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Old 22-04-04, 11:17 AM   #1
JackSpratts
 
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Default Peer-To-Peer News - The Week In Review - April 24th, '04

Quotes Of The Week

"Between January and mid-March this year, Americans spent $1.78 billion at the box office. But in the same period they spent $4.8 billion — more than $3 billion more — to buy and rent DVD's and videocassettes.

"Six years ago, before DVD mattered, Americans spent $18 billion on movie videocassettes. Last year, when the DVD ruled, they spent $22.2 billion on videos and DVD's, according to DVD Exclusive, adding some $4 billion of new consumer spending to the entertainment pot without visibly affecting sales at the box office."
– Sharon Waxman

"[At U.S insistence China] agreed to increase the range of violations of intellectual property rights that are subject to criminal investigations and penalties, [however] piracy is carried out on such a large scale that it may be unstoppable." - Elizabeth Becker

"The culture of theft that turns around MP3 is detestable, and I’m very disappointed about that. But neither MP3 nor peer-to-peer are monsters. They are terrific technologies for distributing content." - Leonardo Chiariglione, Founder, Chair, Moving Picture Experts Group (MPEG)

"My findings suggest that file sharing is not the cause of the recent decline in record sales." - Eric Boorstin

"The studios are making money hand over fist." - John Lesher

"I don’t think you can build a crack-proof system." - Leonardo Chiariglione

"When I get an exciting dload I get up extra early to check it." - Blady, ze0share member.







Justice Dept. Sweeps Suspected 'Warez' Groups
Jim Hu

The U.S. Department of Justice said Thursday that it conducted an international sweep of suspected online copyright pirates.

Dubbed "Operation Fastlink," the sweep consisted of 120 searches in 27 states and 10 countries. Officials seized 200 computers, 30 of which were alleged to have been used as storage and distribution servers, containing thousands of copyrighted works, including newly released movies and music.

The Justice Department estimated that the seized copyright material was worth $50 million.

"In the past 24 hours, working closely with our foreign law enforcement counterparts, we have moved aggressively to strike at the very core of the international online piracy world," U.S. Attorney General John Ashcroft said in a statement.

The operation specifically targeted "warez" groups, which allegedly disseminate pirated copies of computer software, games, movies and music on the Internet. Members of such groups may distribute material to "select clientele" over secure servers, and those files eventually end up on an Internet Relay Chat network or a peer-to-peer file-sharing service, according to the Justice Department.

Operation Fastlink is the latest in an ongoing campaign by law enforcement agencies around to world to target suspected warez groups. In 2001, the Justice Department and foreign agencies conducted a two-day raid that seized computers from a group named "DrinkOrDie."

The Justice Department added that Fastlink targeted a number of suspected warez groups, including Fairlight, Kalisto, Echelon, Class and Project X. Investigations were conducted in the United States, Belgium, Denmark, France, Germany, Hungary, Israel, the Netherlands, Singapore, Sweden and the United Kingdom.

Industry trade groups such as the Recording Industry Association of America, the Motion Picture Association of America, the Business Software Alliance and the Entertainment Software Association were involved with the investigation. Separately, the RIAA has filed nearly 2,000 individual lawsuits against alleged file-swappers in hopes of scaring people away from using peer-to-peer software such as Kazaa.
http://news.com.com/2100-1025-5198047.html


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Internet Technology Vulnerable to Hackers


WASHINGTON (AP) -- Researchers uncovered a serious flaw in the underlying technology for nearly all Internet traffic, a discovery that led to an urgent and secretive international effort to prevent global disruptions of Web surfing, e-mails and instant messages.

The British government announced the vulnerability in core Internet technology on Tuesday. Left unaddressed, experts said, it could allow hackers to knock computers offline and broadly disrupt vital traffic-directing devices, called routers, that coordinate the flow of data among distant groups of computers.

''Exploitation of this vulnerability could have affected the glue that holds the Internet together,'' said Roger Cumming, director for England's National Infrastructure Security Coordination Centre.

The Homeland Security Department issued its own cyberalert hours later that attacks ``could affect a large segment of the Internet community.'' It said normal Internet operations probably would resume after such attacks stopped. Experts said there were no reports of attacks using this technique.

The risk was similar to Internet users ''running naked through the jungle, which didn't matter until somebody released some tigers,'' said Paul Vixie of the Internet Systems Consortium Inc.

''It's a significant risk,'' Vixie said. ''The larger Internet providers are jumping on this big time. It's really important this just gets fixed before the bad guys start exploiting it for fun and recognition.''

The flaw affecting the Internet's ''transmission control protocol,'' or TCP, was discovered late last year by a computer researcher in Milwaukee. Paul Watson said he identified a method to reliably trick personal computers and routers into shutting down electronic conversations by resetting the machines remotely.

Experts previously said such attacks could take between four years and 142 years to succeed because they require guessing a rotating number from roughly 4 billion possible combinations. Watson said he can guess the proper number with as few as four attempts, which can be accomplished within seconds.

Routers continually exchange important updates about the most efficient traffic routes between large networks. Continued successful attacks against routers can cause them to go into a standby mode, known as ''dampening,'' that can persist for hours.

Cisco Systems Inc., which acknowledged its popular routers were among those vulnerable, distributed software repairs and tips to otherwise protect large corporate customers. There were few steps for home users to take; Microsoft Corp. said it did not believe Windows users were too vulnerable and made no immediate plans to update its software.

Using Watson's technique to attack a computer running Windows ''would not be something that would be easy to do,'' said Steve Lipner, Microsoft's director for security engineering strategy.

Already in recent weeks, some U.S. government agencies and companies operating the most important digital pipelines have fortified their own vulnerable systems because of early warnings communicated by some security organizations. The White House has expressed concerns especially about risks to crucial Internet routers because attacks against them could profoundly disrupt online traffic.

''Any flaw to a fundamental protocol would raise significant concern and require significant attention by the folks who run the major infrastructures of the Internet,'' said Amit Yoran, the government's cybersecurity chief. The flaw has dominated discussions since last week among experts in security circles.

The public announcement coincides with a presentation Watson expects to make Thursday at an Internet security conference in Vancouver, British Columbia, where Watson said he would disclose full details of his research.

Watson predicted that hackers would understand how to begin launching attacks ''within five minutes of walking out of that meeting.''
http://www.nytimes.com/aponline/tech...et-Threat.html


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Next Anti-P2P Technology? Sharks With Friggin' Laser Beams Attached To Their Heads:

The entertainment cartel has a new weapon in its war against file sharing and it's looking for willing beta-testers. News.com reports that Vivendi Universal Entertainment and Universal Music Group are talking to universities, ISPs and technology companies about testing their Automated Copyright Notice System (ACNS), a technology that can automatically cut off an individual's access to peer-to-peer networks while Internet access of individuals suspected of sharing copyrighted material. It's an interesting concept but, as Electronic Frontier Foundation attorney Fred von Lohmann notes, it's almost certain to be defeated by hacks and workarounds. "Whether it's an opening gambit for the recording industry to try to tell universities how to design their computer systems, we'll have to wait and see," von Lohmann told News.com. "The trouble I have with this, there will be countermeasures, and who is going to absorb costs to constantly modify this system to make it work? Do universities really want to be drawn into the arms race?"
http://www.siliconvalley.com/mld/sil...sv/8467648.htm


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FCC To Look At Digital Radio Piracy?
John Borland

Federal regulators appear to be making a surprise move toward proposing new content protection rules for digital broadcast radio, consumer groups said Wednesday.

In a joint letter to the Federal Communications Commission, Consumers Union and Public Knowledge asked regulators to avoid issuing new antipiracy proposals for the nascent medium before holding a strict review of technical costs and benefits.

The two groups said the letter was triggered by private information indicating the FCC was close to releasing a proposal or starting an inquiry on the issue, possibly as early as Thursday. The technology proposal would be similar to the "broadcast flag" already instituted for video, a plan that has not yet been seriously considered for digital audio, the groups said.

We "urge that the commission avoid a rush to judgment in this matter," the groups wrote. "There are neither pressing technological issues nor spectrum-related issues that require the commission's immediate action to protect digital radio content."

In comparison to other mediums, digital radio is still young enough to have barely triggered the kind of antipiracy debates already seen with the Internet and digital TV. But few believe that controversies surrounding the technology are far-off.

Digital radio, which is already beginning to broadcast in a few places around the world, turns over-the-air radio signals from analog into digital broadcasts. Its receivers better resemble computers than they do traditional radio.

Because the content is digitized, and potentially could be played on radios with processors and hard drives, people predict it will offer the ability to record CD-quality sound from airwaves or set up tracking and archiving capabilities much like TiVo. Consumers could listen for and save particular bits of music, for example.

That worries record companies, which foresee another way for consumers to get music for free, rather than purchasing CDs or songs from online stores like Apple Computer's iTunes. They suggested ideas like the audio broadcast flag in an FCC informational roundtable held earlier this year, but found little support from consumer groups or consumer electronics device makers. Most in the industry expected the issue to drop.

A Recording Industry Association of America representative had no immediate comment on the FCC's unconfirmed plans or the consumer groups' letter. A representative for the FCC could not immediately be reached for comment.

The video broadcast flag, on which an audio proposal might be based, was approved by the FCC late last year. It creates new rules that would let digital TV broadcasts include bits of data indicating whether a program could be copied and sent over the Internet. Computers and consumer electronics devices must read and obey this bit of information in order to receive digital TV signals.
http://news.com.com/2100-1027-5186980.html


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Did the RIAA Secretly Lobby the FCC for a Digital Radio Tech Mandate?
EFF

Just over a year ago, the Recording Industry Association of America (RIAA) issued a policy statement condemning government-mandated technical protection measures for digital content.

"The imposition of technical mandates is not the best way to serve the long-term interests of record companies, technology companies, and consumers," read the statement. "The role of the government, if needed at all, should be limited to forcing compliance with voluntarily developed functional specifications reflecting consensus among affected interests."

You read that right, folks: for a moment, there, the RIAA agreed with EFF.

Unfortunately, that moment appears to have passed. On Friday, our friends at Public Knowledge put in a request under the Freedom of Information Act (FOIA) to determine whether or not the RIAA has covertly been lobbying the Federal Communications Commission (FCC) for the latest government tech mandate: a "broadcast flag" for digital radio.

Explained Public Knowledge President Gigi Sohn in the media release, "There has to be a reason why the Commission was so drastically prepared to change course, and it didn't show up in the required public filings." She added that she didn't buy the RIAA's claim that the group "didn't know" it had to disclose its contact with FCC commissioners and staff.

"If the request turns up any previously undocumented communications," noted EFF Staff Attorney Jason Schultz, "the RIAA will have violated the Ex Parte disclosure laws."

Whether or not the RIAA is found to be at fault, the problem remains of convincing the FCC not to adopt yet another ill-considered government tech mandate. EFF is working with Public Knowledge and others to fight both the original broadcast flag and the push for this new mandate -- which comes in the absence of a demand for action from Congress, a record of argument in the FCC docket, and any attempt by the RIAA to work out an industry solution.
http://blogs.eff.org/deeplinks/archives/001434.php


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Levies Could Double, Group Warns
Jack Kapica

The levies imposed on blank digital media to compensate recording artists for acts of piracy could double if Canada ratifies an international copyright treaty, a coalition of interested industries warned today.

In a submission to the Standing Committee on Canadian Heritage, the Canadian Coalition for Fair Digital Access said that increases of up to 100 per cent on the levies are possible if Canada goes ahead with ratification of the World Intellectual Property Organization treaties.

If the levies were kept in place, the CCFDA said, they would have to be raised because Canada would be obligated to pay compensation to artists in other countries that signed the treaty.

Canada has signed the international WIPO treaty, but has not ratified it. To ratify the treaty, Canada must rewrite its copyright laws to conform to the international agreement.

Doing that and keeping the levies would be counterproductive to the interests of Canada's recording artists, the coalition argued. Foreign artists have greater air play than Canadian artists, and so most of the revenue would go directly to rights holders outside the country.

"Ratifying WIPO without repealing the levy would not only create an extra financial burden on consumers and businesses, but ... it would provide little or no additional assistance to Canadian artists," the CCFDA said in a statement.

The CCFDA is an organization of manufacturers, retailers and distributors seeking to repeal Canada's private copy levy and replace it with a more equitable system. Its members include AMD, Apple Canada, Best Buy Canada/Future Shop, Costco Wholesale, Dell Canada, HP Canada, InterTAN/Radio Shack, Intel Canada, London Drugs, Micron, Retail Council of Canada, Sony Canada, STAPLES Business Depot and Wal-Mart Canada.

The group says it would be ready to support WIPO ratification if the levy were repealed or if the federal government committed itself to phase out the levy as digital-rights management technologies become more widely used by the recording industry.

The levy allows the Canadian recording industry to be compensated by consumers and businesses whether or not they copy music.

The CCFDA called Canada's copyright legislation "outdated" and said the current levy system leaves Canadians "unfairly penalized." The coalition urged the government to support measures that provide Canadian copyright holders with fair payments.
http://www.globetechnology.com/servl...ry/Technology/


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File Sharing Fight Varies Across Universities
Elizabeth Thomas

In the wake of several rounds of lawsuits against illegal file sharers, colleges and universities are taking steps to curb the practice among students.

According to the 2003 nationwide Campus Computing Survey, nearly two-thirds of schools who participated reported having institutional policies in place designed to reduce students' illegal downloading of copyrighted music and movie files.

The policies differ among universities. Schools like the University of Rochester and Pennsylvania State University have provided students with a university-supported legal alternative to file sharing that allows students to download and purchase MP3s.

Other schools simply have policies that comply with the law, under which sharing copyrighted files is completely illegal without compensation. According to the survey, almost four-fifths of universities -- 80.9 percent of public universities and 77.5 percent of private universities -- have campus codes of conduct that focus on downloaded commercial content.

Despite these statistics, there is no official policy against file sharing at Penn. "We try to stay away from technical details in our policies because technology changes so rapidly," said Dave Millar, Penn's information security officer.

However, Penn's policies expressly forbid copyright infringement of any kind. "We maintain that infringement is against both our own policies and the law," Millar said.

The University of North Carolina at Chapel Hill has a specific anti-file-sharing policy that defines fair use and copyright infringement for students and forbids using any programs that "generate excessive network traffic apart from educational purposes."

As an example, the policy cites Kazaa, a file-sharing program students often use to download music and movie files.

In addition to prohibiting file sharing, some schools have adopted strict enforcement policies.

Students who use the University of Michigan's technology in ways the school deems inappropriate are subject to "termination of Internet access, disciplinary review, expulsion, termination of employment, legal action or other disciplinary action" from the school.

The Recording Industry Association of America has encouraged colleges to take steps to curb illegal file sharing. Surveys have shown that schools are starting to do so.

"The 2003 data confirm that colleges and universities are making significant efforts to respond to the concerns of media industry officials regarding the unauthorized distribution and downloading of music, video and other commercial content on campus networks," Kenneth C. Green, who founded and runs The Campus Computing Project, said in the survey report.

As of 2003, 92.3 percent of universities have policies intended to stem the unauthorized duplication of commercial software, and 87.4 percent have codes of conduct regarding the fair use of copyrighted content like books and articles.
http://www.dailypennsylvanian.com.


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Ex-policeman Quits DirecTV, Says It Was Like Working for the Mob
EFF

Security Focus (hyperlinks, mine): "A one-time enforcer in DirecTV's anti-piracy campaign is suing his ex- employer for wrongful discharge, after he allegedly resigned rather than continue to prosecute the company's controversial war against buyers of hacker-friendly smart card equipment.

John Fisher, a former police officer, alleges in a complaint filed in Los Angeles County Court late last month that he joined DirecTV as a senior investigator in July, 2002, expecting to serve a legitimate investigative role tracking signal pirates. He wound up instead 'as little better than a "bag man for the mob,"' the lawsuit claims. He's seeking unspecified damages, and an end to DirecTV's tactics."
http://blogs.eff.org/deeplinks/archives/001433.php


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Labels Peer at Pirates for Insights
Scott Banerjee

Say what you will about Internet pirates, their downloads speak volumes about what's hot in music.

That fact hasn't been lost on record labels, which are increasingly subscribing -- albeit discreetly -- to companies that monitor illegal download traffic on peer-to-peer services.

"If we weren't looking at the data, we'd be pretty foolish," says Jeremy Welt, head of new media at Madonna's Maverick Records, one of the few labels that admits to subscribing to services that track illegal downloads.

But John Fagot, a consultant for Webspins, a company that monitors P2P services, says its data is being used at every major label.

BigChampagne, the other major player, acknowledges that Warner Bros., Interscope, Elektra, DreamWorks, Atlantic and Disney's Hollywood label have all used its data, as well as MTV and MTV2.

All of which raises the question, Does the industry's use of peer-to-peer data for marketing purposes somehow add legitimacy to the very services that it is trying to stamp out through an aggressive legal campaign?

"Just as it is valuable to understand how pirated CDs are hawked at flea markets, the same applies to the online world. That in no way is any justification for the illegal activity or those who facilitate it," says a spokesperson for the Recording Industry Assn. of America (RIAA), the lobbying arm of the major U.S. record labels.

SEARCHING DATA

BigChampagne, which is based in Beverly Hills, Calif., and opened for business in 2000, tracks the two basic activities that can be monitored on peer-to-peer networks: "queries," or searches, and "acquisitions," or downloads.

Then it matches a computer's IP address to its zip code, creating a map of P2P activity.

Eric Garland, CEO of BigChampagne, says searches can isolate the use of any form of copyrighted material, from music, feature films, software and videogames to instruction manuals or TV episodes.

Webspins, which opened in 2001 in Studio City, Calif., employs a similar strategy, except it monitors traffic across "supernodes," or computers acting as file-sharing devices, Fagot says.

At a client's request, it inserts a searchable digital file into a filter to see who is searching for what by zip code, he says.

Maverick has subscribed to BigChampagne reports since 2000.

"Sometimes you're in a vacuum," Welt says, "and having more information on songs that people in your market helps you stay focused on your goal."

For labels, the instantaneous research into a target audience can translate into increased radio spins and more record sales.

A case in point is Maverick act Story of the Year and its single "Until the Day I Die." It recently ranked among BigChampagne's top 20 downloads.

But the single was getting substantially less radio airplay than adjacent top 20 artists like Blink-182 and Audioslave.

With data in hand, Welt took his case to radio stations.

"Week after week, we looked at BigChampagne reports and data on the conference call," Welt says. "We gave them a different picture of what was happening."

Eventually, Welt persuaded stations in certain markets to play Story of the Year during prime-time listening hours, which he believes helped CD sales. Story of the Year's album, "Page Avenue," recently went gold for U.S. shipments in excess of 500,000 units.

Though BigChampagne's "TopSwaps" chart often mirrors the Billboard Mainstream Top 40, "sometimes it lets you see things before they happen," Welt says. "You might not be aware that the buzz has already started."

BILLBOARD CHART?

