[JackSpratts]

Quotes Of The Week

"File-sharing appears to boost music CD buying." - John P. Mello Jr.

"I wish we could get justice; I don't know where it is." - Robert Moore, President and founder 321 Studios

"A decision like this says that you must prove that someone did something wrong--just owning a product doesn't mean you did something wrong." - Jason Schultz

"If China was as good as Italy, we'd all have a party and I would pay for it." – Microsoft’s Steve Ballmer, on Italy’s stiff prison sentences for sharing music and software.

"With a price point of $1 per song or more, and with the [Digital Rights Management] wrappers on the current music downloads, it actually seems that buying a CD is a better deal." - Greg Bildson






Smear Guardian

I've watched a developing situation over the last six months with increasing alarm. I’m beginning to realize IP blocking programs could be the best thing to happen to the RIAA since the lawsuit was invented. The programs have gotten normally well meaning people so convinced of their legitimacy many file sharers wrongly think most of the planet is working for the copyright police. Hundreds of thousands of peers (and millions of files) may as well be offline when no one using these systems will connect to them. Major areas of Canada are inexplicably blacklisted by one system for instance where nothing should be - filesharing is legal there! It's P2P-Macarthyism. No evidence is given - just a darkbot working in a Star Chamber, secretly whispering into the ears of users.

If I was advising the RIAA I'd tell them to buy and control operations like Peer Guardian and make everyone’s IP suspect, instantly removing millions of otherwise legitimate files from the networks; eliminating peers without the controversy or expense of lawsuits. Why not? It looks like that’s what’s happening. It wouldn't surprise me if they were doing it already. When the wholesale blocking of so many IP’s occurs the software is either seriously warped or the people running the systems are. The case can now be made that these programs are hurting – not helping the P2P networks, more than the lawsuits even, and not just the big webs like Fasttrack but independents like Soulseek as well. With so many IP’s under suspicion it’s time the creators of peer jamming updates issued real and convincing, independently verifiable evidence why countless IP’s are now being blocked. Either that or let’s just stop cutting innocent people off before we play right into the hands of the RIAA, giving it a victory it doesn’t deserve.













Enjoy,

Jack.











Survey Finds File-Sharing Networks Boost CD Buys
John P. Mello Jr.

"[The survey] shows that most people have used P2P networks in a way that many of us have: to find music that is actually worth buying," Jarad Carleton, an IT industry analyst with Frost & Sullivan in Palo Alto, California, told TechNewsWorld. "Putting a top-40 hit on a CD with 11 other piece-of-crap tracks is the reason the record industry is suffering."

File-sharing appears to boost music CD buying, according to survey results released by Warez.com, a maker of file-sharing software.

The online survey, which reportedly has been taken by some 150,000 people, shows that the purchasing of music increases slightly for some consumers after they discover peer-to-peer file- sharing networks. Light buyers of music appear to buy more discs after they discover online file- sharing, the survey indicates.

The survey showed 47.12 percent of the respondents indicated that they bought fewer than 10 CDs a year before they became file-traders, but that number dropped to 41.4 percent after they discovered P2P.

Moderate music listeners showed a negligible uptick when comparing their pre- and post-P2P behavior, and heavy musicos showed a decline.

The survey showed 26.01 percent of its respondents bought 10 to 20 CDs annually before P2P exposure and 26.61 percent afterwards. But the numbers for those surveyed who buy more than 20 CDs a year dropped from 16.21 percent to 15.27 percent after P2P contact.

Finding Music Worth Buying

An alarming number -- at least from the entertainment industry's point of view -- is the number of listeners who don't buy any CDs at all. That figure jumped from 10.67 percent before P2P exposure to 16.72 percent afterwards. A spokesperson for the Recording Industry Association of America declined to comment to TechNewsWorld on the survey results.

On the other hand, one analyst didn't find that 6 percent increase in no-buys disturbing.

"It shows that most people have used P2P networks in a way that many of us have: to find music that is actually worth buying," Jarad Carleton, an IT industry analyst with Frost & Sullivan in Palo Alto, California, told TechNewsWorld. "Putting a top-40 hit on a CD with 11 other piece-of-crap tracks is the reason the record industry is suffering."

"What this survey shows is the propensity of file-sharing users to consume digital media," added Brian O'Neil, a spokesperson for StreamCast, the Los Angeles-based maker of Morpheus , an online file-sharing program.

"It also shows the willingness of users to pay for content," he told TechNewsWorld.

Commercial vs. Peer-to-Peer

Asked how they would behave if online pay-per-tune services sold tracks at 25 cents a song, only 15.76 percent of the respondents said they'd desert P2P and buy exclusively from a commercial site.

That compares to 29.37 percent who said they'd obtain music from both sources and 38.32 percent who vowed to continue to use P2P exclusively for their listening needs.

Another 16.55 percent of the respondents said they'd only buy from a music site if it sold tracks for a nickel or less. While a nickel a tune might seem like an outlandish price point anywhere outside of Russia -- where AllofMP3.com does sell music for roughly five cents per song -- questions have been raised about the current pricing of online music.

Prices for Electronic Music

"We did do an interesting survey of our own about the prices that users were willing to pay for electronic music," observed Greg Bildson, COO of LimeWire, a New York City-based maker of P2P software.

He told TechNewsWorld that the LimeWire survey showed that if prices were lowered, participation rates and volume purchases would increase so much that the music industry would actually make twice as much revenue as they do now.

"If they were able to couple that with leveraging free P2P networks for distribution, then they could make good money," he added.

"With a price point of $1 per song or more, and with the [Digital Rights Management] wrappers on the current music downloads, it actually seems that buying a CD is a better deal," he said. "At least a CD is a perfect digital master without all the roadblocks to listening to the music however you like."
http://www.ecommercetimes.com/story/34544.html


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DirecTV Can't Sue For Gear Possession
Richard Shim

An appeals court affirmed a ruling against satellite company DirecTV that it cannot sue individuals for merely owning gear that could be used to hijack satellite signals.

The 11th Circuit Court of Appeals said Tuesday that DirecTV can't sue individuals like defendant Mike Treworgy for owning equipment that enables them to intercept television programming. The court was supporting a ruling by the U.S. District Court Middle District of Florida's Fort Myers Division that said DirecTV could not sue individuals for owning gear.

"A decision like this says that you must prove that someone did something wrong--just owning a product doesn't mean you did something wrong," said Jason Schultz, an attorney with the Electronic Frontier Foundation. The civil liberties organization filed an amicus brief in support of Treworgy, who is represented by attorney Albert Zakarian.

"We believe this ruling will have no practical effect on existing cases," said Robert Mercer, a DirecTV spokesman.

The company intends to prove that Treworgy did use the gear illegally, Mercer added.

The case will now go back to the Florida trial court, where DirecTV will have to provide evidence that Treworgy intercepted the company's signals. DirecTV's service allows subscribers to receive and decode television shows. DirecTV's service starts at $36.99 per month.

DirecTV had targeted its suits against vendors selling gear. More recently, it turned those efforts toward consumers. It filed more than 24,000 lawsuits, alleging that they stole programming.
http://news.com.com/2100-1040-5235019.html


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Company may fold

Three Makers Of Video Games Sue, Alleging Piracy
AP

Three makers of video games sued a Missouri company marketing software that enables consumers to make backup copies of computer games.

The federal lawsuit, filed Tuesday in New York, alleges that Games X Copy software by 321 Studios Inc. of suburban St. Louis violates copyright laws by illegally cracking copy- protection systems used by game makers.

The lawsuit marks a new legal front against 321 Studios, already at legal odds with Hollywood over the company's DVD-copying software.

Federal judges in New York and California have barred 321 from marketing the questioned DVD- cloning software -- a victory for movie studios, which contended that such products violate the 1998 Digital Millennium Copyright Act. That law bars circumvention of anti-piracy measures used to protect DVDs and other technology.

Since those rulings, 321 has shipped retooled versions of its DVD-copying products, removing the software component required to descramble movies.

Tuesday's lawsuit -- filed by Atari Inc., Electronic Arts Inc. and Vivendi Universal Games Inc. -- also accuses 321 of violating the copyright law by circumventing technological protections used by entertainment software publishers to prevent piracy.

Doug Lowenstein, president of the Entertainment Software Association trade group, said the lawsuit seeks unspecified damages.

``There's not a dollar figure inserted there,'' said Lowenstein, whose group represents U.S. publishers of computer and video games. ``I wouldn't get into speculating on dollar losses here. What's at stake here is a rather important legal principle -- that products with no purpose other than to circumvent copyright protection are illegal under the DMCA.''

Calling Games X Copy piracy-easing software ``masquerading as a consumer-friendly tool,'' Lowenstein said that ``obviously from the moment the device came out, we had concerns.''

The lawsuit seeks a court order blocking 321's further production and sales of Games X Copy, which fetches $60 and lets users make what 321's Web site calls ``a PERFECT backup copy of virtually any PC game.''

