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Old 12-02-04, 10:41 PM   #2
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Big Brother In Britain: Does More Surveillance Work?
Mark Rice-Oxley

KINGSTON, ENGLAND - It was all over in 54 seconds. One moment the four friends were strolling home after a night out, the next they were nursing injuries inflicted by a knife-wielding assailant.

Another sad tale of crime and impunity in modern Britain? Not quite, for the incident last April in this town in southeast England was filmed from start to finish on surveillance cameras. Police were rapidly alerted; a suspect was quickly identified, apprehended, convicted, and sentenced. Case closed.

It's successes like these that are giving CCTV, or closed-circuit television, a good name in Britain. The technology has become popular and widespread, with the result that Britons are by far the most watched people on earth, with one camera for every 14 people, according to recent estimates.

More than 4 million cameras observe all aspects of life, from town centers to transport systems, office towers to banks, commercial zones to residential areas, restaurants, bars, and even churches.

In 1990, just three towns had systems. Now some 500 do, after a decade in which more than £250 million ($460 million) of public money was funneled into CCTV systems.

"The British public seem to like it," says Martin Gill, professor of criminology at Leicester University. "One of the great problems of our lives is crime and disorder, and people feel it can be tackled by having cameras on the wall."

But serious question marks hang over the technology and its dark Orwellian implications. Many cameras are hidden or not signposted, in breach of regulations. Several cases of abuse have been documented, raising fears of snooping or worse.

Civil liberty groups complain that the intrusive lens scanning for suspicious characters contravenes that pillar of civil society - the presumption of innocence.

Research meanwhile suggests that the camera systems may not actually deter criminals.

"One of the concerns about CCTV is that it can give a false sense of security," says Barry Hugill of Liberty, a civil liberties and human rights group based in London. "I suspect that the reason why people are happy with CCTV is that they say it makes us safer and stops crime. But we don't think there's evidence that that is the case."

Indeed, research has yet to support the case for CCTV.

A government review 18 months ago found that security cameras were effective in tackling vehicle crime but had limited effect on other crimes. Improved streetlighting recorded better results.

A new report being drawn up by Professor Gill for the government promises to be no more favorable in its assessment of CCTV as a crime-fighting tool.

"I have talked to offenders about this," says Gill. "They say they are not concerned by security cameras, unless they were actually caught by one."

Britain is a case apart from Europe, where most countries embraced the technology only in the late 1990s - and then with caution. According to researchers now preparing a report on comparative systems, France tends to limit coverage to high-risk locations and public buildings, while in Spain, surveillance is tightly controlled. In Austria, it is used primarily for traffic and transport systems. In Germany, it was severely restricted in public spaces until recently.

But in Britain, the public has had a soft spot for CCTV ever since it was used to dramatic effect to solve a wretched crime more than 11 years ago.

Most people can still picture the grainy footage of two juveniles leading 2-year-old Jamie Bulger by the hand out of a shopping mall in Liverpool. He was found dead days later. Without those images, experts say, police would have been looking for a culprit with an entirely different profile from the 11-year-old offenders.

"Since Jamie Bulger's case over here, the public see CCTV not as Big Brother but as a benevolent father," says Peter Fry, director of the CCTV user group, a 600-member association of organizations who use the technology.

"If you ask the public what they would like to do about crime, No. 1 is more police on the street and No. 2 is more CCTV," he adds.

The trend coincides with a growing culture of snooping in Britain, where speed cameras rule the highway, residents post their own cameras to spy on trespassers, and the favorite TV shows revolve around hidden cameras observing bland people lounging around.

But not everyone is reassured by the idea of lenses capable of reading a car license plate from half a mile away. Anecdotal evidence suggests the technology can be used for voyeurism, and concerns remain about who gets access to the tapes, which are typically held for a month before being erased.

In one case, a man's attempted suicide was caught on camera and passed on to television. Mr Lazell says he sometimes gets individuals calling on him to use the technology to spy on partners.

Prof. Clive Norris, deputy director of the center for criminological research at Sheffield University, told a recent conference that the technology "enables people to be tracked and monitored and harassed and socially excluded on the basis that they do not fit into the category of people that a council or shopping center wants to see in a public space."

Legislation requires authorities to clearly signal where cameras are in operation, yet as many as 80 percent are thought to break this rule.

Some cameras are being developed with face-recognition technology that raises further alarms.

"There are privacy concerns," says Mr Hugill of Liberty. "There are people who believe that we have fundamental human right to go about our business without being spied on. CCTV is spying. It's monitoring your every move."

Naturally, surveillance enthusiasts scoff at such logic, saying that operators will not be focusing on the average member of the public, but on anyone acting out of the ordinary.

For Mr. Lazell, it's a trade-off: a little liberty for greater security.

"All progress offers compromise," he comments. "Would you be prepared to take down all cameras in the Underground and let terrorists move about without being seen?"
http://www.csmonitor.com/2004/0206/p07s02-woeu.html


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Bombs away.

Zip Files Hide Viruses

New techniques help to spread chaos
Paul Roberts

Malicious hackers are finding other ways to maximise increased ZIP file use with viruses.

A recent security advisory from AERAsec Network Services and Security GmbH in Hohenbrunn, Germany, found that many anti-virus engines are vulnerable to denial of service attacks from so-called "decompression bombs," in which gigabytes of data are zipped into very small files.

Anti-virus engines that try to unzip these bombs often crash when trying to handle the huge amount of data stored in them, AERAsec researchers warned.
http://www.techworld.com/news/index....ews&NewsID=988


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Microsoft Takes Drastic Step To Keep Explorer Viable

Cuts out Internet standard for passwords.
Kieren McCarthy

Microsoft has taken a drastic step to prevent Explorer from being undermined by security holes and announced plans to cut an Internet standard out of its browser.

The software giant has not disclosed when its “patch” - but more accurately described as a “limiter” - will be made available, but it has said that it will prevent people from automatically logging into a website using just the browser’s address line.

The announcement of an upcoming fix, rather than the release of the fix itself, points rather conclusively to the fact that another hole discovered this week (which compounded the problem) has forced the company’s hand.

The original problem has been used by con-artists to make Web users think they are visiting one site when they are in fact at another. This is done by twisting the Internet standard that allows you to sign into a website with a password and username using just a single address line of the form: http(s):// username: password@website.com.

If you replace the “username: password” part with a website name like “www.techworld.com” and put it as a link in an email of on a website, it looks to the Net user as if the link leads to Techworld whereas in fact it leads to Website.com.

This simple ploy has been used to con people all over the world by making them think they are visiting trusted sites including PayPal and eBay, among others.

However, the problem was made even worse in December when it was found that the introduction of a simple set of characters made the con even more convincing because one the link was clicked, even the browser itself displayed the false Web address. This meant that someone would have nothing but their own suspicions over whether a site was real - Explorer displayed exactly what the con-artist wanted it to.

To make matters even worse, this week another hole was revealed (although it appears to be identical to one first discovered and pointed out to Microsoft nearly three years ago) in which a user could be conned into thinking he/she was downloading a certain file when they were downloading something completely different.

When a Web browser can’t be trusted to tell you what site you are visiting and even what you might be downloading, you really have to question whether it is viable as a Web browser at all.

Microsoft swiftly recognised the huge issue involved and has jumped in saying it is producing a fix before the idea of Explorer as a liability gathers momentum. This “fix” is clearly painful for Microsoft to introduce as it pulls functionality out of its browser. It is only pulling it out of Web pages (i.e. http(s)) at the moment, but it may also have to do the same for FTP sites - effectively killing any plans to make its browser practical as a website updater.

Microsoft was criticised for not introducing a fix for this problem in January, leading many to believe it was not fixable. Its decision to cut the whole thing out is a good demonstration that it wasn’t.

To be fair though, Explorer is not alone in this problem - all the other browsers have the same issue with spoofed addresses. Mozilla has also yet to find a solution. Opera throws up a warning box if it believes it may be a spoofed address.

We’re not Web developers but it seems to us that rather than destroy the standard it would make far more sense to make it more exacting. For example, specifying what format the username and password have to be given in order for it to work. In this way it would be possible to cut out any misleading links.

Who for example would feel comfortable following a link to the site “http://microsoft8756.com”?
http://www.techworld.com/news/index....ews&NewsID=960


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Requiem for the Record Store

Downloaders and Discounters Are Driving Out Music Retailers
David Segal

With a total stock of more than 85,000 albums, Manifest Discs & Tapes was a music lover's mecca in the North and South Carolina towns where it operated. And despite an industry-wide downturn in CD sales in recent years, all five Manifest stores were turning a decent profit right up until the end of 2003.

So there was shock all around when chain owner Carl Singmaster announced in late December that Manifest would close all locations and lay off all 100 of its employees. There were still plenty of consumers eager to browse the bins, Singmaster explained, but his company's prospects looked bleak and were getting bleaker.

"I felt like I needed to take this opportunity to exit," Singmaster said in a telephone interview. "Indies in the smaller markets face a very risky environment."

It's not just the indies, and it's not just the smaller markets. On Thursday the parent company of Tower Records, which has four stores in the Washington area and a few dozen more in major cities nationwide, was on the verge of filing for Chapter 11 bankruptcy, according to news reports, having failed to find a suitable buyer. In September, the bankrupt Wherehouse Entertainment chain was acquired by a company that promptly said it would close 35 under-performing stores. Mall chains such as Sam Goody are hurting, too.

As pop's superstars strut down the red carpet in Los Angeles tomorrow night for the Grammy Awards, there's something close to panic in the retail trenches of the music business. The record store is in serious trouble. Sales have been hammered by Internet piracy as well as competition from big-box retailers, such as Best Buy and Wal-Mart, which are two of the nation's leading music vendors. Online CD stores, such as Amazon.com, are gaining momentum, too -- 3 percent of the market in the most recent survey by the Recording Industry Association of America, up from zero eight years ago.

Now a new threat looms. The market for legally downloadable music is tiny today, but the success of Apple's iTunes online music store and the rush of rival services to the marketplace is expected to gobble up an ever-larger share of the pop music pie. A recent study by Forrester Research, which examines technology trends, predicts that in five years fully one-third of all music will be delivered through modems, and the CD itself will be passe, if not obsolete, in the years after. This isn't necessarily bad news for the record labels, but it could be lethal for brick-and-mortar stores.

"I tell retailers they need to get out of the plastic business," said Josh Bernoff, the Forrester analyst who wrote the report, titled "From Discs to Downloads." "Two-thirds of the people who currently download say that when it comes to music, it isn't important to them to hold a physical object. They're done with the CD. They just care about the songs."

If that's true, the album is doomed and the industry is headed back to its roots in the '40s and '50s, when the single was the most popular format. It's already moving that way. Last week, the punk trio Green Day released a cover of the rock classic "I Fought the Law" through a promotion advertised on the Super Bowl and available exclusively on iTunes. That's a peek at the future: Hear the song one minute, own it the next.

