Loophole in digital privacy law opens door to scare tactics

Even as Paul, a TekSavvy internet subscriber, faced the possibility of a U.S. film company suing him for illegally downloading a movie, he felt certain that he would emerge unscathed.

"I wasn't too concerned about the repercussions," said Paul, whose name has been changed to protect his identity due to fear of losing his job.

But that sense of security — driven in part by a Federal Court decision in February that put limits on the U.S. practice of "trolling" for copyright infringements  — may soon be a thing of the past.

A proposed new federal law threatens to open the doors to the sharing of online users' identities between companies, without court oversight. 

Tabled three weeks ago in the Senate, the proposed digital privacy act is supposed to better protect Canadian from data breaches and fraud. But it could instead put them at risk in cases of alleged copyright, such as those made against Paul, internet advocates say.

Paul was just one of 2,000 internet subscribers with the Ontario-based TekSavvy provider whose identities were sought in a landmark case by Voltage Pictures, a California film company that owns the rights to numerous lesser-known films as well as star-studded ones such as Hurt Locker and Dallas Buyers Club.

On Feb. 20, the Federal Court told the internet service provider that it will have to hand over subscriber information, but in a court-monitored process intended to protect the users.

Experts heralded that decision, saying it closed Canada's door to the troublesome "copyright trolls" in the U.S., companies that use fear-mongering tactics to scare internet users into paying thousands of dollars in settlements to avoid lawsuits for copyright infringement.

But today these experts are also saying that the proposed digital privacy act threatens to reopen that door.

It 'affects everybody'

Michael Geist, the Canada Research Chair in internet and e-commerce law at the University of Ottawa, was the first to raise alarm bells about a provision buried within Bill S-4.

The bill would finally require organizations to tell Canadians when there had been a security breach involving their personal information. But the proposed rules also permit companies to voluntarily disclose personal information to another company, without a court order and without telling the person affected.

"The expansion of warrantless personal information disclosure raises enormous concerns," Geist said. 

Not only does this put ordinary Canadians at risk in cases of alleged copyright infringement, such as in the TekSavvy-Voltage dispute, it could also raise the legal stakes in cases involving an allegation of defamation, or when a content or service provider accuses someone of violating the lengthy terms-of-service agreement that people so often click through without reading.

"That's a huge loophole and seriously undermines the privacy of any Canadian with an internet connection," says David Christopher, communications manager at open-internet advocacy group OpenMedia.ca. "This affects everybody."

In response to stories about the loophole, Industry Minister James Moore put out a statement on April 15 saying recent media reports misrepresented the intent of the bill: to strengthen protection of Canadians' privacy.

Moore said the act will place "strict limits on the type of personal information companies can disclose to other organizations" and companies will have to follow strict rules before releasing it.

The rules will make sure information is released only "when there is a reason to believe the law has been broken, the investigation would be compromised by notifying the individual and that only information needed in the investigation is released," said the statement. It noted the privacy commissioner will be able to take action against those who break the rules.

However, Geist notes that individuals won't know that their information has been shared.

Canada's Interim Privacy Commissioner Chantal Bernier voiced her pleasure that the digital privacy act mandates companies to notify customers of data breaches and allows for new penalties, but notes her office is still studying the bill. 

"We expect to be called to appear before the [Senate committee when it's referred for study] and that's the point at which we will provide our detailed analysis of the bill," Valerie Lawton, Office of the Privacy Commissioner of Canada spokeswoman, wrote in an email to CBC News.

The danger of 'trolls'

In the precedent-setting TekSavvy-Voltage case, Canadians were not only alerted during the court process but will benefit from the legal system's guiding hand throughout.

Justice Kevin Aalto took specific steps to protect Canadians from the type of harassment and fear-mongering tactics used south of the border.

In those cases, "copyright trolls" send out letters to people who are alleged to have illegally downloaded content, threatening to sue them in court for a hefty amount but offering to settle for several thousand dollars. If even a portion of the people pay, the company profits.

Judge Aalto acknowledged the rights of copyright holders, but made sure that innocent people are protected by vowing to keep these kinds of actions in check.

A case management judge must review the demand letter Voltage sends to alleged illegal downloaders. The letter must clearly state that the individual has not yet been found liable in court. That judge will also monitor any legal action taken by Voltage against the individuals.

He even suggested that, in the future, courts should punish companies by denying its attempt to get the names and addresses of alleged illegal downloaders if there's evidence the company used the court process with an "improper motive" of coercing payments out of people.

For Paul, the court-monitored process in his Canadian case is welcome. He acknowledges downloading movies in the past, but isn't sure whether they involved Voltage films because he doesn't backup his downloads folder. At the time, he also had roommates sharing his WiFi.

"I have literally no way of verifying whether it was my computer used to download that movie. Nor do they," said Paul. "That's a really tricky part of it."

And that's why courts play such a key role, he says.

A 'little game' with big consequences

In the U.S., legislators and consumer groups are struggling to stop mass copyright lawsuits targeting large groups of John and Jane Doe defendants.

"It's a small, little game in the grand scope of things, but it does affect a lot of people personally," says a U.S. blogger who runs the Die Troll Die website dedicated to helping advise those victimized by the so-called copyright trolls.

The blogger, who requested anonymity due to threats from copyright holders, said innocent people can get caught in the wide nets being cast.

"It scares a lot of people and the trolls know that," said the blogger. "And they use it to their advantage."

For example, he says, it might cost a company several hundred dollars to file a case in court, plus a few hours of a lawyer's time. Letters then get sent out to hundreds of people asking them to pay $5,000 to settle before the case reaches the court, or they will be sued for $150,000.

A number of people opt for the settlement, fearing the legal fees will be much more steep. Often, the company has no intention of even incurring the costs of taking individuals to court.

"Most Canadians would agree, we definitely don't want that kind of system here," said OpenMedia's Christopher. "But if this digital privacy act goes through in its current form, it would mark a massive step backwards."

Christopher said OpenMedia.ca has heard from many Canadians frustrated with the proposed digital privacy act and hopes to rally them to put pressure on the government to change the proposed legislation. 

However, even if the legislation remains unchanged, Paul is confident that the internet will adapt.

"The internet is constantly changing and the way that people use it is constantly changing and there's nothing legislation can do to prevent that."

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Internet Explorer security bug: How to stay safe

A vulnerability in Internet Explorer could let hackers take over your computer.

The bug has already been used by hackers to attack some U.S. financial firms, cyber-security software maker FireEye said over the weekend.

Here's what you need to know to protect yourself.

What versions of Internet Explorer are affected?

Internet Explorer 6 to 11 – that is, all of them. However, according to FireEye, cyberattacks have been targeting Internet Explorer 9 and higher.

How does this bug allow my computer to be attacked?

If you have an affected browser and visit a booby-trapped website, the bug leaves you vulnerable to a "drive-by install." That means malicious software (malware) can be installed without your knowledge – you don't have to click on anything.

Once the software is installed, others can take control of your computer.  

Typically, Microsoft says, you'd be directed to the website by a link in an email or instant message. The email may appear to come from someone you know and the website may look like a website you normally visit.

Is there a fix?

As of Tuesday, there wasn't. Microsoft said it is investigating, and will "take the appropriate action to protect our customers, which may include providing a solution through our monthly security update release process, or an out-of-cycle-security update, depending on customer needs."

What can I do to protect myself?

1. Switch to another web browser, such as Mozilla Firefox or Google Chrome. This is one of the recommendations from U.S. and U.K. Computer Emergency Readiness Teams from their national security agencies.
2. Upgrade from Windows XP to a newer version of Windows. Microsoft ended support for XP earlier this month and will no longer be releasing security patches for it.
3. Download and install Microsoft's Enhanced Mitigation Experience Toolkit. This is recommended by Microsoft. The toolkit adds extra obstacles to make it more difficult for cyberattacks to make use of software vulnerabilities.
4. Follow other security best-practices. Microsoft recommends that you:
   • ​​Enable a firewall.
   • Apply all software updates.
   • Install anti-virus and anti-spyware software.
   • Exercise caution when visiting websites and avoid clicking suspicious links or opening email messages from unfamiliar senders.
   • More tips are available here.

What if a new browser and operating system upgrade aren't an option for me?

There are some technical settings you can change to prevent attacks, says internet security company Sophos on its Naked Security blog.

You can turn off Active Scripting in your browser. You can also turn off an Internet Explorer extension called VGX.DLL. If you have XP, Sophos recommends that you unregister VGX.DLL and "never re-register it."

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Lab mice are sexist, and that may skew research results

It turns out the best-laid research plans involving mice and men have a bit of a wrinkle — the lab rodents appear to react differently to male scientists during experiments than they do to females.

And that could skew results of numerous medical studies in which the critters are used as stand-ins for humans, suggests Jeffrey Mogil, a professor of behavioural neuroscience at McGill University, whose lab set out to test the responses of mice to male versus female experimenters.

Mogil directs a group of scientists who focus on pain, including its genetic and neurological underpinnings. Part of their work involves inducing discomfort in lab mice with the ultimate goal of finding drugs that can relieve pain in humans.

But a funny thing kept happening: sometimes, the mice didn't react as expected when given an injection in a limb meant to induce pain and pain behaviours, including a specific set of facial expressions known as the mouse grimace scale previously developed by Mogil's lab.

