Peer-To-Peer News - The Week In Review - March 26th, '05

[JackSpratts]

Quotes Of The Week


"I can imagine years from now something being distributed through cellphones, BlackBerries, computers, whatever. [That video should] only go through a TV set is as archaic as the thought that music can only be distributed on a CD." – Robert F. X. Sillerman


"She's not even a fan of my music. If the song's not about her, she doesn't care. I've started telling her they're all about her so she'll like them." – Mark Oliver Everett


"It's so nice not having to wait for other people to show up. It's a very lonely process, and you miss the gregarious interaction you'd have with musicians. But the flip side of that is your equipment doesn't argue with you, so it's easier being a megalomanical home studio despot." – Moby


"TiVo is God's machine, the iPod plays our own personal symphonies, and each device brings with it its own series of individualized rituals. What we don't seem to realize is that ritual thoroughly personalized is no longer religion or art. It is fetish. And unlike religion and art, which encourage us to transcend our own experience, fetish urges us to return obsessively to the sounds and images of an arrested stage of development." – Christine Rosen


"Over the last year, all the major labels agreed on specifications for the DualDisc, and no one label will control it. The logo will probably be licensed by the Recording Industry Association of America." – Robert Levine















Drive-sharing picking up speed

Music Sharing Evolves Again
Paul Roberts

Music industry litigation may be creating a harder-to-police file sharing underground, according to a new study by the Pew Internet & American Life Project.

Lawsuits against file swappers and peer-to-peer (P2P) software companies may be forcing Internet users onto informal networks to exchange songs and videos, the researchers said.

A Pew survey of 1,421 US adult Internet users found that informal file-sharing networks are used by 19 per cent of music and video downloaders, with MP3 players, email and instant message products popular mediums for transferring files between friends and family. The survey results suggest that litigation is shifting file swapping to other online avenues, even as file-sharing activity recovers from recent declines, Pew said.

People share music

Around 27 per cent of Internet users surveyed by Pew said they downloaded either music or video files over the Internet, and 48 per cent of all those who downloaded said they use sources other than P2P networks or premium online services, such as iTunes, to get music or video files. Pew estimates that about 18 million Americans are swapping files using nontraditional means based on the survey results.

Approximately 19 per cent of the adult Internet users in the survey admitted to downloading files using a music player. That translates into about 7 million adults, and is surprising, because products like the iPod are not designed to support file sharing between devices, said Mary Madden, a research specialist at Pew who wrote the report.

Exchanging music and video files over email or instant message networks was even more common. Twenty-eight per cent of downloaders, or an estimated ten million adult Internet users in the US, said they got files that way. Other alternative sources included music and movie sites, blogs and online review sites.

Persistent sharing

The informal file-sharing on networks that also serve other purposes is harder to monitor and show that Internet users are just finding workarounds and alternative ways to trade files, Madden said.

"With the everyday use of email and messaging, it's interesting to see that around one in four downloaders get their files that way," she said.

File sharing through those means doesn't approach the scale of swapping on P2P networks, but does show that those who want to share songs or get a file are persistent, she said.

"People aren't sending entire albums, but if they hear a song and want to share it with a friend, they might be more comfortable sending it over IM (than using P2P software)," she said.

P2P use declines

However, movie and music industry lawsuits and legal online music services may be dampening illegal P2P file trading. Almost twice as many survey respondents, 43 per cent, said they use paid online music services compared with just 24 per cent in a similar survey in 2004. The survey found that file downloaders are actually more likely to say they use paid services than P2P, Madden said.

About 30 per cent of respondents who said they were former file swappers admitted giving file sharing up because of fears about getting in trouble or RIAA lawsuits. But those who took the survey were divided on the legal questions that surround file swapping on the Internet, she said.

Who is responsible?

49 per cent of survey respondents said firms that own and operate file-sharing networks should be held responsible for the pirated music and movie files traded on the networks. However, a majority were divided about whether individual file traders or a combination of companies and individuals should be held responsible. 18 per cent of those surveyed said they didn't know who should take the blame for pirated music and video content.

Madden said: "What this study shows is that people download music and video files from a wide array of sources. One thing that technology companies fear is that their products will get caught in the crossfire if the court rules in favour of the entertainment industry," she said.
http://www.macworld.co.uk/news/index...ge=1&pagePos=2


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It’s official

Music Sales Rise In United States

After years of decline, sales of recorded music and music-video products appear to be stabilizing in the United States as the industry continues to battle piracy and promote authorized online music services, according to data released Tuesday by the industry's major trade and lobbying groups.