Nielsen SoundScan is considering the tracking services to create a standardized metric for P2P activity, similar to how it monitors legal downloading for Billboard charts.

But the industry has let it be known that it would oppose a chart that specifically tracks illegal music downloads.

Some executives liken it to Billboard tracking CDs that have been shoplifted. But the idea isn't without precedent. The news media frequently report on the most widely stolen cars.

"Whenever you have a new technology, it takes a while to get accepted," Fagot says.

Ted Cohen, senior VP of digital development and distribution for EMI music, is taking a longer-term approach to P2P trends, as well as overall digital consumer behavior.

EMI and NPD Music Watch Digital, a service that tracks online music distribution, have developed a method to chart what consumers do with their music after they download it from either a P2P network or a legitimate site.

"The more we know about usage, qualitatively and quantitatively, the better it's going to help us shape the next iteration of business model," Cohen says.

"We've had great first starts, but for them to be great long-term businesses, they have to evolve," he adds.

Over the long term, some industry insiders think P2P services will go legitimate.

The industry is already privately discussing how to eventually monetize file traffic.

That eventuality, however, will hinge on copyright litigation and cooperation among major labels, independent labels, publishers, software manufacturers, artists and Internet service providers.

"It's going to be a difficult transformation, but not impossible," Garland says.

"Our original intent was to treat downloadable music as a proof of concept," he adds. "This can be done."
http://www.reuters.com/newsArticle.j...section=new s


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EDITORIAL OBSERVER

The Recording Industry Soldiers On Against Illegal Downloading
Verlyn Klinkenborg

In the past few weeks there have been some mixed developments in the recording industry's battle against illegal file sharing. On the legal front, the industry began a new round of international lawsuits against foreign file sharers. A misguided new bill authorizing civil charges in file-sharing cases is making its way through the Senate, and a bill criminalizing copyright violations over peer-to-peer networks has been passed out of committee in the House. The Justice Department has established an Intellectual Property Task Force to look at ways to crack down on violations. Meanwhile, a Canadian judge has refused to force Internet providers to give up the addresses of file sharers. His ruling effectively makes the sharing of music files legal in Canada.

But this isn't just a legal battle, of course. It's a battle of information and ideas. A new book from Lawrence Lessig called "Free Culture" makes a forceful, cogent defense of many forms of file sharing. And — perhaps worst of all from the industry's perspective — a new academic study prepared by professors at Harvard and the University of North Carolina concludes, "Downloads have an effect on sales which is statistically indistinguishable from zero." This directly counters recording industry claims that place nearly all the blame for declining CD sales on illegal file sharing.

Without condoning the theft of intellectual property or the violation of copyright, it's still possible to find a great deal of common sense in Mr. Lessig's arguments in favor of balancing "the protection of the law against the strong public interest that innovation continue." As it stands, the position of the recording industry and its ally, the movie industry, is simply to shut down innovation. That is the clear purpose of the file-sharing bills pending in Congress. That has been the entertainment industry's reaction to all new distribution technologies since Thomas Edison.

But the recording industry's interests are not synonymous with the public interest. The industry assumes that the main reason people engage in file sharing is simply to get free music. For many people, certainly, that is its main appeal. But file sharing — like the new generation of legal music-downloading services, including Apple's wildly successful iTunes Music Store — is also a direct response to a number of unpleasant realities in the music business. As long as the recording industry lives and dies by the blockbuster, music listeners will be looking for ways to see deeper into the music catalog. For some listeners, file sharing has become a way to experiment — to try out new music without first shelling out $16 or $17 for a CD. There was a time when radio gave listeners a chance to hear lots of new music. Thanks to conglomerates like Clear Channel, those days are dead.

The recording industry needs to catch up to music lovers, and soon. Punitive tactics protect the industry's legal rights, but by themselves do not address its deeper problems. Some recording companies have realized this and begun to use file-sharing data, which offers an immediate reading on consumer interest, to hone their marketing. One or two companies have even begun to post paid versions of songs on file-swapping networks simply for exposure. The industry's tactics in the battle against file sharing look to many people — including many artists — less like an effort to protect copyright and more like an attempt to continue the industry's control over the distribution of music. The resources of the industry could be better spent if, as the authors of that recent study suggest, it is waging war against a financially negligible problem.
http://www.nytimes.com/2004/04/17/op...rtne r=GOOGLE


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In a Fast-Moving Web World, Some Prefer the Dial-Up Lane
Matt Richtel

High-speed Internet access is being adopted by millions of Americans each year, growing as quickly as any modern technology. So what makes Dana Jenkins think she can resist?

In fact, she is part of another big group, the tens of millions of Americans seemingly immune to the lure of more speed and satisfied with dial-up services. A majority of Americans who surf the Internet still do so by dialing in on regular telephone lines, despite the rapidly narrowing price gap between high-speed and dial-up connections.

People like Ms. Jenkins are neither Luddites nor laggards, but consumers content to pay for a service that is less than optimal, and at times even frustratingly slow, because they say greater speed is not worth the trouble of starting over with a new telecommunications provider and getting a new e-mail address, even if the added cost is small.

"I resent it," said Ms. Jenkins, 61, an avid Internet user in Marietta, Ga., of the mild pressure she feels to get a high-speed connection. She pays $21.95 a month to dial into the Net — mostly to do research for the doctorate in communications that she is working toward — and said paying even $10 more for a faster connection would feel wasteful.

"I don't do gaming. I don't download a lot of graphics," she said. "For the money I would spend, I don't need it."

Those are words that can give high-technology industry executives chills. They have proclaimed the spread of high-speed, or broadband, connections to be integral to the industry's growth, essential to American competitiveness and indispensable to consumers. Even President Bush jumped into the fray last month, calling for affordable, universal high-speed access by 2007.

Up to now, the market for high-speed connections has been dominated by the young, educated, affluent and tech-savvy. In some circles, it is considered not just functional, but an essential bit of modernity, like knowing what happened on "The Sopranos" or that Diesel refers to jeans, not fuel. Some users of dial-up sheepishly acknowledge that they avoid admitting their low network speeds when they are with their better-connected friends.

The situation is likely to change as more users move to broadband. In 2003, 23 million households had high-speed access, up from 16 million the year before, according to the Yankee Group, a research firm. In 2003, 51 million American households connected to the Internet through a dial-up connection, down from 55 million a year before, the firm reported.

A typical dial-up connection delivers information at 56 kilobytes a second; broadband connections are 5 to 25 times faster.

In practical terms, the performance depends largely on what task a person is doing. E-mail, for example, can take about the same amount of time to download, because it is a small amount of data. But high-speed connections can make a huge difference with the transfer of graphics, elaborate Web pages or video.

For those uses, the denizens of the dial-up world have learned to wait.

"I bring a newspaper and sit and read," said Alex Pope of Berkeley, Calif., explaining how he passes time waiting to download data, like the music programs for upcoming symphonies, on dial-up.

Mr. Pope, 74, a retired lawyer, does not have the option millions of dial-up users have: broadband connections at work that allow them to surf the Internet quickly when they need to. If office connections are counted, 55 percent of Americans have high-speed access, according to a study released on Sunday by the Pew Internet and American Life Project, a nonprofit research group.

Danielle Kolko, 31, of Louisville, Colo., who works in the human resources department at a marketing company, is one who does high-speed surfing at the office. But some people in her social circle still give her grief about her slow-speed home life.

"I have friends who are high-tech computer engineers who are horrified by the fact I have dial-up," Ms. Kolko said. "I just tell them I'm more patient than they are."

While many dial-up users cite cost as one reason to stick with their existing service, the price of high-speed service is becoming more affordable.

Dial-up service costs can range from $10 a month from discount companies to $21.95 a month for services from big operators like EarthLink and MSN. Cable modem service — one of the two principal forms of high-speed access — costs $40 to $45 a month, according to the Yankee Group. Telephone digital subscriber line service, the other principal form, can cost $35 a month, but the price typically drops to $30 a month if users also buy long-distance and local phone service from the same phone company.

Some dial-up services, like Juno and America Online, are now selling what they call accelerated dial-up services. These services — which can cost several dollars more than regular dial-up — use a new compression technology to load some Web pages 40 percent faster, though some content takes just as long to download, the Yankee Group said.

Patrick Mahoney, an analyst with the Yankee Group, said some dial-up users do not realize how much the price difference has narrowed. Many users may not know that a digital subscriber line can be "as little as $8 more per month than some dial-up services," Mr. Mahoney said.

The industry already has a label for people who have not yet moved into the fast lane: prime prospects. Verizon Communications, the nation's largest telephone company, has begun a campaign to convince consumers that high-speed access is affordable and easy to set up.

"There's a mind-set that broadband is hard to install and complex," said John Wimsatt, vice president of broadband marketing for Verizon. Noting that some consumers will always be wary of new technology, he said, "Some people still have their VCR's flashing 12 o'clock."

Verizon's marketing is not convincing everybody. In a survey taken in February, the Pew project found that 60 percent of dial-up users said they were not interested in switching to broadband, roughly the same result as in a February 2003 survey. According to the survey, 47 percent of men wanted to switch, compared with 34 percent of women, a notable gender difference.

The Yankee Group has reported a number of differences between dial-up and broadband users: 47 percent of young unmarried people have broadband, compared with 30 percent of young married couples. It found that broadband has the highest penetration among upper-middle-class households, suggesting that price remains a factor in decisions to get high-speed connections.

There are other factors, too, for loyal dial-up users. Gena Haskett, 46, a computer skills tutor in Glendale, Calif., and a frequent Internet user, worries that a high-speed connection would make her computer more susceptible to viruses and attacks by hackers.

Cameron Brown, 49, of Oakland, Calif., said her reasons for sticking with dial-up were based on "fear, inertia and self-governance." Ms. Brown, a former journalist, said that faster speeds would probably entice her to spend even more time in front of the computer. Besides, she said, she does not want to deal with "another hassle" in subscribing to a new service.

Then again, she is feeling a bit behind. As it is now, she says, she hits the download button, goes to do something else — get dinner, maybe — and comes back later.

It would be nice, she acknowledged, to be able to download information "without having to wait 20 minutes."

"I need to bite the bullet and do it," Ms. Brown said.
http://www.nytimes.com/2004/04/19/te...19DIAL.html?hp


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No Politics Are Local
Christopher Caldwell

As readers of Adult Video News and the 2005 federal budget will be aware, Attorney General John Ashcroft is staffing up the Justice Department for a prosecutorial assault on America's $10 billion pornography industry. Moderate civil libertarians have traditionally taken the side of pornographers on such matters. While a local community can make its own rules, they say, prosecuting smut at the federal level is Orwellian overkill. But this localist view makes less sense in the Internet age. It is unfair to ask bluenoses to band together to sway their city councils when most porn gets made not by some louche photographer living in a trailer across the railroad tracks but by multinational corporations with lobbyists in Washington.

One Ashcroft target is a company near Los Angeles whose films show simulated rapes and murders. You would think that would pass muster as obscene in any setting -- at least according to the Supreme Court's ''Miller test,'' which defines as obscenity anything that disgusts ''the average person, applying contemporary community standards.'' But Ashcroft isn't taking any chances. The Justice Department placed an order for the offending videos in Pittsburgh and will prosecute the company before a jury there. Now, suddenly, porn executives are changing their tune on localism. Pittsburgh is not the real community under which the Miller test should be enforced, they argue. The real community is the broader ''community'' of Internet users.

The battle between Ashcroft and the pornographers fits a pattern. By consensus of the adversaries, divisive issues are being argued in ever-widening jurisdictions. The natural arena for discussing them turns out to be not the bedroom or the town but the nation or even the world. This is not what most people expected of our age. Ever since the media theorist Marshall McLuhan announced that electronic interdependence was turning the world into a ''global village,'' we have put the stress on the adjective ''global.'' The wired world would bring a bigger choice of cuisines, we thought, but no increase in aggravation. Instead, the key term turns out to be the noun ''village.'' And villagers are notoriously bad at tolerating differences that bug them.

Why else should the enthusiasm of Massachusetts judges and a San Francisco mayor for same-sex marriage be such a big deal to the rest of the country? It is not because the issue pits libertarians against moralists, dionysiacs against prudes. (On the contrary, what worries the skeptical global villager is not that gay marriage will bring moral laxity but that it imposes a rigorous notion of tolerance on those who may not want it.) Two moral orders that worked fine in isolation -- human rights and traditional values -- wind up locked in a death struggle when, thanks to the Internet, television and the pressures of law and politics, each cannot get out of the other's hair. And it is in the national arena that it will be decided which of those orders emerges as the new uniform morality.

Many gay-marriage advocates claim that same-sex marriage should remain a local issue. They argue that once one state recognizes gay marriage, there is little danger that the Constitution's full-faith-and-credit clause will compel other states to follow suit. But this is little more than the signature debating trick of our time: trying to advance one's own effort to enforce national standards in the guise of a modest localism.

It's a trick that gets deployed in the most unlikely venues. Look at this month's rejection of a proposed Wal-Mart megastore by the people of Inglewood, Calif. Superficially, this ballot-initiative vote looked like local government in action, but it was hardly that. A Wal-Mart official complained that ''outside special interests'' had snookered the natives into rejecting the store. If so, those outsiders can't have been more aggressive than Wal-Mart itself. After Inglewood's city council initially rejected the store, the company's national headquarters in Bentonville, Ark., began collecting 10,000 signatures to put the matter before the voters. Today, even when it comes to opening a store, no politics are local.

This spring, national governments all over Europe were engaged in village politics of their own. Ireland began enforcing the E.U.'s most comprehensive smoking laws. The incoming Spanish prime minister, Jose Luis Rodriguez Zapatero, promised that his government would wage an ''unceasing fight against criminal machismo.'' Both efforts put moral absolutism before local pragmatism. Ireland is not allowing a few spots to welcome smokers so that a little piece of Dublin can stay as it was when James Joyce haunted the pubs. Spain is not going to carve out an exception whereby Basques or Estremadurans can boss women around in the time-honored Iberian fashion.

We (stupidly) believed that McLuhan's global village would be a friction-free Brotherhood of Man. But McLuhan never said that. In his last television interview, in 1977, his interviewer began, ''I had some idea that as we got global and tribal we were going to try to --''

McLuhan interrupted. ''The closer you get together, the more you like each other?'' he said. ''There's no evidence of that in any situation that we've ever heard of. When people get close together, they get more and more savage, impatient with each other.''

That is why what used to be penny-ante administrative arguments or obscure regional quarrels have been transformed into high-stakes battles over universal values. Of course, McLuhan's readers weren't the first to mix technology and visionary optimism. Walt Whitman, considering ''the steamship, the electric telegraph, the newspaper, the wholesale engines of war,'' asked: ''Are all nations communing? Is there going to be but one heart to the globe?'' Apparently there is, and it's waiting for us to fight over it.
http://www.nytimes.com/2004/04/18/magazine/18WWLN.html


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Fake "Clean Slate" Gone - How About a Real One?
EFF

The RIAA has finally seen the light with regard to its "Clean Slate" program, which offered false amnesty, or shamnesty, to people who admitted to file sharing. Citing the success of its "education" campaign, the group has abruptly cancelled the program.

"Clean Slate" promised that in exchange for a confession, you could gain meaningful protection from lawsuits for copyright infringement. In fact, the program left you vulnerable to lawsuits by record companies and music publishers, as well as bands like Metallica that retain independent control of music rights.

Eric Parke, represented by Ira Rothken, brought suit, charging fraudulent business practices -- and here, perhaps, we can glean the true reason for the RIAA's change of heart. Its attorneys announced during a recent court proceeding that the group had discontinued "Clean Slate" -- and that therefore the case was moot. The announcement took Mr. Parke, his attorney and the judge by surprise.

These kinds of machinations are a terrible waste of time and money. If the RIAA is sincere about helping music fans come in from the cold, it should turn its considerable energies toward offering a true "amnesty" program -- say, by adopting a voluntary collective licensing plan that would turn millions of people from criminals seeking shelter from the law into legitimate paying customers.
http://blogs.eff.org/deeplinks/archives/001435.php


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Teaching an Old Walkman Some New Steps
Ken Belson

Last July, while most people were taking summer vacations, the Sony Corporation of America made a little noticed, but crucial announcement. Jay Samit, a longtime music industry executive, was appointed general manager of Sony Connect, a new subsidiary that will sell songs online and allow consumers to play them on their Sony gadgets.

His appointment was largely overlooked outside the company, but inside, the move was immediately understood as a way to unite the sometimes conflicting electronics and content divisions.

That internal battle was seen by many as the reason Sony, the inventor of the Walkman and the biggest player in the portable audio market, was being trounced by Apple Computer and its hit, the iPod music player, in the emerging digital segment. Something had to be done.

How Sony got outflanked is as much about Sony's inflexibility as Apple's initiative. With its ownership of premier music labels and its foundation in electronics, Sony had all the tools to create its own version of iPod long before Apple's product came to market in 2001. But Sony has long wrestled with how to build devices that let consumers download and copy music without undermining sales in the music labels or agreements with its artists.

Mr. Samit, 43, came from the EMI Group with experience untangling technological and legal knots. He had had a long career selling traditional content in new formats. And he was an outsider, and considered better able to bridge the gap between Sony's engineers in Tokyo and its music team in the United States. "The only reason we didn't do this earlier is the guys didn't talk to each other," Mr. Samit said of Sony's new digital music venture.

A lot is riding on the Connect online store, which will be released in a few weeks. If it catches on with consumers, it will help validate the company's long-held goal of integrating its electronics, music and movie businesses - and give it a shot at re-establishing its leadership in the latest generation of portable music.

"Now it's about integration," said Robert S. Wiesenthal, the chief strategy officer of Sony Broadband Entertainment, who works with Mr. Samit. "Unless you have the integration, it won't work."

Sony's brand name, vast retail network and expertise in electronics are notable advantages, which Mr. Samit said made it possible for Sony to offer a more affordable and more convenient alternative to Apple's music system.

Like Apple's iTunes online music store, Connect will have 500,000 songs that can be downloaded for 99 cents each. But while iTunes songs can be played only on iPods, Sony already sells a variety of devices, including minidisc and compact disc players, which can play songs bought on Connect's Web site. Sony's new Hi-MD disc player, for instance, will hold up to 45 hours of music on one disc, which will retail for about $7.

One of Sony's flash memory players will store up to 22 hours of music and have batteries that last about 100 hours.

"We're not about one-size-fits-all," said Mr. Samit, sitting in his Manhattan office with Louis Armstrong playing in the background. "You can't believe it's about just one brick that people will carry," he said, referring to the iPod.

Steven P. Jobs, Apple's chief executive, said the minidisc player, which uses discs that can be recorded on, much like a cassette player, would not catch on in the United States the way it had overseas.

"We have a very healthy respect for Sony," Mr. Jobs said in a telephone interview. "But Sony believes very strongly in the minidisc, and we don't. It might work in Japan but not here." Apple's most expensive iPod, by contrast, uses a hard drive that can store up to 10,000 songs.

