the real copyright issues we face in this country, and keeps Americans from settling on the proper parameters of digital information use, access, retrieval and preservation in the 21st century. It is too easy for a creator to slap a CC license on a copyrighted work, promote one's apparent knowledge of (and sensitivity to) copyright issues through a CC badge, and feel good about oneself, almost like the purchase of hybrid vehicle becomes one's outward signal to society that its owner is dedicated to stopping global warming.

Indeed, there seems to be a whole aura attached to using a CC license -- or perhaps more specifically, slapping that CC badge on a copyright-protected work -- because it seems to signal that the person using the license is thinking progressively about intellectual property, information policy, and related issues....

But we believe the real question to be asked is how we can calibrate copyright law to make it equally usable by, and effective for, all Americans. To this end, we believe the use of CC licenses actually avoids the question of what U.S. copyright should be in the 21st century, and how the law should best serve its citizens, who now are as likely to be creators of copyrighted works as your average conglomerate record label. This avoidance is particularly problematic given the prominence and use of CC licenses; the organization's position -- real or perceived -- as the antidote to a broken copyright system; and the very real possibility that few who use the licenses really know what they mean....

As Canada is doing now, the U.S. needs to have deep, complicated, and perhaps even painful conversations about information policy; the history, purpose, uses and scope of copyright law and policy in our digital information ecosystem; and the reform that needs to happen in both areas.

We do not believe the Creative Commons license scheme fosters that conversation. Instead, we believe the scheme muzzles this conversation by promoting a contractual bargain in lieu of balanced and calibrated legislation and policy. We hope that in the future, Creative Commons will put more of its considerable intellectual and economic resources toward resolving the problems with copyright law instead of promoting contractual workarounds. In the best case scenario, with a balanced and effective law that serves citizens and corporate owners equally well, a Creative Commons license is unnecessary. This should be the goal.

There's a lot more at the link, but I did want to pull out those sections, as making some points worth thinking about. While I always cringe at calls for "balanced copyright" -- which I think misses the point of copyright (a truly successful copyright law involves making everyone better off, rather than "balancing" interests) -- it is worth thinking about Creative Commons impact on the debate over copyright.

But... I'm not sure that I would go as far as Copycense in condemning Creative Commons. Many of the people behind it went through (and are still going through) numerous battles to push back on the excesses of copyright. Creative Commons wasn't the solution -- it was a helpful (and hopefully temporary) oasis in a bleak desert, following numerous well-reasoned, but ultimately futile attempts to push back corporate expansion of copyright. And while I agree that there are problems with shifting the issue to a contractual agreement (and the post highlights some of the many legal problems CC licenses may cause), I think that CC, as a whole, did turn a lot more people onto the some of the problems with copyright law as it stands today. In many ways, CC is an easy way for people to first start to understand the problems of copyright law, in understanding why CC is needed.

From there, many who do understand this have started questioning the larger issues around copyright -- and many of those involved with CC have continued to fight that good fight, rather than just assuming that CC is "the answer." So, in the end, I agree that we should be clear to recognize that Creative Commons and efforts to really rethink copyright are two separate things, but that doesn't mean that Creative Commons is necessarily bad for copyright policy issues. It has been, and hopefully will continue to be, a real stepping stone to getting more people to recognize these bigger issues. In fact, I'd argue that many of the folks now leading the debate for more reasoned copyright policy in Canada first came to understand these issues via their exposure to Creative Commons' licenses.

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BSA Jumps Onto The Three Strikes Bandwagon

from the with-some-weasel-words dept

So, this was really weird. I was having an instant messenger chat with a colleague here about the various "three strikes" proposals that have been popping up around the world, and he asked me whether or not the BSA had taken a stance on the issue. I noted not remembering hearing anything from them on it, and assumed that it was because the BSA mainly focuses on business users, for which a three strikes policy is not really an issue, and that the BSA would hopefully realize that cutting people off from the internet would almost certainly hurt the software industry a lot more than help it. But, literally 10 seconds after I sent that last text, I flipped over to my RSS reader and up popped an article about how the BSA has come out in favor of a three strikes plan. Freaky.

