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Old 24-02-05, 06:41 PM   #1
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Default Peer-To-Peer News - The Week In Review - February 26th, '05

Quotes Of The Week

"This is about whether the F.C.C. is going to become the Federal Computer Commission and the Federal Copyright Commission. The F.C.C. does not have the power to tell technology manufacturers how to build their machines." - Gigi B. Sohn

"In this age of professional spammers and telemarketers making fortunes, we're misusing our energies to pursue these types of small time wrongdoers. I will personally donate $1,000 to the Canadian student's defense." – Steve Wozniak

"AOL has already removed the Winamp plug-in that made this [Napster song ripping] process fairly simple. Programmers are developing a patch that will be automatically pushed to the software's users." – John Borland

"On the CDFreaks board, there was talk of new conversion methods that had nothing to do with Winamp." - David F. Gallagher

"There is no evidence on the record that piracy of digital broadcast content is a problem now or is going to be a problem in the near future. We don't want agencies making rules based on nothing. And there's also no evidence that the broadcast flag will do what it wants it to do." - Gigi B. Sohn

"Thus Spacewar was, in effect, the first open- source video game. And it was the first piece of freeware as well." – 1up.com

"Remember, don't break the law; just creatively skirt around the legal boundaries like any law-abiding politician would do." - Wallace Wang

"I've got six weeks left and will be conducting at least one more raid ....I'll get back to you." - Michael Speck

"Overall, the book covers a lot of ground in a brisk fashion. It's an excellent resource for the bored file-trading stud looking to expand his game and for the up and coming geek." – Ashlee Vance

Court Questions FCC's Broadcast Flag Rules
Declan McCullagh

A federal appeals court on Tuesday sharply questioned whether the Federal Communications Commission has the authority to ban certain types of digital TV receivers, including peripheral cards, starting in July.

Two of the three judges on the District of Columbia Circuit panel said the FCC never received permission from Congress to undertake such a sweeping regulation, which is intended to encourage the purchase of digital TV receivers that curb Internet distribution of over-the-air broadcasts of programming such as movies and sports.

"You're out there in the whole world, regulating. Are washing machines next?" asked Judge Harry Edwards. Quipped Judge David Sentelle: "You can't regulate washing machines. You can't rule the world."

In November 2003, the FCC said that every product sold in the United States after July 2005 that can receive digital TV broadcasts or digital TV streams must be able to recognize a "broadcast flag." Such products--ranging from TV sets to computer tuners made by Elgato Systems and Hauppauge Computer Works--are permitted to deliver high-quality digital output only to devices that also adhere to the broadcast flag specification.

The groups challenging the FCC's broadcast flag regulation include the American Library Association, the Association of Research Libraries, the Medical Library Association, Public Knowledge and the Electronic Frontier Foundation. They argue that the FCC exceeded its authority, that Congress should be responsible for making copyright law, and that librarians' ability to make "fair use" of digital broadcasts will be unreasonably curtailed.

But one of the judges, Sentelle, suggested that the library and other nonprofit groups challenging the FCC's rule would not suffer the kind of particular harm necessary to allow the case to proceed.

"You have to have a harm that distinguishes you from the public at large," Sentelle said during oral arguments. "If there is not a particularized harm, you do not have standing...There may be someone from the industry who can come forward." Edwards also said he was concerned about the groups' "standing," referring to the judicially recognized right to sue. Special rules exist for organizations suing federal agencies.

From the perspective of the entertainment industry, the broadcast flag is needed to encourage over-the-air distribution of valuable content. Without the FCC's action, the Motion Picture Association of America has argued, the threat of Internet piracy would imperil the future of digital TV.


Wozniak Questions Apple's Legal Zeal in Tiger Leak Lawsuit
Brad Gibson

Apple co-founder Steve Wozniak has criticized his former company for going after a student who shared a developer release of Mac OS X Tiger, saying Apple is wasting time going after "small time wrongdoers." Mr. Wozniak promised to donate $1,000 to help in the students defense.

In an online posting to the blog site DrunkenBlog, Mr. Wozniak wrote that he believed Vivek Sambhara of Atlanta, Ga. was guilty of an honest mistake.

Mr. Wozniak wrote:

"...This is an unintentional oversight and the interviewed student appears to be one of the most honest people on this planet. I have to question who is most right in this case. I wish that Apple could find some way to drop the matter. In my opinion, more than appropriate punishment has already been dealt out. In this age of professional spammers and telemarketers making fortunes, we're misusing our energies to pursue these types of small time wrongdoers. I will personally donate $1,000 to the Canadian student's defense."

Mr. Sambhara, along with David Schwartzstein of Norwalk, Conn. and Doug Steigerwald, of Raleigh, N.C. are being sued by Apple Computer for allegedly distributing "Tiger," the company's next major Mac OS X release. Apple is seeking an injunction against the defendants, as well as unspecified damages.

The company alleges Mr. Steigerwald violated his membership agreement to the Apple Developer Connection (ADC), Apple's in-house developer network, by downloading and distributing the Tiger builds through BitTorrent, a popular peer-to-peer file-sharing network. Mr. Sambhara and Mr. Schwartzstein, also ADC members, allegedly redistributed the file to others via the Internet, first obtained by Mr. Steigerwald.

Details of the case were first reported by The Mac Observer on December 21, 2004.

Mr. Sambhara, in an online interview with DrunkenBlog in early January and identified as 'Desicanuk', contradicted himself by first denying he had redistributed the developer release of Mac OS X Tiger, but then admitting he had.

"I've not uploaded or torrented or shared in anyway, previous releases of Tiger," he wrote. But later, Mr. Sambhara commented, "did I do exactly what Apple is accusing me of doing? I did share the file. So in that regard yes. But there was no malicious intent. I've never done anything malicious in my life...I do think what I did was wrong and I understand why they are suing me."

An Apple spokesperson was not immediately available for reaction to Mr. Wozniak's comments.


RIAA Appeals Ruling In Legal Flap Over Copyright Subpoenas
Jim Suhr

The recording industry is appealing a federal court's ruling that it can't force Internet providers to identify music downloaders under a disputed copyright law, calling such pressure "a critically important tool" in blunting illegal file-sharing worth billions of dollars.

The Recording Industry Association of America wants the entire 8th U.S. Circuit Court of Appeals to overturn last month's split decision by a three-judge panel with that court in a dispute involving Charter Communications Inc. and online music swapping.

In that 2-1 ruling, the 8th Circuit panel affirmed another appellate decision in Washington in December 2003, thwarting the RIAA's push to compel Internet providers to identify customers accused of illegally distributing songs over the Internet.

In its appeal filed last week, the RIAA - the trade organization for the largest labels - argued that the 8th Circuit panel's ruling, if upheld, "will deprive copyright owners of a critically important tool for stopping the massive infringement of copyrights over the Internet."

"Billions of dollars and important federal policy are at stake," the appeal said.

A message was left Thursday with Charter seeking comment.

Last month's ruling did not significantly affect the recording industry's continuing campaign to sue Internet users.

In the Missouri case, judges said St. Louis-based Charter - the nation's third-largest cable TV company and among the country's biggest Internet providers - wasn't responsible for 93 of its customers allegedly trading 100,000 copyrighted music files across the Internet and shouldn't have been compelled to identify them under the 1988 Digital Millennium Copyright Act.

The appeals court said Charter's role was "confined to acting as a conduit in the transfer of files through its network." In now challenging that ruling, the RIAA said "there is no dispute that these individuals are committing copyright infringement on a massive scale and that Charter is the only entity able to identify the individuals."

Since the earlier ruling, the music industry has filed civil lawsuits nationwide against "John Doe" defendants, based on their Internet addresses, then worked through the courts to learn their names. That process is more complicated - and more expensive - for the record labels.

Despite the Missouri ruling, the RIAA has said it would continue suing thousands of people it accuses of illegally sharing music.

In a dissent, the 8th Circuit's Diana Murphy complained that the rulings prevent copyright holders from easily protecting their works and said repercussions were "too easily ignored or minimized." She wrote that the industry's practice of filing lawsuits against anonymous defendants was "cumbersome and expensive."

The RIAA's appeal said the majority's "misreading of the statute (in last month's split 8th Circuit ruling) produced a result that is irreconcilable with the DMCA's text, structure and purposes."


MP3s For Pennies? Russian Cops Say No
John Borland

A Russian digital-music site offering high-quality song downloads for just pennies apiece is the target of a criminal copyright investigation by the local police, recording industry groups said Tuesday.

AllofMP3.com has been operating for several years, asking consumers to pay just 2 cents per megabyte of downloads--usually between 4 cents and 10 cents per song. Alongside the catalogue available at traditional stores like Apple Computer's iTunes, the site offered access to songs from the Beatles and other groups that haven't yet authorized digital distribution.

The Russian site claimed it had licenses to do so from a local clearing house, but record labels have maintained that the licenses weren't valid. After long-standing complaints, the Moscow City Police Computer Crimes division completed an investigation earlier this month and recommended that prosecutors charge the site's operators with criminal copyright infringement.

"We have consistently said that AllofMP3.com is not licensed to distribute our members' repertoire in Russia or anywhere else," Igor Pozhitkov, regional director of IFPI Moscow--part of the International Federation of the Phonographic Industry--said in a statement. "We are pleased that the police are bringing this important case to the attention of the prosecutor."

The investigation marks a potentially substantial step forward in Russia for copyright holders. Record labels and movie studios have sometimes had difficulty persuading Russian law enforcement to deal with piracy problems.

A similar set of self-declared "legal" download sites arose in Spain, claiming to have licenses to sell music from local copyright authorities. Record labels sued both, and only one, Weblisten.com, remains online. The other, Puretunes.com, settled with the industry for $10 million.

The Russian MP3 site claimed it had full rights derived from a group it called the "Russian Multimedia and Internet Society," as long as customers were planning to download the songs for personal use only. In a message posted in English, the site said it "does not keep up with the laws of different countries and is not responsible the actions of non-Russian users."

The Moscow City Prosecutor's office has until March 7 to decide whether to act on the police department's recommendation. The IFPI has also submitted its own formal complaint to the prosecutor's office.

According to the IFPI, the Russian music market is ranked No. 12 in the world, worth about $326 million in 2003. The group estimates that about 64 percent of music consumed in the country has been pirated, however.


Chinese Copyright Rules To Take Effect

A regulation on the collective management of copyrighted materials, approved by the State Council, is to become effective on March 1, better protecting the interests of copyright owners throughout the nation.

Under the 48-article regulation, such rights as hiring, performance, projection, broadcasting, duplication and Internet-based information distribution - all listed in the Copyright Law and difficult for the copyright owners to effectively safeguard their rights - can be entrusted to collective management organizations for protection.

The regulation, which has been developed on the basis of drawing experience from developed countries, is also applied to foreign copyright owners that hope to enjoy protection in China, according to Liu Jie, an official of the National Copyright Administration.

Collective management on copyright means that management organizations, that are authorized by the owner, can sign agreements with the copyright users to be allowed to use products, pay for using products and other relevant activities, said the administration's Deputy-Director Yan Xiaohong, at a news conference yesterday in Beijing.

Copyright is a kind of civil right that is usually governed by owners themselves. But in many cases, methods of using literature, art and scientific works are scattered here and there. Particularly, such rights as performance and broadcast, are difficult for the copyright owners to control, said Yan.

On the other hand, it is complicated for a great number of users of the music product to get authorization from the owners for greatly using the products, said Yan.

Hence, an international practice has come into being - the copyright owner authorizes collective management organizations, on his behalf, to grant use rights to others and collect use fees for the owners.



ILN News Letter

Warner Bros. To Release Discounted DVDS In China

Warner Bros. plans to release dozens of its films on DVD to retailers in China at deeply discounted prices. The studio hopes that cheap and legitimate DVDs will compete effectively enough with their bootlegged counterparts that are readily available on the market.


Studios Target Oscar Film Swappers
John Borland

Hollywood studios launched a new round of legal action Thursday, aimed in part at people swapping versions of nominated films in Sunday's Academy Awards ceremony.

The Oscar season has traditionally been a difficult one for Hollywood's antipiracy efforts, since movie studios typically distribute hundreds of copies of films to awards judges. Some of those copies inevitably end up on peer-to-peer networks or get copied and counterfeited.

As with previous rounds of lawsuits filed by the Motion Picture Association of America, the group's executives declined to say how many people were targeted in the lawsuits or where the suits were filed. They cited several award-nominated films--including "Sideways," "The Incredibles" and "Eternal Sunshine of the Spotless Mind"--as being involved in the lawsuits

"The films stolen in these cases show that every corner of the industry, even smaller productions, are at risk," said Dan Glickman, the MPAA's chief executive officer. "When rampant online theft occurs, it makes it harder for these films to get financed."

The MPAA is several months into an aggressive new legal campaign against unauthorized film trading, which has resulted in several key file- swapping hubs being taken offline.

Earlier this month, the studio trade association announced that file-swapping site LokiTorrent, one of the hubs supporting BitTorrent technology, had agreed to pay a $1 million settlement and give its server logs to the MPAA. The news sparked worry among file swappers, who feared the information could be used for lawsuits against individuals.

As with the thousands of lawsuits launched by the Recording Industry Association of America, the new MPAA legal action is being taken against anonymous "John Doe" individuals. The names of defendants will come out through the course of court actions.

MPAA executives declined to comment on whether they believe any of the movies allegedly swapped by people involved in Thursday's lawsuits came from the versions of films sent to Academy Awards judges.


Hollywood Catches Case of Oscar Blahs
Sharon Waxman

In the days leading up to the movie industry's most glamorous night, the Oscars, the word heard frequently around Hollywood this year is not glitz, or hype, or excitement. It is fatigue.

Strange, perhaps, and unexpected. The same millions of dollars as in years past have been spent on pitched Oscar campaigns, with their color, full-page newspaper advertisements and their earnest television spots. The same publicity muscle has been put into cocktail parties and question-and-answer sessions led by Oscar nominees at the guilds and the movie industry's home for the aged.

But the fatigue is palpable nonetheless. A combination of lackluster box office and a certain awards overload, along with an underlying fear of prosecution for potentially pirated Oscar movie DVD's, seems to be contributing to a malaise. Academy of Motion Picture Arts and Sciences voters have taken less joy than usual in participating in the national movie ritual, which is being broadcast Sunday on ABC.

It hasn't helped that viewership for the Golden Globes plunged by nearly 40 percent this year, and that the Grammys, just two weeks ago, suffered poor ratings, too. What if Hollywood holds an awards show and America doesn't show up?

Awards fatigue "is always a concern, even when the ratings haven't dropped," said an academy spokesman, John Pavlik, who acknowledged an active discussion of the issue in his organization. "How often can you see the same person win the same award and not be fatigued by it?"

He added: "And it's not just the awards shows - it's 'E. T.,' it's 'Access Hollywood' and all the shows that have clips from the awards shows, and show people winning again and again. You see the same thing for a week at a time." The shifting ground under the Oscars, with declining ratings and a rising thicket of competing awards events, was one reason for this year's choice of host, the irreverent and sometimes outrageous Chris Rock. Mr. Rock, whose fan base tends more toward an MTV demographic than the famously conservative one of the motion picture academy, seems to be making some Oscar voters nervous, judging from interviews about the awards with insiders, Oscar handicappers and academy members themselves.

The telecast producer, Gilbert Cates, seems to relish the debate over Mr. Rock and has said he intends to shake up the established order by having some nominees go on stage before the Oscar announcement and by taking cameras into the audience, where some awards may be presented.

Mr. Cates addressed skepticism about the format at a meeting this week with the academy public relations committee, one member who was there said, speaking on condition of anonymity because it was an internal academy matter. The member said Mr. Cates told the group: "Could it backfire? We're going to try it. If it works, the academy will do it again. If it doesn't, it won't."

But another challenge this year seems to be the best picture nominees themselves: none have crossed the $100 million mark at the domestic box office. In previous years when films like "Titanic," "Forrest Gump" or "Gladiator" ruled the box office and the nominations, audience interest seemed built in.

This year the leading contenders for best picture, handicappers and academy members say, are Clint Eastwood's quiet boxing drama, "Million Dollar Baby," and Martin Scorsese's epic about Howard Hughes, "The Aviator." Neither qualifies as a box office blockbuster.

"The Aviator," whose aggressive Oscar campaign has been led by Miramax, a co-financier of the movie with Warner Brothers and the Initial Entertainment Group, has taken in a relatively modest $89 million so far (it cost $112 million). Warner Brothers' "Million Dollar Baby" has taken in $56 million (it cost $30 million). In the best actor and actress categories, only a few major movie stars made the list, Leonardo DiCaprio and Annette Bening among them. But Americans are probably more familiar with Jennifer Aniston than with the rising favorite for best supporting actress, Sophie Okonedo ("Hotel Rwanda").

Indeed, at the box office last weekend, the No. 1 movie was "Hitch," a romantic comedy starring Will Smith, which took in $37 million. The best picture nominees - the director Alexander Payne's wry comedy "Sideways," the gentle "Finding Neverland" and the biopic "Ray" in addition to "The Aviator" and "Million Dollar Baby" - took in just $20 million, combined, according to boxofficemojo.com.

"This year, 'Ray' has done very well with its sector, 'Aviator' did well with its sector, but none of them have crossed over," said the publicist Tony Angellotti, who worked on the "Ray" Oscar campaign for Universal. "Most of these five pictures have not been wildly successful attracting more than their core target audience."

The veteran producer Peter Guber, an academy member, agreed. "Generally I think you'll find the ratings go down this year," he said. "It doesn't have those kind of big, visible icon films. It's just the nature of the thing. Why are people watching? Because of the noise of the film, the stars of the film, the media attention, what they're wearing. We in the academy like to think it's a cultural experience, but it's really a collection of stars and what they're wearing that gets the viewing audience."

As every year, the studios have done their best to compete for the Oscars. Universal has taken care to release the DVD for "Ray," about the singer Ray Charles, in recent weeks, as academy members vote.

For "The Aviator," Miramax, led by its co-chairman, Harvey Weinstein, has bought extensive television advertisements featuring comments from Alan Alda, nominated for best supporting actor, and the co-producer Michael Mann explaining the film's importance and Hughes's significance. Bloggers have noted that in some television spots, the studio paired "Aviator" images with music from the opening credit sequence of Mr. Scorsese's boxing masterpiece, "Raging Bull." The music, from the opera "Cavalleria Rusticana," is a detail that older academy members would be likely to notice, though the average television viewer might not. Mr. Scorsese, a nominee for best director, has never won an Oscar.

Meanwhile, "Million Dollar Baby" has been running promotional segments several minutes long on New York cable channels about the making of the film and its importance to the director and star, Mr. Eastwood. A dispute over the movie's treatment of assisted suicide, with conservative commentators and disability rights advocates attacking the film, seems only to have increased academy members' affection for Mr. Eastwood, who has portrayed himself as a Hollywood outsider in making this project. He is a nominee for best director and for best actor.

And while Fox Searchlight's "Sideways" seems a longshot for best picture, the movie has been a ringing success for the mini-studio, taking in $58 million so far and winning a Golden Globe for best movie, comedy, as well as the Screen Actors Guild's best ensemble award.

But it all remains confusing, truth be told. Historically, the movie with the most Oscar nominations wins best picture, and in this case that would be "The Aviator," which snagged 11. But the sentimental favorite seems to be "Million Dollar Baby," whose director won the top award from the Directors Guild of America, a good predictor of the best director Oscar.

Take your pick. As Mr. Guber put it, "Tradition's great, as long as it works."


For Users, Napster of Old Is Just a Few Tweaks Away
David F. Gallagher

The old Napster, circa 1999, was a vast jukebox with no controls over the illegal copying of music files. The new Napster, which sells legal downloads, is also a vast jukebox, but it was clear last week that the company still has less-than-perfect controls over illegal copying.

Word spread across the Web recently that a few tweaks of WinAmp, a popular music-playing program, and a small plug-in available on the WinAmp Web site would allow users to take a music file protected with Microsoft technology and produce an unprotected copy.

This method can convert files from other music services but it is a particular threat to Napster because of its "all you can eat" subscription model: customers pay as little as $9.95 a month for borrowing privileges at Napster's library of a million songs. The ability to create unprotected files would enable users to download as much music as possible, then cancel the subscription and walk away.

Glenn Shannon, a programmer in Tucson, first publicized the technique several weeks ago on the Web site CDFreaks.com. From there, the method moved to blogs and news sites. Napster responded on Wednesday by posting a message from its chief technical officer, Bill Pence, that played down the problem, saying the method "can be likened to the way people used to record songs from the radio onto cassette tapes."

If so, these were some fancy tape recorders. In online comments, people said they were downloading around the clock and converting dozens of songs at a time by running multiple copies of WinAmp on one computer.

"We offer a service for people who believe artists should be paid for their work," said Dana M. Harris, a spokeswoman for Napster. "If people disagree with that, they're going to find ways to get around it."

Meanwhile, AOL, which owns the company that makes WinAmp, removed the problematic plug-in from the WinAmp site (copies soon appeared elsewhere) and said it was rushing to fix the glitch in WinAmp.

Mr. Shannon said his intention was not to cause trouble for Napster. Indeed, he said he was a satisfied Napster customer who was just frustrated that the protection on the files prevented him from playing them on his older portable music players.

"After people see the convenience that the Napster premium services offer, they're not really going to sit there and pirate all this stuff," he said.

But on the CDFreaks board, there was talk of new conversion methods that had nothing to do with WinAmp.


AOL Blocks Music-Copying Feature
John Borland

America Online is disabling a feature of its popular music software that had been used to evade copy-prevention features of digital music services, the company said Friday.

The company's Winamp software was identified by bloggers this week as part of a process that transformed copy-protected music downloads into songs that could be burned by the thousand to CD. The tool had potentially affected any subscription service that used Microsoft's media format, including Napster, Virgin Music and even America Online's own music subscription plan.

AOL programmers are taking a series of steps to prevent its software from being used in this way, a representative said.

"Immediately upon discovering this flaw, we worked quickly to address it and to ensure that Winamp can continue to provide secure playback of Windows Media content," spokeswoman Ann Burkart said. "A fix is being implemented today in existing players, and a new player will be posted for users to download."

The technique used in the Winamp process is not a new one and is a part of many other pieces of software available online. Nevertheless, the news rippled though the record industry and online music services this week, causing renewed scrutiny of the subscription music business model by top industry executives.

The process was essentially a high-tech version of recording a song off the radio. Antipiracy software, including Microsoft's, typically prevents a direct digital copy from being made. But some software packages, dubbed "stream rippers," allow a computer to rerecord audio as it is being played.

The resulting files are typically lower quality than the originals, and the artist, album and file information are lost.

AOL has already removed the Winamp plug-in that made this process fairly simple. Programmers are developing a patch that will be automatically pushed to the software's users. The patch will probably disable altogether the ability to play copy-protected songs in Microsoft's format.

A new version of Winamp software will then be released that can once again play the Microsoft-formatted songs, but will block the stream-ripping capability, Burkart said.


Federal Effort to Head Off TV Piracy Is Challenged
Tom Zeller Jr.

Mike Godwin, the legal director for Public Knowledge, a digital-rights advocacy group in Washington, is a fan of Showtime's new drama series "Huff." So three weeks ago, when he missed the season finale, he decided to download it to his personal computer.

