*HOT* Tech News And Downloads, I Would Read This Thread And Post Any Good Info

New malware poses as WGA validation and notification

warning A new piece of very nasty malware has been recently discovered on spyware help forums, first here and again here. The file name is wgavn.exe and it creates a service named "Windows Genuine Advantage Validation Notification", as seen in this line in the HijackThis log.

O23 - Service: Windows Genuine Advantage Validation Notification (wgavn) - Unknown owner - C:\WINDOWS\system32\wgavn.exe » New malware poses as WGA validation and notification | Spyware Confidential | ZDNet.com Linked by shanmuga Fri Jun30 2006 1:41am EDT



New malware poses as WGA validation and notification
Posted by Suzi Turner @ 5:41 pm
Digg This!

A new piece of very nasty malware has been recently discovered on spyware help forums, first here and again here. The file name is wgavn.exe and it creates a service named "Windows Genuine Advantage Validation Notification", as seen in this line in the HijackThis log.

O23 - Service: Windows Genuine Advantage Validation Notification (wgavn) - Unknown owner - C:\WINDOWS\system32\wgavn.exe

Thanks to security MVPs at the Aumha forum, I was able to get a sample today — this is one nasty little piece of malware. I tested it on a virtual machine running XP Pro, totally unpatched. On execution, wgavn.exe creates a folder, C:\Windows\etc\, that contains a file named services.exe. Wgavn.exe copies itself to the \System32\ folder as shown in the HijackThis line above.

On my virtual machine, it disabled the following: WinPatrol, an anti-spyware program, a third party firewall, VMware Tools, VMware User Process, and VPCUserServices by changing the values of the Run keys in HKEY_LOCAL_MACHINE. Another researcher reported it disabled the Windows firewall and System Restore.

Wgavn.exe immediately attempted to contact several different IP addresses. The ISP is being notified in an attempt to investigate these sites and IPs. At this time, it's unknown how the two users who posted the HijackThis logs got infected with this. The sample has been submitted to anti-malware vendors but as of earlier today was poorly detected. Kaspersky is now detecting it as Backdoor.Win32.IRCBot.st, and another AV at VirusTotal detected it as Backdoor.Win32.IRCBot.BV.

Update June 30: Infoworld now has this story on wgavn.exe and says Sohpos is calling it an AOL Instant Messaging worm and variant of the Cuebot family. Sophos named it W32.Cuebot-K.

Cuebot-K can disable other software, shut off the Windows firewall, download new malicious programs, perform basic DDOS (distributed denial of service) attacks, scan local files and spawn a command prompt, Sophos said.

Worms that spread through instant messaging programs often appear as messages or links sent from friends, which trick a user into executing the program. Cuebot-K propagates by sending itself as a file named "wgavn.exe" to more people in the user's "Buddy List" but without a message, Cluley said.

Both victims posting for help in the forums had AIM, so I'm not surprised that's how it spread. The article says the worm immediately tries to contact two websites, but I observed it contacting three URLs and the firewall log showed four IP addresses.

eepny.stjohnspark.net
ljrpq.haxx.biz
kroqc.haxx.biz
209.11.244.114
209.11.244.115
209.11.244.162
209.11.244.165

These belong to AS35908 VPLSNET, as seen here on a tracert from dnsstuff.com. VPLS Inc.'s website site can be seen here. The whois info for haxx.biz is very sketchy and stjohnspark.net is registered to Haxx Enterprises. Interesting.
http://blogs.zdnet.com/Spyware/index.php?p=838

 

Intellectual Property Secret Police,


p2p news view / p2pnet: There's nothing more wonkish than intellectual-property regulation. But intellectual-property enforcement may well turn out to be the lever for government intrusions into private life every bit as profound and extensive as the better-known secret-police initiatives of the Patriot Act.