Initially, the experimenters thought there was something wrong with the inflammatory agent they had injected.

Humans seemed to inhibit pain

Yet when they left the room, the mice would start exhibiting signs they were in pain, suggesting that the experimenters themselves were somehow causing pain inhibition — or analgesia — in the animals.

'People simply don't put in the methods section (of their published studies) what the gender of the experimenter was. But these data suggest that starting now, they really need to.'- Jeffrey Mogil, McGill University

"This was something that people had sort of whispered about at (scientific) meetings for years, but as far as we can tell, no one ever tried to investigate whether it was true," said Mogil, who asked his lab to conduct dozens of studies to determine whether the suspicion had any validity.

"And to our great surprise it was true, but only half-true because it was only male experimenters and not female experimenters (that affected the mice)," he said from Montreal.

In their study, published online Monday in the journal Nature Methods, Mogil's team showed that lab rodents become stressed in the presence of male researchers. Stress leads to the release of chemicals in the body that act as pain suppressors.

And the underlying reason for this rodent response? Males smell different than females.

"We found that this was olfactory because we could replace the male experimenter with a T-shirt worn by a male and that also produces analgesia," he said. "And it has nothing specifically to do with humans, because you can use bedding from almost any animal, as long as it's male and has testosterone.

"They're not analgesic to bedding of mice they know. They're only analgesic to bedding of mice they don't know or guinea pigs or rats or cats or dogs, it doesn't matter.

"What's driving this effect are olfactory stimuli that are released from the armpit, specifically ones that are released from the armpits of men in higher concentrations than in women."

Could invalidate conclusions

The finding is important because researchers need to be aware that the sex of an experimenter may alter the outcome of tests — and that could potentially invalidate research conclusions.

McGill University researcher Jeffrey Mogil was initially studying why mice appeared to show more pain when experimenters left the room. (CBC)

"There's been a lot of wringing of hands and gnashing of teeth over the last year or so about the idea that pre-clinical research doesn't replicate," said Mogil, explaining that scientists have not been able to reproduce the findings of some high-profile studies involving animal models like lab mice.

Being able to repeatedly get the same results when studying an experimental drug or procedure from one study to another is the gold standard of medical research.

So when animal research findings can't be replicated, some researchers conclude they must be invalid, caused perhaps by false-positive test results.

"What these data suggest strongly," Mogil said of his lab's findings, "is that there's another explanation, that they're not false positives at all. What it is is that different laboratories have slightly different environments where their studies are conducted.

"So I think this provides a big part of the reason why it's so hard to replicate. You change any little thing in the laboratory environment and your results will be different."

Douglas Wahlsten, a genetic neuroscientist who has studied mouse behaviour extensively, says the McGill paper shows "very strong evidence" that chemical odours emanating from males can influence test results.

Results need to be replicated

But Wahlsten, a professor emeritus at the University of Alberta, said similar studies need to be done using different strains of lab mice, as well as in different laboratory environments to see if the findings hold up.

Similar studies need to be done using different strains of lab mice, as well as in different laboratory environments to see if the findings hold up, says University of Alberta researcher Douglas Wahlsten. (iStock)

"The way a lab is built and set up, the way the air circulates ... are really critically important when you want to study odours," he said from Salt Spring Island, B.C., where he now lives.

Wahlsten believes the McGill study will have some influence on other researchers, and he noted the so-called experimenter effect "needs to be taken very seriously."

"I think that the gender of the person doing the test is a factor, and they've shown this," he said. "It's something we need to be aware of and we need to control for it to the extent that we can."

Mogil said the study obviously doesn't mean that scientists should get rid of male experimenters and hire only females, but should take the gender difference into account when analyzing data and reporting results.

"This is an example of things we should be taking into account, but we don't. People simply don't put in the methods section (of their published studies) what the gender of the experimenter was.

"But these data suggest that starting now, they really need to."

The goal of studies like this is to show scientists how to do better research, no matter what issue they are examining, he said.

"This is a finding that's going to make scientific research better, more reliable than it's been before."

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Alleged internet-ad Ponzi scheme that was shut down in U.S. now operating in B.C.

An alleged pyramid scheme that may have defrauded Brazilians and Americans out of more than a billion dollars has surfaced in B.C.

The discovery comes after U.S. regulators shut down the U.S. headquarters of the company behind the alleged scam, which purported to sell voice over internet (VoIP) phone services.

TelexFREE Inc. first took off in Brazil but was shut down after the firm was accused of bilking one million investors out of $1-billion US in just over a year. Many of the investors lost their life savings in the alleged scam.

The company then set up in Massachusetts until U.S. regulators froze millions of dollars of its assets last week and charged the company operators with running a Ponzi scheme. The company denies any wrongdoing and the charges in the U.S. and Brazil have yet to be proven in court.

• Scroll down to the bottom of this story to read court documents relating to the U.S. charges

Now, CBC has discovered that TelexFREE has set up in Richmond, B.C., as a registered business, with its company address listed as the offices of a lawyer who incorporates new businesses. Two of the individuals listed as the company's directors in Canada, James Merrill and Carlos Wanzeler, are two of the people charged in the U.S.

According to the U.S. Securities and Exchange Commission, in the U.S., TelexFREE's "pyramid scheme" was to sell so-called "memberships that promised annual returns of 200 per cent or more for those who promoted TelexFREE by recruiting new members and placing TelexFREE advertisements on free internet ad sites." 

TelexFREE allegedly uses money garnered from new recruits to pay older investors. (CBC)

Memberships cost between $300 US and $1,400 US, and investors  — called "promoters" — who placed the ads for TelexFREE's voice over internet service were promised returns in the form of monthly payments.

But in fact, most investors never got their money back.

"In classic pyramid scheme fashion, TelexFREE is paying earlier investors, not with revenue from selling its VoIP product but with money received from newer investors," the SEC said in an April 17 news release announcing the U.S. charges.

The regulator said TelexFREE's VoIP sales revenues of approximately $1.3 million US from August 2012 through March 2014 were "barely one per cent of the more than $1.1 billion US needed to cover its promised payments to its promoters."

Move into Canada 'bold,' says one observer

One man who almost got lured by the alleged scam and witnessed the collapse of TelexFREE in Brazil is now raising the alarm about the company's presence in Canada.

"Boris" — not his real name —  believes TelexFREE's move into B.C. is a clear attempt to make inroads in Canada and target local investors.

'Boris' — not his real name — witnessed the collapse of TelexFREE in Brazil. (CBC)

"I think it's a bold manoeuvre by TelexFREE, and it's kind of embarrassing for Canada to let that happen," he told the CBC.

CBC agreed to protect the identity of Boris, who says he fears retaliation from those made rich off TelexFREE.

Boris says he almost invested but decided not to in the end and now wants to warn Canadians.

"Luckily, I was out of it, but some people, they just trust," he said.

Boris said many investors get told about the investment opportunity by friends or family members and are not as lucky as he was in spotting the potential pitfalls.

"I've seen people who lost their houses, their cars, all their money in it," he said.

'You have to take action'

On the firm's Canadian Facebook page, investors appear to be lining up, with more than 7,000 "Likes," as of Friday afternoon. While the company's website in the U.S. has been pulled down, the Canadian version remains up.

Boris wants Canadian regulators to step in.

"I would say you do have to take action. Having an office open in Canada opens doors to a lot of people around the globe to keep investing money in this," he said.

Teresa Mitchell-Banks says the B.C. Securities Commission is monitoring the situation carefully. (CBC)

The B.C. Securities Commission, tasked with protecting the investing public, won't reveal if it's investigating TelexFREE.

But director of enforcement Teresa Mitchell-Banks says it is monitoring the situation carefully.

"We would ask people if you are concerned about this company or any other, to please contact us," she said.

None of the allegations have been proven in court.

On mobile? Click here to read the SEC charges against TelexFREE US

Telexfreeseccomplaint (PDF)
Telexfreeseccomplaint (Text)

On mobile? Click here to read the State of Massachusetts allegations against TelexFree US

Administrative Complaint TelexFREE 4 15 14 (PDF)
Administrative Complaint TelexFREE 4 15 14 (Text)

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Atari's E.T. the Extraterrestrial cartridges found in landfill

A documentary film production company has found buried in a New Mexico landfill hundreds of the Atari E.T. The Extraterrestrial game cartridges that some call the worst video game ever made.

Film director Zak Penn showed one E.T. cartridge retrieved from the dumpsite and says there are hundreds more mixed in the mounds of trash and dirt scooped by a backhoe.

About 200 residents and game enthusiasts gathered early Saturday in southeastern New Mexico to watch backhoes and bulldozers dig through the concrete-covered landfill in search of up to a million discarded copies of E.T. that the game's maker wanted to hide forever.

"I feel pretty relieved and psyched that they actually got to see something," said Penn as members of the production team sifted through the mounds of trash, pulling out boxes, games and other Atari products.

Film director Zak Penn was involved in the landfill dig in New Mexico to uncover the 1983 Atari game E.T. the Extraterrestrial. The dig attracted about 200 residents and game enthusiasts to the site. "I feel pretty relieved and psyched that they actually got to see something," said Penn. (Juan Carlos Llorca/AP)

Most of the crowd left the landfill before the discovery, turned away by strong winds that kicked up massive clouds of dust mingled with garbage. By the time the games were found, only a few dozen people remained. Some were playing the infamous game in a make-shift gaming den with a TV and an 1980s game console in the back of a van, while others took selfies beside a life-size E.T. doll inside a DeLorean car like the one that was turned into a time machine in the Back To The Future movies.

