Canada Hit by Cyberattack

By IAN AUSTEN

OTTAWA — A federal cabinet minister said Thursday that hackers, perhaps

from China, compromised computers in two Canadian government departments
in early January, leaving bureaucrats with little or no Internet access for nearly
two months.

The minister, Stockwell Day, the president of the Treasury Board, told reporters
that hackers had infiltrated computers in his department, which supervises the
bureaucracy and government operations, as well as in the Department of
Finance, which is responsible for the government’s budget and fiscal policy.

“Every indication we have at this point is that our sensors and our
cyberprotection systems got the alerts out in time, that the information doors
were slammed shut,” Mr. Day said.

He added that the attack, the latest in a series of confirmed assaults on

government computer systems, was more directly focused than were previous
strikes against Canada.

“It was a significant one — significant that they were going after financial
records,” he said.

After the attack was discovered in early January, the government largely isolated
computers in the two departments from the Internet. The computers have, for the
most part, remained disconnected while security officials searched individual
computers for evidence in case of a criminal investigation and to remove the
compromising software.

While the attack was not confirmed until late Wednesday, shortly before
a Canadian Broadcasting Corporation report about it, signs that something was
wrong have been evident for some time. For the past six weeks, thousands of
public servants employed by the two departments have either been staying home
to use Internet connections or slipping out of their offices to use wireless Internet
connections at nearby cafes.
The employees were not told why they had been returned to the pre-Internet age,
creating what one Treasury Board employee earlier called a “weird” situation in
which it was difficult to complete work.

There are concerns that the hackers may have gained advance knowledge of the
federal budget, to be released next month. Because Canadian budgets are
generally not amended after being presented to Parliament, they are prepared in
great secrecy to prevent advance knowledge of their contents from being used for
financial gain.

Vic Toews, the minister of public safety, said in an e-mail that “we have no
indication that budget security has been compromised.”

Mr. Toews and other officials have declined to publicly outline the nature of the
attack. But a government computer specialist who was briefed about the attack
confirmed the CBC’s report on the condition that he not be identified because of
the government’s policy of not discussing computer security issues.

According to the CBC and other Canadian news organizations, the attackers
adopted the same approach as the one used by a China-based computer
espionage ring that stole information from the Indian Defense Ministry.
That gang was exposed last year by a team of researchers from the Munk School
of Global Affairs at the University of Toronto.

The hackers used a technique that is sometimes known as “executive spear

phishing.” First they took control of computers used by senior officials in the
affected departments. Once inside, the hackers generated messages that appeared
to be from those officials to the departments’ information technology section,
which provided the hackers with passwords to various government computer
systems.

At the same time, other employees in the departments received e-mails that
falsely appeared to come from the senior officials that included Adobe PDF
attachments. Once opened, those attachments started hidden programs that
hunted for information on the government network to send back to the hackers.

While security scanning software is supposed to catch and block destructive

software hidden in attachments, the hackers either developed programs that were
unknown to software security companies or found a novel method of hiding their
unwanted computer code.

The Canadian news reports said that the government had traced the hackers to an
Internet address in China.

Rafal A. Rohozinski, one of the Munk School researchers who documented the
earlier Chinese attack, said it should be possible for the Canadian government to
determine if the attack originated in China or if the hackers had merely disguised
their location by using Chinese servers.

Nevertheless, Mr. Rohozinski said that China was the most likely source of the
attack, although that did not necessarily indicate that it was a government-
sanctioned action.

“There are more people online in China than anywhere else,” he said. “Most of
them are young, so you see a lot of digital promiscuity coming from China.”

Ma Zhaoxu, a spokesman for China’s Foreign Ministry, rejected suggestions of a

link to China, Reuters reported. “What you mentioned is purely fictitious and has
an ulterior motive,” he said.

