This story first appeared in USA Today.
INDIANAPOLIS -- The legal fight between the estate of James Dean and the online social network Twitter can't be told in 140 characters.
It's much more complicated than that.
The roots of the legal saga date to 2009, when a fan of the Hoosier-born actor set up the Twitter account @JamesDean. His goal was to share a love for the Hollywood icon, who starred in the movies "Rebel Without a Cause," "Giant" and "East of Eden."
Now, Twitter and the anonymous owner of @JamesDean are targets of a lawsuit alleging unauthorized use of Dean's name and image. Both are trademarked by James Dean Inc., which represents Dean heirs who consider his name and likeness a valuable commodity.
The lawsuit highlights the lag that often occurs between the law and the dynamic world of social media, said Gerard N. Magliocca, a professor at the Indiana University Robert H. McKinney School of Law in Indianapolis.
Not all potential legal issues, he explained, can be predicted or addressed by the law before they come to a head outside a legislative chamber or courtroom.
"This isa first-of-its-kind case, as far as I know," he said.
Magliocca said the federal Anti-Cybersquatting Piracy Act covers the unauthorized use of celebrity names when it comes to Web domains but not Twitter user names, called "handles." As part of the lawsuit, James Dean Inc. wants Twitter to hand over to it the @JamesDean account.
"As social media becomes more important as a source of advertising," Magliocca said, "people will be more concerned about who owns what."
The lawsuit initially was filed in Hamilton Superior Court. But attorneys for Twitter, whose more than 241 million users flood cyberspace with 500 million tweets a day, want it moved to the U.S. District Court for the Southern District of Indiana. The request is being sought because of the potential amount of damages at stake and federal issues such as trademark infringement.
The transfer motion was submitted Friday, one day before what would have been Dean's 83rd birthday.
To fans, Dean is frozen in time. He will forever be the young, rebellious movie star who died at the age of 24 in a 1955 car crash. And that powerful image remains a highly valuable commodity nearly 60 years later, vigorously protected by Carmel-based celebrity licensing agency CMG Worldwide.
"CMG's clients have valuable intellectual property vested in their name, image and likeness," Mark Roesler, CMG's chairman and CEO, said in a statement to The Indianapolis Star. "For these reasons, CMG is trying to recover the James Dean Twitter account which directly bears our client's name, which the public would look to for authorized and verified statements and representations by the people who most care about our client, namely, our client's family."
Roesler said CMG clients, such as James Dean Inc., have worked for decades to build and protect their brands. Despite those efforts, he said, Twitter is letting individuals use valuable copyrighted images and other legally protected intellectual property without the owners' permission.
Attorneys for Twitter and James Dean Inc. did not return calls from The Star.
In email exchanges with The Star, the man behind the @JamesDean account declined to give his name but said his account "is strictly a fan account, as can be seen from the tweets."
The account bio features a picture of a brooding Dean in a white T-shirt and red jacket. It says: The King of Cool, New York City, Hollywood.
Past posts have included comments such as:
"Seeing James Dean changed my life the same way hearing the Beatles did. If anyone could legitimately say, 'I'm you,' it was James Dean."
"James Dean's motorcycle goes on public display Nov. 23 as part of the Indiana State Museum's 'Eternal James Dean' exhibit."
"The lasting fascination with James Dean stems from the unusual potency of his work, as well as the way he lived his life."
The lawsuit also names four other "John Doe" defendants who have Twitter accounts using variations on Dean's name and his image, but the main focus is on @JamesDean because it uses the name CMG wants to start its own official Dean account.
The man behind the account said he wanted to remain anonymous because CMG and James Dean Inc. do not, to his knowledge, have his name. He is identified only as one of five "John Does" named in the lawsuit.
"I have never tried in any way to profit from it," he said. "I started the account because I am a longtime James Dean fan and have a connection with him."
Dean grew up in Fairmount, Ind., about 60 miles northeast of Indianapolis. He graduated from Fairmount High in 1949 before leaving for California and then New York to pursue his acting career.
The lawsuit filed Dec. 31 in Hamilton Superior Court notes that James Dean Inc., an Indiana -based corporation set up by his family, is the exclusive owner of the name, likeness, voice, rights of publicity and endorsement, worldwide trademarks and all other intellectual property "of the late internationally recognized movie star, James Dean."
Documents filed with the lawsuit say CMG Worldwide, which represents other celebrity images such as Marilyn Monroe, Jackie Robinson and Babe Ruth, has attempted "on numerous occasions since Oct. 11, 2012" to make Twitter take action to block and identify owners of the unauthorized accounts. Those accounts could give the impression, the lawsuit said, that the users have permission from James Dean Inc. (JDI) or CMG and "result in immeasurable and irreparable damage to JDI."
Copies of email exchanges between CMG and Twitter officials, which are included with the lawsuit, show CMG and JDI contend the accounts also violate Twitter's policy for fan accounts. The lawsuit says such accounts should be clearly designated as a "fan page" or in some other way make clear that it is not officially associated with Dean or JDI.
In an undated response, a Twitter representative told CMG that officials "researched the (@JamesDean) account and determined that it is not in violation of Twitter's Trademark Policy. The account is not being used in a way that is misleading or confusing with regard to its brand, location or business affiliation."
Twitter officials added they do not have a "username reservation policy." The social networking site, which went public in November and is now valued at more than $800 million, lets users exchange short, 140-character messages called tweets.
Maglicco, the IU law professor, said the lawsuit plows into virgin legal ground. He added a First Amendment argument also could be raised by the operator.
"It may come down," he said, "to what is the goal of the person with that account."
If the person is not using it for commercial purposes, he added, the common law "right of publicity" that James Dean Inc. asserts in the lawsuit may not apply.
"Here's the problem," Maglicco said. "We really don't know who owns it or what their motivation is."
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Tuesday, February 11, 2014
Monday, February 10, 2014
REPORTS: YAHOO TO PARTNER WITH YELP ON SEARCH
This story first appeared in USA Today.
Yahoo is partnering with online review site Yelp to enhance its search results and attract users, according to several reports published over the weekend.
Citing an unnamed person who attended a Yahoo employee meeting Friday, The Wall Street Journal said CEO Marissa Mayer revealed plans to incorporate Yelp's local business listings, user-generated reviews and photos into Yahoo's search engine results. The new feature will be made available in the coming weeks, according to the Journal story.
The new partnership is part of Yahoo's initiative to distinguish itself from market leaders Microsoft Bing and Google. In December, Yahoo's share in the search market was 10.8%, compared to Micorsoft's 18.2% and Google's 67.3%, according to ComScore.
This year, Yahoo's shares have declined 7.9%, but San Francisco-based Yelp has climbed almost 30%.
The specific terms of the Yahoo-Yelp deal couldn't be determined. Bloomberg, MarketWatch and The Wall Street Journal reported that both Sara Gorman, a spokeswoman for Yahoo, and Yelp spokesman Vince Sollitto declined to comment.
However, Yelp has similar existing content partnerships with Microsoft and Apple.
Yahoo receives its primary search technology through a multi-year pact with Microsoft, under which Microsoft gets 12% of Yahoo's search ad-generated revenue. The Journal cited executives close to Mayer, who have described the deal as a disappointment.
In February 2013, Mayer promoted Yahoo veteran Laurie Mann to run Yahoo Search.
When she led search at Google, Mayer was involved in the company's attempt to acquire Yelp for at least $500 million in 2009.
Yahoo is partnering with online review site Yelp to enhance its search results and attract users, according to several reports published over the weekend.
Citing an unnamed person who attended a Yahoo employee meeting Friday, The Wall Street Journal said CEO Marissa Mayer revealed plans to incorporate Yelp's local business listings, user-generated reviews and photos into Yahoo's search engine results. The new feature will be made available in the coming weeks, according to the Journal story.
The new partnership is part of Yahoo's initiative to distinguish itself from market leaders Microsoft Bing and Google. In December, Yahoo's share in the search market was 10.8%, compared to Micorsoft's 18.2% and Google's 67.3%, according to ComScore.
This year, Yahoo's shares have declined 7.9%, but San Francisco-based Yelp has climbed almost 30%.
The specific terms of the Yahoo-Yelp deal couldn't be determined. Bloomberg, MarketWatch and The Wall Street Journal reported that both Sara Gorman, a spokeswoman for Yahoo, and Yelp spokesman Vince Sollitto declined to comment.
However, Yelp has similar existing content partnerships with Microsoft and Apple.
Yahoo receives its primary search technology through a multi-year pact with Microsoft, under which Microsoft gets 12% of Yahoo's search ad-generated revenue. The Journal cited executives close to Mayer, who have described the deal as a disappointment.
In February 2013, Mayer promoted Yahoo veteran Laurie Mann to run Yahoo Search.
When she led search at Google, Mayer was involved in the company's attempt to acquire Yelp for at least $500 million in 2009.
MAMAS, DON'T LET YOUR BABIES BE BORN AT AOL
This story first appeared in Bloomberg Businessweek.
AOL Chief Executive Tim Armstrong ruffled more than a few of his employees’ feathers when he disclosed this week that two AOL workers’ “distressed” babies had whacked the company with $2 million in medical bills.
The costly children were cited—along with more than $7 million in costs from the Affordable Care Act—as the reason AOL changed its 401(k) account match to an annual lump sum payment. Workers who aren’t on the payroll at year’s end will forfeit AOL’s 3 percent matching contribution to the accounts. IBM made a similar change in 2012. If you plan to quit, management thinking goes, forget about collecting our share of your retirement savings.
Many employees didn’t react well to either bit of news, according to news reports. First, there’s the financial blow to workers, who will lose 401(k) funds if they leave AOL, as well as miss the opportunity to have the company’s match bolster their financial returns over a full year. There’s also the shock that accompanies hearing your boss tag a colleague’s difficult pregnancy and her newborn child as the reason your retirement plan was cut.
Why did two babies with special medical needs cost AOL $2 million? Most large employers are self-insured for their workers’ health coverage, given the savings such plans can yield over traditional group insurance. Self-funding means that an employer pays for health care rather than buying an insurance policy for their workers. Such plans now cover 60 percent of private-sector workers with health insurance—an estimated 100 million Americans. Financially, self-funding is practically a no-brainer if you have 1,000 or more employees, given the dramatic surge in U.S. health-care costs. The “law of large numbers” takes over and big employers’ annual medical expenses can be projected with relative precision, says Jon Trevisan, a senior vice president at Willis North America, an insurance brokerage that consults with employers on health coverage.