Among the watchers was Armando Ortega, a city official who back in 1983 got a tip from a landfill employee about the massive dump of games.

"It was pitch dark here that night, but we came with our flashlights and found dozens of games," he said. They braved the darkness, coyotes and snakes of the desert landfill and had to sneak past the security guard. But it paid off.

He says they found dozens of crushed cartridges that they took home and were still playable in their game consoles.

Urban legend

The game and its contribution to the demise of Atari have been the source of fascination for video game enthusiasts for 30 years. The search for the cartridges will be featured in an upcoming documentary about the biggest video game company of the early '80s.

Xbox Entertainment Studios is one of the companies developing the film, which is expected to be released later this year on Microsoft's Xbox game consoles.

Whether — and most importantly, why — Atari decided to bury thousands or millions of copies of the failed game is part of the urban legend and much speculation on internet blog posts and forums.

Kristen Keller, a spokeswoman at Atari, said "nobody here has any idea what that's about." The company has no "corporate knowledge" about the Alamogordo burial. Atari has changed hands many times over the years, and Keller said, "We're just watching like everybody else." Atari currently manages about 200 classic titles such as Centipede and Asteroids. It was sold to a French company by Hasbro in 2001.

A New York Times article from Sept. 28, 1983, says 14 truckloads of discarded game cartridges and computer equipment were dumped on the site. An Atari spokesman quoted in the story said the games came from its plant in El Paso, Texas, some 130 kilometres south of Alamogordo.

Local news reports from the time said that the landfill employees were throwing cartridges there and running a bulldozer over them before covering them with dirt and trash.

The city of Alamogordo agreed to give the documentarians 250 cartridges or 10 per cent of the cartridges found, whichever is greater, according to local media reports.

Game has 'recurring flaw'

The E.T. game is among the factors blamed for the decline of Atari and the collapse in the U.S. of a multimillion dollar video game industry that didn't bounce back for several years.

Tina Amini, deputy editor at gaming website Kotaku, says the game tanked because "it was practically broken." A recurring flaw, she said, was that the character of the game, the beloved extraterrestrial, would fall into traps that were almost impossible to escape and would appear constantly and unpredictably.

E.T. The Extraterrestrial is widely believed to be the worst video game ever made, and has been linked to the decline of its maker, Atari. (Wikimedia Commons)

The company produced millions of cartridges, and although sales were not initially bad, the frustrating gameplay prompted an immense amount of returns. "They had produced so many cartridges that were unsold that even if the game was insanely successful I doubt they'd be able to keep up," Amini says.

Joe Lewandowski, who became manager of the 300-acre landfill a few months after the cartridge dump and has been a consultant for the documentarians, told The Associated Press that they used old photographs and dug exploratory wells to find the actual burial site.

Lewandowski says he remembers how the cartridge dump was a monstrous fiasco for Atari, at least from the perspective of a small desert town. The company, he says, brought truckloads from El Paso, where at the time scavenging was allowed in the city's landfills. "Here, they didn't allow scavenging. It was a small landfill, it had a guard."

The guard, however, was either away or unable to stop scores of teenagers from rummaging through the Atari waste and showing up in town trying to sell the discarded products and equipment from the backs of pickup trucks, Lewandowski, said. "That's when they decided to pour concrete over."

The incidents following the burial remained as part of Alamogordo's local folklore, he said. For him E.T. the game did not stir any other memories than an awful game he once bought for his kid.

"I was busy merging two garbage companies together," he said. "I didn't have time for that."

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Hackers use Internet Explorer bug to attack U.S. companies

Microsoft Corp is rushing to fix a bug in its widely used Internet Explorer web browser after a computer security firm disclosed the flaw over the weekend, saying hackers have already exploited it in attacks on some U.S. companies.

PCs running Windows XP will not receive any updates fixing that bug when they are released, however, because Microsoft stopped supporting the 13-year-old operating system earlier this month. Security firms estimate that between 15 and 25 percent of the world's PCs still run Windows XP.

Microsoft disclosed on Saturday its plans to fix the bug in an advisory to its customers posted on its security website, which it said is present in Internet Explorer versions 6 to 11. Those versions dominate desktop browsing, accounting for 55 percent of the PC browser market, according to tech research firm NetMarketShare.

Cybersecurity software maker FireEye Inc said that a sophisticated group of hackers have been exploiting the bug in a campaign dubbed "Operation Clandestine Fox."

FireEye, whose Mandiant division helps companies respond to cyber attacks, declined to name specific victims or identify the group of hackers, saying that an investigation into the matter is still active.

"It's a campaign of targeted attacks seemingly against U.S.-based firms, currently tied to defense and financial sectors," FireEye spokesman Vitor De Souza said via email. "It's unclear what the motives of this attack group are, at this point. It appears to be broad-spectrum intel gathering."

He declined to elaborate, though he said one way to protect against them would be to switch to another browser.

Microsoft said in the advisory that the vulnerability could allow a hacker to take complete control of an affected system, then do things such as viewing changing, or deleting data, installing malicious programs, or creating accounts that would give hackers full user rights.

FireEye and Microsoft have not provided much information about the security flaw or the approach that hackers could use to figure out how to exploit it, said Aviv Raff, chief technology officer of cybersecurity firm Seculert.

Yet other groups of hackers are now racing to learn more about it so they can launch similar attacks before Microsoft prepares a security update, Raff said.

"Microsoft should move fast," he said. "This will snowball."

Still, he cautioned that Windows XP users will not benefit from that update since Microsoft has just halted support for that product.

The software maker said in a statement to Reuters that it advises Windows XP users to upgrade to one of two most recently versions of its operating system, Windows 7 or 8.

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Website in Romania posting Canadians' court documents

Video

CBC News Posted: Apr 25, 2014 9:26 PM ET Last Updated: Apr 25, 2014 9:26 PM ET

Running a Google search on your own name might turn up some unwelcome results if you've ever been in court — thanks to a website in Romania. 

The site Globe24h.com has been posting Canadian court documents and charging a fee to anyone who wants them removed. 

Helen Caplette of Ontario ran a search on herself and was shocked to see a 2009 document detailing multiple domestic assaults. 

"I'm angry and stressed out and it's an invasion of my privacy," she told CBC News. 

She says the man behind the site, Sebastian Radulescu, wanted 19 Euros, about $29, to remove the documents. 

Radulescu said the money is an administrative fee. He says the site is not out to "shame people" because the documents aren't confidential. 

Police and Caplette's lawyer say their hands are tied. 

Click the video for the full story.

With files from CBC's Amanda Margison

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Alleged internet-ad Ponzi scheme that was shut down in U.S. now operating in B.C.

An alleged pyramid scheme that may have defrauded Brazilians and Americans out of more than a billion dollars has surfaced in B.C.

The discovery comes after U.S. regulators shut down the U.S. headquarters of the company behind the alleged scam, which purported to sell voice over internet (VoIP) phone services.

TelexFREE Inc. first took off in Brazil but was shut down after the firm was accused of bilking one million investors out of $1-billion US in just over a year. Many of the investors lost their life savings in the alleged scam.

The company then set up in Massachusetts until U.S. regulators froze millions of dollars of its assets last week and charged the company operators with running a Ponzi scheme. The company denies any wrongdoing and the charges in the U.S. and Brazil have yet to be proven in court.

• Scroll down to the bottom of this story to read court documents relating to the U.S. charges

Now, CBC has discovered that TelexFREE has set up in Richmond, B.C., as a registered business, with its company address listed as the offices of a lawyer who incorporates new businesses. Two of the individuals listed as the company's directors in Canada, James Merrill and Carlos Wanzeler, are two of the people charged in the U.S.

According to the U.S. Securities and Exchange Commission, in the U.S., TelexFREE's "pyramid scheme" was to sell so-called "memberships that promised annual returns of 200 per cent or more for those who promoted TelexFREE by recruiting new members and placing TelexFREE advertisements on free internet ad sites." 

TelexFREE allegedly uses money garnered from new recruits to pay older investors. (CBC)

Memberships cost between $300 US and $1,400 US, and investors  — called "promoters" — who placed the ads for TelexFREE's voice over internet service were promised returns in the form of monthly payments.

But in fact, most investors never got their money back.

"In classic pyramid scheme fashion, TelexFREE is paying earlier investors, not with revenue from selling its VoIP product but with money received from newer investors," the SEC said in an April 17 news release announcing the U.S. charges.

The regulator said TelexFREE's VoIP sales revenues of approximately $1.3 million US from August 2012 through March 2014 were "barely one per cent of the more than $1.1 billion US needed to cover its promised payments to its promoters."

Move into Canada 'bold,' says one observer

One man who almost got lured by the alleged scam and witnessed the collapse of TelexFREE in Brazil is now raising the alarm about the company's presence in Canada.

"Boris" — not his real name —  believes TelexFREE's move into B.C. is a clear attempt to make inroads in Canada and target local investors.