Mr. Samit said Sony would cover all bases when it releases a player this year that included a hard drive just like the iPod. Sony is also developing a portable device that plays video downloads, he said.

Sony will compete strongly on price. The most expensive iPod costs $499, while Sony's devices capable of using Connect - including network Walkmen and players that use memory sticks - will sell for $60 to $300.

And Sony is planning to market broadly, starting this summer with promotions with McDonald's - buy a Big Mac and get a free downloadable song - and United Airlines, which will let fliers exchange mileage points for songs.

Apple will remain a formidable rival. The company's new mini version of the iPod and longer battery life for its products make its brand as sought after as ever. To extend its reach, Apple has licensed iPod technology to Hewlett-Packard and made the iTunes site available to AOL and its 25 million subscribers. It wisely made iTunes compatible with Windows operating systems.

"This is a different phenomenon from 15 years ago," said Megan Graham-Hackett, an equity analyst at Standard & Poor's. "Sony wouldn't have looked at Apple as a competitor then. Apple has been quite innovative."

Apple, though, is not the only rival Sony faces. Dell and other manufacturers have come out with digital music players. What's more, songs downloaded from Dell's MusicMatch Web site can be copied onto a much wider variety of devices.

"We don't like to lock people and force them to use this or that service," said Mark Vena, director for the digital home marketing team at Dell.

Dell, like many others, is betting that the digital audio market will become like the computer industry, where prices for computers fell as more machines used the Windows operating system. If this happens, Apple and Sony, with their more proprietary services, may fall victim to the music software program that is most widely used. Microsoft, with its Windows Media format, is trying to become that standard. Already, dozens of online stores use its software, which is compatible with hundreds of devices.

"Sony is coming out with their own format, but we don't need another standard," said Joe Wilcox, an analyst at Jupiter Research. "The market for protected digital downloads is in the early stages of a format war. It's a recipe for consumer confusion."

Still, Mr. Wilcox and other analysts said that Sony had a loyal following that could help it seize a share of the digital music market quickly.

"Look at the resources at their disposal," said Douglas Krone, the chief executive of Dynamism.com, a Web site that sells high-end electronics. "They own all the intellectual property and they have the retail channel. It will be hard for Apple to maintain its market share."

While the competitors take on each other, they are also fighting music piracy. Despite the efforts of the recording industry and government, more than 99 percent of the songs downloaded or swapped on the Internet are still copied illegally. This has forced legitimate companies to charge low prices, even before they pay the recording artists or cover their costs.

Even so, the market for downloadable music and digital music players is potentially lucrative. By 2008, the percentage of music sales online is expected to triple, to 12 percent, according to Jupiter Research. Online music sites sold 25 million songs in the first quarter this year compared with 19.2 million in the second half of 2003, according to Scoop Marketing, which tracks legal music downloads.

The majority of those songs were downloaded from the iTunes site, and Apple sold a whopping 807,000 iPods in the quarter ended in March. The company, analysts said, has done the best job in the industry of using music as the link between its computers and audio devices.

Sony would like to emulate that success, but catching up will not be easy. Sony entered the digital camera market late, yet became one of the top makers in that field. But its computers and cellphones have struggled and remain niche products while others grabbed those markets.

This time, Mr. Samit and other Sony executives say they can recover lost time because all parts of their corporate empire are on the same page.
http://www.nytimes.com/2004/04/19/te...gy/19sony.html


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DVD War Looms As Advancements Draw Near
AP

The DVD stands out as one of the most rapidly adopted consumer technologies ever, but in the electronics industry it's akin to an aging king in Shakespearean drama -- rivals are lurking, knives drawn.

Just as consumers are beginning to get comfortable with their DVD players, electronics manufacturers are set to introduce next-generation discs that store more -- and would be harder to copy.

A dozen companies, headed by Sony Corp., are pushing a disc called the Blu-ray.

The other main contender, the High Definition DVD, is promoted only by Toshiba Corp. and NEC Corp. But it has an important endorsement from an industry group and is also expected to get Microsoft Corp.'s support as the software giant seeks a toehold for its multimedia format in the consumer electronics arena.

Movie studios generally aren't commenting on the new formats. And the rival industry groups aren't saying exactly when they expect to have players on the market. Both, however, consider the DVD ripe for replacement next year.

For consumers, the benefit of a new format would be better image quality. Sales of high-definition TV sets have finally started to take off, but current DVDs don't have the resolution to get the most out of HDTV sets.

For the industry, a new format could mean an escape from the low-margin market DVD players have become. From costing more than $500 when introduced in 1997, players are now available for less than $50.

The new discs, which look much like DVDs, would be read by players with newly developed blue lasers, which can pick out finer detail than the red lasers used to play DVDs and CDs. This lets the new discs store three to five times as much data as a DVD, enough for high-definition movies with surround sound.

Manufacturers from both groups plan to also build red lasers into their new players, allowing them to read current DVDs.

The Blu-ray disc has the most storage capacity, up to 50 gigabytes. However, it achieves that capacity by using a structure quite different from DVDs. This means that the companies that make prerecorded DVDs would have to invest in new equipment, which is sure to give Hollywood pause as it ponders which format to back.

The Blu-ray does have the widest support among electronics manufacturers, counting not only most of the big Japanese names but also Dell Inc. and Hewlett-Packard Co. in its consortium.

Toshiba's HD-DVD stores up to 30 gigabytes, but can close the quality gap with the Blu-ray by using more efficient compression software than the MPEG-2 standard already used in DVDs and planned for the Blu-ray. One of the several compression schemes that may go into the final HD-DVD standard is none other than Microsoft's Windows Media 9 software.

``If that goes through, it's going to be a huge win for Microsoft,'' says Vamsi Sistla, an analyst at ABI Research. It wouldn't necessarily mean a significant financial windfall -- the analyst estimates that Microsoft may get 10 to 15 cents per player in royalties -- but that's not the point.

``More than money, they're looking for the muscle power to enter the consumer electronics industry,'' he says.

The HD-DVD has been endorsed by the DVD Forum, the industry group that created the DVD, but that may not be as crucial as it sounds. The group has not succeeded in gathering industrywide consensus for any disc standard since the original DVD in 1997. Both its audio and rewriteable DVD standards have competitors.

The Blu-ray and HD-DVD both use hardware advances to store high-definition movies. However, that's not strictly necessary. Improvements in the software used to pack a movie onto a disc means that it's possible to store a high-definition movie on a regular DVD, albeit with poorer quality and fewer special features than on a blue-laser disc.

Microsoft demonstrated that when it helped bring out a high-definition version of ``Terminator 2: Judgment Day'' on a DVD-ROM last year. It played only on computers, but in theory, a specially built DVD player could play it back. That lesson wasn't lost on Japan's Asian competitors. In China, the EVD, or Enhanced Video Disc, is already on sale. It uses software from On2 Technologies Inc. to store a high-definition movie on a slightly modified DVD, read by a red laser.

Not to be outdone, Taiwanese researchers this month demonstrated the FVD, or Forward Versatile Disc, based on the same principle. Players should be on sale this year.

The advantage of using red lasers is that the components are much cheaper than the blue-laser technology, and the players can read DVDs without a second laser.

With all these alternatives, there's a ``very good chance'' that there won't be one successor to the DVD, but several, says Sistla. The Blu-ray may dominate Japan, the cheaper EVD the rest of Asia, and the HD-DVD could be the format of choice in the United States and Europe.

The real kingmaker in the drama is Hollywood. Of the big studios, only Columbia TriStar has expressed support for either format. Since it's owned by Sony, its choice was clear.

One thing the studios are sure to appreciate is that the new discs promise much better copy protection than DVDs. While the older format has been a boon to the studios - - it grossed them more than theatrical releases last year -- its susceptibility to piracy has been a thorn.

A new disc format probably holds another attraction for the studios -- the opportunity to sell old movies all over again on new media.

But Geoffrey Kleinman, who runs review site DVDtalk.com, doesn't think consumers are clamoring for something better than the DVD.

``A high-quality progressive-scan DVD player properly connected to high definition TV looks fantastic,'' he says.

Also, what made the DVD popular isn't just the quality advantage over videotape, but also the addition of special features. So far, Kleinman hasn't seen any similar must- have advantage planned for the new formats.

If there's a pent-up demand for a new disc, it's probably on the recording side, Kleinman believes. There's no cheap or easy way to record HDTV broadcasts, something recordable versions of the new discs would address.

Sony is already selling a Blu-ray recorder for HDTV satellite broadcasts in Japan.
http://www.nytimes.com/aponline/tech...-DVD-Tech.html


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Tiny Films Part of Ebert's Film Festival
AP

A film that cost less than $200 to make is among the attractions at Roger Ebert's sixth annual Overlooked Film Festival.

This year's festival, which opens Wednesday, includes a variety of big-budget movies and independent works such as ``Tarnation'' by Jonathan Caouette, which cost $187 to make on a computer.

Film restoration expert Robert Harris, who discovered a 70mm print of the 1962 Oscar-winning film, ``Lawrence of Arabia,'' in a studio vault and then restored it, will kick off the festival. He will explain how he found and restored the movie.

The lineup also includes Gregory Nava's ``El Norte,'' Buster Keaton's masterpiece ``The General,'' Jay Russell's ``My Dog Skip'' and the obscure Al Pacino drama ``People I Know.''

Ebert, film critic for the Chicago Sun-Times, started the festival in 1999 to call attention to movies he feels have been forgotten or ignored by audiences, critics and distributors.
http://www.nytimes.com/aponline/arts...-Festival.html


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Studios Rush to Cash In on DVD Boom
Sharon Waxman

The other day the chairman of 20th Century Fox, Jim Gianopulos, said he got a call from a lawyer friend. The friend said it was an anniversary of the firm and asked where he could get 100 DVD copies of the cult Fox movie "Office Space." The film made only $10 million at the box office but has become a hit on DVD. No one at Fox pretends to know why, but the film's success is another big drop in the river of DVD cash now flowing into Hollywood's coffers.

Not since the advent of the videocassette in the mid-1980's has the movie industry enjoyed such a windfall from a new product. And just as video caused a seismic shift two decades ago, the success of the DVD is altering priorities and the balance of power in the making of popular culture. And industry players, starting with the Writers Guild, are lining up to claim their share.

There's good cause. Between January and mid-March this year, Americans spent $1.78 billion at the box office. But in the same period they spent $4.8 billion — more than $3 billion more — to buy and rent DVD's and videocassettes.

Little wonder then that studio executives now calibrate the release dates of DVD's with the same care used for opening weekends, as seen by Miramax's strategic release of "Kill Bill: Vol. 1" a few days before the theatrical release of "Kill Bill: Vol. 2." (The DVD made $40 million its first day out.)

Studios now spend comparable amounts of money on DVD and theatrical marketing campaigns. Disney spent an estimated $50 million marketing the "Finding Nemo" DVD last year, said officials at Pixar, which made the film. It was money well spent. The DVD took in $431 million domestically, about $100 million more than the domestic box office. DVD has resuscitated canceled or nearly canceled television series like "The Family Guy" and "24," and has helped small art movies like "Donnie Darko" win rerelease in theaters. It is also beginning to affect the kinds of movies being made, as DVD revenues figure heavily in green-light decisions and are used as a perk to woo craft-conscious movie directors.

"There's not a sector of the entertainment industry to which DVD is not a significant, if not the dominant, contributor of revenue," said Scott Hettrick, editor in chief of DVD Exclusive, a trade paper, pointing to the movie and television libraries being released on DVD. Even in the ailing music industry, he noted, music DVD's are an area of growth.

"This is an unprecedented, huge influx of new money into the motion picture business," Dan Petrie Jr., president of the Writers Guild of America, West, said of the DVD boom. Union negotiators are demanding higher royalty payments in contract talks under way with the Alliance of Motion Picture and Television Producers, which represents the studios. Whatever deal is finally struck when the contract runs out on May 2 is expected to be followed by all the other Hollywood guilds.

While few dispute that DVD's are low-cost, high-profit items for the studios, the studios say they need every penny to survive in a time of dwindling profit margins, and with the menace of piracy looming large. The average movie now costs $64 million to make and another $39 million to market, according to the Motion Picture Association of America.

"In the last five years maybe 6 pictures out of 1,000 recouped their cost in the theatrical marketplace," said Nick Counter, president of the studio alliance. "Today the hits have to make up for all the losses."

For bigger-budget movies the DVD revenue has become critical. Nowadays, "basically the movies are commercials for the DVD's," observed John Lesher, an agent for the Endeavor talent agency who represents leading directors like Walter Salles, Paul Thomas Anderson and David O. Russell. Movies with budgets over $100 million now commonly just break even at the box office.

Stacey Snider, chairwoman of Universal Studios, said she had just asked her executives to analyze more closely the breakdown of profits in terms of the DVD revenues to figure out the changing model of the industry.

The old Hollywood model of needing to recoup three times the production cost at the box office to make a profit is long gone. But many are asking: What is the new model?

The answer to that may lie with a little-known movie called "Office Space" (1999). The satire by Mike Judge, co-creator of the animated television series "King of the Hill," cost 20th Century Fox about $10 million to make, and took in just $10 million at the box office. But on DVD the movie has become a hit, with the studio so far selling 2.5 million units, well over $40 million worth.

There are other examples of surprising windfalls. The Lion's Gate comedy "Van Wilder" was renamed "National Lampoon's Van Wilder" and has unexpectedly become a hit on DVD, where it sits alphabetically next to other National Lampoon movies.

A moderate hit like the DreamWorks comedy "Old School" starring Will Ferrell took in $73 million at the box office, but made an astounding $143.5 million on DVD.

Of course, even before DVD some films found larger audiences on video than at the box office; DVD has amplified the effect and the profits.

The format has another draw, a creative one. Directors now invest a lot of time into putting extra material into the DVD version, and the studios can improve their relationships with directors by creating special editions of their movies with hours of extra features. Peter Jackson added 43 minutes to the extended DVD of "The Lord of the Rings: The Two Towers" (New Line).

But that does not mean the studios do not wring every cent from each movie. Miramax is planning to release a half-dozen different DVD editions related to "Kill Bill."

"This is the beauty of having two volumes," said Rick Sands, chief operating officer at Miramax. " `Vol. 1' goes out, `Vol. 2' goes out, then `Vol. 1 Special Edition,' `Vol. 2 Special Edition,' the two-pack, then the Tarantino collection as a boxed set out for Christmas. It's called multiple bites at the apple. And you multiply this internationally." Mr. Tarantino has also cut an alternate version of the movie for Japan.

With the explosion of DVD advertising, it is easy to forget that the plastic plate, the digital versatile disk, has existed in the marketplace for only seven years.

Six years ago, before DVD mattered, Americans spent $18 billion on movie videocassettes. Last year, when the DVD ruled, they spent $22.2 billion on videos and DVD's, according to DVD Exclusive, adding some $4 billion of new consumer spending to the entertainment pot without visibly affecting sales at the box office.

One of the main changes is that consumers tend to buy DVD's, while they tend to rent videocassettes. (Studios sell their rental cassettes to stores like Blockbuster for far more than they do to consumers.)

The profit margin for studios is significantly higher on the laser disk format. A new study by Jessica Reif-Cohen, an analyst at Merrill Lynch, found that studios make an average of 66 percent profit margin on the DVD, compared with just 45 percent profit on the videocassette. She concluded, "We believe the perception of low returns on feature film production is no longer valid."

The guilds are not the only ones who are demanding their share of the new loot. Talent agents are also demanding that the studio abandon its long-standing formula of calculating profits, in which only 20 percent of revenues from DVD's and videos are used to calculate profit participation for directors and top actors.

The question has also become a principal focus of negotiations with actors being asked to participate in re-releases. Last fall the supporting cast of the hit television series "Seinfeld" balked at giving interviews for the DVD compilation until they were included in a share of the profits.

What no one knows is how long the windfall will last, whether DVD is a consumer bubble that will burst once the studios finish releasing the films and TV shows in their libraries, or whether it will remain a strong current in the entertainment industry profit stream.

"Right now the studios are making money hand over fist," said Mr. Lesher. "But in five years when you can download a movie as fast as a song, that will go away."

Mr. Gianopulos disagreed. DVD's will last "because of the uniqueness of that experience," he said. "It's no longer `I saw that movie.' It's `I saw that movie, now I'm going to see multiple dimensions of that movie.' That's why you want to own it."
http://www.nytimes.com/2004/04/20/movies/20MOVI.html


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24 hours all it takes to download every single movie ever made.

New Internet Speed Record Set
Marguerite Reardon

Researchers have set a new data transmission record over the Internet2's high-speed backbone.

The new record, announced Tuesday at the Spring 2004 Internet2 member meeting in Arlington, Va., was for transmitting data over nearly 11,000 kilometers at an average speed of 6.25 gigabits per second. This is nearly 10,000 times faster than a typical home broadband connection. The network link used to set the record reaches from Los Angeles to Geneva, Switzerland.

Internet2 is a consortium of more than 200 universities working with industry and government to develop next-generation Internet technology. The Internet2's contest, which began in 2000, is open and ongoing, and it tests researchers' ability to build the highest-bandwidth, end-to-end Internet Protocol network.

The new record used IPv4, the current system for Internet addressing, and was set by members from the California Institute of Technology (Caltech) and Geneva-based CERN. The same team had previously set a new mark of 4 gigabits per second over the same distance using IPv6, the next generation of Internet protocols.

"By pushing the envelope of end-to-end networking," Rich Carlson, chairman of the judging panel, said in a statement, "their efforts demonstrate new possibilities for enabling research, teaching, and learning using advanced Internet technology."

While no one expects the average person to need this type of bandwidth anytime soon, the demonstration is important in the research community, where high-capacity links are needed to transfer large amounts of data. Many groups have already begun developing high-speed grids to connect research institutions and laboratories, so that scientists can more efficiently share large volumes of data.

CERN and its partners have already begun building such a network; it's called the Large Hadron Collider (LHC) Computing Grid. Caltech is involved in building the TeraGrid supercomputing network, which connects the National Center for Supercomputing Applications, the San Diego Supercomputer Center, Argonne National Laboratory, the Caltech Center for Advanced Computing Research and the Pittsburgh Supercomputing Center.

Recent studies by the U.S. Department of Energy have shown that researchers in high-energy physics, astrophysics, fusion energy, climatology, bioinformatics and other fields will require networks in the terabit-per-second range within the next decade. As a result, research on these high-speed networks is starting to move into production settings.
http://news.com.com/2100-1032-5195614.html


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Filetopia Making Headway
Thomas Mennecke

Filetopia has a history that exceeds even Napster. Arriving onto the file-sharing scene several months prior, Filetopia was more of a community chat program than a P2P application. However, as time progressed, added functionality was incorporated which has given Filetopia the potential to become a major player in the P2P world.

As the copyright industry turns up the heat on the file-sharing community, more individuals are seeking secure networks that can blanket their online activity. One network that has the potential to fulfill this mighty obligation to the masses is Filetopia.