That's a transaction that doesn't require a record store, of course. As a precedent, consider the airline ticket. Thanks to online travel sites and the advent of ticketless travel, millions of flyers no longer think of tickets as physical objects that must be printed and brought to the airport. And that's been brutal for travel agencies: in the past three years, 30 percent of them have closed, according to Airlines Reporting Corp., which keeps tabs on the industry.

Plenty of stores like Manifest have surrendered, while others believe the end is inevitable, if not yet near.

"The fat lady is warming up, but she's not exactly singing," says Mike Dreese, who runs Newbury Comics, a music chain in Massachusetts. "We're five to seven years from a complete meltdown. The only question is whether our death is in seven years or eight. Everybody's lights are out in 10."

This isn't the first time the death knell has been sounded for a segment of the real-world retail market. Bookstores were supposedly doomed by Amazon a few years ago, and by e-books after that, and yet there are still plenty of Borders stores and Barnes & Nobles -- in part because they started selling CDs -- and even independent bookshops around. People like getting out of their homes, touching the merchandise and mingling more than a lot of tech-enamored Web experts predicted.

Furthermore, most record retailers, Dreese included, aren't going quietly. Many are going loudly, by inviting bands for in-store performances that draw customers. Others are diversifying into other product categories, stocking comic books, posters and clothing lines. Others are getting into DVDs of every kind, including music, television shows and movies.

"The music store of the future will have to be an arcade," says Roy Trakin, editor of Hits magazine, a music industry tip sheet. "A place where you can try out things, grab legal downloads, see performances."

Retailers are also scrambling for a seat at the digital download table. A consortium of the biggest players -- including Virgin, Tower and FYE -- will launch their own downloadable music stores through a technology company they jointly invested in, called Echo. The idea is that Echo will allow the stores to split the cost of building a downloadable sales infrastructure, then handle transactions and downloads on separately branded Web sites.

"Our members do $5 billion worth of business now," says Echo's president, Dan Hart. "The question is, how do you leverage those assets?"

Virgin is now taking its first tentative steps into the downloadable market. Over the Christmas holiday, the company revamped its San Francisco store by adding something it calls Mega Play, a system that allows customers to listen to any album in the store. By June, says company CEO Glen Ward, the system will offer song-at- a-time downloads for portable MP3 players, and eventually there will be frequent-buyer cards that allow repeat customers to build up credits for free downloads.

"There will remain a place for the physical product," Ward predicts. "A good retailer can help people figure out what is new and what is recommended. But we'll offer the chance to buy anywhere people want to buy -- from the home, the office or in a store."

The trouble is that record stores are up against companies that can consistently beat them on price. Best Buy and Wal-Mart often sell new CDs a dollar or two below wholesale prices, using the lure of the new Sheryl Crow album, for instance, to bring customers to the stores and sell them something else, like a high-margin computer or a washing machine. Likewise, at 99 cents per song, Apple is actually losing money on each track it sells. It earns the money back, and then some, by selling iPods, which start at $249.

It's hard to beat rivals who consider music a loss leader, especially given recent trends. CD sales were down more than 8 percent, year over year, in 2002 and dropped another 2 percent in 2003. The most encouraging sign of relief arrived last month, when Nielsen SoundScan reported that sales figures for January were up 10 percent over the same month last year. The uptick might reflect a rebound in the economy, store owners say, or it could be the fruits of the Recording Industry Association of America's high-profile lawsuits against online pirates, which might have scared many people straight. Or it might be an aberration.

Regardless, many in the business blame not just the fans of file-swapping services such as Kazaa for their current woes -- they blame the labels, too.

The rise and fall of Manifest tells the story. Singmaster opened his first store 19 years ago, and since then has often been confounded by the labels' addiction to the album format. It requires fans to pay around $15.99 for, say, a 12-song disc that might have only a couple of tunes they'd like to hear. The single, once the mainstay of the record business, was getting scant attention from the labels. Eventually, as the public demand for a la carte, downloadable music became clearer, owners like Singmaster had a hard time getting in on the action.

"We said, 'Just give us access to anything that is available online,' " Singmaster says. "We'll give you 69 cents a song, just like Apple does. Just let us burn a physical CD, and we'll sell it."

Manifest finally signed a deal for a $3,000 computer system called a Starbox, which allowed customers to burn songs onto a CD, but, under the terms of a licensing agreement, prohibited staff from burning discs or creating compilations on their own. It was as though Manifest employees were teaching every customer how to make a doughnut but couldn't bake any themselves.

"Can you imagine if there was tremendous consumer demand for an 18-ounce Pepsi and we told Pepsi about this demand?" Singmaster says. "How long do you think it'd be before Pepsi started selling an 18-ounce Pepsi to anyone, anywhere? The record industry has created all these barriers, and those barriers have alienated consumers."

The downloadable music system is erecting new barriers, he says. He couldn't offer all the tracks his customers were requesting: four songs that John Mayer released exclusively through iTunes, four Johnny Cash tunes released through the same service. Then there are the deals that labels are cutting with big-box retailers, such as a Rolling Stones DVD released last year that was sold only through Best Buy. That so infuriated some store owners that they pulled all Stones albums from their inventory.

Manifest's sales sank 30 percent in the past three years, causing Singmaster to close two of the seven stores he then owned. Business at one of those, in Clemson, S.C., dried up almost overnight when the university there installed broadband Internet connections in dorms, Singmaster says.

"You can tell me all that online business went to Amazon, but I'd like to see the receipts," he says.

The five stores remaining were getting weaker but still turning a profit when, in December, Singmaster's leases were up for renewal. He decided to jump before he was pushed. He eventually found buyers for all but one of the stores, thanks in part to local newspaper coverage of the closing. Once he closes those deals, he'll be looking for a new line of work.

"I have no idea what I'll do next," he says. "I really don't have another plan."
http://www.washingtonpost.com/ac2/wp...20620-2004Feb6


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St. Paul Passes Resolution Condemning PATRIOT Act
Mark Connor

The St. Paul City Council recently joined Minneapolis and more than 200 cities that have passed resolutions condemning the 2001 USA PATRIOT Act. The resolution was passed with a 6 to 1 vote, the only dissenter being Ward 6 member Dan Bostrom. The wording of the three and one-half page resolution reveals the specific concerns the Council has with how the legislation affects St. Paul residents, as well as how it encroaches on the city’s ability to run its own affairs without undue interference from the federal government. Councilmembers Kathy Lantry, Ward 7, and Dave Thune, Ward 2, spoke with Pulse about the resolution late last week.

“I think if people really took a look at some of the aspects of the PATRIOT Act and what rights they’re giving up, they would be appalled,” Lantry said, explaining her motivations for signing the resolution. A grassroots organization called The Bill of Rights Defense Committee first presented the resolution to the City Council more than a year ago. Some Councilmembers found the language in parts of the original document problematic, but Patrick Harris, Ward 3 Councilmember, worked on a revision of it, eventually coming up with the version that passed, which is more similar to a resolution written by the National League of Cities. “That’s how democracy works,” Lantry said. “The general public decides what they want to have made an issue. I never think we should underestimate the force that a bunch of small entities getting together can have.”

While emphasizing their recognition of the need for effective measures against terrorism, Lantry and Thune both gave specific examples of the aspects of the PATRIOT ACT that trouble them the most.

A provision of the act requires librarians to turn over records of what reading material a library patron checks out when a federal agency demands it, but the librarian will be guilty of a felony for even revealing that the government has made such a demand.

“At our St. Paul Public Library Board meeting,” Lantry explained, “one of the Councilmembers asked the director of libraries if she had been asked to provide any of that. She said she couldn’t answer that. She can’t even report to the board she’s supposed to report to, because that would be illegal.”

“The PATRIOT Act may have been well intentioned,” Thune argues, “but unfortunately I think it was sort of grounded in some kind of anti-citizenry thing that the right wing has been wanting to pass for a long time, and this was their excuse.”

Thune agrees that the Library Board meeting alluded to by Lantry had a major effect on the City Council’s collective opinion regarding the resolution. “It’s interesting how things align themselves,” he said. “Off the top of my head I asked our chief librarian if the federal government had requested any records from our library ... That’s really wrong when a good civil servant, a marvelous library director, is put in that kind of a position by the federal government, because they can’t even answer ‘yes,’ ‘no,’ or deny to their own board of directors.”

Other areas of the PATRIOT Act specifically referred to in the resolution are “Section 206, which effectively eliminates judicial supervision of telephone and internet surveillance,” and “Section 213, which permits law enforcement to perform searches with no one present and to delay notification of the search of a citizen’s home.” The resolution further condemns the expansion of the PATRIOT Act with the Domestic Security Enhancement Act (DSEA), which would further restrict Constitutional rights. The resolution also reaffirms St. Paul’s commitment to prevent racial profiling by the city police force.

Bostrom, the sole dissenting vote, is a retired St. Paul police officer with many family members who have also worked in law enforcement. Debbie Montgomery, Ward 1, is also a retired St. Paul police officer and has sons who work in law enforcement. She is the first African American woman to hold the position of Commander in the department, and she is also the first African American woman elected to the St. Paul City Council.

In a related development, U.S. District Judge Audrey Collins ruled unconstitutional a PATRIOT Act provision banning certain types of support for terrorist groups. In a case filed by The Humanitarian Law Project, which provided what it describes as human rights training to the Kurdistan Workers Party, which is designated a terrorist group by the U.S. for its support of the Kurdish fight for independence from Turkey, Collins said the law is so vague it risks violation of the First Amendment. This ruling could effect the eventual trial of Mohammed Warsame, the Somali-born Canadian citizen arrested in Minneapolis in December and charged last month with “providing material support to a designated terrorist organization.” Although they are different cases and the secretive nature of Warsame’s detention and indictment make an evidentiary prediction of his fate less feasible, the judicial interpretation of at least parts of the USA PATRIOT Act as unconstitutional is, along with the rising numbers of cities condemning it, indicative of just how problematic the legislation is for a country still claiming to be free.
http://www.pulsetc.com/article.php?sid=890


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New York City Passes Resolution Against Patriot II
ILN

New York City has become the latest U.S. city to pass a resolution against the Patriot Act. The City Council called upon Congress to take action to prohibit passage of the Domestic Security Enhancement Act, known as Patriot II.
http://www.nycbordc.org/resolution0060-2004.html


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Piracy shock troops.

Executive Homes of Sharman/BDE Raided
James Pearce

Music Industry Piracy Investigations this morning raided the offices of P2P companies Sharman Networks and Brilliant Digital Entertainment, along with the homes of key executives and several ISPs.

MIPI obtained an Anton Pilar order - which allows a copyright holder to enter a premises to search for and seize material that breaches copyright without alerting the target through court proceedings - yesterday from Justice Murray Wilcox, and began raiding premises in Queensland, New South Wales and Victoria this morning searching for documents and electronic evidence to support its case against the peer-to-peer companies.

In addition to the offices of Sharman Networks and Brilliant Digital Entertainment (BDE), MIPI raided the residences of Sharman Networks' chief executive Nikki Hemming, Brilliant Digital Entertainment chief executive officer and president Kevin Burmeister and Phil Morle, Director of Technology at Sharman Networks. Monash University, the University of Queensland and the University of New South Wales were also raided, as well as four ISPs including Telstra.