It took about seven hours to download all 500 megabytes of the hour-long episode over his high-speed Internet connection, using the latest file-sharing software designed to handle large digital files.

Still, he did get it. And he did watch it.

"It's a great show," he said.

To Mr. Godwin, the time-consuming download (and the file's poor quality) indicated that the rampant piracy of digitized broadcast programs - a threat Hollywood has long warned against - was hardly imminent. But to the Federal Communications Commission and the Motion Picture Association of America, cases like this one suggest a future of widespread illegal file-sharing that must be stopped before it begins.

The debate will be presented in oral arguments tomorrow before the District of Columbia Circuit for the United States Court of Appeals in a lawsuit brought by Public Knowledge and others against the F.C.C., challenging a new regulation that is intended to prevent such bleeding of television content onto the Internet.

"This is about whether the F.C.C. is going to become the Federal Computer Commission and the Federal Copyright Commission," said Gigi B. Sohn, the co-founder and president of Public Knowledge. "The F.C.C. does not have the power to tell technology manufacturers how to build their machines."

All sides agree that the new rule would do just that in attempting to limit unauthorized sharing of digital broadcast content over the Internet. The rule would require that as of July 1, all new consumer electronics equipment capable of receiving over-the-air digital signals - from digital televisions to computers equipped with TV tuner cards - must include technology that will recognize a "broadcast flag."

That flag is simply a marker of sorts, a packet of bits embedded in a digital television broadcast stream that essentially carries the message "this stream is to be protected." In addition to recognizing that message, new equipment must include technology that will prevent the content from being distributed to other devices unless they, too, are flag-compliant.

To the entertainment industry, the rule is a necessary precondition to its participation in the nationwide move toward digital broadcasting that Congress and the F.C.C. have been promoting for nearly 10 years - a transition that would, among other benefits, free up valuable tracts of the electromagnetic spectrum now being used to deliver bulkier analog signals.

The M.P.A.A. has argued that without the broadcast flag rule, content creators would have no incentive to provide digital content over the airwaves, because people could simply pluck video streams out of the air and redistribute them to millions of viewers over the Internet.

"It's very simple," said Fritz Attaway, a vice president and Washington general counsel for the M.P.A.A. "Without the broadcast flag, high-value content would migrate to where it could be protected."

In practical terms, such "protected" places would be cable and satellite systems where digital content can be more easily scrambled, encrypted or otherwise controlled, leaving broadcast networks at a distinct disadvantage in the new digital marketplace. (About 20 million American households still receive their programming exclusively over the open airwaves, according to Nielsen Media Research.)

But the M.P.A.A.'s position has also been understood by some to be simpler and starker: if you don't make it safe for us to provide high-value digital content over the public airwaves, we won't.

The transition to all-digital broadcasting is supposed to be completed by the end of 2006, after which the unused parts of the spectrum are to be reclaimed by the federal government. Those frequencies could then be used for, say, public safety communications, or, perhaps more important, auctioned off for use by emerging wireless and other technologies.

The Congressional Budget Office estimates that such auctions could generate $15 billion in revenue for the government over the next 10 years. Other estimates put the value much higher.

But if content creators refuse to provide digital programming because of piracy concerns, consumer demand for digital television will be low, which means a slower transition to all-digital broadcasts. And that, in turn, would mean no revenue for the government from spectrum auctions.

Less than 5 percent of all households now have televisions that allow them to view digital broadcasts, according to the Consumer Electronics Association.

"The F.C.C. has a unique role in seeing this transition through," said Rick Chessen, chairman of the commission's digital transition task force, "and one of the key elements of the transition is making sure that high-quality digital content is available. If that content isn't there or if it migrates somewhere else, then the transition, and ultimately the broadcasting system itself, is hurt."

The only other viable option to the broadcast flag - encrypting digital broadcasts entirely - would have been a much more heavy-handed approach, Mr. Chessen said, because consumers have already purchased millions of digital televisions that would be unable to receive the encrypted signals. Under the broadcast flag system, noncompliant devices could simply ignore the flag and function normally.

Mr. Chessen also noted that the agency had encouraged competition by not mandating any particular technology to make new consumer devices flag-compliant. So far, 13 methods for doing so have been developed by 9 companies - including big players like Sony, Philips and RealNetworks - and submitted to the F.C.C., which has approved them all.

And using the Internet to redistribute legitimately copied content is not wholly ruled out, Mr. Chessen said, as long as there is some mechanism in the devices to prevent "mass and indiscriminate" sharing.

Consumer electronics manufacturers have, for the most part, kept a fairly low profile in the debate, wanting neither to be burdened with cumbersome design specifications nor to upset the powerful content industry, which is the chief proponent of the flag.

"We have a strong history of defending fair use and innovation," said Jeffrey Joseph, the vice president for communications at the Consumer Electronics Association. "But you also have to have content to make these boxes worth a dime."

But staunch opponents of the broadcast flag rule - which include groups like the American Library Association, the Consumers Union and the Electronic Frontier Foundation - see it as an unprecedented regulatory sledgehammer.

In only a few limited circumstances has the F.C.C. issued design regulations for the manufacture of consumer electronics - and in those cases, only after a statutory mandate from Congress. The V-chip is one example; closed-captioning capabilities in TV sets is another.

But the broadcast-flag rule was not created by a Congressional directive, and opponents argue that is at least partly because the kind of piracy it is meant to prevent is not a big problem.

"There is no evidence on the record that piracy of digital broadcast content is a problem now or is going to be a problem in the near future," said Ms. Sohn of Public Knowledge. "We don't want agencies making rules based on nothing. And there's also no evidence that the broadcast flag will do what it wants it to do."

Indeed, it is a fairly simple matter - and will probably remain so even if the rule survives - for even mildly dedicated pirates to capture and convert signals back and forth from digital to analog, effectively defeating the flag. (Mr. Godwin noted that his version of "Huff," like nearly all video content now circulating on the Internet, was probably an analog signal at some point.)

Another problem, said Ms. Sohn, is that the broadcast flag would prohibit redistribution of public domain works and stop certain kinds of distribution of content that is allowed under the fair-use provisions of copyright law. "Let's say you want to do a video blog, or want to comment on a TV show with a 10-second clip and share it," she said. "You won't be able to do that."

Other opponents of the rule say there will be no way of knowing what sorts of new technologies might have emerged without the regulation, because every device involved - televisions, video recorders, portable devices on which video programming can be displayed - will be forever shaped by the design specifications laid out by the broadcast-flag rule.

"Everything would have to be built to this single standard," said Susan Crawford, a professor of Internet law at the Cardozo School of Law in New York. "It's like being bitten in the neck by a vampire. As soon as you buy one compliant device, you'll have to continue buying new devices to keep them working together."

Whether or not the court will be sympathetic to any of these arguments is an open question, but Ms. Sohn and Mr. Godwin of Public Knowledge say they are confident that their arguments will be persuasive - particularly because the F.C.C. issued the rule without prior action from Congress.

"This is basically the Roach Motel approach to intellectual property protection," Mr. Godwin said. "Content can check in, but it can't check out."


Broadcast TV and Broadband Video: Collision and Disruption

Breakthroo examines the collision between broadcast television and broadband video, what new innovations are at play for scheduling or distributing video, and analyses if any are disruptive to incumbents, and what that would mean for the existing broadcast television value net.

As a mature global industry, broadcast TV has experienced many cycles of sustaining innovations, where various technical and functional performance dimensions have improved over the decades, for example, the shift from: black and white to colour, a single public broadcaster to multiple commercial entities, analogue to digital, etc. All of which, have sustained traditional incumbents while incrementally improving customer satisfaction. However, broadcast TV is unlikely to have faced such a prominent and potentially disruptive innovation to market incumbents as peer-to-peer (P2P), which represents a diametrically opposing distribution method. If broadcast denotes one-to-many distribution, P2P denotes any-to-any, where anyone with a broadband connection can up/ download files (including video assets), irrespective of whether you’re a global firm or individual consumer.

P2P may not be the first method to pull/make available video assets as data, as that is also achievable by HTTP downloads, streaming and video on demand (VoD); but it does mark a shift in the architecture and availability of broadcast video assets, and reduces distribution entry barriers. With P2P networks, video ‘creators/producers’ (that create and fund content) and ‘packagers’ (that commission and aggregate it) can reach end users directly (with the former disintermediating the entire value web, the later disintermediating ‘distributors’). But, instead of P2P being framed as an alternative to broadcast TV, it’s really an augmentation, an additional route to market, albeit one with the potential to disrupt an already fragmenting TV viewing constituency, and enable both firms and amateurs to become asset creators/producers/distributors. And as the Internet is a – conceptual – world of ends, any broadband user can leverage a P2P client/network to distribute video assets.

Read the free report in-full: PDF Download (right-click to save)

What This Report Identifies

1. The current state of broadcast TV
2. The current state of broadband video
3. Traditional broadcast TV value net structure and pressures
4. Innovations that are sustaining or disruptive, and to whom
5. Shifting of Time, Place and Media


P2P marks a radical shift in the architecture and availability of broadcast video assets, and severely reduces competitive entry barriers for video distribution. Using P2P networks, both video creators/producers (that create and fund content) and content packagers (that commission and aggregate it) can reach and sell to end users directly; the former disintermediating the entire value web, while the later disintermediates traditional distributors. However, instead of P2P being framed as an alternative to broadcast TV, it’s more likely an augmentation, an additional route to market; albeit, one with the potential to disrupt a fragmenting TV viewing constituency, and enabling firms and amateurs alike to become asset creators/producers/distributors.


The current state of broadcast TV

TV channels are undergoing a simultaneous confluence and fragmentation, a Pareto principle perhaps, resultant of consolidating large channel packagers coalescing around more populist – commodity – fare, while new digital entrants package ever more niche – differentiated – channels and programming. An increasing array of TV platforms and end devices affords users real diversity in how they choose to consume and/or create video.

The current state of broadband video

High-level convergence of media, telecoms and datacoms, where any TV/ video service can be sent across any network (fixed/cellular/wireless), is fragmenting the distribution market, increasing competition and speeding commoditisation. Channel packagers have additional distribution options, creators can bypass packagers and distributors, and users have more video access and control (push, pull, P2P). Intelligent edge devices enable user generated video, and – faster than real-time – file distribution via efficient, swarming P2P networks; further augmenting millions of concurrent P2P users. Residential gateways that control data access and services, and multi-purpose flat-panel displays, are the eye of the – home environment – storm between multiple markets.
Traditional broadcast TV value net structure and pressures

The broadcast value net will continue to grow, featuring far more segments and increased complexity, from iTV to IPTV, from channel packagers to distributors. New entrants and substitutes will threaten incumbent business models and put aggressive pressure on margins, and innovative new products they diffuse into markets will change technology performance dimensions and customer buying criteria. Firms will need to embrace new offerings in order to find new growth and remain competitive, and explore ever more niche content demands, i.e. look to the margins, to aggregate higher volume, more personal, smaller transactions.

Innovations that are sustaining or disruptive, and to whom

P2P, being the most likely disruptive innovation for video distribution, will enable new firms to threaten distributors which fail to compete on content granularity, volume of sources, and cost. The ability to media shift may be one characteristic customers use in adopting P2P-based video services. New P2P video distributors will force the broadcast value net structure to expand, and increasing competition margin pressure.

Shifting of Time, Place and Media

As sustaining innovations, DVR systems will reside within incumbent services or as augmented features of STBs, online VoD providers, etc. Commoditisation of basic features will be accelerated by multiple, competing value players rushing to diffuse them – consequently forcing some players towards evolved features, premium markets, and modularisation of previously interdependent interfaces within the value net. Freeing users from the TV/home constraint will be achieved with place shifting solutions via streams, downloads and device transfers. Adoption characteristics will differ to iTunes/iPod, as video place shifting requires a user’s total attention, most appropriate for nomadic scenarios; of which a manifestation may be a preference for short – bite size – video clips. End-to-end systems with rich content libraries may prove difficult to negotiate and offer. Media shifting and P2P blur the professional/amateur divide, making possible point-to-point distribution of video content and user-generated videos. In combination with the explosive popularity of blogging, syndication, and ‘long tail’ economic models, will create a virtuous circle. Video professionals and niche markets now have a viable distribution alternative to broadcast, providing them with a direct sales route and zero costs.


New Twist In Internet Piracy As Britons Rush To Download TV
Ciar Byrne

Impatient fans of popular American television shows from 24 to Desperate Housewives are increasingly turning to illegal internet downloads to watch programmes hours after they have been broadcast in the US.

Britain is the worst offender in this explosion of online television piracy that has seen illegal downloads of some programmes increase by more than 150 per cent in the past year, research shows.

24, the hit thriller starring Kiefer Sutherland, is the most popular pirate television programme worldwide. In the past 12 months, illegal downloads of the show have risen from 35,000 per episode for the third series to 95,000 for the fourth.

Downloads of Desperate Housewives, showing on Channel 4, rose from 40,000 for the first episode to more than 60,000 for the most recent, although this is a tiny fraction of the four million viewers who regularly tune in. About 18 per cent of online television piracy is in Britain, closely followed by Australia - countries with a growing demand for early access to American television shows.

The rise in broadband internet access is the main driver of the piracy, allowing a programme to be downloaded in two hours. The UK had more than six million broadband connections at the end of 2004, Ofcom said.

Another factor is the new file-sharing technology known as BitTorrent, specifically designed to download films and television programmes.

Television piracy is gaining the notoriety enjoyed by Napster in its previous incarnation as the home of illegal music downloads.

The cost to the television industry is difficult to quantify because most people pay a general subscription fee rather than for individual programmes. But advertising revenues are at particular risk because illegal downloads do not include adverts.

David Price of Envisional, the internet monitoring company that performed the study, said: "It's a double whammy for advertisers. First, they are losing eyeballs. Second, the people whose eyeballs they are losing are the demographic they want, young and technologically savvy with high disposable incomes. TV companies must take a leaf out of the record industry's book, set up legal download sites and bring lawsuits against the worst offenders. The companies are pursuing a television equivalent of iTunes, which would offer high-quality downloads and maybe added content."


Interactive Viral Campaigns Ask Consumers to Spread the Word
Nat Ives

DURING the early days of Internet advertising, skeptics often argued that Web ads would never sell prosaic packaged goods effectively.

As more Americans become comfortable with the Web, though, major marketers are increasingly asking agencies to produce elaborate, interactive online campaigns - even for grocery store goods that hardly anyone researches or buys online.

One of the shiniest lures online is the developing field of viral advertising, in which companies try to create messages so compelling, funny or suggestive that consumers spontaneously share them with friends, often through e-mail or cellphone text messages. The goal is the exponential spread of ads that are endorsed by consumers' own friends.

The best-known viral success may be the offbeat "Subservient Chicken" site, created to promote a Burger King chicken sandwich. The site, which shows a person in a chicken suit who seems to follow typed commands from Web surfers, has drawn 13.9 million unique visitors since it went live in April 2004, according to the agency that created it, Crispin Porter & Bogusky in Miami.

Thus far the energetic rise of viral marketing has been fueled largely by such bizarre creations, along with young, hip and technology-savvy Web surfers. But its promise is finally tempting marketers like Georgia-Pacific to test the tactic on much broader audiences.

Georgia-Pacific has begun a campaign, created by Fallon New York, part of the Fallon Worldwide division of the Publicis Groupe, that uses a viral component to sell Brawny paper towels to women, age 25 to 54.

"This is definitely a new approach for us," said Alfredo Ortiz, senior brand manager for Brawny at Georgia-Pacific in Atlanta. But the growing number of Americans with high- speed Internet access includes millions of women, he said. "There's definitely room to market to this target."

To seed the campaign, as viral marketers say, Georgia-Pacific sent a single blast of e-mail messages last week to consumers who had signed up for newsletters from www.allyourrooms.com, a Georgia-Pacific site that provides information on topics like decorating, entertaining and cleaning.

Visitors to the Brawny site will find a section for the tongue-in-cheek "Innocent Escapes" videos in which a strong but sensitive Brawny Man offers compliments like, "By the way, you look beautiful today - something about your eyes."

Ari Merkin, executive creative director at Fallon New York, noted that "Innocent Escapes" visitors would find both a "play movie" button and an all-important second button, "send to a friend."

"If someone passes one of these things along, it's an endorsement," Mr. Merkin said. "It does wonders for us."

Brand managers for Brawny and its larger competitor, Bounty, still spend minuscule portions of their annual ad budgets on Internet advertising. From January through November 2004, for example, Brawny spent less than 1 percent of its $24.2 million estimated budget on the Web, with 31.4 percent devoted to broadcast network television commercials, according to estimates by TNS Media Intelligence.

In the same period, Bounty devoted less than 1 percent of its estimated $60.4 million ad spending to the Internet, with 34.2 percent of the ad budget going to broadcast network television buys, TNS Media Intelligence said.

But for Brawny, the No. 2 paper towel brand, new tactics may offer the best hope to erode a daunting Bounty lead. Last year, shoppers spent $240.6 million on Brawny paper towels, according to data from Information Resources Inc., which tallies sales in supermarkets, drugstores and mass merchandisers excluding Wal-Mart. By comparison, Bounty sales totaled $853.5 million, by Information Resources' estimate.

Another company, Frito-Lay North America, has begun promoting a packaged product, Doritos, with a yearlong integrated campaign incorporating big text-message and online components. But its core target comprises teenagers and adults up to 25 years old, who seem the most familiar with and receptive to viral approaches.

Kickoff teasers for the Doritos campaign included enigmatic billboards asking passers-by to text message "inNw" to a certain number, 46691, or visit www.inNw.com. Those who send text messages receive quick responses on their phones from Doritos challenging them to guess what "inNw" means, thereby engaging them in dialogue and potentially making the question a conversation point among friends.

The flagship New York office of BBDO Worldwide, part of the Omnicom Group, created the "inNw" Doritos campaign. The text-message component was developed by HipCricket in Essex, Conn., a five-month-old wireless marketing and event agency.

Text messaging and Web fluency is spreading among consumers, said Lora DeVuono, vice president for advertising and communications at Frito-Lay in Plano, Tex., part of PepsiCo. "In terms of lifestyle integration," she said, however, "it's the under-30 crowd that's focused on its complete integration in their lives."

As viral marketing gains adherents, it is also gaining awards shows like this week's Viral Awards in New York. The event, a North American version of the Viral Awards in Britain, primarily honored bizarre or risqué work like "Subservient Chicken" and an online campaign for Trojan condoms that portrayed seminude athletes vaulting into sexual positions.

"The sophomoric, shock-driven work is going to predominate for a while," said Owen Plotkin, president at the Now Corporation in New York, an editing boutique for television commercials and viral productions that was host for the awards. "That's the easiest way to ensure people pass something along."

"It's really hard to make something so compelling that it makes people want to share," Mr. Plotkin said. "But that can happen, too, and it does happen."

The success of Brawny's "Innocent Escapes" depends largely on the entertainment value it brings visitors, said Stephen Strong, director for interactive at the Chicago office of Foote Cone & Belding, part of the Interpublic Group of Companies. "It's human nature to share that stuff," he said. "People will be sending each other stuff online until the Internet shuts down."


The Times Company Acquires About.com for $410 Million
Katharine Q. Seelye

The New York Times Company announced yesterday that it would acquire About Inc. and its Web site, About.com, from Primedia Inc. for $410 million.

Times Company officials said the acquisition would add a fast-growing, highly profitable Web site to the company's portfolio and would increase the company's revenue from the expanding online advertising business.

"This deal provides a very attractive return on our investment going forward, and I feel very comfortable standing up in front of shareholders and telling them that," said Leonard P. Forman, chief financial officer of the Times Company.

By adding About's 22 million monthly users to the Times Company's 13 million monthly users - from The New York Times, The Boston Globe and more than 40 other Web sites - the company said it would have the 12th-largest presence on the Internet.

"This scale is important as content companies compete for market share in readership and advertising," said Martin A. Nisenholtz, named by the Times Company yesterday as senior vice president for digital operations.

About.com uses a network of about 500 experts to write online about hundreds of specialty topics, from personal finance to quilting to fly-fishing. Primedia wanted About.com as a way to provide a link with its many print publications, Web sites, newsletters and video programs.

Kelly P. Conlin, Primedia's president and chief executive, said that selling About.com would help Primedia reduce its debt and strengthen its own balance sheet.

The Times Company's acquisition of About.com comes after it was among the losers in a bidding war in the fall for CBS MarketWatch, the financial news Web site. The site was acquired by Dow Jones & Company, publisher of The Wall Street Journal, for $519 million.

Times Company officials said About.com would help diversify its online advertising base by adding "cost per click" advertising, in which advertisers pay only when a reader clicks on an ad.

Cost-per-click ads are the fastest-growing segment of online advertising. The Times Company said it also expected to market its products to About.com users. "The appeal of About is that it gets the NYT Company into the fastest-growing component of the advertising market place, and therefore it makes strategic sense," said Peter Appert, a media analyst for Goldman Sachs.

"The challenge is that About is very small versus the total scale of the NYT business," he said, adding that About's revenues last year were $40 million, a fraction of the Times Company's revenues. "It represents barely over 1 percent of NYT revenue, so while it's strategically appealing and it's a step in the right direction, it's financially too small to really change the growth story at the NYT," Mr. Appert added.

Times Company officials said the demographics of About's users were somewhat different from those of users of The Times's Web site. The median age of About's users is 37, which is five or six years younger than that of nytimes.com users. About 65 percent of About users are women, while The Times's site attracts more men than women. The average income of About users is $61,000 a year, while that of The Times's online readers is $80,000 a year. And there is little overlap between current About users and The Times's users.

"It adds a huge new base to our mix," Mr. Nisenholtz said.


Publisher Aims at Cellphones
Edward Wyatt

Stepping into the rapidly expanding business of providing information for wireless hand-held devices, Random House announced yesterday that it had acquired a minority stake in Vocel, a San Diego start-up company that offers educational content to subscribers over cellphones for a monthly fee.

Random House said it had also agreed to license two product lines - Living Language, a series of foreign-language self-study programs, and Prima Games, which publishes video-game strategy guides - to Vocel for use with its cellphone technology.

The two companies did not disclose terms. Random House, a division of Bertelsmann, will not be involved in the day-to-day operations of Vocel, but two Random House representatives will serve on Vocel's five-member board.

Under the agreements, Vocel will adapt language-study guides and video-game tips from Random House for delivery to cellphones beginning sometime this summer. While most information will be in the form of text, the Living Language service will also permit users to hear the correct pronunciations of foreign words.

Since last year, Vocel has offered SAT preparation materials from Princeton Review to subscribers, who pay $5.75 a month to have interactive SAT tests, flash cards and other study materials delivered to the display screens on their phones.

The test preparation service is available to about six models of cellphones through Verizon Wireless. Carl Washburn, who founded Vocel two years ago and is its chief executive, said the company planned to expand to other wireless carriers this year. It is also negotiating with other publishers and information providers to license additional content.

Richard Sarnoff, president of Random House Ventures, an investment subsidiary of the publishing company, said the company intended to expand its offerings of text and audio information to wireless providers beyond yesterday's agreements.

"Mobile phones have already integrated themselves into people's lives as an everyday appliance," Mr. Sarnoff said. "You're also going to see them become an everyday information appliance. As the world's largest consumer publisher, we want to get out in front of this."