Despite its lengthy history, Filetopia has not been known as a great P2P resource. Frequent server problems and simply the lack of advertising have kept this network in the relative dark. However, things are starting to change for the better as Filetopia has reached 5,000 users for the first time. Enrique, the sole programmer for Filetopia, weighs in on the current growth of his network.

"[The reason for our recent growth is due to more] stable servers, a very loyal user base and some of the communities that have been in Filetopia for [a] long [time]…keep growing."

In addition, the allure of participating in a secure network has also been a strong selling point of Filetopia. While SSL is a common (and excellent) encryption scheme, Filetopia allows users to select a variety of encryption devices.

"Filetopia uses a public key based encryption, similar in concept to SSL. In Filetopia, an EC encryptor is used to generate the asymmetric keys (SSL uses RSA) and the symmetric ciphers are optional (the user can choose among the strongest ones, including AES, blowfish, Twofish, etc.)

Of course, using SSL is as secure, the only advantage is probably that the EC cipher is a bit more efficient than the older RSA cipher."

Despite the growth and allure of Filetopia, one nagging issue remains – WinMX-itis. Similar to WinMX, Filetopia has not been updated in nearly a year (WinMX over a year.) Although this is of some concern, Filetopia 4.0 (a seemingly cursed release number) should be released sometime this summer. The delays are attributable to numerous projects, such at TorrentTopia.org.

"I've had to work on other projects in this past year. One of the projects is also related to P2P and it is having a big growth now. It is a BitTorrent client that has embedded search capabilities: Torrentopia.org.

I'm working on FT4 right now, it is a big rewrite, and I expect to have a beta maybe for the summer."

The delay can certainly be forgiven in exchange for a client that may revolutionize BitTorrent. Although the client in its existing state does not have an encryption scheme, future versions promise to add this much sought after feature.

"This version does not add any security to the BitTorrent protocol. That is what I plan to do with then next major version, adding virtual trackers and a secure DHT network. I just wanted to get used to the BitTorrent protocol in this version."

The future certainly looks bright for Filetopia. His current project, TorrentTopia, is a testing ground for eventually intergrating a secure BitTorrent element to FileTopia 4.0. Enrique talks about the future of Filetopia.

"Filetopia 3 is a lot more decentralized than the previous versions, it is based on supernodes; a fully decentralized DHT network (Filetopia 4.0) is a step forward in that direction. Overnet is the first big scale network that used DHT (that I know) and it has proven to be very effective. I will try to improve on that model adding security (PK encryption) and anonymity (using concepts from the Achord (Anonymous Cord) DHT (distributed hash tables) model and some ideas of my own.) Before DHT, fully decentralized networks where not too efficient, that is why I chose the supernodes model for Filetopia 3.

[In addition,] I plan to change key aspects that will help with the scalability. Although I have done a lot of work to improve the server protocols, some things could not be changed without breaking compatibility. FT4 will be a different, more efficient network, with changes in the overall architecture.

Of course, FT4 will borrow from Torrentopia many things (skinned interface, BitTorrent compatibility, usability aspects) but it will work on a new P2P network that will be even more secure than the current one and the file sharing will be completely decentralized (a DHT based network with anonymity improvements.)”

Although things seem stagnant, the Filetopia project is just getting started as version 4.0 hopes to break into the mainstream. With a secure BitTorrent client in the works coupled by an even more secure Filetopia, this aspiration is very possible.

“Although Filetopia seems to be frozen now, things move very fast here and my main focus is now again in the Filetopia project. I do this for the users, when I get a mail or message from a user that is enjoying one of my programs I find the motivation I need to advance faster.”
http://www.slyck.com/news.php?story=454


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iTunes Browser Script
Jack Spratts

Curious about iTunes? You can now search the apple pay music site - and even preview songs - without using their program. Works inside your browser with quicktime. Multiple platforms, including Opera, Mozilla etc
http://www.downhillbattle.org/itmsscript/index.html


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Plaxo Puts Peer-To-Peer Networking To New Use
Louise Story

AFTER Jennifer Cahill changed jobs a few weeks ago, one of the first things she did was spend a few minutes "Plaxo-ing" her new contact information to 400 friends and business acquaintances.

"You just go down the list of people" in your address book, said Cahill, who now works in the marketing group at Muirfield Capital in New York, "and you click, click, click who you want to send it to."

Will "Plaxo" become the next ubiquitous Internet verb, like Google? That is the hope of the founders of Plaxo, an online service that helps computer users keep their address books updated with the latest postal addresses and phone numbers of everybody in their circle.

After downloading Plaxo's free software in conjunction with either the Outlook or Outlook Express e-mail program, a PC user can choose which friends to ask for current contact information.

Recipients can provide new contact information, decline the request or ignore it. They can also click a link in the message and join Plaxo themselves.

Plaxo then automatically inserts any new information provided into the sender's e-mail address book. As people join Plaxo, their contact information is inserted into the address books of other members who have given permission for such updating.

The program also automatically transfers any future changes they make in Outlook to the computers of other members they have listed as their contacts.

About 1.8 million people have subscribed to Plaxo since the company, based in Mountain View, began offering its software online in November 2002, and the company says it is gaining about 10,000 to 12,000 members a day.

But for all of its success at attracting a following, Plaxo has an Achilles' heel. It is just the kind of Web-driven business that fits perfectly with the ambitions of Microsoft and others aiming to incorporate a wide array of business and personal services into their software products.

Plaxo executives say they are not worried. Their success may attract competition, but they say their rapidly expanding network gives them a major advantage.

"What we're essentially building is this network, because it has no value to me unless everyone I know is on the network," said Todd Masonis, a Plaxo founder. "You can't just go with another network because you wouldn't have the value of so many users."
http://www.marinij.com/Stories/0,141...78640,00.html#


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RIAA Halts Amnesty for P2P File-Swappers
Jay Lyman

The Recording Industry Association of America (RIAA) has withdrawn its offer of amnesty to file-sharers. Previously, the group had agreed not to sue individuals who would pledge to stop trading copyrighted music through peer-to-peer (P2P) services and applications.

However, the RIAA also diverged from its standard message of blaming online P2P file-sharing for its dwindling sales figures, instead calling P2P "one factor" of several that are hurting album sales.

"The decline in young buyers, who are the most active downloaders on peer-to-peer systems, is another confirmation that illegal downloading is one factor, along with economic conditions and competing forms of entertainment, that is displacing legitimate sales," RIAA chairman and CEO Mitch Bainwol said.

"That's a fairly significant change in tune," Yankee Group senior analyst Mike Goodman told TechNewsWorld. "They're being forced into a reactionary position, with more and more research coming out showing P2P downloading is not quite the green-eyed monster the RIAA makes it out to be."

In a brief filed in Los Angeles County Superior Court -- where the RIAA is being sued over its Clean Slate amnesty program -- RIAA attorneys wrote that the amnesty deal is no longer necessary, has been stopped and should not be the basis of litigation.

"As public awareness about the illegality of unauthorized copying and distribution of music files over peer-to-peer computing has dramatically increased since the inception of the program, the RIAA has concluded that the program is no longer necessary or appropriate," the brief said.

For her part, however, Electronic Frontier Foundation staff attorney Wendy Seltzer said the program likely ended because the RIAA's promise of immunity was hollow.

"The problem that the RIAA was forced to recognize was that they couldn't guarantee they were not creating more liability for the people they were signing up," Seltzer told TechNewsWorld, referring to admissions of copyright infringement and violations of law by those who signed up for Clean Slate.

Last November, the RIAA reported 156 settlements and 1,000 participants in the Clean Slate program. In its latest court filing, the group indicated a total of 1,108 individuals had taken the amnesty offer.

The EFF's Seltzer, who referred to the quiet end of the amnesty program as "a slimy way to do it specific to the lawsuit," said record labels could offer real amnesty through the EFF's proposed alternative to the RIAA's legal campaign: a voluntary collective licensing program that would legitimize file-sharing and help pay artists.

Meanwhile, Goodman, who indicated the RIAA probably did not expect to be sued over the amnesty program, said the vast majority of file-traders likely ignored the offer because the odds of being sued were extremely slim.

Goodman added that although the amnesty program's cessation was expected, the RIAA's decision to blame other factors for declining music sales may be more significant.

"There's some fairly high-profile stuff that is increasingly contradictory to the RIAA research and less biased than the RIAA research," he said, referring to studies and reports that show P2P has a minimal effect on CD sales.

For every report that indicates other forces are at work, corresponding research from the RIAA highlights P2P's impact. However, RIAA spokesperson Jonathan Lamy told TechNewsWorld that although the group has always said online file-sharing is the main culprit, it also has included other factors.

"We have consistently said we think piracy is the primary, not exclusive, reason for the decline in sales," Lamy said. "We've never said it's the sole point; we think piracy is primary, but there are always other factors that are at play here."
http://www.ecommercetimes.com/perl/story/33487.html#


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iTunes Delay Fillip For Euro Services
Jonny Evans

Leading US digital music distribution services are being hampered in launching services in Europe – leaving the territory wide open for local players in the space.

Apple Europe vice president Pascal Cagni this week warned that the launch of the iTunes Music Store in Europe may be delayed for "a few months", while the company works to ensure that the service will be "perfect". He cited Europe's sometimes-conflicting music-business bureaucracy and its recalcitrance in arranging digital music licences as cause of the delay.

Yesterday Roxio/Napster CEO Chris Gorog offered a similar warning to impatient music fans. Citing "red tape and licensing negotiation snags", he told Reuters: "We intend to launch before the end of summer. I am ever- hopeful it will happen, but it has been very challenging to get the rights together."

Napster had indicated its intent to launch in the UK around August/ September, but has so far been unable to secure the licences it needs to launch the service. "It's a bit frustrating", he explained. Napster faces similar problems in continental Europe, and is arranging permissions to launch in Japan – the world's second-largest music buying market, after the US.

Europe's Byzantine music-licence system is holding the market back. The European Commission (EC) released a report on Monday in which it urged the music industry and its disparate collection of died-in-the-wool rights bodies to create a pan-European music download licence.

On this topic, Gorog told Reuters: "The EC has managed to put together a currency system for all of Western Europe. I would think extending the same powers of cooperation would be very well received by all online music providers."

Speaking to Macworld in January, Universal Music's Larry Kenswil hinted at a potential underlying motive for the level of cooperation Apple and Roxio may be seeing from Europe's labels. Observing that the market is ready to open for business, he stressed that this was for all operators, "Why should the American services make all the money?" he asked rhetorically.

Long-established in Europe, Peter Gabriel's OD2 service, which acts as a warehouse for European companies who want to sell music online has been benefiting from the hype surrounding digital music services, shifting one million tracks in the first three months of this year – a ten-fold increase in sales, year-on-year.

Operators working to enter the European market should note that it took OD2 three years to secure the licensing it needed.

Meanwhile, European entrepreneurs are exploiting the market opportunity inherent here, as essentially honest consumers stare across the Atlantic, anxious to share the US music downloading experience.

Europe's music fans want elegant legal services they can use today, in preference to file-sharing networks.

New services launching to service the UK market – designed to profit from the delay – include: Wippit; War Child Music and Trackitdown. These vie with larger portal-based services such as Tiscali and MyCokeMusic, which work with OD2 to supply music online.

All the action has a sting in its tail, as the litigious music industry prepares to take one of its own to task in a San Francisco court – ironically, for file sharing.

The labels want Bertelsmann AG to stump up $17 billion, alleging that $90 million investments the company made in Napster in 2000 kept the then peer-to-peer service operating for eight months longer than it would otherwise have done. They believe the industry lost $17 billion as a result.

The legal counsel for the litigants Carey Ramos shared the industry's rationale for the case: "Napster created the piracy we've seen in the last four years that continues unabated worldwide."

However, some music industry insiders, technologists and the public reject such assertions, saying that music piracy evolved precisely because the music industry acted slowly in bringing legal digital-music distribution services to market, depriving essentially honest consumers of a legal way to buy songs online.

Anxious to reduce the scale of piracy, music industry associations across Europe have this month launched a program of intimidation and litigation against European music downloaders that echoes the strategy of the RIAA.

However, the launch of major music-download services that provide a legal and compelling alternative to theft for Europe's consumers is an essential element to the RIAA strategy.
http://www.macworld.co.uk/news/main_...fm?NewsID=8474


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Hollywood's New Lesson For Campus File Swappers
Stefanie Olsen

Hollywood is poised to up the ante in its war against file swappers, with new technology that could make it easier to remove suspected pirates from campus networks, CNET News.com has learned.

Movie studios, record labels and technology companies have been testing the system for months, according to sources familiar with the project.

Known as the Automated Copyright Notice System (ACNS), the technology promises to make copyright enforcement easier on peer-to-peer networks, saving schools and Internet service providers (ISPs) time and money. ACNS allows them to automatically restrict or cut off Internet access for alleged infringers on notice from a record label or movie studio. For example, universities using ACNS could instantly send notices of copyright infringement to students by e-mail and restrict their network access until they have removed the file.

Though not specifically ACNS, a similar system is set to go live Monday at the University of California at Los Angeles, one of the nation's largest universities with 37,500 students.

"ACNS is an open-source, royalty-free system that universities, ISPs, or anyone that handles large volumes of copyright notices can implement on their network to increase the efficiency and reduce the costs of responding to the notices," according to a technical summary.

College campuses are ground zero for illegal file swapping via peer-to-peer networks because students often have access to high-speed Internet or local area network (LAN) connections through their school's network. Hollywood and the music industry say that such violations have cost them billions of dollars and thus have targeted universities to help to curb file swapping. ACNS, one such measure, is designed to takes some of the burden off universities and ISPs as they field thousands of content takedown notices from copyright holders.

Universities have an incentive to cooperate with the technological solutions because they can be held liable in lawsuits charging their students with digital theft.

The Motion Picture Association of America (MPAA) is still working on gathering support among universities, which are key to helping curb piracy, said Matthew Grossman, director of digital strategy at the group. "If it enables them to properly implement their copyright policies, we're all for it," Grossman said.

ACNS was jointly designed by Vivendi Universal Entertainment and Universal Music Group in response to an open call for technical solutions to peer-to-peer piracy. The two groups are still talking to universities, ISPs and technology companies about offering it as a pilot program. They have also applied for a patent on the piracy notice and prevention tool.

ACNS is the latest effort from record labels and Hollywood studios to crack down on piracy over peer-to-peer networks. The industries' tactics have grown increasingly aggressive, drawing charges from some critics that copyright holders have trampled the rights of accused infringers.

Last year, for example, the Recording Industry Association of America (RIAA) began suing hundreds of individual file swappers and using fast-track subpoenas allowed under digital copyright law and aimed at making it cheaper for intellectual property holders to sue dozens of people at once. A judge later invalidated most of those subpoenas, forcing the industry to pursue more costly and time-consuming filings aimed at specific individuals.

Privacy vs. policy

ACNS is aimed at slashing the costs of copyright enforcement on peer-to-peer networks, although its backers say the system does protect end-user rights.

According to its technical summary, ACNS does not invade privacy. Rather, it assists universities or ISPs in enforcing their own policies on network abuse and copyright infringement. ACNS can also be used to protect networks from viruses, Trojan horses and other nefarious activity, the summary asserts.

"We're helping the ISP or university with policy enforcement. We're not dictating the policy, but we're saying, 'Here's a tool to help with automating the process.' We're the friends of the ISP," said Mark Ishikawa, chief executive officer of BayTSP, a Los Gatos, Calif.-based digital protection company that is using the system on behalf of copyright holders.

MediaSentry, another copyright searching company, and packet shaping vendor Ellacoya have started testing ACNS. According to the technical specification for ACNS, the group is working with a university that has installed the system using its Cisco routers. Universal Studios, Paramount, MPAA and RIAA have all begun using Extensible Markup Language (XML) tags in their copyright notices.

Although universities are interested in tools that can help them reduce campus piracy, some are reluctant to use ACNS because of concerns that it might not give students a chance to contest the charges against them.

UCLA's new piracy prevention program, for example, is based on principles used in ACNS but ensures that students will always get a fair shake, according to the school's director of IT policy, Ken Wada. The policy affects 7,500 students who live on campus.

"It would be easy to accept a claim and shut the computer off without understanding the circumstances," Wada said. "We seek to balance our responsibilities to respect copyrights and our responsibilities for due process and student privacy."

Under section 512 of the federal Digital Millennium Copyright Act (DMCA), a representative of a copyright holder can send a "takedown" notice to a university or ISP requesting that copyrighted material be removed. Universities may be obliged to comply with such requests from copyright holders.

ISPs have argued that the DMCA takedown requirements do not apply to peer-to-peer networks because the ISPs are not in a position to police the private hard drives of their customers. The statute applies only to material hosted on the providers' own servers, the ISPs have argued.

UCLA sent letters to resident students and staff last week, describing its new policy for file sharing and intellectual property, and warned of the personal risks of file sharing by highlighting the RIAA's latest round of lawsuits against students in March. The university will launch the new piracy prevention program on Monday as a test throughout the spring quarter, Wada said.

Since July, UCLA has received 300 takedown notices from copyright holders, a school representative said.

UCLA's policy will give students two strikes. A first-time offender will lose his or her Internet access until the infringing files are removed. On a second offense, the process is the same, but the student faces disciplinary action from a dean.

"When we receive a claim of copyright infringement and when we've identified the computer, it's put into the form of restricted network access. That computer can only get to resources on the UC campus; file sharing has been stopped," Wada said. "You'll see some commonality with ACNS."

ACNS isn't the first automated network piracy-prevention tool.

Last year, the University of Florida created a similar open-source program called Icarus (Integrated Computer Application for Recognizing User Services). When Icarus detects illegal file trading on the school network, it automatically sends an e-mail and a pop-up notice warning the student that he or she is about to be disconnected.

Utilizing digital tags
ACNS relies on reports of illegal file swapping from movie studios and record labels, which notify schools of infringement. It enhances current reporting methods by using software tags to automate some of the steps.

Several studios and record labels, including Universal Music Group, have begun to standardize the tags at the bottom of their takedown notices into XML, code that allows data to be used seamlessly in various contexts.

The digital tags contain the name of the copyrighted material that's been comprised, the copyright holder's name, date and time stamp, and the Internet Protocol address of the infringer. Receipt of this tag triggers the internal notification process at a university or ISP using the system.

Typically, it can take days or weeks for a university to act on a copyright violation request. When a request reaches the IT administrators, they must investigate who used the IP address in violation of its file-sharing copyright policies. Then they send a note to the residential housing adviser where the student lives. The adviser then sends a note to the dean's office about the student's activity. And the dean will act on the school's policy for such behavior, notifying the student and potentially disconnecting Internet access to the student's machine.

ACNS would trigger such e-mail notifications and could automatically choke off the student's access to a peer-to-peer network, while leaving his Internet or e-mail connection untouched. Depending on the school's policy, it could put the student into a 30-minute penalty box, without access, on the first offense. The second offense could warrant a week without peer-to-peer privileges, and so forth.