'Boris' — not his real name — witnessed the collapse of TelexFREE in Brazil. (CBC)

"I think it's a bold manoeuvre by TelexFREE, and it's kind of embarrassing for Canada to let that happen," he told the CBC.

CBC agreed to protect the identity of Boris, who says he fears retaliation from those made rich off TelexFREE.

Boris says he almost invested but decided not to in the end and now wants to warn Canadians.

"Luckily, I was out of it, but some people, they just trust," he said.

Boris said many investors get told about the investment opportunity by friends or family members and are not as lucky as he was in spotting the potential pitfalls.

"I've seen people who lost their houses, their cars, all their money in it," he said.

'You have to take action'

On the firm's Canadian Facebook page, investors appear to be lining up, with more than 7,000 "Likes," as of Friday afternoon. While the company's website in the U.S. has been pulled down, the Canadian version remains up.

Boris wants Canadian regulators to step in.

"I would say you do have to take action. Having an office open in Canada opens doors to a lot of people around the globe to keep investing money in this," he said.

Teresa Mitchell-Banks says the B.C. Securities Commission is monitoring the situation carefully. (CBC)

The B.C. Securities Commission, tasked with protecting the investing public, won't reveal if it's investigating TelexFREE.

But director of enforcement Teresa Mitchell-Banks says it is monitoring the situation carefully.

"We would ask people if you are concerned about this company or any other, to please contact us," she said.

None of the allegations have been proven in court.

On mobile? Click here to read the SEC charges against TelexFREE US

Telexfreeseccomplaint (PDF)
Telexfreeseccomplaint (Text)

On mobile? Click here to read the State of Massachusetts allegations against TelexFree US

Administrative Complaint TelexFREE 4 15 14 (PDF)
Administrative Complaint TelexFREE 4 15 14 (Text)

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Atari's E.T. The Extraterrestrial cartridges found in landfill

A documentary film production company has found buried in a New Mexico landfill hundreds of the Atari E.T. The Extraterrestrial game cartridges that some call the worst video game ever made.

Film director Zak Penn showed one E.T. cartridge retrieved from the dumpsite and says there are hundreds more mixed in the mounds of trash and dirt scooped by a backhoe.

About 200 residents and game enthusiasts gathered early Saturday in southeastern New Mexico to watch backhoes and bulldozers dig through the concrete-covered landfill in search of up to a million discarded copies of E.T. that the game's maker wanted to hide forever.

"I feel pretty relieved and psyched that they actually got to see something," said Penn as members of the production team sifted through the mounds of trash, pulling out boxes, games and other Atari products.

Film Director Zak Penn shows a box of the decades-old Atari game found in a dumpsite in Alamogordo, N.M. (Juan Carlos Llorca/AP)

Most of the crowd left the landfill before the discovery, turned away by strong winds that kicked up massive clouds of dust mingled with garbage. By the time the games were found, only a few dozen people remained. Some were playing the infamous game in a make-shift gaming den with a TV and an 1980s game console in the back of a van, while others took selfies beside a life-size E.T. doll inside a DeLorean car like the one that was turned into a time machine in the Back To The Future movies.

Among the watchers was Armando Ortega, a city official who back in 1983 got a tip from a landfill employee about the massive dump of games.

"It was pitch dark here that night, but we came with our flashlights and found dozens of games," he said. They braved the darkness, coyotes and snakes of the desert landfill and had to sneak past the security guard. But it paid off.

He says they found dozens of crushed cartridges that they took home and were still playable in their game consoles.

Urban legend

The game and its contribution to the demise of Atari have been the source of fascination for video game enthusiasts for 30 years. The search for the cartridges will be featured in an upcoming documentary about the biggest video game company of the early '80s.

Xbox Entertainment Studios is one of the companies developing the film, which is expected to be released later this year on Microsoft's Xbox game consoles.

Whether — and most importantly, why — Atari decided to bury thousands or millions of copies of the failed game is part of the urban legend and much speculation on internet blog posts and forums.

Kristen Keller, a spokeswoman at Atari, said "nobody here has any idea what that's about." The company has no "corporate knowledge" about the Alamogordo burial. Atari has changed hands many times over the years, and Keller said, "We're just watching like everybody else." Atari currently manages about 200 classic titles such as Centipede and Asteroids. It was sold to a French company by Hasbro in 2001.

A New York Times article from Sept. 28, 1983, says 14 truckloads of discarded game cartridges and computer equipment were dumped on the site. An Atari spokesman quoted in the story said the games came from its plant in El Paso, Texas, some 130 kilometres south of Alamogordo.

Local news reports from the time said that the landfill employees were throwing cartridges there and running a bulldozer over them before covering them with dirt and trash.

The city of Alamogordo agreed to give the documentarians 250 cartridges or 10 per cent of the cartridges found, whichever is greater, according to local media reports.

Game has 'recurring flaw'

The E.T. game is among the factors blamed for the decline of Atari and the collapse in the U.S. of a multimillion dollar video game industry that didn't bounce back for several years.

Tina Amini, deputy editor at gaming website Kotaku, says the game tanked because "it was practically broken." A recurring flaw, she said, was that the character of the game, the beloved extraterrestrial, would fall into traps that were almost impossible to escape and would appear constantly and unpredictably.

E.T. The Extraterrestrial is widely believed to be the worst video game ever made and is among the factors blamed for the decline of its maker Atari. (Wikimedia Commons)

The company produced millions of cartridges, and although sales were not initially bad, the frustrating gameplay prompted an immense amount of returns. "They had produced so many cartridges that were unsold that even if the game was insanely successful I doubt they'd be able to keep up," Amini says.

Joe Lewandowski, who became manager of the 300-acre landfill a few months after the cartridge dump and has been a consultant for the documentarians, told The Associated Press that they used old photographs and dug exploratory wells to find the actual burial site.

Lewandowski says he remembers how the cartridge dump was a monstrous fiasco for Atari, at least from the perspective of a small desert town. The company, he says, brought truckloads from El Paso, where at the time scavenging was allowed in the city's landfills. "Here, they didn't allow scavenging. It was a small landfill, it had a guard."

The guard, however, was either away or unable to stop scores of teenagers from rummaging through the Atari waste and showing up in town trying to sell the discarded products and equipment from the backs of pickup trucks, Lewandowski, said. "That's when they decided to pour concrete over."

The incidents following the burial remained as part of Alamogordo's local folklore, he said. For him E.T. the game did not stir any other memories than an awful game he once bought for his kid.

"I was busy merging two garbage companies together," he said. "I didn't have time for that."

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Website in Romania posting Canadians' court documents

Video

CBC News Posted: Apr 25, 2014 9:26 PM ET Last Updated: Apr 25, 2014 9:26 PM ET

Running a Google search on your own name might turn up some unwelcome results if you've ever been in court — thanks to a website in Romania. 

The site Globe24h.com has been posting Canadian court documents and charging a fee to anyone who wants them removed. 

Helen Caplette of Ontario ran a search on herself and was shocked to see a 2009 document detailing multiple domestic assaults. 

"I'm angry and stressed out and it's an invasion of my privacy," she told CBC News. 

She says the man behind the site, Sebastian Radulescu, wanted 19 Euros, about $29, to remove the documents. 

Radulescu said the money is an administrative fee. He says the site is not out to "shame people" because the documents aren't confidential. 

Police and Caplette's lawyer say their hands are tied. 

Click the video for the full story.

With files from CBC's Amanda Margison

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Privacy watchdog's own sensitive data goes missing

Interim Privacy Commissioner Chantal Bernier, at left in this 2009 photo, was notified of the data breach on April 10. Bernier has been interim commissioner since Jennifer Stoddart, right, retired in December. (Canadian Press)

The Office of the Privacy Commissioner of Canada has lost an unencrypted hard drive containing salary information of about 800 current and former employees.

"This is humbling," said Chantal Bernier, interim privacy commissioner, in an interview Friday, after receiving the first draft of an internal review of the incident.

The main jobs of the federal privacy watchdog are to publicly scrutinize and criticize the privacy practices of other government departments and private companies, and to recommend privacy best practices.

'What's important is that we demonstrate accountability in how we handle the incident – that's what we would expect of others.'- Office of the Privacy Commissioner of Canada

The backup hard drive is thought to have gone missing on Feb. 14 when the office was moving from Ottawa to Gatineau, it was reported at a staff meeting on April 17.

Staff noticed the hard drive was missing in mid-March, and realized on April 9 that it contained personal information including names, employee numbers, and information about salaries and pay transactions for employees of the Office of the Privacy Commissioner of Canada and the Office of the Information Commissioner of Canada.

Data kept longer than it should have been

The information on the hard drive dates back 12 years, even though a government-wide policy says records of this kind aren't supposed to be kept for more than seven.

"This is one of the issues we are examining," said an information sheet to staff from the office's chief privacy officer, Andréa Rousseau.

Bernier was notified of the data breach on April 10. Bernier has been interim commissioner since Jennifer Stoddart retired in December.

According to Rousseau, the hard drive wasn't encrypted because its technology didn't allow that. "However," she wrote, "it can only be read with a specific software and with the technical knowledge to use it."

Police not called

It added that police have not been called because, "At this time, we have no reason to believe the drive was taken for malicious purposes."