The number of CDs and other music products shipped from record labels to retail merchants rose 2 percent last year, to 814 million units, the first annual increase in five years, according to the Recording Industry Association of America.

The shipments carried an estimated value of $12.2 billion, a rise of 2.5 percent, the trade organization said. The figures refer to albums and products shipped to retailers and mail-order clubs, not actual sales to consumers.

A separate report Tuesday by the International Federation of the Phonographic Industry, the global trade group, said that worldwide sales of recorded music products were essentially flat last year.

In a case scheduled for the Supreme Court next week, justices are being asked to decide whether the file-sharing companies Grokster and Morpheus can be held liable for any copyright infringement by their users who may engage in trading music and video files free.
http://news.com.com/Music+sales+rise...3-5631698.html


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Study: Majority of DVR Owners Like Them

percent of Americans own a TiVo or other digital video recorder and another 6 percent plan to buy one in the next year, a study finds.

The overwhelming majority of DVR owners - 81 percent - say they "love" or "like" them, according to the joint study from Arbitron Inc. and Edison Media Research. More than half say the DVRs have had a "big impact" on their lives.

Among all recorders of television shows, including VCR owners, 29 percent cite the ability to skip ads as the primary reason for recording shows, while 52 percent want to watch shows at a more convenient time.

Those who don't record shows are evenly split between who say it's too difficult or time consuming and those who cite an unwillingness to decide ahead of time what they want to watch.

The study also finds that a quarter of Americans have watched video on the Internet and a similar number have used pay-per-view or other on-demand services offered by their cable or satellite provider.

The findings were based on interviews with 1,855 teens and adults from Jan. 13 to Feb. 2. Participants were identified mostly through a random sample of Arbitron's diary keepers for radio audience ratings, which in turn were identified through random telephone dialing. Additional participants came from a separate random phone sample.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Voting On P2P-Shared Files May Thwart Spammers
Celeste Biever

The first peer-to-peer software allowing users to vote on the reliability of a file could thwart spammers - but it might also help illegal file sharers dodge decoys deployed by the record and movie industries.

"It targets anything that the users find disagreeable," explains Emin Gun Sirer of Cornell University in Ithaca, New York, US, who wrote the new software. "I suspect that people will be equally repelled by spam and decoys, and vote against both with comparable fervour."

Named Credence, the software is embedded in Limewire - a popular open-source peer-to-peer (P2P) network - and it already has over 150 users. "Ebay has a great rating system," explains Sirer. "Our goal is to develop one for peer-to-peer."

Credence asks users to vote on whether downloaded files are what they purport to be and then ranks the files. When peers download new files, they are directed to highly-ranked files first, which are less likely to be spam or decoys.

Spammers will not be able to subvert the system by voting for their own files, says Sirer. Votes are only counted if they are submitted by people whose votes you have agreed with in the past. "If spammers deploy robots to vote for themselves, they will all be highly correlated with each other, but they would not correlate well with people voting honestly," he explains.

Decoys and spam

P2P networks allow groups of strangers to share large files over the internet. While they have attracted attention because they enable the illegal distribution of copyrighted movies and music, they also have legitimate uses in providing access to un-copyrighted content.

But recently file-sharing has become less appealing due to an increase in spam files, which appear to be music but in fact hawk bogus goods, and decoy files, which look like ordinary MP3 music files but are actually corrupted and unplayable.

In the last six months, spammers have stepped up their onslaught, often creating the names of spam files dynamically - instantly tailoring them to match a search request. Sirer says that every time a user searches for a file on a network, at least one of the entries on the list of results is spam.

The music and movie industry is also making illegal file-sharing increasingly difficult - a group at the Polytechnic University in Brooklyn, New York, US, estimates that 50% of the files on the networks are now decoys.

"Noble attempt"

P2P networks can also harbour malicious software, which Credence could help users avoid. "It's definitely a big problem," says Andy Salo, of security company TippingPoint in Austin, Texas, US. "And this is a noble attempt to solve it."

But not everyone believes that Credence will help illegal copyright infringers spot decoy files. Marc Morgenstern, of Overpeer, a New York-based company that seeds P2P networks with decoys, says even if the program did catch on with enough users, "it will be very difficult for that type of technology to have an effect on our ability to protect copyrighted content".

For example, he says, Overpeer is constantly injecting new files into P2P networks, making it harder for their decoys to accumulate negative rankings.