A report is generated on the infringing act, including who was notified and how the situation was handled, and a log is created at the monitoring station.

Fred von Lohmann, an attorney with the Internet consumer rights group known as the Electronic Frontier Foundation, said ACNS is an interesting concept but doubted that it will solve the problem of campus piracy. He predicted that students ultimately create workarounds, for example, using wireless devices to avoid detection. He said that the more sensible solution is for the copyright holders to collectively license their content to college campuses.

That approach has proven controversial as well, however. Penn State signed a deal last fall with Napster to offer a legitimate online service for its students, but many people balked because it translates into added fees to their tuition.

"Whether it's an opening gambit for the recording industry to try to tell universities how to design their computer systems, we'll have to wait and see," von Lohmann said. "The trouble I have with this, there will be countermeasures, and who is going to absorb costs to constantly modify this system to make it work? Do universities really want to be drawn into the arms race?"
http://news.com.com/2100-1027-5194341.html
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Internet Usage Increases CD Sales By 3x

New Study of the Net’s Impact on CD Sales
Edward W. Felten

Eric Boorstin, a senior at Princeton, just filed his senior thesis, Music Sales in the Age of File Sharing. The thesis includes a clever study of the impact of Internet usage on CD sales. This is a twist on previous studies, which have tried to correlate CD sales to usage of filesharing. The tradeoff here is that although Internet usage is one step removed from filesharing, the data on Internet usage are much more detailed and much more reliable than the data on filesharing usage.

Eric worked from two datasets. The first dataset came from SoundScan, and gave him aggregate sales of CDs, on a week-by-week basis, for many separate metropolitan areas in the U.S. The second dataset came from the U.S. Census Bureau, and contained data on population, income, and Internet usage, broken down by age group and geographic area. The census data came from 1998, 2000, and 2001. Combining these datasets, he ended up with data for CD sales, age group demographics, income, and Internet adoption, at three different points in time, in ninety- nine separate metropolitan areas in the U.S.

Eric took these datasets and did a regression to determine the correlation between Internet adoption rate and CD sales, broken down by age group. He controlled for differences in personal income. (For more methodological details, see the thesis.)

For people in the 15-24 age group, he found a significant negative correlation between Internet adoption and CD sales. For people in all of the age groups older than 25, he found the opposite – a significant positive correlation between Internet adoption and CD sales. Overall, the correlation was significantly positive – metro areas with higher rates of Internet adoption had significantly higher CD sales.

The explanation cannot be that higher income predicts both Internet adoption and CD sales; remember that Eric controlled for differences in income. There must be something about Internet access, other than income, that correlates with CD purchasing. Perhaps it's filesharing; perhaps it's something else; or perhaps it's a combination of both. Overall, each additional Internet user in a metro area correlated with 3.5 additional CDs sold.

There are two caveats to bear in mind in thinking about this study. First, what the study found was correlation, not necessarily causation – it may be that some common factor is causing both Internet usage and CD purchasing. Second, the study measures marginal effects, not average effects. We cannot conclude that every Internet user in a metro area contributes an extra 3.5 CD sales; we can say only that adding one more Internet user would increase sales by that much.

What does it all mean? And how does this connect to previous studies on filesharing? For my answers to those questions, tune in Monday, when I'll unveil my Grand Unified Theory of Filesharing.
http://www.freedom-to-tinker.com/archives/000573.html


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From December

Will DVD Acquittal Mean Tougher Copyright Laws?
Evan Hansen

The acquittal of a Norwegian programmer charged with breaking Hollywood's DVD encryption scheme could lend new urgency to the entertainment industry's efforts to enact tougher global copyright laws.

Norwegian authorities tried Jon Johansen on criminal charges for writing a software tool that can be used to overcome anticopying technology built into most commercial DVDs. On Monday, an appeals court threw out the government's case, agreeing with a lower court that Johansen had done nothing wrong under Norwegian law.

Even before the Norway case was filed, however, entertainment industry lobbyists had been pressing lawmakers in that country and elsewhere to enact tougher copyright laws, modeled on controversial U.S. legislation that makes it easier for authorities to win prison terms for people who crack encryption schemes or distribute cracking tools. If enacted, proposed legislation in Europe, Canada, Australia and Central and South America would soon hand entertainment companies similar weapons against people caught tinkering with anticopying software.

That's raising warning flags from some critics of the U.S. legislation, known as the Digital Millennium Copyright Act (DMCA), who contend the law protects content owners at the expense of consumers and software experimenters. Now, they say, that law is being exported around the globe with little debate.

"It is interesting that the court said Johansen had not broken any law, but the laws are changing," said Robin Gross, executive director of IP Justice, a nonprofit group that opposes the DMCA.

Monday's decision affects only Norway, a small Scandinavian country with a population smaller than that of New York City. Still, it is a notable setback for Hollywood, which had hoped the case would send a strong message of deterrence to potential DVD pirates, given Johansen's hero status in the video underground. The tool he's become famous for, called DeCSS, has been banned by a U.S. federal appeals court, but it's inspired poems, music, T-shirts and art from admirers.

Monday's acquittal was heralded by Hollywood critics as an important blow for consumer rights in the digital age, at a time when the entertainment industry has increasingly relied on technology that seeks to bar people from copying media products. Those measures may curtail not only piracy, but activities that many people assume are legitimate, such as making a backup of a legally purchased disc.

The case had also been taken up as a cause celebre in software circles on a more esoteric principle, with some programmers worried over a growing and potentially dangerous conflict between their right to develop new products and the right of content owners to protect their profits.

Jonathan Band, an attorney in the Washington, D.C., office of Morrison & Foerster, said the Johansen acquittal is important because it highlights some of the shortcomings of the DMCA, which offers few exemptions for legitimate copying of digital material.

"The acquittal is a great development," Band said. "The whole notion of prohibiting acts of circumvention or circumvention devices when it's not directly tied to infringing conduct is the wrong approach. The point is, there may be lawful reasons why someone would want to circumvent a technology."

But others said DMCA-like laws are the entertainment industry's best hope of fending off a new era of digital piracy, in which large-scale piracy operations and ordinary consumers have easy access to tools for making and distributing perfect copies of movies and other media.

Ian Ballon, an intellectual-property attorney in the firm Manatt, Phelps and Phillips, said court cases targeting alleged piracy have generally gone in favor of the content owners to date. But he said the industry is still on the defensive and needs to bolster legal victories with better antipiracy technology.

"By and large, content owners have prevailed in most of the litigation they've brought," Ballon said. "But the place where content owners have been losing is on the Net. Although new technology provides some new opportunities, it has made piracy easier than ever. Court opinions alone have not been able to withstand it. As a result, technology solutions will be required to address the problem of global infringement."

In some ways, the Johansen ruling offers a simple reminder that different countries have different laws, and companies can't rely on protections established in one region to protect them elsewhere.

But the case also points to an aggressive drive in the entertainment industry to win greater global conformity in copyright law, modeled on the DMCA.

Passed in 1998, the DMCA was the first national law to arise from a landmark 1996 agreement, known as the World Intellectual Property Organization (WIPO) Copyright Treaty, to explicitly criminalize tools that "circumvent" encryption schemes and the act of "trafficking" in circumvention tools.

The DMCA has become a legislative template used by U.S. negotiators in trade talks, according to legal experts, where it is used as a bargaining chip with potential trade partners. If countries agree to pass DMCA-like laws as part of a treaty, negotiators may offer better terms for exchanging other goods and services.

The U.S.-based movie and music industries have won some important victories in pushing this agenda.

International copyright experts said that the European Union has begun implementing the treaty in earnest this year, with Germany among the latest states to ratify enabling legislation this summer. Although that's considerably slower than Hollywood studios and record labels had hoped, the process appears on track to have most European countries finish their versions of the law by 2004.

U.S. negotiators are also seeking to extend DMCA-like laws as part of the pending Free Trade Area of the Americas (FTAA) treaty, which would encompass most of North, Central and South America.

As Norway illustrates, however, the process can move slowly, leaving the entertainment industry exposed to weaker copyright rules in regions where DMCA-like laws have not yet been passed.

"There was never any sense that someone would clap their hands and click their heels and have (the treaty implemented) overnight," said Motion Picture Association of America (MPAA) spokesman Rich Taylor. "Over time, more countries are coming on board, and other countries are doing things to increase their vigilance. As long as we can keep that momentum, we'll consider ourselves on the right course."

Such comments aside, the MPAA has begun to show signs of impatience over the pace of WIPO implementation.

Lacking an anticircumvention statute, Norwegian prosecutors pursuing Johansen were forced to rely on an older law prohibiting anyone from breaking into a computer system in order to access data to which they are not entitled, according to IP Justice's Gross. The case was the first time prosecutors had tried to use the law against someone accused of breaking into data that they owned themselves, she said.

In responding to the outcome of the prosecution, the MPAA raised the possibility of a further appeal to the nation's Supreme Court. But any shortcomings in the government's case, the group said, could be addressed by Norway's lawmakers.

"If the present decision is the courts' final word on the matter, we hope that the Norwegian legislature will move quickly to implement the WIPO Copyright Treaty to correct this apparent defect in Norwegian law," the MPAA said in a statement following Johansen's acquittal.

The Johansen verdict is one of several recent antipiracy setbacks for the entertainment industry in courts around the globe.

Last week, a federal appeals court in Washington, D.C., barred the record industry from seeking the names of alleged file swappers from Internet service providers without first getting permission of a judge. The ruling could raise costs and create delays for the industry's recently adopted and controversial legal strategy of suing hundreds of individuals to thwart Internet piracy.

Also last week, the Dutch high court refused an industry request to shut down peer-to-peer software maker Sharman Networks, which distributes the popular Kazaa file swapping client.

In Canada, meanwhile, the copyright office issued a determination that downloading copyrighted works over a peer-to-peer network is legal under that country's laws, although uploading files is not.

Meanwhile, moves to rein in the DMCA have been initiated in the U.S. Congress, where at least two bills have been introduced that would grant exemptions for consumers who crack encryption for certain legitimate purposes--for example, to make a backup copy of a legally purchased DVD. Those familiar with the bills said they stand no practical chance of success, at least in the current political climate.

On the international scene, as well, the entertainment industry has few serious political opponents standing in the way of its DMCA agenda.

Still, there are signs that some U.S. trading partners are growing increasingly reluctant to rubber-stamp IP provisions pushed aggressively by U.S. negotiators in trade-treaty talks.

For example, Brazil has recently raised objections over including intellectual-property discussions in the FTAA treaty, according to Peter Jaszi, a professor of intellectual- property (IP) law at American University Law School in Washington, D.C.

Jaszi said he was not familiar with the specific reasons for Brazil's position on the IP negotiations, which touch on a sweeping range of topics, including high-priority items such as patented AIDS medicine. Regardless of the reasons for the opposition, however, Brazil's objections could delay the ratification of DMCA-like copyright laws in the region for some time.

Deep reservations over U.S.-led IP policy may also be at work.

"There is a good deal of suspicion of the whole IP package the U.S. is pushing in the free trade agreement and also bilateral trade agreements," Jaszi said. "What I think will be borne out is that there is an increasing sense within that community that the U.S. has a very strong protectionist agenda and that may not be in every case the best approach for countries at different stages of development."

Whether that results in organized opposition to DMCA-like laws, however, is unclear at this stage.

"If I'm an African country in a trade negotiation with the U.S., I'm probably more interested in medicine and (in) getting cotton into the U.S market, than (in) dealing with hypothetical copyright restrictions, Jaszi said.

But entertainment executives are also chaffing at ongoing delays in the treaty process that have left Canada and Korea, two well-developed countries with high levels of broadband Internet penetration, without anticircumvention laws.

"The (WIPO) treaty was effectively negotiated a decade ago," said Neil Turkewitz, the Recording Industry Association of America's executive vice president for international issues, "and for a country like Korea, or Canada, to say now that they need to start examining these issues is crazy."
http://news.com.com/2100-1025-5133152.html


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Napster Investors To Face Music
Sue Zeidler

Napster has been reborn as a legal online music service, but the ghost of its former renegade song-swap self is trailing about $17 billion (9.5 billion pounds) of legal baggage.

Next Tuesday, music labels and publishers will face off against Bertelsmann in a federal court in San Francisco over claims the German media company's 2000 investment in Napster kept the file-swapping service operating eight months longer than it would have done otherwise.

The lawsuits claim the extra lease on life promoted wide-scale piracy and cost the music industry $17 billion in lost sales.

The Bertelsmann cases were first filed in New York, while Vivendi Universal's Universal Music and EMI Group Plc also sued venture capital firm Hummer Winblad in Los Angeles, claiming its $15 million investment and installation of a chief executive at Napster in 2000 also promoted piracy.

EMI declined to comment. Universal was unavailable.

All the cases, first filed in 2003, were recently relocated to San Francisco under U.S. District Judge Marilyn Patel, who issued an injunction against Napster in 2000.

That injunction was stayed, and Napster was operating at the time of the Bertelsmann deal in October 2000.

Venture capitalists say a win by publishers and labels could have a chilling effect on investments in start- ups.

"If the recording community is successful, it will make the investment community think twice," said Michael Cohen, an antitrust lawyer with Heller Ehrman White & McAuliffe.

Napster went bankrupt in 2002. Software firm Roxio Inc. bought its name and logo, relaunching it as a pay service last year. Roxio is not named in the latest cases.

Lawyers for Hummer and Bertelsmann said the plaintiffs, unable to get damages from Napster, are misguidedly seeking compensation from others who aimed to make Napster legitimate.

By providing $90 million in 2000, Bertelsmann said it hoped to turn Napster into a licensed service.

The labels and publishers claim Bertelsmann's funding kept Napster going until July 2001, when it shut down because it could not comply with a new order Patel had issued after an appeals court largely upheld her original decision.

"Bertelsmann legitimised this company and totally changed the equation," said Carey Ramos, counsel to songwriters and publishers, adding Bertelsmann's investment inspired others to fund Napster "copycats" like Kazaa and Morpheus.

"Napster created the piracy we've seen in the last four years that continues unabated worldwide," he said.

Hummer and Bertelsmann lawyers say the plaintiffs have a hard case to prove.

Bertelsmann attorney Bruce Rich said the plaintiffs are accusing Bertelsmann of "tertiary infringement," a legal approach he believes will prove difficult to win.

The defendants' lawyers cite a case in which Patel ruled against record producer Matthew Katz, who asserted infringement claims against Napster investors like Hummer.

"If Patel already ruled on the same theory with the same defendants, we see no reason why it should be different now," said Michael Page, Hummer's lawyer.

Ramos disagrees.

"Courts have been holding third parties responsible for copyright infringement for over 100 years," he said. "The facts clearly establish that Bertelsmann actively supported the continuation of infringement on the Napster systems."
http://uk.news.yahoo.com/040421/80/erl4n.html

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Interview: Phil Morle, CTO Sharman Networks
Steven Deare and Danny Allen

It's revolutionised downloading and could lead to a landmark court decision in the clash between peer-to-peer networks and copyright owners. The KaZaA Media Desktop is loved by millions of people the world over, but some influential music industry heavies are determined to see the object of that affection broken.

Amid international headlines and lawsuits, the company behind KaZaA operates quietly off a highway in North Sydney among a suite of modest-sized offices. The business that could change the face of digital copyright is marked only by a door displaying the name of parent company LEF Interactive.

Beyond this door, Phil Morle, Sharman Networks' chief technology officer, sat down with PC World reviews editor Danny Allen and online news journalist Steven Deare to share the latest on KaZaA's future development, the lawsuit wrangle, and why he believes you'll eventually pay to download major labels' artists on KaZaA.

Company background

Give us some background on yourself and your time and involvement with the company.

I've been with the company since day one, since Sharman was formed a couple of years ago. My background is actually not in technology. I was a theatre director for 10 years back in Perth. During my time as a theatre director, I was subsidising my income working in the local business. There was a point about six years ago where I really kind of flipped, and technology became the full-time part of my working life and my artistic endeavours became sort of part time endeavours in my life. I worked for a bunch of companies doing Web development and found myself at Sharman just over two years ago.

You fell into it?

Well, I knew Nikki Hemming prior to it. She asked me to come onboard. Before it I was working with the original owners of KaZaA, making Web sites for them.

What's your daily role?

All technological aspects for Sharman Networks. Which is largely the development of the KaZaA Media Desktop or the KaZaA Web sites, working closely with partners on their software such as the Altnet software and the Bullguard software and so on. And thinking about and developing technology for the future. There's quite a few things we're working on -- some already more than a year into development -- which are long-term things.

Can you tell me a bit about how Sharman works with Brilliant Digital and Altnet? What's the relationship between those companies?

A really close relationship. We have done since we started the company. It's [Altnet] one of the things we knew we were going to do when we formed Sharman and got into this whole business. Altnet have got some very good technology for letting licensed content benefit from peer-to-peer environment and that's what we're here for. Contrary to what is often said about us, we're here to be a part of the solution not a part of the problem and Altnet is something we've perceived to be part of the solution. We work with them extremely closely. You probably know they have a development team in Sydney as well and every day we are speaking to them at a technological level to make sure the technology grows into something that's excellent.

What's the company's vision in terms of the products and services you're eventually trying to create?

I think there's two parts to that. One which is fairly obvious, which is the reason we were formed, which is to be a part of a solution. Something that takes a leap in peer-to-peer which we believe in very strongly and to take those benefits and to deploy them into a consumer arena where everybody can enjoy those benefits by getting some high performance software at a good price. So in the area of media distribution and peer-to-peer, becoming a dominant force in that is something we're consistently innovating on and we'll continue to do so. But even in that regard it's a lot more than music -- it's any kind of multimedia, movies, games, as well as the music.

There is so much more to peer-to-peer technology and what it can accomplish. The antivirus tools inside KaZaA use peer-to-peer functionality -- because of that, it means when major viruses come about the peers effectively distribute the information about the viruses to each other. It means it happens extremely fast, it doesn't fail, the users are protected and they can have that service for free. Normally, as you well know, it's a comparative product. It's centrally served, you've got all the problems of guaranteeing that the definitions are going to be delivered to you and it costs an awful lot of money. That's why people have to pay a regular subscription fee for viruses. We don't have to do that and peer-to-peer just comes into its own in the environment.

Soon we're going to be releasing some software that'll actually let people speak and communicate between each other.

Isn't that Skype?

We're working with Skype. And in the same way that files can be shared between each other and applications doing that can grow to an infinite size, the same thing can happen with this. So the second part of what we're working on is very much multiple applications for peer-to-peer which are much more than music file-sharing, just generally exploring its power in other areas and seeing what we can do.

Is that within KaZaA Media Desktop?

And outside of it as well. We're working on quite a few things experimentally.

The KaZaA software

What's the state of play with the hacked KaZaA Lite?

[Corrects interviewer] KaZaA Plus. Well, you know KaZaA Plus and KaZaA Lite are nothing to do with us?