Nor does the office think the information on the hard drive is enough to steal the identities of employees. But, just in case, it is asking Public Works and Government Services Canada to take extra measures to confirm the identities of current and former employees of the privacy commissioner's office.

The office said it didn't notify employees immediately because it wanted to spend some time looking for the hard drive and to be able to provide accurate information. It said it did not notify the media because it had not yet had the chance to inform all of the people affected.

Staff concerned about reputation

Bernier said that since staff members were notified of the breach on April 17, "our office's reputation is what they are concerned about."

In response to staff concern's about the effect on the office's credibility, Rousseau wrote, "We have a good relationship with the organizations we oversee. I hope they will continue to see us as reasonable, fair and balanced in our approach. What's important is that we demonstrate accountability in how we handle the incident – that's what we would expect of others."

Bernier said her office has gained a better understanding of how organizations respond to data breaches that she thinks will help it do a better job.

"I've already learned a lot," she said.

For example, she now understands what kind of delay is reasonable in notifying stakeholders about the breach, given the amount of time needed to figure out what data went missing and what happened to it, and who to notify about what.

When asked if other organizations should respond to data breaches the way her office is responding, she said, "We are obviously implementing the best practices that we have always put forward. In fact, we are holding ourselves to the highest standard. So yes, absolutely."

The privacy commissioner's office has responded to the draft internal review with a bunch of questions, Bernier said. The office is also arranging for an external review, which will be conducted by ad hoc privacy commissioner John Sims, retired deputy minister of justice and deputy attorney general of Canada, if he thinks it necessary.

Bernier said she hopes the reviews will reveal more details about what happened and what measures should be taken to correct the problem.

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Alleged internet-ad Ponzi scheme that was shut down in U.S. now operating in B.C.

An alleged pyramid scheme that may have defrauded Brazilians and Americans out of more than a billion dollars has surfaced in B.C.

The discovery comes after U.S. regulators shut down the U.S. headquarters of the company behind the alleged scam, which purported to sell voice over internet (VoIP) phone services.

TelexFREE Inc. first took off in Brazil but was shut down after the firm was accused of bilking one million investors out of $1-billion US in just over a year. Many of the investors lost their life savings in the alleged scam.

The company then set up in Massachusetts until U.S. regulators froze millions of dollars of its assets last week and charged the company operators with running a Ponzi scheme. The company denies any wrongdoing and the charges in the U.S. and Brazil have yet to be proven in court.

• Scroll down to the bottom of this story to read court documents relating to the U.S. charges

Now, CBC has discovered that TelexFREE has set up in Richmond, B.C., as a registered business, with its company address listed as the offices of a lawyer who incorporates new businesses. Two of the individuals listed as the company's directors in Canada, James Merrill and Carlos Wanzeler, are two of the people charged in the U.S.

According to the U.S. Securities and Exchange Commission, in the U.S., TelexFREE's "pyramid scheme" was to sell so-called "memberships that promised annual returns of 200 per cent or more for those who promoted TelexFREE by recruiting new members and placing TelexFREE advertisements on free internet ad sites." 

TelexFREE allegedly uses money garnered from new recruits to pay older investors. (CBC)

Memberships cost between $300 US and $1,400 US, and investors  — called "promoters" — who placed the ads for TelexFREE's voice over internet service were promised returns in the form of monthly payments.

But in fact, most investors never got their money back.

"In classic pyramid scheme fashion, TelexFREE is paying earlier investors, not with revenue from selling its VoIP product but with money received from newer investors," the SEC said in an April 17 news release announcing the U.S. charges.

The regulator said TelexFREE's VoIP sales revenues of approximately $1.3 million US from August 2012 through March 2014 were "barely one per cent of the more than $1.1 billion US needed to cover its promised payments to its promoters."

Move into Canada 'bold,' says one observer

One man who almost got lured by the alleged scam and witnessed the collapse of TelexFREE in Brazil is now raising the alarm about the company's presence in Canada.

"Boris" — not his real name —  believes TelexFREE's move into B.C. is a clear attempt to make inroads in Canada and target local investors.

'Boris' — not his real name — witnessed the collapse of TelexFREE in Brazil. (CBC)

"I think it's a bold manoeuvre by TelexFREE, and it's kind of embarrassing for Canada to let that happen," he told the CBC.

CBC agreed to protect the identity of Boris, who says he fears retaliation from those made rich off TelexFREE.

Boris says he almost invested but decided not to in the end and now wants to warn Canadians.

"Luckily, I was out of it, but some people, they just trust," he said.

Boris said many investors get told about the investment opportunity by friends or family members and are not as lucky as he was in spotting the potential pitfalls.

"I've seen people who lost their houses, their cars, all their money in it," he said.

'You have to take action'

On the firm's Canadian Facebook page, investors appear to be lining up, with more than 7,000 "Likes," as of Friday afternoon. While the company's website in the U.S. has been pulled down, the Canadian version remains up.

Boris wants Canadian regulators to step in.

"I would say you do have to take action, having an office open in Canada opens doors to a lot of people around the globe to keep investing money in this," he said.

Teresa Mitchell-Banks says the B.C. Securities Commission is monitoring the situation carefully. (CBC)

The B.C. Securities Commission, tasked with protecting the investing public, won't reveal if it's investigating TelexFREE.

But director of enforcement Teresa Mitchell-Banks says it is monitoring the situation carefully.

"We would ask people if you are concerned about this company or any other, to please contact us," she said.

None of the allegations have been proven in court.

On mobile? Click here to read the SEC charges against TelexFREE US

Telexfreeseccomplaint (PDF)
Telexfreeseccomplaint (Text)

On mobile? Click here to read the State of Massachusetts allegations against TelexFree US

Administrative Complaint TelexFREE 4 15 14 (PDF)
Administrative Complaint TelexFREE 4 15 14 (Text)

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Keeping arson cases from going cold

Video

U of A students help police speed up arson probes while trail is still warm

CBC News Posted: Apr 24, 2014 9:34 PM MT Last Updated: Apr 24, 2014 9:38 PM MT

University of Alberta researchers are hoping to help police solve arson investigations more quickly.

The trick is in identifying accelerants such as gasoline in the charred residue which could prove if a fire was deliberately set.

That can take two forensic scientists several hours, even days, but now researchers have figured out a way to do it in just seconds.

Find out what they did by clicking on the video above.

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Manitoba to crack down on misleading TV, phone and internet service promotions

The Manitoba government wants to crack down on misleading and confusing promotions for wireless, TV and internet service by forcing providers to be clear about how much their offers really cost.

The province is proposing new consumer protection rules that would require companies offering residential telephone, television, internet and other services to prominently display the full cost of each service, not just a discount introductory rate.

Consumer Protection Minister Ron Lemieux, who tabled the proposed legislation on Thursday, says people are frustrated by "confusing promotional offers" that don't give clear descriptions of how much the services will cost them once the introductory promotion period ends.

"We're not telling the consumer what they should buy or what they should not buy," Lemieux told reporters.

"We're just saying to the companies out there that are offering these services, 'Be upfront. Let the customer know clearly what [they're] going to be paying for and what [they're] going to be getting.' Then it's up to the consumer to make the decision."

Penalties include fines

If approved, the new rules would make providers include in their advertising the minimum monthly regular cost of a service after the promotional period ends, and disclose any one-time charges for equipment or installation.

There will also be limits on cancellation fees, similar to an existing law on cellphone contracts, as well as limits on automatic contract renewals.

In addition to phone, TV and internet packages, the legislation would also cover satellite TV and radio services and monitored alarm systems.

Fines would range from $1,000 to $5,000 and, in more serious cases, the government could apply to the courts for higher penalties.

But slapping fines on a company does not mean consumers who feel they've been duped should expect a refund, said Gail Anderson, director of the provincial Consumer Protection Office.

"It may be that the business decides to give the consumer a portion or a refund back, but we do not have the authority as the Consumer Protection Office to order a business to make a refund," she said.

'Not pointing the finger at anyone'

The NDP government announced the plan last fall and asked for public input, and some 360 people responded.

Many who took part in public consultations said they had been enticed by low, introductory prices and were not clear on what the price would be once the discount period ended, Lemieux said.

The proposed changes are not targeting local companies, but simply seeking overall clarity for consumers, the minister added.

"The companies in Manitoba we have are very, very good companies. This is not pointing the finger at anyone," Lemieux said.

"All we're saying is that the feedback we're getting is that there's a lot of confusion out there and people want more transparency, more clarity as to what they're getting involved in."

The move was welcomed by the Consumers Association of Canada.

"Companies … have a responsibility to provide that information, to make it accessible to us in a format that is easy to understand," Gloria Desorcy, executive director of the association's Manitoba branch, told The Canadian Press.

Lemieux hopes to have the law take effect by the end of the year, but there are still many details to be worked out, such as the limit on cancellation fees.

An existing law on cellphone contracts caps the fee at $50 plus a pro-rated cost of the cellphone if it was not paid upfront.

The province must also determine exactly how "prominent" the full cost of each service must be displayed in any advertising. Anderson said the aim is to have the price easily visible and not hidden away in fine print.

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The death of 'all-you-can-eat' internet

There is a moment in most people's lives when all-you-can-eat restaurants lose their appeal. For some, it's knowing that too much food is a bigger problem than too little. For the better off, it's being able to afford to buy what they like, when they like.

