he U.S. International Trade Commission has decided to investigate Apple after two complaints from Ericsson that the iPhone maker violated its patents.
The companies have been fighting since the start of the year when a license agreement covering Apple’s use of Ericsson patents on LTE high-speed wireless technology expired. Apple complained that Ericsson had asked too much money for the patents during negotiations.
Apple sued Ericsson in January, arguing the patents are not essential for LTE technology and that the price was excessive. Ericsson counter-sued two days later, alleging Apple had infringed the patents and that the price was fair, reasonable and non-discriminatory—the requirement for patents used in industry standards.
Patent lawsuits can be complex and often take years to go through the U.S. courts, leaving lawyers to argue about products that have become obsolete.
So companies lately have been turning more often to the ITC, which acts faster and can ban products from being imported to the U.S. if they find there is a likelihood of infringement. An import ban has an immediate effect on sales and can pressure a defendant into settling.
One of Ericsson’s ITC suits involves “Apple iPhones, iPads, and other cellular-enabled products that use the 2G GSM and 4G LTE telecommunications standards.” The other covers “smartphones, tablet computers, digital media players, and smartwatches.”
The launch of an investigation by the ITC isn’t an indication of infringement.
As one of the largest and earliest crowdsourced projects on the Internet, OpenStreetMap is quietly mapping the planet—with help from 2 million contributors.
By Deb Smit, FastCo.Works
ISSUE NO. 4, SPRING 20150
Steve Coast has an audacious goal: to make the most comprehensive map of the planet. He also wants it to be free. Along with Wikipedia, OpenStreetMap was one of the largest and earliest crowdsourced projects on the Internet. Over the past decade, nearly 2 million volunteers around the world have contributed data from GPS devices, aerial imagery, and other sources to build detailed and regularly updated maps. The project is an exciting example of what can happen when telecom tech is shaped and driven by a common purpose: user utility.
In the spring of 2012, an electrical storm blew in from Lake Michigan, making landfall along its southwest shores and sweeping across the traditional homeland of the Pokagon Band of Potawatomi. High winds and the lightning-filled clouds they carried encountered little resistance across the band’s sparsely populated 4,700 acres, until they reached Matt Clay’s first big project as the new information technology director for the group: three towers with microwave radios.
“We were still testing the equipment when the lightning struck, blowing out one tower and our entire disaster recovery server room,” says Clay, now director of health services for the Pokagon Band of Potawatomi. “In one second, the entire tribal government was shut down and we realized our disaster recovery site was not operable. We worked all night and got things up and running the next day. It was a terrible experience; however, we learned a great deal about our infrastructure.”
Hear more about the storm that shut down the disaster recovery center.
The lightning strike galvanized Clay’s resolve to make the tribe’s technology department one of the best in the United States — a goal motivated by his commitment to the Pokagon community and its journey to self-governance. For Clay and his team, this meant introducing technology that tribal government employees could trust. To win that trust, the technology had to be reliable, efficient and easy to use.
“Because our infrastructure was so outdated and our systems didn’t perform well, people avoided using computers as an integral part of their work. The Education Department only used paper forms. Our Finance Department was reluctant to accept digital workflows,” Clay explains. “People called rather than emailed — no wonder, with only six megabytes of bandwidth, our email service and VOIP were not fast or reliable. I reasoned that if we get tribal government employees to work better with technology, the community could increase control over how we deliver services and govern our people.”
In the last three years, the tribal government has taken this concept to heart. Today, the Pokagon Band of Potawatomi is running on modern software and hardware that supports efficient government programs that touch almost every area of a citizen’s life, including health, education and Elders services.
Clay began by asking the Pokagon’s Microsoft account manager to recommend a partner to help the band rebuild its IT foundation. That request resulted in a five-year plan that Clay presented to the Tribal Council and a partnership with Planet Technologies.