You know all those old myths and stories about dead folk who just won't stay dead - zombies, vampires, Richard Nixon? Well, there are ideas like that too - ideas that won't stop clawing their way out of the grave and back into the light of day. One such idea is the "broadcast flag," recently returned aboveground, for the Nth time, tucked into an enormous telecommunications bill (S. 2686), now before the U.S. Senate.

"Broadcast flag"? Before your eyes glaze over, give me a few seconds to get you good and scared. Because this one is a real flesh-eating zombie of an idea, and it just won't stay dead.

"Broadcast flag" is shorthand for two different but interconnected things. One of them is a flag or tag or attribute, or whatever you want to call it, embedded in a digital audio or video stream, that says "don't copy me without permission." This is the "broadcast flag" in the literal sense.

Which might seem harmless. It's like an electronic version of the copyright notice on a book, or that goofy thing about the FBI that leads off every video you rent. But if the government ever got serious about enforcing it.... that's where the Inquisition would come tiptoeing into your TV room, and maybe right onto your lap, as we will see a little later.

Well, guess what: Big Media does want the government to enforce the broadcast flag, and the government, ever solicitous for the rights of large-scale property, is eager to oblige.

The broadcast-flag initiative now before the Senate resuscitates an attempt by the FCC, back in 2003, to mandate broadcast flag compliance by all digital media devices. That regulation, known to aficionados as FCC 03-273, was subsequently buried with a stake through its heart by a Federal court. Now the Senate is digging it up again, with near-universal participation by Republicans and Democrats alike. The Flag just sailed through the Senate's commerce committee without a recorded vote, a pretty sure sign of bipartisan ownage by the relevant lobby; the frogs and the mice will not be fighting over this one. The only dissenter, so far, is Senator John Sununu of New Hampshire, who seems to have some real libertarian principles, not just a libertarian line of chat like most of his colleagues.

The 2003 FCC rule, written to order for the Motion Picture Association of American (MPAA), Recording Industry Association of America (RIAA), the National Football League and other copyright rentiers, is a thicket of obscure, rebarbative language, vague definitions, cross-references, and cabbalistic terms of art. But if you stare at it for a while, the crux becomes pretty clear: "demodulators" must comply with the broadcast flag. And what is a demodulator? It is any device or component that takes a digital TV or audio signal and turns that signal into a stream of bits that can be written to a CD, or shown on a screen, or downloaded to your iPod.

Sounds like some kind of electronic gizmo, right? A thing with transistors, and wires, and maybe some pretty blinking lights. Indeed, a demodulator can be just that. And maybe it doesn't seem so terribly tyrannical to mandate certain kinds of behavior on the part of a gizmo. There are plenty of precedents - cars have to have seatbelts, for example.

But here's the rub: a demodulator can also be just a piece of software, or part of a larger piece of software. Computers, including your 14-year-old's laptop, are rapidly becoming so powerful that it's only a matter of time before your 14-year-old can download a demodulator, or a program that includes a demodulator, from some other 14-year-old in Finland - or write his own, for that matter.

Now what happens when that wicked Finn, or your wicked offspring, decides to ignore the Broadcast Flag? Well, the FCC doesn't come right out and say. They don't explicitly include such "software demodulators" in the scope of their regulation, but they don't explicitly exclude them either, and the definition of "demodulator" is certainly broad enough to cover them. And the FCC haven't overlooked the possibility of software demodulators - they write:

"... critics note that ... non-compliant hardware or software demodulators could be produced with relative ease by individuals with some degree of technical sophistication...."

They go on to say, ominously, I think:

"... we seek further comment on the interplay between a flag redistribution control system and the development of open source software applications, including software demodulators, for digital broadcast television."

'Interplay' is good, isn't it? Interplay nice, kids. But think for a minute about the implications of all this. Obviously, you won't be able to buy a digital TV, or any other digital media device, whose manufacturers haven't certified to the Feds that it honors the Flag. Perhaps they will have to give the Feds the schematics, or the source code for their "firmware" - the embedded programming that enables the device to operate. And if you want to get around this restriction, and load software onto your laptop that ignores the Flag, then technically, that software is probably contraband and you will have probably committed a federal crime. But will the law be enforced in such cases?