Tired of TiVo? Beyond Blogs? Podcasts Are Here
Kate Zernike

From a chenille-slipcovered sofa in the basement of their friend Dave's mom's house at the edge of a snow-covered field, Brad and Other Brad, sock-footed pioneers in the latest technology revolution, are recording "Why Fish," their weekly show.

Clutching a microphone and leaning over a laptop on the coffee table, they praise the beauty of the Red River, now frozen on the edge of town, and plug an upcoming interview with a top-ranked professional walleye fisherman. Then they sign off.

"I'm Brad" says Brad, in real life, Brad Durick, a 29-year-old television advertising salesman.

"And I'm Brad," says Other Brad, a 44-year-old newspaper writer, Brad Dokken. "Until next week, keep your hook in the water, keep your line tight and keep it fun."

Their show, mostly ad-libbed, is a podcast, a kind of recording that, thanks to a technology barely six months old, anyone can make on a computer and then post to a Web site, where it can be downloaded to an iPod or any MP3 player to be played at the listener's leisure.

On an average day, about 100 people download "Why Fish" from its Web site. That is not a huge audience, but two fishermen can dream. Some popular podcasters say they get thousands of downloads a day.

Since August, when Adam Curry, a former MTV video jockey, and David Winer, an early Web log writer, developed the podcasting technology, 3,075 podcasts have sprung up around the world, according to a Web site, Ipodder.org, that offers downloads of podcasting software.

From "Say Yum," a California couple's musings about food and music, to "Lifespring," a Christian show whose creator said he had a vision to podcast, to "Dutch Cheese and American Pie," by a Dutch citizen planning to move to the United States, these shows cover a broad variety of topics.

Podcasts are a little like reality television, a little like "Wayne's World," and are often likened to TiVo, which allows television watchers to download only the programs they want to watch and to skip advertising, for radio or blogs but spoken.

And as bloggers have influenced journalism, podcasters have the potential to transform radio. Already many radio stations, including National Public Radio and Air America, the liberal-oriented radio network, have put shows into a podcast format. And companies are seeing the possibilities for advertising; Heineken, for example, has produced a music podcast.

Inevitably, politicians are taking note, too. Donnie Fowler Jr. put out "FireWire Chats" by podcast in his bid to become chairman of the Democratic National Committee, saying Democrats had to embrace new technology if they wanted to reach a grass-roots audience.

Still, most podcasts are made by people like the two Brads, who record from basements, bedrooms or bathrooms, and devote their shows to personal passions.

In Southern California, three men have hit the Top 50 on Podcastalley.com, a podcast tracker, with "Grape Radio," a "Sideways"-like program about wine. Their expertise? They drink wine and like to talk about it.

There are music podcasts - cover songs, punk and "The Worst Music You've Ever Heard." There are many religious podcasts, nicknamed Godcasts. Then there is "Five Hundy by Midnight," a Midwest gambler's musings on Las Vegas.

There are podcasts on sports and on bicycling, on agriculture and on politics. There are poetry podcasts and technology podcasts.

In Northern California, Devan and Kris Johnson, young newlyweds, offer "Say Yum," recording themselves making dinner and playing music after work. (A snippet: "I hope everybody gets to eat avocados.") But they are not even the first of their genre; one of the first and most popular podcasts is recorded by a young married couple, talking about their lives, and sex lives, from their farmhouse in Wayne, Wis.

There are even podcasts about podcasting and several Web sites, like Podcastalley.com and Podcastbunker.com, that review and rank podcasts and provide links to them.

People who study consumer behavior say the rapid growth of podcasts reflects people's desire for a personalized experience, whether creating a stuffed animal at a Build-a- Bear store or creating playlists for their iPods.

"It's about control," said Robbie Blinkoff, an anthropologist at Context-Based Research, a consulting firm in Baltimore that has done several studies on how technology changes human behavior.

"Making something of their own, feeling like they've put it together, there's lots of self-confidence in that," Mr. Blinkoff said.

The potential audience for podcasting is huge; Apple alone has sold 10 million iPods in the last three years, about half of those in the last few months of last year.

And already, several podcasts have found sponsors. Dave Whitesock, who under the show name Dave Miller records the "Miller Report," a daily podcast from Grand Forks, got a limousine company to help pay for his report in exchange for a daily mention: "For when you need a stretch limo in Grand Forks."

While some podcasters take hours to edit their shows, many simply embrace dead air and the "ums" that come with what Mr. Whitesock called "Live to Hard Drive."

Brian Race, a radio station manager in Georgia who runs Christianpodcasting.com on the side, picked up his cellphone in the middle of a recent podcast to discover his mother on the line. He kept on recording.

The rawness is part of the appeal.

"Everyone says, 'They're amateurs, they're amateurs, they're amateurs,' but sometimes, frankly, it's more interesting to listen to someone who's not a professional but who has something genuine or interesting to say," said Michael W. Geoghegan, an insurance marketer in California and the host of "Reel Reviews," a movie review podcast intended for people heading to the video store.

Mr. Geoghegan said he had "multiple thousands" of downloads a day. He does no editing. "People stumble when they speak," he said. "I think the listener appreciates when it's not superpolished as it is on a commercial station."

Podcasting has tended to be contagious; after Mr. Geoghegan stumbled on a Web site about podcasting in September and started his show, he persuaded three friends who like wine to start "Grape Radio."

Mr. Whitesock, too, stumbled on a Web site about podcasting, and persuaded the two Brads to do a fishing show, and then another friend to do a movie review show. This month, they added a music show in which a radio disc jockey for a local Clear Channel station plays local music he would not get to play on the air, and persuaded the part- time mayor of Grand Forks, Dr. Michael Brown, an obstetrician, to do a monthly show, and put his State of the City address on podcast, too.

"We can reach people in the rest of the world who might say, 'Hey, Grand Forks is a great place to move to,' " said Dr. Brown, who said his shows had been downloaded by about 100 people, including some who wrote in with complaints. "And technologically advanced young people say, 'I can stay in Grand Forks.' There is a place for them here."

In California, the Johnsons of "Say Yum" added clip-on microphones to their usual after-work routine to create their show.

"I'm usually cooking, and Devan's usually playing music, so we just chat over the music," Ms. Johnson said.

Brian Ibbott had always loved making mixed tapes and CD's. His podcast, "Coverville," has become one of Podcastalley's most popular, and in many ways it is like a real radio show, without the advertising. Sunday is all-request day, and listeners can call in their requests. Mr. Ibbott, 35, plays back their recorded requests before the songs.

"I don't know that I'm doing it so much as a protest against radio as I am to develop the radio show I always wanted to hear," said Mr. Ibbott, who lives in Colorado. The last great radio station nearby, he said, was bought out by Clear Channel. "And they got the same playlist everyone else did."

He pays a few hundred dollars to Ascap and BMI to allow him to play copyrighted music, he said, and is negotiating with the Recording Industry Association of America, which has filed lawsuits to prevent unauthorized music downloading.

Mr. Ibbott, like the Johnsons and most podcasters, work in technology jobs. But then there are some like Steve Webb, who fits his Christian show "Lifespring" in between his regular job as a windshield repairman. He was on a Cub Scout trip with his son, he said, when he woke with a vision that he was to do a podcast.

"I felt it was leading in the Lord," said Mr. Webb, 50. "I felt he wanted to have a voice in this new media. After all, the Gutenberg Bible was the first thing printed on the printing press."

Technology watchers say that like blogs, some podcasts will be widely heard and influential, while others may end up with no more reach than local access cable programs. But many podcasters, like the two Brads, say they are simply happy to have an outlet for their passion. As Mr. Durick said, "You love to talk fish if you're a fisherman."


Napster Founder, Shawn Fanning Among Other Music Industry Leaders to Present at Leading Music & Technology Conference

Music & Technology Industry Luminaries to Debate Grokster Case, Peer-to-Peer Networks and Mobile Opportunities at 5th Annual Digital Music Forum in New York City
Press Release

Digital Media Wire, the industry's leading digital and mobile entertainment news, events, and information provider, today announced its final round of panelists and key-note speakers for the 5th Annual Digital Music Forum (http://www.digitalmusicforum.com/), to be held March 2nd at the French Institute in New York City.

The one-day conference, which is the premier event for music industry decision-makers, will focus on business models and legal issues impacting the music industry, featuring a candid, one-on-one discussion between Wired Editor-in-Chief Chris Anderson and Napster founder Shawn Fanning about Fanning's new venture and his future in music. Additional keynotes will also include one of the most powerful people in music, master manager and promoter Terry McBride, CEO of Nettwerk Productions in addition to David Goldberg, VP & General Manager, Music at Yahoo! Mike Conte, General Manager, MSN Marketplaces for Microsoft.

The event includes thought-provoking panels on the outlook for online and mobile music markets and the clash between technology and copyright laws. Speakers representing both parties in the peer-to-peer file-sharing case MGM v. Grokster make up a panel of legal and policy experts who will discuss views on how best to balance the competing interests of copyright protection and the promotion of technological innovation. The case, which has far-reaching ramifications for the future of peer-to-peer and online piracy, is set to be heard by the U.S. Supreme Court on March 29th, 2005. If the plaintiffs win, distributors of peer-to-peer file-sharing software could face immense damage awards and/ or court injunctions that would force them to cease distributing their software.

"Peer-to-peer and mobile developments will be at the heart of discussions at this year's forum," says Ned Sherman, CEO of Digital Media Wire. "I am excited to line up industry-leading authority topics such as developments in legal peer- to-peer issues, the Supreme Court's review of MGM v. Grokster and technological development in regards to positioning the mobile phone to become the key device for music to be digitally accessed and distributed. This is going to be one of the most important years for the future of music and these events are likely to shape the industry for years to come."


The basics

WinMX MP3 Music Sharing Software Review
Joanna Gurnitsky

1) Overview of the WinMX software: This product is designed to trade songs and videos across the Internet using "peer to peer" (P2P) networking.

It works like this: thousands of users install WinMX on their PCs, and willingly open their hard drives to each other. As these thousands of people log on to the Net using WinMX, the pool of available WinMX hard drives changes moment-to-moment. Every WinMX user is empowered to search for songs and movies, and then begin downloading and uploading music files to each other. Equitable sharing of music and movies is promoted, and people will often share gigabytes of files with their fellow WinMX users.

This WinMX P2P network system employs its own custom file sharing client software, created by FrontCode Technologies. The current version of WinMX is 3.31, and is free to download here: http:// www.winmx.com/

2) Warning: WinMX is a highly controversial software because of copyright laws, and WinMX users do risk possible fines and lawsuits.

3) What You Need to Run WinMX (System Requirements)" : Windows 98 / ME / 2000 / XP. Pentium166 with 64MB of RAM or better recommended. MacIntosh "grey- market" versions are available for around $50USD.

3) Why WinMX is a Good P2P Software: WinMX is simple to install, easy to use, available for free, and is the only no-cost P2P software that is free of malignant spyware. In short, if you choose to participate in P2P file sharing, WinMX is the friendliest and cheapest choice available.

4) The Downsides of WinMX: Other than in Canada, it is a copyright infringement in most countries to share music and movie files. WinMX users risk being fined or even sued everytime they trade music files.

6) The Legalities of Using WinMX Music-Sharing Software:

True WinMX software is FREE, but you must decide if you will risk being sued for copyright infringement. The only country that legally sanctions Internet music- and video-sharing is Canada. If you are in the USA, the UK, Mexico, Australia, or elsewhere, you do run a risk of being caught and fined for sharing music.

Example of an American User Being Fined: On May 6th, 2004, a woman from Connecticut was fined six thousand dollars for downloading copyright-protected music from the Internet, and was barred from downloading, uploading or distributing copyrighted songs over the Internet.

7) Warning About a Consumer Scam: some P2P networks will unethically sell you paid versions of various file sharing software, including WinMX, and claim that this paid software absolves you of copyright responsibility. This is a lie. While the software itself may be legal (you paid for it), the copyright aspect is not addressed by these surchages.

These unethical scammers will obscure the issue with hazy statements like: “Due to the nature of peer-to-peer software, we are unable to monitor or control the types of files shared within the peer-to-peer communities”. In the end, despite what these unethical vendors will tell you, you are still liable for music sharing copyright regardless if you pay for the software or not

8) Technical Concerns for Using WinMX P2P Software:

a. Always check your files with a good anti-virus program.

b. If you are behind a router-firewall and are curious how to set up your file sharing, go here:


This website contains detailed information you can use to “open up” certain ports on your router to allow the “in” and “out” file sharing traffic.

c. Personal comment: I would highly recommend that you get acquainted with some tips and tricks that will make your WinMX-life easier. These tips include: how to avoid downloading fake files, and what to do if the movie you just downloaded refuses play on your computer. You can also find a lot of information about the fine-tuning of your transfer speeds and other WinMX expert features here:


Related Link: US copyright law: http://www.copyright.gov/

9. Final Comments:

If you are willing to assume the risk of copyright infringement, then I highly recommend WinMX over its competitors. The software is free, it is quite stable, it is free of malignant spyware, and the interface is quite friendly.


Music To Your Ears

Never mind copyright laws, file-sharing software creators will constantly reinvent the wheel to ensure peer-to-peer technology lives on, says Aaron Tan

INCURRING the wrath of music bosses was probably on Mr Shawn Fanning's mind when he created Napster, the first peer-to-peer (P2P) file- swapping program that enables users to download music files from computers across the Internet - without paying for copyrights.

A Northeastern University college dropout, Mr Fanning was looking for a better way to trade music files. When he completed the program in 1999, he called it after his nickname. By early 2001, Napster had some 50 million users.

With massive numbers of music files being shared freely, the Recording Industry Association of America (RIAA), together with bands like Metallica, sued Napster for abetting copyright infringement, and forced it to shut down.

Napster had to block all copyright infringing content, including 250,000 songs using 1.6 million file names.

Next in the legal pipeline was Kazaa. But this time, the United States District Court in California ruled in favour of Streamcast Networks and Grokster, distributors of Kazaa-like P2P software. Their verdict: The distribution of such programs is legal.

The good side

The claims that P2P programs are tools to steal copyrighted music and video from people who don't care about copyright laws, ignore the friendly face of the technology.

There is no doubt that freeloaders use it to download copyrighted material, but all the stuff on P2P networks are not just Linkin Park albums or Sex And The City episodes.

The technology can readily and efficiently make available all kinds of information to students, teachers, businessmen, researchers - everyone, in fact, says P2P United, a non-profit organisation fighting to save the know- how.

For example, Pennsylvania State University in the United States created Lionshare, a P2P program that shares academic information around the world.

Kontiki, another file-sharing program, was evaluated by the British Broadcasting Corporation as a way to distribute programmes online, according to an Economist report last year.

The makers of Kazaa have also created Skype, a P2P-based Internet telephony software that allows you to make free phone calls over the Internet to anywhere in the world, giving telcos stiff competition.

So the argument that P2P programs are used to download copyrighted material and, hence, should be outlawed, will rob the technology of its merits. It's like saying kitchen knives should be banned because they can kill.

In fact, about 10 per cent of the material on P2P networks do not infringe copyright laws, according to US research firm BigChampagne.

Apply to P2P, too, the US Supreme Court's 1984 decision that sales of Sony's Betamax video tape recorder does not violate the rights of copyright owners.

'Even if it were deemed that home-use recording of copyrighted material constituted infringement, the Betamax could still legally be used to record non-copyrighted material or material whose owners consented to the copying. An injunction would deprive the public of the ability to use the Betamax for this non-infringing off-the-air recording,' the court ruled.

In fact, many substantial non-infringing uses of P2P software already have been found by some courts to mean that the technology itself is not unlawful and that those who distribute it are not guilty of violating copyright law, P2P United said on its website.

Cat-and-mouse game

So, in a cat-and-mouse game with copyright owners, P2P software makers are constantly reinventing the wheel - the latest effort being BitTorrent.

Now this is a P2P-based technology that rewards people who share. Those who want a file must share what they have with everyone else.

The more they share, the faster they receive their downloads.

It's also incredibly efficient at distributing large files like the Linux operating system, games and video, which would otherwise cost companies a lot of bandwidth to make them available for download.

But late last year, websites like SuprNova.org - crucial BitTorrent hubs or trackers that hold information on who is receiving or sending a shared file at any time - went up in smoke as the Motion Pictures Association of America took criminal action against them.

While other trackers still exist, the demise of major BitTorrent trackers has made files harder to find, as traders turn to private P2P networks.

Qnext is one such network, which makes use of its software clients to share all kinds of files like photos, videos and documents with specific Qnext users - usually friends and family members.

Others, like Pixpo, are focused on photo-sharing within a selected group of friends, or among the entire community of Pixpo users.

Even so, P2P programmers are a resilient bunch. Since Napster, they have been working on better iterations of the technology with Kazaa and Gnutella.

It won't be long before they come up with a way to dynamically move BitTorrent trackers from one place to another, so that the network does not get crippled from a single point of failure.

That is something the entertainment industry has to learn to grapple with, again.


Interview: The Future in Grid Computing
David Worthington

INTERVIEW Computing grids are software engines that pool together and manage resources from isolated systems to form a new type of low-cost supercomputer. In spite of their usefulness, grids remained the plaything of researchers for many years. But now, in 2005, grids have finally come of age and are becoming increasingly commercialized.

Sun Microsystems recently unveiled a new grid computing offering that promises to make purchasing computer time over a network as easy as buying electricity and water. Even Microsoft is said to be investing in grids and Sony has grid-enabled its PlayStation 3 for movie-like graphics.

As interest in these distributed technologies grow, so does the probability for disinformation. With that in mind, BetaNews sat down with some of the world's leading grid guru's, Dr. Ian Foster and Steve Tuecke, to set the record straight and divorce grid hype from grid reality.

BetaNews: Since we last spoke in 2001, what significant developments have there been in the commercialization of grid technologies?

Dr. Ian Foster: Back then we were just seeing earlier interest in grid technologies from companies like IBM etc. Since then we have seen tremendous growth and enthusiasm. And a lot of things are being labeled as grid that perhaps one could argue they are not. Perhaps they are more, in some cases, computing cluster management solutions, but also some substantial early deployments in the industry from companies like IBM and Sun, and others like HP and so forth.

Then more recently we have seen Univa being created, which I am involved as founder and advisor. I primarily focus on the open source software side. And that is significant because it represents a step forward on the transfer to the commercial side of this open source grid technology, which is going to be important as a means of building the standards-based systems that are required for broad deployment.

The other thing that you may have come across just recently is the Globus Consortium and this is a set of four major participants: HP, Intel, IBM and Sun; focused on advanced commercial use of Globus software.

BetaNews: Speaking of IBM, it claims to have grid-enabled much of its product line.

Foster: I think things are not quite as simple as that. IBM has a product called the IBM Grid Toolbox, which is basically Globus with some IBM enhancements or add-ons. They have done a fair bit of business based on that, using that technology to federate storage and computing resources within various industries. At the same time, when they say they grid-enabled WebSphere, for example, what they mean more is that they modified WebSphere to run on a cluster, I believe. So I do not think that the grid-enabled WebSphere at present is using Globus technologies.

BetaNews: Is that what you meant about mislabeling clustering as grid?

Foster: The key thing we are trying to achieve with grid is federating resources, breaking down the silo boundaries that are making computing more expensive or less reliable when it shouldn't be. And there are of course a number of ways of skinning the cat. So at the moment, in the absence of some of the necessary standards, first of all you see low ambition solutions that are already focused on clusters; other solutions that may extend across clusters that are more proprietary in nature; and lastly where we are moving -- with recent work on standards with the open source software basis -- towards larger scale federation and standards base federation. And those are the two things that the Globus software is about.

BetaNews: Do you consider Sun's grid engine to be an example of a proprietary solution?

Foster: Yes, the Sun grid engine is a system that can be used to manage a single cluster. I think it can be used to federate clusters that are running Sun grid engine software. It's a proprietary solution in the sense that it won't interoperate with other resource managers.

But you know it is a grid technology, and I think Sun would like to take it, and where we'd like to see it go, is toward something that would use open protocols probably based on Globus implementations as a basis for federating clusters of different sorts or computing resources of different sorts. So again, it's a technology that is useful today in sort of a closed environment that can become something more powerful as it integrates with the right open protocols.

BetaNews: Let's move on to Globus. Tell us where you are at.

Foster: So, when we would have talked last, Globus toolkit version 2 had come out probably about that time and that was the first version to really get large-scale deployment in the science space. Since then we have made a lot of progress in quite a few dimensions and one primary one is integration with Web services technologies.

Globus Toolkit version 4, which will come out in April, makes heavy use of web services technologies and implements a set of specifications that are relevant to distributed resource management and federation coming out of places like OASIS and W3C and the Global Grid Forum. And so in that sense it represents an alignment -- a convergence -- of what is going on in the Web service space and I think that's pretty significant.

BetaNews: What Web service technologies is Globus supporting?

Foster: What we provide is primarily an implementation of Web services standards to allow people to build services, and the primary goal is also for us to provide a set of pre-defined services that allow you to use Web services protocols to interact to request the allocation of compute resources, the creation of computational services and moving the data from one place to another and so forth.

The actual hosting environment on which we implement our services today is primarily Apache access, we don't currently have a .NET implementation but that is something that could be provided.

BetaNews: Will the upcoming Globus toolkit include pre-coded modules to build grid-based solutions?

Foster: The Globus toolkit version 4 itself provides a set of modules that address various issues that arise when you are building systems that federate computing resources. So, these include components that implement WS-Security standards, others that provide resource management services, data management services and so forth.

The Globus consortium is going to pull resources to add additional modules to the open source code base, perhaps in some cases they may devote resources to porting Globus components to new platforms, perhaps to integrate with new classes of enterprise software. There is a range of things that we would expect them to do that they haven't yet announced such as their plans for exactly where they'll spend their resources.

BetaNews: Will any of the modules be industry-specific modules such as finance or perhaps engineering? What types of applications would these systems actually be used for?

Foster: That's a really good question. Will some of this work that I am talking about the consortium doing focus on particular verticals, financial services for example? I would answer as follows:

What is going to get people using grid technology on a large scale is going to be vertically integrated solutions. The consortium, at least in its initial phases is probably going to be more likely to focus on infrastructure elements because that's where the different pediments will have common requirements. But as the consortium grows in membership, I could certainly imagine interest groups forming that would want to support more vertically focused components.

One thing of somewhat relevance that I would mention at this point, is a neat demo that was done by SAP at its SAP TechEd conference late last year that sort of suggests some of the ways in which Globus and grid technology might evolve. At this conference they showed three of their analysis packages that had been modified to use Globus to do dynamic provisioning so that as incoming load increased they would dynamically acquire and deploy their applications on more computers, and as load was reduced they would dynamically release those resources for other purposes.

BetaNews: What industries are Univa partnering with at the moment?

Steve Tuecke: At this point we are not talking about any particular customers. One partner that we are working with for example is building up to apply the technology to government markets. We have various discussions going on in financial services in big engineering type settings. Examples of those are automotive and aerospace. There's discussions going with other industries, the traditional markets of the big technical computing for grid. Where we see a lot of opportunities moving forward is out in those non-traditional technical computing markets such as the ones indicated by SAP type applications.

Foster: I think we see ISVs as a potentially big market for grid computing.