“Matt and his team clearly understood that you have to get the core infrastructure in place before you can start building services for citizens,” says Andrew Kagan, chief technology officer at Planet Technologies. “They introduced virtualization and automated management in the data center before focusing on applications and cloud-based productivity tools. They’ve done great work.”
It is work that affects everyone. From economic development to improving healthcare, housing, education and Elders services, all facets of Pokagon community life have been influenced by the new technology. That’s one reason that Beth Edelberg loves her job: As enrollment coordinator for the Pokagon Band of Potawatomi, she uses Microsoft customer relationship management software to enroll approximately 12 new members a month and to ensure all 4,934 tribal citizens receive the services to which they are entitled.
“I think of myself as the main gatekeeper to the tribal records, and as a Pokagon, I love the genealogical aspect of my work,” she says.
This morning, she’s replaced an ID badge for a tribal citizen who recently moved. Instead of searching through paper files, she clicks on the person’s name, makes the edit and prints out a badge in less than three minutes. Next, she accesses data from the records and completes a report for the director of social services who asked for the names of all citizens who turned 55 in the last four months so they can sign up for Elders services. “Being able to share data quickly with other departments is really beneficial,” she says. “I used to copy documents and walk around the building. This saves time and paper.”
Closer collaboration between departments is also helping the Tribal Council make progress with pressing social challenges. Down the hall from Edelberg, Sam Morseau, director of the department of education, accesses the same database that his colleague uses. He’s examining data using dashboards and key performance indicators that are available on the community’s new collaboration platform. This makes his quarterly reports to the Tribal Council easier, while helping Morseau develop new services.
“We are addressing areas where we see gaps, such as early childhood education programs that introduce cultural traditions and services for Elders,” he says. “And technology is an integral part of these programs. Currently the Department of Language and Culture is creating an app that can be used on tablets for students to learn the Bodwéwadmimwen native Potawatomi language without being in the classroom. We created an online library and delivered Kindles to our Elders who live remotely. Now they request books and we download them to their e-readers.”
But it’s out in the field where educational associates make the most out of the new technology, such as cloud-based communication and collaboration services like Microsoft SharePoint and Lync, as well as the latest mobile devices. The Pokagon Band has a 10-county service area. Now, it doesn’t matter if an educational associate is six hours away from the office, they carry Surface Pro tablets into schools for independent education plan meetings and can take notes to share with colleagues on online team sites or access their educational resources from online storage wherever they are.
“Yesterday, a citizen came in asking for help in completing his GED certificate,” says Morseau. “Our continuing education associate was at a correctional facility helping a student prepare for the test, so I sent her a quick text using our cloud-based IM service and she responded with the answers immediately, so I was able to help her right there in the office. This level of collaboration on behalf of our citizens creates a sense of community and efficiency that shows the tribal government really cares.”
At about the same time Morseau was talking about raising graduation rates, Melody Pillow, a medical social worker for Pokagon Health Services, got into her car with her tablet and a mobile hotspot solution. Equipped with all the tools she needs to be productive anywhere, she’s anticipating spending most of her day on the road. First stop is the home of a citizen with disabilities who wants to apply for Medicaid.
“I’ve reduced the time it takes for an applicant to begin receiving Medicaid by half,” she says. “I use my tablet to access the application forms online and to take pictures of documents and upload them so the application is complete and ready for an eligibility check right then and there. It sure beats mailing in forms and waiting for weeks.”
On the way to visit a family with a son newly diagnosed with autism, she fields a call from a citizen asking for help in applying for an exemption for American Indians who purchase coverage through the Health Insurance Marketplace. When she reaches her destination, she takes a moment in the car to email the citizen a link with more information and copies of the correct form.
