There is both good and bad news to report on the surveillance front.

Let’s start with the positive.

Bloomberg has just reported that Google Inc. is refusing to comply with a government-issued National Security Letter (NSL) demanding that it turn over private data and keep quiet about it. Google had to file its petition under seal asking that the NSL ‘legal process’ be set aside.

The even better news is that the challenge to the NSL is before US District Judge Susan Illston. This is the same North California judge who ruled on March 14 that the NSL’s gag provisions were unconstitutional and that the FBI should stop issuing them.

Since the USA PATRIOT Act expanded the way NSLs could be used to obtain electronic personal data without any kind of court order, the FBI has sent almost 300,000 of them to Internet Service Providers, financial institutions and credit card companies.

Anyone disclosing that they had been the recipient of an NSL faced prosecution. Anyone whose records were seized was none the wiser.

The gag provision was modified to permit NSLs to be challenged in court after judges ruled in two ACLU cases – one involving Connecticut librarians and another involving an Internet Service Provider – that they were unconstitutional on both First and Fourth Amendment grounds.

Last month, Judge Illston ruled in a case brought by the Electronic Frontier Foundation that as modified, the gag remained a violation of free speech rights. She then stayed by 90 days her demand that the government stop issuing NSLs so that it had time to appeal her ruling.

Let’s hope that Google’s action emboldens other recipients of NSLs to take a similar stand for the privacy rights of their users before the government has a chance to file an appeal of Judge Illston’s ruling with the Ninth Circuit Court of Appeals. Who knows, if there is sufficient push back, the Justice Department might even surprise us and decide not to file an appeal … here’s hoping!

‘Bloomberg’ – this time it’s the mayor – also features in the bad news department.

Do you remember the Domain Awareness System which Mayor Bloomberg unveiled back in August 2012? This $30 million Microsoft/NYPD creation combines the data of thousands of surveillance cameras, license plate trackers, sensors and law enforcement databases “to track both criminals and potential terrorists.”

According to The New York Times, the Domain Awareness System may soon be generating big bucks for the city, as other municipalities and police chiefs line up to access its software — for a price, of course.

Apparently, belief in the power of the algorithm is not just confined to the US. A Microsoft vice president said that “outside the US, large sporting events have approached us, and also law enforcement – people who are interested in providing public security.”

If you are squeamish about the privacy implications of Total Information Awareness’ Little Brother Domain Awareness, never fear. “The Police Department says it is scrupulous about ensuring the system is not abused.” That’s the NEW YORK Police Department.

Feel better now?