It’s not clear what kind of health plan AOL has; but with 4,000 employees, the company is likely self-insured. The company declined to comment Friday on that subject or the CEO’s remarks. Armstrong declined an interview request, an AOL spokesman said.
Given the astronomic costs that a heart attack, premature birth, or cancer can inflict, some self-insured companies purchase what are called stop-loss products to limit their financial exposure. Those limits can kick in for an individual employee’s claims beyond a certain level, or for an entire employee group in aggregate. Once a company has a certain number of employees, however, stop-loss insurance products may not make financial sense given the general predictability of workers’ typical annual claims, Trevisan says. But whether their worker pool warrants stop-loss coverage is a matter of executives’ risk tolerance as much as actuarial and cost-benefit analyses. Some companies may be comfortable forgoing stop-loss coverage for 3,000 workers, while others with 10,000 or more may decide to buy it. “It depends on the risk tolerance that a company has,” Trevisan says. “At the end of the day, it’s about how comfortable the employer is in assuming risks.”
AOL, the parent of the Huffington Post news site, is a media and Internet company with a workforce that may be younger—and healthier—than most employers’. If so, its annual claims could be even more predictable than a more age-diverse employee pool. That could argue against buying pricey insurance products to limit catastrophic claims—but it could at times lead to a $1 million baby bill.
The costly children were cited—along with more than $7 million in costs from the Affordable Care Act—as the reason AOL changed its 401(k) account match to an annual lump sum payment. Workers who aren’t on the payroll at year’s end will forfeit AOL’s 3 percent matching contribution to the accounts. IBM made a similar change in 2012. If you plan to quit, management thinking goes, forget about collecting our share of your retirement savings.
Many employees didn’t react well to either bit of news, according to news reports. First, there’s the financial blow to workers, who will lose 401(k) funds if they leave AOL, as well as miss the opportunity to have the company’s match bolster their financial returns over a full year. There’s also the shock that accompanies hearing your boss tag a colleague’s difficult pregnancy and her newborn child as the reason your retirement plan was cut.
Why did two babies with special medical needs cost AOL $2 million? Most large employers are self-insured for their workers’ health coverage, given the savings such plans can yield over traditional group insurance. Self-funding means that an employer pays for health care rather than buying an insurance policy for their workers. Such plans now cover 60 percent of private-sector workers with health insurance—an estimated 100 million Americans. Financially, self-funding is practically a no-brainer if you have 1,000 or more employees, given the dramatic surge in U.S. health-care costs. The “law of large numbers” takes over and big employers’ annual medical expenses can be projected with relative precision, says Jon Trevisan, a senior vice president at Willis North America, an insurance brokerage that consults with employers on health coverage.
It’s not clear what kind of health plan AOL has; but with 4,000 employees, the company is likely self-insured. The company declined to comment Friday on that subject or the CEO’s remarks. Armstrong declined an interview request, an AOL spokesman said.
Given the astronomic costs that a heart attack, premature birth, or cancer can inflict, some self-insured companies purchase what are called stop-loss products to limit their financial exposure. Those limits can kick in for an individual employee’s claims beyond a certain level, or for an entire employee group in aggregate. Once a company has a certain number of employees, however, stop-loss insurance products may not make financial sense given the general predictability of workers’ typical annual claims, Trevisan says. But whether their worker pool warrants stop-loss coverage is a matter of executives’ risk tolerance as much as actuarial and cost-benefit analyses. Some companies may be comfortable forgoing stop-loss coverage for 3,000 workers, while others with 10,000 or more may decide to buy it. “It depends on the risk tolerance that a company has,” Trevisan says. “At the end of the day, it’s about how comfortable the employer is in assuming risks.”
AOL, the parent of the Huffington Post news site, is a media and Internet company with a workforce that may be younger—and healthier—than most employers’. If so, its annual claims could be even more predictable than a more age-diverse employee pool. That could argue against buying pricey insurance products to limit catastrophic claims—but it could at times lead to a $1 million baby bill.
Friday, January 31, 2014
Google Sales Top Estimates as Retail Ads Bolster Results
Story first appeared in Bloomberg News.
Google Sales Top Estimates as Retail Ads Bolster Results
Google Inc. (GOOG) posted fourth-quarter sales that topped estimates as retailers spent more on advertising during the holidays, making up for lower ad prices.
Revenue, excluding sales passed on to partners, rose 11 percent to $13.6 billion, while profit excluding certain items was $12.01 a share, the company said in January 2014.
Analysts on average had projected sales of $13.4 billion and profit of $12.25, according to estimates compiled by Bloomberg.
Chief Executive Officer Larry Page is fine-tuning Google’s mobile strategy. It’s exiting smartphone manufacturing and selling its Motorola handset unit -- which had an operating loss of $384 million -- to Lenovo Group Ltd. (992) for $2.91 billion. While ads on phones make less money than on desktop computers, Google was able to generate income from retailers targeting online shoppers, who boosted e-commerce sales 15 percent to $61.8 billion during the holiday period.
“The holiday shopping season online was strong for Google.
Google climbed 4.1 percent in extended U.S. trading. The shares advanced 2.6 percent to $1,135.39 to close out the month of January 2014.
Google stock climbed 58 percent in 2013, compared with a 30 percent gain in the Standard & Poor’s 500 Index. Google shares rose 3.4 percent to the equivalent of $1,181.68 at 9:31 a.m. in Frankfurt.
Operating expenses, excluding the cost of revenues, rose 14 percent to $5.5 billion. Net income rose 17 percent to $3.38 billion.
Motorola Deal
The Mountain View, California-based search provider had bought the Motorola mobile unit for $12.4 billion in 2012, pushing it into direct competition with hardware partners such as Samsung Electronics Co. (005930) that use Google’s Android smartphone software.
Motorola again weighed on results during the fourth quarter. The unit’s revenue fell 18 percent to $1.24 billion.
While the search provider may be selling Motorola, it’s continuing to invest. Google earlier this month said it was spending $3.2 billion in cash to buy Nest Labs Inc., the digital thermostat maker led by a former Apple Inc. executive.
Google, which had $58.7 billion in cash at the end of last quarter, said it’s buying artificial-intelligence company DeepMind Technologies Ltd.
Google’s “other” revenue, which includes the mobile Play store and hardware such as Chromecast, rose 99 percent from the year ago-period to $1.65 billion.
Advertising Prices
Within Google’s core business, prices for ads fell 11 percent in the fourth quarter, compared with a decline of 8 percent in the previous period, At the same time, the volume of clicks on ads jumped 31 percent compared with a gain of 26 percent in the earlier period.
Cost per click pricing in AdWords is declining, so Google needs to work on mobile advertising to compensate according to many Stock analysts.
Google has been upgrading its sales features. In 2013, Google introduced an advertising service called enhanced campaigns, encouraging marketers to funnel more of their spending to wireless devices. The company also has been pushing retail customers to spend more on product listing ads, which enable them to use more information in promotions, including pictures.
Google is still benefiting from its leadership in online advertising and search. The company is expected to take 41 percent of the U.S. digital-ad market this year with the closest No. 2, Facebook Inc., grabbing just 8.2 percent, according to EMarketer Inc.
“There’s also great momentum in Product Listing Ads,” Nikesh Arora, Google’s chief business officer, said during a call with analysts. “We continue to improve the experience for shoppers and retailers.”
Monday, January 20, 2014
GOOGLE TO MAKE SMART CONTACT LENSES
This story first appeared in CNN Money.
Google is developing smart contact lenses that measure the glucose levels in diabetics' tears.
If successful, Google's newest venture could help to eliminate one of the most painful and intrusive daily routines of diabetics.
People with diabetes have difficulty controlling the level of sugar in their blood stream, so they need to monitor their glucose levels -- typically by stabbing themselves with small pin pricks, swabbing their blood onto test strips and feeding them into an electronic reader.
Google's smart contacts could potentially make blood sugar monitoring far less invasive.
The prototype contacts are outfitted with tiny wireless chips and glucose sensors, sandwiched between two lenses. They are able to measure blood sugar levels once per second, and Google is working on putting LED lights inside the lenses that would flash when those levels are too low or high.
The electronics in the lens are so small that they appear to be specks of glitter, Google said. The wireless antenna is thinner than a human hair.
They're still in the testing phase and not yet ready for prime time. Google (GOOG, Fortune 500) has run clinical research studies, and the company is in discussions with the U.S. Food and Drug Administration.
Diabetes is a chronic problem, affecting about one in 19 people across the globe and one in 12 in the United States.
The smart contacts are being developed in Google's famous Google X labs, a breeding ground for projects that could solve some of the world's biggest problems. Google X labs is also working on driverless cars and balloons that transmit Wi-Fi signals to remote areas.
Google's contact lens project isn't the first attempt at building the technology. For many years, scientists have been investigating whether other body fluids, including tears, could be used to help people measure their glucose levels. In 2011, Microsoft (MSFT, Fortune 500) partnered with the University of Washington to build contact lenses with small radios and glucose sensors.
Google is developing smart contact lenses that measure the glucose levels in diabetics' tears.
If successful, Google's newest venture could help to eliminate one of the most painful and intrusive daily routines of diabetics.
People with diabetes have difficulty controlling the level of sugar in their blood stream, so they need to monitor their glucose levels -- typically by stabbing themselves with small pin pricks, swabbing their blood onto test strips and feeding them into an electronic reader.
Google's smart contacts could potentially make blood sugar monitoring far less invasive.
The prototype contacts are outfitted with tiny wireless chips and glucose sensors, sandwiched between two lenses. They are able to measure blood sugar levels once per second, and Google is working on putting LED lights inside the lenses that would flash when those levels are too low or high.
The electronics in the lens are so small that they appear to be specks of glitter, Google said. The wireless antenna is thinner than a human hair.
They're still in the testing phase and not yet ready for prime time. Google (GOOG, Fortune 500) has run clinical research studies, and the company is in discussions with the U.S. Food and Drug Administration.
Diabetes is a chronic problem, affecting about one in 19 people across the globe and one in 12 in the United States.
The smart contacts are being developed in Google's famous Google X labs, a breeding ground for projects that could solve some of the world's biggest problems. Google X labs is also working on driverless cars and balloons that transmit Wi-Fi signals to remote areas.