After greeting the parents and visiting with their son, Pillow uses her tablet as an educational tool to help the family understand their child’s diagnosis. “We access YouTube videos and educational links and then I help the parents apply for social services disability,” she says. “I can immediately process the application online because I have instant access to the boy’s medical records. Everything is HIPAA compliant and patient data is encrypted. I upload the documents and instead of waiting months with the paper-based process, the family will receive their son’s disability eligibility next month. It will be a great relief to the parents to know that their son can attend a specialized school for children with autism. ”
Back at home that evening, Pillow and her colleagues put the final touches on an informational brochure about the Affordable HealthCare Act. “We edited the document in real time using the web version of Microsoft Word so we didn’t have to be together in the same room,” she says. “I came back to work with the tribe because I grew up here in Dowagiac and I wanted to give back to the community. With the technology tools I have, it’s easy to help make a difference in people’s lives.”
Amazon started out as an online bookstore, but has since expanded into selling almost any physical goods you can think of. But the company believes a lot of the stuff people buy on Amazon are things they could actually use help assembling, installing, or learning to enjoy. “We have 85 million Amazon customers who have shopped for products this past year that often require a service afterwards,” said Peter Faricy, vice president for Amazon Marketplace. “Things like TVs, toilets, and sinks.” Today, the company is launching a new section in the US, Home Services, where customers can shop for professional help. It’s launching with 700 different services, from the ordinary to the esoteric, everything from installing a garbage disposal to renting you a goat herd that will graze away the unwanted vegetation on your property.
A big part of the sales pitch from Amazon is that they are doing the hard work of figuring out who you can trust. “We’re very excited to see if we can solve what today is a real pain point. It’s tough to quickly find someone who is qualified,” says Faricy. Amazon says it accepts an average of three out of every 100 service professionals in each metro area. It makes sure each business is licensed, insured, and passes a five-point background check, with a further six-point background check for each technician. You will never need to worry about hiring a sub-par goat grazer again.
The second half of Amazon’s promise is speed and transparency. The marketing materials claim it takes 60 seconds to buy a service, regardless of whether that is deck repair, house cleaning, or hedge trimming. “We really make something transparent for customers which is difficult today,” says Faricy. “We have standardized and prepackaged all of our service offerings. So you know exactly what is going to be done and how much it’s going to cost you, up front, no surprises.”
That sounds nice, although it seems likely that many of these services won’t be so easy to fit into just a few multiple choice questions. “They’re shoehorning local services into the same way they treat other products,” Thumbtack CEO Marco Zappacosta toldForbes.”But what about building a deck? Your deck is going to be different than my deck and your backyard is going to be different than my backyard.”
One thing that Home Services hopes to help customers avoid is the up-selling and haggling over price that can come with a lot of service work. Faricy says that all the billing will run through Amazon, and that the provider only gets paid after the finished job has been confirmed. During the beta test, there were reports of customers who had issues with a surprise charge on their bill, which Amazon eventually resolved after a lengthy back and forth. Amazon takes a cut of each service fee, and while they wouldn’t share exactly what the split is, language from the beta version of the website shows Amazon taking 20 percent on standard services, 15 percent on custom, and 10 percent on recurring.
Faricy says that the majority of the labor available on the market will be small, local providers, but Home Services is also integrating with startups like TaskRabbit as well as national chains like Pep Boys. Before today, Amazon was beta testing this offering in Seattle, New York, San Francisco, and Los Angeles. As of today, it will be available in 41 states, with the goal of providing strong coverage across the thirty biggest metro areas in the US. As for how big this business could be, Faricy points out that independent researchshows consumers typically spend four times as much on services as physical goods, meaning a major new revenue stream for Amazon if Home Services is a success.
“I PROPOSE, if and when found, to take him by his beastly neck, shake him till he froths, and pull him inside out and make him swallow himself.” It is not often that Silicon Valley’s denizens quote P.G. Wodehouse. But this is what Benedict Evans of Andreessen Horowitz, a venture-capital firm, expects the success of messaging services could do to both mobile and corporate software.
The most striking example so far of this process came on March 25th when Facebook announced at a conference in San Francisco that it has started to turn its Messenger service into a “platform” that can carry, and be integrated with, all manner of apps created by other software firms. So Facebook Messenger, which is itself an app for smartphones that run on Apple’s iOS and Google’s Android operating systems, will then be competing with those operating systems’ services for buying apps and downloads. In plain language, it could become the app that ate Apple’s app store.