``No more threat of losing a game due to theft, scratches, skipping, freezing or other media imperfections,'' 321's Web site says. ``Your copy works just like the original; your entire collection can be archived and your investment protected.''

Robert Moore, 321's founder and president, called the latest lawsuit confounding, saying provisions in federal copyright law allow consumers to make backup copies of their software. Games X Copy, he said, ``is clearly designed for that purpose.''

``This is par for the course,'' said Moore, who last month told a congressional panel the court rulings in Hollywood's favor have put his company ``on the brink of annihilation.''

By Tuesday, Moore said, 321's work force -- once numbering about 400 -- was less than two dozen.

Those suing the company ``clearly want to drive a nail through our heart and make us dead,'' Moore said. ``I wish we could get justice; I don't know where it is.''

Lowenstein said game-copying software may facilitate theft of intellectual property, given that creating and marketing a top video game typically costs companies $5 million to $10 million.

``Video game copyright owners stand to lose an enormous amount from the piracy enabled by products like Games X Copy,'' he said.

Members of Lowenstein's association account for more than 90 percent of the $7 billion in entertainment software sales nationwide last year, with billions more in export sales of American-made entertainment software.
http://www.siliconvalley.com/mld/sil...al/8929386.htm


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Attorneys General Told By Lobbyists To Monitor File Sharing
Alex Veiga

Lobbyists for record companies and Hollywood movie studios laid out a case against online file-sharing Thursday before a group of attorneys general, suggesting the state prosecutors should examine whether such companies are breaking state laws.

Addressing the National Association of Attorneys General, the entertainment industry representatives warned that consumers in their states needed to be protected from the impact of online file-sharing over so-called peer-to-peer networks.

"P2P networks pose tremendous piracy problems ... but they also pose very substantial threats to consumers," said Fritz Attaway, executive vice president and general counsel for the Washington-based Motion Picture Association of America.

Copyright infringement laws are enforced at the federal level, and state courts have no jurisdiction. But on Thursday, Attaway and his counterpart at the Recording Industry Association of America, both repeatedly stressed consumer protection issues that might prove fertile ground for the state prosecutors to examine.

One example, whether the distributors of file-sharing software like Kazaa, Grokster and Morpheus do enough to warn users that they could be liable for sharing copyright content.

"The vast bulk of material distributed on P2P networks are pirated movies, music and pornography," Attaway said. "And consumers who do so, knowingly or unknowingly, expose themselves."

Last year, the RIAA began suing individuals caught distributing music files over the file-sharing networks.

Attaway also suggested the state prosecutors might have a case for protecting businesses like movie theaters and video stores from P2P software companies under state unfair competition statues. P2P software providers divert customers, affect jobs, he added.

Adam Eisgrau, executive director of P2P United, a trade group representing StreamCast Networks and Grokster and three other file-sharing software companies, said there was no need for states to get involved.

"There is no dearth of federal security of those issues," Eisgrau said. "There is a dearth ... of rationale for involving you folks and the powers you command. Now is not the time to do that."

Despite dealing a mortal blow in the courtroom against pioneer file-swapping service Napster in 2001, movie studios and recording companies have lacked a similarly decisive legal victory against current file-sharing software distributors.

California Attorney General Bill Lockyer, who earlier this year had drafted a letter suggesting P2P software companies could be targets of warnings or legal scrutiny by state attorneys general, said Thursday the group had not decided to adopt any policy on file-sharing.
http://www.usatoday.com/tech/news/te...e-states_x.htm


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Swap Blockers Graduate To High Schools
John Borland

Technology aimed at identifying and blocking copyrighted songs as they're being traded on file- swapping networks is beginning to move into high schools.

Filtering technology from Audible Magic has been installed at several high schools around the country, most recently at private Bellarmine College Preparatory in San Jose, Calif., and a technical high school in Cape Cod, Mass., the company said. The song-blocking tools have largely been used by universities and Internet service providers.

As at the larger institutions, the high-school administrators say they are looking for tools that help them control unauthorized and potentially illegal use of their networks by students or staff.

"We have about 450 computers and 1,400 students, and sometimes, guys will bring laptops in and do some things that we may not want them to do," said Chris Cary, Bellarmine's technology coordinator. "We found there was significant (file-swapping) traffic at lunchtime and after school hours."

Although the use of Audible Magic's tools at Bellarmine remains limited, a broader move into secondary schools could mark a jump toward the mainstream by peer-to-peer, or P2P, network filtering. It could also spark more controversy. High schools' use of Web filtering technologies have led to prominent lawsuits.

Audible Magic's software has already been the source of considerable debate, both over whether it can accurately stop copyrighted song trading on P2P networks such as Kazaa or eDonkey, and regarding privacy.

Last year, top Recording Industry Association of America executives ushered Audible Magic's CEO, Vance Ikezoye, around Washington, D.C., visiting the offices of congressional representatives to demonstrate the technological feasibility of filtering on P2P services.

The tour drew bitter criticism from file-swapping companies and trade association P2P United. Companies providing the P2P software had not been shown the technology and questioned whether it could work in the field as advertised, the trade group said.

In some previous tests, privacy concerns have also been raised by critics. An early test of the song-filtering software at the University of Wyoming stopped ahead of schedule, after some students complained that the tool examines every bit of data going in and out of a network in its hunt for copyrighted songs. The company subsequently modified a version of the software to avoid retaining information on specific user accounts.

The move into secondary schools remains preliminary, however. Cary and his counterpart at the Cape Cod Regional Technical High School each said the ability to block individual songs, instead of all file-swapping traffic, was responsible for their decision to buy Audible Magic's technology.

However, neither has turned on that individual song-filtering mode, electing instead for the broader ability to block file-swapping traffic altogether.

"It's nice to know we do have the feature, if we decided to block only music that was illegal to trade," Cary said. "Then (people on the network) could still use P2P for legitimate things, if they wanted to."

Ikezoye said different customers would always use the tools in different ways.

"Bellarmine is a good example of a school using it first to analyze P2P traffic, and then to implement an appropriate solution," Ikezoye said.
http://news.com.com/2100-1027-5233272.html


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Suspected 'Half-Life' Code Thieves Arrested
David Becker

Game developer Valve Software announced on Thursday that law enforcement authorities have arrested several suspects for allegedly stealing source code for the highly anticipated game "Half-Life 2."

Valve CEO Gabe Newell said in a statement that arrests were made in several countries. He credited customers with helping identify the suspects.

"Within a few days of the announcement of the break-in, the online gaming community had tracked down those involved," Newell said. "It was extraordinary to watch how quickly and how cleverly gamers were able to unravel what are traditionally unsolvable problems for law enforcement related to this kind of cybercrime."

Valve did not offer any information on the identity, nationality
or legal status of the suspects and referred all questions to the FBI's regional Cyber Crime Task Force in Seattle. An FBI representative did not immediately respond to a request for comment from CNET News.com. The agency told GameSpot, a News.com sister site, only that it had made some arrests in the case.

Newell confirmed in October that hackers had broken into Valve's network and downloaded the entire source code tree for "Half-Life 2," which was later redistributed via online forums.

The game is a sequel to the popular shooter "Half-Life" and was originally due out late last year. The theft posed numerous security risks for the online game and forced struggling publisher Vivendi Universal to delay the release, now set for an unspecified date this summer.

The timing of the arrest announcement lends credence to reports in German technology publication Heise Online and other venues that the "Half Life 2" theft may be tied to Agobot, the destructive Trojan horse. According to Heise, a German man recently arrested in connection with Agobot boasted in online forums of hacking into Valve.
http://news.com.com/2100-7355-5230761.html


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Blank CD Levy Could 'Pay Artists'
Kate Mackenzie

A MUSIC industry analyst is calling for industry groups to lobby the Federal Government to reform laws on CD copying and to introduce a levy on blank CDs.

Phil Tripp, who publishes the Australasian Music Industry Directory, said consumers should be allowed to make copies of CDs in some circumstances, and artists should be recompensed through a blank CD levy distributed by organisations such as the Australian Performing Right Association and Screenrights.

Under Australian law, copying personal CDs is illegal, even for personal use such as playing in car stereos.

Mr Tripp said a blank CD levy scheme in Canada collected about $30 million in 2002 and $40 million in 2003, and distributed 66 per cent to songwriters and 19 per cent to performers.

Germany has a similar scheme, which is also considered successful.

APRA and the Australian Music Publishers Association have previously called for government support of a CD levy.

Mr Tripp said such a scheme would not rob artists of their rightful earnings, because organisations such as APRA were experienced at redistributing music revenues.