Google's contact lens project isn't the first attempt at building the technology. For many years, scientists have been investigating whether other body fluids, including tears, could be used to help people measure their glucose levels. In 2011, Microsoft (MSFT, Fortune 500) partnered with the University of Washington to build contact lenses with small radios and glucose sensors.
Friday, January 17, 2014
MORE FIGHTS COULD FOLLOW DRIVER'S GOOGLE GLASS WIN
This story first appeared in The Detroit News
San Diego -- A California woman believed to be the first person cited for wearing Google Glass while driving won her case, but legal experts say it marks only the beginning of what they predict will be numerous court battles fought in the gap between today's laws and fast-arriving technology.
Cecilia Abadie's was found not guilty Thursday after being cited for wearing the computer-in-eyeglass device while driving because San Diego County Traffic Court Commissioner John Blair said there was no proof beyond a reasonable doubt that the device was operating while she was driving.
But Blair stopped short of ruling that it is legal to drive while Google Glass is activated.
Abadie was cited under a code banning operation of a video or TV screen at the front of a vehicle that is moving. Blair said the code's language is broad enough that it could also apply to Google Glass if there were evidence the device was activated while the motorist was driving.
But Abadie, who wore the device around her neck during her trial, insisted afterward that the screen is above her line of vision, its functions can be activated with her voice or a wink, and it is not a distraction even when activated.
"I'm recording a video of all this," she told reporters outside the courthouse as she answered questions without skipping a beat. "Do you feel like I'm not paying attention to you?"
Vivek Wadhwa, a fellow at Stanford Law School, said the lower court ruling does not set a legal precedent but marks the start of what he expects will be a number of similar challenges.
"The fun is just starting," he said.
From driverless cars to wearable devices that can enhance human functions, Wadhwa said, there are a host of legal questions to be answered. For example, when a Google-operated car is on the road and hits someone, who is responsible -- the passenger, car manufacturer or software developer?
Abadie, a software developer, is among thousands of "explorers" who have been selected to try out Google Glass before the technology becomes widely available to the public later this year.
The device in a kind of glass-wear frame features a thumbnail-size transparent display above the right eye.
Her attorney, William Concidine, said anything can be a distraction, such as when drivers turn the radio dials to change stations. He wants lawmakers to rule that Google Glass can be used safely while someone drives, so codes like the one used to cite his client are not left up to the interpretation of individual judges.
"I believe there is an information gap," he said.
The lightweight frames are equipped with a hidden camera and tiny display that responds to voice commands. The technology can be used to do things such as check email, learn background about something the wearer is looking at, or to get driving directions.
Legislators in at least three states -- Delaware, New Jersey and West Virginia -- have introduced bills that would ban driving with Google Glass.
After the ruling, Google said it has warned early Glass adopters to exercise caution.
"Glass is built to connect you more with the world around you, not distract you from it," Google said in a statement. "Explorers should always use Glass responsibly and put their safety and the safety of others first."
San Diego -- A California woman believed to be the first person cited for wearing Google Glass while driving won her case, but legal experts say it marks only the beginning of what they predict will be numerous court battles fought in the gap between today's laws and fast-arriving technology.
Cecilia Abadie's was found not guilty Thursday after being cited for wearing the computer-in-eyeglass device while driving because San Diego County Traffic Court Commissioner John Blair said there was no proof beyond a reasonable doubt that the device was operating while she was driving.
But Blair stopped short of ruling that it is legal to drive while Google Glass is activated.
Abadie was cited under a code banning operation of a video or TV screen at the front of a vehicle that is moving. Blair said the code's language is broad enough that it could also apply to Google Glass if there were evidence the device was activated while the motorist was driving.
But Abadie, who wore the device around her neck during her trial, insisted afterward that the screen is above her line of vision, its functions can be activated with her voice or a wink, and it is not a distraction even when activated.
"I'm recording a video of all this," she told reporters outside the courthouse as she answered questions without skipping a beat. "Do you feel like I'm not paying attention to you?"
Vivek Wadhwa, a fellow at Stanford Law School, said the lower court ruling does not set a legal precedent but marks the start of what he expects will be a number of similar challenges.
"The fun is just starting," he said.
From driverless cars to wearable devices that can enhance human functions, Wadhwa said, there are a host of legal questions to be answered. For example, when a Google-operated car is on the road and hits someone, who is responsible -- the passenger, car manufacturer or software developer?
Abadie, a software developer, is among thousands of "explorers" who have been selected to try out Google Glass before the technology becomes widely available to the public later this year.
The device in a kind of glass-wear frame features a thumbnail-size transparent display above the right eye.
Her attorney, William Concidine, said anything can be a distraction, such as when drivers turn the radio dials to change stations. He wants lawmakers to rule that Google Glass can be used safely while someone drives, so codes like the one used to cite his client are not left up to the interpretation of individual judges.
"I believe there is an information gap," he said.
The lightweight frames are equipped with a hidden camera and tiny display that responds to voice commands. The technology can be used to do things such as check email, learn background about something the wearer is looking at, or to get driving directions.
Legislators in at least three states -- Delaware, New Jersey and West Virginia -- have introduced bills that would ban driving with Google Glass.
After the ruling, Google said it has warned early Glass adopters to exercise caution.
"Glass is built to connect you more with the world around you, not distract you from it," Google said in a statement. "Explorers should always use Glass responsibly and put their safety and the safety of others first."
Monday, January 13, 2014
ACCENTURE WINS U.S. CONTRACT FOR OBAMACARE ENROLLMENT WEBSITE
Original Article by: Bloomberg News
Accenture Plc (ACN), the second-biggest technology-consulting company, will take over construction of healthcare.gov, the Obamacare enrollment website that debuted with crippling computer problems in October.
The U.S. government has awarded Accenture’s Federal Services unit a one-year contract, with an initial payment of $45 million, the Dublin-based company said in a statement yesterday. Accenture will succeed Montreal-based CGI Group Inc. (GIB/A), which drew criticism for the website’s early stumbles.
While the site has improved, healthcare.gov’s first two months were marred by delays, error messages and garbled data that bogged down insurance sign-ups in the 36 U.S. states served by the federal system. Accenture led construction of California’s better-performing state exchange.
“Accenture will bring deep healthcare industry insight as well as proven experience building large-scale, public-facing websites to continue improving healthcare.gov,” David Moskovitz, chief executive officer at Accenture Federal Services, said in the statement.
The government-run insurance exchanges offer health plans and access to subsidies created by the 2010 Patient Protection and Affordable Care Act. CGI’s role in managing healthcare.gov had been reduced following the botched rollout, with a unit of UnitedHealth Group Inc. (UNH) brought in to oversee emergency repairs. Most Americans have until March 31 to select a health plan for 2014 coverage.
Contract Value
Accenture rose less than 1 percent to $83.20 in New York trading on Jan. 10, the day The Washington Post reported the company would replace CGI. Its shares have gained 19 percent for the 12 months through last week. CGI fell 2.9 percent, to $31.58 on Jan. 10.
The Centers for Medicare and Medicaid Services chose Accenture from more than a dozen firms, according to the company’s statement. The contract’s final value will be based on “mutually agreed-upon work plans,” the company said.
Accenture will help the federal system prepare for its second open enrollment period in October 2014, including “24/7 support of the marketplace application, eligibility and enrollment functions, generation and transmission of enrollment forms, and features related to special enrollment periods,” according to the statement. Accenture also will develop new features for future phases of the program.
Accenture Plc (ACN), the second-biggest technology-consulting company, will take over construction of healthcare.gov, the Obamacare enrollment website that debuted with crippling computer problems in October.
The U.S. government has awarded Accenture’s Federal Services unit a one-year contract, with an initial payment of $45 million, the Dublin-based company said in a statement yesterday. Accenture will succeed Montreal-based CGI Group Inc. (GIB/A), which drew criticism for the website’s early stumbles.
While the site has improved, healthcare.gov’s first two months were marred by delays, error messages and garbled data that bogged down insurance sign-ups in the 36 U.S. states served by the federal system. Accenture led construction of California’s better-performing state exchange.
“Accenture will bring deep healthcare industry insight as well as proven experience building large-scale, public-facing websites to continue improving healthcare.gov,” David Moskovitz, chief executive officer at Accenture Federal Services, said in the statement.
The government-run insurance exchanges offer health plans and access to subsidies created by the 2010 Patient Protection and Affordable Care Act. CGI’s role in managing healthcare.gov had been reduced following the botched rollout, with a unit of UnitedHealth Group Inc. (UNH) brought in to oversee emergency repairs. Most Americans have until March 31 to select a health plan for 2014 coverage.
Contract Value
Accenture rose less than 1 percent to $83.20 in New York trading on Jan. 10, the day The Washington Post reported the company would replace CGI. Its shares have gained 19 percent for the 12 months through last week. CGI fell 2.9 percent, to $31.58 on Jan. 10.
The Centers for Medicare and Medicaid Services chose Accenture from more than a dozen firms, according to the company’s statement. The contract’s final value will be based on “mutually agreed-upon work plans,” the company said.
Accenture will help the federal system prepare for its second open enrollment period in October 2014, including “24/7 support of the marketplace application, eligibility and enrollment functions, generation and transmission of enrollment forms, and features related to special enrollment periods,” according to the statement. Accenture also will develop new features for future phases of the program.
Tuesday, December 24, 2013
U.S. MOBILE INTERNET TRAFFIC NEARLY DOUBLED THIS YEAR
Story first appeared on NYTimes.com.
Two big shifts happened in the American cellphone industry over the past year: Cellular networks got faster, and smartphone screens got bigger. As a result, people’s consumption of mobile data nearly doubled.
In the United States, consumers used an average of 1.2 gigabytes a month over cellular networks this year, up from 690 megabytes a month in 2012, according to Chetan Sharma, a consultant for wireless carriers, who published a new report on industry trends on Monday. Worldwide, the average consumption was 240 megabytes a month this year, up from 140 megabytes last year, he said.
But what’s in a megabyte or gigabyte anyway? A megabyte is about the amount of data required to download a photo taken with a decent digital camera, or one minute of a song, or a decent stack of e-mail.
So using that analogy — 1.2 gigabytes of mobile data a month looks something like 1,200 photos that a person downloaded to the Internet from a mobile device each month, compared with 690 photos he downloaded a month last year.