Guess I should have known better than to assume the BSA was smarter than the RIAA on this issue. As the article at Ars explains, the BSA tries to put in a bunch of caveats about due process and judicial oversight, but spends a bunch of time in its statement explaining how ISPs can get around all that due process and judicial oversight by simply putting three strikes into their contractual language -- meaning that they can just decide on their own to cut users off. Good luck with that.

More troubling, however, is that when questioned about the new statement by Ars Technica, the BSA said it was necessary because "last year our industry lost over $50 billion (USD) worldwide." Hmm. It's really quite troubling that the BSA still stands by these numbers when they've been debunked so thoroughly over and over again. They count the "retail value" of every piece of software as being "lost," which is clearly a lie. Five years ago, the research company that runs these studies for the BSA, IDG, flat out said that the BSA was wrong in claiming that "the retail value" of the software is the same as "losses." So why does the BSA continue to get away with claiming it?

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Would You Rather Renegotiate Your Contracts... Or See Your Business Collapse?

from the which-is-more-stupid? dept

You see it all the time with companies in trouble, where they are able to renegotiate certain contracts for the sake of saving the overall business. So, I have a lot of trouble with Hollywood studios claiming that they simply can't figure out a way to offer movies online, because the contracts they signed won't let them. In the link above, Slate's Farhad Manjoo tries to figure out why the movie studios aren't offering up a decent, easy to use online movie service, and unfortunately falls for the studios' claims that they know they need to get online, but they just can't because of "a byzantine set of contractual relationships between many different kinds of companies studios, distributors, cable channels, telecom companies, and others." That sounds good, and it's no surprise to see Hollywood lawyers jump all over this as a defense -- but it's laughable. If the studios, distributors, cable channels, telecom companies and others actually realized how quickly the market is changing, they'd rush to change those contracts. No, it wouldn't be easy, but it is doable. Not doing so is a cop out from a group of folks who don't want to change and are hoping that things "just work out."

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TomTom Caught Between Microsoft Rock And GPL Hard Place

from the divide-and-conquer dept

Last month we covered Microsoft's patent infringement lawsuit against GPS device maker TomTom. As Mike noted, this is a pretty clear example of abusive patent litigation. The patents in question are so broad that it's virtually impossible to innovate in this space without first paying Microsoft for the privilege. Obviously, that prospect doesn't bother Microsoft's top patent lawyer very much, but it should be a serious concern for the rest of us. Since Mike wrote that post, another angle of the case has gotten a lot of attention from tech blogs: whether it's possible for TomTom to settle the lawsuit without running afoul of the GPL, the free software license that covers the Linux code that Microsoft claims infringes at least three of those patents.

A bit of background is helpful here. When the Free Software Foundation drafted version 2 of the GPL, it included a clause saying that if a vendor is forced to place restrictions on downstream redistribution of software covered by the GPL (due to a per-unit patent licensing agreement, for example), that vendor loses the right to distribute the software at all. This clause acts as a kind of mutual defense pact, because it prevents any firm in the free software community from making a separate peace with patent holders. A firm's only options are to either fight to invalidate the patent or stop using the software altogether. This clause of the GPL actually strengthens the hands of free software firms in their negotiations with patent holders. A company like Red Hat can credibly refuse to license patents by saying "we'd love to license your patent, but the GPL won't let us."

This creates a problem for a company like Microsoft that wants to extract licensing revenues from firms distributing GPLed software. Ordinarily, a patent holder sues in the hope that it will be able to get a quick settlement and a nice revenue stream from patent royalties. But the vendor of GPLed software can't settle. And if the patent holder wins the lawsuit, the defendant will be forced to stop distributing the software, depriving the patent holder of an ongoing revenue stream. Either way, the trial will generate a ton of bad publicity for the patent holder.