Meanwhile, Mr. Rohozinski was skeptical that Canadian government

investigators could demonstrate that no information was stolen from the
systems. The government adopted a new computer security plan last fall, but he
said that very little of the plan had been put in effect, leaving security largely
uncoordinated and varying in quality from department to department.

Computer Wins on ‘Jeopardy!’: Trivial, It’s Not

In the end, the humans on “Jeopardy!” surrendered meekly.
Facing certain defeat at the hands of a room-size I.B.M. computer on Wednesday
evening, Ken Jennings, famous for winning 74 games in a row on the TV quiz
show, acknowledged the obvious. “I, for one, welcome our new computer
overlords,” he wrote on his video screen, borrowing a line from a “Simpsons”
episode.

From now on, if the answer is “the computer champion on “Jeopardy!,” the
question will be, “What is Watson?”
For I.B.M., the showdown was not merely a well-publicized stunt and a $1 million
prize, but proof that the company has taken a big step toward a world in which
intelligent machines will understand and respond to humans, and perhaps
inevitably, replace some of them.

Watson, specifically, is a “question answering machine” of a type that artificial

intelligence researchers have struggled with for decades — a computer akin to the
one on “Star Trek” that can understand questions posed in natural language and
answer them.

Watson showed itself to be imperfect, but researchers at I.B.M. and other

companies are already developing uses for Watson’s technologies that could have
a significant impact on the way doctors practice and consumers buy products.

“Cast your mind back 20 years and who would have thought this was possible?”
said Edward Feigenbaum, aStanford University computer scientist and a pioneer
in the field.

In its “Jeopardy!” project, I.B.M. researchers were tackling a game that requires
not only encyclopedic recall, but also the ability to untangle convoluted and often
opaque statements, a modicum of luck, and quick, strategic button pressing.

The contest, which was taped in January here at the company’s T. J. Watson
Research Laboratory before an audience of I.B.M. executives and company
clients, played out in three televised episodes concluding Wednesday. At the end
of the first day, Watson was in a tie with Brad Rutter, another ace human player,
at $5,000 each, with Mr. Jennings trailing with $2,000.

But on the second day, Watson went on a tear. By night’s end, Watson had a
commanding lead with a total of $35,734, compared with Mr. Rutter’s $10,400
and Mr. Jennings’s $4,800.

Victory was not cemented until late in the third match, when Watson was in
Nonfiction. “Same category for $1,200,” it said in a manufactured tenor, and
lucked into a Daily Double. Mr. Jennings grimaced.

Even later in the match, however, had Mr. Jennings won another key Daily
Double it might have come down to Final Jeopardy, I.B.M. researchers
acknowledged.
The final tally was $77,147 to Mr. Jennings’s $24,000 and Mr. Rutter’s $21,600.

More than anything, the contest was a vindication for the academic field of
computer science, which began with great promise in the 1960s with the vision of
creating a thinking machine and which became the laughingstock of Silicon
Valley in the 1980s, when a series of heavily financed start-up companies went
bankrupt.

Despite its intellectual prowess, Watson was by no means omniscient. On

Tuesday evening during Final Jeopardy, the category was U.S. Cities and the clue
was: “Its largest airport is named for a World War II hero; its second largest for a
World War II battle.”

Watson drew guffaws from many in the television audience when it responded
“What is Toronto?????”

The string of question marks indicated that the system had very low confidence in
its response, I.B.M. researchers said, but because it was Final Jeopardy, it was
forced to give a response. The machine did not suffer much damage. It had
wagered just $947 on its result. (The correct answer is, "What is Chicago?")

“We failed to deeply understand what was going on there,” said David Ferrucci,
an I.B.M. researcher who led the development of Watson. “The reality is that
there’s lots of data where the title is U.S. cities and the answers are countries,
European cities, people, mayors. Even though it says U.S. cities, we had very little
confidence that that’s the distinguishing feature.”

The researchers also acknowledged that the machine had benefited from the
“buzzer factor.”