"It would actually benefit consumers who buy music - the ones who support the music industry by paying for CDs - and benefit artists and songwriters, who are at the bottom of the music food chain," he said.
http://australianit.news.com.au/arti...nbv%5e,00.html


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ISP Fear Of Being Sued 'Fanciful'
Simon Hayes

THE Australian recording industry sent 120 take-down notices to ISPs, universities and businesses last year requesting they remove potentially pirated music files.

Music Industry Piracy Investigations general manager Michael Speck told a Senate Committee on the US-Australia free trade agreement that the industry had been sending lawyers' letters to ISPs for seven years, and "rarely have a problem with any of them".

He estimated as much as 20 per cent of ISP customer activity was driven by pirated music files.

Arguing that provisions for a formal system of take-down notices would not increase litigation over online music piracy, Mr Speck said most internet access providers wanted to obey the law.

"Unless the ISPs or those associated with them become total anarchists, nothing is likely to change," he said.

"The prosecution rate is not going to change because most of the corporations want to obey the law."

Despite the informal system and 18 months of negotiations, the recording industry and ISPs are yet to sign a protocol to allow formal take-down notices.

Labelling as "fanciful" ISP concerns about being sued by customers for wrongly removing content, Mr Speck said the internet industry was protected by the Copyright Act and by internet service providers' terms and conditions.

He said ISPs were easily able to identify offenders.

"The internet industry routinely tells the sound recording industry or its investigators that they are unable to identify customers who infringe," he said.

"These are the very same customers they can identify for breaching the download limits, the very same customers they can identify in the cyber-crime protocol for police."

ISPs already participated in an informal take-down notice system, Mr Speck said, and most complied with letters from music industry lawyers asking that allegedly infringing content be removed.

"Invariably Australian ISPs take that material down within 24 hours," he said.

"Yet they come to this committee and revisit the entire issue."

The recording industry has been backed by the Interactive Entertainment Association, which told the committee it welcomed an "expeditious process" for dealing with ISPs, as well as tougher controls on circumvention technology.

The IEA represents games software developers.

"We understand from our counterparts overseas that ISPs overseas are able to accommodate this and do not see it as an imposition," IEA chief executive Beverly Jenkin said.

"We believe the Australian ISPs have that technology available to them."

The Internet Industry Association told the committee earlier that mass mailings of take-down notices in the US had violated customer privacy.

Chief executive Peter Coroneos said the IIA was "happy to continue work on a code of practice".

Australia had to protect "our different legal environment and our different privacy environment", he said.
http://australianit.news.com.au/arti...-15319,00.html


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China Gives Cyber Dissident Suspended Sentence
Juliana Liu

A prominent Internet dissident has been given a suspended sentence for subversion in a rare display of leniency by a Chinese court.

The People's Intermediate Court in Xiaogan city in the central province of Hubei sentenced Du Daobin to three years in prison on charges of "subverting state power", the official Xinhua news agency said on Friday.

But the sentence was suspended for four years, Xinhua said. The former civil servant does not have to serve time unless he breaks the law again in the next four years.

He was given a light sentence after he pleaded guilty, Xinhua said without elaborating.

The court was told Du published 26 articles on the Internet from May 2002 to October 2003, "overtly instigating and subverting the state power by way of slander", Xinhua said.

Du's friends told Reuters he had been released but he could not be reached.

A court official declined comment.

Du was detained by police in Wuhan last October for posting online essays in support of fellow dissident, Liu Di, who was released from police custody last November.

Liu, a university student who wrote satirical essays poking fun at the government, spent more a year in detention but was never charged with a crime. She was known as the "stainless steel mouse" and became a high-profile symbol for free speech in China.

Several dozen Chinese academics, reporters and scholars sent a letter to Premier Wen Jiabao last November protesting against Du's arrest, saying it was a violation of free speech rights guaranteed by the constitution.

China lumps political dissent, including any mention of the 1989 Tiananmen Square democracy protests or the banned spiritual movement Falun Gong, along with pornography as illegal content.

China has been cracking down on Internet content with limited success as the ranks of Web surfers surged.

The government has even set up a special Web site for Internet users to report "illegal" online content including pornography and political dissent, in another bid to control the free-wheeling sector.

The site, net.china.cn, said it aimed to "protect the public interest" by fostering a better environment for China's youth. Internet users had already reported the presence of four Web sites offering "free movies and other services", it said.

"If those sites don't take action on their own, we will further expose their actions," it said in a posting.

The Internet has become a life line for millions of Chinese who want information beyond official sources, as well as a cash cow for aggressive private firms, many of which are listed in New York and Hong Kong.

Cai Mingzhao, deputy director of the cabinet spokesman's office, was quoted by Xinhua as saying China would have nearly 100 million Web users by the end of 2004.
http://uk.news.yahoo.com/040611/80/evpka.html


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Site of the Rat

China's Telltale Web Site Patrols "Illegal" Content

China has set up a special Web site for Internet users to report "illegal" online content including pornography and political dissent, in another bid to control the free-wheeling sector.

The site, net.china.cn, said it aimed to "protect the public interest" by fostering a better environment for China's youth. Internet users had already reported four Web sites, it said.

"If those sites don't take action on their own, we will further expose their actions," it said in a posting. It did not elaborate on the content of the four sites.

China lumps political dissent, including any mention of the Tiananmen democracy protests or the Falun Gong spiritual movement, along with pornography as illegal content.

It has been cracking down on such Internet fare for several years with limited success as the ranks of Chinese Web surfers surge to the tens of millions.

The Internet has become an essential tool for millions of Chinese who want to access information beyond official sources, as well as a cash cow for aggressive private firms, many of which are listed in New York and Hong Kong.

Cai Mingzhao, vice director of the State Council's information office, was quoted as saying by the Xinhua news agency that China would have nearly 100 million Web users by the end of 2004.
http://uk.news.yahoo.com/040611/80/evp9s.html


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Tech Execs Lobby For Better Schools, Anti-Piracy Measures
AP

Chief executives of leading technology companies urged Congress on Wednesday to promote math and science in U.S. schools, avoid interfering with industry efforts to hire more workers overseas and crack down on foreign software piracy.

The executives included Microsoft's Steve Ballmer, Bruce Chizen of Adobe Systems Inc., John Thompson of Symantec Inc. and George Samenuk of McAfee Security. The head of Solidworks Corp., John McEleney, described buying a black market copy of his company's $4,000 engineering design software for $4 during a recent swing through Asia.

The executives said they support plans to let the U.S. Patent and Trademark Office keep more of the fees it earns for reviewing inventions so it can hire more examiners and issue patents more quickly. The process can stretch over years.

``Our innovations are getting kind of bollixed up,'' Ballmer said.

But the business leaders tempered their latest lobbying with recognition that election-year politics will largely overshadow policy debates important for them.

``We can't expect a lot of viable legislation,'' said Bill Conner, chief executive at Entrust Inc., which makes software to protect Internet traffic.

Executives urged Congress not to interfere with their efforts to hire more technology employees overseas, a politically sensitive subject. Greg Bentley of Bentley Systems Inc., which makes engineering software, said such hiring moves were ``a natural aspect of globalization.''

``We have an awful lot to lose through protectionism,'' he said.

They complained about math and science classes in U.S. schools, saying India and China are graduating far more students with skills needed as software engineers.

But during a 90-minute public meeting on Capitol Hill with senators, the executives did not offer detailed plans for overhauling America's schools. The forum was organized by the Business Software Alliance, a Washington-based trade association.

``Why can't we get in the educational system the same increase in productivity that we've gotten in the rest of the economy,'' asked Art Coviello, head of RSA Security Inc.

Conner said schools should offer better opportunities in math and science for women and minorities. He said students who excel in these areas still face stereotypes they are nerds.

``We need to turn up the volume, make it OK and cool to be in math and science,'' Conner said.

Chizen, whose company's Photoshop graphics software is among the most widely pirated programs on the Internet, urged lawmakers not to change a 1998 copyright law that bans the sale of products that can break the digital locks on software or entertainment discs. Such products can be used to make personal backup copies of DVD movies or software.

Executives agreed that although piracy is common in the United States, it is far worse overseas. Ballmer said Italy has a relatively high rate of software piracy, but not anywhere close to the worrisome rates in China.

``If China was as good as Italy, we'd all have a party and I would pay for it,'' Ballmer said.
http://www.siliconvalley.com/mld/sil...al/8939187.htm


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Net Portal Vows To Improve Management
China Daily

A Shanghai website plans to reinforce its management after being chastized in court for copyright infringement.

The case once again highlighted growing legal problems related to online content.

On Monday, Shanghai No 1 Intermediate People's Court ordered www.51tuangou.com to apologize on its front page and pay compensation to the writer of a book whose contents it spread illegally.

In a statement Wednesday, the company said it would reinforce its management to avoid similar violations.

The website, established in September 2002, sells decoration materials, furniture and other products.

Last November, author Liao Tian accidentally found a book he wrote published on the website's electronic magazine without his permission.

The book warns house buyers about scams from decoration companies.