In a comment at the "Open..." blog, prominent Samba developer Jeremy Allison charged that Microsoft has tried to sidestep this agreement by basically forcing companies to sign patent licensing agreements that violate the GPL under the cover of non-disclosure agreements. Allison argues that TomTom got sued because it was the first company to refuse to participate in this fraud. It's important to note here that Allison can't prove the existence of these agreements, so we should take his claims with a grain of salt. But if these charges are ever conclusively proven, they would have explosive consequences. The Free Software Foundation would likely insist that such firms either cancel their agreements with Microsoft (likely triggering a patent lawsuit) or stop distributing GPLed software altogether (which could be a death sentence for a firm that relies on such software).

Regardless, TomTom is now stuck between a rock and a hard place. The GPL has left the firm with only two options. It must either fight Microsoft's patents to the death (literally) or it must settle with Microsoft and immediately stop distributing GPLed software. Given how deeply-entwined GPLed software apparently is in TomTom's products, that second option may be no option at all. So expect a long and bloody fight in the courts.

One likely result will be to create a serious PR problem for Microsoft. Some people might remember the infamous GIF patent wars of the 1990s. When Unisys tried to collect patent royalties on the GIF format, the Internet community responded by switching in droves to the PNG format. In the process, Unisys earned a ton of bad press and a terrible reputation among computer geeks who care about software freedom. Microsoft risks a similar fate if it pursues this litigation campaign against Linux. And given that Microsoft is in a business where innovation is king, it's probably not a good idea to become a pariah in a community that includes many of the world's most talented software engineers.

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

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Google 'Requests' That We Not Copy Works That Are Already In The Public Domain

from the yeah-right dept

Computer scientist Steven Bellovin notes a troubling trend: companies that republish public domain works are increasingly trying to use contract law to place restrictions on their use. For example, Google is apparently in the habit of "requesting" that people only use the out-of-copyright works they've scanned for "personal, non-commercial purposes." Even more troubling, works like this one that were produced by the US federal government—and have therefore never been subject to copyright—come with copyright-like notices stating that any use other than "individual research" requires a license. Fundamentally, this is problematic because copyright law is supposed to be a bargain between authors and the general public: we give authors a limited, temporary monopoly over their works, in exchange for those works being created. But in this case, the restrictions are being imposed by parties—Google and Congressional Research Services, Inc., respectively—who had nothing to do with the creation of the works. The latter case is particularly outrageous because taxpayers already paid for the works once, through our tax dollars.

With that said, there are a couple of reasons to think that things aren't as bad as Bellovin suggests. It's hardly unusual for companies to claim rights they don't have in creative works—that doesn't mean those claims will stand up in court. The fact that Google "requests" that users limit how works are used doesn't mean they can stop people who ignore their requests. And especially in the case of government works, there's a strong case to be made that copyright law's explicit exemption of government works from legal restrictions should trump any rights that private companies might claim to limit the dissemination of such works. Moreover, a few courts have recognized the concept of copyright misuse, the attempt to extend a copyright holder's rights beyond those that are specified in the law. So it's not at all clear that these purported contractual restrictions would actually be binding. Companies might say that you need permission to reproduce the works, but they're unlikely to try to enforce those requirements in court. Nevertheless, government officials and librarians should do a better job of policing these kinds of spurious claims. As Bellovin says, government agencies that hire firms to manage collections of public domain works should ensure that the private firms are contractually obligated not to place additional restrictions on downstream uses of those works.

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

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Tracfone Tells Customer The Meaning Of Life... Is One Year

from the 'till-death-or-contractual-fun-due-us-part dept

Reader crcb alerts us to a fun discovery made by his sister, who had purchased a phone plan from Tracfone, including the companies advertised "Double Minutes for Life" deal. The idea is that if you sign up and pay for that plan, any additional minutes you buy actually give you double the stated number of minutes. Obviously, for some, that sounds like a really good deal. Except that, at least in this case, it turned out that the "for life" part actually only meant "one year." If she wanted to continue getting "Double Minutes for Life" she had to buy a new plan... which also apparently would only last a year. This seems quite reminiscent to various telcos having trouble understanding the meaning of the word "unlimited." Either way, I contacted Tracfone for comment on this on Monday of this week, using two separate email addresses provided on the company's website, clearly explaining what I was writing about... and have received absolutely no response. Perhaps all the folks there are out living it up... since apparently they believe life only lasts a single year, and they shouldn't waste a minute of it.