"Telstra lawyers are presently working with lawyers from the record labels in order to determine exactly what information is being sought under the terms of the order," Telstra spokesman Warwick Ponder told ZDNet Australia . "We have not been asked for and will not provide any BigPond subscriber information."

"Telstra has made it very clear for a long time now that it does not support copyright infringement or any other illegal activity," said Ponder. "At the same time Telstra clearly respects its obligation to protect customers' information and privacy under the Telecommunication Act and Privacy Act under Federal law."

MIPI general manager Michael Speck told ZDNet Australia the order was specifically targeted at the operators of the Kazaa network. "This is not about individuals, this is about the big fish," said Speck. "This is a signal that Internet music piracy is finished in Australia." The ISPs and universities were raided to gain evidence about the operators of the Kazaa network.

The investigation into the Kazaa network has been ongoing for six months, and was precipitated by a significant change in the physical and technical structure of Sharman Networks, according to Speck. "The Kazaa operation infringes copyright within the terms of the Australian Copyright Act," he said.

"This action appears to be an extraordinary waste of time, money and resources going over legal ground that has been well and truly covered in the US and Dutch Courts over the past 18 months," said Sharman Networks in a statement. "This is a knee-jerk reaction by the recording industry to discredit Sharman Networks and the Kazaa software, following a number of recent court decisions around the world that have ruled against the entertainment industry’s agenda to stamp out peer-to-peer technology."

Sharman Networks became a target for the music industry when it purchased the Kazaa peer-to-peer file-sharing technology from its Dutch creators Kazaa BV in 2002. It has had a long relationship with BDE, and in 2002 had to defend against a backlash when it was revealed spyware had been included with the Kazaa software. BDE subsidiary Altnet was later formed and offered to pay people for hosting content on the Kazaa network.

"Kazaa operators know the difference and make the decision as to whether they facilitate legitimate or illegitimate downloads," said Speck. "It's very clear they are facilitating and authorising global copyright infringement."

Sharman disagreed, claiming it bought the Kazaa software "with the express purpose of building it into a legitimate channel for the distribution of licensed, copyright protected content which in turn financially benefits artists".

"There is no doubt this is a cynical attempt by the industry to disrupt our business, regain lost momentum, and garner publicity," said Sharman. "The assertions by plaintiffs are hackneyed and worn out. It is a gross misrepresentation of Sharman’s business to suggest that the company in any way facilitates or encourages copyright infringement."

Monash University and the University of Queensland have challenged the order, and the arguments will be heard before Justice Wilcox on Friday.

Sharman Networks, Australian subsidiary LEF Interactive and BDE will face the record company lawyers before Justice Wilcox on Tuesday.

According to MIPI, there are around 3 million users simultaneously online and connected to the Kazaa network at any one time sharing around 573 million files. More than 850,000 tracks are made available by over 2,500 Australian users. If each downloaded track was purchased for $0.99 the total would be more than $2bn (£1.09bn) per month globally.
http://news.zdnet.co.uk/business/leg...9145541,00.htm


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Aussie Record Industry Raids Kazaa Offices
Jay Lyman

"This is a knee-jerk reaction by the recording industry to discredit Sharman Networks and the Kazaa software, following a number of recent court decisions around the world that have ruled against the entertainment industry's agenda to stamp out peer-to-peer technology," Sharman Networks said in a statement.

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In a move reminiscent of government tactics used against drug dealers and organized crime, an Australian group working on behalf of the recording industry there raided offices and homes belonging to executives of the Kazaa peer-to-peer (P2P) network operator, Sharman Networks.

Using a search order secured from an Australian federal court, the Australian record industry's Music Industry Piracy Investigations (MIPI) unit served the order at Sharman's Sydney offices and executive homes, indicating its intentions to take legal action against the company.

The move, among the most aggressive of the recording industry's efforts to quash the trading of copyrighted music online, is likely to earn the industry even more anger from consumers who already have witnessed the industry bring lawsuits against individual computer users accused of illegally sharing music through services such as Sharman's Kazaa network.

"It's a pretty aggressive tactic to start searching individuals' homes," Yankee Group senior
analyst Mike Goodman told TechNewsWorld. "They have a really good chance of shooting themselves in the foot again."
http://www.technewsworld.com/perl/story/32795.html


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Aust Music Investigators Head To Vanuatu To Tackle Kazaa
James Pearce

An investigator for Music Industry Piracy Investigations (MIPI) this morning formally served papers on Sharman Networks at its headquarters in Vanuatu in relation to the just-launched Australian copyright infringement case.

On Friday, MIPI obtained court orders to search 12 sites across Australia to hunt down evidence of copyright infringement. One of the targets of the searches was Sharman Networks, owner of popular peer-to-peer software Kazaa. Sharman Networks is registered in Vanuatu.

"As a formality you always serve the papers on the registered company as well," MIPI manager Michael Speck told ZDNet Australia . Sharman Networks incorporated itself in Vanuatu to capitalise on tax efficiencies.

MIPI also targeted Brilliant Digital Entertainment (BDE) – the owner of peer-to-peer technology company Altnet, which partners with Sharman Networks to offer authorised content over the Kazaa Network – a move which BDE described as "ironic".

"It is ironic that the music industry would target Brilliant Digital Entertainment in its attacks against online piracy when the business and technology of BDE subsidiary Altnet are expressly designed for authorised distribution of online content," said Altnet in a statement.

"Altnet works on behalf of major independent labels, video game companies, and prominent software firms and film studios to securely sell digital media to the largest Internet audience with a near zero cost of distribution," said Altnet. "Altnet is far and away the largest distributor of licensed digital media in the world."

Despite the attack, Altnet is still keen to partner with the major record labels to distribute their music content via peer-to-peer technology. "Altnet remains committed to the commercialisation of P2P and our door is still open to the major record labels and film studios," said the company. MIPI represents several major record labels in Australia.

In a series of raids last week, MIPI targeted the offices of Sharman Networks, BDE, the homes of key executives of the two companies, three Universities (University of Queensland, Monash University and the University of NSW) and four Internet Service Providers, hunting for evidence of copyright infringing activity involving peer-to-peer companies.

MIPI declined to comment why certain ISPs and universities were singled out for the searches. "The targeting was based on matters that had arisen during the course of the investigation," said Speck.

It is likely MIPI was searching for content hosted on servers at the ISPs and universities that supported their case. For instance, Kazaa uses the services of Akamai, which claims to be "the world's largest on demand distributed computing platform for conducting profitable e-business". ZDNet Australia understands the raid on Telstra may be related to the fact some Kazaa site content is hosted on Web servers on the Telstra network that are used by Akamai.

MIPI and the defendants will appear in the Federal Court before Justice Murray Wilcox tomorrow.
http://www.zdnet.com.au/news/busines...9116030,00.htm


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Telstra Attacks Music Industry Raids
James Pearce

The music industry's piracy investigations unit is in danger of losing one of the legal tools it relies on to gather evidence of copyright infringement, as Telstra joined Sharman Networks in attempting to have the Anton Pillar orders used in raids on company premises and individuals on Friday overturned.

Telstra joined an application by Sharman Networks yesterday to have the Anton Pillar orders thrown out, arguing that Music Industry Piracy Investigations (MIPI) could achieve the same outcome with a subpoena or pre-trial discovery.

"We argued against a particular legal tool used by the music industry to get the information they wanted," Andrew Maiden, group manager of Public Policy and International Regulatory at Telstra told ZDNet Australia . He said Anton Pillar orders don't give Telstra time to prepare, increases the cost of compliance and dilutes the legal rights of the telecommunications heavyweight's Internet service provision arm.

MIPI also used an Anton Pillar orders in a raid against Comcen, the directors of which have been included in litigation. Telstra are claiming that because they are not a party to the litigation they had no reason to destroy evidence, and an Anton Pillar order was therefore unnecessary.

If Telstra and Sharman are successful in convincing the courts that Anton Pillar orders should not be issued in these circumstances, MIPI stands to lose a tool it relies on to gather evidence. "We'll abide by the decision of any court," Michael Speck, managing director of MIPI told ZDNet Australia . However, he reiterated that the order was "court-sanctioned and court-monitored", and that MIPI was comfortable with the action it took on Friday and confident of the outcome.

"We're resisting this on a matter of principle," said Maiden. "Because in the future as more information is stored electronically Telstra is going to be asked more often to provide electronic forms of evidence. We don't want a precedent that allows evidence to be collected using an Anton Pillar order with the costs and obligations that come with that, rather than by subpoena or pre-trial discovery."

"It's really hard to cooperate when you get a knock on the door and people rush past you to seize evidence," said Maiden.

Speck insisted that an Anton Pillar order was necessary in order to gain all the information MIPI thought was available and relevant to the case.

"Telstra appear to be saying that the law in Australia as it stands is inappropriate to it and should be changed," said Speck. "This looks more like an attempt to protect its Internet business over the need to protect its music business."

"I think it will be a concern to artists throughout the world that when it comes to the pinch this telco will throw its weight behind its online business rather than music," said Speck.

Telstra has been concerned about being perceived this way, especially after recently launching an online music store. "We've conducted diplomacy with the music industry over the last few days so they understand we didn't object to the principle, just tactics," said Maiden, adding that if the Anton Pillar order is overturned and MIPI returns to gather the evidence using another method Telstra would cooperate fully.
http://www.zdnet.com.au/news/busines...9116067,00.htm


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Please Don't Squeeze the Sharman
Patrick Gray

SYDNEY, Australia -- The makers of Kazaa, the peer-to-peer file sharing software, challenged the validity of a court order used by the Australian recording industry to raid its offices last week.

The company, Sharman Networks, threw down the legal challenge Tuesday in Australia's Federal Court in Sydney. Sharman was raided by Music Industry Piracy Investigations, a private investigations unit established by the Australian Recording Industry Association to crack down on copyright infringement, including illegal Internet file sharing.

MIPI successfully applied to the federal court for a number of private search warrants, known as Anton Piller orders, which were executed at 12 locations, including Sharman's offices in Sydney. The order allowed MIPI to seize data and documents from all 12 sites, including the private residence of Sharman chief executive Nikki Hemming. The raids are a prelude to a copyright infringement suit, which will argue that Sharman has the ability to block the transfer of copyrighted works through its software but refuses to do so. Sharman vehemently denies the claim.

On Tuesday, Sharman launched a legal counter-attack, accusing MIPI of not disclosing all "material facts" to the court when it applied for the order. If that charge is proven, the order could be rendered invalid. The company claims MIPI did not tell the court there had been similar proceedings against Sharman in other countries, which it claims is an omission serious enough in nature to have the order struck down.

"The music industry had already been unsuccessful in comparable proceedings in the Netherlands and U.S. concerning allegations of copyright infringement against other providers of P2P technology," a statement issued by Sharman read, adding that the company had "already cooperated fully in current U.S. proceedings by producing documents and giving statements, and that the documentation now sought by Australian recording industry companies need not be applied for or produced a second time".