Liao said the book is based on his own experience decorating his house. He published it in March 2001.

Liao found the book was uploaded by a registered user of the website.

Annoyed at such an apparent violation against the country's Copyright Law, Liao asked the website to "make an immediate deletion of the book contents from the web and make a public apology on the Web."

In addition, Liao asked for the identity of whoever uploaded the book.

After receiving no answer, Liao sued the website for 140,000 yuan (US$16,930).

"We played a passive role from the very beginning. Although we did not infringe upon the writer's copyright, it was still negligence in our work that resulted in the violation," said Zhang Guohua, general manger of the company.

Zhang said the company sent a warning to the user who uploaded the book, who never logged on again.

"We encouraged original articles from netizens and our members, yet it was really difficult to distinguish copied articles from original ones," he added.

Zhang explained that as a formal website with governmental approval, it had long paid attention to copyright problems.

"We tried to observe the law, and we also have a lawyer," he said.

Zhang complained that such violations are rampant on the Internet and many original articles on his website are illegally used elsewhere.

Screening articles is complicated, considering it is the duty of a website to provide a communication platform, said Hu Jianxing, the company's attorney.

In China, the first case emerged in 1999 in Beijing when six contemporary writers sued a website which put their novels online without their permission.

Earlier this year, a scandal surrounding leaked graduate English exams triggered a heated debate on supervision of Internet. On January 10, only around 20 minutes after the English test started, some examination questions appeared online.
http://www.chinadaily.com.cn/english...ent_335934.htm


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Vietnam Releases Cyber-Dissident Two Years Before End Of Jail Term

HANOI (AFP) - Vietnam has released a "cyber-dissident" more than two years before the end of his four-year jail term for posting essays critical of the communist regime on the Internet.

"While serving his term in Nam Ha prison, Le Chi Quang expressed remorse and admitted his crimes and those of people who lured him into his activities against the Vietnamese state," a statement from the foreign ministry said. Quang wrote a letter asking for clemency and promised not to break the law again. His request was accepted, the statement added, citing "humanitarian" reasons. He was effectively released on Saturday. Le Chi Quang, a 34-year-old computer instructor, was convicted of "offences against the state and the Socialist Republic of Vietnam" on November 8, 2002 and given a four-year term. He had been arrested on February 21 the same year in a cyber cafe and was accused of breaking the law after posting articles criticising land and sea border agreements forged between Vietnam and China in 1999 and 2000. In a letter to Jiang Zemin ahead of a visit to Vietnam by the then Chinese president, Quang accused the Vietnamese authorities of making territorial concessions to China. As well as criticising the border agreements, Quang had also come out in favour of more democracy and incurred the wrath of the authorities for posting articles praising well-known dissidents Nguyen Thanh Giang and Vu Cao. His arrest was part of an ongoing crackdown against intellectuals and dissidents who use the web to circulate news or opinion banned from the tightly-controlled state press. International human rights groups have accused the communist regime of using national security as a pretext to silence criticism. Several other cyber-dissidents have been arrested these last two years. Last month, the government ordered a crackdown on "bad and poisonous information" being circulated over the Internet just months after tough new rules regulating the use of the web came into force. The government office issued a formal notice ordering ministries and agencies to "tighten state management to prevent the exploitation and the circulation of bad and poisonous information on the Internet". Only around 3.2 percent of Vietnam's 80 million people surf the web, mainly through cyber-cafes.
http://uk.news.yahoo.com/040614/323/evuv9.html


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The Son of Patriot Act Also Rises
Kim Zetter

While activists and politicians work to repeal or change parts of the Patriot Act that they say violate constitutional rights, Patriot Act II legislation -- which caused a stir when it came to light last year -- is rearing its head again in a new bill making its way through Congress.

The bill would strengthen laws that let the FBI demand that businesses hand over confidential records about patrons by assigning stiff penalties (up to five years in prison) to anyone who discloses that the FBI made the demand. The bill would also let the FBI compel businesses to cooperate with record requests, and it would expand the government's secret surveillance powers over noncitizens in the United States.

"There is no reason for this legislation," said lawyer Chip Pitts, head of the Bill of Rights Defense Committee of Dallas and a former constitutional law professor. "Given the expanse of powers and secrecy already granted in the Patriot Act, and given the unclear security benefits and possible security detriments of that legislation, why do we need a further amendment of the law to grant more powers to the government?"

The bill, known as the Anti-Terrorism Intelligence Tools Improvement Act of 2003, or HR 3179, was introduced last September by Rep. James Sensenbrenner (R-Wisconsin) and was co- sponsored by Rep. Porter Goss (R-Florida), chairman of the House Intelligence Committee and a possible contender to replace departing CIA chief George Tenet.

It contains four sections that first appeared in a proposed piece of legislation dubbed Patriot Act II. That proposed law was discovered last year by the Center for Public Integrity just weeks before the invasion of Iraq. Patriot Act II, or "Son of Patriot" as critics called it, was written by the Justice Department to expand Patriot Act powers, but the department was forced to shelve the proposal after news of it created an uproar.

But critics, like conservative former Rep. Bob Barr (R-Georgia), say that rather than abandoning the legislation altogether, the department has been extracting provisions and having sympathetic lawmakers slip them one by one into new bills to pass the legislation piecemeal. At least five other bills pending in Congress also contain provisions from Patriot Act II, but HR 3179 is the one that's in imminent danger of being passed under the radar.

Last year, a Patriot Act II provision was slipped into the Intelligence Authorization Act of 2004 at the last minute and passed quickly before legislators opposed to it had time to fully examine it. The Intelligence Authorization Act, an annual bill that allocates funds for intelligence agencies, is a must-pass bill that generally gets drafted and passed quickly in secrecy.

The new bill, HR 3179, was set to pass through Congress without a hearing last year, but the House Judiciary Committee, chaired by Sensenbrenner, changed its mind and held a hearing May 18. The bill is waiting for markup in that committee, but critics fear that Rep. Goss and the House Intelligence Committee will slip the bill into this year's Intelligence Authorization Act during a closed-door hearing on June 16, and pass it quickly before lawmakers can revise or further debate it.

Proponents of HR 3179 say critics are overreacting to the bill. They say the bill will simply "plug a few gaps" in the Patriot Act by establishing penalties for noncompliance that were never specified in the Patriot Act.

But opponents say the bill grants the government more power to investigate people without probable cause and to do so under a cloak of secrecy. As a result, individuals being investigated will have no chance to protest unconstitutional searches and seizures.

Under the Patriot Act and Patriot Act II provisions passed in the Intelligence Authorization Act last year, the FBI doesn't need a court order or probable cause to obtain the transaction records for patrons of libraries, Internet service providers, telephone companies, casinos, travel agents, jewelers, car dealers or other businesses.

The FBI can simply draft a "national security letter" stating records are needed for a national security investigation, without being specific about the data being sought or the people being investigated. A nondisclosure provision prevents the letter recipient from telling anyone about it, including patrons whose records may be investigated.

Under HR 3179, anyone who knowingly violates the secrecy clause could be imprisoned for up to a year, and anyone who violates it with "the intent to obstruct an investigation or judicial proceeding" could be imprisoned up to five years. The bill also lets authorities force individuals and companies to comply with security letters under contempt-of-court threats.

Jeff Lungren, spokesman for the House Judiciary Committee where the bill currently resides, said HR 3179 simply gives teeth to the Patriot Act.

"Right now you can't disclose if you receive a national security letter," he said. "But if you do disclose it, there is no penalty for that. There's (also) no stick to deal with a person that refuses to comply with a national security letter."

But Jim Dempsey, director of the Center for Democracy and Technology, said the bill tips the balance of power further into government hands while hampering the ability of people "to push back" and provide balance to government powers.

Currently, if government investigators request data that is too broad or intrusive, a company has some wiggle room to protect patrons' Fourth Amendment rights by resisting and negotiating a more targeted search, Dempsey said. But letting the FBI force cooperation while at the same time demanding secrecy and threatening imprisonment would make it unlikely that unreasonable secretive searches would ever be prevented or challenged.

"It's a way to increase the government's leverage," Dempsey said, noting that no company employee would want to go to jail for 30 days, let alone five years, to defend the privacy of the company's patrons.

Dempsey said he believes the original Patriot Act didn't specify penalties for disclosure because lawmakers were ambivalent about the act's powers and didn't want to eliminate opportunities for checks and balances.

Steve Lilienthal, director of the Center for Privacy and Technology Policy at the conservative Free Congress Foundation, said the gag rule is "a license for abuse."

"You have the right to talk to an attorney, but the attorney cannot talk to anyone else," he said. "You're prevented from going to the Department of Justice to communicate, or to the relevant congressional community to tell them when an abuse has taken place. It's almost un-American."