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Subsidized Laptops With Locked In Wireless Broadband Contracts

from the good-or-bad? dept

A few years back, after noting the trend of laptop companies to start building in cellular data modems into their laptops, we wondered when it would reach the stage where mobile operators would subsidize the cost of a laptop, just as they subsidize the cost of mobile phones in many cases. In early 2006, we started to see such subsidized laptops go on sale in Europe, with the mobile operators selling the laptops directly for well below list price, as long as you bought into a long term data plan. The whole idea seemed a bit strange, as mobile operators have long ranted long and hard about how much they hate, hate, hate subsidies, and how they wish they could do away with them. So, why add them to laptops?

However, the idea has now traveled over to the US as well, in a deal between Acer, Radio Shack and AT&T allowing people to buy an Acer netbook for just $100, so long as they agree to a 2 year $60/month contract for an AT&T mobile data plan. It's still a little confusing as to why the mobile operators are agreeing to this, following so many vehement arguments against mobile phone subsidies, but perhaps they're finally realizing that those subsidies aren't such a bad thing when they get people using their services. Still, how long will it be until buyers start complaining about early termination fees for laptops like they do for mobile phones?

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Did Patent Hawk Violate Contracts In Suing Microsoft?

from the integrity? dept

During the summer, we wrote about how Gary Odom, perhaps better known as The Patent Hawk for his patent consulting business, had sued Microsoft over a patent on user-configurable toolbars. Odom has been known to comment here, using a style all-too common among some of our critics: insult liberally while refusing to offer any actual points. Joe Mullin has turned up a lot more details on this particular case, including the fact that not only was Microsoft a former client of Odom, but as part of his contract he promised not to file for certain patents himself or file patent infringement lawsuits against the company. On top of that, while working for Microsoft, he had access to confidential Microsoft info, including the company's patent strategy.

Odom, not surprisingly, disputes Microsoft's version of the events -- and points out that whatever contracts he signed are no longer relevant, since he has not worked with Microsoft in years. However, there are some questions concerning when he filed this particular patent, and whether or not he disclosed that activity to Microsoft or the law firm that he worked for during some of this period. Interestingly, Odom also is perfectly happy to admit that he thinks Microsoft came up with their toolbar version totally independently (which, again, some of us believe should be proof of obviousness).

Even if we grant Odom's version of the story, you have to wonder if the long-term results of this case will come back to haunt him. Given the facts laid out here, I would think that an awful lot of companies that might use Odom's services as a patent researcher will now be rethinking him as a potential consultant.

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UK Court Attacks Cut-And-Paste Boilerplate Lawyering

from the legal-documents-shouldnt'-be-cut-and-pasted dept

One of the results of the word processing era is just how easy it is to simply cut-and-paste things, and perhaps no profession has made more use of this than lawyers. We've seen it where lawyers include the name of the wrong defendant in a lawsuit, for example. Now, a court in the UK has slammed some lawyers for practicing boilerplate cut & paste lawyering, noting that a drafted contract was so meaningless at points that it's clear the lawyer who drafted it had no idea what parts of it were talking about. The court noted "malapropisms, poor uses of terms and drafting errors" all of which "made interpretation of the agreement difficult."

In fact, it was so extreme that the judge actually looked to figure out what was most likely meant between the two original parties, rather than what the actual contract says. This is pretty rare, as most courts tend to default to the actual text of a contract, rather trying to get into what was meant, as that opens up all sorts of questions. Yet, in this case, what was actually in the contract was apparently so terribly written that the court decided to go in the other direction.

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EMI/Virgin Records Sues Platinum Selling Band For $30 Million... Despite Not Paying Them A Dime In Royalties

from the the-music-business-at-work dept

It's always fun to remember stories like the following one the next time you hear some RIAA exec claim that it represents musicians. The RIAA represents the record labels and record labels are continually at odds with musicians -- sometimes to extreme levels. Wired reported that EMI/Virgin Records had sued the band 30 Seconds To Mars for $30 million recently. The band is apparently fronted by movie star Jared Leto, and is considered something of a success. Its last album went platinum and won some awards. So why the lawsuit? Well, EMI implied that the band failed to deliver its latest record on time, but members of the band have now responded with a very different story. Wired now points us to the response from 30 Seconds To Mars, where the band notes that the lawsuit appears to have a lot more to do with the band opting out of its contract. The band points out that, under California law, a contract of more than seven years is not valid -- and the contract EMI held with the band was for nine years.