Well, my biggest concern in my department is that they all in different ways hack the software, and they do it using different means. But generally speaking they change elements of it in a very kind of clunky way. They actually change the binary of the file or just change registry keys to try and tune it for the KaZaA user, for the KaZaA Plus or KaZaA Lite user. But the problem is it potentially damages it for everybody else, they would effectively break the system. Just the act of doing it is a problem, otherwise we would do it. One of the things they do is these download accelerator type tools they have, we would give that to everybody if everybody could have it without being detrimental to each other. But you can't because it'd be detrimental to each other so we don't do it. So we don't like them doing it for that reason.

Then there's the way that they do it. If you actually look at the binary, it's not like looking at source code where you can just see the relationships between things and what they're changing. They're kind of blindly changing a number and saying 'ah it seems to work' and that causes all kinds of problems to us. Then we get thousands of bug reports saying 'KaZaA's not working' and we're saying 'does yours say KaZaA Lite on the top' … and it's not our problem.

What additions and improvements can we expect from KaZaA short term?

We're going to be looking at Skype integration. We're fleshing that out now and looking at all the possibilities but obviously that's going to bring a whole new dimension into KaZaA. The users can kind of interact with each other directly, and phone each other and so on.

One area that we're very keen on is exploding KaZaA out of the KaZaA application into other Internet environments. We're doing a lot of work with a technology called Magnet links, which effectively lets you click a link on a Web site and download that file using peer-to-peer software. Magnet links are an open standard and we've come in behind that standard because it's not a place for a proprietary [technology].

You can't filter KaZaA, is that right?

To our knowledge at this time, you can't. And our knowledge is quite immense on it. We're looking at it in a lot of detail, in particular with the activities we're doing with the DCIA [Distributed Computing Industry Association] and the things that we're thinking of, and just things we're thinking of for the product. We're obviously thinking about filtering in terms of the family filter we have in KaZaA, which does a certain job.

But in terms of what I think you're asking about, which is often called copyright-filtering and that kind of thing, that is a tremendously complex problem and we haven't resolved that problem, in the same way there's no cure for diabetes yet. It's like a big problem and you have to look at it in all its different facets. Even just purely on a technological level we haven't found a way of doing it yet but that doesn't mean we haven't stopped looking at it.

The lawsuit

With all the unlicensed content that circulates around the world via KaZaA every day, why, in your view, is Sharman Networks not liable?

Why are we not liable? Well I think as the lawyers would say of course for a legal conclusion it's not something...(trails off). All I can say is it's not something we do. In the same way that I can also send infringing files using my Outlook client, I can also send them through an instant messaging client, which commonly happens as you probably know. Users use our stuff for multiple things.

But in facilitating that, either directly or indirectly, is the company acting as a good corporate citizen?

That's a very provocative question and I would begin by saying that I don't believe we are facilitating it either directly or indirectly. I mean we've taken a core technology which is a way of sharing files amongst peers and the kind of areas where we're developing the technology and promoting the technology is absolutely all about values. I think if you did a fair comparison between KaZaA Media Desktop and another bit of software like eDonkey or one of the others, we do not promote infringing activity. We're here from day one to move users towards paying. By the same token, we're the biggest distributor on the planet of rights-managed content and users aren't ignoring all those files and doing whatever else they're doing.

Recently, the record industries in Australia and the US have started targeting their lawsuits towards the users that are swapping copyrighted songs. Do you see those lawsuits as more appropriate rather than targeting companies like yours?

I don't think any of it's appropriate. We are a part of an organisation called the DCIA and in those meetings some extremely positive discussions are had, both between us as technology companies, other technology companies, content owners, record labels, other technology companies that have ways of protecting content. You'll see if you go to the DCIA Web site there are multiple models being suggested and they're all being discussed across industries. These are all things which we are seriously looking at and investigating and researching and piloting and trying and talking to people about. I don't think it's a solution at all to sue us, because it costs them a lot of money, it costs us a lot of money and it's going to go on forever. Suing users is clearly problematic, and there's a lot of users out there that they may need to sue.

I heard someone say the other day, we're really at a fork in the road and that is to criminalise or commercialise, and we've just got to hope it's the commercial route that's taken because that's where everybody wins and I think the criminal route everybody loses.

Working with the music industry

As a company that obviously has a commitment to making and sharing music and all sorts of multimedia as widely available as possible, what sort of commitment does Sharman Networks have to the music industry here or abroad?

Enormous. These guys here [in the Sharman offices], work every day with local artists. Honey Palace: through us, there's a small Australian band that became number one in some American state. Well, how were they going to do that without something like KaZaA? We're constantly working with local artists and always looking for opportunities to work with local artists. We're working with Altnet to make it as easy as possible to literally become your own label, or for small labels to automatically use the peer-to-peer technologies to distribute their wares and for a good price. From day one we've been working with emerging artists. You probably know about our relationship with Cornerband in the US which is probably coming on 18 months old now and we've moved an enormous amount of local artists work through that relationship.

So what can you offer an aspiring local artist? Outline your whole package of what Sharman Networks can offer an artist through KaZaA.

Well they would probably go through Altnet. We actually do work here finding local acts and working with them but ultimately refer them on to Altnet. You don't have to sign your life away. It costs you $99 to become listed.

Then they can distribute their music or movie or whatever through the KaZaA Media Desktop and other applications that Altnet is inside. So Altnet is in Grokster, will also be in eDonkey, is also available through Web sites. So you then appear in a number of different ways. In front of three and a half million users at a time through what we call the showcase which is the kind of Web looking pages in the middle of KaZaA. Or you appear in TopSearch which is a preferential search results system which is like buying a Google keyword. You can buy a TopSearch entry and through that your results appear as gold icons and users download them.

Now the other important part of Altnet is they actually protect the files, if that's what the artists want, before they distribute them using Microsoft Digital Rights Management technology

For bands that have had their copyright material infringed, downloaded, what's your stance on whether Sharman Networks should compensate them in some way?

We're here to be a part of the solution, not a part of a problem. I can't simply answer yes or no to your question because it's much more complicated than that. I think there's massive potential there for artists, and for users. I think we will move on from where we are today to find a solution which is something that everyone's happy with. I think we have to.

What offers have you made to record companies in how Sharman might work with them?

We've been offering them the Altnet product for a long time now. Increasingly we get a lot of interest in that and the great thing is that model is proving itself as people are using it. That's clearly one offering to content owners of all kinds and we still think it's an excellent model.

Other ones are much more complicated and are all being discussed through the DCIA because they're really involved. The great thing about the TopSearch one is that it’s something we can offer today. It makes things enormously better than they are today, if not completely resolves the problem, and it's completely within our power to deliver. So we've delivered it, it's there, and we want people to take it.

The other things are more complicated and you'll see a lot of proposals for compulsory licensing schemes. For example, where people will build at the ISP level to pay a kind of levy for music which they get through file-sharing or music that they rip in other means. There's other models where users effectively sell music to each other in a kind of eBay fashion. There are other models where users pay for use effectively, where ISPs kind of toll what people actually do file-share and they're billed for them on the ISP level. And there's many many others.

In saying that I don't understand how Sharman and the record companies could get to that point. What would be the incentive for the record companies to license their work to Sharman when it's already available for free?

Easy, because users will start buying their material instead of trying to find it for free. See the assumption you make there is that you can just find it there, top of the list, know it's a high- quality file, know it's what you wanted. If a user shares out something they shouldn't share out, there's no guarantee of what the quality is, there's no guarantee it's going to show up in your search results at all. If it does show up in your search results, there's no guarantee it's going to show up in the first ten pages of your results. You don't have any guarantees of service, you don't know that it's a high-quality file, you don't know that it hasn't been spoofed, you don't know that it isn't a virus.

People have been going for the Gold Files (Top Search). It's easier. I don't know if you guys agree but on a Google search I rarely go past the first page. I know the top ones are the most relevant, and then in KaZaA there's even more to my decision making, knowing the relationship between files, whether it's high quality. So our position is if Warner Bros is worried about Madonna files being shared out by users, our position is if they licensed the gold versions of those, then that's what users were overwhelmingly presented with, then we believe that users would download those gold ones and they would pay for them. That's our position, but today they don't have that choice.

Spoofing and viruses aside, when you do do a search on say, Madonna, if Madonna comes up as a gold search, you can download that, or you can download a number of the free files and one of those will work. And that's what most users do-

[interrupts] I would challenge you to prove that you know that because I don't think you do know that. I certainly don't know that.

Well every time I've seen it in use, with technical people and non-technical people they've gone ‘I'll download two [free files] and if they don't work I'll delete them’. If you allow in the KaZaA program to sort by kilobyte, in that sense, that also helps filter out some of your argument that you say about the quality [assurance of paid downloads]

[interrupts] I'm not suggesting for one minute that one hundred percent of people are going to go and do the right thing. Let's look at it even more simply and if the price was right, and I knew that what I was downloading was unambiguous and legal to download, I would take it. And I think that's what we think people will do.

As you said before this court battle could go for ages, what sort of finances does the company have to mount that sort of defence?

Well, enough, is the simple answer. Of course that's very frustrating for the people who are suing us because clearly the strategy was that we weren't supposed to last this long, and we have. It's a case which we're confident of winning. We've got enough money and enough user support, and we're in for the long haul.

Sharman's an unusual company in that there hasn't been a day where we weren't being sued [laughs] as far as I can remember at least. So that's how we operate.

So who's financing the company?

The users are financing the company.

So what's the main revenue stream?

Multiple revenue streams. But certainly advertising and content now is an enormous one. It's getting very colourful now because of the content we're putting through, which is the Altnet system.

To finish, obviously there's a clash of cultures between your company and the whole record industry around the world, where in five years do you hope an agreement will lead to in the distribution of music?

We're certainly not colliding with the whole record industry, we're colliding with some of the record industry right now. Some of them are working with us in increasing numbers. I think file- sharing will endure because it must, and because it's better. The more I work with it the more I think that it's silly people relying on centralised services which cost everyone so much money and they fail all the time. I think file-sharing will endure. Whether that's Sharman or not, I don't know. I'm highly confident and I think we're doing tremendously on the case and we're making great software at the same time. And it's my intention to do everything I can to make it a success.

But Sharman aside, Sharman out of the picture, peer-to-peer is so enduring it will be here and in five years time the labels will be distributing their stuff using it.

Note: This transcript has been edited for brevity and clarity.
http://www.linuxworld.com.au/index.p...03;fp;2;fpid;1


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No-show judgment

Pop Star Takes On Ebay Pirate, Wins

Briefless in court

POP STAR Sophie B. Hawkins has taken on the music pirates without her briefs and won.

She took an eBay merchant who was flogging pirated copies of her single "Wilderness" to small claims court and won the grand sum of $346 of your American dollars.

The single was not supposed to be in the shops until next week and it is due to be released by her new label Trumpet Swan Records.

The popular beat artist, who has warbled such classics as "As I Lay Me Down" and "Damn I Wish I Was Your Lover" in the 1990’s, said that she was not after the cash.

She told Reuters that the pirate was just making easy money off something that's her blood and guts.

However Soph, who appears naked on her album cover, seems to have given herself pretty good publicity. She has appeared on a telly show "Celebrity Justice" to tell of the horrors of piracy to potential punters and got herself in all sorts of newspapers and news sites.

But there was no face off with the pirate. He just didn’t turn up to defend himself and she was awarded victory by the beak
http://www.theinquirer.net/?article=15339


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Butterflies May Be Free, But Should Expression Be?

A Review of Lawrence Lessig's Free Culture
Seth Stern

Read Stanford law professor Lawrence Lessig's new book Free Culture and you're likely to agree with his conclusion that he's told a "dark story."

The way Lessig sees it, big bad media companies and their henchmen in Washington are threatening to all but obliterate creative expression. Like some Hollywood mafia family, the conglomerates and their lawyers are using copyright law as a club against well-meaning artists, and extorting music-downloading teenagers out of their last dimes.

After awhile, it's tempting to roll your eyes at all these gloomy pronouncements by an author seemingly striving for the title of the Internet age's Nostradamus.

But dig beneath the proclamations of doom, and you'll find that Free Culture is yet another book well worth reading by one of the nation's most thoughtful cyberlawyers.

Beyond the Internet: Lessig's Larger Point Encompasses Other Technologies, Too

Here, in his third book, Lessig expands beyond the Internet his previous warnings about the threat technology poses to "free culture."

Lessig projects that, in an ideal world, new technologies could allow low-cost access to almost all creative content ever made, much of which no longer has any commercial value anyway. He envisions the building of virtual libraries on the web that would be akin to the wonder of the world built in ancient Alexandria. A world of tinkerers, according to Lessig's vision, could create new content by borrowing from all that's come before.

But Lessig charges that this glorious future is threatened by giant media companies who are stifling creativity in the name of fighting piracy. They're going too far, he argues, by rigidly enforcing copyright laws and limiting what flows into the public domain after its commercial value has shrunk. And the issue isn't limited to the Internet -- it affects virtually all copyrightable material, meaning any fixed expression that the law protects.

Lessig's Argument: Honor a Long American Tradition of Creative Borrowing

As Lessig notes, there is a long tradition of such borrowing. Walt Disney's first cartoon with synchronized sound, "Steamboat Willie," was a rip off of an earlier silent film. Fox was the Napster of its era, fleeing to the West Coast to escape scrutiny for its infringement of patents granted to filmmaking's inventor, Thomas Edison. Indeed, Lessig argues pretty much every innovation in film, records, radio and cable TV since Eastman's Kodak instant camera involved borrowing technologies that preceded them without asking.

Now, you might want to Lessig's tour of Twentieth Century media innovation with a grain of salt. But it's hard to argue with his conclusion: if piracy means using the creative property of others without their permission, then "the history of the content industry is a history of piracy."

Having established this tradition of "borrowing" and its beneficial effect, Lessig asks readers to consider whether the harms of peer-to-peer file sharing like Napster and its progeny really outweigh the benefits. After all, the jury is still out whether file sharing is more likely to eat away at record sales, or to give listeners a way to sample new products they later buy, and provide access to tunes no longer available in stores.

Lessig Isn't Pro-Piracy -- He's Pro-Balancing

Still, Lessig is hardly endorsing all piracy in Free Culture. What he asks for, instead, is greater balance than the "copyright warriors" in the entertainment industry demand. Lessig suggests the balance has been tipped in their favor in two ways: By harsher laws, and longer copyrights, and by better copyright- protecting technologies.

Lessig rejects the notion that intellectual property deserves the same protection as real property, and decries the creeping expansion of copyright protections in recent decades.

Lessig notes that the length of copyrights has tripled in the last 30 years, most recently thanks to an act of Congress named after the late Sonny Bono. And he flagellates himself for his lack of success when he tried convincing the Supreme Court, a few years ago, that such lengthy extensions violated the constitution's Copyright Clause, which that secures exclusive rights to authors only for "limited times." (See Eldred v. Ashcroft for the reasons the Court rejected his argument.)

Yet 98 percent of such copyrighted material is no longer commercially viable, Lessig points out -- why protect what is valueless except to those few who want to borrow from it, and now cannot?

What's more, Lessig notes, technology now makes it easier to catch non-compliers and supplement legal protections with limits built into hardware. Plus, media concentration means the freedom to "cultivate and build on the past" is increasingly held by a few.

Instead, he suggests copyright law should keep the same balance as in the past when new technologies emerged.

Lessig's Book is Accessible to Nonlawyers, But Unfair to Media Companies

Lessig's last book, The Future of Ideas, was at times weighed down by passages on technology that were less than accessible. In contrast, Lessig's Free Culture does a good job of presenting legal battles and the basics of copyright law in laymen's terms. It's a useful primer for non-lawyers, or even lawyers like me who regret not taking intellectual property courses back in law school.

What is less easy to swallow, however, is the unrelenting scorn Lessig heaps on the leading media empires and their Washington lobbyists.

Lessig lays it on particularly thick when discussing the case of Jesse Jordan, a Long Island teenager who gets into trouble his freshmen year of college while building a Google-like search engine of files on his college computer network.

With a quarter of the files music, Jordan's search engine quickly draws the attention of the Recording Industry Association of America (RIAA). Indeed, the RIAA threatened to file a $15 million copyright infringement lawsuit against poor Jordan.

Lessig charges that the RIAA put Jordan to a "mafia-like choice:" pay $250,000 in lawyers' fees, or fork over his $12,000 in savings. Unsurprisingly, the $12,000 was an offer he couldn't refuse: Jordan settled.

Lessig's contempt for the RIAA is perhaps matched only for his dislike for the Motion Picture Association of America (MPAA)'s Jack Valenti, who recently hinted he will finally step down after 38 years as the movie industry's chief lobbyist. Lessig unfairly ascribes the darkest of intentions to every utterance from either of these two powerful interest groups.

After this book, it's hard to imagine Lessig shedding a tear when Valenti vacates his throne or, for that matter, to imagine Lessig earning a spot at the retirement dinner -- not that Lessig would take it if offered.

But even his biggest detractors should probably read this book too.
http://writ.news.findlaw.com/books/r...416_stern.html


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California Votes Against Diebold
Paul Festa


SACRAMENTO, Calif.--California election officials on Thursday recommended banning some Diebold Election Systems voting machines and referred an investigation into the company to the attorney general for possible civil and criminal sanctions.

California's Voting Systems and Procedures Panel unanimously voted to send its recommendations to the secretary of state in a second morning of contentious hearings, during which Diebold's president apologized to the panel and admitted that the company's errors had prevented some Californians from voting.

But panel members said Thursday morning that the company's apologies were insufficient, and they expressed frustration with and distrust of the electronic-voting vendor.

"I'm disgusted by the actions of this company," said panel member Marc Carrel, assistant secretary of state for policy and planning. "And I think we should forward our recommendations to the attorney general, because I can't believe that a lot of the statements made yesterday were accurate."
http://news.com.com/2100-1028-5197870.html


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Investor's Pullout Stirs Doubts About SCO Group
Steve Lohr

The SCO Group received a large dose of cash and a vote of confidence for its anti-Linux campaign last October when BayStar Capital arranged a $50 million investment in the company.

BayStar, a private investment firm in Larkspur, Calif., put $20 million of its own money into SCO, which is based outside of Salt Lake City, and convinced the Royal Bank of Canada to chip in another $30 million. The fact that BayStar made its investment after a referral from Microsoft, a Linux antagonist, only added to the impression of coordinated support for SCO and its strategy.

But BayStar broke ranks last Thursday when it told SCO it wanted its money back, raising questions about the company's future and its ability to wage a lengthy legal attack on Linux. If SCO's legal campaign fades, the advance of Linux as a popular alternative to Microsoft as an operating system for computers used in business could accelerate as the threat of litigation recedes.

In an interview Wednesday, Lawrence R. Goldfarb, managing partner of BayStar, explained why his hedge fund originally invested in SCO and detailed for the first time what he regarded as the wayward corporate behavior on SCO's part that led to the recent split.

Mr. Goldfarb described a company that had become too engaged in publicity and debate with the passionate advocates of the free Linux operating system. SCO's management, he said, was traveling too much and spending too much when it should have been concentrating its efforts and resources on its legal strategy.