That is a significant jump. Mr. Sharma said the uptick in data use could be attributed, at least partly, to the widespread coverage of fourth-generation network technology, called LTE, which carriers say is 10 times faster than its predecessor, 3G. He said the rise was also connected to the popularity of phones with bigger screens, like the newer iPhones or Samsung’s Galaxy smartphones, which download bigger images.
About 1.4 billion smartphones will be in use by the end of this year, according to ABI Research. Cisco, the networking company, predicts that Internet traffic from mobile devices will exceed that of wired devices, like desktop computers, by 2016.
Two big shifts happened in the American cellphone industry over the past year: Cellular networks got faster, and smartphone screens got bigger. As a result, people’s consumption of mobile data nearly doubled.
In the United States, consumers used an average of 1.2 gigabytes a month over cellular networks this year, up from 690 megabytes a month in 2012, according to Chetan Sharma, a consultant for wireless carriers, who published a new report on industry trends on Monday. Worldwide, the average consumption was 240 megabytes a month this year, up from 140 megabytes last year, he said.
But what’s in a megabyte or gigabyte anyway? A megabyte is about the amount of data required to download a photo taken with a decent digital camera, or one minute of a song, or a decent stack of e-mail.
So using that analogy — 1.2 gigabytes of mobile data a month looks something like 1,200 photos that a person downloaded to the Internet from a mobile device each month, compared with 690 photos he downloaded a month last year.
That is a significant jump. Mr. Sharma said the uptick in data use could be attributed, at least partly, to the widespread coverage of fourth-generation network technology, called LTE, which carriers say is 10 times faster than its predecessor, 3G. He said the rise was also connected to the popularity of phones with bigger screens, like the newer iPhones or Samsung’s Galaxy smartphones, which download bigger images.
About 1.4 billion smartphones will be in use by the end of this year, according to ABI Research. Cisco, the networking company, predicts that Internet traffic from mobile devices will exceed that of wired devices, like desktop computers, by 2016.
Friday, December 20, 2013
SPAIN LEVIES MAXIMUM FINE OVER GOOGLE PRIVACY POLICY
Story first appeared on the BBC.
Google has been fined 900,000 euros (£751,000) for breaking Spanish data protection laws.
The fine is the maximum it is possible to levy on a firm that has broken the nation's privacy laws.
It was imposed after Google changed its privacy policy and started combining personal information across its online services.
Google said it had co-operated with the Spanish inquiry and would act once it had seen the agency's full report.
Biggest fine
Google changed its privacy policy in March 2012 and began the process of combining the data that people surrendered when they used its many services.
The change led many European data protection authorities to look into Google's privacy policy. The investigation carried out by Spain's privacy watchdog has now led to it imposing a fine - the maximum possible under Spanish law.
Google collected information across almost 100 services, said the Spanish data protection agency, but had not obtained the consent of people to gather information nor done enough to explain what would be done with the data.
The "highly ambiguous" language Google employed on its privacy policy pages made it hard for people to find out what would happen to their data, said the agency in a statement. Google also kept data for too long and made it far too hard for people to delete data or manage the information they surrendered.
The 900,000 euro fine is made up of three separate penalties of 300,000 euros each for breaking different parts of Spanish privacy laws.
Google said it had worked closely with the Spanish data agency during its investigation and said it would await publication of the full report before taking any action.
The search giant could also face further action from other European data protection bodies. In late November, the Netherlands data protection authority said Google's 2012 policy change also broke its laws. France is also believed to be contemplating levying a fine over Google's data handling policies.
Google has been fined 900,000 euros (£751,000) for breaking Spanish data protection laws.
The fine is the maximum it is possible to levy on a firm that has broken the nation's privacy laws.
It was imposed after Google changed its privacy policy and started combining personal information across its online services.
Google said it had co-operated with the Spanish inquiry and would act once it had seen the agency's full report.
Biggest fine
Google changed its privacy policy in March 2012 and began the process of combining the data that people surrendered when they used its many services.
The change led many European data protection authorities to look into Google's privacy policy. The investigation carried out by Spain's privacy watchdog has now led to it imposing a fine - the maximum possible under Spanish law.
Google collected information across almost 100 services, said the Spanish data protection agency, but had not obtained the consent of people to gather information nor done enough to explain what would be done with the data.
The "highly ambiguous" language Google employed on its privacy policy pages made it hard for people to find out what would happen to their data, said the agency in a statement. Google also kept data for too long and made it far too hard for people to delete data or manage the information they surrendered.
The 900,000 euro fine is made up of three separate penalties of 300,000 euros each for breaking different parts of Spanish privacy laws.
Google said it had worked closely with the Spanish data agency during its investigation and said it would await publication of the full report before taking any action.
The search giant could also face further action from other European data protection bodies. In late November, the Netherlands data protection authority said Google's 2012 policy change also broke its laws. France is also believed to be contemplating levying a fine over Google's data handling policies.
Monday, December 16, 2013
GOOGLE ACQUIRES MILITARY ROBOT MAKER
Story first appeared on GMANetwork.com.
As it turns out, animal-themed robots appear to be the droids that Google was looking for.
Google recently purchased robotics research and development company Boston Dynamics – a transaction that was officially confirmed by the search engine giant on December 14.
Dynamic robotics
Founded in 1992 by Dr Marc Raibert, Boston Dynamics is best known for working in conjunction with the US military to develop agile, fast-moving robots, both for mobile research and on the battlefield.
Among the company’s most notable creations are Atlas, a humanoid machine capable of operating on rocky terrain; Big Dog, a robotic quadruped that can lift and throw heavy objects; and Cheetah, a robot that can run faster than the world’s fastest man, athlete Usain Bolt.
Boston Dynamics also served as a consultant for Sony back when the company was developing the robotic dog, Aibo.
Boston Dynamics is currently honoring a $10.8 million contract with the Defense Advanced Research Projects Agency (DARPA). The company is supplying DARPA with Atlas units for the agency’s Robotics Challenge, which aims to develop robots suited for operating in calamity-stricken areas and nuclear disaster zones.
“Competitions like the DARPA Robotics Challenge stretch participants to try to solve problems that matter and we hope to learn from the teams’ insights around disaster relief,” according to Google’s Robotics Division head Andy Rubin in an official statement. Rubin is also the man behind Google’s Android software, a major player in the field of smartphones.
Google’s feeling lucky
Google’s newest purchase may not be so surprising, though.
The New York Times reports that Boston Dynamics is the eighth in a series of robotics companies that Google brought into its fold during the last six months of 2013. Google had previously purchased US and Japanese companies that focus on a wide range of robotics research, including Schaft.inc (humanoid robots), Redwood Robotics (advanced robotic arms), and Industrial Perception (computer vision).
Evidence seems to point to Google working on a line of automated “servants” to fulfill manufacturing and delivery duties in warehouses, or possibly even caretaker duties for the elderly. Most of it is just speculation at this point, though, as the Internet mogul remains tight-lipped about the true nature of its plans.
According to Rubin, this new top-secret robotics project is a “moonshot,” and would most likely be in its initial development stages for a few years.
Additionally, Dr Raibert, a former Massachusetts Institute of Technology (MIT) professor who is recognized as the “father of walking robots” in the United States, revealed that he is excited by Google’s “ability to think very, very big, with the resources to make it happen.”
No Google-sponsored 'killer robots'
However, although Google confirmed that Boston Dynamics would still honor existing military contracts, the search giant assured that it has no plans to become a military contractor.
Dr Raibert had also previously stated that despite working closely with the military on their recent robotics projects, Boston Dynamics prefers to make advancements in robotics technology as a whole, rather than become a full-time robot builder for the military.
Google declined to reveal exactly how much money was involved in the deal, adding that it does not plan to release financial information about any similar transactions with other companies as well.
As it turns out, animal-themed robots appear to be the droids that Google was looking for.
Google recently purchased robotics research and development company Boston Dynamics – a transaction that was officially confirmed by the search engine giant on December 14.
Founded in 1992 by Dr Marc Raibert, Boston Dynamics is best known for working in conjunction with the US military to develop agile, fast-moving robots, both for mobile research and on the battlefield.
Among the company’s most notable creations are Atlas, a humanoid machine capable of operating on rocky terrain; Big Dog, a robotic quadruped that can lift and throw heavy objects; and Cheetah, a robot that can run faster than the world’s fastest man, athlete Usain Bolt.
Boston Dynamics is currently honoring a $10.8 million contract with the Defense Advanced Research Projects Agency (DARPA). The company is supplying DARPA with Atlas units for the agency’s Robotics Challenge, which aims to develop robots suited for operating in calamity-stricken areas and nuclear disaster zones.
“Competitions like the DARPA Robotics Challenge stretch participants to try to solve problems that matter and we hope to learn from the teams’ insights around disaster relief,” according to Google’s Robotics Division head Andy Rubin in an official statement. Rubin is also the man behind Google’s Android software, a major player in the field of smartphones.
Google’s feeling lucky
Google’s newest purchase may not be so surprising, though.
The New York Times reports that Boston Dynamics is the eighth in a series of robotics companies that Google brought into its fold during the last six months of 2013. Google had previously purchased US and Japanese companies that focus on a wide range of robotics research, including Schaft.inc (humanoid robots), Redwood Robotics (advanced robotic arms), and Industrial Perception (computer vision).
Evidence seems to point to Google working on a line of automated “servants” to fulfill manufacturing and delivery duties in warehouses, or possibly even caretaker duties for the elderly. Most of it is just speculation at this point, though, as the Internet mogul remains tight-lipped about the true nature of its plans.
According to Rubin, this new top-secret robotics project is a “moonshot,” and would most likely be in its initial development stages for a few years.
Additionally, Dr Raibert, a former Massachusetts Institute of Technology (MIT) professor who is recognized as the “father of walking robots” in the United States, revealed that he is excited by Google’s “ability to think very, very big, with the resources to make it happen.”
No Google-sponsored 'killer robots'
However, although Google confirmed that Boston Dynamics would still honor existing military contracts, the search giant assured that it has no plans to become a military contractor.
Dr Raibert had also previously stated that despite working closely with the military on their recent robotics projects, Boston Dynamics prefers to make advancements in robotics technology as a whole, rather than become a full-time robot builder for the military.
Google declined to reveal exactly how much money was involved in the deal, adding that it does not plan to release financial information about any similar transactions with other companies as well.