So why opt out? Perhaps this has something to do with it:

If you think the fact that we have sold in excess of 2 million records and have never been paid a penny is pretty unbelievable, well, so do we. And the fact that EMI informed us that not only aren't they going to pay us AT ALL but that we are still 1.4 million dollars in debt to them is even crazier. That the next record we make will be used to pay off that old supposed debt just makes you start wondering what is going on. Shouldn't a record company be able to turn a profit from selling that many records? Or, at the very least, break even? We think so.

This is, of course, rather par for the course in the recording industry. As Courtney Love explained years ago, it's quite rare for a recording artist to ever see a dime of royalties from selling music. The label gives the band an "advance" which really isn't that much, and then uses some funky accounting tricks to claim all of the band's royalties as paying off that advance as well as covering other fees involved in the marketing and distribution of the album. In this case, apparently, despite selling 2 million records, EMI is still claiming that the band has $1.4 million to pay back. Not so long ago, we noted that Lyle Lovett was in the same boat: 4.6 million albums sold, no royalties paid.

So, at what point will the press and politicians stop buying the RIAA's claims that it's looking out for the musicians and trying to get them paid? The RIAA has always been in the business of not paying musicians.

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iPhone 3G Illustrates What A Real Contract Looks Like

from the legally-binding dept

I spent most of my day last Friday acquiring an iPhone 3G. It was a long and tedious process involving several hours of waiting, a visit to the Apple Store, and two visits to AT&T. Part of the reason it took so long is that Apple wasn't willing to let me have the phone until I'd signed up for a 2-year contract with AT&T. Mike has previously discussed the pros and cons of cell phone subsidies, and the associated carrier lock-in. Whatever you think of that debate, the iPhone story is a good example of what a real contract looks like. I was required to sign up for an AT&T service plan and sign an AT&T service agreement before I was allowed to leave the Apple Store with my iPhone. I knew exactly what I was getting into, and had the option to decline before completing the transaction. I think there's little doubt that the courts would enforce the contract's terms if I tried to renege on my commitment.

Now compare that to the shrink-wrap "contracts" that retail software developers keep trying to foist on people who buy their products. When you buy a software product at Best Buy, the cashier almost never informs you about the license agreement, much less require you to read and sign it. In many cases, it's not even possible to open the box and read the agreement until after you've completed the transaction. One of the key differences here is that Apple spent valuable employee time informing me of the contract, giving me time to read it, and requiring me to sign it. This is annoying for Apple, but enforcing some minimum requirements for contract formation also serves an important function: ensuring that firms only resort to using formal contracts when they have a pretty good reason. Forming, complying with, and enforcing contracts consumes resources, so we don't want people forming contracts too lightly. It also ensures that the contracts actually get read, something Apple has had trouble with in the past. The software industry, in contrast, tries to get all the benefits of legally-enforceable contracts without shouldering any of the costs. That approach isn't fair to consumers or to taxpayers.

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

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Supreme Court Says Patent Holders Can't Shake Down Entire Supply Chain

from the big-win dept

The Supreme Court continues to bring a bit of common sense back to the patent system. While most of the tech world was sitting around paying attention to whatever Steve Jobs has to say this morning, the really big news in the tech industry may be the Supreme Court's decision that patent holders can't shake down the entire supply chain, by forcing each level of the supply chain to also license the patent (even if they bought a product from someone who had licensed the patent).