Pressure mounts over Apple's 30%

subscription charge
Publishers rushed to build apps for Apple's iPad
Pressure is mounting on Apple over subscription charges it plans to levy on
some mobile content.
The company wants a 30% cut of payments for newspapers and other publications
downloaded to its devices.

Anti-trust regulators in the US and Europe are reportedly poised to investigate the new
pricing model.

Apple has defended the changes to its terms of business, saying the system is good for
customers and will give publishers new opportunities.

Under Apple's plans, companies wanting to distribute their content to iOS devices -
including the iPhone and iPad - would have to offer users the option of subscribing
directly from their app.

One third of the selling price would then go to Apple.

Previously, users have been able to make their purchases through a web browser,
effectively circumventing Apple, and handing all of the money to the publisher.

Including such web links within apps will be banned, from June 30th.

Angry publishers
The change has provoked widespread condemnation from content providers, who have
called for an official investigation.

Following a meeting of around 60 European publishers on Thursday, the International

Newspaper Marketing Association issued a statement warning: "publishers simply can't
afford to invest in new technology, products and services when the platform charges
them 30% of total revenue."

According to the Wall Street Journal, the United States Federal Trade Commission
(FTC) is now examining whether Apple's plan breaches anti-trust rules.

If correct, those early stage anti-trust inquiries may not result in full investigations.

Apple has defended the new terms of business, saying that the retail model it offers is
good for all concerned.

Apple said customer privacy is a key feature of subscriptions purchased through its App Store
In a statement, Apple's chief executive Steve Jobs said: "We believe that this innovative
subscription service will provide publishers with a brand new opportunity to expand
digital access to their content onto the iPad, iPod touch and iPhone."

However the company declined to comment directly on the publishers' criticism.

Fears are also being expressed that the charges will not be limited to newspaper and
magazine subscriptions.

Apple has said that the 30% figure will apply to all in-app subscriptions.

They would mean the likes of Spotify, whose current app lets users launch a browser
window to become new subscribers, would lose a large portion of its mobile revenue.

Steve Purdham, chief executive of UK-based music streaming service, We7, said he
would welcome Apple providing the billing service for its apps and it should be able to
charge for that.

But at 30% "we would be losing money on every subscription," he told BBC News.

"Taking a 30% toll amounts to a massive increase in the cost basis of a content
business that will kill it," said James McQuivey, an analyst with Forrester Research.

Ultimately, Apple has the entire media business in its sights, he said.

Media control
"In the end, Apple envisions a world in which people don't consume any kind of digital
media without its help," added Mr McQuivey.

The 10% number is a shot across Apple's bow”

James McQuiveyForrester Research
He said that the charges are likely to encourage publishers on to other platforms.

One such alternative comes from Google, which also produces operating systems for
smartphones and tablet computers.

Its recently announced One Pass payment system for magazine and newspapers
charges a 10% fee, undercutting Apple.

One Pass also gives publishers greater freedom to offer different deals though different
channels and to maintain a close relationship with their subscribers.

"You've got a very publisher-friendly approach; we basically don't make any money on
this," Eric Schmidt, Google's chief executive said.

"The most important thing is to get the money to people who are producing high-quality
content".
Google's cut was simply to cover its costs, Mr Schmidt added.

Warning shot
Even that lower figure may be too much for subscription services, said Mr McQuivey.

"The 10% number is a shot across Apple's bow, but it's still not low enough to sustain
the market," he told BBC News.

A more realistic level would be on a par with the rates credit card processing companies
charge, he added.

But both Apple and Google could be in for a shock, according to Mr McQuivey.

Media firms may give up on the app-based model of distributing content in favour of a
new breed of web-based services, he said.

"It's going to be a pain, but everyone can now clearly see that in an HTML5 world, they
won't have to pay taxes every single time they deliver value to consumers," he added.

Google unveils One Pass system for

online content
Google says the 10% charge will allow publishers to customise how and when they charge
for content
Google has launched a new payment system that allows users to subscribe to
online content for a 10% commission fee.