Wednesday, December 11, 2013
THERE SHOULD BE A LAW: THE SAFE WEBSITES ACT
Story first appeared on DetroitNews.com.
To say that the Obamacare website, Healthcare.gov, has been troublesome for the American public is an understatement. Since its launch on Oct. 1, report after report has stated that access is at best slow and at worst impossible. The website has performed so poorly that Wired Magazine released a story with the headline that read “Obamacare Website Is in Great Shape — If This Were 1996.”
However, over the last month a more startling problem has come to the forefront. The healthcare website is a risk to personally identifiable information of all of its users.
An Associated Press report revealed that no end-to-end security tests were performed and the non-existence of a security leader renders such tests impossible to perform today. The AP also noted that HHS Secretary Kathleen Sebelius’ testimony in another hearing confirmed this, and that an Authorization to Operate memo outlined significant security problems, the details of which were redacted except to say, “the threat and risk potential is limitless.”
A group of security specialists testifying to the House Science Committee recently echoed these findings. David Kennedy, a former cyber-intelligence analyst for the U.S. Marine Corps and the founder of an online security firm, told the committee that the risk to the public was easy to spot. “Fundamental security principles,” he said, are “not being followed.” The witnesses each offered similar assessments: Americans should avoid Healthcare.gov until it has been certified as safe for public consumption.
There is no quick fix. Avi Rubin, a University of Michigan graduate and current professor at Johns Hopkins, explained that you cannot solve a software problem by throwing money and people at it. “Once a project falls behind schedule, sticking to a hard deadline can result in a faulty system that is not properly tested,” he observed. Rubin also added, “One cannot build a system and add security later any more than you can construct a building and then add the plumbing and duct work afterwards.”
In its haste to implement Obamacare, the White House acted recklessly and put the personal information of users attempting to obtain health insurance at risk. It also potentially compromised dozens of other federal agencies and their systems because Healthcare.gov taps into numerous other federal websites. This problem cannot be taken lightly.
Despite numerous public statements from security experts that the website should be taken down while performance and security problems are fixed, President Barack Obama and Democrats in Congress continue to insist that Americans use the site. They would rather prop up the failing healthcare law rather than protect the American people’s privacy.
The job of Congress is to protect people’s rights, not take them away. That’s why I have introduced the Safe and Secure Federal Websites Act. My bill requires that future websites created by the federal government be reviewed by the Government Accountability Office and certified as secure by the issuing agency’s Chief Information Officer before being made available to the public. Furthermore, the Safe and Secure Federal Websites Act forces the White House to take down Healthcare.gov until it has been deemed safe, forcing the Department of Health and Human Services to implement standard security protocols that ensure the public no longer places itself in the sights of hackers simply because they follow the advice of the White House.
Obamacare has shown the difficulties of liberal governance and the troubles that happen when politicians try to control the most important aspects of our lives. The failure of Healthcare.gov comes from political cowardice rather than anticipated glitches. One of the main reasons the HHS website is nearly 25 times larger than Facebook, one of the largest websites in the world, stems from the Obama administration hiding the increased premiums from the public before federal subsidies are calculated. The administration knew that people would reject Obamacare if the skyrocketing premiums it has caused became too apparent. The White House placed an election over the protecting the public.
Government makes decisions poorly because politicians and bureaucrats too often do not have the same incentives of the citizenry. While Americans want the opportunity to succeed, elected officials too often develop large projects like Obamacare, paid for by taxpayer money, that often fail for the people (but help special interests).
Too often, failed federal programs leave our fellow citizens behind. The president’s healthcare reform was passed by one party over a bipartisan opposition. But now, many of our friends and neighbors are being hurt by it. Regardless of its good intentions — and trying to help people gain health insurance coverage is a good intention — government is almost always less efficient and more costly than the private sector. Whenever we discuss new projects, Congress should ask whether the government actually needs to get involved in the first place.
The Safe and Secure Federal Websites Act will ensure that politics never trumps the security of some of the most important personal information Americans have.
We were sent to Washington not to use the levers of power for political follies and misadventures, but rather to help our fellow citizens while still protecting the freedoms we all hold so dear.
To say that the Obamacare website, Healthcare.gov, has been troublesome for the American public is an understatement. Since its launch on Oct. 1, report after report has stated that access is at best slow and at worst impossible. The website has performed so poorly that Wired Magazine released a story with the headline that read “Obamacare Website Is in Great Shape — If This Were 1996.”
However, over the last month a more startling problem has come to the forefront. The healthcare website is a risk to personally identifiable information of all of its users.
An Associated Press report revealed that no end-to-end security tests were performed and the non-existence of a security leader renders such tests impossible to perform today. The AP also noted that HHS Secretary Kathleen Sebelius’ testimony in another hearing confirmed this, and that an Authorization to Operate memo outlined significant security problems, the details of which were redacted except to say, “the threat and risk potential is limitless.”
A group of security specialists testifying to the House Science Committee recently echoed these findings. David Kennedy, a former cyber-intelligence analyst for the U.S. Marine Corps and the founder of an online security firm, told the committee that the risk to the public was easy to spot. “Fundamental security principles,” he said, are “not being followed.” The witnesses each offered similar assessments: Americans should avoid Healthcare.gov until it has been certified as safe for public consumption.
There is no quick fix. Avi Rubin, a University of Michigan graduate and current professor at Johns Hopkins, explained that you cannot solve a software problem by throwing money and people at it. “Once a project falls behind schedule, sticking to a hard deadline can result in a faulty system that is not properly tested,” he observed. Rubin also added, “One cannot build a system and add security later any more than you can construct a building and then add the plumbing and duct work afterwards.”
In its haste to implement Obamacare, the White House acted recklessly and put the personal information of users attempting to obtain health insurance at risk. It also potentially compromised dozens of other federal agencies and their systems because Healthcare.gov taps into numerous other federal websites. This problem cannot be taken lightly.
Despite numerous public statements from security experts that the website should be taken down while performance and security problems are fixed, President Barack Obama and Democrats in Congress continue to insist that Americans use the site. They would rather prop up the failing healthcare law rather than protect the American people’s privacy.
The job of Congress is to protect people’s rights, not take them away. That’s why I have introduced the Safe and Secure Federal Websites Act. My bill requires that future websites created by the federal government be reviewed by the Government Accountability Office and certified as secure by the issuing agency’s Chief Information Officer before being made available to the public. Furthermore, the Safe and Secure Federal Websites Act forces the White House to take down Healthcare.gov until it has been deemed safe, forcing the Department of Health and Human Services to implement standard security protocols that ensure the public no longer places itself in the sights of hackers simply because they follow the advice of the White House.
Obamacare has shown the difficulties of liberal governance and the troubles that happen when politicians try to control the most important aspects of our lives. The failure of Healthcare.gov comes from political cowardice rather than anticipated glitches. One of the main reasons the HHS website is nearly 25 times larger than Facebook, one of the largest websites in the world, stems from the Obama administration hiding the increased premiums from the public before federal subsidies are calculated. The administration knew that people would reject Obamacare if the skyrocketing premiums it has caused became too apparent. The White House placed an election over the protecting the public.
Government makes decisions poorly because politicians and bureaucrats too often do not have the same incentives of the citizenry. While Americans want the opportunity to succeed, elected officials too often develop large projects like Obamacare, paid for by taxpayer money, that often fail for the people (but help special interests).
Too often, failed federal programs leave our fellow citizens behind. The president’s healthcare reform was passed by one party over a bipartisan opposition. But now, many of our friends and neighbors are being hurt by it. Regardless of its good intentions — and trying to help people gain health insurance coverage is a good intention — government is almost always less efficient and more costly than the private sector. Whenever we discuss new projects, Congress should ask whether the government actually needs to get involved in the first place.
The Safe and Secure Federal Websites Act will ensure that politics never trumps the security of some of the most important personal information Americans have.
We were sent to Washington not to use the levers of power for political follies and misadventures, but rather to help our fellow citizens while still protecting the freedoms we all hold so dear.
Tuesday, December 10, 2013
TECH GIANTS TEAM UP IN ANTI-SNOOPING EFFORT
Story first appeared on USA TODAY.
SAN FRANCISCO — Silicon Valley foes have become frenemies.
Torched by disclosures that the National Security Agency routinely tapped into their data and spied on people and businesses, some of tech's biggest names have banded together to form what is essentially an anti-NSA coalition.
Google, Apple, Microsoft, Facebook, Twitter and Yahoo head the Reform Government Surveillance coalition, announced late Sunday, to rein in the vast tentacles of the NSA and — perhaps — salve the worries of privacy-conscious consumers.
Facebook CEO Mark Zuckerberg, Google CEO Larry Page and Twitter CEO Dick Costolo wrote an open letter to Washington, D.C., in which they "urge the U.S. to take the lead and make reforms that ensure that government surveillance efforts are clearly restricted by law." Google SEO Services should not be affected.
"The security of users' data is critical, which is why we've invested so much in encryption and fight for transparency around government requests for information," Page said in a statement Monday. "This is undermined by the apparent wholesale collection of data, in secret and without independent oversight, by many governments around the world. It's time for reform, and we urge the U.S. government to lead the way."
Added Zuckerberg, in a separate statement: "The U.S. government should take this opportunity to lead this reform effort and make things right."
The coalition hopes to limit the federal government's authority to collect user information, protect citizens' privacy and impose more legislative oversight and accountability of organizations such as the NSA.
Each of the participating companies — which include LinkedIn and AOL — have taken technological, legal and public relations steps to assure customers that their personal information is safe, in hopes of preserving their brand names and not losing business in the U.S. and abroad.
"The undersigned companies believe that it is time for the world's governments to address the practices and laws regulating government surveillance of individuals and access to their information," the coalition website says, "We strongly believe that current laws and practices need to be reformed."
But the damage has been done, as outlined by companies such as Cisco Systems and Hewlett-Packard in their recently completed financial quarters. Both hinted that government snooping has spooked overseas customers, undercutting potential sales.
There's no guarantee the NSA, which was able to crack the digital codes of tech companies before, will be less successful in the future, given its enormous resources and information technology prowess.
Still, reassuring the public that sensitive information is safe from the prying eyes of the government is crucial to Google, Facebook and other Internet companies. The surveillance kerfuffle is becoming an ominous asterisk to what has become a data obsession among major tech companies. Nearly every day, Google, Facebook, Microsoft and countless start-ups are carting out new products and services that breathlessly promise to make the most of cloud computing and data.