BetaNews: There has been a lot of buzz about Sony using grid in its PlayStation 3 gaming console. What are some non- enterprise applications of grid and how do you feel grid can perhaps revolutionize or change gaming? Will grid technologies affect consumer electronics such as devices that store photos or music?

Foster: I am not familiar in details of what Sony is doing. But I'll just lead to a couple of things. One is, I am not sure where they are at the moment, but at least a year ago I spoke to an interesting company called Butterfly.net that was proposing to provide grid-based infrastructure for hosting multi-player online games. The assumption being that as people development new games they needed the central infrastructure to host the actual gaming activities and that this was a competency that was better outsourced to a specialist and that is what they proposed to do. But I understand that is not exactly what you are asking about here.

So, there is a whole class of interesting things that people sometimes called peer-to-peer (P2P) that relate to the loose and informal federation of computing and storage resources among individual participants. This is not something that I think we have put a lot of thought into but clearly I think it can become very interesting and I can see that some of the same technologies that are being developed for grid being applied.

Especially if you want to do something more than the current P2P systems that are based on loose notions of federation and trust and perhaps think about systems that, for example, federate storage among members of a family or different participants in some distributed organization that have some degree of trust and are therefore more likely to be people that you rely on to do things for you.

BetaNews: How important are identity management standards to the future of grid computing? There is no firm common ID management standard as of yet. Could that fact impede grid technologies from reaching the market?

Tuecke: I do not think that lack of any particular one set of standards that everyone agrees to will substantially delay grid tech to the market, but it does speak to a larger question about standards in general. This is why at the end of the day grid will not be adopted in its full glory; grid will not see it full potential, until there really are a common set of standards. Not just for ID management, but for all sorts of bits for technology like the Web.

A lot of potential comes out when you get those ubiquitous standards. That being said, there are already getting to be very large grid deployments in enterprises and even across enterprises and those are based on some combination and or Web open standards that exist to underlie them combined with technologies like Globus.

BetaNews: In so far as grids and Web services are now converging, do you feel that grid computing can be used to create alternative to common desktop environments such as Windows?

Foster: So this is one take on things: One perhaps narrow view on grid is that it is part of this trend of moving away from the mainframe where computing and storage and data processing are now done on this loosely coupled fabric of computing systems which may be geographically distributed.

There are various reasons to move into that direction and one is to take advantage of commodity systems. Now as you make that move, you start to need to replicate functions that used to be provided by these nice mainframe operating systems so you need resource management, security, monitoring, and accounting - all of these. This machinery needs to be reconstructed in this loosely coupled web services environment.

As we start to do that -- and we are making good process on those things -- I think we start to create something that has some flavor of a distributed operating system. And perhaps if it is successful starts to commoditize the OS on an individual system.

I think that is part of the excitement and also challenge of Web services for people like Microsoft.

BetaNews: Thank you both for your time.


File-Sharing Dragnet Scoops Up Bay City Grandma
Crystal Harmon

You've got to pay the piper, the saying goes, if you want to call the tune.

And if you want to share the tunes online, you might get hit with a mighty big bill.

The recording industry has targeted hundreds of people around the country with lawsuits, alleging they infringed on record companies' copyrights when giving and taking music online.

A Bay City family got served with notice of such a lawsuit last month at their home on King Street.

"I almost got a heart attack when I was going over those papers," said Margaret Szeliga, an automotive design engineer and single mother. "What happened? How did this happen? I was in shock when I saw those court papers."

The person named as defendant in the lawsuit is Szeliga's mother - a 70-year-old Polish immigrant who speaks little English and has never even owned a computer, let alone downloaded the songs "Armed to the Teeth" by Epidemic or "The Backend of Forever" by Coheed and Cambria.

Those are just two of the 671 songs listed in the lawsuit, filed last month in U.S. District Court, accusing Szeliga's mother of violating copyright laws.

Szeliga says her 17-year-old daughter, like millions of other teens, took part in online music swapping while the two lived with her mom before moving into another apartment in the same home. Since her mother paid the Internet bill, she's listed as the one doing the swapping.

Szeliga phoned the industry lawyers and quickly hashed out a tentative settlement, she said, avoiding the expense of hiring a lawyer and the hassle of court proceedings and a threat of even greater cost.

But it's not cheap. She has 90 days to pay the Recording Industry Association of America $3,750.

She'll raid her 17-year-old daughter's college fund and senior class trip fund and take out a personal loan to pay the unexpected bill. She said her daughter is devastated, feeling guilty, depressed and angry for being penalized for an activity that's common practice.

"I wish we would have had some kind of warning," Szeliga said. "I just cannot believe our luck. What are the odds? Some of her friends have over 4,000 songs. On a raffle, we never win anything. On a situation like this, we are the unlucky ones."

The recording industry says 2.6 billion songs are illegally shared via the Internet each month. Through software that allows computer users to trade music at the touch of the button, an estimated 60 million Americans are building massive music libraries for free.

In the Szeliga family's case, though, the "free" collection of 671 songs will end up costing them about five bucks per tune - tunes which, as part of the settlement, must be destroyed.

Swapping or stealing?

The Recording Industry Association of America sued 717 people around the country last month for copyright infringement. It's the third major round, with the first coming in 2003. Most of the lawsuits end in settlements like that reached by Szeliga.

The RIAA claims that the drastic action is necessary to keep the music industry healthy.

Illegal file-sharing robs musicians of their livelihoods and threatens the very future of the music industry, industry advocates say.

They point to a 26 percent decline in sales of recorded music over the past five years - paired with a surge in the sales of blank compact discs folks use to copy music.

The latest technology that makes it so easy to swap, rather than buy, recorded music; however, also makes it easier to track down offenders.

To prepare for the lawsuits, record industry representatives joined online music-sharing networks and scanned other members' directories - which are an open book to fellow members.

The directories list files members are offering to distribute. The record industry investigators downloaded some of the music, copied the directory, and noted the date and time.

The RIAA - which represents most major record labels - then served subpoenas on Internet Service Providers demanding records to identify the Internet user believed to be violating copyright laws.

While downloading even a single copyrighted song is illegal, the industry focused on folks who were making substantial collections of tunes available through the network, according to RIAA press releases and their informational Web site, whatsthedownload.com.

Unable to sue the millions of apparent violators at once, the RIAA targeted people around the country, making sure that each of the federal court districts were represented.

Their hope is to generate enough publicity that folks, fearing a lawsuit or even criminal charges, will turn to legal online music providers, such as iTunes, which charges 99 cents per song.

Legitimate music services grow in popularity with more and more music being purchased every day," said Steven Marks, general counsel for RIAA, in a press release trumpeting the latest batch of lawsuits.

"But the great music created by hard-working writers, artists and technicians continues to be stolen at an alarming rate through illegitimate peer-to-peer services on the Internet.

We must continue to let individuals know that they bear responsibility for illegally stealing the work of those who make the music. And we need to educate them about the widespread availability of legal music sites on the Web.

With the number of legal online music sites growing - more than 200 are now in operation, industry leaders hope consumers will take the safe and legal route to building their music libraries rather and accept that the free ride is over.

The law is clear and the message to those who are distributing substantial quantities of music online should be equally clear - this activity is illegal, you are not anonymous when you do it, and engaging in it can have real consequences, said RIAA president Cary Sherman.

But the message is slow to get through.

A Survey by the Pew Internet and American Life Project recently revealed that 58 percent of people who actively download music say they don't care about copyrights.

Online file-sharing leaves tracks

How the conflicts over copyrights will be resolved in the digital age remains unknown.

"It's anybody's guess right now," said Jerry Henderson, professor of broadcast and cinematic arts at Central Michigan University. "The RIAA is trying to stop the illegal fire sharing. They're trying to capture money they, and the performers, should be getting.

"The interesting question is going to be whether ignorance of the law will be a defense."

Copying and distributing copyrighted music has always been illegal, even in the olden days of vinyl records. But it was a cumbersome task, with sometimes less-than-stellar results.

"What really made the difference was the digitizing," Henderson said. "An illegal copy is almost as good as the master CD in terms of quality. That's why it's a whole new ballgame."

Also making a difference is the fact that file-swapping online leaves digital fingerprints of the crime. No one knew if you recorded your "Frampton Comes Alive" album on a cassette to give to your buddy.

As technology evolves, the ability to control dissemination of entertainment becomes more challenging. Radio stations - such as the student-run one at CMU - now broadcast in streaming digital formats. Listeners with the right software could easily capture those songs and make copies, Henderson said.

Some music fans are striking back at the record companies. Electronic Frontier Foundation is a group of lawyers, scholars and music lovers that has come to the legal defense of some defendants in the RIAA lawsuits.

EFF says record companies violate consumers' privacy in their quest to ferret out copyright violators. Rather than sue individual music collectors, the organization suggests that record companies embrace file-sharing and find a way to collect payments from users, other than filing lawsuits.

The EFF (www.eff.org) wants people to interested in "fighting the copyright regime" to join their organization and help change laws so that peer-to-peer sharing of music files is no longer illegal.

Henderson expects that, within a decade, music - and other forms of entertainment - will become almost like a utility. Consumers will have access to a global collection of nearly every song, movie and TV show ever made on tap for viewing or listening on demand. A monthly bill will show up, and a portion of that bill will cover royalties.

In the meantime, though, the record companies are fighting to get folks to buy the cow and stop getting the milk for free.

High court to weigh in

College students were among those targeted in the latest round of suits - 68 students at 23 universities, including Michigan State, Wayne State and the University of Michigan, were sued for illegal file sharing.

Henderson said some universities, including CMU, are attempting to educate students about the illegality of free music-swapping and "convince them that file-sharing is not cool."

"The university has cut off access to students computers for excessive file sharing," he said.

While music is the most commonly swapped type of entertainment, copyrighted movies are also available online - illegally - with a click of the mouse.

The U.S. Supreme Court will take up a case next month that, while it focuses on movie-swapping, may set precedent for those who collect music for free in cyberspace.

The court will weigh in on the case of MGM Studios vs. Grokster. The movie-maker is suing the company that produces software that makes sharing movies online so simple.

At issue is weather to software-maker is responsible for the copyright infringement their software facilitates. An estimated 600,000 movies are downloaded daily, according to MGM.

It's up to consumers, most of whom wouldn't even consider shop-lifting from a record or movie store,- to decide whether it's worth the risk to take songs and movies online in violation of copyright laws.

To be completely safe, Henderson suggests folks avoid it.

"If it's free, it's probably illegal," he said.

Szeliga wishes she'd have understood more about the potential consequences of copyright infringement a year ago.

She'd heard rumblings about Kazaa, the services her daughter used to build up a library of music ranging from Willie Nelson to Incubus.

The conventional wisdom was that if you kept your music library under 1,000 songs, you'd be safe from any kind of legal action, Szeliga said, "but I told her it could be trouble."


Why Wilco Is the Future of Music

Great things happen when a band and its audience find harmony.
Lawrence Lessig

On February 13, thousands of musicians from around the world will gather in Los Angeles at the Grammy Awards to celebrate music circa 2005. But the celebration won't hide the war that's going on. Record labels are threatened by technologies that give fans access to music in ways no one ever planned. They plead with Congress for more laws to control the fans. Activist organizations such as the Electronic Frontier Foundation and Public Knowledge (on whose boards this columnist sits) are fighting back. They (we) demand an end to the war, and the attack on innovation that it represents.

Yet there's something hollow about the earnest rage on both sides of this debate. Hollow, as in inauthentic. It is artists who make music, not the industry that markets it or the technologies that take it. But artists independent of the industry have been as rare in this debate as kids who don't file-share music. Of course, there are the "rebels" - those who have made it in the old system and who call for something new. But they know, as we all know, that they will be fabulously successful, regardless of what they do now. They risk nothing, and thus their message means less.

The band Wilco and its quiet, haunted leader, Jeff Tweedy, is something different. After its Warner label, Reprise, decided that the group's fourth album, Yankee Hotel Foxtrot, was no good, Wilco dumped them and released the tracks on the Internet. The label was wrong. The album was extraordinary, and a sold-out 30-city tour followed. This success convinced Nonesuch Records, another Warner label, to buy the rights back - reportedly at three times the original price. The Net thus helped make Wilco the success it has become. But once back in Warner's favor, many wondered: Would Wilco forget the Net?

We've begun to see the answer to this question. Wilco's Net-based experiments continue: the first live MPEG-4 webcast; a documentary about the band in part screened and funded via the Net; bonus songs and live recordings tied to CDs. Its latest album, A Ghost Is Born, was streamed in full across the Net three months before its commercial release. And when songs from it started appearing on file-sharing networks, the band didn't launch a war against its fans. Instead, Wilco fans raised more than $11,000 and donated it to the band's favorite charity. The album has been an extraordinary success - and was nominated for two Grammys.

I got a chance to ask Tweedy about all this before a concert in Oakland, California (that's the weird thing about law professors hanging around Wired - you get to go to the back of the bus). What struck me most was his clarity. He was a man called to a war that he couldn't believe had to be fought. Yet it isn't ideology that drives him. It's common sense.

"Music," he explained, "is different" from other intellectual property. Not Karl Marx different - this isn't latent communism. But neither is it just "a piece of plastic or a loaf of bread." The artist controls just part of the music-making process; the audience adds the rest. Fans' imagination makes it real. Their participation makes it live. "We are just troubadours," Tweedy told me. "The audience is our collaborator. We should be encouraging their collaboration, not treating them like thieves."

He uttered this with the passion of a teacher explaining the most fundamental truths. Words echo in this poet's mind many times before they are spoken. These words had echoed many times before. But when I asked him to explain the extremism in this war, passion faded and disbelief took its place. Commenting on a court decision to ban all music sampling without a license, he said one word: racism. And he seemed genuinely confounded by those who use the courts to punish their fans. "If Metallica still needs money," he almost whispered, "then there's something really, really wrong." He would protest this extremism, he explained, by living a different life. By inviting, by creating, by inspiring music, and by ignoring wars about plastic.

If this war is to end, it needs authentic voices. We have had enough preaching. The outrage is beginning to wear thin. It will take bands like Wilco, who live a different example and whisper an explanation to those who want to hear. Peace takes a practice. One that only artists can make real.


File Sharing Is Good

I never thought of it that way before. But today I had a chance to read this article at Wired about the band Wilco (see above). Stanford Law Professor Laurence Lessig, one of the first law professors to break the digital sound barrier with his use of it, quotes band member Jeff Tweedy as saying: “The audience is our collaborator. We should be encouraging their collaboration, not treating them like thieves.” Wilco has apparently made it’s very name by encouraging usage under some circumstances on the net. Perhaps other bands should follow the model and learn from what was and is being done.

Most recording companies are investing heavily in Digital Rights Management (DRM) or similar write-prohibiting technologies. Mike Davidson explains in three simple lines how silly that effort is, as a few simple clicks with Apple I- Tunes Software get you a usable MP3, totally free of the DRM. That does not excuse or justify using that product without paying for it, or sharing it illegally. Maybe I am naive, but I think most people pay for what they use. The people causing the great losses are skilled pro’s and unaffected by these steps. Most people do not intentionally break law.


Ikanos Pumps 100-Mbit/s VDSL
Press Release

Ikanos Communications, a leading developer of fiber-fast broadband-over-copper solutions, today announced it has added the Fxä 100100 to its successful family of fiber-extension products. The Fx 100100 is the first programmable silicon solution to provide speeds of up to 100 Mbps in both upstream and downstream directions over a single copper line. Ikanos believes that its new solution enables carriers to increase their revenue stream by offering the same high- speed symmetric bandwidth over existing telephone lines that businesses are used to receiving from their Ethernet LAN today.

The Fx 100100 is designed for Optical Network Units (ONUs) and Optical Line Terminals (OLTs), while the Fx 100100S-4 is designed for Subscriber Located Equipment (SLE) and Optical Network Terminals (ONTs). Both products are part of Ikanos' Fx family of chipsets that extend Fiber to the Building (FTTB), Fiber to the Node (FTTN), Fiber to the Premises (FTTP) and Fiber to the Home (FTTH) services over copper.

The Fx solutions
enable carriers to offer a comprehensive suite of high-value services such as the triple play of voice, video, and data; real-time high- resolution video conferencing; enhanced gaming experiences; and peer-to-peer file sharing. Ikanos' Fx solutions spare carriers the cost of trenching fiber because they use the currently installed base of last-mile copper and deployed fiber.

"Ikanos is once again demonstrating its leadership by being the first to market with chipset solutions that provide symmetric 100 Mbps bandwidth over copper," said Rajesh Vashist, president and CEO at Ikanos. "We believe the fiber-fast Fx 100100 solution responds to increasing equipment vendor and carrier interest in offering Ethernet services to their customers. These new chipsets join our existing Fx product family, which has the industry's widest range of Ethernet and ATM solutions for the FTTB, FTTN, FTTP and FTTH markets."


Companies Will Load CDs Onto a DVD or Your iPod
Eric Gwinn

One of the great things about the home computer is its adaptability, far beyond any other device in your home. A TV is a TV; pretty much everything it does is based on visual entertainment. Your computer is a word processor, an adding machine, a gaming system, a connection to the Internet -- and then there are the add-ons.

You get to choose how you want to use your computer, and you get to choose just how far you'll go to make it do even more. Some of us are happy to use what comes preloaded for e-mail, browsing the Web, word processing; others want to open up the hood and tinker to make the machine do what we want, exactly the way we want it to.

It's the tinkerers who have advanced the way we enjoy music and movies, creating and changing options faster than we could comprehend. Back when music file- sharing was heating up, Napster made it easy for its followers to acquire only the songs they wanted, not buy a whole CD at prices they considered too high.

Record companies fought the legality of Napster-style file-sharing and countered with CD singles, then with subscription music services that offered songs in restricted formats. But downloaders continued to choose free music that could be played on any computer or CD player.

It took the hubbub surrounding the easy-to-use iTunes Music Store and the iPod music player -- not to mention the filing of thousands of lawsuits by record companies against file-traders -- to show general music fans that their options had grown beyond physical media such as CDs.

Having abundant choices means nothing if those choices aren't easy to use, and not everyone agrees on what's easy. Some people think it's a snap to put a TV tuner in their computer, others would rather run barefoot across hot coals.

Similarly, some people caught up in the portable music craze will spend hours "ripping" their CDs, that is, loading the music tracks into a computer and adjusting files and formats to get just the sound they want. Others don't want to be bothered.

If you are one of the many people who want to be connected with the maximum convenience, you can make that choice. Companies such as RipDigital and iPod will rip your CDs for you. All you have to do is mail in your CDs and your music player, and in a few days, you get your CDs and a computer-compatible DVD full of your music. That DVD serves as your permanent music library, allowing you to transfer your music from it into your digital music player. Using RipDigital costs $129 for 100 CDs, and there's a discount for ripping even more CDs.

An 8-month-old Florida company goes one better. LoadPod sends a person to your home to pick up your CDs and your iPod, and that person returns five days later with your CDs and your iPod full of all your music. LoadPod handles only iPods, the dominant digital music player.

LoadPod serves 42 states, and charges $1.49 per CD, if you're burning 50 to 99 CDs. The price drops with larger orders.

"After Christmas Day, our business exploded," says Bill Palmer, LoadPod's president. "People who received iPods as gifts were saying, `Great. Now what? I wasn't planning on blocking off several weekends to load my CDs.'"

The constantly changing digital landscape that brought us RipDigital and LoadPod also means their days could be numbered. The rechristened Napster music service is offering an alternative to buying CDs that need to be ripped or paying for tracks that must be copied to the MP3 player.

With Napster's latest offering, music lovers can pay $14.95 a month to stuff Napster-compatible MP3 players with music that will vanish if their subscriptions lapse.

So, you see, living the digital life means having choices that create new gadgets and business opportunities that create new choices.

We like living that way.


Canadian Music
Michael Geist

In these politically charged times, there is a tendency to view many policy issues, whether they be same sex marriage or tax reform, through a narrow lens — left or right, blue or red, liberal or conservative. The same is true for copyright issues.

The University of Toronto recently hosted a major conference on music and copyright law where some participants were quick to label positions as either liberal or conservative. Professor Terry Fisher of the Harvard Law School, author of Promises to Keep, a groundbreaking book on technology, law and the entertainment world, staked out the so-called liberal perspective, presenting his long-term plan for reconciling the divide between the industry and its customers. Fisher argued for an alternative compensation system — one that would grant the public unlimited access to online music while providing substantial compensation to the music industry to be generated through tax revenues.

Graham Henderson, the president of the Canadian Recording Industry Association, spoke after Fisher and countered with a conservative, George W. Bush-like view based on "values" and free markets.

Calling him "Comrade Fisher," Henderson argued that the industry was fundamentally opposed to proposals that would replace a market-oriented approach where sales determine revenues with new alternative compensation systems.

In his view, the music copyright issue would be best addressed by "digital rights morality" and by faith in the free market.

While the incongruity of an industry that has mistakenly sued teenagers and dead grandmothers preaching the need for greater morality is notable, it is this industry's professed love of the free market that is worthy of more detailed discussion. In fact, contrary to claims of faith in the free market, the music industry has been a leading proponent of government involvement, consistently seeking both financial support and legislative intervention from Ottawa.

Consistent with most countries, Canada has never adopted an exclusively market-oriented approach to copyright and culture. This is reflected in our division of copyright policy responsibilities — the Copyright Act is officially administered by Industry Minister David Emerson, while the Department of Canadian Heritage Act grants responsibility for the formulation of cultural policy as it relates to copyright to Canadian Heritage Minister Liza Frulla.

This duality suggests that copyright policy must consider both economic and cultural goals. Were Industry Canada to adopt an exclusively economic-based approach, it might eliminate government programs supporting the arts on the grounds that it is the market that should determine Canadian cultural activity. Similarly, a single- minded focus by Canadian Heritage on cultural goals would risk the development of extreme copyright policies that place the interests of the culture sector ahead of the broader economy and the public interest.

Since a market-based approach to music would presumably lead to no government funding, the industry has unsurprisingly ignored its own advice and sought millions of dollars in taxpayer assistance. For example, at last November's music lobby day on Parliament Hill, the industry urged the government to expand its scope and funding of the Canada Music Fund, calling for at least $35 million in annual support.

Not only does the industry rely heavily on government financial support, it also looks to government to intervene in the marketplace by establishing new rules that provide protection against upstarts that threaten longstanding business models.

Many in the industry have admitted that the major music labels were slow to respond to the Internet and its customers' demand for digital distribution of music. While the industry demonizes file sharing services such as Kazaa and BitTorrent, it fails to acknowledge that most of its problems have resulted from changes at the retail level, pricing pressures, and competition from entertainment alternatives.

Viewed in that light, the emergence of the file sharing services was in reality a product of the industry failing to meet marketplace demand, rather than a function of users searching for free music (which is actually not free but compensated through a private copying levy system). The remarkable growth of fee-based music services such as Apple iTunes bears this out. With a viable competitor to the peer-to-peer systems now on the market, Apple estimates that it will sell more than half a billion songs worldwide in 2005 or more than 4,000 songs during the five minutes it takes to read this column.

Rather than changing its business practices to meet this market demand, however, the industry instinctively looks to government for legislative intervention. Just last month CRIA issued a release noting that sales had risen in Canada for the first time in six years. Instead of focusing on new performers, a better economy, reduced pricing, and improved marketing, it continued to focus on government intervention, commenting that "we should not be fooled that the worst is necessarily over."