The prospect may surprise those who thought messaging apps were just another way for teens to share this week’s tragic news about One Direction (a pop group, apparently). But their continuing explosive growth suggests that they will be a lasting phenomenon. According to Flurry, a market-research firm, the total number of users grew by more than 100% last year (which explains why old-style text messages seem to have peaked, see chart). Together the ten biggest messaging apps, which include KakaoTalk, Viber and WeChat, now boast more than 3 billion users. WhatsApp, the leader of the pack, alone has 700m—a big reason why Facebook last year paid $22 billion for the firm, despite continuing to develop its own Messenger app.
As the number of users has grown, specialised versions of messaging apps have emerged. What made Snapchat popular was the ability to exchange pictures that vanish after a few seconds (and often contain nudity). Secret, Whisper and Yik Yak let users remain anonymous (including bullies, unfortunately). Telegram stands out because of its strong encryption (making intelligence services unhappy). And FireChat works without cellular service: users’ phones communicate directly, which was a popular feature during recent protests in Hong Kong.
The time users are spending on messaging services has encouraged investors to value them highly, even though it is not yet clear how some of them will make money—much as happened with the rise of Twitter and with Facebook’s original service, its social network. WhatsApp handled more than seven trillion messages last year, about 1,000 per person on the planet. In Britain users spent as much time on WhatsApp as on Facebook’s social-networking app, according to Forrester, another research firm. In China subscribers to WeChat are estimated to use the app for about 1,100 minutes a month on average.
Although the numbers are smaller, something similar is happening in the business world. Slack, a messaging service that works on both smartphones and personal computers, seems to be succeeding where other attempts to create “corporate social networks” have failed, by replacing e-mail as the main communications channel inside firms. Just over a year old, Slack now has 500,000 users. It says they typically spend 135 minutes each working day on the service and altogether send 300m messages a month—which is why investors valued the firm at more than $1 billion when it raised capital in October.
Instead of inundating workers with individual messages, Slack divides the digital deluge into more manageable “channels”, each dedicated to a project or a team. Users can create and subscribe to such channels, exchange messages, post links and upload files—all of which are saved. Besides reducing the time everyone spends handling e-mail, the channels also help new employees to get up to speed quickly, instead of starting with an empty inbox.
Slack is not the only service of its kind. Other startups, including Quip and HipChat, offer similar features. Established firms are not far behind. Cisco, a maker of networking gear, recently launched a service called Spark, which looks and feels a bit like Slack, but lets users switch to voice and video communication if needed. IBM will soon follow suit with Verse, a web-based e-mail service which lets users exchange instant messages, but also employs the firm’s artificial-intelligence engine, Watson, to sort messages and even reply, to reduce the communication burden.
To please investors as much as they evidently please their users, messaging services, in their consumer and corporate incarnations, will eventually need to turn a profit. There are several ways in which they aim to do this. One is by selling add-ons, at a modest price but in large volumes: for instance, in Asia some messaging services sell “stickers”, little pictures that let users make their messages more expressive, for something like a dollar a dozen.
Another way to make a living is to take a cut of any e-commerce or money transfers that take place over their networks. WeChat users have long been able to order taxis and buy air tickets over the service, and as its popularity keeps growing, so will its ability to start charging businesses for sending customers their way. Snapchat already lets CNN, National Geographic and other news media publish articles on its service in return for a share of any advertising revenue. Line and Snapchat have recently added a payment service, as has Facebook Messenger.
Although most messaging services are free, WhatsApp charges a small subscription fee, of 99 cents a year, something the main social networks have shied away from. Once users, and all their friends and contacts, have grown accustomed to using a particular messaging service, it should become easier to get them to cough up a small annual payment. Multiplied by a huge user base, with only modest running costs to subtract, that could provide a handsome profit.