Eating out becomes a matter of quality, not quantity. Since it became popular at the end of the last century, the internet has been a bit like an all-you-can-eat restaurant. This week it looks like the U.S. Federal Communications Commission, America's equivalent of Canada's CRTC, wants to change that.

Of course it is easy to carry the analogy too far, but essentially, all-you-can-eat is only rarely an effective market strategy. As a business plan, it only works under a certain set of conditions.

My teenage son and his pack of eight-foot-tall friends occasionally head out for the all-you-can-eat experience. For the most part, they are always hungry and always a little short of money. When that group walks in the door, all-you-can-eat restaurant owners must cringe. If everyone who bellies up to the food bar is an eight-foot-tall teenager, the restaurant owner will go broke.

So one condition of all-you-can-eat is that while some eat inhuman quantities, others must eat less than the price of admission, effectively subsidizing the big eaters.

Overall the food must be cheap to serve, so eaters must be filed past the troughs in large number. And it must be cheap to make, which generally means it is not of the very highest quality. The FCC's plan is still not clear. Despite a clarifying blog from the commission chair Tom Wheeler, only commissioners have seen the proposals, and they got them just yesterday.

But it appears the FCC is caving in to pressure from the high-end specialty restaurants who want to squeeze out all-you-can-eat and offer caviar and champagne and choice cuts of beef to those who can afford to pay more. For those of us who can afford it, this may not be a bad plan. Generally, our problem is that we get too much internet rather than too little. Under the new plan, we can afford to buy luxury services like Apple speciality TV if we want them.

At the same time the telecom and cable companies who provide the pipeline will get paid "commercially reasonable" fees for the bandwidth they provide. In the past, they have complained that too many of the companies that use their pipelines have been like eight-foot tall teenagers, gobbling up bandwidth, subsidized by everyone else.

So much for the well-off. But while the giant service providers and the well-heeled service consumers may benefit from a two-speed service, this is not where the true innovation of the web has happened.

Just as my son and his friends are vigorous enough to take advantage of all-you-can-eat restaurants, it is the young and relatively poor who have always been at the leading edge of the all-you-can-eat internet.

It is kids in the glow of screens sending reams of data. And it has been the small companies without Apple-sized budgets that have continually transformed the web into something new and wonderful.

The FCC, and countries like Canada that will inevitably follow them, must be wary of creating a two-price system that will kill the culture that made the internet great.

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6.6-magnitude quake strikes off B.C. coast

A 6.6-magnitude earthquake struck last night shortly after 8 p.m. PT, with the epicentre located 40 kilometres southwest of Port Alice, according to the Pacific Tsunami Information Centre.

There were no initial reports of damage or injury.

The earthquake was initially reported at 6.7 magnitude, but the U.S. Geological Survey's National Earthquake Information Centre later changed the scale of the quake to 6.6.

The epicentre had a depth of 11 kilometres, according to USGS. The Pacific Tsunami Information Centre initially reported it to be 22 kilometres.

Although the earthquake was powerful enough to generate a local tsunami, the risk of one was quickly ruled out.

People from as far away as Kelowna, B.C., about 575 kilometres from the epicentre, reported feeling buildings sway. Within an hour of the quake, more than 400 people also reported feeling it to the USGS.

Some residents in highrises said they felt their building sway, including Marjorie Blair, who was in her 12th-storey apartment in Burnaby when it hit.

"I looked up and my first instinct is always to look at the chandelier when something happens, and it is rocking I am telling you," said Blair.

"Then I heard the clicks, the clicks on the glass, and there are the rods on the curtains and they were hitting the glass."

'I've lived here 37 years and I've never felt anything like it.'- Pamela Shea, Port Hardy resident

In Port Hardy, about 89 kilometres northeast of the earthquake's epicentre, Deputy Fire Chief Brent Borg said there happened to be a meeting at the fire hall when the earthquake struck.

"The windows started rattling, the walls started rattling and one of the lieutenants says, 'Did we just have an earthquake?'" he told CBC News.

Borg said one of the local firefighters phoned in to say he had some pictures rattle off his mantle. He said no local warnings were issued, and firefighters did not have to respond to any emergencies.

"It was a pretty minor shake. It was less than 10 seconds."

Port Hardy Mayor Bev Parnham told The Canadian Press that although the quake was short, it was strong.

Pamela Shea was working a late shift at Port Hardy's Airport Inn when she felt the quake, which she said lasted between 10 and 12 seconds.

U.S. Geological Survey map shows the area of shaking in yellow surrounding the epicentre of Wednesday night's earthquake. (USGS)

"My chair was rolling back and forth, the bottles were rattling," she told CP. "I've lived here 37 years and I've never felt anything like it."

The earthquake was followed by three aftershocks, one of magnitude 5 and the next two both at magnitude 4.2. The second was initially reported at a magnitude 4.

The USGS says aftershocks of this size are normal for a quake of this magnitude.

Earthquakes are common off the province's coast, where the Juan de Fuca tectonic plate meets the Pacific tectonic plate. However, few earthquakes are large enough to be felt by humans.

The most recent large earthquake in B.C. was in October 2012. A magnitude 7.7 quake shook the northern B.C. Haida Gwaii Islands.

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Why didn't Revenue Canada act sooner to counter the Heartbleed bug?

Even with the arrest last week of an alleged culprit in the theft of the private data of about 900 Canadians, the Canada Revenue Agency is still unwilling or unable to say why it didn't act faster to prevent an attack on its web servers that exploited the Heartbleed software bug.

Now, a tale is emerging of ignorance and perhaps even government nonfeasance, with the CRA admitting Wednesday it found out about the Heartbleed vulnerability one full day after the rest of the global web security world was advised there was a problem.

The CRA buried that news in the middle of an awkward sentence that suggested action, but in fact revealed trouble: "After learning that the Canada Revenue Agency (CRA) systems were vulnerable to the Heartbleed bug on April 8, 2014, the CRA acted quickly to protect taxpayer information by removing public access to its online services on the same day," spokesman Philippe Brideau wrote in an e-mail.

Over the course of two weeks, CBC News has been trying to identify why, when warnings about the devastating Heartbleed bug first emerged in professional IT security circles Monday, April 7, the government apparently did not shut down its vulnerable CRA systems until about 36 hours later, on the evening of April 8.

It turns out those hours were critical.

The RCMP allegations and CRA comments suggest it was during that 36-hour gap a 19-year old London, Ont. university student allegedly exploited the Heartbleed web weakness to access the Social Insurance Numbers of 900 Canadians.

The CRA has acknowledged fragments of other data pertaining to business accounts were accessed too, but it has not clarified whether that loss was comprehensive enough to constitute a breach of privacy.

The entire web world was taken aback by news of the Heartbleed bug, which was termed "devastating" and recognized as one of the most significant global threats to online security.

The CRA is certainly not the only organization to have been exposed by the vulnerability.

But, in retrospect, the issue that emerges is whether CRA — and indeed the government in general — did enough to protect the private tax information of Canadians once word of the Heartbleed bug started to circulate in security circles.

Several departments involved in security

Was the inability to heed the global warning a problem at CRA, or was it the fault of others in the government's IT security apparatus?

That's a lengthy and twisting chain of accountability that weaves from secret security teams at Communications Security Establishment Canada, through the Treasury Board's Chief Information Officer branch, Public Safety's Canadian Cyber Incident Response Centre, Shared Services IT teams and finally to the CRA.

"Shared Services Canada has played a major role, along with the Treasury Board Secretariat, and other government departments and agencies, in resolving the problem and administering the patch to all vulnerable software," the CRA said in an e-mailed response to CBC News this week.

The Communications Security Establishment Canada told CBC News last week it learned of the bug "at the same time as the global IT security community." That presumably means Monday, April 7, when a global security alert went out.

A look back at what Revenue Minister Kerry-Lynne Findlay told reporters on Wednesday of that week reveals the CRA only learned on the Tuesday night it was running the vulnerable software.

"We know there is a systems vulnerability," Findlay told reporters. "We have identified that so we shut down those systems right away as a precautionary measure only."

That assessment, in retrospect, belies the reality that the private data of Canadians was stolen before that "precautionary measure" was taken. CRA maintains that, at the time of the shutdown, it had not yet learned of the alleged theft.

"Regrettably, the CRA was notified by Government of Canada security agencies of the criminal breach after online systems were shut down," Brideau said in an email Wednesday, emphasizing the word "criminal" in all capital letters.

"CRA worked diligently to apply the patch and test all systems to ensure they were safe and secure prior to restoring online access."

Who didn't tell CRA?

The timeline that has now been revealed suggests key government online security actors did know about the vulnerability in time to prevent an attack, but the CRA did not. 

Almost any way that's evaluated it presents the probability of failure: Either CRA should have known about Heartbleed the day the world was told and did not, or someone else who did know that same day didn't warn the CRA to shut the proverbial barn door until after the horses were loose.

What is known is that up until noon the day CRA was told of its vulnerability, the tax agency's top bureaucrats apparently thought the system was too robust to break.

That very day, the department's assistant commissioner and chief privacy officer told Parliament the CRA had "one of the — if not the — strongest security regimes around our technological systems of any government department."

Susan Gardner-Barclay bragged about CRA's cyber-security to MPs at a Commons committee meeting on identity theft.

