If by chance your tap water is undrinkable, does your water have to be shipped in miniature bottles (even more plastics made from precious fossil fuels) half-way around the globe?
Story Updates...6,5,4,3,2,1
6. Balance in Media Reporting Ensures Fairness and Democracy
THE PASSING OF NBC's TIM RUSSERT - JUNE 2008Thomas Patterson, a professor of government and the press at Harvard's Shorenstein Center on the Press, Politics, and Public Policy, said Russert's contribution was "in an age of changing journalism, to stick with the old style, in a sense, with the old substantive content.'' Noting that during Russert's tenure Meet the Press was the only Sunday morning interview show that consistently made news, Patterson said it was "as close as journalists in these days had to a bully pulpit.''
Russert was respected for his balanced coverage and fairness towards guests. After a session, he would close with his customary "Thank-you for sharing your views." It is this kind of reporting that has been so lacking over the past decade at other media outlets.
He will be sorely missed.
"He was always about fairness," said NBC anchor Brian Williams.
Senate Majority Leader Harry Reid, D-Nevada., said that Russert “asked the tough questions the right way and was the best in the business at keeping his interview subjects honest.”
MOYERS' TALK ON THE DANGERS OF MEDIA CONSOLIDATION - JUNE 2008
Media consolidation is a corrosive force leading to polarizing views and a stifling of debate and understanding. Dialog and compromise is the bedrock of democracy. Why then is it that big media cow tows to large corporate boards, engaging in commoditization of news to sell for profit? Democracy without participation and accountability creates the allusion of consent, but it leaves the elite in control of the state. The individual and the public interest is lost.
Moyers says that the work of activists for democracy has "challenged the stranglehold of mega-media corporations over our press" and fostered "alternative and independent sources of news and information that people can trust."
The open architecture benefits of the web cannot be lost to organized media that want to eliminate net neutrality and charge for usage, i.e., surfing the web. The Internet must remain an open and non-discriminatory medium for all people. The digital age must remain a place for freedom of speech, freedom of the press, and freedom of assembly. Branded content must not win since packaged news and advertising becomes “communitainment.” George Orwell must be turning in his grave.
What can we do?
1. Remain vigilant and support the Public Broadcasting System (PBS).
2. Be a watchdog for broadcasting excellence.
3. Contact your congressional leaders to support net neutrality.
4. End the war in Iraq – initially supported by media lies for a disastrous foreign policy, actually passing on U.S. government lies while IGNORING the competing narratives against these claims.
5. Toyota is/was Against Increased MPG
Toyota succumbed to the pressure of its Prius owners and many other concerned Americans and finally backed more stringent regulations for auto makers as proposed by Congress in December 2007. Please watch this video production by the NRDC.October and November have been hectic months in California and across the U.S. in trying to pass an energy bill that includes provisions for an increased CAFE standard or greater “miles per gallon” ratings for vehicles. Toyota was challenged, responded, and other agencies found fault with their updated position.
Letter from the NRDC
Dear Robert,
Thanks again for taking action along with more than 80,000 other online activists who are appalled at Toyota's shameful stance on improved gas mileage.
By now, you will have no doubt received an email from the car company in which it claims to "share your interest in strengthening automotive fuel economy."
Don't be fooled. Here's the situation --
The Senate has already passed a strong bill that would raise the fuel economy standard to 35 mpg by 2020. With your support, we're fighting to get that measure included in a final energy bill that will soon be voted on by both houses of Congress.
But instead of supporting that greenest of measures, Toyota is attempting to derail it by supporting the Hill-Terry bill. The Hill-Terry bill would only require an increase in gas mileage standards to 32 mpg by 2022.
The difference between these two bills may not seem all that significant, but in reality, it's huge. The bill passed by the Senate is more than twice as effective as the Hill-Terry bill, which would waste millions more gallons of gasoline per day and could produce hundreds of millions more tons of global warming pollution.
We're going to keep the pressure on the self-styled "green" automaker until it gets in gear and supports the tough fuel economy measure that has already passed the Senate.
Please take a moment to tell your friends who are tired of corporations that market themselves as environmentally conscious even as they undermine the future of our planet.
We'll be sure to keep you updated on this crucial fight for cleaner cars.
Sincerely,
Frances Beinecke
President
NRDC Action Fund
Toyota Response to Being Challenged by Prius Owners
Date: Thu, 11 Oct 2007 17:30:16 -0700 (PDT)
From: "Ask Toyota" toyota_cares@toyota.com
To: Rob Koslowsky Subject: Has Toyota no shame? [Incident:071011-023360]
Thank you for contacting Toyota Motor Sales, USA, Inc. regarding your concerns with Toyota's position on federally mandated fuel economy increases.
We share your interest in strengthening automotive fuel economy and, in fact, are actively lobbying for a significant increase in the Corporate Average Fuel Economy Standards (CAFE). Any assertion by anyone or any one website or blog that we are doing otherwise, is simply not true.
