Sucks to be Amazon

From the New York Times:

Writers are peeved at Amazon. On Thursday, investors became disgruntled too.

The company, which is embroiled in a very public conflict with the publisher Hachette, announced second-quarter losses nearly double what Wall Street predicted. It also warned that the third quarter would be worse. Much worse.

That was enough to make the stock plummet in after-hours trading. Shares quickly fell 10 percent, shaving more than $15 billion in value from the high-flying retailer.

Amazon long ago proved that it could sell vast quantities of goods to tens of millions of people, and that it could simultaneously develop new businesses while innovating with old ones.

What is a more debatable question is when — or even if — all those investments will truly pay off.

Amazon is quickly reaching a “do or die” moment. Big sales numbers mean nothing to investors if there is no profit. And Amazon hasn’t made a significant profit in it’s entire operating history dating back to 1994.

Break time

Andrew Sullivan is running a contest on his site to find the best cover of an original hit. He pulls this one up, and it is a two for the price of one production.  It is a snarky treatment by the Pet Shop Boys of U2′s song “Where the Streets Have No Name.” Snarky in the sense of treating U2′s classic anthem as no more profound or creative than the pop hit “Can’t Take My Eyes Off You.” The Boys run the two songs together seamlessly.

U2′s response was “What have we done to deserve this?” That plays off the Pet Shop Boys hit “What Have I Done to Deserve This?,” featuring Dusty Springfield.

PCLOB to investigate use of Executive Order 12333

I previously described the nature and operation of Executive Order 12333, which allows warrantless collection of communications by Americans, provided only that the collection occurs overseas. Now, the Privacy and Civil Liberties Oversight Board has announced to it will examine the surveillance activities conducted un EO 12333.

The Washington Post reports:

An independent privacy watchdog agency announced Wednesday that it will turn its focus to the largest and most complex of U.S. electronic surveillance regimes: signals intelligence collection under Executive Order 12333.

That highly technical name masks a constellation of complex surveillance activities carried out for foreign intelligence purposes by the National Security Agency under executive authority. But unlike two other major NSA collection programs that have been in the news lately, EO 12333 surveillance is conducted without court oversight and with comparatively little Congressional review.

The Privacy and Civil Liberties Oversight Board, an independent executive branch agency, over the last year has taken in-depth looks at the other two NSA programs. It concluded the bulk collection of Americans’ phone call metadata under Section 215 of the Patriot Act was illegal and raised constitutional concerns. By contrast, it found the gathering of call and email content under Section 702 of the Foreign Intelligence Surveillance Act to be lawful, though certain elements pushed “close to the line” of being unconstitutional.

Now the board is planning to delve into EO 12333 collection, among other topics. It is not clear, however, how deep or broad its examination will be.

“It’s obviously a complex thing to look at 12333,” but “it’s something we’ll likely be delving into,” said a member of the Privacy and Civil Liberties Oversight Board who requested anonymity in order to speak freely. The board has highlighted 12333 issues in the past. For example, each agency is supposed to have guidelines to carry out the executive order, but some guidelines are three decades old. The board has encouraged the guidelines be updated, the source said.

Rules for US watch lists, no-fly lists and selectee lists leak

Seal of the United States National Counterterr...

Seal of the United States National Counterterrorism Center. (Photo credit: Wikipedia)

The Intercept has obtained and published the governments rules for operating its various watch lists, including no-fly lists and lists that call out certain airline passengers for special screening.

The Obama administration has quietly approved a substantial expansion of the terrorist watchlist system, authorizing a secret process that requires neither “concrete facts” nor “irrefutable evidence” to designate an American or foreigner as a terrorist, according to a key government document obtained by The Intercept.

The “March 2013 Watchlisting Guidance,” a 166-page document issued last year by the National Counterterrorism Center, spells out the government’s secret rules for putting individuals on its main terrorist database, as well as the no fly list and the selectee list, which triggers enhanced screening at airports and border crossings. The new guidelines allow individuals to be designated as representatives of terror organizations without any evidence they are actually connected to such organizations, and it gives a single White House official the unilateral authority to place “entire categories” of people the government is tracking onto the no fly and selectee lists. It broadens the authority of government officials to “nominate” people to the watchlists based on what is vaguely described as “fragmentary information.” It also allows for dead people to be watchlisted.

* * *

While the nomination process appears methodical on paper, in practice there is a shortcut around the entire system. Known as a “threat-based expedited upgrade,” it gives a single White House official the unilateral authority to elevate entire “categories of people” whose names appear in the larger databases onto the no fly or selectee lists. This can occur, the guidelines state, when there is a “particular threat stream” indicating that a certain type of individual may commit a terrorist act.