For corporate messaging services, there is even more potential for charging such recurring fees, since businesses are already used to paying annual licensing and maintenance charges for the e-mail systems and other software that these services aim to replace. Companies large and small have all sorts of online functions, from customer support to the tracking of software bugs, that bombard them with alerts and queries—so anything that helps them deal with these more efficiently is worth paying for. Slack’s customers, for $7 a month for each user, can pump unlimited numbers of external messages into channels, turning the service into a hub for all the flows of information that make a company tick.
Yet the juiciest prospects may lie in the example Facebook set this week—allowing messaging services to become platforms on top of which other firms can develop content and apps, with all sorts of means to generate revenues. WeChat, with its various add-ons, is already a platform of sorts. Facebook now intends to go even further and wants its Messenger to become the point of integration for other services and apps. Users will, for instance, be able to open another app simply by tapping a link embedded in the flow of messages.
Such moves to become the platform that supersedes other platforms are a natural evolution in software, says Venkatesh Rao of Ribbonfarm, a consulting firm. Similar battles have happened before, most notably in the “browser wars” of the mid-1990s, when Netscape’s Navigator tried to usurp a dominant platform, Microsoft’s Windows operating system. This time the incumbents are Android and iOS, and they will certainly fight back.
This is the story of “MPK 20″—Facebook’s new flagship building on its Menlo Park campus. The hacker warehouse, designed by renowned architect Frank Gehry, is a 430,000-square-foot LEED-certified building tucked into the terrain like a Bilbo Baggins hut, where it will house a little under a third of Facebook’s global team.
The design is one big room because it’s meant to reflect Facebook’s open culture. Teams can sit together in one spot rather than be divided by offices and cubicles. The building’s parking lot is hidden away underneath the structure, reducing the eyesore and the urban island heat effects. And a green roof is designed to act like a park on top of a building. It’s a massive 9 acres of grass, complete with 400 trees and a half-mile walking loop.
Last night, Facebook allowed some of Instagram’s elite photographers to enter the space for the first time. That’s why the photos you see here have a propensity for Hudson filters. Today, the new building opens for business, though we’re told it will take some time for employees to fully inhabit the space.
Bigger picture, Facebook has just fired the first shot in Silicon Valley’s latest war—the one about “who has the most architecturally impressive offices?” Apple is building a giant clickwheel designed by Norman Foster, while Google just shared plans for a modular canopy designed by Thomas Heatherwick and Bjarke Ingels Group. It’s worth noting that Facebook recently spent $400 million acquiring an additional 56 acresdirectly across the street from its new Gehry. What exactly that space is for, Facebook has yet to say.
Of course, none of these visions has yet solved the more practical problems facing the companies and the once-quaint Bay Area cities they’ve occupied. Traffic and housing shortages have become major issues across the region, and no green roof or expandable canopy—however enviable one may be—can solve that.
Today’s Windows 10 Desktop preview is the second Microsoft has made available to testers in March, and the fourth Windows 10 Desktop build the company has released as of October 1, 2014.
Like Windows 10 Desktop — which runs on PCs, laptops and tablets — Spartan is still not feature-complete at this point. The first Spartan preview does, however, include most of the functionality that Microsoft execs showed off on January 21 during an early demo of Spartan as part of a Windows 10 press event.
Specifically, the integration between Spartan and Cortana, Microsoft’s personal digital assistant, is in today’s Windows 10 release, as is the “Ask Cortana” user assistance technology. The ability to annotate Web pages with a pen or mouse is included in today’s Spartan build. Users can share annotated Web pages using this new “Web Note” technology and view the annotated pages in a variety of browsers.
The new Reading View, which allows users to view content with fewer distractions and/or save it for later, also is in Spartan in today’s new test build. (The ability to read saved content offline is not yet enabled in today’s test build.)
Today’s Windows 10 Desktop build includes the browsing rendering engine changes Microsoft officials outlined last week.