There are various bills before Congress that would mandate new CAFE targets by 2020 and require both cars and trucks to meet that standard. At Toyota, we favor proposed legislation known as H.R. 2927, the Hill-Terry bill. This measure is aggressive and calls for increases in CAFE by as much as 40% by 2022. Although this won't be easy, we believe it is achievable. The bill maintains separate categories for cars and trucks.
Please also note the following:
- Toyota has always exceeded federal fuel economy requirements, and our passenger car line-up has the highest CAFE rating in the automotive industry.
- Toyota is the only major automaker to consistently improve global warming performance since 2001, thanks to hybrids and better conventional technology.*
- We're totally committed to ongoing improvement of fuel economy and emissions in all of our vehicles. In fact, our commitment to this is so deep, we spend $23 million every day on green initiatives and research.
We are continuously striving to improve our fuel economy, regardless of federal mandates.
So please understand that we, too, strongly support increased fuel economy standards. It's the right thing to do-and, we hope that we've been able to provide a little more insight into our environmental commitments and actions.
To learn more, please visit our corporate blog and see our recent posts regarding this topic at http://blog.toyota.com/2007/10/post.html and at http://blog.toyota.com/2007/09/irvs-sheet-a-ca.html.
Thank you for your interest in Toyota and the environment.
Toyota Motor Sales, USA, Inc.
Corporate Communications
toyota_corp_comm@toyota.com
* Union of Concerned Scientists
Letter of Concern to a Toyota President
Shigeru Hayakawa, President and CEO
Toyota Motor North America, Inc.
9 West 57th St., Suite 4900
New York, NY 10019
Dear Mr. Hayakawa,
I am appalled that Toyota is opposing a guaranteed increase in fuel economy standards to 35 miles per gallon by 2020. If your company is serious about satisfying consumers and fighting America's addiction to oil, it's time for your lobbying to match your advertising rhetoric.
Toyota's ads paint the company as the greenest, most fuel-efficient car company on the market. If that's the case, why is Toyota an active member of the Alliance of Automobile Manufacturers, a Washington lobbying group that claims that a sensible 35 m.p.g. standard is "unattainable"?
Americans who love the Prius bought the message that Toyota is a leader in the field. But your current lobbying activities threaten to paint you as no different than any other gas-guzzling auto company.
I urge you to back up your green image by calling for a guaranteed 35 m.p.g. standard by 2020 that allows for continuous improvement after 2020. And I call on you to withdraw Toyota from any lobbying association that opposes a guaranteed 35 m.p.g. standard.
Sincerely,
Robert Koslowsky
4. Nuclear Power – Q & A with the Southern Company
During the summer of 2006, Rob and the Southern Company exchanged views on nuclear power generation within its operating territory. Rob is a stockholder of the Southern Company (NYSE: SO) and had some tough questions for them. The Southern Company is one of the largest generators of electricity in the southeastern U.S. It is a super-regional energy company producing more than 41,000 megawatts of electricity, one of the largest producers in the country.
The Southern Company has a 120,000 square mile service territory spanning most of Georgia and Alabama, southeastern Mississippi, and the panhandle region of Florida. It is a FORTUNE 500 company with reported earnings in 2005 of $1.59 billion and employing about 26,000 employees. The Southern Company owns four regulated retail electric utilities: Alabama Power, Georgia Power, Gulf Power, and Mississippi Power.
RKK: The US recently allocated $14B of taxpayer money for tax credits to fund half a dozen nuclear power plants in the 2005 energy bill. How much of these credits or how many additional plants is the Southern Company using or planning, respectively?
So. Co.: The 2005 Energy Policy Act provides up to $500M of federal risk insurance for each of the first two new plants constructed and up to $250 each of the next four plants. Events covered by this insurance include licensing schedule delays associated with the Nuclear Regulatory Commission’s reviews of inspections, tests, analyses and acceptance criteria, as well as certain delays associated with litigation in federal, state or tribal courts.
The Act also provides for production tax credits of up to 1.8 cents per kWh for 6,000 MW of new nuclear generation with a $125 million per 1,000 MW limit. To qualify for these credits, a utility must file its Combined Operating License (COL) application before 12/31/08 and must pour the unit’s first safety-related concrete by 1/1/14.
On August 15, 2006, Southern Nuclear, on behalf of Georgia Power and its nuclear co-owners filed an Early Site Permit (ESP) application with the NRC for two additional nuclear units at the Vogtle Electric Generating Plant. While the decision to construct new units has not been made, the filing of the ESP and the planned 2008 COL filing will position Southern Company to participate in the federal incentives if it does decide to build.
RKK assessment: For the six plants proposed by the Southern Company, it would be eligible for $2B of the tax credits. It seems to me that these tax credits would be applied to the Southern Company’s legal expenses for expected lawsuits and regulatory delays. The second subsidy would make Southern Company eligible for an additional subsidy of $125 for each of its new 1 GW nuclear power plants, another $900M in taxpayer funded subsidies.
RKK: How does Southern Company mitigate thermal pollution, especially since the incredible heat of a nuclear reaction raises the surrounding water temperature to the detriment of marine life?