I think, sooner or later, it will. Not tomorrow. For tomorrow, and next week, software demodulators will be a very geekish hobby, too small-scale to bother the MPAA and the RIAA. But we have all seen how quickly geekish hobbies can infect the millions. And when that happens with software demodulators, there'll be a crime wave, and the MPAA and RIAA will sit up and take notice.

They'll want to find all these bad actors who have loaded non-compliant software onto their laptops. But that's not so easy. There's no way a "content provider" can tell, from his end of the wire, what software the recipient of his digital media stream is running.

Ultimately, warrants will have to be issued. Fibbies in flak jackets will charge into your house and confiscate your 14-year-old's computer. Aha! He's running Linux! And he's been visiting Web sites in Finland! Twenty years for the little Commie song pirate!

Does this sound unlikely? It shouldn't -- we've already seen it before, with the FBI breaking into houses and the RIAA filing thousands of lawsuits against people accused of "file sharing."

Intellectual property enforcement, in other words, will lead to a kind of de facto government software regulation. The software police won't entirely succeed in suppressing contraband software - we'll have an eternal war, a little like the Drug War, which suits the police just fine, of course. But certainly they will succeed to some extent; the prospect of a midnight raid will keep all but the bold and heedless safely inside the sheepfold of approved software, produced by Microsoft or Apple or Sony or some other large corporation.

You know what the next step will be. The approved software manufacturers will be approached, just the way the NSA recently approached the telephone companies. Kiddie porn - terrorism - video piracy - bad things, right? Surely you'll help us defeat terrorism and put child molesters behind bars? Your techies have probably left some back doors into that movie software, right? Tell us more. What's that? You're hesitating? You're not a, uh, child molester yourself - are you? Y'know, your ex-wife tells some strange stories....

Paranoid, you say? Well, a few years ago it would been paranoid to predict that cops would be searching people's knapsacks in the New York subways, or that the NSA would be monitoring your grandmother's phone calls.

There's been a vast expansion, in recent years, of the idea of "intellectual property." You can patent most anything - Microsoft, I hear, owns all the transcendental numbers except pi, and they're suing Euclid's estate over that. (Just kidding. Sort of.) Copyright is forever, or as near as dammit. Fair use is narrower and narrower, and there are even public parks where it's a copyright violation to take pictures.

And this is taking place at the same time that technology is making intellectual property a laughably obsolete idea. Once you've got a stream of bits on your hard drive, there is no power on earth that can stop you from copying it -- except the oldest power, the power of armed men to break your door down and take you away.

Michael J. Smith - stopmebeforeivoteagain.org
[Smith says he's a computer programmer by day who by night, conspires to destroy the Democratic Party on his StopMeBeforeIVoteAgain blog. This article originally appeared in the June 30, 2006, Counterpunch, as Intellectual Property is Intellectual Theft ... at Gun Point.]

p2pnet newsfeeds for your site.
rss feed: http://p2pnet.net/p2p.rss
Mobile - http://p2pnet.net/index-wml.php

(Saturday 1st July 2006)
http://p2pnet.net/story/9237


MORE GOOD NEWS BELOW

 

Good afternoon all. I want to wish you a happy 4th and watch out for the fireworks, kind of hard to type missing a finger or two. Have a nice get together with your families. Later, George

 

little155 and all a happy and safe 4th,

 

Open letter to parents'





Hi:

This is an open letter from my wife, Liz, and I to other mothers and fathers who are becoming seriously worried by the influence vested corporate interests are able to exert - long distance and up-close-and-personal - on our children through school systems around the world.

