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Old 12-02-04, 10:40 PM   #1
JackSpratts
 
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Default Peer-To-Peer News - The Week In Review - February 14th, '04

Quotes Of The Week

"The cat is out of the bag, People have it in their brain that they can organize themselves." - Scott Heiferman, CEO of Meetup.com.

"No one has put any figures on the industry's revenue loss due to consumer piracy that have any credibility." - Bill Rosenblatt.

"It's not anonymous, and it can't be made anonymous because it's fundamentally antithetical to the architecture." – BitTorrent’s Bram Cohen





Rip Tide

This week’s 130-page issue harks back to the big summer WiR’s of 2003. Those giant hundred-plus page magazines put out in June and July were so packed with story after story of outrageous corporate behavior they made my hard drives wobble. Hard to tell when the big waves’ll roll in but one reason this weeks is so full is the absolutely amazing stories coming out of Australia. The ones about the secret raids at the homes of P2P company personnel. Imagine having your place invaded by force by corporate cops - because you might be working on some software! And legally no less. What a surprise that would be at six o’clock in the morning. I’ve heard reports that people were assaulted and injured, and I thought things were tough in the DMCA crazed USA! If I hadn’t already stopped supporting RIAA member companies I’d sure be stopping now, and if I lived in Australia I’d be burning up the phone lines pushing repeal of those police-state Anton Pilar laws. I’d also demand the removal of Murray Wilcox, the guy who gave the order for the raids. Shame on you judge.

The good news is this kind of over-the-top behavior doesn’t sit well with reasonable people – and reasonable people participate in democracy. We’re seeing more and more communities here in the States organizing and responding to threats against their liberties and it’s a movement on the march. They’re fighting back – we’re all fighting back, and we’re beginning to be heard.












Enjoy,

Jack











“This Machine Kills Fascists”
Siva Vaidhyanathan

How committed are we to free speech? In the first of his new monthly columns on life in America, Siva Vaidhyanathan, passionate champion of liberty, abandons the cause when faced with airport security, his wife and the ghost of Woody Guthrie.

I am writing this on a plane to San Francisco. Until a few hours ago I had a sign taped to the cover of the laptop on which I am typing:

“This Machine Kills Fascists”

As I approached security at Newark, I took the laptop out of my bag to place it in the plastic tray. I froze when I saw the sign. What if this security person reads the sign as a threat? Would he care about my explanation? Would he be interested in the fact that it is only a quote, a reference to the words that Woody Guthrie wrote on his guitar? Would he care that I have no intention of killing anybody?

I quickly calculated the risks of proceeding with the sign taped to the computer. If I were pulled aside, would the security staff see me as a genial professor and frequent flyer?

Or would the staff see me as a man with a long, foreign name, olive skin, a goatee, and an attitude?

Would it even matter? They are trained to take threats and jokes of threats seriously. Some of them have probably been called fascists by less polite passengers. And I pride myself, with my slip-on shoes and empty pants pockets, as a deft, trouble-free traveler.

I decided to remove the sign. I started digging at the tape. “What are you doing?” asked my wife. “They don’t want to see this,” I said, nodding in the direction of the security guards. “But Woody Guthrie …” she said. “I don’t want any complications,” I said.

Maybe if I had been traveling alone, I would have been braver. Maybe I would have been willing to jeopardize my flight, but not my wife’s. Maybe I would have felt like having a conversation, even an argument, with security.

But instead I kept thinking about civil libertarian John Gilmore and his lapel button that read “suspected terrorist”. British Airways attendants demanded that he remove his button because it was making other passengers uncomfortable, when that was clearly the point. When he refused, and he questioned airline officials why a pro-Tony Blair button would be allowed, but a “suspected terrorist” button would not, the crew returned the plane to the gate and made Gilmore and his partner leave.

I respect Gilmore and his commitment to free speech and reason. But did I really want to be a martyr for the cause? Did I really want to be a troublemaker for the sake of the memory of Woody Guthrie? Could I get to San Francisco in time to deliver my lecture if security pulled me aside? Would I still get reimbursed for my ticket?

After I got through security, pangs of guilt hit me. I don’t really want to live this way. I don’t want to censor myself from making harmless statements during sensitive times. What will I do when I have to make serious statements during difficult times?

I claim to understand the ways general fears can twist us into behaving in inauthentic ways. I pretend to teach young people about the pernicious effects of a total surveillance state.

But can I trust myself to stand up for my own professed values? Are they even my values if I am not willing to act upon them?

The state of mind in the United States for the past two years is a strange mix of arrogance and paranoia. We are confident that we can defeat something as nebulous as “terrorism”, yet we panic over the smallest hint of risk. The fact is, neither of these attitudes is actually making us safer.

Airlines check identification of every passenger, as if fake identification were not easily available in every city in the world (and despite the fact that the 2001 hijackers used their Ids to no avail). Yet time and time again we find how easy it is to evade prohibitions against bringing weapons or explosives onto airplanes.

My students who come from Italy, Israel, and the United Kingdom don’t understand why the United States is filled with so many foolish security measures, and why Americans can’t seem to just deal with constant surveillance. After all, they have dealt with threats of terrorism and constant surveillance for decades.

I think that’s the point, exactly. Americans do not have decades of experiences, mistakes, and modifications on which to rely. This is all new and odd to us. We all stop and cringe when we see large men in fatigues bearing automatic weapons walking in public places. This is not the country we grew so comfortable with.

As we head toward one of the most definitive elections in American history, I wonder how this combination of arrogance and paranoia is corrupting the political culture of this country and fraying its social fabric.

Can we trust ourselves to select leaders who would install reasonable yet imperfect measures to make us safer? Or will we invite our leaders to pander to our worst attributes: xenophobia, provincialism, and impatience?

Will we continue to reward leaders who insist on intrusive measures that make the state more secure in its power over its subjects? Or will we remember the value of and reinvest in our liberal traditions?

The potentially alarming statement itself, “this machine kills fascists,” demonstrates a passion, a commitment, to speak loudly against the technologies of oppression and conformity that fascists use to maintain power, even without pointing guns at everyone. Eyes can be more effective constraints than weapons.

I am sorry. I am not worthy of Woody Guthrie’s legacy. I wonder how many of us are.

When I get back to my office next week, I will put those words back on the computer. This land is our land, and this machine must be free to do its job. We must not be cowed out of speaking our minds.
http://www.opendemocracy.net/debates...3-77-1720.jsp#


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First of it’s kind ruling

Finn Ordered To Pay Alanis Morissette For Internet Bootleg Spreading

HELSINKI (AFP) - A Finnish court ordered a 24-year-old man to pay Canadian rock star Alanis Morissette 7,000 euros (8,965 dollars) for spreading unauthorized recordings of her concerts on the Internet.

The judge found that during 1999 to 2003, the man had swapped over 1,900 copies of unauthorized concert recordings, so-called bootleg tapings, with other bootleggers through his private website, news agency FNB reported. The case was the first of its kind in Finland, and legal experts said the ruling might be the first in Europe where someone who swapped illegal recordings to add to his own collection had been found guilty. Legal action in Europe has so far been limited to prosecuting people who have tried to make money off the trend. While the man offered illegal recordings of a number of artists, including Eric Clapton, The Cure, Madonna, HIM and Ozzy Osbourne, he had been swapping no less than seven tapings of Morissette's concerts with others, the court found. As a result, the Tampere district court, some 170 kilometers north (100 miles) of Helsinki, ordered him to pay a total of 17,000 euros (21,756 dollars) in damages for copyright infringement to various artists and organizations. He was only fined 408 euros (522 dollars) however, as he had not engaged in the online bootleg swapping for profit but rather as a hobby, and had not made the illegal recordings himself, FNB said. On the website, the man posted lists of which bootleg recordings he wanted and what he had to offer in return, as well as his detailed contact information.
http://uk.news.yahoo.com/040211/323/elt7j.html


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Court Battles Don't Stop Streamcast Releasing Morpheus 4
Matt Whipp

Even as Streamcast fights to uphold a lower court ruling that it is not liable for the actions of users of its file-swapping software, it has released a new version that hooks its users into the networks of other peer-to-peer platforms such as KaZaA.

Morpheus 4 gives its users access to the networks of Kazaa, iMESH, eDonkey, Overnet, Grokster, LimeWire, Gnutella, G2 and others, in addition to files on its own network. It also offers free voice chat (VOIP). Streamcast says nearly 300,000 people have downloaded the beta already.

Meanwhile, on the courtroom floor, lawyers for MGM, seeking to overturn the lower court ruling and force peer-to- peer networks to introduce filters to curtail the trading of copyright material, didn't have the judge on their side when they argued that such activities amounted to piracy.

Judge Noonan chided them for 'abusive language': 'Let me say what I think your problem is. You can use these harsh terms, but you are dealing with something new, and the question is, does the statutory monopoly that Congress has given you reach out to that something new. And that's a very debatable question. You don't solve it by calling it 'theft.' You have to show why this court should extend a statutory monopoly to cover the new thing. That's your problem. Address that if you would. And curtail the use of abusive language.'
http://www.pcpro.co.uk/?http://www.p...y.php?id=53375


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The Pornography Industry vs. Digital Pirates
John Schwartz

THOUSANDS of Web sites are putting Playboy magazine's pictures on the Internet - free. And Randy Nicolau, the president of Playboy.com, is loving it. "It's direct marketing at its finest," he said.

Let the music industry sue those who share files, and let Hollywood push for tough laws and regulations to curb movie copying. Playboy, like many companies that provide access to virtual flesh and naughtiness, is turning online freeloaders into subscribers by giving away pictures to other sites that, in turn, drive visitors right back to Playboy.com.

When Mr. Nicolau is asked whether he thinks that the entertainment industry is making a mistake by taking a different approach, he replies: "I haven't spent much time thinking about it. It's like asking Henry Ford, 'What were the buggy-whip guys doing wrong?' ''

The copyright rumble is playing out a little differently in the red-light districts of cyberspace. That neighborhood is increasingly difficult to confine, what with a fetishwear- clad Janet Jackson flashing a Super Bowl audience of millions, and Paris Hilton making her own version of a "Girls Gone Wild" video. Professional peddlers say they are hard pressed to compete.

Still, the business of being bad is very good, especially for the biggest players. Though the industry has felt a financial squeeze during the economic slowdown, it nonetheless has sales of as much as $2 billion each year, said Tom Hymes, the editor of AVNOnline, a business magazine for the industry.

And the pornography industry, which has always been among the first to exploit new technologies, including the VCR, the World Wide Web and online payment systems, is finding novel ways to deal with the threat of online piracy as well. The mainstream entertainment industry, some experts say, would do well to pay attention.

Music executives say their campaign of lawsuits has been successful. They say they have spread the word that downloading free music infringes on copyrights and that there could be consequences for large-scale file sharers.

But the pornography industry has been dealing with Internet copyright issues since the 1980's. By comparison, the movie and music businesses are relative newcomers. Mr. Hymes said companies in his industry had come to realize that suing consumers and promoting "draconian laws" were not the answer. "No law written can stem the tide," he said. And so, he said, companies are seeking ways to live with the technologies that threaten them and are trying to turn them to their advantage.