In addition to penalties for disclosure, HR 3179 expands surveillance of noncitizens by amending the Foreign Intelligence Surveillance Act of 1978, or FISA. Currently FISA investigations involve individuals or groups acting on behalf of a foreign government or terrorist organization. But HR 3179 would let the government conduct secret domestic surveillance against noncitizens believed to be engaged in international terrorism, but who have no known affiliation with a foreign government or terrorist group.

Pitts, the attorney with the Bill of Rights Defense Committee, said the amendment could be used to justify surveillance of noncitizens for criminal activity, for work with organizations like Amnesty International or for donating money to an environmental organization that stages protests.

"Because there is no accepted definition of international terrorism, and because they're eliminating the need for someone to be acting on behalf of a foreign government, you're relying on subjective and perhaps arbitrary or politically motivated definitions" to determine who could be secretly investigated, he said.

Barr, a member of the American Conservative Union who has been practicing law since leaving Congress last year, testified against the bill during the May hearing and said that Congress should not be passing new laws to strengthen the Patriot Act while there are concerns about how the legislation has been used to date. The FBI has admitted using the Patriot Act for nonterrorism investigations, such as cases involving corruption in a Las Vegas strip club, drug trafficking and other criminal activity.

Barr said the surveillance powers of the Patriot Act play "fast and loose" with the Constitution and that the secrecy penalties in HR 3179 would make its assault on the Fourth Amendment even worse.

"If the government is able to conduct its powers in secret, then we never know the extent to which its power is being used or being abused," he said. "If the government wants to conduct more of its business in secret and without probable cause, then (we should) just amend or repeal the Fourth Amendment, not allow the government to eat away at it in small steps and pretend it's still there."

Barr said the law should allow recipients of national security letters the right to challenge them, just as they can challenge grand jury subpoenas.

The American Civil Liberties Union recently discovered just how daunting the secrecy provisions can be when it was forced to file a lawsuit in secret that challenged the constitutionality of national security letters under the First Amendment. The organization was able to reveal the existence of the lawsuit only after negotiating with the government about what it could say about the suit.

The lawsuit was filed after the ACLU filed a Freedom of Information Act request for information about how often and in what cases authorities have used national security letters to date, and the organization received six pages of blacked-out documents.

Pitts said that although HR 3179 is not yet on the radar screen of most congress members, activists are working to thwart what he calls a "stealth measure."

"The last time (a Patriot Act II provision) slipped through and got signed was on the day of Saddam Hussein's capture," Pitts said. "There was not a single activist who knew it was coming down the pike. At least this time we know about it in advance."

In total, six bills pending in Congress contain provisions taken from Patriot Act II. In addition to HR 3179, three other House bills (and two Senate companion bills) were introduced late last year:
http://www.wired.com/news/privacy/0,1848,63800,00.html


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Libraries Oppose Internet Filters, Turn Down Federal Funds
AP

Libraries that receive federal funds have until month's end to install Internet filters on their computers, but many in New Hampshire are giving up the money without much regret.

The federal government offers libraries nearly $3 billion a year to help pay for Internet access and computer setups. In return, the computer systems must include filters designed to protect both children and adults from pornographic and other inappropriate Web sites.

The New Hampshire Library Association encouraged forgoing federal funds in a statement posted on its Web site. It said filters block valuable information like research on breast cancer, sexually transmitted diseases and even Super Bowl XXX, and give a false sense of security.

Local librarians have additional complaints. Many say the federal grants were often too small and the application too cumbersome to bother with.

The library in Laconia is giving up about $1,700 a year by choosing not to filter its Internet access.

Bob Selig, chairman of the library's trustees, said the library would spend more money than it would get in grants to maintain the filter and comply with requests from library users to disconnect the filter.

Instead, the library filters only the two Internet stations in the children's rooms, not the six elsewhere in the library.

The Franklin library once got $1,700 toward its phone bill. But library director Rob Sargent found the year-long application process took too much of his work week to make it worth it.

''As a professional librarian I am not in a position to judge the information another person may want to see,'' he said. ''Here ... (we) allow customers to exercise their own intellectual freedom.''

Sargent explains to patrons that the access is not filtered and requires children younger than 18 to have a parent or guardian's permission to use the Internet. The library also has privacy screens on its computers so other patrons can't see what someone is looking at unless they are very close to the computer.

Sargent said he has not found anyone using the computer to view potentially offensive sites. But nor does he police their viewing.

''We assume people are using good judgment and exercising their own personal responsibility,'' he said.

Andrea Thorpe, president of the state library association and director of the Newport library, complained that filters keep harmless and useless information from the screen. She said an innocent Web search for John Stark or Smuttynose Island would be hampered by a filter because Stark can be associated with stark naked and Smuttynose is too close to smut.

She and other librarians have heard of school nurses being unable to get information online about sexually transmitted diseases because body parts are mentioned. Also, the law says libraries must filter out images, not necessarily words, and filtering technology cannot yet assess pictures.

But Denise Jensen, director of the Berlin Public Library, said she can't afford to fight the filtering because her library could not provide Internet access if not for the help it gets in federal money. Last year, the grant totaled $201. This year, Jensen is expecting $890 because she discovered she had been using the wrong calculations in her application.

She said the library did have trouble with younger students looking at inappropriate sites before the filter was installed. The librarians monitored the usage by circulating in the room and barred kids who'd misbehaved from using the Web again.

''We put the filters on so we could get the federal funds,'' Jensen said.
http://www.boston.com/dailynews/165/...et_filt:.shtml


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Court Bans Internet Cut-Price Book Sale
DPA

A court Tuesday banned a journalist from selling his review copies of books online, saying the discounts breached German price- fixing arrangements that forbid price competition.

A bookseller had sued for a court order after the Berlin journalist posted 48 books on the Ebay auction site in a space of six weeks. The journalist said at trial he had been sent the books free by various publishers and he was only earning a little on the side.

But court said that as a "power seller", he was on a par with a professional bookseller, and bound by the book-price rules.

Confirming the ban on appeal, the state superior court in Frankfurt said Tuesday the ban did not apply to used books, or the occasional sale of an unwanted gift book.

Decades-old price-fixing arrangements for books have collapsed in recent years in the United States and Britain, but remain in force in Germany after obtaining European Union dispensation.

There has been little public discussion of the rules. The book trade argues that economically marginal small publishing houses and bookshops would collapse without protection, and authors fear that competition would make it harder to publish small-print-run books.
http://www.expatica.com/source/site_...&story_id=8538


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SBC Restrictions on DSL Are Illegal, Judge Rules

The firm is ordered to cease its practice of refusing to provide the service to people who switch phone carriers.
James S. Granelli

SBC Communications Inc. is violating California law by refusing to make its high-speed Internet service — SBC-Yahoo DSL — available to customers who switch their local voice service to rival carriers, according to a decision Wednesday.

The ruling by a Public Utilities Commission administrative law judge states that SBC's refusal "is not just or reasonable" and that California's dominant local phone company must cease the practice.

The decision becomes effective in 30 days unless any party files an appeal to the PUC, or a commissioner requests a review.

Competitors have complained that SBC has unfairly maintained its control over local phone service partly by tying that to its DSL, or digital subscriber line, service.

SBC executives, who have not yet seen the decision, insisted Wednesday that the company didn't have to provide its DSL service to customers who wanted to move their local phone service to a rival.

"Based on what we know is in the record, we have no obligation to provide a retail resale DSL product," spokesman John Britton said.

He said DSL was offered by an SBC subsidiary only in an arrangement in which it shares the copper lines to homes with SBC.

The decision by Judge Anne E. Simon came in a case involving tiny Telscape Communications Inc. in Monrovia, which serves the Latino community primarily in Southern California.

Telscape complained to the PUC two years ago that SBC would not process orders for switching local customer service when the customer also subscribed to SBC-Yahoo. The rejected orders amounted to about 10% of Telscape's total orders, Simon wrote.

SBC's practice was so prevalent that giant competitors AT&T Corp. and MCI Inc. had instructed their salespeople to ask potential customers if they had SBC- Yahoo DSL and turn down their business if they did, Simon wrote.

AT&T and MCI now offer their own DSL service, mainly through Covad Communications Group Inc. in San Jose, in SBC territory. The territory covers about 78% of the state geographically and about 94% of all phone lines.
http://www.latimes.com/business/la-f...,6394839.story


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Bell Tolling For DSL?
Ben Charny

The suspension this week of rules regarding local phone competition could play havoc with fast- growing broadband services, experts said, bolstering the position of the Bells at the expense of smaller players and of consumers.

Legal rulings took effect Tuesday that for now remove key conditions that had previously regulated the terms and prices local phone monopolies can demand from rivals seeking to rent parts of their networks.

Many predict the regulatory vacuum will drive some competitors out of the local phone business, a trend that could potentially lead to price increases down the road. And the impact on broadband could be even more sudden and severe.