Indeed, some in the security industry think it hypocritical the same tech companies monetize the data they collect.
It also remains to be seen if a united tech front will have any impact on a federal government bent on collecting information about individuals considered threats in the post-9/11 world, security experts caution.
SAN FRANCISCO — Silicon Valley foes have become frenemies.
Torched by disclosures that the National Security Agency routinely tapped into their data and spied on people and businesses, some of tech's biggest names have banded together to form what is essentially an anti-NSA coalition.
Google, Apple, Microsoft, Facebook, Twitter and Yahoo head the Reform Government Surveillance coalition, announced late Sunday, to rein in the vast tentacles of the NSA and — perhaps — salve the worries of privacy-conscious consumers.
Facebook CEO Mark Zuckerberg, Google CEO Larry Page and Twitter CEO Dick Costolo wrote an open letter to Washington, D.C., in which they "urge the U.S. to take the lead and make reforms that ensure that government surveillance efforts are clearly restricted by law." Google SEO Services should not be affected.
"The security of users' data is critical, which is why we've invested so much in encryption and fight for transparency around government requests for information," Page said in a statement Monday. "This is undermined by the apparent wholesale collection of data, in secret and without independent oversight, by many governments around the world. It's time for reform, and we urge the U.S. government to lead the way."
Added Zuckerberg, in a separate statement: "The U.S. government should take this opportunity to lead this reform effort and make things right."
The coalition hopes to limit the federal government's authority to collect user information, protect citizens' privacy and impose more legislative oversight and accountability of organizations such as the NSA.
Each of the participating companies — which include LinkedIn and AOL — have taken technological, legal and public relations steps to assure customers that their personal information is safe, in hopes of preserving their brand names and not losing business in the U.S. and abroad.
"The undersigned companies believe that it is time for the world's governments to address the practices and laws regulating government surveillance of individuals and access to their information," the coalition website says, "We strongly believe that current laws and practices need to be reformed."
But the damage has been done, as outlined by companies such as Cisco Systems and Hewlett-Packard in their recently completed financial quarters. Both hinted that government snooping has spooked overseas customers, undercutting potential sales.
There's no guarantee the NSA, which was able to crack the digital codes of tech companies before, will be less successful in the future, given its enormous resources and information technology prowess.
Still, reassuring the public that sensitive information is safe from the prying eyes of the government is crucial to Google, Facebook and other Internet companies. The surveillance kerfuffle is becoming an ominous asterisk to what has become a data obsession among major tech companies. Nearly every day, Google, Facebook, Microsoft and countless start-ups are carting out new products and services that breathlessly promise to make the most of cloud computing and data.
Indeed, some in the security industry think it hypocritical the same tech companies monetize the data they collect.
It also remains to be seen if a united tech front will have any impact on a federal government bent on collecting information about individuals considered threats in the post-9/11 world, security experts caution.
Thursday, October 31, 2013
NSA INFILTRATES LINKS TO YAHOO, GOOGLE DATA CENTERS WORLDWIDE, SNOWDEN DOCUMENTS SAY
Story first appeared on WashingtonPost.com.
he National Security Agency has secretly broken into the main communications links that connect Yahoo and Google data centers around the world, according to documents obtained from former NSA contractor Edward Snowden and interviews with knowledgeable officials.
By tapping those links, the agency has positioned itself to collect at will from hundreds of millions of user accounts, many of them belonging to Americans. The NSA does not keep everything it collects, but it keeps a lot.
According to a top-secret accounting dated Jan. 9, 2013, the NSA’s acquisitions directorate sends millions of records every day from internal Yahoo and Google networks to data warehouses at the agency’s headquarters at Fort Meade, Md. In the preceding 30 days, the report said, field collectors had processed and sent back 181,280,466 new records — including “metadata,” which would indicate who sent or received e-mails and when, as well as content such as text, audio and video.
The NSA’s principal tool to exploit the data links is a project called MUSCULAR, operated jointly with the agency’s British counterpart, the Government Communications Headquarters . From undisclosed interception points, the NSA and the GCHQ are copying entire data flows across fiber-optic cables that carry information among the data centers of the Silicon Valley giants.
The infiltration is especially striking because the NSA, under a separate program known as PRISM, has front-door access to Google and Yahoo user accounts through a court-approved process.
The MUSCULAR project appears to be an unusually aggressive use of NSA tradecraft against flagship American companies. The agency is built for high-tech spying, with a wide range of digital tools, but it has not been known to use them routinely against U.S. companies.
In a statement, the NSA said it is “focused on discovering and developing intelligence about valid foreign intelligence targets only.”
“NSA applies Attorney General-approved processes to protect the privacy of U.S. persons — minimizing the likelihood of their information in our targeting, collection, processing, exploitation, retention, and dissemination,” it said.
In a statement, Google’s chief legal officer, David Drummond, said the company has “long been concerned about the possibility of this kind of snooping” and has not provided the government with access to its systems.
“We are outraged at the lengths to which the government seems to have gone to intercept data from our private fiber networks, and it underscores the need for urgent reform,” he said.
A Yahoo spokeswoman said, “We have strict controls in place to protect the security of our data centers, and we have not given access to our data centers to the NSA or to any other government agency.”
Under PRISM, the NSA gathers huge volumes of online communications records by legally compelling U.S. technology companies, including Yahoo and Google, to turn over any data that match court-approved search terms. That program, which was first disclosed by The Washington Post and the Guardian newspaper in Britain, is authorized under Section 702 of the FISA Amendments Act and overseen by the Foreign Intelligence Surveillance Court (FISC).
Intercepting communications overseas has clear advantages for the NSA, with looser restrictions and less oversight. NSA documents about the effort refer directly to “full take,” “bulk access” and “high volume” operations on Yahoo and Google networks. Such large-scale collection of Internet content would be illegal in the United States, but the operations take place overseas, where the NSA is allowed to presume that anyone using a foreign data link is a foreigner.
Outside U.S. territory, statutory restrictions on surveillance seldom apply and the FISC has no jurisdiction. Senate Intelligence Committee Chairman Dianne Feinstein (D-Calif.) has acknowledged that Congress conducts little oversight of intelligence-gathering under the presidential authority of Executive Order 12333 , which defines the basic powers and responsibilities of the intelligence agencies.
John Schindler, a former NSA chief analyst and frequent defender who teaches at the Naval War College, said it is obvious why the agency would prefer to avoid restrictions where it can.
“Look, NSA has platoons of lawyers, and their entire job is figuring out how to stay within the law and maximize collection by exploiting every loophole,” he said. “It’s fair to say the rules are less restrictive under Executive Order 12333 than they are under FISA,” the Foreign Intelligence Surveillance Act.
In a statement, the Office of the Director of National Intelligence denied that it was using executive authority to “get around the limitations” imposed by FISA.
The operation to infiltrate data links exploits a fundamental weakness in systems architecture. To guard against data loss and system slowdowns, Google and Yahoo maintain fortresslike data centers across four continents and connect them with thousands of miles of fiber-optic cable. Data move seamlessly around these globe-spanning “cloud” networks, which represent billions of dollars of investment.
For the data centers to operate effectively, they synchronize large volumes of information about account holders. Yahoo’s internal network, for example, sometimes transmits entire e-mail archives — years of messages and attachments — from one data center to another.
Tapping the Google and Yahoo clouds allows the NSA to intercept communications in real time and to take “a retrospective look at target activity,” according to one internal NSA document.
To obtain free access to data- center traffic, the NSA had to circumvent gold-standard security measures. Google “goes to great lengths to protect the data and intellectual property in these centers,” according to one of the company’s blog posts, with tightly audited access controls, heat-sensitive cameras, round-the-clock guards and biometric verification of identities.
Google and Yahoo also pay for premium data links, designed to be faster, more reliable and more secure. In recent years, both of them are said to have bought
or leased thousands of miles of fiber-optic cables for their own exclusive use. They had reason to think, insiders said, that their private, internal networks were safe from prying eyes.
In an NSA presentation slide on “Google Cloud Exploitation,” however, a sketch shows where the “Public Internet” meets the internal “Google Cloud” where their data reside. In hand-printed letters, the drawing notes that encryption is “added and removed here!” The artist adds a smiley face, a cheeky celebration of victory over Google security.
Two engineers with close ties to Google exploded in profanity when they saw the drawing. “I hope you publish this,” one of them said.
For the MUSCULAR project, the GCHQ directs all intake into a “buffer” that can hold three to five days of traffic before recycling storage space. From the buffer, custom-built NSA tools unpack and decode the special data formats that the two companies use inside their clouds. Then the data are sent through a series of filters to “select” information the NSA wants and “defeat” what it does not.
PowerPoint slides about the Google cloud, for example, show that the NSA tries to filter out all data from the company’s “Web crawler,” which indexes Internet pages.
According to the briefing documents, prepared by participants in the MUSCULAR project, collection from inside Yahoo and Google has produced important intelligence leads against hostile foreign governments that are specified in the documents.
Last month, long before The Post approached Google to discuss the penetration of its cloud, Eric Grosse, vice president for security engineering, said the company is rushing to encrypt the links between its data centers. “It’s an arms race,” he said then. “We see these government agencies as among the most skilled players in this game.”
Yahoo has not announced plans to encrypt its data-center links.
Because digital communications and cloud storage do not usually adhere to national boundaries, MUSCULAR and a previously disclosed NSA operation to collect Internet address books have amassed content and metadata on a previously unknown scale from U.S. citizens and residents. Those operations have gone undebated in public or in Congress because their existence was classified.
The Google and Yahoo operations call attention to an asymmetry in U.S. surveillance law. Although Congress has lifted some restrictions on NSA domestic surveillance on grounds that purely foreign communications sometimes pass over U.S. switches and cables, it has not added restrictions overseas, where American communications or data stores now cross over foreign switches.
“Thirty-five years ago, different countries had their own telecommunications infrastructure, so the division between foreign and domestic collection was clear,” Sen. Ron Wyden (D-Ore.), a member of the intelligence panel, said in an interview. “Today there’s a global communications infrastructure, so there’s a greater risk of collecting on Americans when the NSA collects overseas.”
It is not clear how much data from Americans is collected and how much of that is retained. One weekly report on MUSCULAR says the British operators of the site allow the NSA to contribute 100,000 “selectors,” or search terms. That is more than twice the number in use in the PRISM program, but even 100,000 cannot easily account for the millions of records that are said to be sent to Fort Meade each day.