The move comes after rival Apple was criticised over its payment system which takes
30% of the sale price.

One Pass will work on tablets and smartphones, as well as Google-related

websites.One Pass will launch initially in the UK, Canada, France, Germany, Italy and
Spain.The announcement came just one day after Apple announced new rules for
publishers selling subscriptions on its iOS platform.

Apple says companies must now offer users the option to buy directly through an
iTunes account, handing 30% of the price to Apple.

Previously, vendors were allowed to simply direct customers to an external website,

keeping all of the profits.
On a Google blog posting, Lee Shirani, the company's director of business product
management wrote: "Publishers can customise how and when they charge for content
while experimenting with different models to see what works best for them."

Untangling code
Much conventional wisdom about programs written by volunteers is
wrong
IN INFORMATION technology there seems to be a revolution every other week. At
least that is the impression one gets when following media coverage of the sector.
Yet sometimes the hype is justified, in particular in the case of open- source
software, free programs developed by loosely knit groups of developers. Within just
15 years they have completely changed the landscape of the software industry,
turning it from a mostly capitalist economy into a mixed one.

The shift should be of interest—and not just to techies. Software is important stuff;
it keeps the world moving. No car, no television set, not even a modern toaster
works without some code. Take corporate computer programs away, and the
economy comes to a grinding halt. In some cases software has changed how
humans behave; spreadsheet programs, for instance, have redefined more than
one job.

At least theoretically, open source could also resolve the main dilemma that
bedevils innovation policy. On the one hand, most inventors need incentives to
keep inventing. On the other, the social value of an invention is maximised if
anyone—not just those willing to pay for it—can use it. Open source seems to
satisfy both conditions. Developers contribute voluntarily, and share code freely.

This makes it all the more surprising that the writing about open source is rather
patchy. To be sure, there are plenty of books about it. But many are banging a
drum on one side or the other of the heated debate within the software industry.
Others lionise open-source stars, such as Linus Torvalds, who wrote the first
version of Linux, a popular operating system. None offers a robust survey and
analysis of the phenomenon.

With “The Comingled Code”, Josh Lerner and Mark Schankerman, professors at the
Harvard Business School and the London School of Economics respectively, are
aiming to fill this gap. They have done a good job—although its academic tone
makes it unlikely that the book will fly off the shelves, even in areas with a lot of
hackers (who are sure to take offence at the fact that the authors took money for
research from Microsoft, long the arch- enemy of the open-source movement—
although they assure readers that the funds came with no strings attached).

The authors offer a brief history of their subject. Open source is actually nothing
new. Sharing of source code was widespread in the early days of computing, when
software was not perceived as having market value and most developers were
academics. But companies soon discovered that selling proprietary software can be
a very profitable business. To recreate a software commons, a group of politically
motivated programmers came up with a special usage licence in the early 1980s to
ring-fence “free software”, as it was then called.

This approach, known as “copyleft”, as opposed to copyright, languished in

obscurity until the internet made it easier for far-flung groups of developers to
collaborate—which led to an explosion of open-source activity. Today SourceForge,
an online home for such projects, hosts thousands of them. More importantly,
open-source software has become an integral part of information technology. In
some markets, for instance, Linux is more successful than Windows. And Android,
the fastest growing operating system for smart-phones, is largely open source.

Greatest contributions
Although the book is a good primer on all this, its main contribution consists of two
surveys—one of users of software, the other of developers—that are unprecedented
in both scale and scope. More than 2,300 companies and nearly 2,000
programmers, spread across 15 countries, both rich and poor, filled out
questionnaires. And Messrs Lerner and Schankerman asked a lot of questions, from
how much open-source software a firm has implemented to whether governments
should mandate the use of such programs.