The Spartan browser, which will be pinned to the Windows 10 Desktop task bar, includes only the new “Edge” rendering engine. At the same time, IE 11, which also is bundled with the Windows 10 Desktop, includes only the “Trident” (MSHTML) rendering engine — not both the Edge and Trident ones — and is there for backwards compatibility. IE 11 is not pinned to the task bar in Windows 10 Desktop, but it is still meant to be readily discoverable and usable (and pinnable, if users want to do so).
There are a few bug fixes in today’s new Windows 10 Desktop build but no other noteworthy new features beyond Spartan.
Microsoft officials said over the weekend that the company is working on the next test release of Windows 10 Mobile, which is on track to support the majority of Lumia Windows Phones. Gabe Aul, the head of the Windows Insiders program, said on March 27 that Microsoft probably had at least one more week’s worth of engineering/testing work to do on what will be the second public test build of Windows 10 Mobile before releasing it to testers.
Nearly 18 months after the Silk Road online drug market was busted by law enforcement, the criminal charges rippling out from the case have now come full circle: back to two of the law enforcement agents involved in the investigation, one of whom is accused of being the Silk Road’s mole inside the Drug Enforcement Agency.
DEA special agent Carl Force and Secret Service special agent Shaun Bridges were arrested Monday and charged with wire fraud and money laundering. Bridges is accused of placing $800,000 of Silk Road bitcoins he obtained in a personal account on the Mt. Gox bitcoin exchange. But Bridges’ charges pale in comparison with the accusations against the DEA’s Force, who is additionally charged with theft of government property and conflict of interest in his investigation of the Silk Road. Force allegedly took hundreds of thousands of dollars worth of bitcoin payments from the Silk Road as part of his undercover investigation and transferred them to a personal account rather than confiscate them as government property. He’s also accused of secretly working for the bitcoin exchange firm CoinMKT, using his DEA powers to seize a customer’s funds from the exchange, and later using a subpoena to the payment firm Venmo to try to unlock his frozen funds there.
But there’s an even more surprising set of accusations against Force: That he acted as a paid informant for Silk Road’s recently convicted administrator Ross Ulbricht, allegedly selling information about the investigation back to Ulbricht under two different pseudonyms. Meanwhile, under a third pseudonym, Force is separately accused of trying to blackmail Ulbricht using other law enforcement data he believed might have been Ulbricht’s identity.
The Alleged Mole
Force, a 46-year-old member of Baltimore’s Silk Road task force, began working in 2012 as an undercover agent on the case, communicating directly with Ulbricht, who was allegedly using the pseudonym the Dread Pirate Roberts. In that role, Force even served as a fictitious criminal named “Nob” who helped arrange a murder of Silk Road employee Curtis Clark Green for Ulbricht. That murder-for-hire didn’t happen; The entire killing was staged by the Baltimore task force. But the attempted murder was allegedly paid for by Ulbricht to silence Green as a potential witness, and it represents the first in a series of six killings prosecutors have accused Ulbricht of commissioning.
But allegedly, those anonymous communications with Ulbricht led Force down an even stranger, more corrupt path. “Force then, without authority, developed additional online personas and engaged in a broad range of illegal activities calculated to bring him personal financial gain,” according to a press statement from the Department of Justice.
The criminal complaint against Force and Bridges includes a detailed affidavit written by IRS agent Tigran Gambaryan. In that account, Force is accused of using his Nob persona and possibly others to sell Ulbricht law enforcement information, telling Ulbricht that a corrupt law enforcement official named “Kevin” was feeding him info. A folder on Ulbricht’s laptop at the time of his arrest, Gambaryan points out, was labeled “LE counterintel” and includes data that appeared to have been based on real internal materials from the federal investigation into Ulbricht’s activities.