Sharman's U.S.-based trial counsel, David Casselman, who has flown to Sydney to assist in proceedings, believes the recording industry is targeting the company in Australia because legal attacks in other countries have failed. He further claims MIPI made misrepresentations to the court in seeking the order. "(MIPI) failed to acknowledge that the only two courts to address that issue have found that the P2P software company does not have control," he said.

"They have now determined from the outcome in the Netherlands and the very bold writing on the wall in the U.S. that things are not faring well for them in their chosen jurisdiction," Casselman said. "The law here requires essentially the same things in the U.S. when it comes to proving vicarious or indirect infringement."

MIPI general manager Michael Speck, who has spearheaded the investigation, denies Casselman's assertion that the initiative is a part of a global strategy on behalf of the recording industry.

"This is an Australian case brought by the Australian copyright owners," he said. "Six months ago we identified technical and physical changes to the infrastructure of the Kazaa operation that make it clear that they had become an Australian operation infringing copyright in Australia."

In another development, the country's largest telecommunications company and ISP, Telstra, moved to support Sharman in its application to have the order "set aside." The telco, which is 50 percent government owned and one of only a handful of Australian companies to sell digital music over the Internet, was itself raided by MIPI. Speck said while the company is not itself a legal target, it held information pertinent to the case. Despite supporting the broader action being launched by MIPI, a spokesman for the telco said the company is worried the issuance of the order will set a dangerous precedent.

"We think the Anton Piller order is a heavy handed order that is expensive to comply with, and gives the subject too few legal rights," said Telstra spokesman Andrew Maiden. "We think that there are alternative legal instruments that could have the same effect without the drawbacks.

"It's a sledgehammer for a walnut. This is a federal court decision ... that will be relied on as a precedent."

The decision by Telstra to rush to the aid of Sharman has surprised MIPI. "I'm surprised a company with a legitimate music business and not a party to the actual proceedings would want to get involved with the pirates," he said.

Properties raided by MIPI included companies and universities in three states, among them Telstra, Monash University, Akamai Technologies and Brilliant Digital Entertainment.
http://www.wired.com/news/digiwood/0...w=wn_tophead_4


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After Aussie Assault, Sharman Squeezes Back
John P. Mello Jr.

Sharman Networks' legal action surprised no one at the Australian Recording Industry Association. "It's not an unexpected strategy," general manager Michael Speck told TechNewsWorld. "We're confident we'll be pursuing our copyright infringement case against the Sharman-Kazaa operation after February 20th."

Sharman Networks has moved to nullify a court order that allowed agents of Australia's music industry to raid the company's offices in Sydney last week in search of evidence for a copyright infringement case against the owner and distributor of Kazaa, a popular Internet file-sharing program.

The action by the Australian Recording Industry Association (ARIA)-- which also blitzed three major Australian universities and four ISPs, including the country's largest telecommunications company, in the raids -- was sanctioned by a legal instrument called an Anton Piller order, a measure usually issued when evidence is in imminent peril of destruction.

"There is a duty to give full and frank disclosure to the court of all material facts in order to obtain an Anton Piller order," Sharman said in a statement issued Wednesday. "It is Sharman's position that the recording industry failed in this duty. Because of this, the orders should be set aside."

Significant Omissions

A hearing on Sharman's motion has been scheduled for February 20th. According to the company's statement, some of the most significant omissions in the presentation made to obtain the order included:

The music industry already has been unsuccessful in comparable copyright infringement proceedings against other Internet file-sharing providers in The Netherlands and the United States.
Sharman already has produced documents and testimony in litigation in which it is involved in the United States, and it should not be forced to produce that evidence a second time.

"Threat of destruction of potential evidence is a key preconditon of an Anton Piller order," the statement said. "Clearly, there was no risk of destruction of documentation, as Sharman has already provided the information the recording industry seeks.

"Anton Piller orders are commonly considered a particularly intrusive and draconian mechanism," the statement continued. The recording industry has "used the equivalent of a nuclear bomb to obtain documentation that is already being produced by Sharman through the U.S. court system."

Sharman's legal action surprised no one at the ARIA. "It's not an unexpected strategy," general manager Michael Speck told TechNewsWorld. "But we're comfortable with the action that we took, and we're confident we'll be pursuing our copyright infringement case against the Sharman-Kazaa operation after February 20th."

Speck argued that the court was justified in issuing the order to seize evidence from Sharman. "This is an operation whose real aim is to conceal themselves," he said. "The way the operation is structured, the only way to properly obtain evidence in relation to Australian copyright infringements on any realistic basis was to obtain these orders."

Asked if the crackdown on Sharman was a prelude to a campaign to target Australians sharing music files on the Internet, as has been done in the United States by the Recording Industry Association of America (RIAA), Speck replied, "We're only after the big fish -- the people who are establishing major infrastructures dedicated to providing infringing material worldwide."

Sharman's latest jam has not been greeted with total shock and awe in the peer-to-peer (P2P) file-sharing community. "[Sharman is] no friend to the industry, but this is a pretty desperate measure by the recording industry," Wayne Rosso, CEO of Madrid, Spain-based Optisoft, which distributes a P2P program called Blubster, told TechNewsWorld. "This is an act of intimidation."

Recording Industry 'Stormtroopers'

"Sharman is friends of no one, and they do more to hurt our industry in a lot of ways than help us, but that still doesn't excuse the behavior of the recording industry," Rosso added. "These guys are truly stormtroopers, and they're showing their hand every single day."

Although raids like those in Australia are making headlines today, what impact they will have on resolving the larger problem remains to be seen.

"I don't think raids unto themselves will have any impact on the long-term resolution of the problem," Jonathan Zittrain, director of the Harvard Law School's Berkman Center for Internet and Society in Cambridge, Massachusetts, told TechNewsWorld.
http://www.technewsworld.com/perl/story/32841.html#


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voiceglo To Showcase First Browser-Enabled VoIP Product Line At Internet Telephony Conference & Expo In Miami
Press Release

The sound to listen for in Internet Telephony in 2004 involves things hitting the floor. Jaws, prices, and big, old clunky telephones.

The festival of gravity is scheduled to begin on Thursday, February 12, 2004 when voiceglo’s Ed Cespedes will be introducing the product line at a press conference scheduled for 9:15 a.m. in the Brickell room (near the registration desk) at the Internet Telephony Conference & Expo at the Hyatt Regency Miami, 400 South East Second Avenue. There, voiceglo will officially launch the GloPhone, a key product in its new line of hardware-free, browser-enabled VoIP solutions. Using nothing but speakers and a microphone, voiceglo customers will be able to enjoy a variety of calling options and plans – from a free plan to others with a variety of features. And with the GloPhone Express service, GloPhone users will be able to take their VoIP capabilities with them wherever they go and use at any computer terminal with Internet access. If you’re on the Internet, you’re on the phone.

For consumers, the GloPhone is free software that enables them to make and receive calls right from their web browsers to anywhere in the world. The simple- to-install GloPhone uses our Peer-to-Peer technology and has consumers talking in just minutes. All that is needed is an Internet connection (dial-up or high speed). voiceglo will assign customers a unique U.S.-based 14 digit phone number (traditional 10-digit number plus a 4-digit extension), in the area code of the customer’s choosing, to make and receive your calls. Other features include voicemail, voice2email, caller ID, call waiting, call forwarding and 3-way calling. Features NOT included are outrageous fees or confusing and costly long distance plans. Initial GloPhone plans are free to consumers, with the most expensive GloPhone plan costing $24.99 per month for unlimited usage.

For ISPs and Internet portals, the GloPhone presents a unique opportunity to offer existing users the value-added package of GloPhone via a co-branding arrangement offered by voiceglo. This partnership will cost ISP and portal partners nothing, and can actually help generate revenue for partners through a commission program that is activated when their users upgrade for voiceglo’s fee-based plans.
http://www.tmcnet.com/usubmit/2004/Feb/1023651.htm


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Thorny Issues Await F.C.C. on Internet Phones
Stephen Labaton

The effort to write the rules for Internet telephone service begins this week, and whether it succeeds may ultimately come down to a matter of money.

On Thursday, the Federal Communications Commission is set to consider approving a notice of proposed rulemaking, the first step in a lengthy process of writing regulations for Internet-based phone services. The commission is also set to issue a final decision on a petition by one of the new Internet phone companies, Pulver.com, which has asked the commission to rule that it does not need to pay interconnection access fees to phone companies for any calls made and received between computers through Internet connections.

Experts say that a ruling in Pulver's favor will not have a major effect immediately on the nascent industry because there are so few Internet phone users. But one analyst, Blair Levin of Legg Mason, said that a favorable ruling for Pulver could have a significant effect if a company with a huge consumer base, like Microsoft, were to begin offering computer-to-computer voice services.

The interconnection and access charges in the telephone industry have long been the cause of bitter fighting between local and long-distance carriers, and the new technology raises a host of complex and arcane issues that will ultimately play a huge role in the profitability of the new services.

The access fee question is not the only important issue before the commission. The commission will have to decide how to apply a host of other regulations to Internet phone services, like fees to support 911 emergency services and rules ensuring that phone service is universally available.

The proceedings were nearly stalled by objections from federal law enforcement agencies which have complained to the commission that any attempt to deregulate the service could pose legal and technical obstacles to their ability to monitor phone conversations in criminal investigations.

Under heavy political and industry pressure, the Justice Department, which had complained earlier that it was having problems monitoring Internet-based voice calls, abruptly reversed course last week. It rejected the position of the Federal Bureau of Investigation, which had insisted that law enforcement issues had to take priority over other regulatory questions involving broadband access to the Internet.

In a series of letters and discussions over the last few months, the law enforcement agencies insisted that the commission first resolve the issues surrounding the wiretapping of Internet phone calls.

Last month, John G. Malcolm, a deputy assistant attorney general who has played a lead role for the Justice Department on the new technology, said that as a result of legal uncertainties created by the commission, prosecutors had encountered obstacles in executing surveillance orders.

And on Jan. 28, Patrick W. Kelley, a deputy general counsel at the F.B.I., asked the commission to resolve the law enforcement issues before considering other new rules and petitions from some Internet phone companies seeking regulatory relief.

But on Feb. 4, Mr. Malcolm sent a letter to the commission that both contradicted Mr. Kelley and reversed the direction of the Justice Department.

"I consider it regrettable that articles appeared last week that were prompted by Pat Kelley's letter," Mr. Malcolm wrote, referring to newspaper articles on the controversy. "While it would obviously be our preference that the F.C.C. decide these issues prior to considering other broadband proceedings, we recognize that this is not practical, and have no desire to prevent the F.C.C. from doing its work."
http://www.nytimes.com/2004/02/09/te...y/09rules.html


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EU To Criminalize P2P Sharing?
posted by Ketola

The European Parliament is set to debate a draft law that would weed out mass piracy of digital products, such as music and movies. There is a chance, however, that the proposed law might be stretched to include peer-to-peer file sharing as well.