That is not to say that the companies have not been harmed by free copying and distribution of copyrighted material online. Mr. Hymes's magazine warned recently that such companies were "losing incalculable amounts of cash" to peer-to-peer file-sharing networks like Kazaa, LimeWire, Grokster and Bit Torrent.

"As the networks continue to grow and even more sophisticated programs are created, the P2P networks might prove a bigger threat to the revenue stream of the porn world than all the censorious right-wingers in the country put together," the article stated.

Maybe. But many companies that distribute X-rated material say they do not worry too much about consumers sharing among themselves; they often unleash their lawyers only when someone is trying to profit by copying their goods and trying to sell them.

When people in the industry talk of copyright, there is none of the grand speechifying about revering artists and rewarding creativity, and the near-tearful paeans to the yeoman key grips and stunt men, as is favored by movie and record executives. Instead, there is just this: We spent a lot of money to get this stuff out to the market. Somebody else is making money off of it. We want the money.

"We haven't gone after Joe Citizen who's sharing something he printed off something from the Hustler Web site with another guy," said Paul Cambria, a lawyer who represents Hustler, Vivid Video and other companies on copyright issues. He does send out some 20 letters a week, he said, warning for-pay Web sites to remove material owned by his clients.

Mr. Cambria suggests that the mainstream entertainment industry is much more combative when it comes to consumers partly because the songs and movies are so carefully and expensively made and distributed. Movies in his industry, by contrast, are often made in a few weeks, and on budgets that a major studio may spend on coffee and pastries, so piracy is not taken quite as seriously. "Maybe a classic is one thing," he said, "but they're not all classics."

A few merchants in the industry who have tried the kind of aggressive methods used by mainstream entertainment companies say they have not received much in return for their efforts. One company that tried to track down copyright infringers and demand that Internet service providers shut down their sites used BayTSP, an Internet monitoring service that also serves the music and movie industries. "It was costing us a lot of money and was producing absolutely zero results," said Humphry Knipe, who manages the business operations of Suze Randall, a photographer in the field who has her own Web site.

Mr. Knipe, who is married to Ms. Randall, said many Web sites were taken down as a result of more specific legal threats by subpoena to Internet service providers. But even then, "it was extremely doubtful that any of this activity had any effect at all in the real world of improving our sales by restricting piracy," he said.

MARK ISHIKAWA, the chief executive of BayTSP, disputes that. He said his company worked for Mr. Knipe almost four years ago, before the threat of lawsuits became common enough to present a real danger to downloaders. "He would have a much different effect today," he said of Mr. Knipe.

In general, Mr. Ishikawa said, pornography businesses have not been a good market for his services, which can cost from $10,000 to $50,000 a month, depending on the volume of work. "Nobody wanted to spend the money," he said. It was just as well, he said: "We don't want to be known in the porn space."

Many of the businesses, however, are trying various techniques to make paying customers out of people who take their content. Titan Media, a provider of gay pornography, says it tracks down people who violate its copyright and, as an alternative to a lawsuit, offers amnesty if the infringer becomes a subscriber. Identities are not easy to find in the virtual world, and the company must track the infringement through Internet service providers, who are often reluctant to reveal the names of their customers.

So Titan does what many copyright holders do: it sends infringement notices to the service providers, asking them either to remove the offending material or to pass along the notice to the customer. Titan initially tried to unmask infringers by using the same controversial provisions of copyright law used by the music industry to track down file sharers: a streamlined system of subpoenas that do not require a judge's approval. Titan backed away from the tactic when it prompted privacy protests; a federal court has since ruled that the music industry cannot use those subpoenas against peer-to-peer file traders.

Wendy Seltzer, an advocate for online civil liberties, says the Titan approach may point the way for other industries to enforce their copyrights. Ms. Seltzer, a staff attorney for the Electronic Frontier Foundation, a high-tech policy group that has fought the record industry over copyright issues, acknowledged that the amnesty offer "sounds a little extortionate when they say it, perhaps." But she said it was "a much more sensible approach" than the music industry's litigation strategy. "People always want this stuff," she said, referring to pornography. "Seeing some of it just whets their appetite for more. Once they get through what's available for free, they'll move into the paid services."

Gill Sperlein, general counsel for Titan, said his company must be tough in combating file-sharing networks because of the nature of the content. "When we're trying to maintain control of our product, it's not just to protect our financial interest but also our moral obligation to keep it out of the hands of minors," he said. Once an image or movie has been taken from his site, the company's elaborate precautions to ensure that minors cannot gain access to the material through the site are defeated. "We are very careful about who we sell our products to," he said.

Companies are finding that free images can be a selling point, and not just a problem. Playboy pays Webmasters $25 or more for every subscription they funnel to Playboy.com and provides sales and marketing tools to help make the free Web sites more effective. Mr. Nicolau of Playboy.com said that the subscription business grew 74 percent in 2002 and that the company's revenue growth in 2003 was expected to be as much as 60 percent.

Mr. Hymes of AVNOnline said that the salvation for the industry would come not from laws or lawsuits as much as from bits and bytes. "Technology is going to solve the problem that technology has created," he said. "The people in this space are seeing it as an opportunity to change habits and to create new opportunities."

Mr. Sperlein said Titan Media had experimented with software that would require people who download a video clip to return to the Titan site to unlock it and view it, but that this process was too intrusive. So, he said, the company is coming to realize that "the key is to make a product available that's reasonably priced and reasonably easy to obtain."

"We're kind of at the beginning stages of that," he added.

Others in the industry are using bare-knuckled legal tactics, but they are suing other companies, not individuals. An emerging industry of lawyers and self-appointed Internet monitors is feeding off provisions in copyright law that allow automatic damages when infringement is proved in court. Groups like the Association for the Protection of Internet Copyright, which works mainly for pornography-related businesses, scour the Internet for signs of copyright infringement that they can present to the original owners of the material. They then collect a bounty from a portion of the settlement or statutory penalties, which can reach as much as $150,000 an infringement.

Some people who have been approached by APIC say tactics of the organization's founder, Steve Easton, go out of bounds. According to papers filed by an Internet service provider in the United States District Court for the Northern District of California last fall, Mr. Easton sent copyright notices with links to pornographic sites to the company and business associates "to burden, harass and embarrass" the service provider.

Mr. Easton said that he was the one being victimized by the lawsuit, but conceded that his tactics had made him vulnerable. "I've said things to people that I probably should not have bothered," he said, "instead of sending notices and keeping to the straight and narrow."

A pornography merchant, Norman Zada, has sued Web sites that use pictures from his site, Perfect 10, and has also sued the companies that process payments for those sites. (Those suits are still working their way through the courts.) Last month, he took his campaign a step further and sued MasterCard and Visa, which he said contribute to online piracy by processing bills for Web sites that post pornography that rightfully belongs to his site and magazine.

Mr. Zada argues that piracy has cost him some $29 million. "If you create a product and everybody else can sell your product" without paying for it, he said, "you can't survive."

Neither credit card company would comment for attribution, but a lawyer from one of the companies scoffed at the suit, saying that it had no legal basis and that the company was too far removed from copyright infringement to have any liability.

Mr. Zada said his lawsuits were legitimate. "They're all accusing me of extortion and they're accusing me of using litigation as a profit center - I'm out $29 million!" he said. "This is not a profit center." He said he believed, however, that he could make back that sum and more if he could only have the courts give him total control over images he owns.

He has the right to make his case in court, he said: "This wonderful country gives you the opportunity to right the playing field." Companies like his, he said, must litigate aggressively because they do not get the kind of support from law enforcement that the music and movie industries receive.

TOUGH industry tactics should come as no surprise, said Charles Carreon, the lawyer suing Mr. Easton. Pornography, after all, is a business with a history. "Everybody forgets that somebody shot Larry Flynt," he said.

Pornography merchants say that they have the advantage over free file-sharing networks, at least for now. They say the networks are not well suited to the needs of their consumers, who like images and movies that push their very specific buttons for, say, blondes or cheerleaders.

"Free is very anarchistic and hard to deal with, and you don't know what you're getting," said a pornography entrepreneur who goes by the online pseudonym T. Lassiter Jones. "Cheap is more convenient."

That notion could be the great hope of the mainstream entertainment industry, where fledgling services like the iTunes store and Rhapsody that offer inexpensive, easy access to legal music are beginning to catch on.

So, yes, sex sells, but so can music.
http://www.nytimes.com/2004/02/08/bu...rtne r=GOOGLE


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Real Announces Flaw in Music Software
Bloomberg News

RealNetworks Inc. said a flaw in its RealPlayer software for playing music over the Internet may let hackers take control of a personal computer.

The problem with RealPlayer, which competes with similar software from Microsoft Corp., allows someone to create a fake song file that when loaded into the program could make the PC run whatever malicious instructions the creator set up, the company said.
http://www.latimes.com/technology/la...nes-technology


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EU Debate To Take Up P-to-P Filesharing

Draft law addresses mass pirating, counterfeiting of digital products
Paul Meller

BRUSSELS - Sharing music over the Internet could become a criminal offense if some members of the European Parliament get their way in a debate next week. The Parliament is set to debate a draft law designed to stamp out mass pirating and counterfeiting of digital products such as music and movies.

But instead of focusing on law breakers as the European Commission intended, the Parliament's legal affairs committee wants to stretch the proposal to include peer-to-peer (P-to- P) exchanges of digitized music. The proposed changes to the intellectual property rights enforcement directive collide head-on with citizens' rights to privacy, and have angered consumer groups and legal academics.

ISPs (Internet service providers) are also opposed to the changes to the bill because they say they would be required to snoop on their subscribers or face fast-track injunctions in the courts to reveal private information. A provision of the enforcement bill would subject ISPs to criminal sanctions if they fail to provide information to copyright holders about subscribers who may be infringing copyrights.

''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.

No one on either side of the debate doubts that counterfeiting, the main target of the new law, is a major problem. According to the European Commission counterfeiting and piracy cost the union €8 billion (US$10 billion) annually in lost economic output between 1998 and 2001.

According to the International Federation of Phonographic Industries, one-third of all music CD's sold around the world last year were counterfeit.

The music industry joined forces with the film industry last year to complain that the European Commission's proposal, which limited enforcement measures to breaches of copyright "for commercial purposes," was too soft.

Even though the proposal granted rights holders criminal legal tools to pursue pirates across the European Union (EU), this wasn't enough for them. The proposal ''failed to introduce urgently needed measures to hold back the epidemic of counterfeiting,'' music and film companies said after the Commission's proposal was unveiled a year ago.

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

International intellectual property protection rules called TRIPs (Trade-Related Aspects of Intellectual Property Rights) of the World Trade Organization (WTO) urges WTO members to impose criminal sanctions, such as imprisonment, for people who counterfeit goods for commercial gain.

Shapiro admits that by stretching the proposed EU law to catch file shares, the European Parliament is going beyond the TRIPs agreement. "You could say the amended version is TRIPs-plus," he said. Nevertheless he supports the Parliament's changes, calling them "a useful tool."

The European NetAlliance, which includes BT, Deutsche Telekom AG, Vodafone Group PLC, MCI (WorldCom Inc.), Verizon Communications Inc. and Yahoo Inc., have warned of the risks that a widening of the directive would pose. "It must be ensured that consumers are not placed on the same level as parties that violate copyright for commercial gain or as members of organized crime," the trade group wrote.