As Canada heads toward yet another round of copyright reform — there has been more copyright reform in the past 18 years in Canada than in the previous 120 years — policymakers and politicians should be mindful that they have already used legislative intervention to establish many rights and protections that have tilted the copyright balance heavily toward creators at the expense of users.

With the music market showing signs of recovery, government ought to take the industry at its word and stay on the sidelines.
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The Original Computer Game

Ask the average person on the street for the name of the world's first video game and chances are they'll tell you it was Pong. It's certainly a reasonable assumption: Pong's simple black-and-white visuals and back-and-forth table tennis gameplay are like the electronic equivalent of cave paintings -- how much more primitive could you get? It stands to reason that such a basic creation must have been the first game ever. Right?

As any student of the medium's history can tell you, though, the answer isn't Pong. Though the identity of the absolute first video game ever is the subject of some contention, Pong didn't come along until ten years after the first fully-realized game had swept the world by storm. Or at least that very small subset of the world which had access to a computer in 1962.

The title of that obscure but vital pioneer? Some claim it was a rather complicated space combat simulation called Spacewar.

Pinning down the identity of the world's first video game can be tricky, as the answer varies depending on a person's given definition of what actually constitutes a video game. Is a video game simply any form of technology which involves manipulating an object on a screen, no matter how dull or uninvolving it is? (Those responsible for much of the CDi's library would certainly have you believe so.) If that's the case, Ralph Baer's untitled invention in the early '50s, which allowed a dot to be bounced around on an oscilloscope, came first. Granted, it was pointless and no fun, but it was first. Alternately, is a video game just any amusement which involves some form of interactive video technology? Chicago Speedway , an arcade game which allowed players to steer a model racecar in front of a video of moving street footage, predates Spacewar by several years. Furthermore, there's significant evidence that the first computer game actually was an obscure direct predecessor to Pong: a 1960 invention by William Higginbotham called Tennis for Two.

Whatever the case, Spacewar was unquestionably the most influential "first" interactive computer game, a game which was enjoyed by a large community of early programmers while the other claimants languished in obscurity. The game was a digital battle in which two players steered tiny spaceships through the inky void of simulated space trying to annihilate one another with minute dots of destruction. A far cry from Pong's primitive take on ping- pong, Spacewar was complex and detailed, and had much more in common with Asteroids and even Descent than with Pong. Granted, it was a monochromatic space adventure with stark graphics and no sound -- a mere shadow of the detailed 3D worlds of contemporary first-person shooters -- but it introduced concepts which guide the game developers and fans alike even 40 years later. For such an early foray into interactive gaming, it was an amazing feat.


Largely created in the space of six months by a single student programmer during an era in which computer access was a rare and expensive commodity, Spacewar pitted two players head-to-head with a pair of classic sci-fi rocketships armed with tiny missiles. Controls were limited to thrust, rotate right and rotate left, with a dangerously unpredictable hyperspace panic button reserved for emergency situations. All action transpired on a single screen, the center of which was occupied by a deadly sun that exerted a powerful gravitation pull on the combatants. Clever players were able to make use of the sun's attraction to give themselves an edge by slingshotting through its gravity field -- a solid understanding of Newtonian physics was definitely a boon when playing Spacewar.

Imagine that the film industry had skipped straight from still photos to The Jazz Singer, or that Thomas Edison's first recording had been a Buddy Holly record -- that's how impressive Spacewar was as the debut of a brand new medium. By the time the game was complete in early 1962, it featured an accurate star map of the galaxy, a realistic physics model governed by gravity and inertia, and spaceships which could be rotated through 360 degrees. It even included a hyperspace button, years before Star Trek made "warp speed" a household phrase. In fact, the game was so sophisticated for its time that Nolan Bushnell's blatant copy of it (called Computer Space) was a commercial flop a decade later. Gamers were hopelessly daunted by its intricacy.

The Mod Squad

Though Spacewar was impressive as a technical achievement, the culture that developed around the game is perhaps even more noteworthy. Steve Russell is acknowledged as the mind behind the game, but the final product came to fruition only through collaboration with a number of his contemporaries. Academic computing in the 1960s was a completely new field, and in the true spirit of scientific exploration all discoveries and inventions were shared with the larger computing community. Programmers were not simply allowed to explore the work of others -- they were actually encouraged to refine and improve it.

Russell's original game design was fairly minimal. Pete Sampson added a subroutine called "Expensive Planetarium" to Russell's code to provide the starfield in the background. (Expensive Planetarium was given its name as a tongue-in-cheek acknowledgement of the steep cost of early computers -- it was a program which did the work of a simple planetarium on a multi-million- dollar piece of equipment.) Another student by the name of Dan Edwards hacked in the sun and the code necessary to calculate its gravitation effects.

Space is deep.

Thus Spacewar was, in effect, the first open- source video game. And it was the first piece of freeware as well; no one responsible for the game's creation profited from it. Ultimately, the code for the game was distributed by DEC for free with every PDP-1 system they sold.

The principles upon which Spacewar was built are observed even today throughout the industry, and particularly within the PC first-person shooter community. The modern FPS is in many ways a direct descendent of Spacewar; both emphasize multiplayer deathmatch gameplay, and both feature intricate physics models. Some of the most popular FPS titles are the result of clever hacks: Half-Life was built with a heavily-modified Quake engine and then reprogrammed to create Counter-Strike, which in turn has given rise to an enormous community of amateur programmers and designers dedicated to the creation of mods and hacks shared freely with other enthusiasts.

It seems a shame that the most important of the world's first video games is largely anonymous to the general gaming public and that the creator has gone mostly unrecognized outside of historical footnotes, but it's not unusual. How many people can claim to have seen the first-ever motion picture, or listened to the first-ever commercial music recording? In a sense, gaming is fortunate, as its fairly brief history has already been thoroughly chronicled. The spirit of Spacewar lives on in countless modern video games, and it's even possible to play accurate simulations of the game courtesy of kind Java programmers (see sidebar).

Spacewar hasn't been completely forgotten, nor is it likely to be. It's the kernel from which an entire industry has grown, and as long as people use computers to simulate killing their friends and peers, its influence will live on.


You can now play a Java-based version of Spacewar. You’ll find it here - Jack.



Does the Kid Stay in the Picture?
Gary Rivlin

LONG before his company celebrated its 2002 stock-market debut, and long before he learned that millions of customers also meant head-to-head competition with the likes of Blockbuster and Wal-Mart Stores, Reed Hastings was just another small-business man fretting his way through the 1998 holiday season, wondering if his 14- month-old start-up would survive the winter.

At the time, his company, Netflix, an online movie rental site, had few customers but plenty of skeptics convinced that a service that dispatches DVD's by mail was quaintly absurd.

Mr. Hastings, who had previously co-founded a company that went public, had access to venture capitalists, but "basically that meant I got to hear a lot of people say no," he said. An investment firm agreed to provide him a line of credit to help him the first year, but when the company tried to draw down money, the partners told him "they didn't think we had a workable model." So two days before Christmas, he crammed himself into an airplane seat to fly east from Silicon Valley for a meeting with Lighthouse Capital Partners, a California venture firm with a branch in Cambridge, Mass.

"If I didn't get that money, we were toast," Mr. Hastings said.

Lighthouse provided the cash the company needed to continue, but there were still plenty of heartburn-inducing days ahead for Netflix, including one more near-death experience and an aborted attempt at a public offering in the spring of 2000. "We've always struggled, but in the end I think that's given us character," he said.

Those behind Netflix need all the character they can muster. In the last two years, Wal-Mart and Blockbuster have entered the online DVD rental business, and it seems only a matter of time before Amazon.com joins in. If battling three behemoths were not enough, there is also the threat posed by the video-on-demand market, which, when it is finally embraced by both Hollywood and the public, will allow people to forgo rentals and download movies over the Internet or via cable television.

Mr. Hastings, it seems, has attained every entrepreneur's dream. But his story stands as a cautionary tale for every small business.

By some measures, Netflix has never been more successful. Safa Rashtchy, an analyst with Piper Jaffray, had predicted the company would swell to 2.2 million customers by the end of 2004, but the subscriber base crossed 2.6 million members, growing at an even faster pace, 76 percent, than the impressive 74 percent growth rate the company sustained through 2003. It also exceeded fourth-quarter revenue targets set by Mr. Rashtchy and other analysts.

Yet shares in Netflix are down 68 percent from their January 2004 high. The low point came in mid-October, when the company reported its quarterly earnings. Mr. Hastings announced that because of the anticipated entrance of Amazon in the market, he was slashing the basic subscription fee to $17.99 a month from $21.99, prompting eight of nine analysts who cover Netflix - on a single day - to downgrade the stock.

"I was one of the penguins," said Derek L. Brown, an analyst with Pacific Growth Equities who downgraded Netflix from "overweight" to "equal weight." The lower monthly fees mean the company will be pressed to earn its profits in the short run, say Mr. Brown and Mr. Rashtchy, who both see only uncertainty when considering the company's long-term stock prospects.

"That was a painful day," said Mr. Rashtchy, who changed his rating from "outperform" to "market perform." "It was like all our beliefs in the Netflix growth strategy were shattered."

THE birth of Netflix proves that even if you have a net worth of millions like Mr. Hastings, it is still maddening to pay a $40 late fee for a single video. It was in 1997 that Mr. Hastings paid a hefty fine on a movie he returned weeks late that he thinks may have been "Apollo 13." Earlier that year, the company he helped to found, the Pure Atria Corporation, which made software development products, was bought by its chief rival, the Rational Software Corporation, in a deal worth $525 million. Mr. Hastings, who taught math for two years in Swaziland right after college, had only recently started his studies for a master's degree in education at Stanford, figuring on a life that blended politics, education policy and philanthropy. He was 36.

Yet he couldn't get out of his head the idea that people might resent paying late fees so much that they might prefer to join a DVD rental club the way one joins a health club. "This was 1997 and everything was e-commerce, so I said let's do this over the Internet," he said.

"People thought this idea was crazy that consumers would rent movie through the mail," Mr. Hastings said. "But it was precisely because it was a contrarian idea that enabled us to get ahead of our competitors."

Mr. Hastings now confesses that his service was not much to boast about in the first couple of years. Netflix introduced its Web site in May 1998, but initially it was no different from a video store, except you had to wait for a new movie to arrive by mail. Early adopters rented one DVD at a time - and paid a late fee if the disk was not returned on time.

Sixteen months passed before the company began a subscription service that allows users to keep movies for as long as they liked. Then, as today, users browse the Netflix site and select DVD's they want to view. The company sends new customers the first three DVD's on their list, assuming they are available, in envelopes that are reused to return the disks at no charge. Customers can rent as many DVD's as they like but can't rent more than three at once - unless they're willing to pay more for five or eight at a time.

Today, the company operates 30 distribution centers around the country, but in the late 1990's, it operated a single facility near San Francisco, so DVD's could spend days in the postal system traveling cross-country. "It wasn't a very consumer-satisfying experience, except in the San Francisco Bay Area," Mr. Hastings said. Now, one of every nine residents of San Francisco is a Netflix subscriber, he added.

It was essential that the company set a national goal; but at the same time, staffing and supplying warehouses around the country, so that more customers could get next- day delivery, proved prohibitively expensive, especially when only one in 10 households owned a DVD player in 2000. Revenues were growing, but Netflix was still losing money at an alarming rate - so much that, although it had raised another $50 million in venture capital in early 2000, the company had less than $5 million in the bank 18 months later.

"It felt at the time very touch and go," Mr. Hastings said. By the fourth quarter of 2001, however, Netflix was enjoying positive cash flow, and in May 2002 the company went public, despite an ice-cold market for new stock offerings.

IN retrospect, Mr. Hastings wishes he had waited longer to go public. By the time the investment bankers were willing to sell shares in Netflix, the company was no longer desperate for the $94 million it ended up raising in its initial public offering.

"In hindsight, what triggered Amazon and Blockbuster to compete with us is they could see how profitable we were and how fast we were growing," Mr. Hastings said. It has also meant that Mr. Hastings is constantly fending off analysts and commentators who are convinced that long-term survival requires that he sell the company to a large suitor to ward off the competition.

Netflix has $175 million in cash and is carrying no debt, Mr. Hastings noted, and it has "no desire or need to be acquired." Mr. Rashtchy of Piper Jaffray is inclined to agree that Netflix can survive, but wondered if independence is the wisest route.

"They can survive on their own, and there's a good chance they will," Mr. Rashtchy said. "They are, after all, the single biggest player in this area, and singularly focused. It's just that they face a very bumpy road on their own."

Wal-Mart was the first large company to jump into the market, in June 2003. The impetus, said Amy Colella, a Walmart.com spokeswoman, was a spike in DVD sales.

"With clearly more and more of customers moving to that format, we decided on a DVD service for our customers," Ms. Colella said.

Wal-Mart operates 14 DVD distribution centers nationwide, and sells a subscription that allows a customer two, not three, DVD's at one time for $12.97 a month. But Mr. Hastings does not seem concerned that the world's largest retailer has entered his market. "They've been in the market two years, but they haven't been pushing it very hard," he said. Ms. Colella disputed that characterization but would not provide subscription numbers.

Mr. Hastings's reaction to Blockbuster's entry into his market has not been indifferent. "Blockbuster has been tremendously aggressive in competing with us," he said. The company has lowered its price twice and now charges $14.99, $3 less than Netflix for the three-rental plan, and Blockbuster's offer also includes two free store rentals each month.

Five years ago, physical stores were considered a huge drawback in the race for online dominance in a given sector. Yet the presence of Blockbuster stores across the country, coupled with the stores' profits that the company is pouring into a television ad campaign, are proving to be critical so far in penetrating the online DVD rental market.

"We think our in-store passes are a clear differentiator for us," said Shane Evangelist, senior vice president and general manager of Blockbuster.com. The company was building its online service for two years before its debut last July. "Being the market leader in rentals, and having the leading brand, we had the luxury to watch as the market developed," Mr. Evangelist said. The company operates 23 distribution centers.

Amazon.com has no operating centers in the United States, but Mr. Hastings said that he was convinced that it was only a matter of time. Last year, Amazon began an online DVD rental business in Britain, though the company has refused to comment on whether it has plans to enter the American market.

"We're just thankful Blockbuster and Amazon didn't enter four years ago," Mr. Hastings said.

Ultimately, video on demand poses the greatest threat to Netflix - a fact Mr. Hastings is inclined to acknowledge. "Our competitors are a bigger threat next year," he said. "But in 10 years, digital distribution is a bigger threat."

The good news for Mr. Hastings - and for executives at Blockbuster, given that the ability to download any DVD via the Internet or cable could inflict even more damage on video stores - is that video on demand is a long way off, despite more than a decade of promises.

"It'll be at least four or five years away, if not 10 years, before we reach the tipping point on video on demand," said Gary Arlen, president of Arlen Communications, a research and consulting firm in Bethesda, Md. One major hurdle, Mr. Arlen and others said, has been Hollywood studios' reluctance to accept a new delivery system as long as DVD's are still proving so lucrative.

Mr. Hastings anticipates that it will be 2010, if not 2015, before a lot of the movie-watching public is downloading films over the Internet. Mr. Hastings is convinced that the same features that draw people to his DVD rental service will induce them to use his service to download digitally delivered movies. Netflix has devoted millions of dollars to building an easily navigated Web site while it refines a complex software system that recommends movies based on customer ratings.

"If we differentiate the Web site well enough, with rating histories and other features consumers want, that's our strategic leverage" once people start receiving movies via the Internet, Mr. Hastings said.

Mr. Hastings is used to people counting him out. "To be doubted and be successful is particularly satisfying," he said.


AMD To Demo A Dual-Core Desktop Chip
Michael Kanellos

Advanced Micro Devices is expected show off a dual-core processor for desktops at its headquarters Wednesday, but is keeping tight lipped about the details.

The chip, code-named Toledo, will feature two separate Athlon 64 processing cores on the same piece of silicon. It will start appearing in PCs in the second half of 2005, said Theresa DeOnis, desktop brand manager for AMD.

Putting two cores on a chip will allow a computer to perform two tasks at once, she said, or run specially tweaked applications faster. Windows XP Professional will be the operating system of choice for many dual-core desktops as it is already threaded to run two processors.

"We don't have a lot of multithreaded applications on the market yet, but it (Toledo) will perform will in multitasking environments," she said.

The chip will come in the same package and fit in the same PCs as current single-core Athlons, DeOnis said. Nonetheless, she declined to provide the clock speed or other details.

AMD and rival Intel will both start coming out with dual-core chips this year and each can claim to be ahead of the other in different ways. Intel's first dual core chip for desktops, code-named Smithfield, will come out in the second quarter, ahead of Toledo.

AMD, however, will come out with a dual-core version of its Opteron chip for servers in the middle of the year. Intel won't have a dual-core Xeon until 2006, although it will release a dual-core Itanium in the second quarter. IBM has been selling a dual-core chip for servers, The Power4, for a few years.

Dual-core chips are an easier fit for the server market as many servers come with two processors already. However, the number of server chips shipped in a year pale in comparison to the number of desktop chips. Server customers are also notoriously conservative, so adoption won't take place immediately, analysts have said.

In the gamer desktop market, Intel will come out with a dual core-chip for high-end PCs this year that will also sport HyperThreading, which effectively will allow the chip to mimic, to a certain degree, a four-processor system. AMD won't likely do so until 2006, DeOnis said, but that's because most games aren't multithreaded and therefore can't effectively take advantage of two cores.

Intel's first dual-core chip for notebooks, code-named Yonah, comes out late this year. AMD won't have a notebook chip until after Toledo. Toledo can be used in notebooks, DeOnis said, but it has a 110-watt thermal envelope, relatively high for a notebook chip.


Apple Unveils Four New iPod Models

Apple Computer Inc. on Wednesday released four new versions of its popular iPod for users who want either a compact device or a full-color media player that can display photos.

The photo-capable iPod features a high-resolution screen and can hold up to 25,000 digital pictures, Apple said. A 30-gigabyte model carries a price of $349, while the 60-gigabyte version will cost $449.

Meanwhile, Apple also unveiled two news iPod minis with greater storage memory and increased battery life. The 4-gigabyte model will sell for $199, and a 6-gigabyte model will retail for $249.

All four devices require Apple's iTunes software, which is compatible with both Mac and Windows operating systems.

Apple shares rose $1.41 to $86.70 in premarket activity.
http://hosted.ap.org/dynamic/stories...LATE=DEFAUL T


The Return of Free Internet
Posted by timothy

from the probably-browser-limited dept.

valdean writes "Remember the days of ad-supported dial-up Internet access from the likes of Netzero and Altavista Free Access? Those days, and the business model that supplied them, are long gone... or perhaps not. A new effort is being explored by California-based FreeFi Networks. Last week, the company launched what will be a nationwide network of ad-supported wi-fi hotspots. Ads will appear in what FreeFi calls a "narrow, persistent band of content" across the bottom of the user's screen. To provide incentive to America's coffee shops, they'll share advertising revenues with the hosting venue. Has 'free Internet access' finally arrived?"


Ad Supported FreeFi
Posted by samc

FreeFi Networks, a hotspot provider, has launched a nationwide network of free, advertising- sponsored hotspots in locations such as shopping centers, airports and cafes. It will develop and manage the free hotspots in qualifying locations at no cost to the venue owner other than the cost of a broadband connection.

FreeFi says it will support the network with advertising that appears in what it called a "narrow, persistent band of content" across the bottom of the user's screen.

The gamble: will users reject the use of "adware" on their screens?

The company said that the content bar does not involve adware or spyware and will not be present on the user's laptop when not connected to the FreeFi network. Pushed content could include advertising as well as other types of information, such as information about the local area.

Besides managing the hotspot for free, FreeFi said it will share advertising revenue with venue owners. A California restaurant chain, Togo's Eateries, is currently offering the service.

FreeFi says their service uses 802.11g with a powerfull 251mw radio linked to external RADIUS and SQL servers located at FreeFi’s Network Operations Center (NOC). The hotspot package is used for user authentication, data storage, bandwidth management, and page redirect.

"It's another option for business owners considering offering Wi-Fi as a valuable amenity with zero cost or risk," Larry Laffer, FreeFi's president, said in a statement. Of course it's not really "zero cost" since the owner has to pay the DSL bill.

Other inexpensive managed services are available for businesses interested in offering WiFi, although the hardware and service is not free. Sputnik introduced last week their SputnikNet Premier service, a hosted wireless network management service that can accept online payments for wireless Internet service through credit card billing and PayPal.

It's a hosted service managing both networks and subscribers.

There is no server hardware to maintain and you are always on the latest version of the software, without the hassle of software upgrades or field service visits. SputnikNet Premier is targeting businesses without technical staff or fast-growing ISPs managing multiple networks. It has Modules for Pre- Paid Cards, RADIUS, PayPal and credit card billing.

I'm a fan of Sputnik. Their management system might enable many wide-area networks. Free or pay.

It would be a no brainer from the small business perspective, if someone could offer hardware, broadband backbone and management service at no cost. Revenue from music, videos and games might make it happen - although it would be a challenge. Maybe the first 3 months could be free, then the package costs the venue operator perhaps $25/month.

Whole neighborhoods might be interconnected with news and location-specific advertising. Messaging and local music could be featured.

Neighbornode, an application that allows people to share their Wi-Fi connection, add a community online bulletin board to post "for sale" items and trade gossip. A blogging black box like What Counts can enable "citizen journalists".

Austin Wireless is good at free community nodes with music. They will make more than 175 newspapers and magazine accessible at Austin's hot spots in a deal with NewsStand.

The Austin Wireless City Project, designed to deliver free Wi-Fi access to the public. The project consists of 75 locations in Austin and 117 locations worldwide -- Less Networks helps support the global locations.

Many WiFi enthusiasts in Portland are using the Portless WRT-54G flash software by Irving Popovetsky and Brandon Psmythe. It embeds NoCat software to enable a one-piece WiFi box. No computer is necessary. Just plug the modified WRT-54G ($70) into a phone jack.

Hot spot advertising could help make WiFi free - especially in high traffic areas with lots of eyeballs.


Budget Motel Chain Offers Free Long Distance, Wi-Fi

Free HBO and continental breakfasts aren't the amenities that have Microtel Inn & Suites guests chattering, sometimes for hours on end.

It's the free, unlimited long distance calls and wireless high-speed Internet service.

The economy-budget motel chain is now offering those services as well as free unlimited local calling in all its guest rooms at its 265 locations nationwide.

As telecommunications services get cheaper, more hotels and motels will be offer the same amenities, industry analysts predict.

"It's something new to lure more customers in, and it really doesn't hurt a hotel's revenue stream much because telephone revenues are small," said Julian Perlmutter, a lodging analyst for Chicago-based Morningstar.

Free long-distance calling is a big bonus at Microtel considering the chain typically charges less than $50 for a one night's stay — about the cost of a 20- minute long-distance call placed from some upscale hotels.

"We've stayed in a lot of motels and many times you have to pay $10 just to have them turn on the phone services. ... Being able to call home is very important," said Myrtle Smith of Latrobe, Pa., who stayed Tuesday night at a Microtel in Tifton with her husband, Melvin, who travels with his work in asphalt paving.