The changes would create a situation similar to the one in USA, where ISPs and RIAA have been arguing whether or not the Digital Millennium Copyright Act grants copyright holders to obtain personal details of individual customers if they are suspected of P2P piracy.

"The balance between privacy of subscribers and the duty to cooperate with right holders seeking to protect their intellectual property that was reached in the e-commerce directive could be changed by this directive," said Tilmann Kupfer, British Telecommunication PLC's (BT's) European regulatory manager.

World Trade Organization (WTO) rules urge WTO members to impose criminal sanctions for people who counterfeit goods for commercial gain. That was exactly what the original draft of the law sought. European Motion Picture Association (EMPA), however, didn't feel that the proposal was enough.

"The Commission's proposal fell short of international requirements agreed at the World Trade Organization," said Ted Shapiro, director of the EMPA.

European ISPs fear that individual consumers might be placed on the same level with criminals seeking commercial gain by counterfeiting products. Legal experts have expressed similar concerns, and many feel that a law that would criminalize private P2P use would go too far.
http://www.afterdawn.com/news/archive/4952.cfm


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Trade Group Suggests Paying File-Sharers
Reuters

Internet users could collect paychecks rather than lawsuits when they share music through "peer-to-peer" networks like Kazaa, under a proposal outlined by an industry trade group Thursday.

Rather than losing millions of dollars in potential sales to online song swappers, the recording industry should give them a cut of the revenues when they distribute songs in a protected format, the Distributed Computing Industry Association said.

The scenario follows two others put forth by the trade group in an effort to forge peace between peer-to- peer networks and the major record labels that have hounded them and their users in court.

Association Chief Executive Marty Lafferty said record labels could see sales grow by 10 percent over the next four years if they embraced the new technology, much as movie studios increased their market when they embraced the videocassette recorder in the 1980s.

Under the plan, record labels would encode their songs with copy-protection technology so users would have to pay a small fee, between 80 cents and 40 cents, to listen to them.

Prolific song-swappers would be encouraged to convert their collections of unprotected material into the protected format, and then paid a portion of the fees collected each time somebody purchases a song after copying it from them.

Eventually, user-friendly software would let amateur musicians without recording contracts make their music available too, the association said.

But implementing the plan could be difficult because it would require the cooperation of Internet providers, record labels and peer-to-peer networks.

Most peer-to-peer networks back a model in which musicians and record labels could be reimbursed through surcharges on blank CDs and CD burners, and fees from Internet providers and peer-to-peer networks themselves.

Although any proposal to pay artists for peer-to-peer activity is welcome, the association's suggestions "need to be taken with a large portion of the salt shaker," said Adam Eisgrau, executive director of P2P United, a rival trade group.
http://www.chron.com/cs/CDA/ssistory...siness/2390182


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All Played Out

Legal downloads are revolutionising the way we listen to music but, asks Claire Neesham,will the companies at the forefront of this technology ever turn a profit?
Claire Neesham

The legal download business is no longer the preserve of a few industry specific start-ups.

Companies as diverse as Virgin Megastore, Microsoft, MTV, Sony and Wal-Mart have either launched online music stores or have expressed interest in doing so.

Yet late last year Steve Jobs, Apple's chief executive officer, revealed that Apple's iTunes Music Store was barely breaking even, despite selling tens of millions of songs since its launch last April - the ten millionth song downloaded was Avril Lavigne's 'Complicated'.

Jobs says most of the income is eaten up by record companies, licensing authorities, credit-card companies and the cost of hosting the site.

Michael Robertson, the founder of the free-music site MP3.com, commented: "Apple is leading a race of lemmings into the zero-profit business of closed music downloads."

Peter Jamieson, the executive chairman of the British Phonographic Industry (BPI), disagrees.

"This is the greatest opportunity for the music industry since the arrival of the CD," he said.

The International Federation of the Phonographic Industry (IFPI) is also positive about the download business. It believes more legal downloads are better than more illegal ones.

Fran Nevrkla, the chairman of Phonographic Performance, which collects licence fees from broadcast and public performance on behalf of the record companies, thinks electronic distribution poses "a fantastic opportunity".

He says it not only allows a huge range of new music to be heard, but also enables archive material that it would not be financially viable to sell on CD to remain available.

But how can companies provide this service if music-download services cannot turn in a profit?

Peter Kastner, an analyst with Boston-based research company The Aberdeen Group, sees 2004 as the year when many companies in the sector will go bust.

"This market would be a terrible venture capital investment," he said. "I think the survivors will be household brand names. The question is which will survive?"

Ed Averdieck, the marketing director of On Demand Distribution (OD2), a European provider of music-download technology, remains confident.

OD2, which supplies the technology behind digital music-store services such as those offered by HMV, Freeserve and MSN, broke even in three out of ten months in 2003.

"If just one per cent of people who download illegal files in the UK switched to OD2's services the business would become highly profitable," he said.

But industry insiders insist around 98% of music acquired on the internet is still via a peer-to-peer network and is not being bought for download.

Figures from Forrester Research show 6% of the UK's online population admits to using peer-to-peer file sharing.

Typical is Jasper, a 15-year-old Londoner. He downloads ten to 20 tracks a week from the internet, which he transfers to his MP3 player. "Everybody does it," he says. "It doesn't feel right paying for music any more."

Elizabeth Brooks, who is the senior vice-president of business development for BuyMusic.com, part of the US-based Buy.com e-commerce business, is well aware of this attitude.

"For legal digital services to compete they need to provide a wide range of music in a format with which the younger generation feels some connection. Initiatives that try to stop them downloading music can only fail ... and the cost per tune must come down."

But estimates from the industry suggest that in the US the legal digital music suppliers are lucky to keep 10 cents (6p) of the 99 cents (55p) charged per tune (in the UK the price per tune is nearer £1 due to VAT).

Peter Kastner warns that this kind of pricing "leaves little to cover the cost of the network bandwidth and infrastructure such as computers, operators and search engines needed to run a site".

He says Microsoft and Wal-Mart have threatened to undercut the current suppliers if they launch their services this year.

But how can a supplier that can't sell digital music as a loss leader (as Kastner believes Wal-Mart will) or that doesn't have an established infrastructure (like Microsoft's MSN) expect to flourish?

Mike Bebel, the chief operating officer and president of Napster, says: "We believe that we make sufficient margin across the offering to make a profit."

The Napster 2.0 service offers both an à la carte download music service at 99 cents (55p) per tune and a subscription service that offers subscribers unlimited listening and tethered downloading of tunes to up to three computers for $$9.95 (£5.50) per month.

Both BuyMusic.Com's Brooks and OD2's Averdieck see legal online music as a volume market.

"The margins are tight, but when the volumes come through the profits will be made," confirms Averdieck.

Brooks notes: "To give the digital services the right numbers for 'all you can eat' subscription downloads, the labels would need to make the bet on volume versus pricing. That is a bet they have not yet taken."

But Jay Berman, the chief executive officer and the chairman of IFPI, believes that, even with current licensing agreements for digital music, the record companies are demonstrating that they are prepared to experiment with different business models.

John Hutchinson, the chief executive of the UK's MCPS-PRS Alliance, which represents composers and music publishers, stresses: "We are very keen to see regulat

ed online business develop."

His organisation is currently offering a discounted licence fee equivalent to 8% of a legal service's gross revenues compared to the 12% of revenues that will eventually be charged - and this agreement can be arranged with just a single e-mail or telephone call.

Are such initiatives enough? Kastner is dubious.

He believes that if the record companies bet on selling around 100 million songs a week, and charge fees that let the online stores sell tunes at 25p or 50p each, then more people might be tempted to pay for music online.

And Rebecca Jennings, a senior analyst at Forrester Research's UK Research Centre, thinks that there is room in the market for a number of players ... "but current offerings aren't flexible enough for a significant mass of online consumers to pay for them".
http://www.belfasttelegraph.co.uk/ne...p?story=489340


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Is The Mood Changing Towards The Legitimate Use Of P2P Networks?
By Faultline

The mood of the media and the entertainment industry used to be very clear that file sharing equals bad and that copy protection equals good. During the past two weeks we have been told that piracy is about to be beaten and that CD sales will soon be on the rise again.

Faultline chose not to tow that party line and perhaps we have sensed in the last week that this could anyway be about to change?

Just as the file sharers are in court once more duking it out in a life or death legal battle that could see them as a permanent fixture, or eliminated from the scene forever, evidence has arisen from various parts of the industry to suggest a new lease on life for file sharing networks. The Distributed Computing Industry Association (DCIA), the association of the P2P file sharers, has proposed that a series of new business models for the legal distribution of music and film over the
networks of its members.

At the same time we have heard some praise for a new DRM lite system that does not lock out file sharing, but just makes it easy to trace back to who did any illegal file sharing. Also a UK peer to peer file sharing system has finally managed to license some major record label content and Reprise records has come up with another way around the file sharing networks, by releasing an online digital version of one of its band’s albums three months before it is in the shops. That way Reprise customers can’t copy a CD, and their only way of getting hold of the new song, during its early, most popular days, is via paid online service.

And finally this week a UK company was acquired that has technology that plugs what it calls the analog hole, stopping the swapping of music over file sharing networks without reducing playability on other devices. When a track is legally copied on a DRM controlled digital system, it allows normal copying, but when it is copied to analog devices or goes through an analog-to-digital converter or undergoes conversion to MP3, a hidden watermark suddenly becomes audible ruining the track. It strikes us that finally technology and the music labels are learning to live with P2P networks, instead of trying to crush them.

Filing suit

Just as well really, because if the appeal that began being heard this week, does not go the way of the RIAA and the MPAA, then file sharing is most certainly here to stay. This appeal was filed back in August when the Recording Industry Association of America representing the music industry and the Motion Picture Association of America, representing the film industry, jointly filed an appeal with the US Court of Appeals in San Francisco, aiming to overturn the April decision that file sharing networks such as Grokster and Morpheus do not infringe copyrights themselves and should not be shut down.

The judge at that time pointed out that it is the customers of these networks that are committing the crime, not the network or networks owners themselves.
It is this ruling that has led to the RIAA going after individual file sharers, those who actually make copyrighted material available, rather than the services that offer the file sharing infrastructure that makes it possible. At the time of the original finding, the judge compared file sharing networks with photocopiers, saying it is not their existence which is illegal, but the purposes they are put to.

The appeal has also had the weight of the National Music Publishers Association added to the original two protagonists. Grokster has always said that there is little or no new evidence for the appeal to consider, and this really looks like these organizations just want a different verdict, regardless of the law.

A statement referring to the file sharing services as “businesses that were built for the exclusive reason of illegally exchanging copyrighted works, and they make money hand over fist from it. The Court of Appeals should hold them accountable," came from RIAA president Cary Sherman as the appeals were filed. Now the courtroom argument is little different and the three-judge panel for the US 9th Circuit Court of Appeals in Pasadena are being asked for a second time to close down all file sharing networks and make them effectively illegal.