Similar words of warning were voiced by legal experts, who expressed concern that EU lawmakers have gone to far in their efforts to protect copyright holders by pushing for a law that goes beyond piracy and counterfeiting. William Cornish, a professor at the University of Cambridge in England, and Josef Drexl, Reto Hilty and Annette Kur from the Max Planck Institute in Germany wrote in an article published in the European Intellectual Property Review: "Haste and political pressure from interest groups do not make for good counsel when it comes to regulating complex and sensitive fields like that of sanctions and procedural measures for IP (intellectual property) protection.''

Consumer groups have also weighed in. "We are worried that the current European Parliament text would allow consumers to be prosecuted, judged and condemned as harshly as a person making and selling millions of copies of CDs, BEUC (Bureau Européen des Unions de Consommateurs) said. "We do not see why a consumer downloading music from the Internet to make a private copy for personal and noncommercial use should be prosecuted at all."

National governments are also unhappy about criminalizing file sharers. One EU diplomat said the Council of National Government Ministers may agree to stretch the directive to cover file sharers, but only if criminal sanctions against P-to-P exchanges of content such as music and movies are dropped.

The Council, Parliament and the Commission have held four meetings this year to try to reach a swift conclusion to the debate. All three institutions want the directive agreed to at first reading in the Parliament before March when the parliamentarians leave Brussels to campaign for re-election.

The EU diplomat admitted that efforts to push the directive through before the recess could be "overly hasty." He criticized the Commission for not doing its homework before proposing the directive a year ago. "A little more consultation would have been useful," he said.

The Parliament hopes to put the proposed directive to a vote toward the end of February. However, the topic has already been added and removed from the plenary agenda several times. Many critics of the bill say it would be sensible to delay it again.
http://www.infoworld.com/article/04/...pdebate_1.html


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University Of Rochester Opens Online Music Store
Ashlee Vance

The relationship between the music industry and universities just gets cozier and cozier.

The University of Rochester is the second school to sign up as a Napster customer, following the ground-breaking move earlier this year by Penn State University. All 3,700 students living in Rochester dorm rooms will have free access to the Napster service and its rich listing of tethered downloads. At present, the school will subsidize the monthly Napster service fee, but it warned that students may well end up shelling out for the program at some point in the future.

“Digital distribution of entertainment media is definitely the wave of the future,” said University Provost Charles E. Phelps. “I am very proud that the University of Rochester will be at the forefront of this emerging trend by offering students easy access to a high quality, legitimate music service.”

It's not at all surprising to see Phelps pop up as a champion of the Napster service. Phelps chairs a Task Force on Technology for the national Joint Committee on Peer-to-Peer File Sharing and is a member of the Joint Committee of the Higher Education and Entertainment Communities Technology Task Force.

For those of you following the online music business closely, these committees should be familiar. You'll recall that Barry Robinson, a Penn State trustee and RIAA lawyer, Grand Spaniel, Penn State's President and Cary Sherman, the RIAA President all serve on the Joint Committee of the Higher Education and Entertainment Communities Technology Task Force. These four men are doing everything in their power to turn universities into online music stores.

Like Penn State, the University of Rochester is receiving the Napster service at a heavy discount. Neither school will say exactly how much it is paying, but you can bet the price is lower than a 12- year-old's allowance.

"The only thing we can say is that the regular rate for the premium service is $9.95 per month, and we are paying a discount amount from that," said Robert Kraus, a spokesman for the University of Rochester, in an interview with The Register.

This discount is a sticky point from where we sit for a couple of reasons. First off, both Penn State and University of Rochester are billing themselves as pioneers in the legal online music scene - models to follow. This is all well and good when you are such close friends with the RIAA (Recording Industry Association of America). But should less fortunate schools expect the same price breaks? We think not.

This puts the business model being shoveled forth by Napster into question. A couple of privileged schools are leading the rest of the higher education community toward programs they may not be able to afford. But the pressure will surely be on these schools to fork over the full price for Napster or look like laggards in the copyright protection game.

Secondly, the University of Rochester may be tricking its students with a similar shell game.

"The university is paying but whether or not that is the model in the long term needs to be discussed," Kraus said.

Look out kiddies. Your university fees may soon be funding the music industry whether you like or not and by 2005, no less. Apple customers will feel the most pain in this plan, as they can't even use the Napster service.

"That is absolutely true," Kraus said. "(Napster) does not work for Mac users, and we are aware of it. We could not find one service that would fit all the students in this regard."

That's a pretty interesting position given Kraus' argument for why University of Rochester needs to be in the music business. Selling music is not "too dissimilar" from the school providing Internet access, athletic facilities and cable TV, Kraus said.

Well, it really is dissimilar. Internet access and athletic facilities make up pretty basic parts of a students' educational resources and all students have access to them. Most schools now rely on the Internet for the delivery of assignments and other course material. In addition, many universities require at least a couple of athletic credits. We've yet to see the music downloading requirement come into effect, but don't imagine it is far off.

With regard to cable TV, Kraus could not say whether or not the school subsidizes that service.

"In the face of the emerging digital nature of our society, (the Napster service) is in a way a logical step forward," Kraus said.

Logical or lucrative?

The emerging digital nature of our society has put peer-to-peer technology at the forefront of personal computing - like it or not. And yet not one member of a P2P company or even scientific user of the technology is on the Task Force on Technology for the national Joint Committee on Peer-to-Peer File Sharing.

As of today, P2P services have been deemed legal by US courts. In addition, companies such as Sun Microsystems, Intel and Microsoft are all looking into ways to tap the technology as an efficient and cost-effective means of file distribution. Wouldn't input from these companies be logical?

Beyond that, some very bright people have proposed sound business models for allowing everyone - not just Windows users or college students - to enjoy music and taste our culture.

It will come as no shock to see all of the universities with representation on the above committees roll out Napster-branded services over the next year. The only shock is that outsider universities are not questioning this before it's too late for them, their budgets and their students.
http://www.theregister.co.uk/content/6/35372.html


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E-Mail at The Washington Post Disrupted by a Missed Payment
Jacques Steinberg

Sometimes it doesn't take a hacker to bring down a computer network.

The Washington Post said yesterday that it had inadvertently allowed the registration for one of its Internet domain names - washpost.com - to expire. That lapse had the immediate effect of shutting down the e-mail system that reporters and other Post employees use to exchange messages with the world, something they were unable to do for much of the day.

In a message sent to newsroom employees over another computer server yesterday morning, Steve Coll, the managing editor of The Post, wrote that "Network Solutions, which manages Internet addresses, apparently notified The Post of the pending expiration via a drop-box that was not being monitored.'' Mr. Coll wrote that "all external e-mail has been disrupted and external senders are receiving delivery failure notices.'' In general, the cost of renewing an Internet domain name is under $100.

The Post said that it had been able to renew its registration for washpost.com by midmorning, before any outsider had a chance to lay claim to it. But the disruption to the newspaper's newsgathering efforts was significant enough that Post editors were advising reporters to set up temporary e-mail accounts using Yahoo and Hotmail.

In interviews, several reporters said the loss of e-mail made them realize how dependent they had become on technology to do their jobs.

"I know I'm missing things,'' one reporter said.

Another said that many people in the newsroom, especially those who believed they should be paid more, expressed regret that they had not "snapped up the domain name and parlayed it into the reward that they know they so well deserve.''

By 5 p.m. yesterday, the newspaper had restored some e-mail functions, a spokesman for The Post, Eric Grant, said, but did not yet have "100 percent e-mail capability.''

Mr. Grant declined to say if any of The Post's production operations or other Web services - including its main news Web site, washingtonpost.com, whose domain name did not expire - had been affected by the lapse.

The Post is not the first company to allow its registration to expire inadvertently. Last May, for example, Alameda Power and Telecom, a California utility, allowed its domain name to lapse through an oversight, The Contra Costa Times reported at the time, drawing complaints from nearly 100 customers whose messages to the company bounced back.
http://www.nytimes.com/2004/02/06/te...y/06paper.html


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Let's All Gather Round the Screen
Katie Hafner

BUD AND LYNDA SLOTKY live a quiet life in a hillside development of 65 houses not far from Hollywood. Each day, Mr. Slotky, a mutual fund administrator, looks forward to his leisure hours. He and Ms. Slotky love nothing more than dinner and a movie with friends.

But such evenings do not involve restaurant reservations or theater lines. Instead, chez Slotky, hosts and guests journey all of 20 feet from the dining table to the living room couch.

Wielding his remote control, Mr. Slotky orders an 82-inch reflective screen to drop from the ceiling, activates a digital projector overhead, adjusts the volume on five surround-sound speakers and commands a DVD to play.

Within seconds, the screen is awash in action, the room is rumbling with sound effects and the audience is completely immersed. "Ice Age" is a favorite. So is "Chicago," which the Slotkys have seen half a dozen times.

The VCR and the DVD player have changed where and how Americans watch movies, and now home theaters are further transforming the experience. As setups like the Slotkys' become commonplace, TV watching is becoming more of a communal ritual, shared with family and friends.

"People really congregate around it. It's what people do now," said Mike Orio, who designs and installs home theater systems in the New York area and is the host of frequent movie gatherings at his Brooklyn home. "It's an American temple and the screen is the altar."

Some home-theater owners find that their living room has become a gathering place for neighbors to watch big games and other special events. Others prefer more intimate movie viewings with a few friends.

"Everybody's doing it, said David Bruce Mann, an architect in Manhattan. "Every apartment I'm doing right now, whether it's high end or just regular people with regular budgets, involves surround sound."

According to the Consumer Electronics Association, some 3.1 million prepackaged systems - five speakers, a subwoofer and an audio-video receiver - were sold last year, nearly triple the number sold in 2000.

The rise of the home theater appears to be having an effect on the movie industry: the number of tickets sold last year dropped to 1.5 billion, from 1.6 billion in 2002. Anthony Kusich, an analyst with ReelSource, a box-office tracking firm in Los Angeles, attributed the decline in part to home theaters. "Particularly older people who don't want to deal with a theater don't mind waiting for the DVD," he said.

The home theater numbers from the electronics association do not take into account more expensive customized systems, to say nothing of rooms made to resemble a movie theater, complete with curtains and reclining seats.

The range in systems is indeed enormous. "If you ask consumers what a home theater is, you'll get so many different answers you won't know what to do," said Nick Donatiello, president of Odyssey, a market research firm in San Francisco.

Home theaters generally have a television with a screen of at least 30 inches combined with surround-sound speakers, but there are plenty of other permutations. Fifty- inch flat-screen plasma TV's, digital projectors, six-foot speakers, special lighting and inclined walls to maximize acoustics are but a sampling of the possibilities. And some custom-built homes are being designed with a home theater in mind.

Not only have the Slotkys, who are both 56, all but eliminated their trips to movie theaters, but since they installed the home theater last summer it has turned into the center of their social life. Last weekend they held a Super Bowl party for about 40 neighbors and friends. "Everybody brought an appetizer or a dessert, and the seating was great," Ms. Slotky said. A few people watched the game from the backyard, through a large picture window.