"The real issue for us was spending and focus," he explained.

The public statements from Darl McBride, SCO's chief executive, were too frequent and too grand for BayStar's liking.

Linux is an operating system that is distributed free. It is improved and debugged by a worldwide network of programmers, who share the basic source code, in a model of software development known as open source. Linux has become a mainstream operating system for running server computers in data centers, competing with Microsoft's Windows and commercial Unix offerings, like Sun Microsystem's Solaris.

SCO holds rights to Unix, and it asserts that Linux, a variant of Unix, violates its property rights. Others, including I.B.M., contend that SCO's legal rights are less far-reaching and that Linux is not in violation.

In an open letter SCO put on its Web site last December, Mr. McBride took on the advocates of free software like Linux in terms that suggested the stakes in SCO's legal dispute are high indeed.

"There is no middle ground," Mr. McBride wrote. "The future of the global economy hangs in the balance."

BayStar, it seems, would have preferred that managers pragmatically focused on running the business, mostly out of the limelight. The BayStar view was that courts would decide the validity of SCO's intellectual property claims eventually, and that having the company's executives embroiled in a running debate about the role of intellectual property rights was counterproductive.

SCO was becoming a significant distraction for BayStar, a private hedge fund unaccustomed to publicity. BayStar was involved in 64 deals last year in technology, life sciences and media companies, with the average investment being $18 million. And SCO was only one.

Microsoft initially recommended that BayStar take a look at SCO. But there is nothing unusual about that, Mr. Goldfarb said. BayStar often talks to the investment and venture arms of major technology companies like Microsoft, Intel and Cisco. "It was evident that Microsoft had an agenda," Mr. Goldfarb said.

BayStar, he said, then did a lengthy assessment of SCO's intellectual property claims and whether, if the dispute ever came to a jury trial, the lawyer SCO has hired, David Boies, one of the nation's top litigators, could win.

SCO's claims in suits against I.B.M., DaimlerChrysler and others that Linux is essentially an unauthorized version of Unix, which it holds the rights to.

"The issues for us were, first, is the intellectual property claim valid, and if it went to a trial would David Boies win or not?" Mr. Goldfarb explained. "Right, wrong or indifferent, it was our position that we would prevail."

Since its founding in 1998, BayStar has never before sent a letter to a company seeking its money back, as it has with SCO. In the letter last Thursday, BayStar asserted that SCO's behavior violated provisions of the investment agreement and that BayStar's convertible preferred stock be redeemed. In a statement on Friday, SCO said that it did not believe it had breached the provisions of its agreement with BayStar.

"We're unsure what their issues are," Marc Modersitzki, a SCO spokesman, said yesterday. He added that the BayStar letter was "a notification, not a legal action," and that SCO hoped the two sides could settle the matter.

For his part, Mr. Goldfarb said that with reforms in management practices to address BayStar's complaints, it might keep its funds in SCO.

SCO's stock price, which fell 38 cents yesterday to $6.80 a share, has dropped 30 percent since last Thursday, the day BayStar sent its redemption letter. And SCO's stock is down sharply from its high of more than $22 a share reached last October, shortly after the BayStar investment was announced.
http://www.nytimes.com/2004/04/22/technology/22sco.html


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China Agrees to Postpone Wireless Plan, Thwart Piracy
Elizabeth Becker

China agreed on Wednesday to give up a plan to impose its own standard for wireless technology, essentially agreeing to join the rest of the world rather than dividing it up.

The Chinese said they would indefinitely postpone a plan, scheduled to go into effect on June 1, to impose a software encryption standard for wireless computers that American giants like Intel and Microsoft regarded as an unfair trade barrier.

The concession was one of several made by China in a daylong trade meeting held here between senior Chinese and administration officials. But the agenda did not include contentious issues like textile exports, currency controls or labor rights.

For the administration, the successes from the meeting offered an opportunity to respond to critics who have complained that President Bush has failed to protect American industries and American jobs from unfair trading practices, especially by China.

"It is certainly a landmark day - a fruitful day in the relationship between the United States and China," said Donald L. Evans, the commerce secretary, who was co- chairman of the talks with Robert B. Zoellick, the United States trade representative.

Instead of viewing China as a predator stealing jobs and livelihoods, Mr. Evans spoke, instead, of China as a huge, hungry customer of American goods and services.

"Our exports to China are growing faster than exports to any other country in the world," he said.

But Democrats complained that the administration only began addressing China's unfair trading practices because of election year politics and said more needed to be done to help American workers.

Senator John Kerry of Massachusetts, the presumptive Democratic nominee for president, said in a statement that "there are 2.8 million reasons why this White House needs to change its tune when it comes to standing up to China, and they are the 2.8 million manufacturing workers who have lost their jobs since George Bush took office."

The Chinese also agreed in the talks to concede to administration demands to crack down on counterfeiting and piracy of intellectual property rights, to fully open their markets six months ahead of schedule and to sign international treaties protecting intellectual property rights on the Internet.

To try to improve the longstanding problem of piracy and counterfeiting, the Chinese agreed to increase the range of violations of intellectual property rights that are subject to criminal investigations and penalties.

They also agreed to lower the threshold for these sanctions and apply them to the import, export, storage and distribution of pirated and counterfeit products.

Jack Valenti, chairman of the Motion Picture Association, said this plan was commendable and "contains important elements that could lead to improved copyright protection in China."

This was not the first instance where China promised to crack down on piracy under pressure from the United States. Under President Bill Clinton, several prominent agreements were reached to end counterfeiting of tapes, movies and compact discs. But the problem was never resolved and has grown worse in some areas, in part because piracy is carried out on such a large scale that it may be unstoppable, according to analysts.
http://www.nytimes.com/2004/04/22/bu...s/22trade.html


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China Steps Up Internet Control With Video Surveillance In Public Places

SHANGHAI, (AFP) - China has stepped control of the Internet in its largest city Shanghai with the installation of video surveillance equipment and software in public places.

The directive from the Shanghai Culture, Radio, Film and TV Administration was designed to prevent the surfing of banned websites and to stop people under 16 from entering Internet bars, the Shanghai Daily said. Authorities have already installed video cameras in every Internet cafe in the city so officials can keep track of youngsters' movements, the newspaper said. The yet-to-be installed software will force users to input personal identification data to log on, while a supervisory centre will monitor surfing and check whether a cafe was illegally operating at night, it said. Foreigners will have to input their passport number. "The software, which cost seven million yuan (850,000 dollars) to develop, can help supervise more than 110,000 computers at the city's 1,325 Internet bars and spot illegal activities immediately," the paper quoted project director Yu Wenchang as saying. The measures are part of a six- month campaign by municipal authorities, which began this month, to crackdown on Internet bars. Fifty-seven net bars have been punished or shut down in the city so far. There are roughly 70 million Internet users in China, putting the world's most populous nation second behind the United States in terms of people online. The Internet explosion is both a blessing and a curse for the Chinese authorities, who want people to be more tech-savvy without absorbing too many foreign ideas or spreading anti-government messages. Internet users are frequently jailed for posting articles critical of the government.
http://uk.news.yahoo.com/040422/323/erpbe.html


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Ten Hut!!!

RIAA enlisting?

Downloading Shared Files Threatens Security
Sgt. 1st Class Eric Horton

FORT HUACHUCA, Ariz. (Army News Service, April 22, 2004) – People spend hours in front of their computer screen, downloading music or new movies from the Internet, and not paying a cent, the Army considers such action on government computers to be a security threat.

One program that is used to downloaded files is Peer-to-Peer (P2P) architecture. It is a type of network in which each workstation has the capability to function as both a client and a server. It allows any computer running specific applications to share files and access devices with any other computer running on the same network without the need for a separate server. Most P2P applications allow the user to configure the sharing of specific directories, drives or devices.

In a white paper written by the Army’s Computer Network Operations Intelligence section, unauthorized P2P applications on government systems, “represent a threat to network security.”

“The idea of someone else getting unfettered access to anything of yours without your explicit consent should scare anybody – and that’s exactly what P2P authorizes,” says Zina Justiniano, an intelligence analyst with the U.S. Army Network Enterprise Technology Command’s (NETCOM) Intelligence Division, G2. “P2P is freeware. Freeware, shareware – most of the stuff that you pay nothing for, has a high price. The fact that it’s free says that anybody and their cousin can get it; that means that anybody and their cousin can get to your machine.”

P2P applications are configured to use specific ports to communicate within the file sharing “network,” sometimes sidestepping firewalls. This circumvention creates a compromise and potential vulnerabilities in the network that, in a worse case scenario, can lead to network intrusions, data compromise, or the introduction of illegal material and pornography.

There is also the issue of bandwidth. Since the start of the Global War on Terrorism, the most pressing issue from service members in the field has been the shortage of bandwidth to transmit battlefield intelligence to combatant commanders. The average four-minute song converted into an audio file recorded at 128-bit, can be upwards of 5 megabytes. Full-length video MPEG files can easily reach 1.6 gigabytes. Depending on the connection speed, even a small file may take several minutes to hours to download, using valuable bandwidth.

Unauthorized use of P2P applications account for significant bandwidth consumption. It limits the bandwidth required for official business, and storage capacity on government systems.

While those who monitor the Army networks agree that copyright infringement is a valid issue, they do have other, more important concerns.

There are several known Trojan horses, worms and viruses that use commercial P2P networks to spread and create more opportunities for hackers to attack systems. Trojan horse applications record information and transmit it to an outside source. They can also install “backdoors” on operating systems, transmit credit card numbers and passwords – making these malicious programs a favorite of hackers. Some of the malicious codes allow hackers to snoop for passwords, disables antivirus and firewall software, and links the infected system to P2P networks to send large amounts of information (spam) using vulnerabilities in Windows operating systems.

“If it’s a really good Trojan horse, it will actually run two programs; it will run the program they said they were going to run, so they will not only download it, but they will install it and be very happy that it’s there,” Justiniano said. “Meanwhile in the background, another program is doing malicious damage to the computer by either damaging files or possibly taking files off the computer without your knowledge. If it’s a really nice program that runs well, (the user) will pass that file over to someone else because they really got their money’s worth out of it. People will just keep passing it along.”

Trojan horses are not the cause of all security issues. Oftentimes, “spyware” applications are installed with the users consent; it’s buried in the really long agreement that nobody reads that a user must click, “I Accept,” in order to begin the installation. This is especially true with free-ware applications downloaded from the Internet. According to published reports, a couple of years ago, some P2P applications came packaged with a spyware application that acted as a Trojan horse. This specific program sent information to an online lottery server.

Those are just a couple of reasons the Army doesn’t want its people loading P2P on their systems, and enacted regulations prohibiting loading those applications.

The Army’s regulation on Information Assurance, Army Regulation 25-2, specifically prohibits certain activities; sharing files by means of P2P applications being one of them. There are some, however, who have P2P applications on their Army systems and use them despite the prohibition of such activities.

Over a two-month period at the end of last year, government organizations identified more than 420 suspected P2P sessions on Army systems in more than 30 locations around the globe.

It seems some don’t understand or haven’t read the standard Department of Defense warning that says, “Use of this DOD computer system, authorized or unauthorized, constitutes consent to monitoring.” For those who think, “How are they going to know it’s me? I’m just one person in a network of hundreds of thousands,” don’t be surprised when network access is cut off and the brigade commander is calling.

It is the role of the Theater Network Operations and Security Center, located in Fort Huachuca, Ariz., to monitor and defend its portion of the Army network. This includes identifying potential security risks to the network, and unauthorized P2P applications, which create a considerable risk to those networks.

“People shouldn’t assume they are using P2P applications in secrecy,” said Ronald Stewart, deputy director of the C-TNOSC. “We are able to detect use of P2P, and when we do, we take measures. We can detect and identify systems with P2P software on them; and when we find them, we direct the removal of the software from the system through the command chain.”

Some Soldiers try to work around the Army networks to feed their P2P habits. Lt. Col. Roberto Andujar, director of the C-TNOSC, says using the Terminal Server Access Controller System (TSACS) to dial into the military network is not a work-around, because there are tools in place to identify P2P traffic.

Methods commonly used by commercial industry, such as Internet Protocol (IP) address and port blocking, random monitoring, and configuring routers are some of the methods the C-TNOSC and installations take to prevent P2P access. There are other methods used, but specific examples cannot be discussed.

Commanders who unwittingly allow P2P to run unchecked on their networks are not exempt from liability. Commanders may be held personally liable for any illegal possession, storage, copying, or distribution of copyrighted materials that occurs on their networks. Soldiers, civilian employees and contractors face even tougher penalties.

People using P2P on government computers can to look forward to other possibly harsher punishments depending on the kinds of files the users are sharing.

“Say you have a Soldier downloading music through P2P, in violation of copyright rules,” said Tom King, a legal adviser with NETCOM. “The people who own the copyright can actually sue that Soldier. Then you have the issue that he’s violating a lawful order. Then you have the issue that it’s a misuse of government time and misuse of a government resource. He can be in a world of hurt. Then he’s also exposing the Army network to hacking attacks.”

“Prosecutions are on the rise. Discipline is on the rise. People are taking this stuff more and more seriously all the time,” King said. “People just don’t understand that there’s a price to be paid for this.”

Not understanding seems to be the main reason P2P applications keep showing up on Army computer systems.

“User education is one of the keys,” said Kathy Buonocore, chief of the Regional Computer Emergency Response Team. “Some users don’t know it’s illegal.”

“When I call some commanders and tell them, they say, ‘What’s P2P?’” Andujar said. “Commanders have to be educated and take action.”

Education has to extend down to the organization administrators. Justiniano says those who have administrator privileges on government computer systems are the ones loading the unauthorized programs. To prevent this, system and network administrators should configure systems correctly, so users cannot install unauthorized software.

“There are very few benefits that are not addressed somewhere else, that do not include the risk of P2P software,” Justiniano said, adding that the use of Army Knowledge Online knowledge centers and secure File Transfer Protocol sites are their preferred method of file sharing.
http://www4.army.mil/ocpa/read.php?story_id_key=5878


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Feds Ding AT&T Over Internet Calls
Ben Charny

Federal regulators ruled on Wednesday that AT&T must pay traditional local access charges to complete Internet phone calls, putting the long-distance carrier on the hook for billions of dollars in deferred fees.

Telecommunications companies closely watched the Federal Communications Commission decision for its potential impact on voice over Internet Protocol services. VoIP technology uses high-speed Web connections to carry phone calls, so it promises to bypass the traditional phone system, thus saving carriers and customers substantial fees.

AT&T had argued that it was not required to pay the access fees to local landline companies for completing long-distance calls, when those
calls travel partly over the Internet.

But the FCC disagreed. In a limited decision anticipated months ago, it chose to maintain much of the status quo between long-distance and local carriers for now. The FCC said its ruling affects only calls that begin and end on the public switched telephone network and use Internet Protocol networks in between. The ruling is not expected to impact commercial VoIP providers.

"The carrier has long been obligated to pay access charges for this service, and we unanimously confirm that it still is required to do so," FCC Chairman Michael Powell said in a statement.


The decision, a unanimous one, could prove very expensive for AT&T. Two years ago, the company, the largest U.S. long- distance carrier, stopped paying some of those access fees. AT&T estimates that it pays about $10 billion annually to local phone companies. It was unclear how much it might owe, given Wednesday's ruling, but some analysts said it could run up to several billion dollars.

"The FCC today chose to protect the monopoly revenues of the Bell companies at the expense of consumers everywhere," AT&T said in a statement. "This sends an ominous signal, as the FCC prepares to tackle even more critical questions that will either spur Internet telephony or stifle it in order to favor four monopoly phone companies."

The long-distance carrier said the decision could trigger more regulation of the Internet, which the FCC has previously established as a no-regulation zone. "The Commission took the first steps to regulate the Internet, despite its public statements to the contrary," the carrier said in the same statement.
http://news.com.com/2100-7352-5197204.html


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Tower Records Settles With FTC Over Site Security
Reuters

Tower Records has agreed to settle charges that a flaw in the music chain's Web site exposed customers' personal information to other Internet users, the Federal Trade Commission said Wednesday. Without declaring Tower guilty of any wrongdoing, the settlement bars the unit of bankrupt MTS from misrepresenting the extent to which it maintains and protects customer privacy. The settlement also requires Tower to establish a security program that will be monitored for compliance for 10 years.

The FTC charged that Tower had posted a privacy policy with claims of "state-of-the-art-technology" but had introduced a security flaw in redesigning its site that allowed Web users to access Tower's order-history records and other information such as names, addresses and phone numbers. Tower said the isolated instance that led to the FTC's inquiry did not involve the disclosure of any personal financial information, such as credit card numbers or Social Security numbers. The FTC has reached similar Net security agreements in the past two years with Microsoft, drug maker Eli Lilly, clothing maker Guess and others.
http://news.com.com/2110-7355-5197226.html


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Sony Raises Profit Estimate for Year
Todd Zaun

TOKYO, April 20 - The Sony Corporation on Tuesday raised its estimate of net profit by 60 percent for the fiscal year that just ended, citing favorable currency swings, a lower tax bill in the United States and a strong performance for its movie and finance businesses.

Though the forecast was increased, Sony's earnings would still be down 23.8 percent for the year ended March 31. Sony said that it expected a net profit of 88 billion yen or $813 million.

The new outlook was better than analysts' expectations and the company's earlier forecast of 55 billion yen in net profit for the fiscal year. Sony also raised its forecast for sales for the year ended March 31 to 7.5 trillion yen ($69.2 billion) from its earlier estimate of 7.4 trillion yen. The company had revenue of 7.47 trillion yen in the previous fiscal year.

Improvements in revenue in all of Sony's divisions, including games, electronics and financial services, led Sony to raise its forecast, Tom Yanagi, a company spokesman, said.

The better-than-expected figures are good news for Sony, which is trying to increase earnings and cut costs through a overhaul plan that includes eliminating 20,000 jobs, or about 12 percent of its work force, by 2006.

Sony is trying to raise its operating profit margin, the ratio of operating profit to sales, to 10 percent in 2006 from 2.5 percent last year.

But analysts said Sony still had work to do to restore profitability in its core electronics division.

Sony trimmed its forecast for operating profit for the year ended in March to 99 billion yen from an earlier 100 billion yen.

The new figure was still better than expected after Sony said last month that it would bring forward some revamping charges that it had planned to take over several years.

Sony provided no breakdown for the profit or sales figures, and it was not clear to what extent the improvement came from foreign exchange gains or from real recovery in its business lines. Sony will make a full earnings report for the fiscal year next week.

Analysts and investors are particularly eager to see details on whether profits are improving for Sony's electronic products, like its portable music players and televisions. One goal of Sony's revamping is to cut costs and increase profits in its electronics division, where the company is facing new competition from rivals like Apple, Dell and Hewlett-Packard.

Kazuharu Miura, an electronics industry analyst at the Daiwa Institute of Research, said he was not as positive on Sony "because the reason for the revision was not electronics, but rather movies."