The logic is that they ONLY exist for trading copyrighted works, and that if they are allowed to stay in existence, then they should at least be made to filter out copyrighted works. The riposte from the file sharers has been that it is not possible to filter out all copyrighted works, and to refer back to what is known as the Betamax finding and be treated as it they are VHS or DVD devices. In a case heard way back in 1984 the US Supreme Court upheld Sony’s view that it was not liable for copyright infringement by selling VCRs which could be used to tape the TV. The case hinged on whether or not the devices had other, legitimate uses, which
they were found to have.

Changing the filter

If this court is satisfied that file sharing networks have other uses, then it would be powerless to overturn a Supreme Court verdict, and the RIAA and MPAA would either have to accept it or try to get leave to take it up with the Supreme Court. The ideas of putting in blocks and filters appears to be a non-starter, given that the Appeal Court would have to make an effective change in the law by precedent, and has been urged to leave that to the legislature. A new bill could be brought making it the responsibility of a file sharing network to filter the content that is shared using its software, but it is unlikely that the Appeals Court will take that on itself.

When asked why this suit was different from Sony’s case, the counsel representing the RIAA and the MPAA said that Sony had no way to prevent unauthorized copying on VCRs, but that Morpheus and Grokster, the two file sharing networks named in the suit, could apply the filters.

This is not technically true. Sony could have placed a file listing every piece of copyrighted work in existence on every VHS device and made it impossible to copy them. However this would have made the product economically impossible. But that’s what the RIAA is now asking the file sharers to do now. And we don’t think a court will impose a sanction on file sharing networks that makes it economically infeasible to carry out their business.

We don’t want to tempt fate, or pre-judge the Courts, but our guess is that the File sharing networks, in one way or another, will remain in business for some many years yet to come, so it is the other direction, that of co-existence that has become more interesting this week.

Previously media reporting almost solely focused on the unimaginative approach to file sharing that the RIAA has offered – extinguish it, don’t negotiate with it – but these other events seem to see the networks themselves growing up and beginning to realize that if they are to have a place in the universe, then they need to do some of the thinking to create a use for them and at the same time put an eventual end to illegal copying.

The DCIA is backed by Kazaa parent Sharman Networks, and its close ally Altnet and its new business model projection may have some legs. Take a look at the P2P Music models presentation at http://www.dcia.info.

It begins its pitch acknowledging that sales of CDs are going down at 2.1 per cent per year and yet it should be going up in line at least with US Gross Domestic Product, at around 2.7 per cent - a discrepancy of 4.8 per cent. It asks why the music industry is resisting overtures from P2P networks and yet encouraging online music services and asks why the RIAA hasn’t courted a marketplace that has 80 million active music lovers. Embracing it would lead to sales going up by 10 per cent per annum for the next four years, the presentation says.

What the DCIA wants to see happen is that Digital Rights Managed files are made available over the file sharing networks for purchase, that they could have pride of place in a file sharing environment a little like paid advertisements on Google are the first that anyone sees.

Initially, customers would buy these by credit card billing which is already in place at the file sharing networks, then later through their phone bills or better still their monthly ISP charges for convenience. In this environment, presumably with a cut going to the delivering network, the file sharers would promote the benefits of legitimacy and quality of content to users and the result would be 600 million legitimate paid downloads a month rising to 1.7 billion representing $900 million a month.
If those figure are right, then they would dwarf the online music sales of Apple and Rhapsody and would just about mean that P2P sales were bigger than retail sales.

By using the ISPs to bill for the service, a cut could be extracted for allowing their networks to be used for delivery, the DCIA argues, perhaps an additional monthly ISP fee for anybody having downloaded a P2P, making everybody happy. But the DCIA warns that without a micropayments billing system in place, this won’t take off. And places the responsibility for that with Telcos and ISPs.

To backfill over the existing collections that individuals have built up over the years, the DCIA asks for the labels to offer some kind of conversion of the legacy file shared music to authorized copies, carried out automatically via software so that it doesn’t involve anyone being identified or prosecuted.

Of course in order to do all of this, a Digital Rights Management regime has to be brought into play that doesn’t rely on locking down music. The one that has been suggested by the DCIA is a watermarking system.

You're all lightweights

It just so happens that such a system was described this week by the Fraunhofer-Institute, in Germany. The Light Weight DRM (LWDRM) relies on locking tracks to a PC at the stage that it is downloaded, but then using LWDRM compatible software to convert tracks into any codec of their choice including MP3. But at the same time an inaudible signature is placed on the track, in effect what we call a watermark. This watermark can be traced back to a particular PC or copy of the LWDRM software easily and if it is found on the internet, prosecution would become a formality.

The nice thing about this simple system is that personal copies can easily be made, and as long as they are not distributed over the internet, then they are ok. Even the most ardent rip and burn fan is going to think twice about even cutting a CD for his best friend, if he knows that the tracks can be identified immediately with him.

Content holders would have to have a permanent ear on file sharing content, but that could be managed by a central administration system out of a central fund, and this type of system would only be effective in countries where the local authorities could be relied upon to act when a pirated watermark is identified. But it would certainly decimate file sharing without locking down music. Locked CD protected music is not something that has not yet appealed to US purchasers of CDs, who so far have point blank refused to buy copyright protected music.

Another form of copy protection also emerged this week, with SunnComm’s distributor arm Quiet Tiger, buying UK based DarkNoise Technologies. This is a similar system to the one described above, which places watermarks on CDs. But in this system, when the tracks are illegally copied it makes the watermark audible, ruining the track.

We don’t think this approach will be quite so popular with users as the one from the Fraunhofer-Institute, because it will lock down the music so that there are no personal use copies, but it shows that the copy protection companies are at least thinking about the problem. SunnComm plans to use the technology inside its own CD copy- protection system, going to beta in just 60 days.
Whippit up

Along the same lines, EMI made headlines this week when it licensed Whippit, a UK based P2P file-sharing service to carry most of its portfolio, to start in February. EMI is the first major label to sign up, but Whippit has over 200 independent labels signed already. It hopes to license its service for just $50 per year and allow customers to download any of Wippit's tunes and save them in as many places they like. Whippit also reckons it has the ear of a further four major labels and expects to sign at least two of them. But that word, file sharing, may still scare them off.

And finally, just to throw a note of caution into anyone that thinks that perhaps Grokster and Morpheus will lose their court case and never be heard from again. Streamcast networks, distributors of Morpheus, has released a new version of the program that connects to other file sharing networks. In effect this is middeware for P2P. So requests to share files can now be picked up on other networks and the results of their search transferred back, effectively melding the entire global P2P community into a single community.

So if the law closes one down, then its customers can still link to another, and another, and so on. So far the networks included are just Kazaa, Grokster, eDonkey, Gnutella, LimeWire iMesh and Overnet, but that should do for now.

The new version of Morpheus also includes Voice over Internet Protocol software like Skype, that lets its users place phone calls over the Internet for free, so pretty soon too, VoIP traffic will move freely between all the networks.

A chilling thought if you are thinking of using a courtroom to suppress either file sharing or VoIP piggybacking.
http://www.theregister.co.uk/content/6/35433.html


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Big Music Doesn't Deserve Your Money
David Wiernicki

There's been a lot of media buzz lately about the effect file sharing has had on the recording industry. Reporters local and national seem to look only to the RIAA's web site when writing about the most recent store closing or falling sales figure.

The RIAA talking points are that file sharing is responsible for recent sales losses, and that a file shared is a sale lost. This logic has resulted in lawsuits ranging upwards of $300 million against individual users. With yearly CD sales in the $14 billion range, this somewhat outlandishly suggests that one user was responsible for a 2.1% drop in industry revenue! What's more, the RIAA's own suggestion that some 60% of files shared on peer-to-peer networks are illegal music seems to be somewhat at odds with the MPAA (Motion Picture Association of America) claim that over 50% of file sharing is of copyrighted movies.

From the starting gate, it's clear that the RIAA plays fast and loose with the numbers. They obviously don't particularly care how close to the truth they come in justifying their attacks on file sharing -- and on file sharers. Those attacks culminated this weekend in a bizarre collaboration between the RIAA, Pepsi, and Apple, the Pepsi and iTunes commercial that aired during Super Bowl XXXVIII. In the spot, a series of fresh-faced, contrite teenagers targeted by the RIAA (not actors; despite Pepsi's involvement, the RIAA wanted the Real Thing) are labeled incriminated, busted, accused, and charged -- oddly enough, not convicted or guilty.

A particularly presentable girl then puts on her best "I'm getting back at the man" face and tells the audience that she and her pals are going to keep downloading music for free, and suggestively wiggles her Pepsi in evidence.

So we've got Apple, whose co-founder, Steve Jobs, incidentally, lets his kids neither drink Pepsi nor watch TV commercials, and Pepsi teaming up to not only strike fear into the hearts of evil-doers, but also convince kids that they're somehow fighting the good fight by pouring more money and energy into the organization that's threatening them. This, it would seem, is more than enough to justify a boycott of RIAA-backed products.

In the end, though, the RIAA's lawsuits and PR machinations are just the subtext of a much larger issue.

The RIAA is the voice of the major players in the record industry. Its policies and legislative agenda reflect the goals of the companies that receive money whenever anyone buys RIAA- label CDs from the likes of Sam Goody, Fye, and Wal-Mart.

When you buy RIAA-label CDs, your money goes to support their lobbyists and their lawyers. Those legislative efforts are aimed at destroying independent music and eliminating consumer choice.

As an independent artist, I buy a lot of CD-Rs (blank CD media) to record my music. But of the cost of every CD-R I buy, 2% goes to the RIAA, a deal going back to blank cassette tape days designed to help cover the lost sales from illegal music copying. Have I ever received any of this money? No. But I bet you the Big Music labels have. I pay Blink 182, Madonna, Britney Spears, and U2 for the privilege of making a copy of my own music.

You should boycott CDs because RIAA is ripping off independent musicians.

You should boycott CDs because RIAA labels' contracts do more to destroy music than promote it: as Steve Albini, producer of Nirvana's "In Utero" describes it, a band that signs a standard industry contract and sells a quarter of a million albums will end up $14,000 in debt to the label, which will have profited $710,000.

You should boycott CDs because the RIAA shut down Internet radio for six months, until a groundswell of public outrage forced them to back down -- for now.

You should boycott CDs when the industry launches their pay-per-download music service (named, ironically, after the breakout file-sharing company Napster), and signs a deal with Penn State to force every student to buy music they don't want, and won't even be able to keep after they graduate. You should boycott CDs because Penn State's president is co-chair of the Committee on Higher Education and the Entertainment Industry, along with RIAA president Cary Sherman.

You should boycott CDs if you don't want to hand money to an organization that's tried to pass laws that would allow it to legally hack into your computer and destroy all MP3s you have -- legal or not, yours or not -- without any due process or potential recourse, and laws that would make it illegal to have a consumer electronics device that plays any kind of media without checking with the RIAA first to make sure it's OK -- essentially outlawing non-RIAA music.