The home theater has encouraged some people to reconsider the moviegoing experience. Pam Stuchin, 51, a psychiatrist who lives in Manhattan with her husband and two teenage daughters, is increasingly put off when she goes to the movies. She offered a litany of peeves: "The floor is all sticky, and you can't put your bag on the floor, and someone is always coughing or singing along. And there's always someone taller than you with a big head."

Dr. Stuchin's 15-year-old daughter, Margot, is not fond of theaters either. Unlike many teenagers - a group that studios bank on for ticket sales - Margot prefers to invite friends over for a movie rather than go out. "You have to be polite in the theater," she said. "And it's more fun at home because if you miss something you can say, 'Wait, I want to see that again.' "

Of course, the comfort of the Stuchins' Park Avenue apartment might be an influence. A cozy den, redesigned 18 months ago by Mr. Mann with the benefit of Mr. Orio's audiovisual expertise, is now a library and media room. It has a 42-inch Fujitsu plasma TV, Bowers & Wilkins speakers and a Sunfire subwoofer, the bass speaker that creates the sounds of explosions, falling buildings, and asteroid strikes. ("The things the guys like and women always turn the volume down on," Mr. Orio said.)

The whole setup, which would have cost $30,000 four years ago, cost less than $15,000. "You don't have to spend huge amounts of money to get a high-quality home theater system any more," Mr. Orio said. "And you don't have to tear the whole house apart to do it."

Lynn Spigel, a professor of communications at Northwestern University and the author of "Make Room for TV: Television and the Family Ideal in Postwar America (University of Chicago Press, 1992), said that when television sets first started appearing in upper-crust homes in the early 1940's, they were viewed much as today's home theaters are. "A TV was very much of a status symbol," Professor Spigel said. Box-office ticket sales fell in areas where television was being introduced. Now, Professor Spigel said, "the home theater is a sign of luxury because you can be back in your private home again."

Mr. Slotky said that persuading his wife to agree to spend $12,000 on a home theater was not easy. In fact, two years went by before Ms. Slotky, who is a speech therapist, agreed. "It was a really, really, really long sell," he said. Ms. Slotky said she worried that her husband would become an incurable couch potato. But now she loves the theater as much as her husband does.

The couple is careful not to have friends simply come over, watch a movie and leave. "I still like conversation," Mr. Slotky said. "That's what friendship is all about."

As he spoke in his living room, blinds drawn, Mr. Slotky demonstrated his system with a swashbuckling scene from "Pirates of the Caribbean." As the sound thundered throughout the room, Ms. Slotky took over the task of answering a reporter's questions - at raised volume - while her husband sat staring straight ahead, too transfixed to talk.

Brian Cincera, 35, a computer security consultant in Allentown, Pa., spent 52 weekends working to convert his basement into a theater at a cost of more than $50,000, a sum he managed to conceal from his wife, Tina. Each new component he brought home was scrutinized by Ms. Cincera, and when she inquired about the price, he offered a standard reply. "Apparently everything costs around $200," she said.

Yet like Ms. Slotky, Ms. Cincera is a convert. "Family members come over and Brian shows them the beginning of 'Toy Story 2' and they think it's amazing," she said.

With his home theater finally in place, Mr. Cincera said, he is reluctant to go to theaters, where the picture is "grainy," and he is less enthusiastic about attending sports events, particularly Philadelphia Eagles games, which he receives in high-definition format on his 64-inch rear-projection TV. "For the headaches of driving to the stadium, and paying for the tickets and the food, you have it much better in your own home," he said.

Larry Hertzog, a television writer and producer who lives in Los Angeles, has not bought a movie ticket in nearly a decade. A serious film buff, Mr. Hertzog finally decided that going to movies was too upsetting. "You'd go to revival houses to see old classics and they'd be out of focus and there would be babies crying. It ruined the experience for me," he said. "I like to be swept away by a Lana Turner and Clark Gable on the high seas, and that's hard when the person behind you is being an idiot."

He put together a home theater in the late 1980's, then built a far more elaborate one after his house was destroyed in the Northridge earthquake in 1994.

Mr. Hertzog, 52, said his home theater is less of a social focus than some tend to be. Still, over the years he has noticed that when he goes out to dinner with friends and a particular film is mentioned, "I'll say: 'Oh, you haven't seen that? Let's go watch it.' "

When the group arrives at Mr. Hertzog's house, he plucks the film from his collection of 1,800 movies, turns down the lights and invites his guests to sink into a plush sofa and enjoy a movie on his 10-foot screen.

Mr. Hertzog pointed out that in his room, "the visual experience is as good, if not better, than what many people would experience in today's chopped-up multiplex theaters."

Almost as much as the film itself, Mr. Hertzog said, he enjoys "the afterglow," the time spent sitting with friends, discussing what they have just watched. "It's the only time I really just hang out in that room," he said.

Collecting films has become a crucial component of the home theater hobby. Dr. Stuchin said her Manhattan home theater made her want to buy more movies. Indeed, DVD sales have soared. "Seabiscuit" sold five million copies in the first six days after its release, and sales quickly surpassed the $120 million the film made at the box office.

Mr. Orio, who lives in Brooklyn in a Park Slope brownstone, has a home theater with a 92-inch screen and projector, which he uses just for movie viewing. Television programs are watched on any of several large-screen TV's.

When "Seabiscuit" came out on DVD in December, he held a private screening for four friends. "We had dinner afterwards, then we went upstairs and watched 'The Sopranos' on one of the TV's," he said. "Then people had coffee and left. It was great."

Mr. Orio now plans to show movies to his friends every two weeks. Across the continent, Ms. Slotky is thinking along the same lines. She wants to start a movie club, taking a book-club approach. And while she's at it, she is seriously considering buying a theater-style, free-standing popcorn maker.
http://www.nytimes.com/2004/02/05/te...ts/05thea.html


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HOW IT WORKS

For Better HDTV Displays, It's All About the Chip
Eric A. Taub

BACK in the dark ages of high-definition television - about four years ago - HDTV pictures suffered in quality.

The problem was not with the technical standard, but with some of the digital television sets that were sold. "The weakest link in the HDTV chain was the display," recalled Joe Flaherty, a CBS senior vice president for technology who was one of the people responsible for instituting digital high-definition TV. "It was like Mark Twain's comment that Wagner's music is better than it sounds."

The biggest sets at the time, supersize rear-projection monstrosities priced around $10,000, used conventional cathode-ray-tube technology to create images. As a result, the high-definition pictures were not very sharp and had some problems common to big-screen TV's in general: inaccurate color registration and pronounced "hot spots" that limited where viewers could sit and see the picture.

Today, consumers have a much wider and better choice of display technologies in HDTV models, some of which are priced considerably lower than those available a few years ago.

Flat-panel TV's using plasma and liquid-crystal-display technology have captured the public's imagination. But plasma is pricey and has its own problems, like image burn-in, decreasing brightness over time and high energy consumption. L.C.D. panels do not have those problems, but the largest sizes cost even more than plasma.

To offer consumers advanced displays at lower cost, manufacturers have focused on improving rear-projection technology. By using smaller image-generating micro- display devices like single-L.C.D. chips, rear-projection sets can be made lighter and thinner than those that use cathode ray tubes.

Because it is a transmissive technology, L.C.D. can be used in both direct view and projection sets. In a direct-view screen, light passes through the liquid crystals and color filters and appears on the front of the display. In a rear-projection L.C.D. television, a light source and a series of lenses magnify the image. By using mirrors to direct the image to the screen, the back of the set can be kept relatively shallow.

Another rear-projection technique uses D.L.P., or digital light processing, technology to create the image. The D.L.P. chip, made by Texas Instruments, measures less than one inch across diagonally and contains hundreds of thousands of tiny mirrors that pivot to allow more or less light and color to be reflected to the screen. Today D.L.P. sets can be created that rival the depth of flat-panel displays. At the Consumer Electronics Show last month in Las Vegas, RCA showed its new Profiles rear- projection D.L.P. models, 61- and 50-inch sets that are just 6.85 inches deep.

Another rear-projection technology, liquid crystal on silicon, or LCoS, shows promise, too. Like an L.C.D. chip, an LCoS chip uses liquid crystals to determine how much light reaches the viewer. But that light is reflected off the LCoS chip rather than passing through it. Built into the chip are aluminum plates that function as both electrodes and fixed mirrors.

LCoS chips, their proponents say, create a high-resolution, good-contrast, long-lasting image without the problems associated with some other techniques.

Philips is first on the market with a single-chip LCoS set, and several other companies, including Intel and the MicroDisplay Corporation, have entered into agreements with electronics manufacturers to deliver components that will make sets available later this year. In addition, JVC will make a series of three-chip LCoS displays marketed under the D-ILA name.

LCoS has been tried before. RCA marketed an LCoS rear-projection TV in 2001, a 50-inch set that sold for $8,000 and was withdrawn after one year. And last month Toshiba announced that it would abandon its promise to sell LCoS sets and concentrate on making D.L.P. TV's instead.

LCoS sets have inherent advantages over D.L.P. and L.C.D., proponents of the technology say. Because light shines through an L.C.D. chip, the circuitry that controls the liquid crystals blocks some of the light. With an LCoS chip, all the circuitry is in a silicon layer behind the reflective layer.

Unlike D.L.P., LCoS has no moving parts, making it relatively easy to shrink the size of each pixel within a given space, thereby increasing resolution. And because D.L.P. chips use tiny mirrors secured to individual posts, "each post shows up as a dimple on the screen," degrading the image, said Sandeep Gupta, president of MicroDisplay.

D.L.P. proponents dispute these claims.

"Both D.L.P. and LCoS make a great picture," Dale Zimmerman, general manager for D.L.P. television at Texas Instruments, said. "Our new HD2+ chips, shipping this year, have the same performance as LCoS. We've created a dimple fix."

LCoS sets will be price-competitive with D.L.P. TV's of the same size. Philips' first LCoS model, a 55-inch set, is currently priced at $4,499.

Whichever technology eventually captures the pocketbook and the imagination of the American consumer, it is clear that the first HDTV's were the worst HDTV's the world will ever see.
http://www.nytimes.com/2004/02/05/te...pagewanted=all


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STATE OF THE ART

Recording the VCR's Swan Song
David Pogue

PREDICTING the future of technology is a fool's game. Still, every now and then, you recognize that a product is so obviously superior to what came before it, the writing is on the wall in block letters big enough for Mr. Magoo to read. The graphic elegance of the first Macintosh spelled the demise of DOS, the crisp sound and compact size of the CD unmistakably suggested the vinyl record's decline, and the convenience of the digital camera set off a tailspin in film sales that continues today.

Don't look now, but another machine you probably own is on its way out: the VCR. Its disruptive successor is the cheap set-top DVD recorder.

Now, the phrase "cheap set-top DVD recorder" may strike you as two oxymorons in one. First of all, in this era of flat screens that are only two inches thick, the last place you'd set a set-top box is on the top of the set. (Nominations are welcome for a better term that distinguishes these TV-room DVD recorders from the ones that you attach to a computer.)

Second, there's that bit about "cheap." Everybody knows that set-top DVD recorders are expensive. The best ones include a hard drive for TiVo-like flexibility but cost $600 and up. DVD-only models start at $400 or so. Logic and pundits have long maintained that the VCR's funeral rites won't begin in earnest until DVD-recorder prices fall below $300 - and now they have, led by Gateway's AR-230 and a few rivals from lesser-known companies.