More stories on this topic

Legal rulings took effect Tuesday that for now remove key conditions that had previously regulated the terms and prices local phone monopolies can demand from rivals seeking to rent parts of their networks. Such rules have generally been considered crucial for ensuring an even playing field among companies seeking to offer phone and broadband service over local telephone wires and switches owned by the Bells.

Many predict the regulatory vacuum will drive some competitors out of the local phone business, a trend that could potentially lead to price hikes down the road. According to reports, AT&T and MCI already plan to wind down local phone service in some markets.

Experts said the impact on broadband could be even more sudden and severe.
http://news.com.com/2100-1037-5234647.html


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U.S. Broadband Access Leaped 42 Percent In 2003
Jim Hu

Broadband Internet access in the United States surged 42 percent last year as demand for speedier connections remained strong, according to a report from the Federal Communications Commission.

At the end of 2003, the FCC reported a total of 28.3 million broadband lines in the United States. The study, released Tuesday, also showed that growth for the second half of 2003 reached 20 percent, up from an 18 percent increase during the first half of the year.

As the market grows, the battle between cable modems and digital subscriber line (DSL) services is getting more cut-throat.

Asymmetric digital subscriber lines (ADSL), the most common type of DSL used to connect households, grew 47 percent to 9.5 million lines. This is good news for the Baby Bell phone companies, which are the main purveyors of the technology. DSL has been available longer than cable, but the Bells are playing catch-up because they were slow to enter the market.

The Bells have succeeded in closing the gap by offering steep discounts and slashing prices. Cable companies have refused to cut prices, opting instead to boost download speeds.

Cable modems did not grow as quickly as DSL, but the technology continued to lead in the market. Cable modem access jumped 45 percent to 16.4 million lines, a sizeable lead over DSL.
http://news.com.com/2100-1034-5229545.html


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Pop-Up Toolbar Spreads Via IE Flaws
Robert Lemos

An adware purveyor has apparently used two previously unknown security flaws in Microsoft's Internet Explorer browser to install a toolbar on victims' computers that triggers pop-up ads, researchers said this week.

One flaw lets an attacker run a program on a victim's machine, while the other enables malicious code to "cross zones," or run with privileges higher than normal. Together, the two issues allow for the creation of a Web site that, when visited by victims, can upload and install programs to the victim's computer, according to two analyses of the security holes.

The possibility that a group or company has apparently used the vulnerabilities as a way to sneak unwanted advertising software, or adware, onto a user's computer could be grounds for criminal charges, said Stephen Toulouse, security program manager for Microsoft.

"We consider that any use of an exploit to run a program is a criminal use," he said. "We are going to work aggressively with law enforcement to prosecute individuals or companies that do so."

Microsoft learned of the issue when a security researcher posted an analysis of the problem to the Full Disclosure security mailing list Monday. The software giant has already contacted the FBI and is in the "early stages" of building the case, Toulouse said. The company is considering creating a patch quickly and releasing it as soon as possible, rather than waiting for its usual monthly update.

The flaws are apparently being used to install the I-Lookup search bar, an adware toolbar that is added to IE's other toolbars. The adware changes the Internet Explorer home page, connects to one of six advertising sites and frequently displays pop-ups--mainly pornographic ads, according to an adware advisory on antivirus company Symantec's Web site.

On Tuesday, security information group Secunia released an advisory about the problem, rating the two flaws "extremely critical."

"Secunia has confirmed the vulnerabilities in a fully patched system with Internet Explorer 6.0," the group wrote. "It has been reported that the preliminary SP2 (a major security update being developed by Microsoft) prevents exploitation by denying access."

The flaws could let any attacker with a Web site send an e-mail message or an instant message with a link that, when clicked on by an Internet Explorer user, would cause a program to run on that victim's computer.

The original analysis, written by a Netherland student researcher, Jelmer Kuperus, who found that the type of programming needed to take advantage of at least one of the flaws required sophisticated knowledge of the Windows operating system.

"While sophisticated, it's so easy to use, anyone with basic computer science can set up such a page, now that the code is out there in the open," Kuperus wrote in an e-mail interview with CNET News.com. "It's just a matter of changing two or three (Internet addresses) and uploading another" executable file.

Kuperus, who used an e-mail account based in the Netherlands, wrote in a Monday e-mail that he had been tipped off to the adware Trojan horse by an unnamed individual.

"Being rather skeptical, I carelessly clicked on the link only to witness how it automatically installed adware on my PC!" he wrote.

The Internet address from which the adware Trojan horse was downloaded resolves to I-Lookup.com, a search engine registered in Costa Rica that antivirus firms Symantec and PestPatrol have linked to aggressive advertising software. Two of the top three searches on the site relate to removing such programs, according to I- Lookup.com's own statistics.

A domain name search shows i-Lookup.com's parent company to be Aztec Marketing, but Pest Patrol links the site with iClicks Internet. E-mails sent to both companies for comment were not immediately answered.

Kuperus believes that i-Lookup.com's parent company may not be directly responsible for the adware-installing Trojan horse program, but that it could be rewarding the creator through an affiliate program.

"It does pass along a referrer code when downloading," he said. "Whomever created this probably is getting money for every install, so if the folks at (i-Lookup.com) would be willing, they would be able to track down the perpetrators."

Microsoft's Toulouse said Internet Explorer users could harden the software against such attacks by following instructions on the company's site. Other browsers available on Windows, such as Opera and Mozilla, do not contain the flaws.
http://news.com.com/2100-1002-5229707.html


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RIAA Moves In on Digital Radio

Digital radio broadcasts that bring CD-quality sound to the airwaves could lead to unfettered song copying if protections are not put in place, a recording-industry trade group warned on Friday.

Without copy protections, music fans could cherry-pick songs off the air and redistribute them over the Internet, further deepening the copyright woes of record labels, the Recording Industry Association of America said.

U.S. regulators at the Federal Communications Commission should ensure that the broadcast format limits such copying so radio stations don't turn the airwaves into a giant file-sharing network, RIAA officials said.

"A little bit of prudence right now goes a long way," RIAA CEO Mitch Bainwol said in a conference call.

Digital radio promises to bring CD-quality sound to FM stations and FM-quality sound to the AM band, along with "metadata" like artist and song information. Broadcasters also can use the standard to broadcast several signals at once.

Roughly 300 stations now broadcast digital signals or are in the process of setting them up, according to the FCC.

RIAA officials said digital-radio players could soon allow listeners to record certain songs automatically when they are broadcast, allowing them to build a free library of music they otherwise might pay for and distribute it to millions of others over the Internet.

Players already on the market in Europe, such as Pure Digital's "The Bug," allow users to pause and rewind broadcasts and record them digitally.

Under restrictions proposed by the RIAA, listeners would be able to record digital broadcasts for later playback, but would not be able to divide that broadcast up into individual songs.

Listeners would also not be able to program their players to record certain songs, or redistribute those recordings over the Internet.

The RIAA plans to submit its proposal to the FCC next Wednesday.

XM Satellite Radio Holdings and Sirius Satellite Radio, which broadcast digital signals by satellite, do not pose the same risk because those companies would be hurt by song copying and thus have an incentive to limit it, RIAA officials said.

A spokesman for iBiquity Digital, a privately held company whose broadcast technology was selected as the standard for the medium, was not immediately available for comment.

The RIAA represents the world's largest record labels, such as Warner Music, Bertelsmann AG's BMG, EMI Group, Sony's Sony Music and Vivendi Universal's Universal Music Group.
http://www.wired.com/news/digiwood/0,1412,63819,00.html


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Piracy Battle Begins Over Digital Radio
John Borland

Consumer groups, electronics companies and record labels squared off Wednesday in the first full public airing of proposals for antipiracy protections for digital radio networks.

Digital radio, which transforms traditional over-the-air broadcasts into the same kind of bits and bytes used in Internet transmissions, promises to boost the audio quality of FM signals to that of a CD. But it also holds out the promise of transforming radio listening in the same way that TiVo hard drive-based recorders have changed TV--by providing powerful recording and playback options.

The new medium has attracted the attention of the Federal Communications Commission, which recently began a proceeding that could end up laying out content protection rules and other regulations for it.

On Wednesday, the Recording Industry Association of America asked the FCC for new antipiracy protections that would prevent listeners from archiving songs without paying for them--and from trading recorded songs online. The RIAA and musicians' trade groups are worried that consumers might one day forgo buying albums or songs from iTunes-like services in favor of recording CD-quality songs off digital radio services.

"We know this (technology) will be attractive to consumers," RIAA Chief Executive Officer Mitch Bainwol said. "For us, it's the challenge that peer-to-peer introduces but made more complex by the fact that there are no viruses, there is no spyware or other file-sharing (problems)."

The debate is shaping up to resemble the earlier discussion around digital television technology, which similarly had movie studios worried that their products would be recorded and traded online. Both debates have pitted powerful forces against each other in Washington, D.C., and have given content companies a key role in helping shape the future of a nascent technological medium.