While Sirer and his colleagues were embedding credence within Limewire, they discovered two vulnerabilities that could have given any member of the P2P network access to another member's entire hard drive, not just the files they wanted to share. The team alerted the owners of Limewire, which has since patched the vulnerabilities.
http://www.newscientist.com/article.ns?id=dn7179


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Appeal Filed in Apple Trade Secrets Suit
Rachel Konrad

Online journalists who published secrets about Apple Computer Inc. filed an appeal Tuesday in a case that could have broad implications for the media.

A California judge ruled March 11 that three independent online reporters may have to provide the identities of their confidential sources and that they weren't protected by "shield laws" that usually protect journalists.

In December, Apple sued 25 unnamed individuals, called "Does" and believed to be Apple employees, who leaked specifications about a product code-named "Asteroid" to Monish Bhatia, Jason O'Grady and another person who writes under the pseudonym Kasper Jade. Their articles appeared in the online publications Apple Insider and PowerPage.

The Cupertino-based company said the leaks and the published documents violated nondisclosure agreements and California's Uniform Trade Secrets Act. Company attorneys demanded that the reporters identify their sources.

The reporters sought a protective order against the subpoenas, saying that identifying sources would create a "chilling effect" that could erode the media's ability to report in the public's interest.

But Santa Clara County Superior Court Judge James Kleinberg ruled in Apple's favor earlier this month, saying that reporters who published "stolen property" weren't entitled to protections.

On Tuesday, attorneys representing the journalists filed an appeal, as expected. They argued that the judge's ruling violated the First Amendment and that Apple should first subpoena its own employees or use sophisticated computer forensics to determine the sources of the leak before subpoenaing the journalists.

"The California courts have a long history of supporting and protecting the freedom of the press," said attorney Kurt Opsahl of the San Francisco-based Electronic Frontier Foundation, which represents the journalists. "The Court of Appeal will now get the opportunity to correct a ruling that endangers all journalists."

Apple spokesman Steve Dowling declined specific comment on the appeal, but said: "Apple's DNA is innovation, and protection of trade secrets is crucial to our success."
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Yahoo Adds Search For 'Flexible' Copyright Content
Matt Hines

Yahoo has added the ability to search specifically for content with unconventional copyright arrangements.

The search giant launched the new function Thursday, giving Web surfers the ability to scour content hosted by Creative Commons, a nonprofit group aimed at carving out new ways to share creative works.

The search tool was produced in order to help promote Creative Commons' efforts to advocate the use of nontraditional copyright arrangements between digital content developers and people interested in licensing those individuals' work. The group said that most of the content available through the Yahoo search can be licensed for free under required attribution or noncommercial usage guidelines.

Yahoo introduced a dedicated interface for the Creative Commons search, which it said links to millions of Web pages featuring the unconventional content licensing agreements. The new approach to sharing original work is being pushed by Creative Commons because the group believes the current patent process has become too inflexible and often awards too much protection to ideas that aren't genuinely unique.
http://news.com.com/Yahoo+adds+searc...3-5633649.html


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Noose tightens round necks of file- sharers worldwide

Canada Re-Writes Lawbook, Swedes Make First Arrest
Paul Hales:

The Canadian Government said it is setting about re- writing its copyright laws in order to "address the challenges and opportunities of the Internet".

In a joint statement yesterday, the Canadian ministers of industry and women said the government would shortly introduce legislation to implement the provisions of the 1996 World Intellectual Property Organization (WIPO) Treaties, clarify liability for Internet service Providers and facilitate the use of the Internet for educational and research Purposes.

Minister responsible for Status of Women Liza Frulla, issued a call to "strengthen the hand of our creators and cultural industries against the unauthorized use of their works on the Internet."

She said the government wanted to show, "how we intend to build a copyright framework for the 21st century."

The minister responsible for the status of men wasn’t able to comment because he doesn’t exist.

File-sharers on Canada have been happily downloading whatever they like from P2P networks in the knowledge that they had the protection of the law. Now, they’ll risk prosecution like the rest of us.

In a related development, a 27-year old man became the first Swede to be prosecuted for with illegally sharing files over the Internet, according to a Swedish paper, The Local. Investigators say they found him sharing a copy of a film called Hipp Hipp Hora from his PC.
http://www.theinquirer.net/?article=22130


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France

News Agency Sues Google, Testing Fair Use
Anick Jesdanun

In a case that could set limits on Internet search engines, the French news agency AFP is suing Google Inc. for pulling together photos and story excerpts from thousands of news Web sites.