The brilliance of these stripped-down machines is that they're so easy to explain to people. "It's exactly like a VCR, except you use blank DVD's instead of tapes." You hook the thing up to your TV the same way, operate the remote control the same way and choose a recording speed the same way.

Yet discs offer a list of advantages as long as your arm. DVD's offer far better picture quality than VHS tape. They never require rewinding or fast-forwarding. You can never record over something by accident. DVD's are cheaper to mail, and a lot more of them fit into the same shelf space. DVD's may well last a lot longer than tapes, too, which begin deteriorating in as little as 15 years (the DVD format is too new to know for sure).

Furthermore, a DVD recorder like Gateway's also plays DVD's - and very well, too. It's a so-called progressive-scan player, which means that if your set has Y, Pb and Pr jacks on the back, you get an even more stable, brilliant picture.

For many people, though, storing movies and shows "taped" from the TV is only a secondary perk of owning a DVD recorder. The primary mission is more time- critical: rescuing VHS and camcorder tapes before they turn to dust.

Here, the Gateway does a great job. It offers input jacks in enough formats and locations to accommodate just about anything you want to hook up. On the back panel are S-video, coaxial and composite connectors (the standard red-white-yellow set of three connectors); on the front is another set of composite jacks so you can hook up your camcorder without crawling behind your TV table.

The front panel also offers, surprisingly, a FireWire input for today's digital camcorders - something that's missing from most DVD recorders under $600.

Better yet, the Gateway features extremely simple on-screen menus. Even the remote control is thoughtfully designed, featuring buttons of different sizes and shapes to help your thumb find its way in the dark.

All of this looks good on paper, but remember that this machine costs $300. The lightweight box has so few components inside, it feels practically hollow. You're entitled to wonder, then, how well it works, if indeed it works at all.

As long as you keep adding "compared with a VCR" to your critical assessments, the Gateway performs very well indeed.

The machine offers four quality settings that fit one, two, four or six hours onto a DVD. You can't see any difference whatsoever between the one- and two-hour modes, even with repeated A-B tests and a magnifying glass; both look indistinguishable from the original TV or videotape. The four-hour mode is fine for sitcoms, news and reality shows and still beats the quality of a VCR by a country mile. Only the six-hour mode looks blurry and blocky.

One strange quality glitch arises when you burn a DVD from the front-panel FireWire jack, though. Even at the best recording setting, the faces of moving subjects are just the tiniest bit blurry - a surprise, considering the pristine perfection of the original digital camcorder source. It turns out that despite having a reputation for excellent picture quality, a DVD nonetheless stores video, behind the scenes, as compressed files. When you turn a digital camcorder's footage into a DVD, you're actually stepping down slightly in quality.

What do you give up by buying a $300 player instead of, say, a $450 model? You can't edit your recordings. You can't watch the beginning of a show while you're still recording the end, as you can on some Panasonic models.

The Gateway lacks the on-screen TV guide that its more expensive competitors have, and there is not even VCR Plus+ to save you some programming hassle. It can't change the channel on your cable or satellite box, either, so you have to set the box to the proper channel before you leave the house.

You do get a nice menu screen of the recordings on a disc, featuring a thumbnail picture representing the first frame of each recording. But although the machine can divide longer recordings into chapters or scenes, just like those on a Hollywood DVD, they appear automatically at regular intervals (every five minutes, say); you can't insert them at dramatically significant moments. And although you can rename your recordings - tediously, using an on-screen alphabet - you get only eight characters per show, so "Home Improvement" becomes "Home Imp."

Finally, a note on compatibility. This machine requires blank DVD's in the DVD+R format (about $20 for 10), which aren't easy to find in stores and don't play in as many DVD-player models as the confusingly similar DVD-R format.

Note, too, that as long as you keep a disc in the machine, you can delete recordings and add new ones. But to play one of your homemade discs in somebody else's player, you must first subject it to a digital shrink-wrapping process called finalizing, which takes about a minute (and isn't even mentioned in the mediocre manual). Once you have finalized a DVD+R disc, it's frozen; you can never erase or edit it. The Gateway also accepts the more expensive DVD+RW discs, which you can completely erase even after finalizing.

Gateway isn't the only maker of low-priced DVD recorders, by the way. Best Buy, Wal-Mart and other chains each carry a sub-$300 model or two, which offer roughly the same features as the Gateway. Some carry recognizable names (Magnavox, Polaroid), and some don't (Coby, Cyberhome), but all are made in Asia using the same supercheap standards as $50 DVD players and $40 VCR's. In short, they may not offer, ahem, Toyota-like reliability.

But never mind all that. If your point of reference is the VCR (rather than, say, Pioneer's $700 DVR-810H, a drool-worthy combination TiVo-DVD recorder), you lose very little by investing in a recorder like the Gateway AR-230. The simplicity, picture quality and price of these machines makes one aspect of next year's home entertainment center crystal clear: the VCR isn't in it.
http://www.nytimes.com/2004/02/05/te...ts/05stat.html


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Step on the Gas With a Speedier DVD Recorder
J.D. Biersdorfer

Just as CD burners got faster at recording discs as the technology improved, DVD recorders are beginning to pick up speed. The Memorex True 8X Dual Format DVD Recorder can record DVD+R and DVD-R discs at a sizzling (for DVD) 8x pace. With the ability to store 4.7 gigabytes of data on a disc, DVD has become a common option for data backup as well as recording homemade video.

The True 8X drive also records other disc formats at various high speeds: DVD+RW and DVD-RW discs at a speed of 4x, CD-RW discs at 24x and CD-R discs at 40x. The drive reads DVD-ROM at a speed of 12x and CD-ROM discs at 40x and comes with a kit for either vertical or horizontal installation inside the PC. To prevent recording errors and wasted discs, the True 8X uses a two-megabyte buffer to keep the data flowing onto the DVD during the burning process.

The package includes the Nero Express software suite for all types of DVD and CD recording, from data backup to DVD movie creation. The True 8X drive works with Windows 98 SE and later on a computer with at least a Pentium III 800 megahertz processor. Detailed specifications are at www.memorex.com. Although the drive usually sells for $200, a $30 mail-in rebate is now available, enabling you to save a chunk of change while burning a hunk of data.
http://www.nytimes.com/2004/02/05/te...ts/05driv.html


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Music-Sharing Group Proposes Pay-to-Play Plan
Andy Sullivan

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.

DCIA 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.

"Each time there's a technology breakthrough in entertainment distribution, once it's harnessed and embraced and an industry finds a way to capitalize on it, the industry does enjoy accelerated growth," he said.

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 allow amateur musicians without recording contracts to make their music available as well, DCIA said.

But implementing the plan could be difficult as 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, CD burners, and fees from Internet providers and peer-to-peer networks themselves.

Though any proposal to pay artists for peer-to-peer activity is welcome, DCIA's suggestions "need to be taken with a large portion of the salt shaker," said Adam Eisgrau, executive director of P2P United, a competing trade group.

An earlier DCIA proposal would have positioned member company Brilliant Digital Entertainment Inc.'s copy-protection technology as a standard, Eisgrau noted.

A spokesman for the Recording Industry Association of America said he had not had time to look over the proposal and declined comment.

Major record labels include Vivendi Universal , Bertelsmann AG's BMG, EMI Group Plc, Sony Corp.'s Sony Music and Time Warner Inc.'s Warner Music.
http://www.washingtonpost.com/wp-dyn...-2004Feb5.html


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File Sharing's New Face
Seth Schiesel


Anna Mia Davidson for The New York
Times


AFTER working for a parade of doomed dot-com startups, a young programmer named Bram Cohen finally got tired of failure.

"I decided I finally wanted to work on a project that people would actually use, would actually work and would actually be fun," he recalled.

Three years later, Mr. Cohen, 28, has emerged as the face of the next wave of Internet file sharing. If Napster started the first generation of file-sharing, and services like Kazaa represented the second, then the system developed by Mr. Cohen, known as BitTorrent, may well be leading the third. Firm numbers are difficult to come by, but it appears that the BitTorrent software has been downloaded more than 10 million times.

And just as earlier forms of file-sharing seem to be waning in popularity under legal pressure from the music industry, new technologies like BitTorrent are making it easier than ever to share and distribute the huge files used for video. One site alone,

suprnova.org, routinely offers hundreds of television programs, recent movies and copyrighted software programs. The movie industry, among others, has taken notice.

What Mr. Cohen has created, however, seems beyond his control. And when he was developing the system, he said, widespread copyright infringement was not what he had in mind.

Rather, he was intrigued by a problem familiar to many Internet users and felt acutely by friends who were trading music online legally: the excruciating wait while files were being downloaded.

"Obviously their problem was not enough bandwidth to meet demand," Mr. Cohen said in an interview at a Mexican restaurant near his home in Seattle. "It seemed pretty clear to me that there is a lot of bandwidth out there, but it's not being used properly. There's all of this upload capacity that people aren't using."

That was the essential insight behind BitTorrent. Under older file-sharing systems like Napster and Kazaa, only a small subset of users actually share files with the world. Most users simply download, or leech, in cyberspace parlance.

BitTorrent, however, uses what could be called a Golden Rule principle: the faster you upload, the faster you are allowed to download. BitTorrent cuts up files into many little pieces, and as soon as a user has a piece, they immediately start uploading that piece to other users. So almost all of the people who are sharing a given file are simultaneously uploading and downloading pieces of the same file (unless their downloading is complete).

The practical implication is that the BitTorrent system makes it easy to distribute very large files to large numbers of people while placing minimal bandwidth requirements on the original "seeder." That is because everyone who wants the file is sharing with one another, rather than downloading from a central source. A separate file-sharing network known as eDonkey uses a similar system.

For Mr. Cohen, BitTorrent was always about exercising his brain rather than trying to fatten his wallet. Unlike many other file-sharing programs, BitTorrent is both free and open-source, which means that those with enough technical know-how can incorporate Mr. Cohen's code into their own programs.

While writing the software, "I lived on savings for a while and then I lived off credit cards, you know, using those zero percent introductory rates to use one credit card to pay off the previous card," Mr. Cohen said.

The first usable version of BitTorrent appeared in October 2002, but the system needed a lot of fine-tuning. Luckily for Mr. Cohen, he was living in the Bay Area at the time and his project had attracted the attention of John Gilmore, the free-software entrepreneur, who had also been one of the first employees at Sun Microsystems. Mr. Gilmore ended up helping Mr. Cohen with some of his living expenses while he finished the system.

"Part of what matters to me about this is that it makes it possible for people with limited bandwidth to supply very popular files," Mr. Gilmore said in a telephone interview. "It means that if you are a small software developer you can put up a package, and if it turns out that millions of people want it, they can get it from each other in an automated way."

BitTorrent really started to take off in early 2003 when it was used to distribute a new version of Linux and fans of Japanese anime started relying on it to share cartoons.

It is difficult to measure BitTorrent's overall use. But Steven C. Corbato, director of backbone network infrastructure for Internet2, the high-speed network consortium, said he took notice in May. "We started seeing BitTorrent traffic increase right around May 15, 2003, and by October it was above 10 percent of the traffic," he said.