This the LG v. Quanta case that the Supreme Court agreed to hear last fall. Basically, LG had some patents that it licensed to Intel. Intel then sold products based on those patents, which its customers used to build other products. LG demanded license fees from those customers as well, even though they bought fully licensed products from Intel. LG insisted that since its contract with Intel said that the license didn't cover any additional products, then the patents had to be relicensed by each player down the supply chain. To some extent, this question of "patent exhaustion" is similar to questions about first sale doctrine when it comes to copyright, in determining if you have a right to actually resell a product that was legally purchased. And, thankfully, the Supreme Court agrees that patent exhaustion is an important concept.

This is yet another very important limitation on patent holders, preventing them from stifling innovation at every step of the product process, and double-, triple- and quadruple-dipping off a product based on a single use of their patented invention. Hopefully this will lead to the quick dismissal of a bunch of cases that were filed last fall against a ton of companies up and down various supply chains. A lot of patent hoarders, fearing this exact decision, tried to just sue everyone at once, hoping for quick settlements before the Supreme Court stepped in. It's great to see the Supreme Court taking such an active interest in rolling back massive abuses of the patent system. Update: The EFF has a good take on the ruling, noting some of the holes in it, suggesting that it's unfortunate the the Supreme Court wasn't as clear as it could/should have been.

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T-Mobile Sues Starbucks For Over Eager Switch To Free WiFi

from the that-wasn't-what-we-bargained-for... dept

Back in February, Starbucks surprised an awful lot of people by signing up to use AT&T's WiFi offering, ending the exclusive deal it had for many, many years with T-Mobile (and Mobilestar before T-Mobile purchased that company). Part of the AT&T deal was that it would offer some amount of free WiFi -- something T-Mobile/Starbucks never did. There was some early confusion about the deal concerning whether T-Mobile would continue offering service and how the two services would overlap. It turns out that it wasn't just confusing to us reading about it -- it was confusing to T-Mobile as well.

T-Mobile has now sued Starbucks over the transition, saying that the company has gone well beyond what the two companies had agreed to. The original plan was that T-Mobile would gradually transition the network to AT&T, and the companies would work together to make sure things worked well for customers of each company. However, just recently, Starbucks pushed forward with the plan to offer some number of "free" WiFi hours to AT&T customers -- much to the annoyance of T-Mobile, who says most of the WiFi equipment in use is still T-Mobile's, and the company isn't getting paid at all for the free hours (an interesting question could be whether or not AT&T is getting paid for that usage).

Basically, the infrastructure transition has barely begun, and Starbucks is already acting as though it's complete, shifting over to the business model provided by AT&T, without having that work within the parameters of T-Mobile's model. While the legal result will almost certainly come down to contractual terms, the real issue may be that this suggests the promised "smooth transition" from T-Mobile to AT&T may not be very smooth at all. T-Mobile is going to have less and less incentive to make sure that the network really works all that well, especially if it feels that it's being cheated out of money for the use of its network.

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Sprint And Affiliate Sue Each Other Over Legality Of New WiMax Effort

from the bad-blood dept

In certain markets, Sprint has always used affiliates to sell its service, rather than building out its own efforts. Some of those affiliate relationships caused problems back in 2004/2005 when Sprint merged with Nextel -- as Nextel's service existed in some of those markets, potentially "competing" with the Sprint affiliates who had agreements that Sprint would not compete directly. So, with the new WiMax joint venture with Clearwire, Sprint knew that the big affiliate iPCS would be upset. In fact, last week, Sprint sued iPCS in Delaware seeking a declaratory judgment that the new joint venture did not break their agreement with iPCS. That lawsuit appears to have been filed slightly before iPCS filed its own lawsuit in Illinois against Sprint. Chances are the two suits will be combined in some manner, but it's yet another hurdle that Sprint needs to clear before it can get this new WiMax offering off the ground. Sprint may have a decent claim here -- as the agreement with iPCS is focused only on 1.9GHz spectrum, whereas the WiMax network is on 2.5GHz spectrum. Either way, it seems like these affiliate relationships may be a lot more pain than they're worth.