The major record labels and Hollywood movie studios are traditionally and infamously linked to organized crime, rampant drug use, the use of sex as currency and corruption at all levels and they're the absolute last entities on earth to be instructing anyone, let alone children, on moral issues, on what's right and what's wrong and on truth and fairness.

Yet that's exactly what's happening, and it's happening everywhere with the collusion of local governments and school staffs and administrations.

Get 'em while they're young, at kindergarten and university, is the corporate buzz-phrase. And spare no expense.

The RIAA is, "taking the battle for hearts and minds directly to the auditorium of your kid's school," reports thep2pweblog. The RIAA has teamed with i-Safe, "a nonprofit organization" which, "teaches kids, teachers and parents how to be safe on the Internet," with topics such as, "awareness about predators, not to give out too much personal information," and, "the risks of getting on P2P networks".

"Sounds fine so far," the post goes on.

Sounds fine? With the Big Four's RIAA involved? And it should read, "has taken" rather than "is taking".

Nor are Warner Music, Vivendi Universal, EMI and Sony BMG all there is to worry about. Let's not forget Time Warner, Viacom, Fox, Sony, NBC Universal and Disney's MPAA (Motion Picture Association of America). Or organizations such as Microsoft, Apple Computer, Adobe and the other owners and operators of the BSA (Business Software Alliance).

So, 'Sounds fine' is most assuredly not the case, especially, "When you add in the idea of the RIAA feeding iSafe the propaganda and iSafe in turn showing up to your kids school under the guise of saving them from MySpace predators, only to tell them about how music wouldn't be made if the RIAA didn't get thier [sic] cut, it becomes something quite different," as thep2pweblog emphasises.

"Obviously the information presented will be biased in favor of the industry, and I'm going to go out on a limb and bet that no one will talk about the crappy record deals your kid's favorite artists are living with," it states.

But thep2pweblog isn't going out on a limb. It's an iron-clad, carved-in-rock, solid-gold certainty no one will talk about the "crappy record deals," or anything else even remotely connected to truth and reality.

Cheers! And thanks ..

Good little cash cows - 102

go here to read it all,as its a long read...
http://p2pnet.net/story/9238

 

Good Morning All! It's strong iced coffee for me this morning after a good long walk to the office. I haven't been around much lately, things have been pretty nuts lately but I wanted to say hello to everyone. As its July 3rd, I'm hoping things will be really slow and uneventful here at the office ... gives me the chance to catch up on things here at aD! ...rather like missing three weeks of my favorite soap! I hope everyone is well! ... Gerry

 

Good morning, Iced Coffee for me too, it is going to be a hot one out there today. Just hoping the rain stays away for tomorrow, don't like grilling in a monsoon. You been missed gerry, glad you finally got a little down time to check in.........hope it continues

 

Howdy Arnie! I've missed being here but things truly have been nuts. We had a hit of massive lay-offs and I've literally been doing the work of four people and inherited the case loads of two others...I've been working seven days a week using Sat and Sundays for data entry that I hadn't had time to do during the week. Things should be better now though; they've transfered a clerk from the main office and she's astonishingly good. She was annoyed at first (fear of the unknown, I guess) but she quickly discovered that one has a lot more fun away from the brass and politics. I hope I'll be around more now.

I don't know where you live Arnie but maybe you're getting the weather we had yesterday. I haven't seen it rain like that in a long time. It ended with a thunderstorm last night that was nothing short of spectacular; I stood in my living room window and just watched it ... like a light show. I haven't seen one like that since I moved north from Miami. I'm not sure but I could swear a couple of the skyscrapers were hit a number of times by lightening but I'm sure they're built with that in mind. It was neat though.