So. Co.: The nuclear reaction process is carefully controlled and takes place in a specially designed reactor vessel. The temperature and pressure of the water in the reactor is very similar (generally lower) than the water temperatures/pressures associated with fossil fuel combustion. The reactor does not interact directly with the environment and the heat discharged to the river is only slightly higher than the temperature of the ambient river water.
First, some background information about steam-electric generating facilities (either fossil-fueled or nuclear). In the conventional fossil steam-electric generating plant, fuel is burned in a furnace (boiler) and the heat from combustion is transferred through steel pipes containing flowing water (boiler tubes). The water, under pressure, is heated and directed to a steam drum where it flashes into steam. The steam is then circulated through another section of the furnace (boiler) where its temperature and pressure increases. This “superheated steam” is routed to a turbine where it expands, thus pushing the turbine blades and turning the turbine which is coupled to a generator. The resultant low-pressure steam that exits the turbine is condensed (typically in cooling towers) and returned to the cycle.
Two types of nuclear reactors are utilized in the U.S.; the boiling water reactor (BWR) and the pressurized water reactor (PWR). Basically, both types of reactors operate on the same principles but differ in the way heat is transferred from the reactor to the steam system. In a BWR, the water that circulates through the fuel core boils directly and provides steam for the turbine generator system.
Boiling Water Reactor Design. Diagram courtesy of Southern Company.
Pressurized Water Reactor Design. Diagram courtesy of Southern Company.
Neither the fossil combustion process nor the nuclear fission process is extremely efficient (~30 - 40 %), and significant heat remains as the steam is condensed to water. River water typically is used to cool the condenser, and the remaining heat is transferred from the condenser to the river water.
For plants with cooling towers such as Plant Vogtle, the remaining heat is removed by evaporation or transferred through the condenser to a closed cycle cooling system (cooling tower) with makeup supplied by river water. A small amount of water is discharged from the cooling tower to the river and contains a small amount of residual heat. Even at very low river flow, the thermal effect of the Vogtle plant is minimal; the river temperature is raised only a few tenths of a degree before returning to ambient temperature a few hundred feet downstream.
Southern Company nuclear plants all utilize cooling towers. This technology is recognized by EPA as Best Available Technology (BAT) for thermal control.
RKK comment: Use of solar energy or wind power creates no thermal pollution at all and produce no radioactive waste at all.
RKK: How is the Southern Company dealing with tons of radioactive waste it has generated and will continue to generate? I don’t believe the Yucca Mountain site is operational yet for the required millennia of storage time required.
So. Co.: In July 2006, the Department of Energy released a schedule for the development of the Yucca Mountain repository that calls for the facility to begin accepting nuclear waste in 2017.
{March 2008 Update: It is expected that the federal license application will be completed before the end of the year. President Bush earmarked $494.7 million for this nuclear waste storage facility.}
Seismic monitoring activities on Yucca Mountain in October 1994. Photo courtesy of the U.S. Department of Energy
In the interim, U.S. nuclear utilities have adopted the following solutions: Used fuel pools: At most plants, used fuel assemblies are stored in steel-lined, concrete vaults filled with water. In these used fuel pools, the water serves as a natural barrier for radiation and a coolant for the fuel as it decays and becomes less radioactive. The water itself never leaves the inside of the plant’s concrete building. Plants Hatch, Vogtle, and Farley have used fuel pools.
On-site dry storage facilities: Since 1986, more than two dozen U.S. plants have supplemented their storage capacity by building above-ground, dry storage facilities. Plants Hatch and Farley have dry storage facilities. Dry Storage will not be needed at Vogtle until the 2014-2015 timeframe.
Interim storage facilities: A proposal submitted by Senate Energy Committee Chairman Pete Domenici (R-New Mexico) and backed by Senate Minority Leader Harry Reid (D-Nevada) is included in an energy spending bill pending in the Senate. It would create centralized temporary sites to store waste in states that generate nuclear power. Regional sites are also on option under the plan.
RKK assessment: Reactor locations are running out of room in their used fuel pools and therefore must construct dry storage facilities on their property to accommodate the increasing amount of spent fuel that must be safely stored. The concern for many U.S. residents is to where the interim storage facilities will be located until Yucca Mountain is opened in 2017. The majority of citizens do not want a nuclear storage facility anywhere near their residence.
RKK: How are these waste storage costs figured in the Southern Company cost per kilowatt-hour? If not, how are these long-term costs accounted for?
So. Co.: Approximately 1 mil per kilowatt-hour of nuclear generation is included to pay the DOE for ultimate disposal of the fuel discharged from the reactor and a much smaller additional cost is included to pay for the interim dry storage of the discharged fuel prior to DOE pickup.
RKK: What security is provided for on-site spent fuel rod storage? How is this cost accounted for?
So. Co.: Security for spent fuel rods is the same as for the fuel assemblies in the reactor. Security at our sites is robustly structured to protect the fuel in any location. That same security also protests plant assets from any criminal activity. These costs are not tracked separately within our comprehensive security plan.