That's why you should boycott not only RIAA-label CDs, but RIAA-backed music on Internet services like iTunes, Napster 2.0, and whatever soft-drink flavor of the moment e-music store has just opened up -- and you Mac aficionados don't even have to feel bad about costing Apple revenue. The RIAA takes so much of the cut from iTunes sales that Apple can barely pay the cost of uploading the file. Buy an iPod instead, before the US slams through legislation like that just passed in Canada slapping a $22 tax on all digital music players to "pay artists" -- no matter that no artists have ever seen a penny from such taxes (which are as high as 70 cents on CD-Rs, and which, if the Canadian Recording Industry Association had had its way, would have been $21 per gigabyte of hard drive space, jacking the minimum cost of a 200gb hard drive to more than four thousand dollars!) and that you might well have already paid for the music you put on your player.

It's hard to avoid every purchase whose proceeds might end up in the hands of RIAA lobbyists. If you own a Disney DVD, a Sony TV, visit CNN.com (owned by Time Warner), or buy a computer game from Papyrus, who are distributed through Sierra, who are owned by Vivendi, a RIAA label is getting your money. But the least we can do is hit the RIAA labels where the cut is the deepest and the statement the most obvious.

Until the music industry plays fair, it's time to stop supporting it.

When the next attack on fair use or free musical expression hits Congress, call your representatives and let them know that it's time for an alternative to the RIAA -- a system which can respect the right of artists to sell music on their terms and of consumers to listen to music on theirs.
http://magazine.14850.com/0402/musicindustry.html


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'Arresting' Kids for Downloading Music
Timothy W. Maier

Since Napster exploded on the music scene with the new millennium, allowing consumers to download copyrighted music for free, the Recording Industry Association of America (RIAA) has been attacking the file-sharing networks and knocking them down like bowling pins. Other copycat Napster- type sites have folded or given up because the cost of litigation is too expensive to keep operating. Still others, such as Grokster, the parent company of Kazaa and Streamcast, continue legally to provide equipment for the new breed of buccaneers patrolling the Internet for recorded booty.

Indeed, while these pirates don't sail under the skull and crossbones, and few of them are even old enough to drive, they have captured from the Internet a treasure chest of stolen music. They in turn bootleg millions of tunes to their fellow pirates - the downloader who with the click of a mouse can obtain a recording of anything from the Beatles to the latest rap hit by Eminem.

And Peter Pan is having great fun pretending to be Capt. Hook even as the recording industry morphs into Ming the Merciless. Engaged in a war against children, RIAA has gone so far as to bust a 12-year-old pirate who "illegally" downloaded 1,000 songs, and forced a struggling mother to pay $2,000 for alleged illegal downloading by one of her children - an act of the sort the recording industry claims has led to the loss of billions of dollars in lost revenues. RIAA justifies its hard line by claiming CD sales are faltering because 2.6 billion files are being copied "illegally" and shared each month.

The Motion Picture Association of America (MPAA), which has supported RIAA's litigation tactics, claims its industry also is being hurt by Hook's pirates. More than 600,000 movies allegedly are being copied illegally worldwide each day, leading only to a handful of criminal prosecutions, says MPAA attorney Fritz Attaway. In a recent federal case, Kerry Gonzalez, 25, was convicted in New Jersey for stealing a preview copy of The Hulk and posting it online before the film's release. He faces up to three years in prison and a $250,000 fine. "We don't want to scare everybody, but there are consequences for illegal behavior," Attaway warns potential mischief-makers.

But these Draconian tactics could backfire into a public-relations nightmare, say entertainment specialists. After being sued and fined last year, one angry mother lashed out. "We are hardly in a position to pay the price to the recording industry as their sacrificial lamb," she said. "We feel victimized and angry, but mostly we feel hurt. We are good, honest, hardworking people. My husband works two jobs and I work one. We have never stolen anything, and to be touted as thieves is the ultimate insult."

Under the law, ignorance is not a defense. Chicago entertainment lawyer Peter Strand says parents need to educate themselves. "Kids are committing a crime when they burn copies of their purchased CDs for their friends, burn CDs from [those belonging to] their friends, or download music from Kazaa or other peer-to-peer file-sharing systems," he says. "It's the Internet equivalent of shoplifting."

A Maryland mother who admits her teen-ager downloads music responds, "Oh, come on! That's an unfair comparison." She notes that as kids many parents committed the same alleged crime by making a copy of an LP record with a cassette recorder and sharing it with friends. RIAA certainly didn't make a federal case of it then, so why are kids today being sued for downloading digital music to an MP3 player? Perhaps because in this digital age, with the click of a mouse anyone can download millions of songs at once, whereas the intrusive labor to record a song on a cassette tended to keep the bootlegger from making millions of cassette copies.

"Such pirating now is so pervasive that record sales have been in decline. It has had an immediate impact, and it's devastating to the industry," says New York entertainment and copyright attorney Michael Friedman. True, CD sales are in decline, but the situation is hardly so bad as the industry wants the public to believe, critics respond. The Nielsen Soundscan figures show that 687 million CDs were sold in 2003 compared with 693 million in 2002 - a decline of less than 1 percent.

So are bullying and scare tactics the way to win back that 1 percent? Chuck D of rap group Public Enemy thinks not. "Lawsuits on 12-year-old kids for downloading music, duping a mother into paying a $2,000 settlement for her kid? Those tactics are pure gestapo," he says. Chuck D's comments might even convince kids that such downloading is legal. In fact, a recent Gallup poll found that 83 percent of teen-agers think it is acceptable to download copyrighted material illegally.

"Everyone is doing it," says a 13-year-old in Maryland whose mother approved his decision to download about a dozen songs on his MP3 player. The 13-year-old rationalizes that there is no injustice in this because "those musicians are making so much money."

Friedman counters, "But for every Elton John making millions, there are hundreds of artists who claim they have been deprived of work and creativity. It's the rest of the field, which is the vast majority of artists, that need to be protected."

It is at this point that the 13-year-old points out Kazaa is perfectly legal. He's right, because Kazaa does not provide music to download but instead allows others to use their software to share music. The tools they provide are legal because some music is in the public domain and can be legally downloaded. Music goes into the public domain either when the artist gives consent or 70 years after the artist's death.

While the heavy exchange mostly is of copyrighted performances, and therefore illegal, the prosecutors often turn a blind eye when it comes to enforcing the claims of the recording industry. "The Justice Department has bigger fish to fry," explains Boston copyright attorney Deborah Peckham. "They aren't interested in going after children." That puts enforcement clearly on the shoulders of RIAA, which has enlisted an army of recording artists, including Britney Spears, Elton John, Eminem, the Dixie Chicks, Madonna, Sheryl Crow and about 90 other artists of every genre, to participate in an aggressive educational campaign organized by the Music United for Strong Internet Copyright Coalition. The MPAA says it joined the fight out of fear that its industry could be the next to be attacked by the kiddie pirates as soon as technology develops to where movies can be copied at lightning speed.

Even so, not all musicians support RIAA's harassment lawsuits. For example, after RIAA filed nearly 400 lawsuits against consumers found to have had more than 1,000 music files each on their computers, the Grateful Dead's Bob Weir told the press in September 2003, "They're protecting an archaic industry. They should turn their attention to new models." David Draiman of Disturbed, a hard-rock band with a platinum debut album on the charts, also blasted RIAA shortly after the lawsuits were filed. "For the artists, my ass," Draiman told the music press at the time. "I didn't ask them to protect me, and I don't want their protection." Instead, he added, RIAA should spend the money it is using to litigate against kids on finding ways "to effectively use the Internet" to promote music.

In fact many musicians use their own Websites to promote their songs. And most feature free downloads, such as Country Joe McDonald, who posts dozens of tracks for free at country-joe.com., much to the dismay of RIAA, which is seeking as much as $150,000 per alleged violation. While that figure is steep it is meant to intimidate, and copyright attorneys say RIAA is hoping to settle the bulk of these cases for about $3,000.

The media ran wild with RIAA's scare campaign. Consumer Reports even recommended that parents remove file-sharing software from their teen-agers' computers. Downloading appeared to decline. A Pew survey revealed that 14 percent of Americans admitted to downloading in December 2003 compared with 29 percent in May of that year. RIAA managed to get its message out to parents loud and strong: Your child could be next.

Scared? Don't be. If you are downloading illegally you may be committing a crime, but experts tell Insight your chances of being caught fall between slim and none - more likely, none. Consider this: What's the chance of getting nabbed for sharing a song with a friend when millions of people are illegally downloading music daily and only a few hundred have been caught in the web? "Do the math," Friedman says. "Everyone has to reach their own conclusions."

After the wave of panic settled, a more recent nationwide survey by NPD Group, a marketing-analysis company, suggested downloading is on the upswing again. According to NPD Group, the number of U.S. households downloading tracks from Websites increased from 6 percent in October 2003 to 7 percent in November, and it claims to have identified some 11 million downloaders during that period, an increase of 1 million from September.

Those numbers could continue to increase in light of a favorable federal appeals court ruling concerning Internet sites such as Morpheus, Streamcast and Grokster. A ruling handed down recently from a three-judge panel of the U.S. Court of Appeals for the District of Columbia overturned a trial judge's decision in a Verizon lawsuit to enforce a special copyright subpoena from a law that predates the music-downloading trend. The appeals court said the Digital Millennium Copyright Act of 1998 doesn't cover file-sharing networks. File sharers viewed it as a major setback for RIAA, because now networks such as Kazaa do not automatically have to surrender on demand names of customers who use their sites.

A frustrated Cary Sherman, president of RIAA, released this statement upon hearing the court's decision: "This is a disappointing procedural decision, but it only changes the process by which we will file lawsuits against online infringers. This decision in no way changes our right to sue, or the fact that those who upload or download copyrighted music without authorization are engaging in illegal activity. We can and will continue to file copyright- infringement lawsuits against illegal file sharers."

San Francisco intellectual-property and entertainment attorney Cydney Tune, whose firm has represented Verizon in the past, calls it a "good decision for Internet-service providers [ISPs] who particularly are acting as a conduit for its users. It gets the ISP out of the middle. The Verizon case was a victory in the name of the anonymous user." She adds there now will be more expenses and legal work for RIAA because it will need to get a judge to sign a subpoena to obtain names from an ISP. Even then, she says, the user could seek a protective order or challenge the subpoena, which would create further delay.

"Of course, this means the ruling may have taken away RIAA and the potential defendant's ability to settle the case," Tune adds. "If you are a potential defendant you will need to decide which matters more to you - money or your rights?" But it also raises a series of privacy questions concerning those who successfully have been sued by RIAA. For example, how was RIAA able to learn the identity of the anonymous downloader? Did it hack into people's computers or did the file-sharing network freely provide the names? No one is providing any answers.

However, RIAA vows to fight on in court and hopes to appeal the ruling. In the meantime, RIAA and MPAA continue to push educational campaigns, but with even scarier warnings to the downloading generation. For example, they warn that some downloaded songs and movies contain viruses that have knocked off instant-messenger services and disrupted files and documents on computers.