 

I live not too far from you, Ohio so we get the same weather. Last night got some real boomers, and wind was pretty bad also. All and all it has been a wet summer, at least my grass is happy it just grows and grows. All I do is mow it, lol

 

In the wake of the action against the PirateBay some others have joined the fight against restrictive laws


http://www.pirate-party.us/


Thank You!
David and I would like to thank everyone for the huge outpouring of support we have received these last few days. We're working very hard to bring the new site online and start the very important work of this party.
We look forward to working with you. - Joshua Cowles

In the meantime, please visit us on the temporary unofficial forums,
or on IRC server: irc.echel0n.net Channel: #USPirateParty (Java Web Client)

Help Build the Pirate Party
Please consider a donation to us in order to help pay for important things like web hosting, incorporation, accounting and legal fees, and other expenses.

The Pirate Party of the United States is this country's version of Piratpartiet, a Swedish political party that wants to "fundamentally reform copyright law, get rid of the patent system, and ensure that citizens' rights to privacy are respected." As a fraternal party, the PPUS shares similar goals while working within the political context of U.S. to achieve them.

For far too long, Big Media copyright cartels like the Motion Picture Association of America and the Recording Industry Association of America have held back technological progress and individual freedom. They have done so through cutthroat litigation against ordinary Americans, interfering with peer-to-peer networks by flooding them with bogus files, and corrupting the political system with unscrupulous lobbying and political donations.

Similarly, the pharmaceutical firms of the Pharmaceutical Research and Manufacturers of America have, through the power of their medicine patents, denied lifesaving medical treatment to the world's poorest people suffering on a horrific scale just to raise their profit margins. Doctors and scientists are beholden to Big Pharma's grant money, extorted through patents, to devote research efforts on what makes the most money, not always on what saves the most lives or reduces suffering. The New England Journal of Medicine can no longer find unbiased reviewers of medical studies because of Big Pharma's long patent-granted reach.

Preceding and following the 9/11 attacks, the U.S. government has had a longstanding antipathy towards protecting the privacy of ordinary Americans when it conflicts with their interests in state control. The NSA's phone-tapping, the FBI's Carnivore email spying program, and Congress's two so-called "PATRIOT Acts" are symptoms of a rampant disregard in law enforcement and the legislative branch for the private lives of U.S. citizens.

No matter what excuses or rationalizations Big Businesses and Big Government offer, it all comes down to cold, hard corporate greed and state control at the expense of your freedom and well-being. Most Americans have wished that one of the major parties would have the courage to stand up to these undemocratic conglomerates and policies and win back control of the cultural, scientific, and personal spheres for artists, critics, scientists, patients, and citizens from all walks of life. Both the Republicans and Democrats have instead, as a whole, enthusiastically rolled over for Big Media's and Big Pharma's campaign dollars.

While fine groups like the Electronic Frontier Foundation, the Free Software Foundation, Creative Commons, and Doctors Without Borders have been fighting these battles for a long time with us, no political party in United States has made the reform of intellectual property and privacy laws their top priority.

Until now.

Signed,

Joshua Cowles & David Sigal
Provisional Chairmen, PPUS

Original text by Brent Allison, Founder.

 

Good morning one and all; and greeting from Philadelphia, the birthplace of the US. I just want to wish everyone a happy and safe holiday!

To my buddies from other countries, no excuse is ever needed for a good party! ... Gerry

 

Good going gerry, happy holiday to all. George

 

To all,

 

Happy 4th of July to all in the USA. For me here in England another year of wedded bliss has passed 14 years today

 

Thank you consul, and congrats on your anniversary. For me it is 40 years, and everyone said it wouldn't last, lol

 

Senator questions need for new law to plug analog hole
Posted by Dan Bell on 05 July 2006 - 17:00 - Source: Business News

Hollywood received a bit of a shock in a recent special Senate hearing, from Senate Judiciary Committee Chairman Arlen Specter, R-Pa. The gentleman from Pennsylvania questioned the need of creating new laws, to force the closure of the analog hole. The movie industry is pointing to this problem as it is a means of facilitating the illegal copying of copyrighted materials, such as DVDs. He suggested that the industry should form a voluntary agreement on their own, to get the job done.