RKK: If there are only 40 years of uranium left, how viable is the nuclear option for the Southern Company in the long room? Will the Southern Company be able to reprocess spent fuel rods to extend the life of the uranium supply and reduce the long-term storage needs?
So. Co.: Uranium [atomic number 92] is a naturally occurring element and is present in great quantities on the earth. Current estimates of world uranium supply are based largely on exploration and drilling data accumulated prior to the 1980's. Until the late 70's, nuclear power generation was projected to expand at a very rapid pace through the turn of the century and uranium mining activities were responding to the projected future demand. With the rapid decline in new nuclear plant construction beginning in the late 70's, uranium prices began to decline and most large scale uranium exploration and drilling activities ceased. For most of the last twenty five years, no significant exploration for new uranium deposits occurred. With the recent renewed interest in new nuclear generation, exploration and drilling activities have increased significantly and are projected to continue to increase at a rapid pace. Industry expectations are that reported world uranium resources will increase as additional exploration and drilling data becomes available. Normal supply/demand forces should ensure an adequate uranium supply for existing and projected new nuclear generation for the foreseeable future.
In addition, activities are underway within the federal government and the nuclear industry to increase the potential for the reprocessing of used nuclear fuel to recover the energy remaining in the fuel and to reduce the long term high level waste storage requirements of the industry. These activities, if successful, are projected to have multiple benefits for the energy supply of the U.S. Southern Company personnel are actively involved with federal, state and local officials regarding these activities.
RKK: How is the Southern Company mitigating the danger of tritium (H3) leaks, a potential carcinogenic?
So. Co.: Southern Company monitors tritium discharges into the rivers connected to our nuclear facilities. These discharges, which are permitted by the NRC, and are well below the standards, established by federal authorities responsible for regulating tritium, which include the U.S. Nuclear regulatory Commission (NRC) and the U.S. Environmental Protection Agency. Southern Company monitors water both upstream and downstream of our facilities and results are reported to the NRC on an annual basis. Southern Company also inspects all above-ground radioactive piping, tanks, and components for any leakage. In addition, we have contracted with engineering firms to perform underground piping studies and to study the surface and subsurface drainage systems. We also test and monitor on-site wells and have increased our sampling rates in recent years. State Environmental Agencies also conduct independent sampling and testing.
RKK comment: Some level of tritium, a known carcinogen, can be released into the environment per the NRC. This is consistent with the small amounts of benzene, another carcinogen, allowed to be found in soft drinks per the FDA. Two different government departments, each allowing an OK amount of two different carcinogens to be released into the environment. Who checks to see that all of these little bits of OK carcinogens do not accumulate to give us a fatal dose over time? Is it the EPA? Furthermore, note that all of this federal and independent state testing for radioactive leaks, whether into the water table or air, is another hidden cost to taxpayers. Someone has to pay for the government workers to do the testing.
RKK: Steam released to the environment from the cooling towers is another form of pollution since water vapor is a greenhouse gas. A recent study has shown that a 1 percent increase of water vapor in the atmosphere could raise the global average temperature of the Earth’s surface more than four degrees. Does the Southern Company recycle water vapor?
So. Co.: First, the cooling towers do not produce “steam.” The towers direct heated water from the condenser across specially designed fill material that produces water droplets. At high velocity, the droplets rapidly cool and evaporate. The air exiting the tower is saturated with water and depending on the environmental conditions; the condensation produces a water vapor plume.
Cooling towers. Image courtesy of Southern Company.
Southern Company does not recycle water vapor from cooling towers and is not aware of any such applications in the power industry.
RKK: Old nuclear power plants (40 - 50 years old) must be permanently entombed in place since it is not practical to dismantle and move them. How is the Southern Company addressing this issue for its current nuclear plants?
So. Co.: The Nuclear Regulatory Commission which regulators U.S. nuclear power plants, allows licensees three decommissioning options. These options are called: DECON, SAFSTOR, and ENTOMB. The DECON alternative, selected for all Southern Company Nuclear Power Plant Decommissioning Cost Studies, assumes that all plant systems, structures and facilities that contain radioactive material will be removed or decontaminated to levels that permit unrestricted use shortly (approximately 7 years per unit) after permanent cessation of plant operations. The Southern Company Decommissioning Cost Studies assume only the switchyard facilities are left in place to preserve the option for later generation facilities.
The SAFSTOR method allows the licensee to seal the facility and defer DECON up to 60 years unless a longer duration is justified. The licensee must maintain the facility in a mothballed state under condition surveillance and security.
The guidelines for ENTOMB are similar. At the conclusion of a 60-year SAFSTOR dormancy period (or longer for ENTOMB if the NRC approves such a case), the site would undergo decontamination to meet the definition of unrestricted release and license termination.
Southern Company has chosen the DECON method as the most practical option from a cost perspective and the most flexible option to allow re-powering in a relatively short time frame.