Agence France-Presse said the "Google News" service infringes on AFP's copyrights by reproducing information from the Web sites of subscribers of the Paris-based news wholesaler.

The issues raised by the case have profound implications for the Internet, where anyone can be a publisher and Web journals, or blogs, are becoming more frequent destinations for seekers of news.

The lawsuit's outcome will likely hinge on whether Google can persuade the courts that Google News constitutes permissible "fair use" of copyright material. Legal scholars say Google could argue that it adds value by significantly improving the news-consuming experience without greatly harming AFP's ability to sell its service.

But in seeking at least $17.5 million in damages, AFP says Google adds little because its news site looks much like those of AFP subscribers, albeit one where software and not human editors determine the placement of stories on a page.

The U.S. District Court in Washington, D.C., where the lawsuit was filed Thursday, will ultimately have to balance search engines' desire to give consumers convenience, selling ads in the process, and copyright owners' rights to control their works.

"The story (of the Internet) from day one has been one of waves of liberalization followed by attempts at control," said Jonathan Zittrain, a Harvard law professor. "It's rightly up to the courts and the government to figure out where the lines should be drawn."

It's possible, though, for the courts to skirt key issues given Google's promise this week to remove the AFP items in question, though technically that's not something that can be done overnight.

AFP lawyer Joshua Kaufman said the lawsuit would nevertheless proceed because damage already has been done.

The Google News service, which debuted in 2002, scans some 4,500 news outlets and highlights the top stories under common categories such as world and sports.

Many stories carry a small image, or thumbnail, along with the headline and the first sentence or two. Visitors can click on the headline to read the full story at the source Web site.

Yahoo Inc. has a similar service, though it uses human editors and pays some news sources, including AFP and The Associated Press, for rights. (Google wouldn't comment on any similar financial arrangements.)

In a statement, Google spokesman Steve Langdon said Web sites can request removal though most "want to be included in Google News because they believe it is a benefit to them and their readers."

In fact, AFP's own Web site includes a "robots.txt" file that spurns search engines, essentially telling them to avoid indexing its news pages.

But the case is complicated by the fact that the stories come not directly from AFP but from its subscribers, some of which might want the rest of their sites indexed to generate ad-boosting referrals.

The fair use argument will likely draw upon a 2002 appeals court ruling that thumbnail images serve a different, transformative function as compared to full-size originals - and thus constitute fair use.

But Charles D. Ossola, who handled that appeal on behalf of the copyright holder, said that ruling may not apply to the use of text, given that summaries can be rewritten whereas images cannot for search purposes.

A 1985 Supreme Court ruling on a non-Internet copyright dispute found that small excerpts can constitute infringement if they represent the heart of the work. AFP argues that the headline and the first sentence of a story constitute such an essence.

"They capture the reader's attention and describe what the rest of the article is about," the lawsuit said.

AP spokesman Jack Stokes came out in AFP's support, issuing a statement that AP believes "intellectual property laws protect news. That protection is important to ensure that organizations such as the AP can afford to collect news."

That said, facts cannot be copyrighted, and Google may have a claim on such citations if they are mostly based on facts not expression, said Fred von Lohmann, an attorney with the Electronic Frontier Foundation, a civil liberties group in San Francisco.

Von Lohmann said a ruling against Google also could harm the free exchange of ideas on blogs, which often cite and link to news stories.

The AFP case is not the only lawsuit challenging a search engine's practices. A Web site that sells nude photos of women has sued Google, accusing it of distributing links and passwords. Several companies also have sued Google and others over the use of trademarks as keywords for triggering a rival's ads.

"They are becoming multimedia centers rather than simply indexing information for consumers," said Ossola, who represents Geico Corp. in one such trademark case against Google. "The argument of convenience and benefits to consumers only goes so far when it runs into what are the legitimate rights" of intellectual property owners.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Google Loses French Trademark Appeal, Ordered to Pay $100,300 in Damages to Two Companies
AP

A French appeals court upheld a ruling against Google's advertising policy in a decision published Wednesday, ordering the Internet search engine to pay euro75,000 (US$100,300) in damages to two companies whose trademarks it infringed.

The court in Versailles, west of Paris, found that Google Inc. was guilty of "trademark counterfeiting" and ordered it to pay the damages originally awarded to French travel companies Luteciel and Viaticum, as well as costs.

The companies' founder, Fabrice Dariot, filed the suit because Google users carrying out searches on the names of their registered trademarks including "Bourse des Vols" -- which means "Flights Marketplace" -- were offered ads for rival companies such as low-cost airline easyJet.