Data for the week of Jan. 26, which Mr. Corbato said was the latest reliable information, showed that BitTorrent generated 9.3 percent of the total data traffic on Internet2's so-called Abilene backbone, which connects more than 200 of the nation's biggest research universities, in addition to laboratories and state education networks. By contrast, no other file sharing system registered more than 1 percent of the traffic, though Mr. Corbato said his network might be underreporting the use of those other services.

Just a few months ago, however, that success still had not translated into dollars for Mr. Cohen.

"This past September I had, like, no money," he recalled. "I was just scraping along and doing the credit card thing again."

But unknown to Mr. Cohen, BitTorrent was serving as a job application. Out of the blue, he heard from Gabe Newell, the managing director of Valve Software, based in nearby Bellevue, Wash. Valve is developing what gaming experts anticipate will be a blockbuster video game, Half-Life 2, but it is also creating an online distribution network that it calls Steam. Because of Mr. Cohen's expertise in just that area, Valve offered him a job. He moved to Seattle and started work in October.

"When we looked around to see who was doing the most interesting work in this space, Bram's progress on BitTorrent really stood out," Mr. Newell said. "The distributed publishing model embedded in BitTorrent is exactly the kind of thing media companies need to build on for their own systems."

All along, Mr. Cohen had accepted donations from BitTorrent users at his Web site, bitconjurer.org, but the sum had been minimal. In October, however, Mr. Cohen's father prevailed on him to ask a bit more directly. Now, Mr. Cohen said, he is receiving a few hundred dollars a day.

"It's been a pretty dramatic turnaround in lifestyle in just a few months, with the job and the donations coming in," Mr. Cohen said. "It's nice."

According to survey data from the Pew Internet and American Life Project, file sharing is on the wane, apparently as a result of the music industry's legal offensive. Last May, 29 percent of adult Internet users in the United States reported that they had engaged in file sharing; that figure dropped to 14 percent in a survey conducted in November and December. Nonetheless, the ranks of the BitTorrent faithful - whether anime fanatics, Linux users, Deadheads or movie pirates - appear to be growing. And some are quite thankful to Mr. Cohen.

"I think Bram is going to be like Shawn Fanning in terms of the impact this is going to have," said Steve Hormell, a co-founder of etree.org, a music-trading site that predates the file-sharing phenomenon, referring to the inventor of the original Napster service. "It is a bit of paradigm shift and I can't stress the community aspect of it enough. You have to give back in order to get. Going back 15 years, that's what the Internet was all about until the suits came along."

Not surprisingly, the movie industry is not amused. "BitTorrent is definitely on our radar screen," Tom Temple, the director for Internet enforcement for the Motion Picture Association of America, said in a telephone interview. While the association first became aware of the technology about a year ago, BitTorrent's surging popularity prompted the group to start sending infringement notices to BitTorrent site operators in November.

"We do have investigations open into various BitTorrent link sites that could lead to either civil or criminal prosecution in the near future," Mr. Temple said.

For his part, Mr. Cohen pointed out that BitTorrent users are not anonymous and that their numeric Internet addresses are easily viewable by anyone who cares. "It amazes me that sites like Suprnova continue to stay up, because it would be so easy to sue them," he said. Using BitTorrent for illegal trading, he added, is "patently stupid because it's not anonymous, and it can't be made anonymous because it's fundamentally antithetical to the architecture."

That said, Mr. Cohen is not in the nanny business.

"I'm not going to get up on my high horse and tell others not to do it because it's not my place to berate people," he said. "I just sort of watch it with some amusement."
http://www.nytimes.com/2004/02/12/te...ts/12shar.html


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Justice Department Asks FCC To Address VoIP Wiretapping
AP

The Justice Department has asked federal regulators to delay setting rules for carrying phone calls over Internet connections until they address how those conversations can be monitored.

FBI Deputy General Counsel Patrick W. Kelley made the request in a letter to the Federal Communications Commission.

``We look forward to working with the FCC on this matter of paramount importance to the law enforcement and national security interests of the United States,'' Kelley wrote on behalf of the FBI, Drug Enforcement Administration and Justice Department.

FCC spokesman Richard Diamond declined to comment on the letter.

The FCC is looking at how to regulate ``Voice over Internet Protocol,'' or VoIP. The technology allows users to transmit calls through high-speed Internet connections, known as broadband.

In some cases, a conventional phone, plugged into a special jack, is used to dial in. Other VoIP systems allow users to bypass the conventional telephone network entirely.

Law enforcement officials are concerned the new technology won't allow them to listen to calls the way they can now wiretap conventional phones. A 1994 law requires phone companies building digital networks to include surveillance capabilities, but there are no similar standards for VOIP technology.

Before they can place a tap on a phone, law enforcement agents must first obtain a court order. Some privacy advocates say they are concerned that VoIP wiretaps may also pick up e-mail and other data sent over the same Internet connection.

The FBI letter was sent to the FCC last week. The five-member commission is scheduled to discuss VoIP at its meeting next Thursday.

A small Long Island VoIP company and industry giant AT&T have pressed the FCC to issue the rules. As their businesses grow, they want to know whether they will be subject to the same regulations and fees as conventional phone service.

Jeff Pulver, chief executive officer of Melville, N.Y.-based Free World Dialup, said he already has met with the FBI and offered to work with law enforcement.

``The FBI is trying to get a handle on this new form of communications,'' Pulver said. ``There's a lot of opportunity to learn and to work together, which is going to happen.''

Among the issues before the FCC are whether customers who make phone calls over the Internet should have to pay the same fees as conventional callers for 911 emergency services and delivery of telephone service to poor and rural areas, schools and libraries.

In a speech last month, Chairman Michael Powell said law enforcement's views must be taken into account in any commission rules, even as he warned against over-regulating the nascent technology.

``Regulation can smother the risk-taking oxygen young entrepreneurs need to survive,'' he said. ``It can weigh down innovation with forms and filings and drain capital by adding significantly to the cost of service. And the cost of government compliance is higher and you get less competitive prices for consumers.

``Yes, there will be issues as Internet voice becomes more widely adopted. You will need to assure the legitimate concerns of public safety and law enforcement are addressed.''
http://www.siliconvalley.com/mld/sil...al/7884914.htm


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Playing Games With VoIP
David Becker and Ben Charny

While the giants of the telecom industry scramble to stake a claim on the nascent market for making phone calls over the Internet, Microsoft and Sony have already discovered the first breakthrough application: talking smack to other virtual commandos.

Online services for Microsoft's Xbox game console and Sony's PlayStation 2 have created the first major consumer application for voice over Internet Protocol (VoIP) service, enabling thousands of hours of daily chat for online combatants. While a far cry from the business and home installations seen as the major market for VoIP services, online gaming is providing valuable early clues about how to deliver such services cheaply and effectively enough to entice consumers.

But VoIP isn't just for playing games. There are now about 2.5 million U.S. residents making phone calls via the Internet, whether with VoIP or a less elegant method of broadband telephony that relies on traditional circuit-switched telephone network equipment.

Getting voice to work was another matter, however. In VoIP, each second of a phone conversation is broken up into about 50 packets of data that have to travel over the Internet, arrive at the same Internet Protocol address, and then be reassembled successfully. Crowded networks and lost packets are common. "Voice had been tried in a number of PC games, and it was very cumbersome and difficult to configure," he said. "There was some healthy skepticism about whether we could get this to work."

The solution adopted by both Microsoft and Sony was to use a peer-to-peer version of VoIP, in which consoles connect directly to each other to exchange voice data instead of transmitting it over a network. Similar approaches have been promoted by a few VoIP carriers, including start-up Skype. But the peer-to-peer approach is considered generally inappropriate for business environments, where client software varies and multiple voice streams have to be accommodated.

Such concerns don't apply with game consoles, however, because the client software is identical on every system, and traffic is limited by the capacity of the game. For all the concerns about bad voice quality, Skype has resonated with consumers. It has been downloaded 6 million times.

"We had a big debate about whether voice should go all through the service or whether it should be peer to peer," Henson said. "Our ambition was to be serving many millions of users, and the topology of that design made it pretty clear peer to peer was the right choice."

Sony's SOCOM series uses a similar peer-to-peer system to enable voice chat. Seth Luisi, senior producer at SOCOM, said one of the keys to making a peer-to-peer approach work was to develop efficient software codecs to compress and decompress voice traffic.

"When I was looking for a voice solution, there wasn't really anything that fit," he said. "There weren't a lot of good voice codecs out there, so we did our own...Once the service was running, I immediately got a lot of phone calls from people wanting to know how we did it."

Henson describes similar software tweaking to make Xbox Live voice-friendly. "We put some special sauce into our front-end servers--that let us do some magic," he said.
http://zdnet.com.com/2100-1103_2-5154140.html


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FCC To Weigh In On VoIP Regulation
Ben Charny

Federal regulators this week are expected to issue their first major decision on Internet phone services, in a closely watched decision that could reshape the telecommunications industry.

At a meeting scheduled for Thursday, the Federal Communications Commission is widely expected to contend that companies that sell phone services based on voice over Internet Protocol (VoIP) technology aren't subject to traditional telephone rules.

The FCC is then expected to open a 12-month to 18-month public-comment period to help decide what to do next, sources familiar with
agency's plans said.

The FCC has yet to disclose its position. Still, commission watchers said they believe that the outcome is not in doubt, given the outspoken antiregulation views several commissioners aired prior to the ruling. Chairman Michael Powell and at least two FCC commissioners on the five-member board have said publicly that they believe that modern telephone laws don't apply to VoIP services.

"When it comes to nascent services such as VoIP, we should employ the regulatory equivalent of strict scrutiny.

We should make sure that our rules are narrowly tailored to the governmental interests at stake," FCC Commissioner Kathleen Abernathy said recently.

The FCC's decision is expected to derail state-by-state efforts to regulate VoIP providers, cementing a federal court decision issued last year that found that VoIP provider Vonage was not a telephone service and was thus not subject to phone rules the Minnesota Public Utilities Commission set.

Although the FCC won't likely slap traditional phone rules on VoIP services, the agency may still regulate Internet calls. For example, some industry groups are already lobbying for consideration of new rules that would require VoIP providers to offer access for the disabled, support 911 emergency services and allow law enforcement to intercept calls, among other things.

At the same time, VoIP providers are hopeful that the agency will, for the foreseeable future, steer clear of ordering price regulations and other "economic sanctions" that traditional phone companies must obey.

The FCC's expected decision Thursday comes in response to a petition filed last year by Free World Dialup founder Jeff Pulver, who asked the FCC to declare that his free Internet phone service isn't subject to traditional phone regulations.

"I just wanted to ask a simple question a year ago: 'Do phone rules apply?'" Pulver said. "In my wildest dreams, I didn't think it would become something as big as this."

Internet phone services have existed for years, but they have recently gained prominence, thanks to improvements in quality and ease of use. While traditional phone services create an end-to-end connection between callers, VoIP breaks up conversations in packets that are routed independently across a network and reassembled on the other end. VoIP calls are cheaper than circuit-switched calls, because they make more efficient use of network resources. But the biggest cost savings from VoIP come simply because the calls are usually not subject to taxes that apply to the old telephone system.