3. Toshiba Also Recalls 340,000 Laptops Using Sony Batteries (September 2006 Update)
Apple Also Recalls 1.8 Million Notebooks Using Sony Batteries (August 2006 Update)
Dell Recalls 4 Million Notebooks with Sony Batteries (August 2006 Update)
Sony MP3 Players Trounced by Apple iPod (June 2006 Update)
Sony Looking at Digital Books (June 2006 Update)
Sony Court Settlement on Tainted CDs Reached (June 2006 Update)
Sony Sued by Rock Bands (May 2006 Update)
Sony and its Business Practices (February 2006 Update)
Sony Innovation Absent (January 2006 Update)
Sony Alienates Its Customers (December 2005 Update)
SEPTEMBER UPDATESony's battery nightmare continues with Toshiba Corp.'s Septermber 19th recall of 340,000 of its laptops. The cost to Sony for all of these battery recalls could be as high as $255 million US.
AUGUST UPDATE 2
Apple Computer, like Dell ealier in the month, is recalling laptop batteries made by Sony. The batteries were found to overheat. 1.8 million batteries used in the 12-inch iBook and 12-inch and 15-inch PowerBook are suspect. All of those models are based on the discontinued G4 processor shipped between October 2003 and August 2006.
AUGUST UPDATE 1
Dell traced the source of their overheating Notebooks to the Sony lithium-ion batteries that store energy to power the portable PCs. Sony is a leading supplier of batteries to a number of computer companies. Apparently the root cause for the overheating is how the batteries are manufactured. More to follow in the near future.
JUNE UPDATE 3
Sony's MP3 music players have failed to come back from the Apple iPod juggernaut that dominates 77 percent of the music download market. Sony's Connect music service has also failed to find accepatance in the marketplace. Apple's iTunes music service has trounced its venerable competitor, leaving Sony with less than 10 percent of the music market.
JUNE UPDATE 2
Borders has agreed to stock and sell the Sony Reader in its 200 stores across the U.S. The Reader should be able to last for the 'turning' of 7,500 'pages' before a recharge is needed. Sony claimes that the Reader can be used effectively in sunlight and low lit environments.
In April 2006, Sony became the first major player to announce it would take advantage of a new technology that arranges miniature black and white particles into words and images via an electronic charge. E Ink, a small company perfecting the new screen technology, will allow Sony to debut its Sony Reader, a device which mimics the size, weight, and feel of a traditional book.
The Reader is expected to cost $400 and will display content from Sony’s online store. Initially, Sony is offering 10,000 book titles, news stories, and blogs.
Competition will be fierce as Apple will leverage its accepted iPod and iTunes store to offer digital books and major publishers, such as Random House and Simon & Schuster, are exploring ways to generate revenue from online book selling too.
Stay tuned for exciting developments in this world of digital reading.
JUNE UPDATE
A New York federal judge OKd a settlement between Sony BMG Music Entertainment and several lawsuits related to Sony’s unsettling use of copy-protection software on its compact discs (see “Sony Alienates Its Customers” DECEMBER UPDATE below).
Consumers will be able to exchange their tainted CDs for replacements without the copy-protection software and other compensation, including a number of free music downloads from the Sony Music Store.
MAY UPDATE
Cheap Trick and the Allman Brothers Band are suing Sony Music.
Apparently Sony is being accused of reneging on its contract to pay the bands half of the net revenue received from music downloads. Sony pays its musicians 4 1/2 cents per song download instead of the expected 30 cents.
Other download services such as iTunes and Napster pay the 30 cent rate - a royalty that is music to musicians’ ears. Is it any wonder the working musicians mistrust the big record companies?
FEBRUARY UPDATE
Sony has moved us all into that confusing area where shades of gray replace the simplicity of black and white answers. Does Sony’s recent foray into installing ‘spyware’ on those consumers buying Sony music CD’s of their favorite artists, move them from the realm of legitimate business practice to the backwaters of illegal hacking?
Sony is insistent on protecting its product from consumers using it in ways Sony does not like or cannot control. To protect its assets, Sony basically installed spyware that would inform its central computer if more than three copies of its artists’ songs were made, in addition to transmitting information about the user’s computer. Whoa...talk about invasion of privacy. Consumers are rightly upset, especially since the Sony spyware was invisible to the user. Again, Americans were being spied on without the consent of the court , in this case the court of industry standards.
It is high time, big government, industry trade groups, and consumer advocates regulate what companies like Sony can do and cannot do to its customer’s computers. This wake-up call suggests consumers understand and get involved with the issue of digital rights management. Manufacturers cannot become the sole arbiter of how the consumer uses the product it buys or extract personal information to use as they please.
JANUARY UPDATE
Japanese government officials have highlighted the danger of its firms being “caught asleep at the wheel” by foreign innovators such as Apple. The success of the iPod shows the need for reform of Japanese business practices and regulation. Sony, the inventor of the Walkman, could not compete or duplicate the success of Apple because the Japanese environment was not conducive to distribution of music over the Internet.
Sony's Walkman has effectively been replaced by Apple's iPod. While Sony required store-bought hardware such as casettes and CDs to provide portable music, Apple uses internet delivered digital music files for storage on computers and portable iPods.