This is certainly a bit of fresh air, as it seems rather puzzling that the government should have to create laws to police an industry.

The issue at hand is the use of the familiar red, yellow and white connections that still sprout from many a home entertainment device. People can use these analog ports to capture the converted analog signals from a digital source. Then, you simply convert the signal back to digital for storage to a computer disc or optical media. This, the movie industry contends, is the "analog hole".



GO HERE TO READ IT ALL
http://www.cdfreaks.com/news/13639

 

From the article

It is good to know I now have an excuse

 

French Pirate Party launch,...

p2p news / p2pnet: France has become the newest member of the world's fastest-growing political party.

Le Parti Pirate has joined the copyright reform Piratpartiet whose Swedish founders and members say they're, "tired of being deemed a criminals and terrorists by the system for sharing a few measly files for no financial gain or loss to anyone," as The Inquirer summed it up in January.

The Swedish manifesto says it's against seeing the developing world starve, "because the developed world refuses to share its intellectual property," says the story, adding:

"Its message is that corporations are engaging in racketeering in the developing world and a few power hungry individuals and greedy corporate entities are infringing on privacy and integrity. Piratpartiet says that it will strike out immaterial law, ignore WIPO and WT, and annul any further treaties or policies that hinder the free flow of information. They will refuse to allow data retention nonsense based on terrorism claims or failed RIAA business models."

Says Pirate Party France:

We, French Internauts, presently observe the confiscation, by a few partisan and powerful groups, of the French Internet Domain, therefore leading to a prejudice for the vast majority of Internauts.

With the upcoming promulgation of the law about Author Rights - EUCD - , these rights being now seen as the ennemy of the network and of the internauts, we demand the abrogation of the whole set of laws that define intellectual property on the French soil and encourage the internauts to forget these notions in their everyday lives.

The party also demands the legalisation of P2P networks for non-lucrative use as a natural consequence of the suppression of the author right.

The French Pirate Party plan 6 major reforms :

1 - Total and unlimited liberty of speech
2 - The end of the author rights as they exist in 2006
3 - The right to browse anonimously on Internet
4 - The legalization of P2P Networks when used in a non-lucrative purpose
5 - The suppression of all taxes on empty hardware
6 - Free Internet access to all

The already established Parti Pirate Belge is also online in Belgium, where it declares:

The Belgian Pirate Party is currently an association which intends to eventually form a new political party aiming to bring about reform on author's rights, the abolition of the patent system and the safeguarding of individual rights of privacy.


go here to read it all
http://p2pnet.net/story/9268

 

Canadian 'lawful access' fears

p2p news / p2pnet: Recently, The Canadian Bar Association says it's concerned about a growing trend for ISPs to monitor, or investigate, customers' communications.

'Lawful access' proposals have been characterized as updates to current law enforcement powers, says a letter to Vic Toews, Canada's federal minister of justice and attorney general of Canada.

But is it a, "corporate or industry content monitoring scheme"?

July 5, 2006

The Hon. Vic Toews, P.C., M.P.
Minister of Justice and Attorney General of Canada
House of Commons
Ottawa ON K1A 0A6

The Hon. Stockwell Day, P.C., M.P.
Minister of Public Safety
House of Commons
Ottawa ON K1A 0A6

The Hon. Maxime Bernier, P.C., M.P.
Minister of Industry
House of Commons
Ottawa ON K1A 0A6

Dear Ministers,

I write on behalf of the Canadian Bar Association (CBA) concerning a trend by internet service providers (ISPs) to monitor or investigate their customers’ communications, similar to proposals in Bill C-74 from the 38th session of Parliament, the Modernization of Investigative Techniques Act (the Bill). The CBA is a national professional organization representing over 36,000 lawyers, notaries, law students and teachers from every part of Canada. The CBA’s mandate includes seeking improvements in the law and the administration of justice, and being the voice of the Canadian legal profession.