Regulators are already worried about revenue shortfalls, as more calls shift to IP-based systems. Consumer VoIP services from companies such as Vonage, 8x8 and VoicePulse have begun to sign up tens of thousands of residential customers. VoIP subscriptions could soar, as cable companies begin to market broadband phone services to their customers, threatening local taxes, if large numbers of people switch over and cancel traditional phone service.

As IP-based voice traffic surges, other sticky policy issues are waiting in the wings. Already, more than 11 percent of long-distance calls travel at least part of the way over IP networks, a number that's expected to jump to more than 50 percent by 2007. That trend raises significant policy issues related to connection fees paid between carriers for completing each other's calls.

Signaling the importance of the issue, AT&T last year filed a petition with the FCC, seeking to exempt its IP-based traffic from some interconnection charges. The FCC is still weighing its response in that case, and observers said they do not expect the agency to issue an answer by Thursday.

Cathy Martine, in charge of the company's VoIP rollout, says it could save AT&T about $10 billion a year. "We'll reinvest it and make our network better," she said.

The regulatory makeover is another example of how technology has outpaced FCC regulation. The FCC faces a number of glaring examples of just how Internet dialing has made its rules obsolete and, at the same time, how it threatens the way it funds public services like 911. Perhaps the best example: universal service fees, which telephone operators pay as a percentage of service revenues to subsidize rural telephone expansion.

On traditional phone networks, calls travel the same series of circuit switches, so it's easy to determine whether a call is local or over a long distance. But that's not the case on the Internet. Each of the approximately 50 packets of data that represent a single second of an Internet phone call could take a different pathway, sometimes halfway around the world, to avoid Internet traffic jams. The FCC's rules, rooted in geography, can't cope.

One of the most important regulatory problems that face the FCC is creating a definition of a VoIP provider.

The National Cable & Telecommunications Association (NCTA), which represents cable interests, has developed a test that it is lobbying the FCC to use, and that's gaining some favor inside the beltway, sources said.

Lobbyists said there should be at least three criteria met before labeling something a VoIP provider: It gives its customers a 10-digit telephone number; it allows customers to make calls to and from the regular phone network; and its service is IP-based.

That test casts quite a wide net. It would include most U.S. telephone service providers, which now routinely use the Internet to complete long-distance phone calls, as well as cable companies that use VoIP to enter the local phone market, plus Vonage, 8x8, VoicePulse or other subscription services that connect broadband subscribers to each other and the regular phone system.

It wouldn't include the few hundred thousand VoIP devotees who use what's called Internet-to-Internet methods such as Skype, Free World Dialup and instant-messaging clients, which completely avoid the traditional phone networks.

"Only a regulatory framework that is minimally burdensome can create the right incentives and a favorable climate in which service providers can invest, innovate and deploy VoIP services," the NCTA wrote in a recent white paper, making the rounds among the telecommunications sector's elite.

Whether VoIP is to be regulated by states or the federal government is another longer-term policy issue. On this front, VoIP providers both large and small, in addition to FCC commissioners, agree that VoIP is subject to federal controls.

Under a federal umbrella, VoIP providers would face only one policy. Currently, about a dozen states have expressed interest in crafting their own rules for VoIP, the beginnings of a possible patchwork of slightly different regulations that could slow down the pace of VoIP's spread.

With just 300,000 people in North America now paying for VoIP service, Abernathy and others feel that it would be wise to keep VoIP under the jurisdiction of the federal government, where it can be coddled with light regulations and give it enough room to expand from coast to coast.

"As VoIP providers gear up to roll out services regionally or nationally, they should not be burdened with a patchwork of disparate state regulations," Abernathy recently said.

The FCC also has shorter-term problems they have indicated they will address more immediately.

One is what to do about universal service. Both FCC Commissioner Kevin Martin and AT&T, which will use VoIP to launch a local phone service, want to base universal service not on revenue but on the number of telephone numbers that a service provider has.

VoIP luminaries want to use the FCC overhaul to redirect universal service to fund broadband expansion, an old idea that's gaining new support.
http://news.com.com/2100-7352-5156819.html


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F.C.C. Begins Rewriting Rules on Delivery of the Internet
Stephen Labaton

The Federal Communications Commission began writing new rules today that officials and industry experts said would profoundly alter both the way the Internet is delivered and used in homes and businesses.

In one set of proceedings, the commission began writing regulations to enable computer users to gain access to the Internet through electric power lines. Consumers will be able to plug their modems directly into the wall sockets just as they do with any garden variety appliance. Officials said the new rules, which are to be completed in the coming months, would enable utilities to offer an alternative to the cable and phone companies and provide an enormous possible benefit to rural communities that are served by the power grid but not by broadband providers.

In a second set of proceedings, commissioners began considering what rules ought to apply to companies offering Internet space and software to enable computer users to send and receive telephone calls.

A majority of the commissioners suggested that the new phone services should have significantly fewer regulatory burdens than traditional phone carriers. The agency also voted 4-to-1 to approve the application of a small Internet company, Pulver.com, asking that its service of providing computer-to-computer phone service not make it subject to the same regulations and access charges as the phone carriers.

Industry experts say that neither the phone service nor the broadband delivery systems offered by electric companies will take any sizable market share for at least the next two years. But in moving forward with the new regulations, they said the agency was reducing regulatory uncertainty and encouraging major companies and investors to make investments in the new technologies to enable them to move to market more quickly.

The F.C.C. chairman, Michael K. Powell, and his two Republican colleagues on the commission said the agency's decisions on the two sets of rules and the Pulver application would ultimately transform the telecommunications industry and the Internet.

"This represents a commitment of the commission of bringing tomorrow's technology today," Mr. Powell said. He added that the rules governing the new phone services were intended to make them as ubiquitous as e-mail, and at possibly a significantly lower cost than traditional phones, since the services would have lower regulatory costs.

A Republican commissioner, Kathleen Q. Abernathy, said that the agency and industry "stands at the threshold of a profound transformation of the telecommunications marketplace" as more companies — including such giants as AT&T and Verizon — move from circuit-switching phone technology to Internet-based technology.

But one Democratic commissioner, Michael J. Copps, raised objections to the Pulver petition and questioned the underlying themes of deregulation in the two rulemaking proceedings. He said that they had set the agency on a course that could effectively rewrite the Telecommunications Act of 1996 and make it easier for the incumbent phone companies to escape necessary regulation.

Mr. Copps also criticized the majority of the commission for rejecting a request by law enforcement agencies that the F.C.C. first work out the legal and technical problems in monitoring phone calls over the Internet before granting Pulver's application or considering new rules for the Internet-based phone services.

"I believe it is reckless to proceed, and I cannot support this decision at this time," he said of the Pulver application. "The majority apparently prefers to act now and fix law enforcement issues later — along with universal service, public safety, disability access and a host of other policies we are only beginning to address."

Mr. Powell replied pointedly to Mr. Copps's criticism that the agency was rewriting the Telecommunications Act by offering a new deregulatory climate that the old phone companies might seek to take advantage of.

"We can talk about rewriting the Telecommunications Act," he said. "But the Telecommunications Act is nine years old and it is being rewritten by technology."
http://www.nytimes.com/2004/02/12/te...ND-NET.html?hp


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Spam May Be Driving Shoppers Away From Internet
Reuters

BRUSSELS — The exponential growth of unsolicited junk e-mail — better known as spam — is shaking consumer confidence in the Internet and may hamper growth of the online economy, according to officials gathered Monday at a global anti-spam meeting.

A survey published by the Trans-Atlantic Consumer Dialogue, a consumer group, showed that 52% of respondents were shopping less on the Internet or not at all because of concerns about receiving unsolicited junk e-mail.

"It is very clear that the majority of citizens are very troubled by unsolicited commercial e-mails," said the survey, which was released at a global anti-spam meeting led by the Organization for Economic Cooperation and Development.

"It is also very clear that bona fide businesses are losing money because the disreputable image of spam is making consumers uneasy about engaging in e- commerce," the survey said.

Data from anti-spam software company Brightmail Inc. of San Francisco showed that spam accounts for half of all e-mail traffic. Filtering and clearing up e-mail inboxes is a rising cost for business and consumers.

Only 17% of the 20,000 respondents to the consumer group's survey said they thought their spam filters worked well. Another 21% did not even know whether their e-mail program had a filter.

An overwhelming majority of those surveyed said they either hated or were annoyed by unsolicited junk e-mails and wanted them to be banned.

"If you continue at this pace, in five years from now I do not think the Internet will be very popular," said Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington.

The OECD is calling for governments to pool resources to tackle the scourge of nuisance offers of sex aids and cheap loans. The e-mails also can be used to spread malicious viruses.

The problem costs European Union and U.S. companies more than $11.5 billion a year in lost time and productivity, according to the American Chamber of Commerce to the EU. The United Nations Conference on Trade and Development estimates that the global economic cost could reach $20 billion.

Governments are trying to tackle the problem through a mixture of regulations, codes of conduct for business and advanced technical solutions.

"Most governments do view the Internet as a key to the global economy," said Peter Ferguson, chairman of the OECD working party on information security and privacy. "Spam has certainly the capacity to interfere with that."
http://www.latimes.com/technology/la...nes-technology


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Online Song Sales, Though Rising Fast, Are at Most a Hopeful Blip
Jeff Leeds

John Mayer is basking in a new kind of stardom: The Grammy-winning troubadour is one of the most popular acts on Apple Computer Inc.'s iTunes music service.

In December, the 26-year-old singer captured all top three spots on the service's chart with live songs he released exclusively to Apple. And in the last nine months, the online versions of Mayer's singles have sold 161,000 copies.

But even with such popularity, Mayer's download sales equate to only about 16,000 albums — or a fraction of the 1.3 million copies that his latest CD, "Heavier Things," has sold for Sony Corp.'s Columbia Records, according to Nielsen SoundScan data.

It all goes to show that record companies looking for paid downloads to fill the void left by dwindling CD sales may be in for a long wait.

Global record sales dropped to an estimated $28 billion last year from a 1999 peak of roughly $40 billion. Paid downloads are rising on services such as iTunes, Roxio's Napster and Real Networks' Rhapsody but have barely begun to cover the shortfall. Industry analysts estimate that total U.S. sales from online music stores and subscription services were only about $60 million last year.

So label executives are trying to turn online sales into an everyday practice among consumers. The unofficial kick-off of the effort comes today, when PepsiCo Inc. is expected to air a 45-second ad during the Super Bowl inviting an expected 90 million viewers to redeem soda caps for free songs at the Apple service.

As many as 100 million songs will be given away in the promotion, and executives are expecting a redemption rate of 10% to 20%.

Upbeat executives are projecting that the U.S. online music business could generate $400 million or more this year. That would mean, of course, luring fans away from file-sharing networks, where piracy flourishes.Industry officials are hoping a massive legal assault against digital pirates and more Pepsi-style promotions will help turn the tide.

"When it came to downloading illegally, that was a slow process. It took a while to hit big, and I think it's the same thing with the turnaround" and a shift to legal online buying, said Mayer, who counsels patience for artists and executives alike.

"It might take another five years to get back in the other direction," he said. "The best we can do is put music out there, point people to where it is and hope they find it."