The findings contradict much conventional wisdom. Open-source developers, for

instance, are widely believed mostly to be volunteers who just love writing code.
While this may have been true in the early days of computing, the motivation and
background of programmers is now much more mixed. Many work for firms that
develop both open-source and proprietary programs and combine them in all kinds
of business models. Nearly 40% of companies surveyed fall into this category.

The survey also indicates that the two software worlds are much more “comingled”
than their respective champions would have it. More than a quarter of companies
happily mix and match both sorts, in particular in poorer countries. Messrs Lerner
and Schankerman view the environment of software developers and users as a
complex ecosystem akin to a rainforest. It would be wrong, they say, to see the
two types of software as substitutes for another or as interchangeable.

Yet the finding that open-source advocates will like least is that free programs are
not always cheaper. To be sure, the upfront cost of proprietary software is higher
(although open-source programs are not always free). But companies that use such
programs spend more on such things as learning to use them and making them
work with other software. Whether one or the other type of software is a better
deal depends on a customer’s circumstances. Does a firm have cash to spend? Do
its employees have the necessary skills? There “is no such thing as ‘the cost of
software’,” the authors argue.

Given the complex picture, they dismiss the argument that open source can solve
the conundrum of innovation policy as being “too optimistic”. They do not believe
that governments should intervene in favour of open-source software, as many
have done through subsidies or public procurement. Instead governments should
make sure that the two forms of software compete on a level playing field and can
comingle efficiently. One way of doing this would be to promote open standards to
ensure that proprietary incumbents do not abuse a dominant position.

All this sounds reasonable, but these recommendations also point to the book’s
weakness. Having dissected open source in detail and told governments at length
what not to do, the authors’ prescriptions remain rather vague. “There is no right
answer,” they say in the final chapter, amusingly called “The Takeaways”.

It would also have been helpful to examine the implications of the findings for
technology sharing in other industries. Open source has moved way beyond
software—into biology, all forms of digital content (Wikipedia, now ten years old, is
the most prominent example) and even hardware. “The Comingled Code” is full of
insights, but the literature about this important development in recent economic
history is still far from complete.

Losing Sleep Over Ipad

Saad Sarwar Muhammad
I bought my Ipad in the first week of May and its almost been a month now that most of my senses have
been captivated by this very visually stimulating and sensory gadget. Ipad is widely touted to have
ushered in a new era of computing and very rightly so. The rich plethora of applications or "apps" as
they are widely called along with the touch interface has truly revolutionized the face of the computing
industry. All of a sudden everybody from HP to Dell to a vast number of Chinese clones have jumped on
the band wagon of the next big gadget that they feel would take the world by storm as the previous
iphone of Apple did with the smart phone industry by coming up with their own tablet computers. The
jury is still out on whether the Ipad is a niche market or a substitute of the laptop or the netbook market.
One thing is for sure that the Ipad is here with a bang and its here to stay. In the process it has
propelled Apple to become the largest technology company in the world by market capitalization.
Beating to the top its long time rival Microsoft. Apple's founder Steve Jobs has earned a reputation for
innovation with killer products like the Ipod with its Istore along with the huge hit Iphone and now Ipad.
Mr. Jobs is said to have thought about the development of the Ipad even before he thought of the
Iphone but the latter made it to the market more than a couple of years earlier than Ipad did. At the core
of Mr. Jobs fascination with innovation is his attention to detail along with the focus on the minute
design aspects of his computing software and hardware. Apple's slick hardware is usually meant as a
delivery system for its most valuable commodity; the software, rich media like songs and videos along
with myriad variety of apps available to the customer for a small fee with the click of the button thereby
ensuring a constant revenue stream for the technology company. Emulating Apple's success is no easy
feat for any company. Apple sold out around 9 million iphones world wide just the last month alone
while the traditional mobile industry giant Nokia just managed to sell a total of a hundred thousand of its
top end smart phone since the many months it was launched. However, the incumbent Apple is not
without a rival. Google is coming up strong with its operating system Android especially made for the
smart phones and is also set to launch its new operating system which would be known as the Chrome
OS for the traditional PC market. Android is poised to become the top competitor of the iphone OS with
many Android apps already available to be downloaded to smart phones like the Motorola Droid.