The free phone and Internet services are aimed at attracting new customers and adding value and convenience to those who already stay with the chain, said Mike Leven, president and CEO of Microtel's Atlanta-based parent company, US Franchise Systems Inc.

While a handful of hotels offer free long-distance calling to preferred customers, Microtel's approach of offering it to all guests is new to the industry, analysts said.

"They might be the first, but I'm sure with more time it's going to be at least part of everyone's frequent-stay program," Perlmutter said.

Free, unlimited phone and Internet service at hotels makes sense when considering how inexpensive those services have become, said Robert LaFleur, a hotel industry analyst for Susquehanna Financial Group in New York.

"That sounds pretty impressive, but at the end of the day they're not giving away that much," LaFleur

Free local calling has been offered for years at many hotels. However, over the past year, more limited-service hotels have started offering free high-speed Internet access in an attempt to siphon guests away from bigger, more expensive hotels.

The trend will likely continue and force bigger hotels to follow suit, LaFleur said.

"Over time that guest push-back will get to the point where the full-service guys will have to offer free as well," LaFleur said. "High-speed Internet access has become the kind of standard amenity that most people require in the places they stay."

Offered since Feb. 2, the new amenities have been a big hit with guests at the Microtel Inn along busy Interstate 75 in Tifton, about 200 miles south of Atlanta, said the motel's manager, Jana Morrison.

"We're really glad we can offer this," she said. "It's very important to the business travelers to be able to use their laptops. To the family travelers, I think it's important for them to call home. The fact that it's free is an added bonus."

At the Tifton Microtel, they even have a loaner wireless PC adapter for guests whose laptops lack built-in adapters.

John Mascoe, chief executive officer for VanCoe Environmental of Wilkinson, Ind., said he won't stay at a motel that doesn't offer at least a wireless or a DSL connection.

"It's important," he said, as he entered the motel lobby with his laptop and rolling suitcase. "My business revolves around that. The majority of people on the road are business customers and they need to stay in touch."

Mascoe and other Microtel guests said they were more impressed with the addition of wireless Internet service than with free long distance because cellular phones with unlimited calling plans have largely weaned them from hotel phones.

"Most everybody has a cell phone," Mascoe said. "You get free long distance on cell phones and that works well unless the battery dies."

Guest Leon Brown was grateful for the free long distance. The singer from Bayonne, N.J., who is part of a New York-based musical ensemble touring the East Coast was able to save some of his mobile minutes Wednesday by using the motel's lobby phone to call a pharmacy for a prescription refill.

"They make it very easy," Brown said of the free phone service. "I think it's a good feature."

The musical group's Russian-born bus driver, Andrey Stupenkov, had considered calling his sister in Moscow when he heard about the free long distance. However, he was soon informed that overseas charges apply. Calls are only free within the continental United States.

"We're generous, but not that generous," motel manager Morrison said with a laugh.


3MBPS Data Speeds Predicted As Mainstream In 2006
Mobile Pipeline Staff

HSDPA, a cellular data technology that promises typical speeds of between 1 Mbps and 2 Mbps, will start being widely deployed later this year and will become a mass market phenomena next year, the CEO of Ericsson said Tuesday.

The fast wireless technology is needed because the industry is nearing what Ericsson CEO Carl-Henric Svanberg called a "triple play;" telephony, Internet access and streaming television. HSDPA is an upgrade to slower GSM- based W-CDMA wireless networks which are already being deployed. Those networks provide typical speeds of between 300Kbps and 400Kbps.

"I think we can say that the first phase of 3G deployments is behind us, and we can confirm that 2005 will be the year for mass-market growth for W- CDMA and the start for mobile broadband," Svanberg said in a speech at the 3GSM World Congress in Cannes, France.

Another Ericsson official, provided more specifics about what the company believes is the roll-out timetable for HSDPA.

"The networks will be upgraded second half of 2005. Initial HSDPA terminals, PC cards, supporting up to 3.6 Mbps, will be available at the same time," Mikael Back, the company's vice president of W-CDMA radio networks, said in a statement. "In early 2006, HSDPA will most likely be introduced in smartphones as well as the second generation of PC cards. We are also confident that we will see HSDPA integrated in laptops in 2007."

HSDPA is necessary to help wireless operators, who are Ericsson's primary customers, sell more services that will generate more revenue, according to Svanberg. The new technology will follow what already has been a robust period of growth, Svanberg said.

"We have experienced the strongest growth of mobile users ever, with 300 million new subscribers in 2004," Svanberg said. "This is exciting for a company with a vision of being the prime driver in an all-communicating world."


NextNet’s Public Safety Win Strengthens McCaw’s Grand Plans For ITFS
Caroline Gabriel

Public safety is one of the key ‘low hanging fruit’ markets that pre- WiMAX vendors believe they can attack at an early stage, before other sectors like last mile really take off. We have seen companies such as Proxim and Motorola focusing heavily on optimizing their platforms for these applications, and now NextNet Wireless has trumped them with a hugely important agreement to provide the network for a major US emergency response project. This will not only lead to a major contract and act as a valuable endorsement of NextNet’s abilities in this sector, but will be a high profile proof of the concept on which NextNet’s parent company, Craig McCaw’s Clearwire, is building its ambitious business plan – that the underused 2.5GHz ITFS spectrum previously allocated in the US to educational broadcasting is perfect to be the basis of a national broadband wireless network that will disrupt the economics of the US wireless industry.

The NextNet Expedience non-line of sight technology, which will be migrated to the mobile WiMAX standard when that is ratified, is being used in the second phase of the Smart Nets Emergency Communications System. With phase two close to completion, Smart Nets will then transition to the GUARD program, which will provide a national model for adoption in urban areas in many US regions.

The GUARD (Geospatially-Aware Urban Approaches for Responding to Disasters), program is a collaboration between Rosettex Technology & Ventures Group, with Thirteen/WNET, Raytheon, NextNet, KenCast and Grey Island Systems.

GUARD establish an operational prototype in New York City, and follow this with systems in Washington DC, Las Vegas and Missouri. Based on these roll-outs, it will provide an open platform and model for communities around the country to adapt for their local needs.

The Smart Nets phase two capabilities were demonstrated last week in New York City, with satellite uplinks to Washington DC, using spectrum owned by metro area broadcaster Thirteen/WNET. Thirteen/ WNET is itself a pre-WiMAX pioneer, having used Redline equipment to create a link between two studios, and with plans to offer end user wireless television services over WiMAX. It is in a strong position because it was allocated significant chunks of 2.5GHz ITFS spectrum (originally for educational programming) in the New York metro area and now, under changes to FCC rules, can use this for other purposes or lease it to partners such as Smart Nets – or, indeed, Clearwire, when it brings its NextNet-based ISP service to New York.

McCaw has purchased ITFS and MMDS spectrum in many areas but where it is not available, has said he will enter leasing deals with the holders, often regional or local broadcasters. Although the common wisdom is that 2.5GHz spectrum is, apart from Clearwire, almost entirely held by Sprint and BellSouth – which would either sit on their holdings or charge high fees for access – their licenses are mainly in MMDS, while the ITFS spectrum is held by a large number of smaller operators, including television stations and churches. McCaw therefore has the chance to repeat what his previous venture, Nextel, did in sub-1GHz bands, amassing a patchwork of underused and undervalued spectrum to create a national network by stealth and at relatively low cost.

Significantly, a string of ISPs that have ITFS spectrum are adopting NextNet gear, suggesting they are part of the extended McCaw patchwork. They include WatchTV, which controls 33 channels of ITFS and MMDS in Ohio; Speednet, whose licenses cover 500,000 households in north and central Michigan; and Gryphon Wireless, which uses ITFS channels in Nebraska. Clearwire itself, originally a Florida-focused WISP, was also an ITFS holder before being acquired by McCaw.

“Spectrum availability has long been one of the greatest obstacles to effective emergency communications,” said Bill Baker, president of Thirteen/WNET. “The success of the Smart Nets prototype in tests to date supports our belief that the ITFS spectrum is the answer that first responders have been looking for – a robust, dedicated digital pipe, widely available in towns and cities nationwide, and excellently suited for two-way transmission of critical voice, data and video information that can save lives.”

And what is true for emergency response is equally valid for commercial services. The ITFS spectrum (6MHz channels in the 2.5GHz range) provides sufficiently wide bandwidth to support audio, video and data plus mobility.

NextNet, which is owned by Craig McCaw’s Clearwire ISP company, bases its public safety line on its new Mobile Subscriber Unit (MSU). This provides a fully mobile experience – rather than portable, as in previous products – on the Expedience OFDM network, supporting a pre-standard version of 802.16e, to which NextNet will migrate once specifications are ratified. The mobile unit has been tested by some service provider customers but is now being packaged to be targeted specifically at the public safety and transportation sectors. It will provide all the same functions as the fixed subscriber units, said NextNet, including IP voice and video streaming and VPN support, but from vehicles.

“This new technology revolutionizes the economics for delivery of mobile data,” claimed NextNet’s CEO Guy Kelnhofer. “It enables 100% of the mobile data project dollars to go directly to public safety vehicles.”

The MSU is currently in volume production, and is available for sale in the 3.5GHz band and MMDS band (pending FCC approval in the US).

The ITFS frequencies are in licensed 2.5GHz-2.7GHz bands, originally allocated by the FCC to non-profit and educational organizations for one-way analog broadcasting of educational television programming. In the 1980s, the FCC allowed these groups to lease their excess capacity to commercial service operators, and in 1998 allowed two- way digital operation. It is likely to permit change of usage of the whole spectrum, which is suitable for WiMAX services or mobile television.

The appeal of ITFS is that many states already have broadcast networks in these frequencies, complete with towers, even though these are currently restricted to educational programming. Public broadcasting towers could provide national coverage, delivering television and broadband wireless services for a relatively low investment by the operator. The ITFS frequencies are in licensed 2.5GHz-2.7GHz bands, originally allocated by the FCC to non-profit and educational organizations for one-way analog broadcasting of educational television programming. In the 1980s, the FCC allowed these groups to lease their excess capacity to commercial service operators, and in 1998 allowed two-way digital operation. It is likely to permit change of usage of the whole spectrum, which is suitable for WiMAX services or mobile television.

The appeal of ITFS is that many states already have broadcast networks in these frequencies, complete with towers, even though these are currently restricted to educational programming. Public broadcasting towers could provide national coverage, delivering television and broadband wireless services for a relatively low investment by the operator.


Consumer Ultrawideband: Coming Soon
Jeff Goldman

A white paper published by the research firm Parks Associates takes an optimistic view of the prospects for successful deployment of ultrawideband (UWB) technology in the coming year, despite the inability of the IEEE (define) to get the consensus needed to set a single standard. Analyst Kurt Scherf, the author, says significant UWB product announcements can be expected before the end of the year.

The paper, entitled "The Market for Ultra-Wideband Solutions," assesses the hype that has been attached to the technology for the past few years, and examines UWB's potential applications. The unique strengths of the technology, Scherf says, include its low power consumption, high quality of service, and high data rates—all of which make it particularly appropriate for cable replacement in the home between consumer electronics platforms, computer peripherals, and mobile devices.

From 2005 to 2008, Scherf suggests, the UWB market will shift from an initial focus on PCs and peripherals to devices like digital cameras, camcorders, and MP3 players, then finally to fixed consumer electronics platforms like HDTV receivers and set-top boxes. In the meantime, he says, UWB could well become a standard on all PC motherboards in the near future. "As a cable replacement solution, UWB will certainly fill a valued role in creating multimedia 'clusters' that are easier to configure and eliminate the 'rat's next' of cabling associated with the home entertainment ecosystem today," the paper states.

Meanwhile, the MultiBand OFDM Alliance and the UWB Forum, which supports DS-UWB, continue to fight for conflicting UWB standards. But Scherf says their differences may not have as negative an effect as some expect.

"The perception out there is that this industry is wringing its hands, but I think many, many companies have moved beyond the fact that IEEE standardization is not going to happen at this point in time," he says. "The game right now is getting the products out to market."

Scherf is hesitant to pick sides in the standards battle, though he does say the MultiBand OFDM Alliance appears to have a strategic advantage thanks to the number of chipset manufacturers and consumer electronics manufacturers backing it.

"They should have the leg up, but what all of us analysts are anxiously waiting to see is which manufacturers are going to take the next step to implement and integrate those products," he says. "We can all sit back and say one side should do this or that, but we can always be surprised, too."

Much of Scherf's optimism regarding the technology in general is due to the nature of the specific problems that UWB is intended to solve, particularly cable replacement for short-range connections in the home. "Our take on the market is that portable devices are really going to play a critical part in the multimedia experience that consumers have in and around the home," he says. "For that space, an ultrawideband solution is ideally positioned to be the cable replacement."

Once the first end-user products ship in late 2005, Scherf suggests, the market is likely to grow fast, with annual UWB chipset revenues exceeding $1 billion by the end of 2009.


Volume Lowered on Wimax Hype

Wimax: 3% of broadband users by '09

Responding to the same InStat study, the Enquirer leads with "Wimax Likely to Have Limited Success", while Mobile Pipeline runs the headline "WiMAX Could Alter Telecom Industry." Both are responding to new predictions that the oft-hyped wireless broadband technology will likely only grab three percent of total broadband customers world-wide by 2009 - if all goes well. That's a far cry from the Wimax hype of 2004; many proclaimed it would quickly become a competitor for DSL and cable.


Ma Bell's Kids Will Live On The Net
Steven Levy

We're seeing the phone call turn into just another Internet tool, like e-mail or instant messaging.

Have telephone companies gone off the hook? In the last few weeks, AT&T has been gobbled by SBC and MCI snapped up by Verizon. It's like some toddler upchucked his alphabet soup.

Part of this ferment comes from the telco struggle to deal with new technologies, but the most disruptive change of all —voice over Internet protocol (VoIP), pronounced by geeks as "v-oy-p"—is only beginning to make its mark. "Telephone service used to be based on a huge infrastructure of high-priced equipment," says Peter Sisson, a former Bell Labs researcher turned entrepreneur. "And now it's just software."

Think about that. All those costly switching stations and all those miles of wire and fiber optic trumped by the ability to plug your telephone into the Internet, where voice is as easily transmitted as e-mail, iTunes songs and pictures of Teri Hatcher. That's why a company called Vonage can sell 400,000 subscribers unlimited long distance service for $25 a month, simply by letting them plug their phones into broadband Internet instead of phone jacks. And that's certainly why the Swedish mavericks who created the Kazaa file-sharing service could use the same kind of digital bucket-brigade-style model to come up with an Internet peer-to-peer-based phone service called Skype.

More than 25 million people talk to each other free, from anywhere in the world, on Skype, a number that grows by 140,000 a day. Businesses are using it for conferencing and friends separated by thousands of miles keep a line open to each other all day. At that price, why not?

What's more, with the pervasiveness of wireless Internet connections, you can use services like Skype pretty much anywhere, without worrying about your allotment of roaming minutes. Vonage, in fact, has just announced a $100 Wi-Fi phone. Just sit at the Starbucks and gab with your buddies in Brazil.

The next step comes from Teleo, a company formed by the aforementioned Sisson and publicly announced last week.

Directed toward the "mobile professional" (a big market, since nobody who's stationary will ever admit it), Teleo is something like Vonage, in that it can replace traditional long-distance service by letting you plug a telephone into the USB port of your computer and call all over the world, for a flat two cents a minute. It's also something like Skype, because it's a peer-to-peer system where the calls you make and receive from others on the Internet are free.

Teleo also claims a more effective means of making itself available to those using the Net behind corporate firewalls. But its most interesting advance is a frank treatment of VoIP as just another digital tool like e-mail or instant messaging. It blends phone calls into your software applications.

For instance, you can specify that calls directed to your Teleo phone number ring your computer, your mobile phone or your voicemail. If the latter, the messages can appear in your Microsoft Outlook in box as e-mail. Also, when you're surfing the Internet, Teleo recognizes when phone numbers appear on Web pages. A single "click-to-call" on the number, and you're connected by voice. The cost for this is $4.95 a month, less money than the taxes most of us spend on our regular phone service.

I mention taxes because right now all sorts of strange tariffs and fees are slapped onto your phone bills. It comes along with the byzantine regulatory structure of the phone system, a construct that has increasingly drifted from the technological reality of the 21st century. Sisson predicts that as Internet calling prevails, "innovation and competition [will drive] prices down to nil." But others fear that regulators—spurred by states that want to keep collecting taxes and lobbyists from the current telephony giants—will inevitably set their sights on VoIP. Another fear is that telco's selling broadband will block the new services, a charge recently leveled by Vonage toward an unnamed provider.

Maybe I'm just overly eager to see my voicemail relegated to my e-mail in box, but my guess is that regulators or not, the VoIP revolution is inevitable. If AT&T can hang up, anything is possible.


Satellite ISPs Gain Ground
Paul Korzeniowski

Satellite services have emerged as a good alternative to terrestrial lines for a few niche applications. Satellite television vendors have been broadening their product portfolios with Internet access and telephony services so they can provide consumers with all of their data, voice and video services.

When it comes to high-speed data networks, users tend to focus on cable modems or digital subscriber lines, but they do have a third option: satellite services. Though not nearly as popular as the others alternatives, satellite systems have found a growing number of fans. Approximately 100,000 consumers and businesses in the U.S. rely on them for Internet access.

Interest in these systems is rising for a few reasons, starting with recent technological improvements in satellite networks. Carriers are moving away from proprietary data protocols, which require a great deal of systems integration work and are difficult to maintain, to TCP/IP, where new links can be connected more easily. "It's been a slow process but satellite providers are starting to move to more standard protocols," said Chris Baugh, an industry analyst with Northern Sky Research.

However, the pairing of IP and satellite networks is not a natural one. A satellite link travels from a user's desktop to a network switch to a "very small aperture terminal" (VSAT) -- basically a satellite dish -- that exchanges information with a spacecraft orbiting the earth 22,300 miles away. Each time a data packet is shipped it travels up from the sending system to the orbiting satellite and then back down to a receiving dish. The time needed to make the trip translates into one-quarter of a second. The framing, queuing and switching TCP/IP relies on to ensure that packets arrive at the proper destination can increase that time to as much as half a second.

Off by a Factor of a Hundred

TCP/IP was designed for networks where delays are measured in milliseconds rather than tenths of seconds, so satellite delays can disrupt the acknowledgements and handshaking that is at the core of the network protocol. This problem can decrease network performance: Whenever a line becomes garbled, TCP/IP adapts by slowing down the transmission rate, and satellite network transmission speeds may slow to a crawl.

To address the problem, equipment vendors and service providers devised a variety of workarounds of known problems within the system. Packet spoofing, for example, fools a sending system into thinking it has received acknowledgments for shipped packets so it continues to transmit data steadily.

Another challenge is that satellite systems have to account for the weather. Heavy rain or snow can slow down transmissions and increase the number of dropped packets. Vendors have developed various schemes to address the latency and weather problems, but these techniques often add overhead to data transmissions, and that lowers throughput.

These satellite communications limitations exacerbate another problem with the networks: a lack of bandwidth. Terrestrial carriers are upgrading their fiber-optic backbones to OC-192 links, which transmits data at up to 10 gbps, while satellite lines typically top out at 45 mbps.

Easier Coming Down than Going Up

The bandwidth constraints are most evident when companies try to upload information. Unlike many terrestrial services, satellite services support different transmission rates for uploads and downloads. That's because these networks were optimized for video transmissions, where complex images are shipped to tens -- or even hundreds -- of endpoints and little, if any, data is sent up from those end stations. As a result, download speeds can be 10 to 20 times faster than upload rates. While satellite network transmission rates have been improving, they are not as fast as cable modem or DSL systems.

Users also discover that deployment of satellite networks can be tricky. Customers have to make sure that they have a clear line-of-sight for the transmission; something as innocuous as a tree could block a sight line so that no information flows over the link.

Price has been another hurdle for satellite suppliers. Wireline carriers rely on less costly equipment, possess more network capacity to spread out their operating costs, and have larger customer bases, which means greater revenue than satellite suppliers. Consequently, a satellite link may cost two to ten times as much as a terrestrial line. "There aren't many cases where a satellite option wins a head-to-head competition with a cable modem or DSL service," Northern Sky's Baugh told TechNewsWorld.

New Opportunity Emerges

As a result, satellite services have emerged as a good alternative to terrestrial lines only for a few niche applications. Satellite television vendors have been broadening their product portfolios with Internet access and telephony services so they can provide consumers with all of their data, voice and video services. Hughes Network Systems, Inc., a subsidiary of The DirectTV Group Inc., has been promoting its DirectWay Internet access services as a complement to its satellite broadcasting services.

In rural areas, satellite is often the only communications option. "Satellite is able to offer universal coverage, which is something wired and wireless carriers cannot," noted Victor Schnee, president of market research firm Probe Financial Associates Inc. There are between 20 and 25 million homes in the U.S. that fall into that category, so Starband America Inc., a subsidiary of satellite service provider Gilat Satellite Networks Ltd., has also had some success in this space.

After September 11, 2001, corporations understood that their disaster recovery plans must take into account the possibility that a telecommunications central office could be wiped out. As a result, the traditional technique of relying on alternative landline carriers doesn't provide desired resiliency, but satellite links do.

"Recently, satellite vendors have been aggressively promoting their networks as backups to landline and wireless networks," Probe Financial Associates' Schnee said.

Dot-Bomb Fallout

These successes arose amid a number of high-profile flops. Like other telecommunications segments, the satellite space has had to dig out from the dot-com bust. A few years ago, industry heavyweights including Bill Gates and Craig McCaw backed various ventures that planned to launch new satellites for data communications services. When the dot-com bubble burst, those ventures were canceled.

Given the nature of satellite communications -- vendors have to plan years in advance to take advantage of new spaceship launches -- the recovery process has taken a bit longer than landline and wireless communications.

Still, at least one high-profile venture from the dot-com era remains. As 2004 closed, Wildblue Inc. began testing its high-speed satellite Internet service, which relies on the Anik F2 satellite that went into orbit last fall. Wildblue is planning a nationwide rollout of its services next summer. The company is looking to lower monthly service from the $75 range, where it is now for many services, to the $50 range, which would make it more competitive with cable modem and DSL services.

How much of an impact these new services will have on the market is unclear. "As of now, satellite providers are taking a wait-and-see attitude when it comes to Wildblue," concluded Northern Sky's Baugh. "If the company has a great deal of success, then competitors will be forced to respond, but as of now, they are waiting for the company to deliver on its promises."



Telecoms Feel Heat On Wiretaps

Ottawa wants to toughen 31-year-old rules Violators could face 5 years in jail, $500,000 fines
Tyler Hamilton

Officers and directors of telecom service providers could face fines as high as $500,000 or up to five years in prison if their companies fail to comply with wiretapping rules being considered by the federal government, the Toronto Star has learned.

A service provider that violates or is likely to violate the proposed rules could also be hit with a court order to shut down certain operations.

"There will be some people in the industry who argue this takes it a little too far," said Kirsten Embree, a lawyer with Fraser Milner Casgrain LLP's communications law practice.

Ottawa has argued new wiretapping, or "lawful access," rules are needed to keep pace with technological advances, such as Internet-based phone services, and for Canada to move forward with international cyber-crime initiatives.

The Canadian Association of Chiefs of Police has lobbied hard for a change, arguing existing rules created in 1974 hinder public safety. The group wants to make it easier for police to snoop on the BlackBerry emails, text messages and phone conversations of Canadians.