This extraordinary power for “categorical watchlisting”—otherwise known as profiling—is vested in the assistant to the president for homeland security and counterterrorism, a position formerly held by CIA Director John Brennan that does not require Senate confirmation.

The rulebook does not indicate what “categories of people” have been subjected to threat-based upgrades. It is not clear, for example, whether a category might be as broad as military-age males from Yemen. The guidelines do make clear that American citizens and green card holders are subject to such upgrades, though government officials are required to review their status in an “expedited” procedure. Upgrades can remain in effect for 72 hours before being reviewed by a small committee of senior officials. If approved, they can remain in place for 30 days before a renewal is required, and can continue “until the threat no longer exists.”

“In a set of watchlisting criteria riddled with exceptions that swallow rules, this exception is perhaps the most expansive and certainly one of the most troubling,” Shamsi, the ACLU attorney, says. “It’s reminiscent of the Bush administration’s heavily criticized color-coded threat alerts, except that here, bureaucrats can exercise virtually standard-less authority in secret with specific negative consequences for entire categories of people.”

* * *

In addition to data like fingerprints, travel itineraries, identification documents and gun licenses, the rules encourage screeners to acquire health insurance information, drug prescriptions, “any cards with an electronic strip on it (hotel cards, grocery cards, gift cards, frequent flyer cards),” cellphones, email addresses, binoculars, peroxide, bank account numbers, pay stubs, academic transcripts, parking and speeding tickets, and want ads. The digital information singled out for collection includes social media accounts, cell phone lists, speed dial numbers, laptop images, thumb drives, iPods, Kindles, and cameras. All of the information is then uploaded to the TIDE database.

Screeners are also instructed to collect data on any “pocket litter,” scuba gear, EZ Passes, library cards, and the titles of any books, along with information about their condition—”e.g., new, dog-eared, annotated, unopened.” Business cards and conference materials are also targeted, as well as “anything with an account number” and information about any gold or jewelry worn by the watchlisted individual. Even “animal information”—details about pets from veterinarians or tracking chips—is requested. The rulebook also encourages the collection of biometric or biographical data about the travel partners of watchlisted individuals.

* * *

For the living, the process of getting off the watchlist is simple yet opaque. A complaint can be filed through the Department of Homeland Security Traveler Redress Inquiry Program, which launches an internal review that is not subject to oversight by any court or entity outside the counterterrorism community. The review can result in removal from a watchlist or an adjustment of watchlist status, but the individual will not be told if he or she prevails. The guidelines highlight one of the reasons why it has been difficult to get off the list—if multiple agencies have contributed information on a watchlisted individual, all of them must agree to removing him or her.

If a U.S. citizen is placed on the no fly list while abroad and is turned away from a flight bound for the U.S., the guidelines say they should be referred to the nearest U.S. embassy or consulate, which is prohibited from informing them why they were blocked from flying. According to the rules, these individuals can be granted a “One-Time Waiver” to fly, though they will not be told that they are traveling on a waiver. Back in the United States, they will be unable to board another flight.

This is totally out of control and subject to no significant oversight. Americans, in particular, should not be labelled as terrorists or potential terrorists based on the decisions of faceless bureaucrats subject to no significant oversight. How can these programs be labelled as anything other than the creation of a police state in America. As the New York Times reports:

Civil libertarians have also challenged the watch lists because the standards for being added to them are murky and people are generally not notified that they have been included or told why. Last month, a Federal District Court judge in Oregon ruled that the procedures for reviewing whether it was appropriate to have put someone’s name on the no-fly list were inadequate and violated Americans’ Fifth Amendment right to due process.

And I agree with this take by Conor Friedersdorf, writing in The Atlantic:

The Obama administration should be condemned for its policy. There is no defense for its avowed belief that a system as opaque and unchallengeable as what it propagates and defends can protect the civil rights and civil liberties of those subject to it. The Congress should also be criticized for permitting two successive presidents to transgress against core American norms and values in this realm. The former Constitutional law lecturer in the Oval Office knows that this system transgresses against basic rule-of-law norms, but has evidently persuaded himself that normal safeguards aren’t needed so long as he is in charge. Obama defenders should recalibrate their esteem for the president accordingly. 

Apple places huge orders for iPhone 6

The Wall Street Journal is reporting that Apple plans to manufacture many more iPhone 6 devices than they produced last year for the iPhone 5S.

The Cupertino, Calif., company is asking suppliers to manufacture between 70 million and 80 million units combined of two large-screen iPhones with 4.7-inch and 5.5-inch displays by Dec. 30, according to people familiar with the matter.