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Dear Wal-Mart Executives: You're On Candid Camera... And There's A Big Market For Those Videos

from the oops dept

Allen Funt, the creator of the famed Candid Camera TV show eventually donated the archives of the show to Cornell University, where it could be used for psychology research -- and to entertain the nearly 2,000 students in each year's psych 101 class. Now another long running set of "candid" videos is getting released, but not for academic purposes. A small company named Flagler Productions has, since the 1970s, filmed Wal-Mart's internal meetings for archival purposes. Wal-Mart was, effectively, Flagler's only client (it had a few others, but Wal-Mart represented 95% of the company's business). In 2006, Wal-Mart fired Flagler, basically taking away nearly all of its revenue. Rather than shut down or find new clients, Flagler realized it possessed an asset and started selling access to the behind-the-scenes videos of Wal-Mart executive meetings. Apparently it's been of tremendous interest to folks involved in all sorts of lawsuits against Wal-Mart -- especially for the clips showing execs mocking women (for a sexual discrimination case).

Of course, some might immediately question whether or not Flagler owns the rights to these videos, but no contract was signed between the parties and no transfer of rights was made -- and copyright law basically says whoever recorded it owns the copyright. Of course, the simplest solution would be for Wal-Mart to pay Flagler for the rights -- but it would appear there's something of a gap between asking prices. Wal-Mart has offered $500,000. Flagler wants $145 million. Apparently Flagler realized the best way to bridge the gap was to start selling access to the videos. Wal-Mart hasn't started any legal proceedings (it's probably trying to figure out if it has any case at all), but in quite the understatement, noted: "Needless to say, we did not pay Flagler Productions to tape internal meetings with this aftermarket in mind." Indeed.

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AP Examines Just How Ridiculous ISP Contracts Are

from the just-so-you-know dept

We recently learned that customers of Verizon's FiOS service don't get to see the full terms of service they're agreeing to until after it's been installed. But, of course, no one actually reads those kinds of things, because if you did, you'd probably never agree to it. To help you out, the Associated Press took some time to read through various ISP end user license agreements (EULAs) and discovered that ISPs put a ton of ridiculous stuff in the fine print, which is basically to give them many different options to kick you off if they suddenly decide you've become a problem. Or, in some cases, it's because lawyers want to protect the ISPs from ridiculous lawsuits, which leads them to put in clauses warning customers that the ISP (in this case, Verizon) doesn't own the internet, so that people know they can't sue Verizon for something that happens online. Verizon recently removed that clause, apparently realizing that it was a bit extraneous.

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Verizon Wireless's Outrage Over Alltel Ad A Bit Misplaced

from the bad-timing-is-all dept

Having just run into its own problems with false advertising, Verizon Wireless is now suing competitor Alltel, claiming false advertising in its commercials. The ads, such as the one here, make fun of Verizon Wireless and other mobile operators for forcing people to extend their contracts whenever they make changes, and claim that one of Alltel's advantage is the lack of such requirements.

Verizon Wireless doesn't just claim that this is wrong, its spokesperson states: "Whatever merit this comparison may have to other carriers, in the case of Verizon Wireless, the supposed 'advantage' is pure fiction." "Pure fiction" is a pretty strong claim, and it would be a lot stronger if it hadn't been absolutely true until just a couple months ago. Verizon Wireless did, in fact, force people to extend contracts, and only stopped the practice back in October when Sprint got sued over doing the same thing. And, of course, the Alltel ads began running well before Verizon was pressured into making this change. So, while it's technically accurate that these ads are false advertising now, it seems a bit excessive to describe them as "pure fiction," when they were absolutely true until just a few months ago.

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Sprint Realizes That People Hate Forced Contracts, Early Termination Fees

from the making-it-a-choice dept

It's become quite clear that people absolutely hate the forced two year contracts and early termination fees from mobile operators. It appears that some of the operators are finally getting the message. In discussing how it's going to offer its eventual WiMax offering, Sprint is now saying that there will be no mandatory contracts with early termination fees -- instead, it will be voluntary, based on a sliding price scale. In other words, if you're willing to take a longer contract, it'll be much cheaper. If you don't want a contract, that's fine, but you'll pay more per month. That seems perfectly reasonable and fits with typical pricing systems that lets the customer figure out how much the flexibility is worth to them. It's about time someone started offering this. Hopefully the other operators take the hint and start offering something similar for their regular phone service.

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