Ottawa appears to be inching closer to draft legislation. After a 30-month consultation process and more than 20 closed meetings with stakeholders, officials from Industry Canada, the Department of Justice, and Public Safety and Emergency Preparedness Canada met on Feb. 7 with members of the telecom industry to discuss some of the government's plan.

Among the proposed rules:

A requirement that service providers, within 72 hours of a lawful access request, be able to intercept all types of communications in real time, and to have the capability of doing simultaneous interceptions of one or more customers. Unclear is whether "simultaneous interceptions" means a few, dozens or hundreds at the same time.

Interception would also include the full content of a communication, not just the time, location and nature of the communication.

Companies, public schools, hospitals, churches and retirement homes that run internal telecommunications networks to serve their employees or clientele could be exempt from the rules, while service providers with less than 100,000 subscribers would get partial exemption.

All service providers affected by the new rules would have to file a report with the justice minister within six months of the law going into effect, detailing their degree of compliance.

The government has maintained from the outset that lawful access requests would be subject to the same scrutiny as a search warrant.

Michael Geist, an Internet law professor at the University of Ottawa, said penalties of up to five years in prison for non-compliance ensure the co-operation of service providers.

"There's no question if this is put into place the telcos will comply," said Geist, hinting the days of service providers standing up for privacy rights of customers could be short-lived. "Things like real-time interception capabilities ... raise up those Orwellian fears of a Big Brother society."

The government is expected to have one-on-one consultations with service providers and equipment manufacturers this week and next. On March 9, government officials are scheduled to meet with consumer groups, privacy advocates, academics and civil libertarians. A day later, Jennifer Stoddart, the federal privacy commissioner, will be formally briefed. "At this stage, it's too early for us to comment on the proposal," a spokesperson for Stoddart said.

Embree, who is representing the Canadian Advanced Technology Alliance, said a big concern for telecom-service providers and equipment makers remains the cost of compliance.

According to government documents, older "transmission apparatus" will be grandfathered, but any new network switches, routers, email servers, access nodes, voicemail servers, voice over Internet servers or software would need to comply.

Embree said there is an assumption in the proposal that service providers pay for this intercept capability in new equipment and software. And because Ottawa's proposed rules are broader than U.S. interception rules, gear makers will need to customize equipment for Canadian service providers.

"We have to make sure we are not asking our service providers and equipment manufacturers to build to standards that are going to be different elsewhere, otherwise we'll be out of step," Embree said.


On the Net, Unseen Eyes
Patrick Di Justo

ACCORDING to the complaint filed in United States District Court in Nashville, members of a girls' basketball team visiting Livingston Middle School in Tennessee spotted the camera right away. "It was high up in a corner, near a ceiling tile in the visitors' locker room," said the girls' lawyer, Mark Chalos. "It seemed to look out over the changing area."

The girls were wary at first, Mr. Chalos said, but ultimately didn't believe the camera would be recording them, so they continued changing their clothes. Later, one girl mentioned the camera to her coach, who confronted Livingston's principal. The coach was told that the camera was not positioned to observe dressing and undressing, the court papers contend. But after parents pressed the point, a school district official reviewed the video and reported that it showed the girls in "bras and panties."

That was enough to enrage the parents. But what they learned as they questioned school authorities outraged them even more. Logs from the server holding the school's video show that the images were available, unsecured, over the Internet, Mr. Chalos said, and indicate several instances of access by unknown outsiders.

With the proliferation of surveillance cameras in everyday life and Webcams at home computers, the ease with which unsecured cameras can be detected on the Internet has become an increasing cause of concern. Last month bloggers began reporting on the ability to tap into thousands of raw Webcam feeds with a few simple Google searches, and the Spanish police arrested a suspect on charges of developing a computer virus that can activate a Webcam without the owner's permission.

The Yankee Group, a market research firm, estimates that as many as 13 percent of American households have a Webcam attached to one of their computers, often sitting on top of a monitor in a living room or a bedroom.

Like each Web page, each camera on the Internet has an address, and unless the cameras have been concealed behind software firewalls, their addresses make them specifically searchable and identifiable.

A Google search one day last week indicated more than 10,000 such Web cameras, showing everything from bedrooms and living rooms to coin-operated laundry businesses and shoe stores to plasma reactors and mountain ranges. (Some of the cameras required passwords for access to the video.)

Other video sources are mostly security cameras that have been fed onto the Net, either deliberately to make them available to the public, like traffic or weather cams, or simply because putting the camera online was the easiest way to get the video signal into the building's security office.

If a Webcam image is deliberately displayed as a part of a public Web site, then the image is obviously intended to be seen by whoever visits that site. But a search for specific video camera signatures allows users to skip the Web site and view the camera image outside its intended context.

It is illegal to gain access to a secured computer without the proper authorization, even if the computer's password is publicly known. But is it legal to look at unsecured Webcams discovered as a result of a Google search, through the back door, so to speak? "It's probably not illegal, but you never know," said Annalee Newitz, policy analyst at the Electronic Frontier Foundation, a digital rights advocacy group. "That would be the court case - would a reasonable person consider these cameras to be public?"

Jennifer Stisa Granick, executive director of the Stanford Law School Center for Internet and Society, agrees that it is a gray area. "The law states you have to know that you're not authorized to look at this information," she said. "But if it's available through Google, most people would reasonably think that it was all right. But what if a person didn't realize that their Webcam image was going out over the Internet? Do they have an expectation of privacy?"

That, Mr. Chalos said, is the crux of the case that the Tennessee girls' families brought against the Overton County school board, which administers the Livingston school. "You should never, ever, ever put cameras in locker rooms, period," Mr. Chalos said. "Any student undressing in a locker room has the right to privacy. And the school has to protect that."

But not everyone understands the difference between installing a "secure" camera system and making it truly secure. Axis Communications of Sweden specializes in establishing and maintaining Internet-based surveillance camera systems around the world. Fredrik Nilsson, Axis's general manager for the United States, points out that Axis cameras are installed with a default password, and it is up to the owners to make the cameras more or less secure.

"Just to give some perspective, we have delivered close to half a million cameras, and a Google search produces only a few hundred of them," Mr. Nilsson said. He acknowledges that default passwords to many camera systems, including those of Axis, are frequently traded over the Internet. Nevertheless, he maintains, Axis cameras are secure against accidental intrusion.

But protecting against accident is not the same as protecting against a deliberate invasion, Mr. Chalos said. "The images were protected only by the software's default username and password, which the school had never changed," he said. Lists of default passwords for many different types of computer systems are available on almost any "hacking" site on the Internet. "You've got to believe that pedophiles prowling the Internet, they're going to know that password," Mr. Chalos said.

The cameras at Livingston were installed over the summer of 2002 by EduTech of Dyersburg, Tenn., a company specializing in school security cameras. Twice every second, the cameras took high resolution color images of the school's hallways, exits and, as it turned out, the changing area of the visitors' locker room. The school's lawyers maintain that their clients wanted the locker room camera to face the door and that the camera was mounted incorrectly. EduTech maintains that it put the camera where it was told.

Images from the system, including those of the locker room, were fed into a video server that sat in an assistant principal's office. That server was a part of the school's internal network, which was in turn plugged into the Internet.

A lawyer for the school acknowledged in court papers that school officials never changed the video server's password from its default setting. But the lawyer said school officials had "insufficient information either to admit or deny" whether there was access to the images over the Internet.

Mr. Chalos's complaint, originally filed in District Court in June 2003, five months after the initial incident, asserts that someone outside the school gained access to the video server over the Internet several times over a six-month period. There is no way to tell precisely which video images might have been viewed by outsiders, but Mr. Chalos appeals to common sense.

"In theory, whoever broke in could have gotten onto the server, looked at pictures of hallways and classrooms, and that's it," Mr. Chalos said. "But my suspicion is, if they kept coming back, they had a more directed purpose."

The Internet visits, through computers in Clarksville, Tenn., Gainesboro, Tenn., and Rock Hill, S.C., came late at night or early in the morning, Mr. Chalos said. But the server holds not only live video, but also archived files as well. The unknown viewers are named in the suit as John Does and are cited for having potentially violated federal law on sexual exploitation of minors, Mr. Chalos said.

The original complaint listed 17 students and their parents as plaintiffs. Since then, Mr. Chalos said, he has determined that at least two other visiting teams had been captured on the locker-room camera, which was dismantled within days after the initial complaint. He filed a modified complaint last week on behalf of 34 students, seeking millions of dollars in damages.

Whether or not the cameras' video had been made available on the Internet by negligence, it has long been understood that people in the workplace or schools have little or no expectation of privacy from their teachers or employers. Having a supervisor monitor one's workplace activities, sometimes by video, has become a way of life for many Americans. But can employers, either deliberately or through neglect, make those images accessible for the world to see?

"The real scandal is why these Webcams are insecure," Ms. Newitz of the Electronic Frontier Foundation said. "This is just really, really sloppy. It is one thing for an employer to place employees under surveillance, but to take no effort to keep the Webcam access limited just to the workplace is really reprehensible."


ISPs Forced To Report Child Porn

INTERNET service providers (ISPs) will face fines of up to $55,000 if they can be used to access child pornography and do not refer the information to the police.

Justice Minister Chris Ellison said today ISPs and internet content hosts (ICHs) would have strict obligations to report online child pornography to the Australian Federal Police from March 1.

"It can not be emphasised enough that behind every horrid piece of child pornography is a tragic case of an abused defenceless child, somewhere in the world," Senator Ellison said.

Under the new laws, an ISP or ICH will face penalties of $11,000 for the individual and $55,000 for body corporates if they are made aware that their service can be used to access material that they have reasonable grounds to believe is child pornography or child abuse material and they do not refer details of that material to the AFP within a reasonable time.

It will also be a federal offence, carrying a penalty of 10 years' jail, for a person to use the internet to access, transmit or make available child pornography or child abuse material.

This is on top of the current state and territory penalties.

Senator Ellison said it was hoped that internet providers would work closely with the AFP's online child exploitation team and the Australian High Tech Crime Centre to crack down on child exploitation and paedophile networks.

The AFP last month announced it was also taking part in an international task force to prevent online child abuse.



Operators Weigh How To Shield Kids From Phone Porn
Laurence Frost, AP Business Writer

Wireless companies are under pressure to police the services they carry amid mounting concern that today's increasingly versatile cell phones can be gateways to a lot more than football highlights and pop videos.

As governments and parent groups wake up to the problems posed by an expected global boom in mobile pornography and gambling, a few operators are taking action to restrict such content to over-18s.

"We've learned from fixed-line (Internet) that if you leave it too late the genie gets out of the bottle," said Al Russell, head of content services for Vodafone UK.

Parent Vodafone Group PLC, which has operations in 26 countries, backed voluntary age checks and content filtering in Britain and is urging partners and rivals to avoid heavy-handed regulation by supporting similar moves elsewhere in the world.

Russell was speaking at the annual 3GSM World Congress on the French Riviera, which ends Thursday. This year, the four-day mobile industry gathering was abuzz with the arrival of a plethora of third-generation phones and services offering speedy connections to a widening array of multimedia content.

Alongside the handset makers displaying their "3G" products in Cannes, there were almost twice as many content exhibitors listed as last year _ companies from Anxa Europe, an interactive software developer, to the self- explanatory XXX Providers.

Under voluntary British rules drawn up with groups including the National Family and Parenting Institute, wireless networks bar adult services to new handsets by default and lift the restrictions only after receiving proof that the user is 18 or over.

Industry initiatives are also under discussion in the United States and France, while Germany already has statutory rules and the Australian government has published a draft bill it plans to introduce in parliament.

Attempts to label and filter content for global consumption remain fraught with technical and civil liberties problems, as well as cultural differences. Even within the industrialized world, some countries are much less tolerant of explicit imagery than others.

Not far from the beachfront auditorium where Russell spoke, at a booth in the exhibit hall, a French company named 1633 Publishing was showing off its licensed Playboy phone content and celebrating its recent acquisition of the exclusive global rights to distribute Pamela Anderson images over mobiles.

At the next booth, Andreas Adami of Italy's Princess Productions was talking visitors through the pornographic film maker's lucrative sideline in mobile screensavers, videos and other content.

"We also have wallpapers and some spicy cartoons, even for younger people.... Bikini babes, lingerie, non-nude stuff," Adami said, holding up a demo phone. On the screen, five carefully chosen frames from one of the Milan-based company's productions ticked over in an endless loop.

Adami said there was no doubt 3G networks will be fertile ground for the porn industry as handsets with full video-streaming capability become more commonplace.

"Last year mobile sales accounted for about 20 percent of our revenue," he said. "This year it will probably be 60 percent."

Vodafone is pressing rivals in countries such as Spain and Italy to adopt filtering, said Tina Southall, the group's head of content standards.

"In Spain there's some pretty explicit content without any form of age verification," she said. "Given what's happening in other markets I don't think that's a sustainable position."

Mobile operators fear being cast as pornographers, but they also want to avoid being seen as censors by the providers of lucrative wireless services _ a key business opportunity in an industry where the main source of revenues, phone calls, is afflicted by price wars.

The strict regime they accepted in Britain is the exception rather than the rule. Elsewhere, networks are overwhelmingly choosing not to bar adult services unless requested to do so by users.

Southall said Vodafone plans to use only ``opt-in'' filtering outside Britain, Ireland and Sweden. That means most of its handsets will have no out-of- the-box access restrictions on pornography, violent games or online casinos.

Stephen Balkam, head of the nonprofit Internet Content Rating Association, said parents often don't know how to block access to services on a child's phone, or may not even realize that inappropriate content might be accessible on the devices.

"The fear is that younger people, who tend to be the early adopters of these technologies, will gain access to content that parents aren't aware of," he said.

The ICRA, funded by the European Union and by the industry, is fighting an uphill battle for filtering standards capable of screening out indecent or violent Web content. As such, the group prefers to see the stricter default- bars and age checks on mobiles.


IWF Reports On Illegal Content On The Net

The Internet Watch Foundation has reported that the number of cases in which it took action against illegal online content increased last year.

However the total number of complaints processed by the group’s hotline staff dropped for the first time. According to the IWF’s 2004 Annual Report, of the 17 255 reports received in 2004, the number of reports relating to potentially illegal content where action was taken by the IWF increased to 20% of all reports, compared to 17% in 2003. According to the IWF, 50% of the sites containing potentially illegal content were Pay-Per-View sites, an indication of the high level of commercialisation of abusive images of children on the Net, reports Out-Law.com. The report showed a geographical shift in the locations of where Web sites containing illegal content are apparently hosted. Russian servers hosted 31% of the sites; up from 23% in 2003, while US servers saw a reduction in hosted material – 40%, compared to 55% in 2003.


Google "Library" Sparks French Warcry
Timothy Heritage

France's national library has raised a "warcry" over plans by Google to put books from some of the world's great libraries on the Internet and wants to ensure the project does not lead a domination of American ideas.

Jean-Noel Jeanneney, who heads France's national library and is a noted historian, says Google's choice of works is likely to favour Anglo-Saxon ideas and the English language.

He wants the European Union to balance this with its own programme and its own Internet search engines.

"It is not a question of despising Anglo-Saxon views ... It is just that in the simple act of making a choice, you impose a certain view of things," Jeanneney told Reuters in a telephone interview on Friday.

"I favour a multi-polar view of the world in the 21st century," he said. "I don't want the French Revolution retold just by books chosen by the United States. The picture presented may not be less good or less bad, but it will not be ours."

Jeanneney says he is not anti-American, and that he wants better relations between Europe and the United States. But like French President Jacques Chirac, he says he wants a multi- polar world in which U.S. views are not the only ones that are heard.

His views are making waves among intellectuals in France, where many people are wary of the impact of American ways and ideas on the French language and culture.

But he says he has heard nothing from politicians in Paris or Brussels, days before U.S. President George Bush visits the European Union's headquarters and NATO.

"On the eve of George Bush's arrival in Europe, the president of the National Library of France is sounding a warcry ... he is seeking a French and European crusade," Le Figaro newspaper said on Friday.

California-based Google Inc. said last December it would scan millions of books and periodicals into its popular search engine over the next few years.

Its partners in the project are Harvard University, Stanford University, Oxford University, the University of Michigan and the New York Public Library.

Google says the project will promote knowledge by making it more easily and more widely accessible. It aims to make money by attracting people to its Web site and to its advertisements.

The impact this might have on attendance at world libraries is not yet clear. But Jeanneney expressed his concerns in an article published by Le Monde newspaper late last month.

"Here we find a risk of crushing domination by America in defining the idea that future generations have of the world," he wrote, urging the EU to act fast.

He pushed his campaign forward this week by announcing the national library would make editions of 22 French periodicals and newspapers dating back to the 19th century available on the Internet.


Sixth Circuit Rules in Favor of Static Control Components ... Again

The United States Court of Appeals, Sixth Circuit, responding to a request by Lexmark International, Inc. for a re-hearing, ruled against the Lexington-based company in a decision announced Wednesday.

In late October, the Sixth Circuit vacated an order by Judge Karl Forester, who granted a preliminary injunction in February of 2003 banning the sale of Smartek replacement chips by Static Control Components for the Lexmark cartridges.

Immediately following the ruling, Lexmark filed a motion for re-hearing. The Sixth Circuit denied that request on February 15th.

"This is a very gratifying decision," said SCC CEO Ed Swartz, on the latest setback for Lexmark. "We feel that the public interest has been served by a knowledgeable court to not allow a greedy OEM to use the law to perpetuate an electronic monopoly. Consumers and justice have been served."

On December 30, 2002, Lexmark filed a lawsuit against SCC. In the suit Lexmark claimed that SCC's Smartek 520/620 chips violated the Digital Millennium Copyright Act of 1998.

"We have asserted from the outset that this is a blatant misuse of the DMCA. The Sixth Circuit's ruling and the court's decision not to hear Lexmark's request for another hearing solidifies and supports our position that the DMCA was not intended to create aftermarket electronic monopolies," said Swartz, who pointed out that such monopolies could cost consumers billions of dollars each year.

According to SCC General Counsel William London, "The case is scheduled for trial in December of 2005 on what remains of Lexmark's claims, and on Static Control's claims against Lexmark for violating several state and federal antitrust and anticompetitive statutes."

Static Control Components, which employs over 1,300 people in Sanford, North Carolina, accounts for over $300 million in annual sales. The primary market for Static Control Components is the laser toner cartridge remanufacturing market. Static Control supplies over 3,000 replacements parts to over 10,000 remanufacturers all over the world.


Suit Calls HP Printer Cartridges Defective

A Georgia woman has sued Hewlett-Packard, claiming the ink cartridges for their printers are secretly programmed to expire on a certain date, in some cases rendering them useless before they're even installed in a printer.

The suit, filed in Santa Clara Superior Court in Northern California last Thursday, seeks to represent anyone in the United States who purchased an HP inkjet printer since February 2001. HP, which recently endured the high-profile ouster of former CEO Carly Fiorina, is the world's No. 1 computer printer maker.

An HP spokesman said the company does not comment on pending litigation.

HP ink cartridges use a chip technology to sense when they are low on ink and advise the user to make a change. But the suit claims those chips also shut down the cartridges at a predetermined date regardless of whether they are empty.

"The smart chip is dually engineered to prematurely register ink depletion and to render a cartridge unusable through the use of a built-in expiration date that is not revealed to the consumer," the suit said.

The suit, which seeks class action status, asks for restitution, damages and other compensation.


Threat to BBC as EC Investigates German Public Broadcasters
David Gow

The European commission will launch a formal inquiry next week into German public television and radio's use of licence fee money to fund internet and other services, the Guardian has learned.

The investigation could have serious consequences for other publicly funded broadcasters such as the BBC and comes after complaints from private channels two years ago that their state-owned rivals, ARD and ZDF, used illegal subsidies.

Last week senior officials from four German states - Bavaria, the Rhineland-Palati nate, North Rhine-Westphalia and Saxony-Anhalt - sought to avert the investigation in talks with Neelie Kroes, the competition commissioner.

It is understood that Ms Kroes conceded that the licence fee itself was not an illegal subsidy under EU rules - partly because that is a matter for national authorities alone. The Dutch Liberal and her advisers believe, however, that using public money to fund internet-based services and win a slice of the growing market appears to be unlawful. ARD.de and ZDF.de, which offer sports and financial news as well as advice, are expanding.

The four German states have shown Ms Kroes the financial details of ARD and ZDF, which are undisclosed even in Germany, but she, according to Der Spiegel magazine, wants more transparency over funding subsidiaries, including internet services.

Carl Eberle, ZDF's lawyer, said the commission's view that broadcasting based on licence fees limits competition "undermines the principles on which Germany's broadcasting system is based".

The two channels, set up after the second world war, are in effect under party political control. The system was set up to ensure pluralism after the Nazi dictatorship, but the channels are now moving into sponsorship. Some politicians believe they should be pared back to their core broadcasting role. The BBC has won Brussels' backing for its expansion into digital radio and television.


OASIS Patent Policy Sparks Boycott
Paul Festa

A who's who of the open-source and free-software movements on Tuesday took aim at a leading Web services standards group, escalating pressure for mandatory royalty-free licensing policies with calls for a boycott of its specifications.

Open-source and free-software advocates including Mitchell Kapor, Lawrence Lessig, Tim O'Reilly, Bruce Perens, Eric Raymond, Lawrence Rosen, Doc Searls and Richard Stallman signed an e-mail urging the community not to implement certain specifications sent out by OASIS (the Organization for the Advancement of Structured Information Standards). OASIS this month revised its patent policy in a way it claimed offers better options for open-source software development.

"We ask you to stand with us in opposition to the OASIS patent policy," states the e-mail, which was sent Tuesday morning. "Do not implement OASIS standards that aren't open. Demand that OASIS revise its policies. If you are an OASIS member, do not participate in any working group that allows encumbered standards that cannot be implemented in open-source and free software."

In an interview, one signatory said the campaign would not target individual specifications, but the organization as a whole.

"We want organizations like OASIS to develop policies so any group that wants to use an industry standard can know in advance whether or not someone's going to come along and reach into their pocketbook," said Rosen, a lawyer with Rosenlaw & Einschlag and author of "Open Source Licensing: Software Freedom and Intellectual Property Law."

OASIS defended its revised policy and launched a counterattack against the e-mail campaign.

"This policy from OASIS is as strong as the W3C policy in terms of specifying work to be royalty-free," said OASIS CEO Patrick Gannon in an interview. "Our policy states that standards may incorporate work that is patented, but that they have to disclose it. And in almost all cases, that results in a royalty-free license for that work."

OASIS revised its policy to specify three modes for standards work: RAND, or reasonable and nondiscriminatory licensing; RF, or royalty-free, on RAND terms; or RF on limited terms.

Gannon claimed that people who had signed the e-mail hadn't read the policy.

"Does it represent an accurate description of our policy? Absolutely not," Gannon said. "Have these people read the policy? Or are they just reacting to someone's claim? Had any of these people come to us, we would have been more than happy to open a dialogue. This isn't the best way to open a dialogue between communities, through the press."

Gannon said that even without the new policy, OASIS standards with royalties attached to them are comparatively few.

Out of 20 formalized OASIS standards, Gannon said he was not aware of any that required a royalty to implement them. Fewer than a half dozen of the 101 specifications still working their way though committee had royalties, he said.