In October 2003, the lower court had ordered Google to stop showing rival 'sponsored links' in response to searches on Dariot's trademarks and later fined Google when it failed to comply in time.
http://biz.yahoo.com/ap/050316/franc...demarks_1.html


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Google Faces French Competition

President Jacques Chirac has told France's national library to draw up a plan to put European literary works on the Internet, rivalling a similar project by U.S.-based Web search engine Google.

Chirac gave the go-ahead for research into the project after Jean-Noel Jeanneney, who heads the national library, expressed concern that Google's plan to put books from some of the world's great libraries online would favour the English language.

Chirac asked Jeanneney and France's culture minister to look at ways "in which the collections of the great libraries in France and Europe could be made more widely and more quickly accessible by Internet", Chirac's office said in a statement on Wednesday.

Chirac would seek support among other European countries in the coming weeks for a bigger, coordinated push to get Europe's literary works online.

Jeanneney, who met Chirac on Wednesday, said last month Google's choice of works was likely to favour Anglo-Saxon ideas and that he wanted the European Union to balance this with its own programme and its own Internet search engines.

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

California-based Google 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 widely accessible. It aims to make money by attracting people to its Web site and to its advertisements.

Culture Minister Renaud Donnedieu de Vabres said the French move was not a direct challenge to Google's project. "It is simply the wish for a diversity of influence," he said.
http://uk.news.yahoo.com/050316/80/feem0.html


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Free Speech

Woman Cleared in Mass Obscene E-Mailings

A death penalty opponent who sent e-mails laced with obscenities and references to Adolf Hitler and Osama bin Laden to a pro-death- penalty Web site was not guilty of a crime, a judge ruled.

Police charged Rachel L. Riffee with misdemeanor electronic harassment after they traced to her two e-mails and three Web site postings sent to a pro-death penalty site run by Frederick A. Romano, the brother of a murder victim.

On Monday, Circuit Judge J. Barry Hughes acquitted Riffee, 34, of Sykesville, ruling that state law protects political speech. He said the Web site invited discussion, and a few e-mails do not constitute a pattern of harassment.

Prosecutor Jennifer L. Darby, who refused to read the communications in the courtroom, said Romano felt threatened by the vicious tone of the e-mails and postings.

But defense attorney Andrew M. Dansicker said Riffee did not know the communications expressing her strong anti-death penalty views would go to Romano himself, any more than someone sending a message to Microsoft would assume "Bill Gates would get it."

"They're angry, they're vulgar, they're curse words - and they're not directed at Mr. Romano," Dansicker said.

Romano's Web site focused on Steven H. Oken, who was executed last June for killing Romano's 20-year-old sister, Dawn M. Garvin, in 1987. Oken also was convicted of killing two other women during a 15-day spree.

The e-mails and postings were sent around the time of the execution.
http://hosted.ap.org/dynamic/stories...MPLATE=DEFAULT


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Holland

Occasionally Freedom Of Speech Can Prevail Over Copyright

Today, Attorney-General Verkade delivered his opinion regarding the Scientology case to the Dutch Supreme Court. In this case the Church of Scientology accuses Karin Spaink of copyright infringement for making parts of their course material available on her website. By publishing this material, Spaink wants to inspire a public debate about the nature of the cult.

According to his 82 page opinion, Verkade is of the opinion that under certain circumstances freedom of speech, as protected by art. 10 EDHR, prevails over copyright. To quote Verkade: "Although copyright resides under Article 1 of the First Protocol of EDHR and can therefore be regarded as a human right, this does not exempt copyright from being balanced against the right to freedom of information."

The opinion also contains essential remarks about the right to quote, especially with regard to the question of whether a work that is quoted from has been legally published. According to the Attorney-General it is not necessary for the author of the work to have given his consent to publication. In this particular case, making a work available to the public by a court library, as happened with the Fishman Affidavit, is sufficient for the work to have been legally published. Hence it may be quoted from by third parties.

If Supreme Court follows the advice of its Attorney-General, the ruling in appeal will stand. The Supreme Court will rule on July 8, 2005.
http://www.xs4all.nl/nieuws/bericht.php?id=625&taal=en


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First Swede Prosecuted For Sharing Files On Net

A man in Västerås has become the first Swede to be charged with illegally sharing files via the Internet. But prosecutors say that unless the case results in a prison sentence, other cases of web piracy might never get to court.