As a symbol of Japan's postwar boom in technological innovation, Sony is now struggling to reverse its failing fortunes by cutting ten thousand jobs and offsetting tens of millions of dollars in losses. Maybe once Japan and its leading companies toss out obsolete business practices, eliminate vested interests, and obliterate regulatory obstacles, the competitive development of goods and services that leverage the latest technology and the Internet will return companies like Sony to the status of world leaders again.
DECEMBER UPDATE
Sony’s efforts to protect the value of its music it sells has once again led to disaster for all concerned. Sony upset and frustrated its customer while alienating the artists it needs to produce the music. And this is not the first time Sony’s Music Division ruffled feathers. A previous attempt to guard their music occurred when they launched an on-line music store to compete with Apple iTunes resulted in an ornerous “Digital Rights Management” software that hampered the product launch and scuttled any chance of success. Why is Sony seemingly targeting its customers to address anti-piracy concerns?
Sony does not want its customers to share music with their friends. To force a certain customer behavior, Sony adopted a technology approach that locks music within the CD, similar to how legally downloaded songs have copy limitations. Sony’s change in policy meant the following:
- the customer is allowed to make only three copies, which limits most of us who have more than one computer, cell phone, and portable electronic device (e.g. iPod) we use to hold music
- oh, these Sony CD-housed songs can NOT be played on an iPod
- the customer had to accept a load of software from Sony to copy the songs to their computer.
And it is this last point that has caused all of the uproar. Sony’s ineffective software testing meant that a secretly inserted ‘rootkit’ bit of code in your computer actually allowed hackers to take control of your computer. This approach even violates existing law against spyware being installed on someone’s computer. By now, you must be shaking your head in either amazement or disgust...
Our personal collection of CD music features very few SONY titles. Most appear to be other labels such as Capitol, EMI, Columbia, Warner, and more. We are not buying any artists featured on Sony labeled CDs - we will get them when they appear on the iTunes music store.
So what has happened? Sony was forced to recall its audio CDs. It has been hammered in the press and on blogs. Sony’s artists (e.g. Celine Dion) have taken big sales hits and its fans are revolting.
With this kind of draconian customer selling policy, how does Sony expect to be a leader in music sales going forward? Punishing its paying customers seems to be a policy fraught with folly.
Whatever happened to Sony and the days of the Walkman...
2. VoIP Business Model Requires Liability Protection (April 2007 Update)
VoIP and the FCC’s Unfinished Business (January 2006 Update)
VoIP Has More Work Done (June 2005 Update)
VoIP Needs More Work to Achieve Parity With Wireline Phone Service (May 2005 Update)
APRIL 2007 UPDATEVoIP providers have long since complied with the FCC mandate to provide E911 service. The challenge for them has been preserving the integrity of their business model since these VoIP providers do NOT have something the large wireline and wireless providers do - liability protections.
Since only Congress can bestow liability protection across all states, the VoIP industry is waiting for a Senate bill (The IP-Enabled Voice Communication and Public Safety Act) to protect operators from onerous lawsuits arising from possible failures in not identifying the proper physical location with a call originating from a computer caller.
Companies like Vonage have held back on their growth recently because emergency call centers will not take E911 calls from some VoIP customers. Attempts in 2005 and 2006 to pass a bill on VoIP liability protections failed. Consequently, industry expansion will be tempered by risk-adverse lawyers who want to play it safe and not see their clients take subscribers in geographic areas that cannot provide E911. In the meantime, the VoIP industry is hoping this latest Senate bill will pass.
JANUARY 2006 UPDATE
Maybe the FCC responded too quickly in the summer heat of last year. Their July 29th compliance date for VoIP providers to support E911 calling was overly ambitious and gave way to a string of postponements...the deadline extended to August 29, then moved to September 28, followed by a Halloween scare, and finally set at November 28. By now all VoIP customers must be aware of the limitations of E911 service. However, the technical challenge remains to determine the physical location of the caller when a 911 call is placed.
This requirement gives me a sense of deja vu as cell phone service was plagued with similar caller location determination issues. In 1994, the FCC adopted similar compliance issues for cell phone 911 calls and then extended deadlines and granted exceptions until the majority of the cellular network was brought into compliance in 2004. This time around though, the Congress will not wait ten years for the FCC to get the job done. In November 2005, Bill S.1063 was introduced, which would force incumbent telephone companies to interconnect with the VoIPs and require the FCC to waive the VoIP E911 location demands if it is technically or operationally impractical. Its looking like this issue will be solved within a year instead of within a decade - good for everyone, especially the citizen in need of completing that 911 emergency call.
JUNE 2005 UPDATE
As a follow-up to the April 2005 Newsletter story on page 5 ‘Consolidation Always Seems to Produce Job Cuts,’ the intervention by the FCC to protect consumers during times of crisis has been swift and fair.