"We are obviously very cognizant of the fact that security and the security of those portals is instrumental to Canadians having confidence in sharing their information with us, so we have a very rigorous security system around the CRA system," she said.

According to CRA staff, as Gardner-Barclay spoke, "she was unequivocally unaware of the Heartbleed bug vulnerability."

But that might not even matter. As we now know, much of what she said about CRA's security was, according to the RCMP, being proved wrong.

The Heartbleed bug is a "zero-day" vulnerability problem — that's to say, it existed from the very day the software was released about two years ago. That means the CRA was in fact at risk of anonymous and nearly untraceable theft of data for as long as it had been using the affected software.

It just never knew it.

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New U.S. internet rules would let companies pay for priority

U.S. regulators are expected to vote on May 15 on a new set of so-called "net neutrality" rules aimed at preventing broadband providers from slowing down or blocking consumers' access to legal internet content.

The rules from the Federal Communications Commission, which released its framework in February, are expected to ensure network operators disclose how they manage internet traffic and do not block any content on the web.

The proposed rules are also expected to allow internet providers to negotiate agreements with content providers on delivery of traffic to users as long as the deals they strike are "commercially reasonable," according to an FCC spokesman.

FCC Chairman Tom Wheeler has also said he planned to review the practices adopted by internet providers on a case-by-case basis.

'Baseline' service level required

The rules will propose "that broadband providers would be required to offer a baseline level of service to their subscribers, along with the ability to enter into individual negotiations with content providers," an FCC spokesman said.

The proposed rules would only affect the part of the internet that connects directly to the consumer. That means they don't apply to a recent deal in which Netflix is paying Comcast for a more direct connection to the part of its network further from the consumer.

Exactly what the baseline level of service and commercially reasonable standard are going to be or how the FCC would resolve disputes will be established after the FCC collects public comment on the proposed rules, according to the spokesman.

Wheeler on Wednesday said he plans to share his proposed rules with other commissioners on Thursday, who may seek changes before the agency votes on May 15 to formally propose the rules and seek public comment.

Consumer advocates criticized the FCC potentially allowing "commercially reasonable" negotiations with content providers, concerned that it could lead to deals that would offer a "fast lane" to content providers who pay up for better traffic delivery to the user.

"This standard allows ISPs (Internet service providers) to impose a new price of entry for innovation on the internet," Michael Weinberg, vice president at public interest group Public Knowledge, said in a statement.

Netflix objects

Video streaming service Netflix Inc, which relies on internet providers to deliver its movies and TV shows, also objected. "The proposed approach is the fastest lane to punish consumers and internet innovators," a Netflix spokesman said.

Virtually all large internet service providers, such as Verizon Communications Inc and Time Warner Cable Inc , have pledged to not restrict consumers' access to web content whether the FCC writes new rules or not.

But critics have raised concerns that without a formal rule, the voluntary pledges could be pulled back over time and leave the door open for deals that would give unequal treatment to websites or services.

The U.S. Court of Appeals for the District of Columbia Circuit in January for the second time struck down the FCC's previous version of the open internet order, which prohibited discrimination against web traffic more broadly.

The court said the FCC had improperly treated internet service providers as regulated public utilities providing telecommunications services, like telephone companies, while they were actually classified as information service providers.

Consumer advocates have called on the FCC to reclassify internet providers as more heavily regulated telecommunications services, an idea that has faced tremendous pushback from the broadband industry and Republican lawmakers who have urged the FCC to tread lightly.

The new effort to rewrite the Open Internet rules rely on other legal standards, affirmed by the court's ruling that the FCC did have authority to regulate broadband.

Affects consumer connection only

The new rules, in line with the FCC's approach to net neutrality in the past, would only regulate deals between businesses on connections in the last leg of the network that reaches the consumer.

Deals on connections that happen on the part of the network further away from the customer, known as interconnection agreements, are outside of their scope. That means the rules won't have any bearing on Netflix's recent agreement to pay Comcast to improve the hand-off of traffic to its network. Netflix had called for the FCC to expand its definition of "net neutrality" rules to cover such connections and guarantee that they would be free of charge. Internet providers say they should be allowed to charge content companies when they absorb more traffic than they send back, like in the case of Netflix.

Comcast, through conditions placed on its 2011 merger with NBC Universal, is the only internet provider still bound by the earlier FCC net neutrality rules through 2018.

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Netflix set to 'grow like crazy' despite price increase

Netflix's decision to bump up its subscription rate for new members has been met with disdain in some quarters, but analysts say the price increase is unlikely to drive away viewers.

In fact, tech watchers say it will only strengthen the company's reputation for high-quality video content.

"I always felt like they were going to inch the prices up," says Kaan Yigit, president of the Solutions Research Group in Toronto. "In the short term, a dollar or two is not going to make an impact on [customer] penetration."

The planned price increase for new sign-ups "might take the edge off growth a little bit, but they're still going to grow like crazy," says Greg O'Brien, publisher and editor-in-chief of Cartt.ca, a news site covering the Canadian cable industry.

"Even factoring in the price increase, they might be at 50 million subscribers by the end of the second quarter."

As part of its first-quarter earnings report on Monday, the video-streaming service announced that sometime before July, it will raise its subscription price by $1 or $2 per month for new customers, an investor-pleasing move that saw Netflix share prices jump.

Netflix is currently available in 41 countries. Solutions Research Group estimates there are about 3.5 million Netflix subscribers in Canada and 31 million in the U.S., in each case with a current subscription price of $7.99 a month.

Much stronger today

Some tech watchers have expressed concern that the price increase could pan out as badly as Netflix's previous attempt at a rate hike.

The Calif.-based company lost about 800,000 subscribers in 2011 after announcing a price increase for U.S. customers. At the time, Netflix CEO Reed Hastings went so far as to issue an official apology.

That was clearly a chastening episode in the Netflix story. But three years later the company is in a much stronger position, says Gregory Taylor, a post-doctoral fellow at the Ted Rogers School of Information Technology Management at Ryerson University.

"That was a different age, as far as Netflix goes, because at the point, it was still dealing a lot with mail-in DVDs, and that's not really their business anymore," says Taylor.

He says the latest price hike is a "bold move by Netflix, but I don't think it comes with the same elements of risk for them as there were in 2011."

Since then, Netflix has come to be seen as a game-changer for the cable television industry. Not only does it provide an ever-growing library of movies and TV shows, but it has made a successful foray into original programming, including the Emmy-winning political series House of Cards, the comedy-drama Orange Is the New Black and a documentary about 2012 presidential contender Mitt Romney.

The second season of the Netflix series Orange Is the New Black is set to begin in June. (Netflix/Associated Press)

O'Brien says the Netflix trajectory is similar to that of HBO, which began as a movie channel and soon grew into a beloved destination for compelling original shows.

"When they hit on the idea of original content and produced a huge hit in The Sopranos, [HBO's] subscriber numbers jumped like crazy," says O'Brien.

Content driven

According to Netflix, the stated aim of the upcoming price increase is to "acquire more content and deliver an even better streaming experience."

Forbes magazine estimates the rate increase could add between $600 million and $1.2 billion US to the company's revenues within the next two years.

Michael McGuire, a media analyst for U.S. consulting firm Gartner, says that Netflix can use the precedent set by House of Cards to justify the price hike.

"There is a way to point that out to consumers, to say, 'Look, you have to pay for quality programming, and if we're the only place you can get it, can a buck or two matter?'"

Still, while the future looks bright, the biggest likely hurdle for Netflix is internet bandwidth consumption, says O'Brien.

According to a report from broadband research company Sandvine, Netflix accounted for over 30 per cent of prime-time internet traffic in North America in the first half of 2013.

Streaming video requires a lot of bandwidth, and in order to manage its growth, Netflix has had to sign deals with internet providers, such as Comcast in the U.S., to ensure that its video content gets priority delivery to customers.

Netflix's incredible growth has not gone unnoticed by both traditional and newfangled broadcasters in the U.S. and Canada. Google and Amazon have both ventured into video-streaming and original content.

Meanwhile, O'Brien reported earlier this year that Rogers Communications had spent $100 million to build a video-streaming service of its own called Showmi.

Part of the motivation behind Showmi, O'Brien says, is to buy streaming rights for Hollywood films that would not be available on Netflix, thus ensuring that Netflix's offerings in Canada remain inferior to those on the American version of the site.

"Nobody is unassailable," says O'Brien. "[Rogers] could certainly pose a threat to Netflix in Canada."

Yigit, however, feels a Rogers move like this would be a risky venture.

"If Rogers is able to buy some prime rights and keep them off the table and Netflix access, they could limit its growth. But to launch something that's going to compete at that price point and still grow without cannibalizing their own core business, that's a difficult equation to master."

For all the challenges — and challengers — facing Netflix, Yigit says the company's current strength is because there is no viable competitor.

"The one thing that surprises me a great deal is if you look around the globe and you say, 'OK, is there a service that's similar in scope and delivery?' There isn't."

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Shakespeare at 450: How science may have influenced his work

[​Dan Falk is a Canadian journalist, author and broadcaster. His book, The Science of Shakespeare, was published in April by Goose Lane in Canada and by St. Martin's Press in the U.S.]