The CBA is concerned that ISPs are amending their service agreements with customers to announce that they will “monitor or investigate” how customers use their services, and will “disclose any information necessary to satisfy any laws, regulations or other governmental request from any applicable jurisdiction.” This seems to be introducing a corporate or industry content monitoring scheme, without the necessity of prior authorization or oversight. This initiative appears significantly more intrusive than the previous legislative proposal.

In consultations about so-called “lawful access”, government officials characterized proposals as simply updating current law enforcement powers to recognize technological realities. The CBA voiced strong concerns about the scope and potential impact of the various proposals. Our concerns focus on the profound impact on the privacy of individual Canadians, and particularly on the potential to destroy solicitor client privilege by seizing communications between lawyers and clients. Solicitor client privilege is a cornerstone of democracy and the Canadian legal system. It allows individuals to seek legal advice knowing that communications with their counsel will remain private, and protected by law. Solicitor client privilege belongs to the individual seeking legal advice and is for the benefit of the client, not the lawyer.

In our view, all “lawful access” measures must be defined to conform with legal protections and guarantees that safeguard Canadians’ rights and freedoms, and be closely monitored to ensure that conformity. Prior judicial authorization is central, and blanket customer agreements without prior judicial authorization or oversight do not meet that test. A heightened level of care and scrutiny is imperative where the interception or search of such communication may infringe solicitor client privilege.

We urge you to ensure that Canadians’ private information remains appropriately protected, and that any privilege accorded to communications between lawyers and clients remains inviolate. We would appreciate an opportunity to discuss this with you or your officials at greater length.

Yours truly,
(Original signed by Brian A. Tabor)
Brian A. Tabor, Q.C.



(Thursday 6th July 2006)

 

AOL may offer free Internet access

7/6/2006 11:31:32 AM, by Jeremy Reimer

We all remember collecting giant stacks of "free" AOL CDs (and for the really old techies among us, free AOL floppy disks, which could at least be reformatted and used for something else). Now it turns out that AOL may be offering something else for free: access to their Internet service.

Those still on dial-up (yes, they are out there) will continue to pay a fee to use the AOL service. However, subscribers to the "AOL for Broadband" service, where you bring your own high-speed Internet connection to the party, will no longer have to pay subscription fees. The plan, which could see AOL losing up to US$2 billion in revenue from subscription fees, is intended to boost AOL's numbers and ultimately the company's advertising revenue. AOL hopes that up to 8 million of its existing dial-up customers will take advantage of the offer. An earlier attempt to move people from dial-up to broadband by increasing dial-up access prices met with limited success.

The proposed change comes at a crucial point for AOL. While the company still has an impressive number of subscribers, they are losing customers rapidly as broadband access becomes more widespread. In 2002, AOL had 26.5 million subscribers in the United States; by 2006 this figure was down to 18.6 million. AOL estimates that the company lost approximately 850,000 members in the first quarter of this year.

The plan to drop access charges from broadband essentially turns AOL from a subscription-based service to an advertising-supported one. While companies like Google and Yahoo have shown that you can make very good money from online advertising bundled with free content, it remains to be seen whether the corporate culture at AOL will adapt well to this change.

According to the Wall Street Journal, the new plan was proposed to top Time Warner executives by AOL CEO Jonathan Miller, in a meeting held last week in New York. Time Warner, which was "acquired" by AOL in a stunning stock swap deal in 2001, right before the dotcom crash, has been distancing itself from its AOL portion. AOL reported a colossal US$99 billion loss in 2002, and in response, Time Warner removed "AOL" from its name and removed Steve Case from his position as executive chairman. Case left the Time Warner board in 2005. The media giant has considered selling its AOL property many times before, but decided to partner with Google instead. It is likely that the partnership with the search engine company provided the impetus to move to an advertising-supported business model.
http://arstechnica.com/news.ars/post/20060706-7201.html