Proponents of downloading believe that those tied to record labels also may disguise some popular songs for downloading with what has been called a "circular song," in which a phrase is played over and over again and followed by dead silence, or maybe something spoofing the songs and movies. "I remember we wanted to download the first Harry Potter movie and what I got was a pornographic film," says MPAA attorney Attaway. "This was not tame stuff. It was really bad stuff." MPAA spokesman Rich Taylor adds that authorities may have shut down the red-light district on Times Square, but parents should know that with downloading, "Your child's bedroom could become a red-light district."

Even so these scare tactics are unlikely to stop music and film sharing by friends, nor does it appear technology that makes it more difficult to copy music will be the answer. Whatever is done, someone always develops technology to defeat it, says music promoter Jeff Newman of V.P. Entertainment & Promotions. Newman says the music industry also has to take responsibility for some of what is happening and start producing CDs with more than one or two songs that are hits. "We need to produce albums at a fair price with more integrity," he insists, adding that the iTunes Music Store and other sites where singles can be purchased for 99 cents is long overdue and a "win-win situation for everyone."

And former Allman Brothers manager Dave Lory says the music industry should be blaming a combination of factors for its troubles, not just piracy. The record labels no longer own the distribution centers, and record stores in the malls are disappearing while mergers and layoffs in the industry are the trend, he says. According to Lory there has been too much concentration on producing "one-hit wonders and not developing artists." He says the industry made a critical mistake when it dumped singles (formerly 45s) and forced fans to purchase $18 CDs for the one or two songs they really like. In comparison, Europe continues to kick out singles with tremendous success among the teen-age population. "The kids are telling the industry something and they should listen," Lory advises.

While the 99-cent single is a start, according to Lory, the industry has to move away from oversexed stars and give the public music that it wants. Never was that more evident than with the success of Clay Aiken and Ruben Studdard of the hit TV show American Idol. Neither of these singers is exactly a sex symbol, Lory observes. "A nerd and a fat guy are big hits," he says. "The public is saying, 'We like Clay and Ruben because some of us are nerds and some of us are heavy. We can identify with these guys.'"

Lory laughs. "It's so funny. Piracy? We have had piracy going on in Asia for years, but when it hits our home turf the recording industry has to have some easy way to tell its stockholders and the public and Congress why it suddenly is in bad shape. They aren't in bad shape because of piracy. They just need great records, and great songs and great artists will solve the problem."
http://www.insightmag.com/news/2004/...c-593447.shtml


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Contrite, Besieged Music Industry Hosted An Uptight Grammys Show
Greg Kot

The 46th annual Grammy Awards telecast turned into an extended apology rather than a celebration Sunday, as the besieged music industry struggled to regain its dignity after some embarrassing nationally televised controversies.

The awards themselves became an afterthought, the sideshow to a public-relations counterattack. Beyonce Knowles won big, claiming five Grammys and tying a record set by Alicia Keys, Norah Jones and Lauryn Hill for the most trophies won by a female artist. The ailing R&B singer Luther Vandross captured four Grammys, including song of the year ("Dance With My Father"), which he shared with Richard Marx. And OutKast took home the big prize, album of the year, for "Speakerboxxx/The Love Below," only the second hip-hop act ever to win the honor.

The multiple winners also included the late Warren Zevon and June Carter Cash; Beyonce's collaborator, Jay-Z; the White Stripes' Jack White; Eminem; and Alison Krauss. Goth-rock band Evanesence won best new artist, besting thug-rapper 50 Cent, who was shut out despite five nominations. And Coldplay's "Clocks" topped OutKast's ubiquitous single, "Hey Ya," for record of the year.

But the real buzz was the lack of buzz, the earnest attempt by the uptight Grammy gurus to suppress the chaotic spirit that puts the sizzle in popular music. It was a telecast that practically begged listeners to take it seriously, a disconcertingly middlebrow showcase for what are, at their best, defiantly lowbrow art forms: the pop, rock and hip-hop that dominate the awards. Only a performance led by Parliament Funkadelic's cast of funk freaks suggested that this was about the glorious mess that is popular culture, rather than some bland, spontaneity-free recital for the censors' approval.

After a wave of manufactured televised "controversies" in the music world, the Grammy poobahs went the extra mile to keep the event as sanitized as possible. There would be no breast-baring, a la Janet Jackson or French-kissing, a la Madonna and Britney Spears, this night, at least not for nationally televised consumption, with a five-minute broadcast delay installed as an extra precaution against any potential offensive displays. More than ever, the show needed a host with a sense of humor, a Chris Rock to lob verbal grenades at how suddenly self-serious and defensive the music biz has become. Instead, we got a rotating list of co-hosts such as Queen Latifah who intoned, "Despite what you heard, music can be a powerful force for good in the world."

Justin Timberlake marched to the podium like a chastened schoolboy to accept his best pop vocal performance Grammy, and then caved in to the powers that be by issuing an apology for his role in Super Bowlgate, a k a the "wardrobe malfunction" incident. "I know it's been a rough week on everybody," he said, "and what occurred was unintentional, completely regrettable and I apologize if you guys were offended."

To complete the picture of wholesomeness, Timberlake brought his mother as his date. Jackson, in contrast, was disinvited after her scheduled award presentation to Luther Vandross was canceled because of the singer's health problems (Vandross instead appeared on video).

Christina Aguilera got in a dig while receiving an award for best pop female vocal. "I don't want to (do) the same thing Janet has done," Aguilera said, as she struggled not to fall out of her dress.

With everyone feeling so chastened, it might have been appropriate for the music industry to do a little apologizing of its own. Let's see, where to start: Apologize for the thousands of recording artists who have never seen a single royalty check? Apologize to the consumers of America for spending $14 million marketing dreck like the latest Jennifer Lopez album? Or perhaps apologize for suing its own fans over peer-to-peer file sharing?

No such luck. Instead, the National Academy of Recording Arts Sciences, the 16,000-member organization comprised of music business professionals that stages the Grammys, began airing ads during the telecast that discourage online music "piracy." The academy set up a Web site (whatsthedownload.com) that features artists discussing the impact they say online piracy has on their business, but the site's presentation is slanted in favor of those artists who have come out against file swapping.

"Our industry will emerge from what has been a perfect storm," said Neil Portnow, recording academy president. At least a beer company ad poked fun at the industry's plight with a "piracy is so wrong" tag line for a spot about refrigerator etiquette.
http://www.centredaily.com/mld/centr...ws/7908826.htm


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Anti-Piracy Ad Debuts on Grammys Associated Press
AP

The organization best known for bestowing accolades on the music industry at its Grammy Awards will begin airing ads discouraging online music piracy with the awards show's Sunday broadcast.

The Recording Academy hopes the TV and radio spots will drive viewers to a website that features artists discussing the impact they say online piracy has on their business.

The downloading and sharing of songs via the Internet is blamed for declines in music sales that have reduced profits for record companies and royalties for artists.

"People still do not realize why it's illegal," Recording Academy President Neil Portnow said.

The television ad, to debut during Sunday night's Grammy broadcast, depicts a teenager downloading a song from the Internet while a crowd dances inside a nightclub.

When the teen completes transferring the song file to her computer, the music and the lights at the club suddenly turn off, leaving clubgoers confused over who pulled the plug on their fun. The ad closes on the Web address for the organization's information site.

The radio spot asks the listener, "Wouldn't it be great if everything were free? Music's free. Or is it?"

The Recording Academy's campaign comes almost a year after the Recording Industry Association of America, the industry's trade group, announced it would take legal action against people suspected of swapping music online. The RIAA has sued hundreds of people since September.

Portnow declined to say how much the Recording Academy spent on the campaign, which is scheduled to run through the end of the year. He said broadcast stations will run the ads as public service announcements.
http://www.wired.com/news/digiwood/0,1412,62210,00.html


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Serious Crimes Tied To Online Dating Up 37%
Kyodo News

TOKYO — Serious crimes, including murder, robbery and rape, linked to online dating sites rose 37% in 2003 from the year before to 137 cases, the National Police Agency (NPA) said in a report released Thursday.

Rape accounted for most of the serious crimes, with 72 cases, up 19 from the year before. This was followed by robbery, at 37, and indecent assault at 18. There were six cases of kidnapping and abduction and four cases of murder. The number of all online dating sites- related crimes came to 1,746 cases.
http://www.japantoday.com/e/?content...at=2&id=287407


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AUSTRALIA & U.S. Free Trade Agreement With Copyright Provisions
ILN

Australia has concluded a free trade agreement with the United States. The agreement includes an extension of the term of copyright in Australia, the creation of an Australian process to allow copyright holders to engage ISPs to deal with allegedly infringing material, and tighter controls on circumventing technical protection measures.

Cautious Welcome For FTA Deal
James Riley

THE technology sector’s largest industry groups have cautiously welcomed the signing of the Australia-US Free Trade Agreement, pointing to improved access to the $78 billion US federal government IT market as reason enough to support the deal.

But while generally supportive of the FTA, lobbyists warned that much of the detail within the agreement had yet to be revealed, making it impossible gauge the impact of the deal in many important industry sectors.

Australian Information Industry Association (AIIA) executive director Rob Durie said the group was generally positive about the FTA’s signing, but added “until we see the text of the document, it’s difficult to understand precisely how it’s going to impact on us.”

The draft FTA document has yet to be put to Federal Cabinet for approval before the full text of the agreement will be released, a process likely to be expedited, but which could take several weeks nonetheless.

Mr Durie said the AIIA was especially pleased with what had been negotiated on government procurement - and the potential access to the $US59 billion ($78 billion) US federal government market.

The deal appeared to restrict the use of government procurement to back local companies as an industry development measure - giving Australian IT firms equal access to US federal government work, Mr Durie said.

“On procurement we are quite pleased with what has been negotiated,” he said. “Given that our government doesn’t really have any (procurement-related) industry development measures in place right now, we essentially haven’t traded anything away.”

Mr Durie said the draft FTA document appeared to be flexible enough to allow for government to use procurement policy to assist local SMEs - and urged government to start providing better support to small local firms.

“If we’re going to take advantage of (the US government procurement) opportunity, we’ve still got a lot of work to do,” Mr Durie said, “because it’s difficult for local SMEs to get access to our own government’s contracts, let alone US government contracts.”

Mr Durie said the provisions within the FTA that made “the movement of people” between Australia and the US were most welcome. By making it easier for small Australian companies to send executives to the US - without the administrative burden of having to apply for and maintain business visas - would be a financial relief for SMEs.

Internet Industry Association chief executive Peter Coroneos said there were some immediate “positives” that would result from the FTA, especially in the area of electronic commerce. In particular, Mr Coroneos pointed to the FTA’s commitment to standardisation of and mutual recognition of digital certificates as a means of improving security while opening up electronic trade.

But the IIA was more cautious about the FTA’s intentions for intellectual property legislation. Mr Coroneos said it was difficult to interpret the language of documents so far released, but the IIA was concerned that government intended to adopt legislation similar to the US government’s Digital Millenium Copyright Act.

Mr Coroneos said Australian IP and copyright legislation was more flexible that US law, and that a move toward the US system of governance would be a mistake.
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