Last month the FCC ruled that many classes of VoIP service providers must provide enhanced 911 emergency calling support. These providers include cable operators providing voice and other service providers like Vonage. The FCC order states that interconnected VoIP providers must deliver all 911 calls to the customer’s local emergency operator, provide emergency operators with the customer’s call back number and location information, and inform all of their customers about enhanced 911 capabilities and limitations. Traditional telephone companies must provide access to their 911 networks to any requesting VoIP carrier. The speed at which the FCC responded to this potential widespread crisis is astounding and it should be lauded for its commitment to public safety and security.
MAY 2005 UPDATE
Internet-based phone service, commonly called voice over Internet protocol (VoIP), is gaining popularity with consumers due to its lower price. Vonage is one of the larger players with 500,000 subscribers. In April 2005, AOL introduced a VoIP service, called Internet Phone Service, to leverage its huge internet subscriber base and compete with both Vonage and traditional wireline service providers. Unlimited local and long distance calls can be made for six months for $39.99 using the AOL Broadband service. Verizon also announced a new VoIP service in April called VoiceWing 500. For $19.95 a month customers can place 500 minutes of outbound local and domestic long distance calls, unlimited inbound calls, and no charge for placing calls among other VoiceWing customers.
But buyer beware since a new VoIP service may not support 911 services. This issue became apparent when a home invasion victim in Texas failed to reach police when dialing 911 with an Internet phone. Most consumers assume that telephone service is telephone service and don’t appreciate the difference between a switched-telephony service (your traditional wireline service) and the new voice-over-broadband service. It is not safe to assume that all VoIP service providers offer the same service as the telephone company. Other concerns raised are that internet phone services will not work if the electricity goes out or if the high-speed broadband connections go down. Not all VoIP companies offer the same services, and as one person in Texas found out, 911 services were not offered by the VoIP provider, Vonage.
However, Vonage and others have plans to roll-out improved 911 service in the near future. Buyers still beware - for even if a 911 service can be supported over VoIP, it cannot be used to find out where you are located if the VoIP service is loaded onto another computer found at another location. Maybe we will see convergence of VoIP and GPS to accurately determine the source of a 911 call - or maybe many of us will keep our wireline service for reliable 911 lifeline support.
1. Bristol-Myers Squibb Fines Total $1.3B So Far! (December 2006 Update)
Canadian Ambassador on Canadian Drugs (July 2005 Update)
Merck - Aligned with GSK on Overcharging Americans? (April 2005 Update)
GlaxoSmithKline - High Drug Prices and Now Poor Quality (March 2005 Update)
Bristol-Myers Squibb (BMY) settled with the U.S. federal government on inflating drug prices by paying a $499 million fine. BMY is accused of inflating the wholesale prices of some of their popular drugs such as the blood thinner Plavix, its blood-pressure drug Acapro, the cancer treatment Taxol, and the cholesterol-lowering drug Pravachol. The $0.5B fine against $19.2B of sales in 2005 results in a 2.6 percent penalty against sales. This hardly seems fair, considering BMY’s history of “doing the wrong thing” and then cutting a deal with the government.
In June 2005, BMY settled for $800M with the Feds in an accounting scandal. Furthermore, a Federal monitor in September 2006 recommended CEO Pete Dolan be fired after the company tried to force a generic form of Plavix off the market.
JULY 2005 UPDATE
Frank McKenna, Canadian Ambassador to the U.S. recently expressed his views about Americans getting cheaper drugs from Canada, including ordering through Web sites.
McKenna said, "we're very sympathetic, because a lot of the people involved live along the border and have been buying from Canadian pharmacies for years...All of us are concerned about the Internet pharmacies because they live in the world of the ether. Canada has a pricing regime for drugs based in large part on having a smaller, slightly less affluent population. As a result, we enjoy lower prescription drug prices. There are individuals who decided to take advantage of that situation and create a pure arbitrage out of it that's very, very profitable."
Source: Washnigton Examiner, July 29, 2005
See more details of this interview at:
http://www.dfait-maeci.gc.ca/can-am/washington/ambassador/050729-en.asp
APRIL UPDATE
Merck stockholders, like GlaxoSmithKline stockholders, are challenging their board of directors concerning the availability of Merck products for Canadian wholesalers. This is driven by the following facts, as outlined in a recent proxy:
* Merck’s current business practices have resulted in a drug pricing structure that charges United States customers significntly higher prices for the same prescription medicines made available at significantly lower prices in Canada, other developed countries, and world markets,
* individuals and government agencies in the United States are demanding affordable drug prices and continue to take actions to access lower priced prescription products from Canada and other world markets, and
* in response, Merck, according to published reports, has cut supplies of the medicines to Canadian wholesalers and companies that it claims allowed its product to be sold to Americans seeking lower prices in the Canadian market.
Merck shareholders are concerned that the company’s actions to limit suppply of lower cost drugs may violate local, national, or international laws and could result in large legal settlements, which would negatively impact the economic stability of the company and the value of its shares. Merck, on the other hand, appears to be hiding behind United States law against the reimportation of drugs and continuing to raise fears that any returning drugs could be counterfeit, adulterated or substandard. Consequently, the company feels its liability is low and does not feel the stockholder challenge is warranted.