At first, Force seems to have given Ulbricht only fraudulent information, according to Gambaryan, and Force kept his superiors aware of the fake informant scheme. But as time passed, more and more of Force’s communications with Ulbricht were encrypted, Gambaryan writes in the affidavit, preventing Force’s superiors and later Gambaryan from determining exactly what Force told Ulbricht. Eventually, Gambaryan writes, Force also asked Ulbricht to send him 525 bitcoins in payment for information about law enforcement’s investigation of the Silk Road—-worth about $50,000 at the time— to a secret bitcoin address where he kept personal funds rather than the DEA’s confiscated money.
Ulbrich Lawyers Hinted at This
The revelation of an alleged Silk road informant inside the DEA follows repeated hints in Ulbricht’s trial of those leaks. Ulbricht’s lawyer Joshua Dratel made multiple references to the Silk Road’s boss paying for counter-intelligence information from law enforcement officials. (He argued, however, that the Silk Road boss wasn’t in fact Ulbricht, but was instead using that leaked information to plan his or her exit from the Silk Road and to frame Ulbricht.) The operators of the Silk Road “had been alerted the walls were closing in,” Dratel said in his opening statement at trial.
Ulbricht’s journal, taken from his seized laptop, also references two pseudonymous individuals named French Maid and Alpacino, whom Ulbricht seems to have used as sources for information about law enforcement activities. At one point Ulbricht writes that he paid French Maid $100,000 for the tip that Mt. Gox CEO Mark Karpeles, who also ran a web-hosting company used by the Silk Road at one point, gave Ulbricht’s name to the Department of Homeland Security.
In his affidavit, Gambaryan writes that he believes Force was in fact French Maid. He points to Force’s knowledge not only of the DHS interview with Mark Karpeles, but also of the versions of PGP both French Maid and Force used and to the financial trail from Ulbricht’s payment to French Maid that eventually ended up in Force’s bitcoin account. He also points out a message where French Maid ends a message “Carl,” perhaps by accident. (Force allegedly “covered” for that error by explaining that French Maid also went by the name “Carla Sophia.”)
From Mole to Blackmailer
From there, the story gets stranger still: Under yet another pseudonym, “Death From Above,” Force is accused of telling Ulbricht he was a Green Beret and a friend of Curtis Green, whose murder Ulbricht allegedly believed he had paid for. “I know that you had something to do with [Green’s] disappearance and death. Just wanted to let you know that I’m coming for you,” Force allegedly wrote as Death From Above. “You are a dead man. Don’t think you can elude me.”
Death From Above later wrote to the Dread Pirate Roberts again and threatened to reveal his real name if Ulbricht didn’t pay him $250,000. According to Gambaryan, a screen-recording program on Force’s DEA computer captured video of him writing as Death From Above.
However, Gambaryan writes that Force was actually blackmailing Ulbricht by threatening to reveal the wrong suspect’s identity. Trying to show the seriousness of his threat, he sent Ulbricht the identifying details of an earlier suspect he believed to be the Dread Pirate Roberts, rather than Ulbricht himself. (That earlier suspect isn’t named in the affidavit.) Writing in his journal, Ulbricht dismissed the threat as “bogus.”
The Alleged Thief
Bridges, for his part, is accused of a more traditional form of corruption: Quietly stealing money by exploiting a suspect’s arrest. Gambaryan describes how Bridges participated in the Baltimore Task Force arrest and questioning of Silk Road employee Curtis Green in Utah, and then used Green’s administrator account on the Silk Road to pull off a “series of sizable thefts” from Silk Road vendors. “The thefts were accomplished through a series of vendor password and pin resets, something that could be accomplished with the administrator access that [Green] had given to the Baltimore Task Force.” Bridges then allegedly moved that money through a series of accounts and eventually into the Fidelity account of a corporation he created as a money laundering vehicle.
What This Mean for Ulbricht
It’s not yet clear whether or how all of the alleged corruption in the Baltimore Silk Road investigation might affect Ross Ulbricht’s own legal case. Ulbricht still faces murder-for-hire charges in Maryland as a result of that investigation, a case that could be tainted by the alleged, epic misconduct of these two investigators.