In digital radio, the RIAA would like to see music transmissions encrypted so that only authorized receivers that follow content protection rules could play the songs. It would also like to see a "flag" inserted in a song's data stream to prevent any recordings made from being transmitted online.

Those ideas have drawn deep opposition from consumer groups and electronics companies, which say the FCC has no congressional mandate to impose content protection on radio broadcasts of any kind.

"Interfering with radio broadcasters' shift to digital broadcasting would choke off advancement and modernization," Gary Shapiro, president of the Consumer Electronics Association, said in a statement released Wednesday. "Not only is that un-American, it's totally without merit."

Consumer groups echoed Shapiro's opposition to the RIAA's proposals.

"No one at the Recording Industry Association of America or the FCC has demonstrated any need whatsoever for content protection on a service that doesn't exist in the U.S.," said Gigi Sohn, co- founder of Public Knowledge, a copyright campaign group that is working with Consumers Union and the Consumer Federation of America on the issue. "The recording industry is trying to fool the FCC into regulating home taping of radio, which is protected by law."

The first round of comments on the digital radio issues had a deadline of Wednesday for submission to the FCC. Another round of comments is due on July 16.
http://zdnet.com.com/2100-1104-5236755.html


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Digital Radio Sounds Too Good For The RIAA

The American music industry this week warned the Federal Communications Commission that digital radio, with its high quality broadcasts and accompanying data services, presents a new risk of internet piracy to rival P2P networks, making music freely available on demand.

Since 2002, when the FCC selected in-band, on-channel, or IBOC, as the technology enabling AM and FM radio broadcast stations to go digital, Digital Audio Broadcasting, or DAB, has grown in popularity. Apart from transmitting near-CD quality audio signals, IBOC provides data services like station, song and artist identification, stock and news information.

IBOC also lets a radio station split its digital channel so that it can broadcast multiple streams of digital audio programming and allows broadcasters to use their current radio spectrum to transmit AM and FM analog signals simultaneously with new digital signals.

In April, recognising that the rules and requirements of the system needed to be updated, the FCC launched a consultation on the way forward for DAB. On Wednesday, it heard from the RIAA as well as broadcasters and consumer groups.

The RIAA, the Recording Industry Association of America, warned the FCC that unprotected digital radio would create free libraries of thousands of CD-like quality songs; allow users to “cherry-pick” the music wanted through an automated search function; and allow them to redistribute songs over the internet.

“The potential upside of digital radio for fans, artist and labels, broadcasters and others in the music chain is tantalising,” said Mitch Bainwol, Chairman and CEO of the RIAA. “For the potential to be fully reached, we need the help of the FCC to approve some common-sense safeguards. Given the enormous damage wrought by peer- to-peer piracy, a little advance prudence here would go a long way.”

The RIAA’s brief argues that unprotected high-definition radio could become a popular substitute for the unauthorised peer-to-peer networks, as consumers could acquire all the music they want from free over-the-air broadcasts without having to download any software, expose their computers to viruses and spyware or themselves to a copyright infringement lawsuit.

The solution, says the RIAA, is either to encrypt the copyrighted music being broadcast or to use an audio protection flag that, as with digital television broadcasts, tells the recording device being used to encrypt the recording to prevent further distribution of it.

But the RIAA stresses that there is no intent to prevent consumers from enjoying DAB as they would traditional analogue radio - by manually pressing a button to start and stop recording a song. Instead, says the RIAA, it is merely trying to prohibit “cherry-picking” and the unfettered redistribution of the music.

For its part, consumer group the Consumer Electronics Association warned the FCC that restraints on DAB could stifle innovation, chill technological progress, and deny US consumers the non-commercial recording rights upon which they have come to rely.

"This [consultation] is the latest example of the content community - in this case the Recording Industry Association of America - seeking to limit consumers' recording rights and rollback the landmark 'Betamax' decision, which maintains that manufacturers have the right to sell a product if it is capable of any commercially significant non-infringing uses," said CEA President and CEO Gary Shapiro.

"Interfering with radio broadcasters' shift to digital broadcasting would choke off advancement and modernisation. Not only is that un-American, it's totally without merit," he added.

A further set of comments is due to be submitted to the FCC by 16th July.
http://www.out-law.com/php/page.php?...4136&area=news


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Online Pirates Use Submarine Tactics
Jefferson Graham

In the face of potential arrests and litigation, Internet movie swappers are getting foxier in outwitting Hollywood.

They have begun bypassing popular peer-to-peer (P2P) networks like Kazaa and eDonkey, where their activities can be tracked, to share unauthorized copies of hit films. That is making it harder for the film industry to find them.

The number of hit movies available for unauthorized swapping on peer-to-peer networks has dropped considerably. Number of copies available for download during May:


May 2003

1.
Bulletproof Monk
104,765

2.
Anger Management
69,227

3.
The Core
64,444

4.
Phone Booth
53,360

5.
Final Destination 2
48,445

May 2004

1.
The Passion of the Christ
37,609

2.
Hellboy
33,650

3.
Van Helsing
30,666

4.
Lord of the Rings: Return of the King
28,593

5.
Kill Bill, Volume 2
26,587

Source: BayTSP


Internet detective agency BayTSP says the availability of hit films on P2P services is down as much as two-thirds from a year ago.

Mark Ishikawa, CEO of BayTSP, which hunts for online pirates on behalf of six of the seven major studios, says many P2P users "are starting to understand that they can be caught and in trouble."

With the publicity generated by the 3,000-plus copyright infringement lawsuits filed by the recording industry and BayTSP's 1 million monthly cease-and-desist notices to online traders, "People are getting smarter," Ishikawa says.

And more careful.

"Students are sharing among themselves with private networks," says Phil Leigh, an analyst with research firm Inside Digital Media.

They connect their PCs in small or large groupings.

Internet cops like Ishikawa track down swappers when they "upload" films or other media to share with others. Uploading is copyright infringement with fines reaching as much as $150,000 per title.

Now, many users disable the "share" function in programs like Kazaa while nabbing a film or song, thus protecting their identity.

"Because of the lawsuits, people are wary about putting their files out there, unless they're in trusted groups," says Jorge Gonzalez, co-founder of Zeropaid, a Web site devoted to file sharing.

They still trade, but more quietly.

"We haven't seen any indications that downloading is anything but an ever-growing problem," says 20th Century Fox Senior Vice President Ron Wheeler.

The Motion Picture Association of America says it loses $3.5 billion a year from piracy. The industry has yet to sue anyone for sharing films online.

The MPAA is lobbying Congress to pass a law that would make it illegal to videotape a movie from a theater. Most films offered for trade come from video copies.

About 14 states have passed such legislation. Three people were recently arrested in Los Angeles for videotaping The Day After Tomorrow, The Passion of the Christ and The Alamo.

Bootleg copies of films also are sold frequently as DVDs on street corners. Internet piracy is "slightly greater" than bootlegs now and in two years "will be even greater," says MPAA anti-piracy chief John Malcolm.
http://www.usatoday.com/tech/news/20...4-piracy_x.htm


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Harry Potter Tops Box Office With $34.9M
AP

''Harry Potter and the Prisoner of Azkaban'' continues to charm audiences, taking in $34.9 million to remain the No. 1 movie for a second straight weekend.

Three new flicks, ''The Chronicles of Riddick,'' ''Garfield: The Movie'' and ''The Stepford Wives,'' all opened in the top five with healthy $20 million-plus debuts.

The top 20 movies at North American theaters Friday through Sunday, followed by distribution studio, gross, number of theater locations, average receipts per location, total gross and number of weeks in release, as compiled Monday by Exhibitor Relations Co. Inc. and Nielsen EDI Inc.:

1. ``Harry Potter and the Prisoner of Azkaban,'' Warner Bros., $34,910,393, 3,855 locations, $9,056 average, $157,975,042, two weeks.

2. ``The Chronicles of Riddick,'' Universal, $24,289,165, 2,757 locations, $8,810 average, $24,289,165, one week.

3. ``Shrek 2,'' DreamWorks, $23,316,920, 3,843 locations, $6,067 average, $353,333,317, four weeks.

4. ``Garfield: The Movie,'' Fox, $21,727,611, 3,094 locations, $7,022 average, $21,727,611, one week.

5. ``The Stepford Wives,'' Paramount, $21,406,781, 3,057 locations, $7,003 average, $21,406,781, one week.

6. ``The Day After Tomorrow,'' Fox, $14,538,226, 3,210 locations, $4,529 average, $153,144,814, three weeks.

7. ``Raising Helen,'' Disney, $3,705,336, 2,103 locations, $1,762 average, $31,284,112, three weeks.

8. ``Troy,'' Warner Bros., $3,417,016, 2,003 locations, $1,706 average, $125,604,418, five weeks.