We don't usually talk about Shakespeare and science in the same breath: For one thing, science, as we think of it today, didn't really exist in Elizabethan England. And yet, with hindsight, Shakespeare lived during a remarkable period of discovery – a period that we now look back on as the first phase of the Scientific Revolution. 

Dan Falk's new book, The Science of Shakespeare, explores the connections between the famous playwright and the beginnings of the Scientific Revolution. (Courtesy Sara Desjardins Photography)

As the world marks the 450th anniversary of the playwright's birth (April 23, 1564), some scholars are examining Shakespeare's interest in the natural world. Although magic and superstition of various kinds were still prevalent during the Bard of Avon's lifetime, new ideas about the universe and the place of human beings within it were gaining attention. 

Did any of these new ways of thinking influence the playwright? A look at his life and famous plays suggests a number of them did.

Here are five ideas that emerged during Shakespeare's time and may have made an impact on his writing.

Atoms

The idea of atoms was actually an ancient one:  The early Greeks had speculated that matter may have been composed of tiny, indivisible chunks, too small to be seen with the naked eye.

Hannah Arendt debate

On the Wed. April 23 edition of CBC radio's Ideas starting at 9 p.m. EDT, a debate over Hannah Arendt's theories. 

Was Adolph Eichmann not ultimately responsible for the destruction of six million Jews? Were Jews themselves partially to blame for their own fate? Fifty years ago, political philosopher Hannah Arendt published a famous book that seemed to imply these things, and created an instant uproar that hasn't ended. Roger Berkowitz, Adam Gopnik, Rivka Galchen and Adam Kirsch debate the reality behind Arendt and her ideas.

Confirmation of this bold idea would come only in the 19th century, long after Shakespeare's time; and yet, the ancient Greek idea was experiencing a bit of a revival in Elizabethan England. 

This was largely thanks to the work of Lucretius, a Roman philosopher whose epic poem, On The Nature of Things, touted the virtues of the atomic theory. As Stephen Greenblatt of Harvard has noted, the book went through some 30 Latin editions between 1473 and 1600 (the copy that belonged to playwright and critic Ben Jonson can be seen to this day in Harvard's Houghton Library). 

Did Shakespeare know about atoms?  Yes – at least, he knew enough about them to refer to them poetically on several occasions.

In Romeo and Juliet, for example, Mercutio suggests that his friend has been visited by Queen Mab, a fairy-like creature that enters her victims' brains via their noses, interfering with their dreams. How small is Queen Mab?  She comes "in shape no bigger than an agate stone," Mercutio says, sitting in a coach "Drawn with a team of little atomi / Over men's noses as they lie asleep."

Automata

The climactic scene in "The Winters Tale," in which a statue of queen Hermione springs to life, may have been inspired by the popularity of automata during Shakespeare's time.

To the ancient Greek thinker Aristotle, the world was like a living organism and might be investigated as one studies plants and animals. In Shakespeare's time, however, the first stirrings of what would come to be called the "mechanical philosophy" were in the air. 

Rene Descartes – born 32 years after Shakespeare – would describe the human body as "nothing but a statue or machine made of earth." He compared the movements of humans and animals with the workings of the robot-like "automata" that had already become a popular distraction in royal gardens in Shakespeare's time. 

As Scott Maisano of the University of Massachusetts in Boston has pointed out, the climactic scene in The Winters Tale – in which a statue of the dead queen Hermione springs to life – may have been inspired by the popularity of these automata, and, more generally, of the new conception of the world as a mechanical device, with its various parts pushing and pulling on one another.

Medical diagnoses and treatments

Shakespeare's characters often talk about illness, disease, and various treatments and cures. Much of the writing accurately reflects the medical learning of his time (such as it was). 

Where did Shakespeare come by his medical knowledge? 

In the latter part of his career, there would have been a doctor in the family. John Hall, a prominent Stratford physician, married the playwright's oldest daughter, Susanna, in 1607.

This may explain why doctors are, in general, shown in a positive light, especially in Shakespeare's later works.

Luckily for historians, some of Dr. Hall's medical notebooks have survived; we even have a record of a treatment he once administered to his wife – Mrs. Hall of Stratford.  The unfortunate Susanna had been "miserably tormented with the Colic," but was cured, Hall writes, by means of an enema and various libations.

Copernicanism

In "Hamlet," the prince envisions himself as "a king of infinite space," which some theorize could be Shakespeare alluding to the theory of an infinite universe described by his countryman Thomas Digges. (NASA/The Associated Press)

Copernicus had published his groundbreaking book, On the Revolutions of the Heavenly Spheres, in 1543 – twenty-one years before Shakespeare's birth. Two decades later, an astronomer named Thomas Digges published the first detailed account of the theory by an Englishman. 

Digges' vision was even more radical than that of Copernicus: In one of his books he included a diagram of the cosmos in which the stars are seen to extend outward without limit – a remarkable vision of a possibly infinite cosmos.

What did Shakespeare make of Digges' idea? 

We find a clue, perhaps, in a remarkable passage in Hamlet, in which the prince envisions himself as "a king of infinite space."  Could he be alluding to the new, infinite universe described – for the first time – by his countryman Thomas Digges? 

It is also possible that one of the later plays, Cymbeline, contains allusions to Galileo's telescopic discoveries, which lent further support to the Copernican model of the heavens.

The debunking of astrology

Astrology and astronomy were very much intertwined in Shakespeare's time, and the idea that the stars control one's fate was very popular, perhaps almost ubiquitous. And yet, several of Shakespeare's characters speak out against the folly of such views. 

In Julius Caesar, for example, Cassius declares, "The fault, dear Brutus, is not in our stars, / But in ourselves, that we are underlings."

In King Lear, Shakespeare explicitly contrasts the superstitious views of Gloucester – who believes that the recent eclipses of the sun and moon "portend no good to us" – with those of his illegitimate son, Edmond, who mocks such beliefs as "the excellent foppery of the world."

Edmond goes on to ridicule the idea that the circumstances of his birth are responsible for shaping his character: "My father compounded with my mother under the Dragon's tail, and my nativity was under Ursa major, so that it follows, I am rough and lecherous. Tut!  I should have been that I am had the maidenliest star in the firmament twinkled on my bastardizing."

[Listen to Dan Falk's documentary, "The Science of Shakespeare," produced for CBC Radio's Ideas, in the link at the top-left of this page.]

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Now you can go back in time on Google Street View

Google has launched a new feature that lets users explore how places around the world have changed since it launched Street View seven years ago.

"This will let you go back in time up to 2007," said Vinay Shet, product manager for Street View. "It paints a picture of how the world has been. It's a mirror of the world across time."

The feature is rolling out around the world over two days. As of 10:30 a.m. ET Wednesday, it was live in the U.S., but had not yet rolled out in Canada.

Google Canada spokesman Aaron Brindle said he would alert CBC News when Canadian users are able to try it out.

Brindle suggested that one interesting thing for Canadian users to check out is how Toronto's Lake Shore Boulevard has changed during the condo boom over the past few years.

Street View users can watch the construction of buildings like this one in Singapore. (Google)

Shet suggested using the new feature to see:

• The construction of landmarks such as the 2014 World Cup Stadium in Fortelaza, Brazil.
• The destruction wrought by natural disasters such as the 2011 earthquake and tsunami on places like Onagawa, Japan, and how they have been rebuilt.
• How different cities such as Kyoto, Japan, look when covered in spring cherry blossoms and in the summer.

"It's also an opportunity to see how humanity has evolved culturally," said Shet, pointing out the evolution of technology from flip phones to smartphones in ads in New York's Times Square during an online video demo.

The availability of the new feature is indicated by a little clock in the upper left of a given Street View scene. A slider allows you to toggle among views from different times. Google has also dressed up its yellow Google Street View man icon as Doc Brown, the time machine inventor from the movie Back to the Future, for the launch.

The new feature will allow you to see some previously unpublished Street View images captured over the years, such as night shots of Times Square. Their quality wasn't high enough to allow them to be the main images on Street View, but Shet said they now can be used to add context.

The feature also preserves access to Street View images that are meaningful to some users. Shet gave the example of a man whose parents died some time after having been captured in Street View imagery. He was afraid the image would be replaced by a newer view of the street.

Some images show cities such as before and after natural disasters such as the massive 2011 earthquake and tsunami in Japan. (Google)

Some Street View pictures posted through the years have also upset people who were captured in activities or visiting places that they wanted to keep private. Google now blurs the images of people who contact the company asking to be shielded from Street View. Masking will be available on the older photos too, Shet said, even if it's just because a person didn't like the way he or she looked a few years ago.

On average, in most places, only one image from the past will be available in addition to the most recent Street View image.

However, many past images will be available in major city centres because Google's Street View cars tended to visit those areas more frequently.

Google Inc. intends to keep adding pictures to the digital time capsules as its photo-taking cars continue to cruise the same streets gathering updates.

Like everything else on Google's map, the time-tripping option is free. Google makes money off its maps from advertising, so the Mountain View, Calif., company is constantly coming up with new attractions to keep people coming back.

Google Street View is used by a billion people each month and currently spans 55 countries.

The look-back feature will be available in all but three of those countries: Germany and Switzerland, where government regulations restrict Google's use of the past images, and South Africa, where technical problems have slowed the feature's rollout.

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