This afternoon, Ulbricht’s lawyer had this to say about the two arrests:
Major Silk Road govt corruption scandal revelation today that we’ve had to sit on for four months and were not permitted to use at trial.
— Joshua Dratel (@JDratel) March 30, 2015
But Ulbricht was already convicted in February of seven felonies including conspiracy to sell drugs and launder money, as well as a “continuing criminal enterprise” charge often known as a kingpin statute. Based on the evidence in Ulbricht’s trial, that case seems to have largely been conducted by the New York division of the FBI and the Chicago Department of Homeland Security.
Given those two separate investigations, Ulbricht’s conviction or upcoming sentencing may not be affected by the charges against Force and Bridges. Instead, those charges merely add two more names to the long list of criminal suspects who allegedly gave in to the temptation of the dark web’s dirty money.
Read the full criminal complaint against both Force and Bridges below.
At a press conference in New York City this afternoon, Jay Z and a huge group of musical stars took the stage to officially relaunch TIDAL, the streaming music service he recently acquired as part of a $56 million deal. The rallying cry was a service that would “turn the tide” and restore the value to music by launching a service owned by artists. Coldplay, Rihanna, Daft Punk, Alicia Keys, Calvin Harris, Jack White, Madonna, Usher, Arcade Fire, Deadmau5, and Beyoncé joined Jay Z in the owners circle. He is reportedly offering millions of dollars and an equity stake to artists who join him.
urn the tide against what exactly? The unspoken enemies are services like Spotify that offer streaming music for free, supported by advertising. Many artists have accused it of paying only a pittance for the rights to stream their music. TIDAL, by contrast, has promised to pay double the standard streaming royalties, a promise it confirmed with The Verge this afternoon. It’s framing itself as a sort of United Artists for the streaming era, a business built in opposition to tech companies that traffic in ads. That sounds like a huge difference, but of course there are some caveats.
Before today, that premium tier was the only one TIDAL offered. This morning it introduced a $9.99 service with standard definition audio, which will pay just the standard royalty rates. The double royalties only get paid on streams for customers who sign up for the $19.99 plan, which promises higher quality audio files, but is twice the cost of a typical Spotify subscription. In other words TIDAL is bound by the same economics as its competitors, but it choose to move up the food chain, away from the free ad-supported tier that pay the least per stream.
The larger argument is over what will be a better business in the long run. Spotify has always argued that offering a free tier helps to build the biggest audience, and that over time more of those people will switch to the paid version. It has gotten to more than 60 million customers this way, 15 million of whom pay. Tidal, by contrast, has only around 17,000 paying subscribers.
It’s easy to understand artists’ frustration and skepticism. The US music industry generates roughly half the annual revenue it did back in 1999. And while there are tens of millions of people listening to Spotify, the revenue from ad supported streaming is smaller than that generated by sales of vinyl records.
The simple truth remains, however, that streaming music is the industry’s best bet for growth. Artists seem to grasp that, but want to make sure that it’s paid streaming, where the economics are better for them. That business now generates more money than CDs.
The battle over how best to build the music business — and best for whom — is going to get very heated over the next year. Taylor Swift’s departure from Spotify was a big moment, and TIDAL’s move to capture exclusives and better reward artists is another. And behind most of these artists are record labels who often negotiate the deals with streaming services and write the checks for the artists only after taking their cut. Where those power players fit into this new “artist owned” service isn’t clear, but they often have control over where an artist’s music can appear. In an interview with Billboard, Jay Z acknowledged that many label executives were suspicious of what he was attempting to do with TIDAL.
The elephant in the room is Apple, which has plans to relaunch both its Beats streaming service and to integrate it with the iTunes music store. Apple reportedly also plans to eliminate the option of a free tier. If there is any company on earth that can afford to pay a premium to woo artists and win exclusives, it would be the world’s richest and most profitable corporation.