9. ``Saved!,'' United Artists, $2,535,013, 589 locations, $4,304 average, $3,717,375, three weeks.

10. ``Mean Girls,'' Paramount, $1,486,032, 944 locations, $1,574 average, $81,303,696, seven weeks.

11. ``Van Helsing,'' Universal, $1,194,255, 1,034 locations, $1,155 average, $116,989,795, six weeks.

12. ``Soul Plane,'' MGM, $933,068, 783 locations, $1,192 average, $13,009,074, three weeks.

13. ``Super Size Me,'' Roadside, $820,686, 230 locations, $3,568 average, $7,533,912, six weeks.

14. ``Man On Fire,'' Fox, $452,980, 402 locations, $1,127 average, $76,293,464, eight weeks.

15. ``Kill Bill -- Vol. 2,'' Miramax, $221,512, 201 locations, $1,102 average, $65,075,745, nine weeks.

16. ``NASCAR: The Imax Experience,'' Warner Bros., $213,014, 45 locations, $4,734 average, $13,043,892, 14 weeks.

17. ``A Day Without a Mexican,'' Televisa Cine, $199,403, 73 locations, $2,732 average, $2,832,595, four weeks.

18. ``Coffee and Cigarettes,'' MGM, $156,703, 46 locations, $3,407 average, $1,362,068, five weeks.

19. ``The Ladykillers,'' Disney, $146,368, 231 locations, $634 average, $39,349,265, 12 weeks.

20. ``Control Room,'' Magnolia, $141,070, 41 locations, $3,441 average, $290,174, four weeks.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

INTERVIEW:
MediaServices CIO Vadim Mamotin on Russia's AllofMP3.com
Kirk L. Kroeker

"We think that in the foreseeable future, the prices of online music stores will drop because of the constant pressure from the direction of peer-to-peer networks and their growing popularity and availability," MediaServices CIO Vadim Mamotin told TechNewsWorld.

File-sharing applications are among the most popular uses of the Internet today. According to the market research firm Big Champagne, an average of 9.5 million Internet users are simultaneously logged on to use file-sharing applications at any given time of the day to share music, videos, applications and other digital media -- a fact that does not please the Recording Industry Association of America .

In fact, the RIAA has taken several steps over the past year to stem the flow of what it considers to be wholesale music piracy. Last month, for example, the RIAA filed nearly 500 more lawsuits against alleged music file-sharers. This action brings the total number of individuals it has sued to roughly 3,000. The RIAA suits against file-sharers began in September 2003, and, despite many reports to the contrary, the RIAA says it is having a positive effect on the amount of illegal file-swapping.

In contrast to the unchecked flow of pirate MP3s on file-sharing networks, there are plenty of legit services that offer, at a cost, a wide range of digital music. But while iTunes, Rhapsody, MusicMatch, Napster, Sony Connect and several lesser-known digital music sites are charging roughly US$10.00 per album and roughly US$1.00 per song, another player has emerged on the international scene and is making big waves: MediaServices' AllofMP3.com.

AllofMP3.com, based in Russia, has been controversial from the get-go, charging for legit music not by the song or by the album, but by the megabyte. The company caters to every kind of musical taste with a huge library of legitimate music. While many have questioned the legality of the service, AllofMP3.com assures its users that the service is above-board legitimate. The cost per song through the service works out to be about 5 cents, with the cost per album works out to be 65 to 75 cents, depending on the album size and the format requested by users.

Many consumers who are accustomed to paying $1.00 per song and a minimum of $10.00 per album typically raise an eyebrow suspiciously at the prospect of such a low-cost service, which offers nearly all its music in AAC, MP3, OGG and several other formats. How can this service be legal? How are artists compensated? How does the RIAA even allow the site to function? And why are users not migrating in droves from the higher-cost services like iTunes and Napster? With these questions in mind, TechNewsWorld turned to MediaServices CIO Vadim Mamotin for an exclusive interview.

TechNewsWorld: First off, can you tell us what motivated you to create AllofMP3.com?

Vadim Mamotin: People love music. As digital audio and mobile technologies improve, interest in digital music will only increase. Several years ago we somehow foresaw this situation and thought we could create an Internet store to provide people -- both experienced and inexperienced computer users and audiophiles -- with a quality service and a wide assortment of music. We obtained all necessary licenses and started our hard work. What will become of it in the long run, our users will decide.

TNW: Have you been approached by the RIAA or other media organizations to stop selling music so inexpensively?

Mamotin: The RIAA didn't address us directly. As far as we know, several legal owners' organizations contacted ROMS -- the equivalent of the RIAA here in Russia -- wishing to obtain more specific information on our service and its legality. No suit was brought against us.

TNW: What do you think of the RIAA's current process of suing music users to prevent them from sharing music online through Kazaa, Morpheus, LimeWire and the other P2P music networks?

Mamotin: From our point of view, peer-to-peer networks are the natural reaction to the high cost of MP3 (and other audio) files at music stores of official distributors. We think the RIAA and other remedial organizations are acting badly in trying to sue music users. Lawsuits against users is only a temporary, insufficienly considered solution that will be found ineffective in the future. We think the only way to force users to pay for the music is to provide users with rich services for less cost.

TNW: Is your service legal from an international perspective, or just in Russia?

Mamotin: Because we have ROMS licenses, it would be more appropriate to address this question to ROMS.

TNW: How do you respond to questions about artist royalties, when you charge so little per song and per album?

Mamotin: We pay all royalties according to our license, which we have obtained from ROMS. These royalties allow us to keep our prices at their current level.

TNW: Can you talk a little about the technology behind what your service offers, in terms of the multiple formats? No other service offers as many different formats as AllofMP3.com.

Mamotin: A variety of available encoders and file formats allows our users to obtain what they want. We attempt to satisfy all our users, so we consider all essential requests to be important. Generally, we work in two slightly different directions: We want to satisfy those who are not that experienced in audio technologies and also the advanced, competent audiophiles.

Of course, most of our users download regular MP3s encoded with default parameters, but there are also those who choose other encoders and want to control all encoding parameters. All of these users are more than welcome.

TNW: In terms of the current most popular service in the world -- iTunes -- do you identify Apple as your primary competitor?

Mamotin: We do not compete with foreign services. We work basically for the Russian users.

TNW: Are you planning any marketing efforts in the U.S. or other countries to promote your service?

Mamotin: We didn't plan such efforts and do not plan them in the future. We intended our service initially to be for Russian users. But, of course, those who come to our site from abroad are welcome and are provided with our full service.

TNW: When did the service officially debut?

Mamotin: In August, 2001. In its present form, it debuted in November 2003.

TNW: When did you launch an English-language version?

Mamotin: The English version has been developed simultaneously with the Russian one. This is because certain problems with Russian language-encoding standards existed when we launched, so we addressed this by offering two language versions simultaneously. There are also many our nationals living outside Russia who prefer to browse our English part of the site.

TNW: What percentage of your customers are from outside Russia?

Mamotin: It is insignificant. Our service has been created for Russia and based on Russian legislation.

TNW: What do you think will happen in the future of online music distribution?

Mamotin: The consumer always prefers services with a variety of abilities and features. The more technological features are provided by the service, the greater popularity it has. We think that in the foreseeable future, the prices of online music stores will drop because of the constant pressure from the direction of peer-to-peer networks and their growing popularity and availability.

TNW: Are you planning any partnerships with any hardware vendors, like iRiver, Creative Labs or Rio?

Mamotin: We carry on negotiations with different manufacturers of MP3 and audio equipment. At present we are cooperating with Samsung .

TNW: What other digital formats are you planning to offer in the future?

Mamotin: Recently, we have implemented the support of WMA 9 Lossless, Monkey's Audio, OptimFROG and FLAC. Our users are able also to download uncompressed source CD-DA data as wave files. Technology never stands still. New audio-encoding techniques and formats will be developed. If these technologies will become popular, we'll include their support at AllofMP3.com.

As to our other plans. We will continue to develop our AllofMP3 Explorer. This program is a fully autonomous part of our service that makes the work with our services much easier and more convenient.

TNW: Many users in the United States are leery of using their credit cards on International sites, because outside the U.S., there is no direct way to appeal against credit card theft or identity theft. How are you working to assure users that their information is safe?

Mamotin: First of all, the security of any transaction depends to a large extent on the payment- processing company. If it is banking company and it has international certificates from Visa, MasterCard, Diners Club and so forth, the probability of user's information leakage is insignificant. We use such a company -- CyberPlat -- for our financial transactions with international clients.

In fact, we do not directly access the information from user credit cards. We get only notifications about successful transactions. We know that many people are leery of buying anything on Russian sites or are leery of using their credit cards on the Internet at all. It would be ineffective to try convincing these kinds of users of our honesty.

The only way we see it is to advance our good reputation, provide users with as good support as we can and answer all questions of our current users.
http://www.technewsworld.com/story/34512.html