The launch of the Ipad is also meant as a stepping stone for Apple's Mac OS operating system. As
more people become familiar with Apple's way of operating a system by using Iphones and Ipads, the
switch from Microsoft Windows to the Macintosh would become easier with this slow and steady
acclimatization. Google has already made it mandatory for all of its employees in China to stop using
Windows and instead switch to either Macintosh or Linux in a bid to secure the work of its employees
from hack attacks. That is, till the time Google's own operating system Chrome OS becomes fully
operational.

The Ipad could not have come at a better time to rescue the slagging publishing industry from its steep
decline. The publishing industry has hailed the Ipad as a device designed for information consumption.
Its no surprise then that the New York Times, Wall Street Journal and USA Today were one of the first
ones to roll out the apps for the new Ipad, some even before the Ipad was actually launched.

The Ipad for me has totally changed the way i computed before. Its more of a gadget for information
consumption rather than one that can be used for creative work. It is an amazing tool for watching
Youtube videos, surfing the net, playing application games, listening to music and radio. However, in
order to download apps directly through the Apple store one has to have a US bank account it seems. It
is also a great device for watching movies. Netflix is one amazing application where one can download
even free movies to watch provided you have a US credit card. Its battery time of at least ten hours
without a charge is its biggest plus which makes the Ipad a truly mobile gadget. Its very light and thin
with crystal crisp resolution. The Wifi works amazingly well on the go and the on screen keyboard is
good for most tasks. However, it might give one a Carpal Tunnel Syndrome for works which require a
great deal of typing. I have personally bought a blue tooth keyboard to work on the Ipad through which i
am currently typing. I bought an Apple bluetooth keyboard, however Apple says the Ipad is compatible
with any bluetooth keyboard from any other company in the market.

Some of the major drawbacks of the Ipad is the lack of support for multitasking, a lack of a camera
along with over-dependence on a traditional laptop for syncing applications. Saving documents is also
not that easy however there are many free apps available which would do just that. Another problem is
printing from an Ipad. One needs a Wifi printer to print directly from the Ipad. I have personally found it
convenient to email the documents to myself in order to get them printed from another computer. I am
typing this Ipad review on the pre-installed application called Notes, after which i will be emailing the
document to myself. I have yet to purchase the apps that are most required for creative work on Ipad.
Apps which are a substitute to Microsoft Office like Page, Keynote and Numbers each costing 9.99
dollars. I would personally like the Ipad to be a substitute to my laptop. However, at present it seems
that it would not be possible in the very near future, unless there are software apps available for
program coding, html editing and blogging etc. There are apps available of IMing but still lack
multitasking capabilities. Currently there are around nine thousand applications available through the
Apple store with hundred more added each day. It is estimated that around ten percent of these apps
are free to download and i have about more than a hundred free apps already downloaded on my Ipad.
Apps available through the apple store mainly fall in the games, entertainment and productivity category
with plethora of apps relating to news publishing, books and other software utilities. The Ipad also has a
variety of Atlases and books available for Medical students with 3d graphics. I think an Ipad is a must
for a student of medicine and would go a long way in rendering clarity to a doctor's medical brain when
it comes to graphic images of the human body functions available through the Ipad. My Ipad is a 16 GB
one and its only a matter of time when the space runs out. I feel my best bet would be the 2TB Time
Capsule that costs around thirty thousand rupees in Pakistan if it is allowed to sync with my Ipad. I have
yet to find out whether it does.

On the whole I would say the Ipad is the best information consumption device especially designed for
the most common consumers. Those who belong to the new generation of Youtubers and even the die
hard book worms. Its a treat to the eye but beware it eats up your time and before you know it its 12 am.
Not that I am suggesting people go to sleep at 12 but that it would definitely keep you awake past bed
time.