Its forecast for what is commonly called the iPhone 6 is significantly larger than the initial order last year of between 50 million and 60 million versions of the iPhone 5S and 5C—which had a display measuring 4-inches diagonally, these people said. Both of the coming models are expected to feature metal cases similar to the iPhone 5S and likely come in multiple colors, these people said.

Of course, Apple has made no public announcement regarding its plans. The Journal article is interesting, since Apple will release its Fiscal Quarter 3 earnings after the market closes today.

Reagan’s Executive Order 12333

Despite the pressure that has been generated to reform NSA surveillance of Americans under the FISA Act, there remains a huge program that the NSA operates completely without regard to FISA. It is called Executive Order 12333, it was put in place during the Reagan Administration and it continues unchanged.

The guts of the order provide that there is no protection for American’s communications if the communications are collected by US intelligence agencies outside the United States. There is no right to appeal the collection and no restrictions on how long the collections can be retained. No warrants are required. The order is not a statute and has never been subjected to judicial review for constitutional compliance. And this program does not collect merely metadata; it collects the full content of communications. It is in many respects less constitutional than the NSA’s telephone metadata collection program.

Writing in the Washington Post, John Napier Tye, who served as section chief for Internet freedom in the State Department’s Bureau of Democracy, Human Rights and Labor from January 2011 to April 2014, has called out the dangers of EO 12333.

A legal regime in which U.S. citizens’ data receives different levels of privacy and oversight, depending on whether it is collected inside or outside U.S. borders, may have made sense when most communications by U.S. persons stayed inside the United States. But today, U.S. communications increasingly travel across U.S. borders — or are stored beyond them. For example, the Google and Yahoo e-mail systems rely on networks of “mirror” servers located throughout the world. An e-mail from New York to New Jersey is likely to wind up on servers in Brazil, Japan and Britain. The same is true for most purely domestic communications.

Executive Order 12333 contains nothing to prevent the NSA from collecting and storing all such communications — content as well as metadata — provided that such collection occurs outside the United States in the course of a lawful foreign intelligence investigation. No warrant or court approval is required, and such collection never need be reported to Congress. None of the reforms that Obama announced earlier this year will affect such collection.

Without any legal barriers to such collection, U.S. persons must increasingly rely on the affected companies to implement security measures to keep their communications private. The executive order does not require the NSA to notify or obtain consent of a company before collecting its users’ data.

The attorney general, rather than a court, must approve “minimization procedures” for handling the data of U.S. persons that is collected under 12333, to protect their rights. I do not know the details of those procedures. But the director of national intelligence recently declassified a document (United States Signals Intelligence Directive 18) showing that U.S. agencies may retain such data for five years.

* * *

When I started at the State Department, I took an oath to protect the Constitution of the United States. I don’t believe that there is any valid interpretation of the Fourth Amendment that could permit the government to collect and store a large portion of U.S. citizens’ online communications, without any court or congressional oversight, and without any suspicion of wrongdoing. Such a legal regime risks abuse in the long run, regardless of whether one trusts the individuals in office at a particular moment.

I am coming forward because I think Americans deserve an honest answer to the simple question: What kind of data is the NSA collecting on millions, or hundreds of millions, of Americans?

The President has specifically indicated that he intends to do nothing to disclose or eliminate this abusive program. So it appears that the President believes that the Fourth Amendment rights of US citizens end at the border, and anything that can be captured elsewhere is fair game. Even Dianne Feinstein, Chair of the Senate Intelligence Committee and a staunch NSA defender, has said that Congressional oversight of the program is limited.

Feinstein has consistently defended the NSA’s collection of domestic cellphone metadata, saying the program under which it is doing so is overseen by both the courts and Congress. But even she has said the 12333 programs skirt similar protections.

“The other programs do not (have the same oversight as FISA). And that’s what we need to take a look at,” she said, adding that her committee has not been able to “sufficiently” oversee the programs run under the executive order. “Twelve-triple-three programs are under the executive branch entirely.”

Feinstein has also said the order has few, if any, privacy protections. “I don’t think privacy protections are built into it,” she said. “It’s an executive policy. The executive controls intelligence in the country.”

There is more from the EFF.

Elaine Stritch dies at 89

I always loved watching Elaine Stritch, and now she has passed away yesterday at her home in Birmingham, Michigan. She was born in Detroit and February 2, 1925 and had several relatives lving there.

The New York Times obituary is here, and for a lovely farewell you might want to watch a documentary about Ms. Stritch, available on Netflix streaming, called Elaine Stritch: Shoot Me.