Industry leader Universal Music Group recorded CD sales last year of more than $5 billion with hits from such acts as 50 Cent and 3 Doors Down. The Vivendi Univeral unit's U.S. online sales were $8 million to $10 million, sources said.

British music giant EMI Group, home to Norah Jones and Coldplay, said it generated about $3.8 million in worldwide digital sales for the six months through Sept. 30, up from about $1.3 million for the prior six months.

No Bonanza Yet

Such modest figures are a reality check for executives who first ignored the power of the Internet, and then suddenly envisioned a digital bonanza reaped from fans who would buy music on their cellphones and zap them to a computer or TV set-top box. In 1999, Forrester Research was predicting U.S. sales of song downloads alone would reach $1.1 billion by 2003.

Today, online for-pay services continue to face stiff competition from unauthorized file-sharing networks, where the bulk of the history of recorded music is floating around free for the taking. And a thicket of legal and logistical troubles continue to hamper expansion.

Some artists have slowed the process by insisting that their albums not be broken up into singles available for individual sale. (Indeed, such concerns prevented Mayer's "Heavier Things" from becoming available on iTunes until Dec. 17, more than three months after it was released in stores.)

Record labels, music publishers and artists are still bickering about how much money each of them should receive from the sale of a digital track. As a result, the catalogs of the industry services are lacking the works of such acts as the Beatles and Led Zeppelin.

Complaining that too many people "are at the table and they're all competitors," Marc Geiger, veteran music talent agent and co-founder of online music firm Artistdirect Inc. said: "They'd rather kill each other half the time than win."

Indeed, even the early commerce rests on a series of temporary truces between warring factions. A two-year settlement designed to put off a fight over how fees from online subscription services would be divvied up, for example, expired in October, with music publishers' pay rates still undetermined.

Meanwhile, some of the hottest artists have limited the amount of time their record companies can sell digital downloads, waiting to see how the royalties will flow from online sales.

Punk band the Offspring, for example, agreed to sell their music on iTunes for only six months, sources said.

Such core issues may not be resolved for years.

"We all want to encourage online services, because we think it's a major part of the future. But we're going to have to sort out the rights," said music attorney Jay Cooper, who represents such acts as Sheryl Crow. "There's going to have to be a complete reformation of the contracts, if you want to know the truth. The battle may continue while records are being sold."

The conflicts are likely to be amplified as the labels seek to expand online services beyond the U.S. to foreign markets, where the industry earns two-thirds of its revenue.

Outside the U.S., the services will confront a web of different licensing procedures and copyright rules.

In Europe, for example, the services may have to secure rights from music publishers and set up payment systems in each nation individually. And while the major labels are happily licensing U.S. online services, iTunes and other services will have to start from scratch in Japan, where artist management firms — not the labels — control many artists' master recordings.

Global expansion probably will be hampered by more disputes with artists, some of whom are likely to challenge the customarily lower royalties they receive for foreign CD sales. Executives also say the payoff may be smaller abroad, because most international territories have far fewer Internet-wired homes.

"All of a sudden I have to look at the different copyright laws, I have to put everything in a different language and the market opportunity is smaller," said Sean Ryan, vice president of RealNetworks music services.

Still, the initial burst of sales has prompted many in the industry to raise their estimates of how big the market will be.

Alain Levy, chairman of EMI Group's recorded-music division, said that six months ago, he believed online sales would account for as little as 5% of his company's sales in five years. Now, he says, it will be at least 10% — and as much as 25%.

"We've learned that the consumer wants their music in a different form and they're ready to pay for it," Levy said. "The perception has gone from doom and gloom, to, 'Now, it's a new world and everybody's going to pay for music and use music all the time.' The truth is somewhere in the middle."
http://www.latimes.com/technology/la...nes-technology


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Pirated Movies Flourish Despite Security Measures

The more studios try to stifle bootlegging, the more technology works to undermine them.
Lorenza Muñoz and Jon Healey, Greg Krikorian and Patrick Day

Hollywood's all-out war against movie piracy is turning into a big-budget bomb, with illegal copies of virtually every new release — and even some films that have yet to debut in theaters — turning up on the Internet.

Sophisticated computer users currently can download pirated versions of titles ranging from "Bad Santa" to "Master and Commander: The Far Side of the World." While some of the versions are crude copies made by camcorders aimed at theater screens, a surprising number are nearly pristine transfers.

The abundance of bootlegs arrives just as the movie studios have launched their most aggressive campaign yet to protect their business from the rampant downloading that has plagued the record industry. As part of this antipiracy initiative, the studios have done everything from banning the distribution of free DVDs to awards voters to stationing security guards equipped with night-vision goggles inside Hollywood premieres to spot camcorder users.

The steps may have made some thievery more difficult, but overall, piracy appears to be up from previous years, when an avalanche of year-end awards DVDs and videos, or "screeners" as they are called, flooded the entertainment and media communities. In fact, the new security measures seem only to have emboldened some pirates.

The Motion Picture Assn. of America says that last year it found at least 163,000 Web sites offering pirated movies. The number is likely to go up to 200,000 sites by the end of the year, said Tom Temple, the association's director of worldwide Internet enforcement.

A major source of movies online is an underground network of groups that specialize in bootlegging films, piracy experts say. These "ripping crews" — which recruit members around the world to obtain, edit, transfer and store films — compete with each other to be the first to obtain a movie, the experts say. They frequently are assisted by people connected to the movie industry, whose numbers include cinema employees, workers at post-production houses and friends of Academy members.

Pirates usually copy a movie first by sneaking a digital camcorder into a movie theater, sometimes the very auditorium in which antipiracy public service announcements have just played before the feature attraction. These copies yield something less than DVD-quality results. After this version appears online, crews will continue to compete to deliver a true DVD-quality version before it is officially released to video stores.

Piracy-monitoring firms say the advancing technology of digital camcorders is yielding dramatic improvements in the earliest versions of pirated movies. Although these efforts vary, the best ones come close to the picture and sound quality of DVDs.

Mark Ishikawa, the chief executive of BayTSP, a Los Gatos firm that helps studios combat online piracy, said, "We have seen some copies of 'Finding Nemo' that look like they were DVDs, yet after forensics we determined they were camcorders." Said another antipiracy expert who asked not to be identified: "The quality of non- DVD screeners has increased so much in the past year, the DVD screener ban is too little, too late."

The crews store films on powerful computers connected to the Internet but not accessible to the public. But their movies quickly trickle down to places open to the Internet savvy, such as Internet chat rooms and news groups. They take pains to hide their identities and locations, and so far have remained outside the reach of federal enforcers and studio lawyers. The Justice Department has struck only a glancing blow against this type of piracy, prosecuting members of several so-called "warez" groups, loose confederations of online partners who concentrate on copying computer software and games.

Nevertheless, government agencies are paying attention. The FBI began investigating the unauthorized release to the New York Post of Mel Gibson's "The Passion of Christ" two weeks ago; by the time that probe began, federal authorities already had launched a broader investigation into the unauthorized copying of numerous other first-run films, according to sources.

Adding to the magnitude of the problem is the fact that some of these bootleg copies are pirated from inside the entertainment industry itself.

Piracy from such an array of sources means that there now are more Internet movie offerings than at the world's largest megaplex. Quentin Tarantino's "Kill Bill Vol. 1" is available in two versions, an American/European edition (with portions in black and white) and one in Japanese (all in color). Other titles available include "The Rundown," "Timeline," "21 Grams," "The Missing," "The Cat in the Hat," "Thirteen" and "Pieces of April."

The box-office hit "Elf" was available four days before its Nov. 7 release in theaters, taken from a digital camcorder recording made in a theater, with the sound most likely recorded from a cinema seat audio jack used by hearing-impaired moviegoers. Films not yet in theaters, including "Girl With a Pearl Earring" and "Monsieur Ibrahim," were taken from DVD screeners sent out in advance of the films' release.

As part of the campaign against movie piracy, the MPAA on Sept. 30 banned the seven major studios and their specialty film divisions from sending out free movies to anyone but the 5,800 Academy Awards voters. Oscar voters, furthermore, can only receive specially marked videocassettes and not DVDs, which provide better masters for bootlegs. The move infuriated the makers of lower-budget movies and less conventional fare, who feared the true motive for the ban was to bring Oscar attention back to big studio releases.

Movies from independent companies that are not part of the MPAA are turning up in a number of Internet sites. DVD copies of all of the movies being pushed for awards consideration by Lions Gate Films, for example, are available illegally online. Lions Gate began sending out screeners to an array of awards voters two weeks ago. The studio declined comment Wednesday.

The motion picture association's Temple said the main point of the ban was to delay the arrival of high-quality copies of movies online as long as possible. It's too early to tell the impact of the new rules, he said, because the studios have just started sending out screeners. But a few copies of DVD and VHS screeners have started to pop up online; for example, a VHS copy of United Artists' "Pieces of April" hit the Net on Thanksgiving.

The piracy expert who asked not to be named said the MPAA's action "has of course caused a shortage of real, true DVD screeners of movies" online. "But it doesn't matter because there are copies out there that are good enough…. Some of them even exceed the quality of VHS screeners."

Several other experts agreed that the new rules have had absolutely no effect on the availability of movies online.

"There's no difference," said Kevin Moylan, senior vice president of the antipiracy firm Vidius Inc. of Beverly Hills. "The thing to remember is that all it takes is one copy. So even an authorized screener, one of them is going to perpetrate a leak."

The MPAA ban is now at the center of a lawsuit in New York, where on Wednesday a federal judge heard a full day of testimony on a challenge by a group of independent filmmakers to the screener edict. MPAA President Jack Valenti testified that the prohibitions were necessary to combat the illegal copying and sale of videotapes and DVDs.

But two independent film producers who are among the plaintiffs in the case testified that the distribution of screeners is essential to their strategy of marketing independent films based on good reviews, word of mouth, mentions on critics' Top 10 lists and, eventually, awards nominations.

"The hardest thing with my movies is getting people to see them…. [It's] not that people would want to steal them," said producer Ted Hope, who has prize aspirations for two films this year, "American Splendor" and "21 Grams."

He and fellow indie producer Jeff Levy-Hinte, who has similar hopes for his film "Thirteen," told the judge that the major studios would have a big advantage if lower- budget films like theirs cannot send thousands of copies to opinion-makers and voters who may never see the works in theaters.

The organization's vice president supervising its anti- piracy efforts, former FBI agent Kenneth Jacobson, later told the judge that the film studios were trying to avoid what happened in the music industry, in which illegal Internet downloading is widely seen as cutting sharply into sales.

Authorities around the world already have seized "35 million [illegally copied movies] so far this year," Jacobson testified, adding that film piracy has become so rampant in countries such as China, Russia and Pakistan that the legal markets there have all but evaporated.

Miramax's Harvey Weinstein, who has used promotion campaigns to gain multiple Oscars for films such as "Shakespeare in Love," submitted a declaration stating that "a successful awards season can make the difference between a movie grossing $5 million at the box office and a movie grossing $20 million."

U.S. District Judge Michael B. Mukasey said he will rule Friday whether to grant a temporary restraining order barring the MPAA from carrying out the ban.

The MPAA and California law enforcement officials plan to announce today how they will enforce a new state law barring the illegal recording of motion pictures in movie theaters. Similar federal legislation has been proposed.
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