In 2011, when the FISC learned that the NSA was using similar methods to collect and analyze data streams — on a much smaller scale — from cables on U.S. territory, Judge John D. Bates ruled that the program was illegal under FISA and inconsistent with the requirements of the Fourth Amendment.
he National Security Agency has secretly broken into the main communications links that connect Yahoo and Google data centers around the world, according to documents obtained from former NSA contractor Edward Snowden and interviews with knowledgeable officials.
By tapping those links, the agency has positioned itself to collect at will from hundreds of millions of user accounts, many of them belonging to Americans. The NSA does not keep everything it collects, but it keeps a lot.
According to a top-secret accounting dated Jan. 9, 2013, the NSA’s acquisitions directorate sends millions of records every day from internal Yahoo and Google networks to data warehouses at the agency’s headquarters at Fort Meade, Md. In the preceding 30 days, the report said, field collectors had processed and sent back 181,280,466 new records — including “metadata,” which would indicate who sent or received e-mails and when, as well as content such as text, audio and video.
The NSA’s principal tool to exploit the data links is a project called MUSCULAR, operated jointly with the agency’s British counterpart, the Government Communications Headquarters . From undisclosed interception points, the NSA and the GCHQ are copying entire data flows across fiber-optic cables that carry information among the data centers of the Silicon Valley giants.
The infiltration is especially striking because the NSA, under a separate program known as PRISM, has front-door access to Google and Yahoo user accounts through a court-approved process.
The MUSCULAR project appears to be an unusually aggressive use of NSA tradecraft against flagship American companies. The agency is built for high-tech spying, with a wide range of digital tools, but it has not been known to use them routinely against U.S. companies.
In a statement, the NSA said it is “focused on discovering and developing intelligence about valid foreign intelligence targets only.”
“NSA applies Attorney General-approved processes to protect the privacy of U.S. persons — minimizing the likelihood of their information in our targeting, collection, processing, exploitation, retention, and dissemination,” it said.
In a statement, Google’s chief legal officer, David Drummond, said the company has “long been concerned about the possibility of this kind of snooping” and has not provided the government with access to its systems.
“We are outraged at the lengths to which the government seems to have gone to intercept data from our private fiber networks, and it underscores the need for urgent reform,” he said.
A Yahoo spokeswoman said, “We have strict controls in place to protect the security of our data centers, and we have not given access to our data centers to the NSA or to any other government agency.”
Under PRISM, the NSA gathers huge volumes of online communications records by legally compelling U.S. technology companies, including Yahoo and Google, to turn over any data that match court-approved search terms. That program, which was first disclosed by The Washington Post and the Guardian newspaper in Britain, is authorized under Section 702 of the FISA Amendments Act and overseen by the Foreign Intelligence Surveillance Court (FISC).
Intercepting communications overseas has clear advantages for the NSA, with looser restrictions and less oversight. NSA documents about the effort refer directly to “full take,” “bulk access” and “high volume” operations on Yahoo and Google networks. Such large-scale collection of Internet content would be illegal in the United States, but the operations take place overseas, where the NSA is allowed to presume that anyone using a foreign data link is a foreigner.
Outside U.S. territory, statutory restrictions on surveillance seldom apply and the FISC has no jurisdiction. Senate Intelligence Committee Chairman Dianne Feinstein (D-Calif.) has acknowledged that Congress conducts little oversight of intelligence-gathering under the presidential authority of Executive Order 12333 , which defines the basic powers and responsibilities of the intelligence agencies.
John Schindler, a former NSA chief analyst and frequent defender who teaches at the Naval War College, said it is obvious why the agency would prefer to avoid restrictions where it can.
“Look, NSA has platoons of lawyers, and their entire job is figuring out how to stay within the law and maximize collection by exploiting every loophole,” he said. “It’s fair to say the rules are less restrictive under Executive Order 12333 than they are under FISA,” the Foreign Intelligence Surveillance Act.
In a statement, the Office of the Director of National Intelligence denied that it was using executive authority to “get around the limitations” imposed by FISA.
The operation to infiltrate data links exploits a fundamental weakness in systems architecture. To guard against data loss and system slowdowns, Google and Yahoo maintain fortresslike data centers across four continents and connect them with thousands of miles of fiber-optic cable. Data move seamlessly around these globe-spanning “cloud” networks, which represent billions of dollars of investment.
For the data centers to operate effectively, they synchronize large volumes of information about account holders. Yahoo’s internal network, for example, sometimes transmits entire e-mail archives — years of messages and attachments — from one data center to another.
Tapping the Google and Yahoo clouds allows the NSA to intercept communications in real time and to take “a retrospective look at target activity,” according to one internal NSA document.
To obtain free access to data- center traffic, the NSA had to circumvent gold-standard security measures. Google “goes to great lengths to protect the data and intellectual property in these centers,” according to one of the company’s blog posts, with tightly audited access controls, heat-sensitive cameras, round-the-clock guards and biometric verification of identities.
Google and Yahoo also pay for premium data links, designed to be faster, more reliable and more secure. In recent years, both of them are said to have bought
or leased thousands of miles of fiber-optic cables for their own exclusive use. They had reason to think, insiders said, that their private, internal networks were safe from prying eyes.
In an NSA presentation slide on “Google Cloud Exploitation,” however, a sketch shows where the “Public Internet” meets the internal “Google Cloud” where their data reside. In hand-printed letters, the drawing notes that encryption is “added and removed here!” The artist adds a smiley face, a cheeky celebration of victory over Google security.
Two engineers with close ties to Google exploded in profanity when they saw the drawing. “I hope you publish this,” one of them said.
For the MUSCULAR project, the GCHQ directs all intake into a “buffer” that can hold three to five days of traffic before recycling storage space. From the buffer, custom-built NSA tools unpack and decode the special data formats that the two companies use inside their clouds. Then the data are sent through a series of filters to “select” information the NSA wants and “defeat” what it does not.
PowerPoint slides about the Google cloud, for example, show that the NSA tries to filter out all data from the company’s “Web crawler,” which indexes Internet pages.
According to the briefing documents, prepared by participants in the MUSCULAR project, collection from inside Yahoo and Google has produced important intelligence leads against hostile foreign governments that are specified in the documents.
Last month, long before The Post approached Google to discuss the penetration of its cloud, Eric Grosse, vice president for security engineering, said the company is rushing to encrypt the links between its data centers. “It’s an arms race,” he said then. “We see these government agencies as among the most skilled players in this game.”
Yahoo has not announced plans to encrypt its data-center links.
Because digital communications and cloud storage do not usually adhere to national boundaries, MUSCULAR and a previously disclosed NSA operation to collect Internet address books have amassed content and metadata on a previously unknown scale from U.S. citizens and residents. Those operations have gone undebated in public or in Congress because their existence was classified.
The Google and Yahoo operations call attention to an asymmetry in U.S. surveillance law. Although Congress has lifted some restrictions on NSA domestic surveillance on grounds that purely foreign communications sometimes pass over U.S. switches and cables, it has not added restrictions overseas, where American communications or data stores now cross over foreign switches.
“Thirty-five years ago, different countries had their own telecommunications infrastructure, so the division between foreign and domestic collection was clear,” Sen. Ron Wyden (D-Ore.), a member of the intelligence panel, said in an interview. “Today there’s a global communications infrastructure, so there’s a greater risk of collecting on Americans when the NSA collects overseas.”
It is not clear how much data from Americans is collected and how much of that is retained. One weekly report on MUSCULAR says the British operators of the site allow the NSA to contribute 100,000 “selectors,” or search terms. That is more than twice the number in use in the PRISM program, but even 100,000 cannot easily account for the millions of records that are said to be sent to Fort Meade each day.
In 2011, when the FISC learned that the NSA was using similar methods to collect and analyze data streams — on a much smaller scale — from cables on U.S. territory, Judge John D. Bates ruled that the program was illegal under FISA and inconsistent with the requirements of the Fourth Amendment.
CONTRACTORS SAY LATE CHANGES, LACK OF TESTING DOOMED LAUNCH OF HEALTH-CARE WEBSITE
Story first appeared on ArcaMax.com.
WASHINGTON -- Private contractors working on the troubled federal health insurance marketplace told a congressional committee Thursday that they needed several months, but had only two weeks, before its Oct. 1 launch date to fully test the Healthcare.gov website.
The task was further complicated by the Obama administration's late decision to require users to create personal accounts before they could browse and compare health plans on the website.
User bottlenecks created by the required accounts, along with the abbreviated test period, appear to be the main causes of the marketplace crash that disabled the website shortly after its launch on Oct. 1, the contractors testified. The crash occurred when just 2,000 users across 36 states tried to access the system.
Thursday's hearing before the House Energy and Commerce Committee gave lawmakers their first opportunity to question several key marketplace architects about the rampant problems that have plagued the system and created a political firestorm for President Barack Obama and Health and Human Services Secretary Kathleen Sebelius.
Congressional Republicans want the administration to waive the health-care law's fines for people who don't obtain coverage until the marketplace problems are ironed out. Had it done so previously, said Rep. Brett Guthrie, R-Ky., House Republicans wouldn't have moved to shut down the government during the debt-ceiling standoff earlier this month.
Democrats remain largely supportive of the Affordable Care Act and often used the phrase "fix it, don't nix it," during the hearing to describe their feelings about the problematic website. But some have begun to publicly express anger over the marketplace controversy.
Sen. Jeanne Shaheen, D-N.H., has called for extending the six-month open enrollment period, and others, like Sen. Bill Nelson, D-Fla., said administration officials should fire someone over the problems.
Both sentiments were on display during the four-hour hearing, which at times veered from confrontational to comical.
Committee Chairman Fred Upton, R-Mich., expressed the feelings of most Republicans when he described the website as "not ready for prime time."
After Rep. Joe Barton, R-Texas, repeatedly questioned a witness on whether an obscure website disclaimer would violate a federal privacy law regarding personal health information, Rep. Frank Pallone, D-N.J., angrily called the hearing a "monkey court," noting that the health privacy law wasn't at issue because the website doesn't seek any personal health information from applicants.