MARCH UPDATE
In the February 2005 Newsletter, I discussed GSK’s reluctance to price its drugs for the US market consistent with its prices elsewhere. Not only are GSK’s drug prices inflated for US customers, but its advertising practices are designed to scare US consumers from acquiring lower-priced GSK drugs from Canada. The reason given was that you cannot trust the quality of drugs from other countries.
How ironic!
It now appears that you cannot trust the quality of US produced GSK drugs either. A March 5, 2005 New York Times story, entitled “FDA Seizes Millions of Pills From Pharmaceutical Plants,” reveals that the US Government had to send in armed marshals to seize bad medicine in two of GSK’s plants in Tennessee and Puerto Rico. GSK has had over two years to correct the quality control of its antidepressant Paxil CR and its diabetes medicine Avandament.
It makes one wonder how a company can highlight the potential (and unlikely) dangers of imported drugs while knowingly producing bad medicine for over two years for those same US customers it has been trying to intimidate. Paying higher prices for poorer quality GSK medicine than our Canadian neighbors fork out is just plain wrong.
It may be time for US consumers to shop elsewhere as there are many alternatives to these GSK drugs, and if you have GSK stock, you can choose many other alternatives too. Challenge your doctor and pharmacist on this point and stay healthy.
--Rob’s February Newsletter Perspective on GSK Follows--
Advertising copy in the November 2004 issue of National Geographic reads: “Recently the FDA ordered three medicines from 'Canada.' When they arrived one thing was clear. They weren't from Canada.” The ad goes on to pictorially show an FDA case of bad drugs imported from Canada, by way of a third world country.
Is this the normal situation or does this ad highlight an isolated case of criminal profiteering? Additional ad copy continues: “Getting medicines from 'Canada' isn't the answer. But it does raise a lot of questions.” The advertisement, by GlaxoSmithKline (GSK), was placed in response to a significant flow of lower cost drugs coming from Canada.
Interestingly enough, these same drugs are available for purchase in the United States but at a much higher price. GSK appears to be practicing predatory pricing based on geopolitical boundaries, but will not admit this practice in public.
This certainly seems to be the case after corresponding with GSK about their ad. On September 5, 2004, an e-mail was sent to GSK as follows:
Your recent ad using scare tactics about obtaining medicine from Canada is beyond contempt. Many people cannot pay the excessive charges your company/suppliers charge for medicine in the US. It is time you look at becoming more competitive with others and look to fund drugs that help people vs. funding pet research projects. Maybe GSK should consider the old adage 'Physician Heal Thyself.' Please advise when ads like this will be pulled and when we can expect lower drug costs from your company.
Thanks, ….RKK
One would think the confrontational tone of this e-mail would evoke a rapid response, well before the promised five-day customer service response time. I was wrong. After the third five-day period almost expired, I called GSK on September 19 and was told a response would be coming. Another two five-day periods came and went so I tried reaching GSK again on September 30, again receiving apologies and assurances that a response was forthcoming. The customer service representative did try to highlight GSK's Orange Card program for seniors that provide a lower cost drug service. These cost savings, for seniors only, still do not match the better Canadian pricing, which ranges from 50 to 80 percent less than current US pricing. So I waited. After another two five-day periods expired. I again called GSK on October 11. This third different customer service representative also expressed concern and surprise that I had not yet received a response from their marketing department. Finally, on October 18, I received a call from GSK's corporate office responsible for Public Policy. Candace Dematteis introduced herself and during the call defended GSK's advertisement as a service GSK was bringing to the American Public. From what I could gather, this service is to protect us Americans from using drugs from 'Canada' (yes, 'Canada' is in quotations in their ad). The reason given is to protect American GSK consumers from web sites posing as Canadian suppliers of GSK products, which are actually fronts for lower quality drugs coming from Belize or Mexico.
Point conceded, however, GSK is not highlighting which web sites are legitimate either. One could infer that all web sites are suspect since one does not know which ones are legitimate. In not providing a balanced view, GSK is using fear to stem the flow of drugs (mostly good ones I suspect) from Canada to maintain their profitability.
GSK does not want Americans receiving drugs at all if it means getting them at lower prices. Such a precedent would close the 'gouging' loophole that only US war veterans currently enjoy. The FDA, apparently in league with the drug companies like GSK, do not support price regulation for the balance of Americans. The FDA promotes its own brand of fear citing the dangers of possible counterfeit drugs and the terror threat of poisoned drugs in a bottle. Strange, my parents live in Canada, and their drug stores look no different that the ones here in America. Neither they, nor my fellow Americans using drugs shipped across the border have become sick or terminally ill using imported Canadian drugs.
Maybe GSK can concede this point and help the elderly and forty-five million uninsured Americans afford health-preserving drugs at a reasonable price. One can only hope since the return calls from GSK are not forthcoming in a timely fashion. And, new sets of color ads are hitting the print media as of this writing.
bravenet.com