On the firing line

The call for an OASIS boycott is the latest in a series of skirmishes between industrial interests that claim intellectual property rights and open- source and free-software advocates.

The most significant conflict to date launched in 2001 after the World Wide Web Consortium (W3C) floated a proposal. The plan would have made the W3C's rules friendlier to member organizations that wanted to introduce patented technologies into standards.

The resulting row led the W3C into a highly public re-examination of its commitment to royalty-free standards. In 2003, it produced a revised patent policy, which made it all but impossible to standardize patented technologies that bear royalties.

OASIS billed its revised policy, set to take effect April 15, as a compromise to make its system more amenable to open-source advocates. Tuesday's e-mail campaign--and particularly the noteworthiness of its signatories--indicate how its move was received.

"The intellectual property policy seems to be a sop that they threw us," said Bruce Perens, a longtime open-source advocate. "There's the option for standards to be royalty-free but there's no strong incentive."

OASIS bristled at the claim that it hadn't considered open-source developers in revising its policy. Gannon said the group had numerous members involved in open-source development that had approved the revision and that OASIS had taken special care to vet the policy with intellectual property lawyers.

Gannon suggested it was possible but unlikely that OASIS might revise its policy again anytime soon.

"We looked at the needs of the open-source community in coming up with this revision, and therefore I cannot see what else they are advocating," Gannon said. "If a group of these people want to engage in a detailed review and make additional suggestions after considering how this is implemented, then they should submit that to our staff and we'll put it before the board. We have a process for continuing revision. But it's not clear to me what other changes need to be made."

The open-source industrial complex?

The conflict between open-source and intellectual-property demands has become particularly acute now that many technology giants have embraced open-source products such as Linux.

Last week, IBM pledged $100 million for Linux support in its upcoming Workplace software, a Microsoft Office competitor, for example. IBM routinely files more software patents every year than any other company and holds more than 10,000 of them.

Last month, Big Blue extended an olive branch to open-source developers, designating 500 of those patents royalty-free. Sun Microsystems made a similar offer to certain developers, and Computer Associates followed suit last week.

When it comes to standards-setting bodies like the W3C and OASIS, standards advocates call patents unfair, in light of open-source contributions to the industry.

"We don't see why, given that the open-source community is providing the operating systems going forward for a good deal of e- business, that we should be excluded from standards," Perens said. "OASIS needs to resolve to be an open standards organization, because open source and software patents don't mix."

Defenders of RAND-tolerant standards policies say standards suffer from exclusion of royalty-bearing technologies. OASIS saw substantial new involvement by companies including Microsoft, IBM and BEA Systems after the W3C's revised patent policy sent those companies to OASIS to develop Web services standards.

Perens attacked OASIS for having become a refuge for those companies.

"There's always going to be some standards organization somewhere that accommodates people who want to have royalty-bearing patents in their standards," Perens said. "With Microsoft, it's a competitive strategy and it has no place in a standards organization. We feel that for OASIS to have any stature as a standards organization, rather than something that just panders to the patent holders, it needs a better policy."



Piracy And Payment

Kristyn Maslog-Levis

Q&A Music Industry Piracy Investigations (MIPI) head Michael Speck -- the controversial champion of the music industry's efforts in Australia to curb unauthorised obtaining and sharing of music -- is set to vacate his position for a quieter life. He leaves with public awareness of the illicit nature of music piracy at new highs -- but not without disquiet over the music industry's hardline legal pursuit of the parties allegedly involved. Here he shares with ZDNet Australia his views about life bringing pirates to account.

Q: What are your expectations for this year in terms of MIPI's fight against music copyright infringement?
A: MIPI's focus will continue to be on the facilitators of piracy. The pirate online services and physical piracy operations. This strategy has been particularly efficient for us to date and there is no reason to think that will change. I expect that MIPI will continue to meet its obligations to the industry and public by preventing or detecting piracy and effectively prosecuting it.

Do you think Australia's copyright law is obsolete? What changes would you make, if any, especially in terms of the "fair use" right? (or the right of people to copy their music collection to another format for personal use)
I believe we have some of the best digital / copyright laws in the world. There can be no doubt that these laws do not suit online pirates, or commercial operations that would also want to adopt the "content should be free" aspect as part of their business model. Markets, even online ones, can only survive if there is a regulated marketplace. Laws to recognise and protect property are paramount if the online market is to flourish. Even the pirates recognise this in their rush to prosecute those that infringe their rights and to get licences.

The "fair use" argument has become a little dated in the current market. A consumer can now clearly decide in what form they buy their music. You can already go to a legitimate online service and buy your music in a portable format as an alternative to the compact disc if you wish. In fact buying a compact disc now and complaining about the lack of portability would be as absurd as complaining that the tarpaulin you bought was a lousy parachute.

Aside from the illegal sharing of music files through peer to peer networks, what else threatens the music industry here in Australia? (e.g. markets selling pirated CDs etc)
Australia remains an attractive market, online and physical, for both legitimate operators and pirates. Online piracy attempts will continue but little will change on their technological approach. The linchpin of the digital revolution the online pirates talk about is their exculpatory language, they don't make proceeds from their crime - they commercialise opportunities! I expect two significant Federal Court judgements this year that will go a long way to exposing the true nature of online pirates and their real motivations.

Pirate activity here is, moving forward, focused in three areas; online, cottage industry counterfeiting and commercial (and largely imported) counterfeiting. Fortunately through legislation and action we have a relatively low level of piracy and I don't see that changing!

In terms of traditional piracy (CDs as opposed to the online music kind), what statistics do you have on that in Australia?
Piracy here is at about 9 percent of the market by volume far as we can tell. Our statistics are based on identifiable activity only.

What can you say about a report stating that Australian consumers have no choice but to obtain music through P2P services because their music demands are not met by the limited resources of retail and online stores?
I am aware of the report in question and am surprised it's given any credence. You've got to remember that the P2P services don't produce music, they misappropriate the music the legitimate industry develops, produces and promotes. Not one of the P2P services has an artist repertoire function locating new artist, developing them, promoting them, in fact they just don't make the music consumers want - the legitimate industry does! The proposition is part of the sham the pirate online industry perpetrates on consumers and doesn't withstand analysis. They have been counting on no-one noticing how much money they make from someone else's property and reports such as this one can only serve these millionaires, not the consumer.

You mentioned that this year, MIPI will be intensifying their pursuit of universities that allow copyright infringing activities through their systems. Will students be part of that pursuit? Or even individual Australians infringing music copyright?
Our primary concern is the facilitators of piracy, not individuals. This strategy has been particularly successful for the industry and there is nothing to suggest we need to change this strategy. I cannot be any more direct than to say to you -- we will not be suing individuals. Our current approach has been exceedingly effective and efficient.

Should Universities and ISPs who are not directly involved in copyright-infringing music behaviour really be dragged into legal actions over the issue? Should we expect more ISPs to be in the in the line of fire this year?
I would respond by asking you, "Should an organisation or business not be prosecuted simply business it belongs to a particular set?". There is something completely unfair about a business like an ISP or University having as a defence to proceedings that it is simply an ISP or University. How do you get on a list like that? It has never been the case, despite the protestations that a University or ISP is prosecuted if it is not "directly" involved in an infringement. There can be no doubt that the ISP industry's dirty little secret is how much revenue they derive from the traffic in unauthorised sound recordings. I think it is telling that every time we've raided an ISP we've found evidence of their knowledge and participation in the industry of online infringement. You can expect more ISP prosecutions this year.

You're probably public enemy number 1 to a generation that has, for many years, grown up believing they can download music for free online. Do you have a message for those who believe you are robbing them of a right?
I think you're over-rating my relevance if you think I'm public enemy number 1. However, no-one out there genuinely believes that there is no cost in downloading free music, that it is right or fair and that this misappropriation can last forever. No-one can honestly believe they have a right to take someone else's property without their permission. I would say to them, even the pirates want you to pay for the download so get used to the idea that you will be paying. But remember you will only see the continuing development of musical product if you pay the people it belongs to.

Why are you retiring? What were the rigours of the job that forced you to do so (i.e. the working hours, pressure from P2P companies, even the death threats that you mentioned previously in your affidavit) What capabilities and personality does your replacement need to have?
I've had an usually long run in this job. The best job I've ever had I might add. The accepted wisdom is that you turn over these types of positions every five years or so, and I accept that wisdom. Having this position has been a privilege for me and I'll certainly take my experiences on to anything I do in the future.

I recently met six potential candidates for the position and I don't think I could compete with them if I were applying for the job now. I would not be so presumptuous as to think I should determine the capabilities of a person taking this job.

Some commentary has suggested you've had to take the heat while [ARIA boss] Stephen Peach hasn't put in his fair share. Does ARIA need to step up its profile in this area? What about the record company multinationals themselves? Some might say that MIPI is a unit that allows them to disperse the heat that they would otherwise get for the often unpopular issue of curbing free music downloading.
There is no point having a dog and barking yourself! MIPI is the "anti-piracy" unit and it should come as no surprise that MIPI would take the heat as you say. A great investment of resources and support is made by the record companies and ARIA in MIPI, they established the unit to provide their anti-piracy services. Stephen Peach takes an a great deal of the heat directed at MIPI and its to his great credit that he has remained professional about it.

The record companies have never resiled from their public positions and are committed to their consumers not only on the development of music but also protecting then from piracy.

What are you planning to do next?
I've got six weeks left and will be conducting at least one more raid ....I'll get back to you.


Africa, and Its Artists, Belatedly Get Their MTV
Sharon LaFraniere

For as long as anyone can remember, it has taken a rare stroke of luck for an African recording artist to be heard outside Africa. Pino di Benedetto, the marketing director for EMI Africa, a major recording company here, remembers how the South African rock band Watershed got the cold shoulder throughout Europe until one German disc jockey named Gregor happened to hear its lyrical hit single "Indigo Girl" on the radio while vacationing in South Africa in 2000.

He picked up the CD at a store, packed it in his suitcase and played it on his station, SWR3, when he got home to Stuttgart. "Indigo Girl" hit Germany's Top 10 chart, Mr. di Benedetto said. "There is a lot of music that comes out of Africa that would be easily marketable in the States and in Europe," he said. "Nobody gives us a chance. We just are not seen as hit-makers."

Until now, perhaps. On Tuesday night, in a snazzy nightclub in Sandton, a well-heeled suburb outside Johannesburg, MTV opened its first local music channel in Africa, bringing one of the world's best-known consumer brands and its global dominance of music television to one of the few remaining untouched markets. For viewers in 48 nations in sub-Saharan Africa, the opening belatedly offers what young music fans in other nations have long watched on MTV's 43 other music channels - their favorite local artists, showcased in a slick, fast-paced music-video format with contests, music news, viewer-request lines and behind-the-scenes features.

For the continent's artists - those bands with talent and drive but lacking a road map out of Africa or even out of their own country - the channel, called MTV Base, could offer the kind of break they long for, says Bill Roedy, president of MTV Networks International. The best of those artists, he said, may be able to jump from the newly begun local channel to other MTV channels around the world, giving them the global exposure that has eluded all but a precious few African musicians.

"We are looking to Africa to be a huge contributor," he said in a telephone interview from London. "It is going to enrich our channels around the world. We work very hard to develop local artists. It is something we passionately believe in. It's not just a natural evolution. It's a commitment."

Many would snicker at that, arguing that MTV's ubiquity these days - the seamless broadcasts of Outkast in Pskov, or Maroon 5 in Hokkaido - fosters cultural homogeneity, not originality. Rather than promoting indigenous, original music, they say, MTV's global reach simply encourages foreign artists to mimic the American formats that the mass market seems to crave. To its critics, MTV is the classic example of what President Jacques Chirac of France called the threat of a worldwide invasion of American pop culture. If unchecked, Mr. Chirac warned in Hanoi in October, "all other countries would be stifled to the benefit of American culture."

Todd Gitlin, a professor of journalism and sociology at Columbia University, said, "MTV represents a wing of American youth culture that has a following - and also arouses contempt and loathing."

Still, more than a few African artists laboring in impoverished anonymity see MTV as a possible ticket to fame. Indeed, their hope is that the trend will go in the opposite direction - that MTV will help Africa export its music to the United States.

Other markets are crucial because Africa's own market is minuscule, amounting to less than 1 percent of global music sales, industry studies show. If a South African recording artist sells 50,000 copies, it's a platinum record. "In terms of the United States, that's a joke," said David du Plessis, general manager for the music industry's trade association, the Recording Industry of South Africa. He blames piracy problems, in part, for crippling the industry.

How to break out of Africa is the perennial question here. Miriam Makeba, a legendary singer known in the United States for hits like "The Click Song" and "Pata Pata," managed by hooking up with Harry Belafonte in the early 60's. Ladysmith Black Mambazo, winner of two Grammy awards, was virtually unknown outside Africa until the group collaborated with Paul Simon on his groundbreaking "Graceland" album, which made so-called World Music a phenomenon among American artists.

Artists all over the world complain there is no room for them in a market dominated by Americans and Europeans , said Steve Harris, Africa's international marketing director for the recording company Universal South Africa. But Africans struggle especially hard, he said, because outside South Africa, there is a real dearth of studios, record companies and producers capable of turning out a sophisticated music video.

The hope, he said, is that MTV will give talented African artists a springboard to local fame that is the prerequisite for international interest. "In Brazil, MTV really did create a demand and help music at the local level," he said. "That's what I am hoping will happen here."

MTV Base was a long time coming. The network's first music channel made its debut in the United States in 1981, and its first international channel began in Europe six years later. In the ensuing 18 years, MTV's local channels have spread almost everywhere except Africa, which until now had been offered only MTV's European channel.

It is easy to understand why: In much of the continent, televisions are only slightly more common than ice rinks. Americans own one television set for every one person, according to United Nations surveys. Africans own one for every 16. Pay television, MTV's platform here, is the staple of barrooms here, not the one-or-two room block urban homes where millions of young Africans live.

MTV now reaches 411 million homes worldwide, counting Nickelodeon and its various other channels. In Africa, MTV will add 1.3 million subscribers, more than two- thirds of them in South Africa, according to DS-TV, the satellite broadcasting service. Some industry experts question how much that viewership can grow.

"Considering the average household income, I don't believe you are going to see millions of people rush out and buy a decoder just because MTV is available," Mr. du Plessis said.

Still, the continent is home to nearly 900 million people, more than a third of whom are between the ages of 15 and 34, MTV's target audience. Now that it is more politically stable and on a path toward economic growth, Mr. Roedy says that Africa fits in MTV's plan to span the globe.

Eighty-one percent of MTV's viewers live outside the United States, but they still account for 16 percent of MTV's revenues.

Unlike Britain, where MTV is fighting hard to ward off challengers, its competition in Africa is confined to dead-of-the-night music fillers on free television stations and to Channel O, a pay television channel that is devoted to local music but lacks MTV's name recognition or glittering appeal.

Even South Africa's radio stations have had to be forced to play more local music. Outraged at broadcasters' slavish devotion to American and European music, musicians and record companies demanded that local songs be given one-fifth of the music airtime on the nation's radio stations. State regulators agreed, instituting the quota in 1997.

Lebo Mathosa, a Johannesburg singer with a powerful voice and provocative dance style reminiscent of Tina Turner, thrilled the hip, racially mixed crowd invited to celebrate MTV's new channel with a live performance Tuesday that cellphone cameras snapping wildly. Like most popular artists here, she said that she is starved for broader outlets, especially those with global reach.

Mr. Roedy says that local programmers at the network's other channels decide on their own what songs in MTV's international inventory merit airtime. But having seen Latin American artists take off in the mid-1990's, he said, he has high hopes for the musical form of kwaito, as well as the Zulu form of hip-hop and other distinctly African genres.

Initially, Mr. Roedy said, MTV's new channel will devote 30 percent of its airtime to local music, and programming will be coordinated out of London. But after the channel establishes itself, local and international music will divide the airtime 50-50. By the end of next year, the channel's entire operation will operate out of Africa, an MTV spokesperson said.

Mr. Roedy says the individual personalities of its local channels is the secret of MTV's dominance of the world market. MTV Indonesia includes a daily call to prayer for its Islamic audience; MTV Italy offers food programs; MTV Japan has a sharp, techy edge.

And MTV Africa? "Good question," he said. "It will evolve."


Book review

Sue The Reader Of This File Sharing Book
Ashlee Vance

When the drugs begin to wear off, and the sun starts to rise, an unnamed music executive shudders at the thought of its existence. In that painful moment of desperation, he wonders, "How could it happen?" "How could that rat write this book?"

Steal This File Sharing Book by Wallace Wang must be the worst nightmare of deluded music big boys everywhere. It's a guidebook to trading music, movies, photos, software and just about any other type of file. More than that, it's a guidebook for trading as anonymously as possible and via methods the big media companies would prefer the average person not know about. It's this rich content - not the writing or lack of a clear audience - that makes the book a treat. Why not give the mogul a heart attack before the coke gets a chance?

"The bottom line is that the corporations, who currently hold all the power and make most of the money, are going to have to change, and that's something they aren't willing to do," Wang writes. "Unfortunately for them, their fate is already sealed and out of their hands in the same way that buggy whip manufacturers, slide rule makers, and whale-oil lamp companies found themselves wiped out by technological change.

"The question isn't whether file sharing technology will put today's corporate powerhouses out of business. The question is when, and that future is closer than they think."

This lucid declaration appears on p. 258 of the book. That's the last page, and the above is the last paragraph. This, however, isn't they type of book you read for the surprise ending. Nor is it the type of book you read to discern the author's position on the pigopolist scum/media geniuses - take your pick - trying to crush the file trading industry.

Wang deals with the central debate surrounding file trading hardly at all. That last paragraph is one of just a handful providing much point of view on who might be wrong or right - mankind, or the music/movie industry - about file trading.

Instead, the book delivers a roadmap for finding and trading files - just as its title promises. In fact, it provides such a thorough list of file trading techniques that Wang only needs that final conclusion on p. 258 to make his point. There's no way the media companies can fight the technophiles and win this battle. After all, it's not even clear that shutting down music and movie swapping sites is really in Hollywood's best long-term interests.

The first half of the book will appeal more to the computer-curious than savvy geeks. It covers all the forums where files are traded and does so in the most basic, straightforward language possible. "A computer file can be anything from a single song to a photograph, a full-length motion picture, the complete text from a book, or a computer program that sells for thousands of dollars." "Email lets you send a message to a particular address on the Internet." "File sharing networks have soared in popularity because they make it really easy to find tons of files and download multiple files at one time." See? You get the idea.

If you know what a newsgroup, FTP, instant messaging and eDonkey are, then you're going to want to skip to Part II of the book and do so fast. Definitions of email can ruin any self-respecting geek's day. If you have no idea what any of the above terms stand for, then Part I is a blessing. It's kind of like Computing 101, telling you all the main file types, the main ways to send files via the internet, where to find content and where to find general computing information. Wang does an excellent job of filling the book with useful links, and Part I ends up as a top-notch resource for making your way around the internet.

Given that most Register readers are Part II types, that's where we're going to spend the majority of our time.

Kicking over the traces

Part II kicks off with one of the juicier subjects - protecting your identity. Wang gives out solid advice for masking your email and IP addresses and for setting up proxy servers. The author dutifully warns readers that many identity protectors don't work quite as well as billed. Still, he provides comprehensive lists of sites and types of technology that can help anyone protect their identities whether they are file trading or not. The methods laid out by Wang will trigger many moans at the RIAA and MPAA, as they make it much harder for the pigopolists to identify big time file swappers.

"Remember, don't break the law; just creatively skirt around the legal boundaries like any law-abiding politician would do," Wang writes.

Along with protecting your person, Wang lays out some basics for protecting you PC from viruses, worms and trojan horses. This section is a must for anyone who thinks clicking on britneylove.jpg is safe. More advanced readers will find advice for blocking spyware/adware, creating virtual PCs and encrypting files.

With these basics taken care of, you get to the good bits: sharing music, movies, TV shows, porn, software and books.

Even people who consider themselves above average file-traders will cherish these sections. Wang charges right past the popular file-trading sites and lists a host of new locales. It may be tougher to find the exact file you're looking for on these sites, but they're mostly free of legal eagles and can turn up hidden gems. For the serious geeks, Steal This File Sharing Book then opens up the world of warez.

Last but certainly not least is a penetrating analysis of the porn file trade. The book lays out places to find porn and handy programs for downloading and viewing porn safely. You can never be too safe. In addition, it points out that porn makers embraced file trading technology before it even become popular. The porn companies long ago figured they couldn't beat the geeks, deciding to join them instead. Losing a few dollars here and there to downloads is just part of doing business. Retailers often hold a similar attitude about shoplifting. Don't like it, but can't avoid it.

Overall, the book covers a lot of ground in a brisk fashion. It's an excellent resource for the bored file-trading stud looking to expand his game and for the up and coming geek.

AOL meets Debian

The book, however, suffers from its breadth. Is it directed right at geeks? Well, no. Right at newbies? Nope. It can be a frustrating read at times. You're being told what email is on one page and then digging through the inner-working of warez file- trading on the next. Think AOL meets Debian.

This means that those readers starting from technical scratch get more for their money. They can, over time, use the entire book. Above average geeks will want to turn right to the second part of the book for the juicy stuff.

And while Steal This File Sharing Book is clear and simple to follow, it's not the most entertaining read on the planet. Wang uses a style close to that of the author of your first Macroeconomics text book. This is a bit frustrating since the back of the book tells you that Wang is a "successful stand-up comic." Hard to believe unless you laughed at the one about the supply curve, the demand curve and the duck.

You'll want to read Steal This File Sharing Book in the near future, since much of the information in it will likely have a shelf life of about two years.

The book gets the highest of marks for content, clarity and usefulness. If every file- trader on the planet gave it a read, the media moguls would have a much tougher time fingering prolific swappers for lawsuits. And even if stealing songs by the gigabyte isn't your thing, you'll find Steal This File Sharing Book makes using the internet more interesting. Have a go at protecting your identity of traveling to newsgroups you never knew existed.

Steal This File Sharing Book




The pigopolists will hate it. You'll find it to be a great resource for doing all kinds of naughty and not so naughty things. Porn.


Too geeky at times not geeky enough at others. So clear it's bland. As Homer said, "Be more funny."


Until next week,

- js.


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Jack Spratt's Week In Review is published every Friday. Please submit letters, articles, and press releases in plain text English to jackspratts (at) lycos (dot) com. Include contact info. Submission deadlines are Wednesdays @ 1700 UTC.

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Old 24-02-05, 07:37 PM   #3
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You can now play a Java-based version of Spacewar. You’ll find it here - Jack.
the keys


i beat the internet
- the end boss is hard
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Old 24-02-05, 09:35 PM   #4
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good find multi!

- js.
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Old 25-02-05, 12:14 AM   #5
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i didnt really find ...
well i guess i did have to find the keys on the keyboard

they didnt tell you the keys on the page...so i thought i would work them out

i beat the internet
- the end boss is hard
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Old 25-02-05, 02:35 PM   #6
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The readme linked from that page has the keys listed, but it didn't mention the hyperspace button. I found that pushing both 'rotate' keys at the same time makes the spaceship disappear for a moment and reappear in a random location. Man, that game is forty three years old now, hard to believe.
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