"If the reason for the revision had been improvement in the electronics division, that would have been very positive," he said.

Among the movies Sony made this year was "50 First Dates," through a subsidiary, Columbia Pictures.

Profit margins on products like Sony's Walkman music players and its televisions have fallen sharply in the face of competition from products like Apple Computer's iPod digital music player and Dell's flat-panel televisions, Mr. Miura said.

One way Sony is fighting back is by trying to develop a flexible and powerful chip that will power a variety of devices.

Sony said that it would spend more than $1 billion this year on the chip, which it is developing with I.B.M. and Toshiba.
http://www.nytimes.com/2004/04/21/bu...ss/21sony.html


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Hollywood Enforcer Comes Downunder To Battle Pirates
Steven Deare

The movie industry's chief Internet enforcer visited Australia last week to shore up support for identifying and prosecuting file traders that infringe copyright.

Tom Temple, the Motion Picture Association's (MPA) director of worldwide Internet enforcement, held talks with member film studios, as well as Telstra BigPond and eBay Australia, as part of his visit to Asia-Pacific nations.

eBay Australia's director of trust and safety, Katrina Johnson, said discussions had led the MPA-established Australian Federation Against Copyright Theft (AFACT) to become an eBay Verified Rights Owner. The agreement lets AFACT, setup this year to protect film studios' interests in Australia, request the removal of copyright-infringing auctions with eBay cooperation.

In addition to the sale of pirated movies, online copyright infringement is high on Temple's agenda.

The MPA is currently working on ISP acceptance of a notice and takedown procedure, issued to an ISP when copyright-infringing material is found on its network.

The MPA has had "varying levels of cooperation" with ISPs on takedown notices, Temple said.

"Some ISPs have asked us for messages they can relay on to users, but there are things they could be doing that they're not.

"ISPs are in a very powerful position, so we'll continue to work on a notice and takedown procedure with ISPs," he said.

Like its record association cousin, the MPA has ruled out working with peer-to-peer providers and considers the distribution technology ineffective.

The movie industry was working on its own high-tech distribution service, and would not be dictated to by peer-to-peer providers, according to Temple.

"A peer-to-peer system only works for files that everyone knows the name of. And the only files that everyone knows the names of are Finding Nemo, [and] the Norah Jones songs; popular well-known types.

"These are systems that are designed from the ground-up to distribute copyrighted material, and by way of advertising and other means, bring income.

"Can they [peer-to-peer companies] prove they've done everything they can to protect content? They've done nothing to show that copyright infringment will cease."

Accordingly, the Internet enforcement unit was constantly monitoring peer-to-peer networks, Temple said.

"We try to educate people that peer-to-peer networks are not anonymous. We will continue to take legal action and notify ISPs that copyright violations are occurring on their network and try to bring the consequences to the end user."

The MPA has about 200 people around the world working on identifying online breaches of the MPA's copyright, Temple said.

This includes a 100-staff third-party affiliate vendor which develops a Web spider program.

"[That] searches peer-to-peer networks and Web sites where copyright infringement might be taking place, and where movies are being sold, 24x7, all round the world," Temple said.

The Internet enforcement unit use the Web spider program to set up undercover 'trap' purchases, and send takedown notices to ISPs when copyright infringement has occurred on their networks.

While Temple admitted the MPA could never stop the potential of copyright infringement on peer-to-peer networks, he said they would work to limit the crime.

"If you look through history, of any crime, you can't make it go away. Look at burglary, it still happens. The point is there are consequences."
http://www.pcworld.idg.com.au/index....85;fp;2;fpid;1


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A Near Miss For Mankind Part I
Brickley Paste

Independent musicians: how I envy you. Major Label musicians: better luck next time.

I may be jumping the gun here, but it is my honest opinion that there has never been a better time to be an unaffiliated artist in the music industry. I'd like to be brash and say something bold and flashy like, 'THE MAJOR LABEL MUSIC INDUSTRY WILL BE REDUCED TO RUBBLE BY 2007!!' but the truth is probably a little less revolutionary sounding.

I'd like to believe that file-sharing/'piracy' (a buzzword as misleading and effective as the term 'terrorism') is widespread enough, revampable enough, and socially accepted enough that it will not be reined in and subtly steered into the grip of 'big business' (another buzzword, admittedly).

But one only has to look at a parallel like the history of radio to see where we're headed. Sure initially, all the big-wigs balk and freak out, declare the new format to be apocalyptic to the welfare of the music industry, and manufacture all sorts of statistics to support that rant ... but it only takes a few years of increased revenue for every denim-clad wireless-whatever-toting-Johnny-A&R-Face to reverse discourse (word to Joe Beats) and pledge allegiance to the new format.

Sizeable labels like TVT (Sevendust, Nothingface, and more) and BMG (who defied the RIAA and signed a deal with Napster to utilize it's pay-for-play technology) are making strong efforts to embrace the technology, and the results have been eye-popping for the floundering majors surrounding them.

What's so strange about this debate is that it's actually taking place and being decided on a person-to-person level in the social domain. Call me a cynic, but that sort of thing is unheard of. It is conscientious objection on such a massive scale that it makes the 60's look like a student council meeting. I have no idea if what I just said is true or not.

We have two things to thank for this rare public participation:

1) An actual large-scale public domain in which to argue – hello Internet.

2) A remarkable number of catalysts forcing the issues into every home.

Think about it; since Napster basically began the argument in 1999 (yes, the argument had surfaced in lesser forms when dual cassette decks were introduced on a consumer level in 1975, and then again with VHS/beta recorders in 1984, but both were quickly quelled before most common folk even knew they were issues), we've had the issue approached loudly and from all angles.

It must be a big deal if large corporations are utilizing an appeal to the country's morality (these are the same people that brought us The Swan?). Some of the spotlight-grabbing moments in piracy history are:

· Metallica's bitching: unfortunately, the last people on earth to cut their mullets managed to be heard the loudest and represent musicians as money-hoarding misguided has-beens

· RIAA's hilarious lawsuits against consumers: similar to the Metallica shenanigans, the major labels try to shape the public opinion with weak scare tactics and celebrity testimony.

· The Grey Album/Grey Tuesday: 'copyright infringement' artistic and thorough enough to have people questioning the term itself. This is another arm of the debate – major labels' iron grip on copyrighted material.

· Musicians publish complaints in NY Times, Rolling Stone, and more: Courtney Love, Don Henley, Steve Albini, and others go public with their major label contract gripes.

· Janet Jackson/Howard Stern debacles: though these incidents may seem unrelated, they do in fact play a role.

The FCC's leniency with big business indecency has come under fire, thanks to the ease with which conservative Americans can file a complaint via the Internet. In December 2003, complaints jumped from 351 to 19,920.

So with all this publicity, you'd think everyone would have a good idea of what's going on, right?

Not likely.

We're witnessing the convergence of several small wars that have been bubbling for years, and the Internet is what ties them all together beautifully.

· The Decency War: good ol' young vs. old, genitals vs. bikinis.

· The Consolidation/Deregulation War: is it ok for there to be 2-3 companies in the US, and everything else a subsidiary? Is it ok for Clearchannel to monopolize most of the nation's media outlets (1240 radio stations, 95% market share of all concerts, etc.)? Should limits be placed on broadband companies (namely Comcast) to ensure competitive markets?

· The Copyright War: should producers have to pay exorbitant fees to use slices of music in a collage format?

· The Payola War: will anything ever be done about the fact that major labels purchase airplay, despite it being outlawed long ago?

· The Property/Piracy War: are the limitations to media usage too strict? Will the government do anything about theft on such a massive scale? Is downloading truly costing the industry money?

· The Bad Contract War: Will anything be done about the horrible stipulations of the standard major label contract?

· The Artistic Diversity War: given the horribly similar playlists of today's 'modern rock' radio stations across the country, should something be done to facilitate a broader musical spectrum in media?

What is this really about? This is about a playing field standing on its head for so long that all the pieces scatter, and something has to give ... the field must be levelled.

This is about an industry so bloated with middlemen that the artists they are exploiting can't afford to produce anymore.

This is about the FCC, the sole public watchdog agency, traveling the world on the dime of Viacom and other conglomerates, and utilizing mainly data from private sectors to form it's regulations.

This is about congressmen enjoying campaign donations from the Record Industry to extend copyright laws and encourage deregulation.

This is about reaching a potential limit point for greed (at least, in its current incarnations). And without the Internet, we wouldn't stand a chance at doing anything about it.

These, then, are the problems. I'll discuss their solutions in the next issue.
http://p2pnet.net/story/1276


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Top 10 Free Must-Have Applications Part 2
Bo Coaten

Last week's article listed five of the top 10 free applications for a personal computer.

It should be noted that the applications were numbered by popularity, or lack thereof. In other words, the more popular applications were listed last week.

The top five applications that follow are less popular but just as beneficial and easy to use.

5. SiSoftware Sandra -- This program gives you all the information you need to know about your personal computer and can be very helpful when speaking with technical support.

Sandra (System ANalyzer, Diagnostic and Reporting Assistant) contains benchmarks and can even report your CPU and power supply temperatures.

4. BitTorrent -- BitTorrent is one of the best ideas in terms of file- sharing and file distribution since Napster.

BT creates a network where generally large files are divided into very small sections and then shared among hundreds of people, all downloading from each other simultaneously.

This way the server doesn't do all of the work.

As a downloader, you primarily depend on your peers. Therefore, many Web sites are beginning to host torrent files to save on bandwidth costs and help prevent server overloads.

Shadow's Experimental client is a suggested file.

3. Mozilla Firefox .8 -- Firefox is a fast, efficient and easy-to-use browser.

It supports Java, JavaScript, Shockwave and Flash plug-ins. However, the greatest feature of Firefox is its tabbed browsing.

Tabbed browsing allows multiple pages to be loaded into one Firefox application, rather than numerous new "window" programs like in Internet Explorer, consequently consuming fewer resources than IE.

2. The Gimp 2.0 -- The Gimp 2.0 is an image manipulation program much like Photoshop.

However, The Gimp is both free and open-source. It is also available for all platforms, including Linux, Mac and Windows.

If you have ever wanted to learn about image manipulation but don't want to pay $600 for Photoshop, this is the program for you.

1. Open Office -- Open Office had to be number one.

If you need an office suite but can't afford the $130 student/teacher package of Microsoft Office, this program is for you.

It reads and writes into all supported MS formats.

Open Office also includes the ability to export documents as PDF files.

This is a highly recommend office suite, and since it is free, it is definitely worth checking out.

These 10 programs will help make your computer safe, more efficient and easier to use.
http://www.thedmonline.com/vnews/dis.../4087ba42f2fb2


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The State Of Copyright Activism
Siva Vaidhyanathan

One of the great hopes I had while I researched and wrote Copyrights and copywrongs (New York: New York University Press, 2001), a cultural history of American copyright, during the late 1990s was that copyright debates might puncture the bubble of public consciousness and become important global policy questions. My wish has come true. Since 1998 questions about whether the United States has constructed an equitable or effective copyright system frequently appear on the pages of daily newspapers. Activist movements for both stronger and looser copyright systems have grown in volume and furor. And the U.S. Supreme Court ruled in early 2003 that the foundations of American copyright, as expressed in the Constitution, are barely relevant in an age in which both media companies and clever consumers enjoy unprecedented power over the use of works.

Contents

Introduction
Political success, actual failure
Effects on teaching and scholarship
Opposition emerges and organizes
The brilliance of real copyright
Eldred v. Ashcroft
Building a better system
Conclusion


http://www.firstmonday.org/issues/is...iva/index.html


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Digital Revolutionary: Interview with Leonardo Chiariglione
Sergio Pistoi

The father of MP3 recently established the Digital Media Project, which aims to formulate a new standard for digital audio and video. If things proceed according to plan, the media world will never be the same

A tortuous, vineyard-lined road leads to the secluded house of Leonardo Chiariglione. In this rural village near Turin, Italy, only a few locals are aware that their neighborhood engineer is the mastermind behind the revolution that has brought MP3, DVD and digital television into the lives of millions. An electronics engineer and former vice president of multimedia at the corporate research laboratories of Italian Telecom, Chiariglione is founder and chair of the Moving Picture Experts Group (MPEG), which has established such ubiquitous digital multimedia formats as MP3 and MPEG-2.

Chiariglione would have good reason to rest on his laurels: in 1999 Time Digital ranked him among the top 50 innovators in the digital world, and his résumé lists an impressive series of awards, including an Emmy in 1996. Instead he has just called fellow experts to arms against "the stalemate" that he believes is crippling the development of digital media. Late last year Chiariglione established the Digital Media Project (DMP), a not-for-profit organization of individuals and companies--among them giants BT, Matsushita and Mitsubishi--with the ambitious goal of formulating a new standard for digital audio and video. If things proceed according to plan, the media world will never be the same.

Scientific American.com met Chiariglione at his home (and DMP headquarters) to talk with him about this new endeavor and his vision for the future of digital media. An edited translation of that conversation follows below.



Scientific American.com: Millions of people are using digital audio and video today. Why do you say that the dream of a digital revolution hasn’t happened ?

LC: Everyone expected that these technologies would bring huge benefits to everybody along the value chain. Creators would be given new ways to express themselves, end users would enjoy new kinds of experiences, and industries would find new opportunities for business. Ten years later, this is not happening. I don’t see any industry that is really thriving on digital audio and video--at least not as much as they do in other sectors like consumer electronics or telecommunications. The music industry is the most dramatic example: it is still based on a physical support--the CD--that you buy, bring home and put inside a player like you did before with vinyl records or cassettes. The quality of sound is better, but the overall experience hasn’t really changed. Technologies such as MP3 and the internet have opened the way to revolutionary digital experiences--and also to an unprecedented development of piracy. Record labels are reluctant to adopt any new technology that does not guarantee their copyrights and prefer to stick to their old business models. But if nothing changes, many users will continue to steal music. It’s a stalemate in which everybody loses in the long run: industries miss new opportunities for business, and users will not benefit from future technological advances.

SA: How do you feel about the fact that MP3 is so often associated with music piracy?

LC: The culture of theft that turns around MP3 is detestable, and I’m very disappointed about that. But neither MP3 nor peer-to-peer [the technology behind Napster, by which Internet users share files directly from their computers] are monsters. They are terrific technologies for distributing content with an enormous potential for business, but they are pieces of an uncompleted puzzle. Digital copyright management is the missing piece that we need.

SA: Wasn’t it clear from the beginning that MP3 would be used to distribute music illegally?

LC: When we approved the standard in 1992 no one thought about piracy. PCs were not powerful enough to decode MP3, and internet connections were few and slow. The scenario that most had in mind was that companies would use MP3 to store music in big, powerful servers and broadcast it. It wasn’t until the late ’90s that PCs, the Web and then peer-to-peer created a completely different context. We were probably naïve, but we didn’t expect that it would happen so fast.

SA: A number of online music stores, where you can legally download music for a fee, have started a profitable business. (Apple’s iTunes, the leading online music store, reported in March that it had sold its first 50 millions tracks.) Are they a solution for the future?

LC: I don’t see these systems as a solution in the long run, because they put too many limits on the users. The music is watermarked or encrypted with Digital Right Management [DRM] algorithms and is then decrypted by your player. The problem is that every store has its own proprietary system, which is incompatible with the others. Consequently, you can play music on your PC, but not in your salon CD player or in your wife’s car, for example, because they use different systems. Where is the digital experience if you can’t enjoy your music as easily as you did before with a disc or a cassette? Eventually people will say, "Let’s go back to making MP3 copies. They are illegal but at least I can do what I like with them."

SA: How could you resolve this stalemate?

LC: What we need is a system that guarantees the protection of copyrights but at the same time is completely transparent and universal. With the Digital Media Project [DMP] we are working to develop a format that meets these requirements. The system will be nonproprietary, meaning that any manufacturer will be allowed to incorporate it into its products. It will also be designed to manage digital rights in a flexible way. For example, you could play a specific title until a certain date, or you could buy a subscription allowing you to play anything you want for a given period. People could even swap files on the Internet, as long as they have the right to play them. If DMP becomes the industry standard, you will be able to use music or video files as you do today with MP3 files, but legally. This will open endless opportunities.

SA: Can you build such a system with the current technology ?

LC: We don’t know yet which technologies will be included in the format, since the DMP has just begun and we won’t come out with full technical specifications before two years from now. However, I believe that most of the technology is already there. Formats for the compression of audio and video have attained excellent quality, and some standards, such as MPEG-21, are also designed to program which rights come with your copy [a 15-day license, for instance]. Our approach will be to integrate existing technologies and develop new ones only if we need to.

SA: With a universal platform wouldn’t it be a disaster if the copyright protection were cracked?

LC: I don’t think you can build a crack-proof system. But you can design one in which the algorithms used for copyright protection don’t come as hardware but as software, so that you can update them with an Internet or wireless connection if they are cracked. Also, every manufacturer could choose its own algorithms, as long as they are compatible with the universal standard. However, our purpose is not to fight piracy. We want to create the right conditions so that users can enjoy a full digital experience legally and without the current limitations. I believe that this will remove many of the incentives that exist today for piracy.

SA: What do you envision for the future of digital media?

LC: I believe that there are hundreds of possible applications just waiting to be invented. The real value will be in providing the users with new experiences. When every published music or video is available on the Web you will need tools to catalogue and find these files. With MPEG-7, for example, you can create a simple description of a multimedia file that can be used by search engines. In the future we will have new generations of search engines in which you will directly enter music or video sequences. Software will interpret the content and compare it to millions of files on the Web, much as you do today for Web pages. You will discover new music and movies you didn’t even know existed that have something in common to yours, and you will be able to access any kind of information about your tracks. The cultural impact of that would be immense. I also see a great potential for peer-to-peer. It’s a wonderful system. If it is used to distribute contents legally, it will create new business opportunities.

SA: Are you a music lover?

LC: My preferences are broad, but I wouldn’t say that I am an expert. I confess that my son is my mentor in this field.

http://www.sciam.com/article.cfm?art...m&chanID=sa004


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Music Sales in the Age of File Sharing
Senior Thesis of Eric Boorstin

In this paper I examine the effect of Internet access on compact disc sales. I combine U.S. census data on population characteristics with Nielson SoundScan data on CD sales for 99 metropolitan areas in the years 1998, 2000, and 2001. Controlling for year, income, and the fixed effects within each area, I estimate the relationship between Internet access and CD sales for four age groups. Overall, Internet access has a positive and statistically significant effect on CD sales. For children aged 5 to 14, Internet access has a negative but statistically insignificant effect on CD sales. For youths aged 15 to 24, Internet access has a negative and statistically significant effect on CD sales. And for the adult groups aged 25 to 44 and aged 45 and older, Internet access has a significant positive effect.

My findings suggest that file sharing is not the cause of the recent decline in record sales, and that file sharing decreases the record purchases of younger people while increasing the purchases of older people.

http://www.princeton.edu/~eboorsti/thesis/















Until next week,

- js.














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