The federal marketplace -- a one-stop, online shopping center to purchase health insurance required under the Affordable Care Act --is not a standard consumer website. Databases for numerous federal agencies, more than 170 insurance companies and information on more than 4,500 health plans in 36 states are integrated into the system. It also determines consumers' eligibility for government health plans and federal subsidies that help pay for private insurance.
Government reports indicated that testing for the complex system was months behind schedule, due in part to delays by the administration in drafting guidelines for marketplace operation. But in numerous appearances before the committee, HHS officials and contractors indicated the project was proceeding on schedule with no problems.
"This is on us," White House Press Secretary Jay Carney said during his Thursday briefing. "And that goes from the president on down. This website needs to work effectively for the American people. And we need to get the product that they so clearly desire to them as efficiently and effectively as possible."
At the hearing, Cheryl Campbell, senior vice president of CGI Federal, the contractor that designed and developed the federal marketplace, testified that the system passed eight technical reviews before going live on Oct. 1. She said her team never suggested delaying the site launch because that decision was up to HHS, which served as the site development manager.
"Our portion of the application worked as designed," Campbell told Upton during direct questioning.
But in earlier testimony, she said, "We acknowledge that issues arising in the federal exchange made the enrollment process difficult for too many Americans."
Those problems, Campbell said, stemmed from issues with the "front door" to the marketplace, where people register and create personal accounts. That application, designed by Quality Software Services Inc., "created a bottleneck preventing the vast majority of consumers from accessing" the marketplace, she testified.
Andrew Slavitt, executive vice president of Optum, which owns Quality Software, explained the front door bottleneck to lawmakers: "It appears that one of the reasons for the high concurrent volume at the registration system was a late decision requiring consumers to register for an account before they could browse for insurance products. This may have driven higher simultaneous usage of the registration system that wouldn't have otherwise occurred if consumers could 'window shop' anonymously."
Campbell testified that she believed the window-shopping feature was ordered disabled in August by Henry Chao, deputy director of the Office of Information Services in the Centers for Medicare and Medicaid Services.
Julie Bataille, communications director at the center, known as CMS, called the move a "business decision" to make sure that users understood their eligibility for a tax credit before enrolling in a plan.
Slavitt said he raised concerns with CMS about the risks associated with the lack of system testing on several occasions during the site construction. He said he was told they "understood the concerns "
But Bataille acknowledged that the fully integrated system -- not just its individual parts -- wasn't tested properly. "Due to a compressed time frame, the system just wasn't tested enough," she said in a telephone briefing Wednesday.
While testing of the fully integrated system didn't occur until two weeks before the Oct. 1 launch, both Campbell and Slavitt said that several months of testing would have been optimal for a project this complex.
Rep. John Shimkus, R-Ill., said he believes "political appointees manipulated the system to hide (test) data they didn't want the public to know. And we're going to find out who that is because that's the crux of this problem."
At the White House, Carney dismissed a question of whether the administration was so wedded to the Oct. 1 rollout that it didn't allow adequate testing. He called the question "Monday morning quarterbacking."
"The fact that some critics of the Affordable Care Act, who have worked assiduously for years to try to do away with it, repeal it, defund it, sabotage it, are now expressing grave concern about the fact that the website isn't functioning properly, I think should be taken with a grain of salt," he said.
Meanwhile, at the hearing, Slavitt said Quality Software fixed the registration application to meet the site's "unexpected demand." By Oct. 8, he said, the system was processing personal accounts "at error rates close to zero."
But Rep. Anna Eshoo, D-Calif., said the complaints about "unexpected demand" were bogus and that other websites routinely handle similar, if not greater, volumes. "That really sticks in my craw," she told Campbell and Slavitt. "I think that's really kind of a lame excuse. Amazon and eBay don't crash the week before Christmas and ProFlowers doesn't crash on Valentine's Day."
Campbell said she believes the website will be functioning properly in time for people to purchase coverage by Dec. 15, the cutoff date to enroll in coverage that begins on Jan. 1, 2014. The Obama administration is preparing regulations that allow coverage under the health law for 2014 to be purchased until March 31, 2014, the end of the open enrollment period.
To date, 700,000 people have completed applications and gotten determinations on their eligibility for government coverage and federal subsidies to buy private coverage. The administration has said that in November it would provide the number of people who have so far signed up for coverage on the federal website.
WASHINGTON -- Private contractors working on the troubled federal health insurance marketplace told a congressional committee Thursday that they needed several months, but had only two weeks, before its Oct. 1 launch date to fully test the Healthcare.gov website.
The task was further complicated by the Obama administration's late decision to require users to create personal accounts before they could browse and compare health plans on the website.
User bottlenecks created by the required accounts, along with the abbreviated test period, appear to be the main causes of the marketplace crash that disabled the website shortly after its launch on Oct. 1, the contractors testified. The crash occurred when just 2,000 users across 36 states tried to access the system.
Thursday's hearing before the House Energy and Commerce Committee gave lawmakers their first opportunity to question several key marketplace architects about the rampant problems that have plagued the system and created a political firestorm for President Barack Obama and Health and Human Services Secretary Kathleen Sebelius.
Congressional Republicans want the administration to waive the health-care law's fines for people who don't obtain coverage until the marketplace problems are ironed out. Had it done so previously, said Rep. Brett Guthrie, R-Ky., House Republicans wouldn't have moved to shut down the government during the debt-ceiling standoff earlier this month.
Democrats remain largely supportive of the Affordable Care Act and often used the phrase "fix it, don't nix it," during the hearing to describe their feelings about the problematic website. But some have begun to publicly express anger over the marketplace controversy.
Sen. Jeanne Shaheen, D-N.H., has called for extending the six-month open enrollment period, and others, like Sen. Bill Nelson, D-Fla., said administration officials should fire someone over the problems.
Both sentiments were on display during the four-hour hearing, which at times veered from confrontational to comical.
Committee Chairman Fred Upton, R-Mich., expressed the feelings of most Republicans when he described the website as "not ready for prime time."
After Rep. Joe Barton, R-Texas, repeatedly questioned a witness on whether an obscure website disclaimer would violate a federal privacy law regarding personal health information, Rep. Frank Pallone, D-N.J., angrily called the hearing a "monkey court," noting that the health privacy law wasn't at issue because the website doesn't seek any personal health information from applicants.
The federal marketplace -- a one-stop, online shopping center to purchase health insurance required under the Affordable Care Act --is not a standard consumer website. Databases for numerous federal agencies, more than 170 insurance companies and information on more than 4,500 health plans in 36 states are integrated into the system. It also determines consumers' eligibility for government health plans and federal subsidies that help pay for private insurance.
Government reports indicated that testing for the complex system was months behind schedule, due in part to delays by the administration in drafting guidelines for marketplace operation. But in numerous appearances before the committee, HHS officials and contractors indicated the project was proceeding on schedule with no problems.
"This is on us," White House Press Secretary Jay Carney said during his Thursday briefing. "And that goes from the president on down. This website needs to work effectively for the American people. And we need to get the product that they so clearly desire to them as efficiently and effectively as possible."
At the hearing, Cheryl Campbell, senior vice president of CGI Federal, the contractor that designed and developed the federal marketplace, testified that the system passed eight technical reviews before going live on Oct. 1. She said her team never suggested delaying the site launch because that decision was up to HHS, which served as the site development manager.
"Our portion of the application worked as designed," Campbell told Upton during direct questioning.
But in earlier testimony, she said, "We acknowledge that issues arising in the federal exchange made the enrollment process difficult for too many Americans."
Those problems, Campbell said, stemmed from issues with the "front door" to the marketplace, where people register and create personal accounts. That application, designed by Quality Software Services Inc., "created a bottleneck preventing the vast majority of consumers from accessing" the marketplace, she testified.
Andrew Slavitt, executive vice president of Optum, which owns Quality Software, explained the front door bottleneck to lawmakers: "It appears that one of the reasons for the high concurrent volume at the registration system was a late decision requiring consumers to register for an account before they could browse for insurance products. This may have driven higher simultaneous usage of the registration system that wouldn't have otherwise occurred if consumers could 'window shop' anonymously."
Campbell testified that she believed the window-shopping feature was ordered disabled in August by Henry Chao, deputy director of the Office of Information Services in the Centers for Medicare and Medicaid Services.
Julie Bataille, communications director at the center, known as CMS, called the move a "business decision" to make sure that users understood their eligibility for a tax credit before enrolling in a plan.
Slavitt said he raised concerns with CMS about the risks associated with the lack of system testing on several occasions during the site construction. He said he was told they "understood the concerns "
But Bataille acknowledged that the fully integrated system -- not just its individual parts -- wasn't tested properly. "Due to a compressed time frame, the system just wasn't tested enough," she said in a telephone briefing Wednesday.
While testing of the fully integrated system didn't occur until two weeks before the Oct. 1 launch, both Campbell and Slavitt said that several months of testing would have been optimal for a project this complex.
Rep. John Shimkus, R-Ill., said he believes "political appointees manipulated the system to hide (test) data they didn't want the public to know. And we're going to find out who that is because that's the crux of this problem."
At the White House, Carney dismissed a question of whether the administration was so wedded to the Oct. 1 rollout that it didn't allow adequate testing. He called the question "Monday morning quarterbacking."
"The fact that some critics of the Affordable Care Act, who have worked assiduously for years to try to do away with it, repeal it, defund it, sabotage it, are now expressing grave concern about the fact that the website isn't functioning properly, I think should be taken with a grain of salt," he said.
Meanwhile, at the hearing, Slavitt said Quality Software fixed the registration application to meet the site's "unexpected demand." By Oct. 8, he said, the system was processing personal accounts "at error rates close to zero."
But Rep. Anna Eshoo, D-Calif., said the complaints about "unexpected demand" were bogus and that other websites routinely handle similar, if not greater, volumes. "That really sticks in my craw," she told Campbell and Slavitt. "I think that's really kind of a lame excuse. Amazon and eBay don't crash the week before Christmas and ProFlowers doesn't crash on Valentine's Day."
Campbell said she believes the website will be functioning properly in time for people to purchase coverage by Dec. 15, the cutoff date to enroll in coverage that begins on Jan. 1, 2014. The Obama administration is preparing regulations that allow coverage under the health law for 2014 to be purchased until March 31, 2014, the end of the open enrollment period.
To date, 700,000 people have completed applications and gotten determinations on their eligibility for government coverage and federal subsidies to buy private coverage. The administration has said that in November it would provide the number of people who have so far signed up for coverage on the federal website.
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