The 27-year old at the centre of the case is accused of having the film Hipp Hipp Hora on his computer, which he allowed others to download. If convicted, he could face up to two years imprisonment.

The case was brought after a tip off from Antipiratbyrån (APB), a lobby organization set up by the media industry to combat illegal downloading in Sweden. Since the man was reported APB has found itself in hot water, with an Internet company accusing the organization itself of illegally downloading films and games.

Uppsala prosecutor Katrin Rudström says that this is a vital test case, and that the result will have big implications for future prosecutions. She told Aftonbladet that if the case resulted only in a fine, it was unlikely that other file sharers would be prosecuted in the future. This was partly due, she said, to the fact that police would not have the right to demand information about which computers were sharing their files if the crime was only punishable by financial penalties.

“As these cases do not involve criminals, but instead quite ordinary people who share their files, any prison sentence would certainly be suspended,” Rudström said.

The case comes as Sweden’s legislators prepare to debate a new copyright law that would make it clearer that unauthorised downloading of copyrighted material is illegal. Yet Justice Minister Thomas Bodström has made it clear that enforcing the new law will not be a priority area for the police.

Meanwhile, the opposition Center Party has said that downloading should be allowed, and the law should focus on those who spread material rather than those who download it.

“It is, for example, a breach of copyright laws to copy a music book, but it is not illegal to receive or use the copied book,” said the party’s legal affairs spokesman, Johan Linander. “It should be no more complicated than that in the digital arena,” he added.

The Center Party will not be able to block the law on its own, although Linander said that he would argue his case when the centre-right alliance to which the party belongs meets in April.
http://www.thelocal.se/article.php?ID=1172


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Sweden To Introduce Tougher Download Laws

The Swedish government has proposed changes to the country's copyright law which would make it illegal to download, as well as distribute, music and films on the internet without the copyright owner's permission.

But justice minister Thomas Bodström said on Thursday that the tightened law was not intended to be used against individuals downloading material for their own private use.

"With this new law we want to fight against those who earn serious money by spreading copyright-protected material," he said.

"But the idea isn't that the police will charge into homes hunting teenagers who are sitting there downloading."

The government's 600-page proposal comes in the middle of a controversy over the actions of Sweden's anti-piracy organisation, Antipiratbyrån (APB), which last week raided an internet supplier, Bahnhof, and confiscated machines holding 450,000 sound files, 5,500 games and 1,800 films.

Thousands of people have now reported APB, which is an interest group for the film and computer games industries, to the Swedish Data Inspection Board. Among them are internet entrepreneur Jonas Birgersson and the founder of mp3 company Jens of Sweden, Jens Nylander, who say that the organisation has broken personal data laws by checking and registering "IP addresses", unique identifiers for every computer on the internet, before reporting downloaders to the police.

The Data Inspection Board says it will launch an investigation after Easter.

"I'll put the coffee on," said APB lawyer Henrik Pontén. "They're welcome. It's natural that they want to see what we're doing after the debate around this."

Pontén, who has been the subject of a hate campaign by disgruntled downloaders, may need to make extra coffee: Sweden's National Post and Telecom Agency has also said that it will look into whether APB has broken laws governing electronic communication.

Dagens Nyheter met three self-confessed downloaders who attempted to explain why "copyright is a meaningless word".

"If the copyright owner doesn't get paid, that's not my problem," said Ibi Botani.

"Music came before copyright. If I take milk from you, you don't have any milk left. But if I download a film, you still have the film. You haven't lost anything."

His friend Sara Andersson agreed.

"Technology has run away from the rules. The law has become irrelevant," she said.

Despite such opposition, justice minister Thomas Bodström said he believes the new law will be effective.

"You shouldn't underestimate people's attitude towards the law. The majority don't want to be criminals. Now we've sorted out the lack of clarity in the law, so ordinary people know what the deal is."

Bodström added that he hoped the industry would react by making it possible to download a song for ten kronor.

"Then you won't have to buy an expensive album in the record shop," he said.
http://www.thelocal.se/article.php?I...&date=20050317


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Bahnhof Blames APB Insider For Illegal Files
Alex Tanner

The illegal file-sharing case against Swedish ISP Bahnhof has taken a bizarre twist, with the company accusing Antipiratbyra (APB), Sweden's anti-piracy agency, of planting files on its servers.

The APB raided Bahnhof's offices earlier this month. After the raid the APB's lawyer Henrik Ponten admitted that the agency had used a paid infiltrator to gather the evidence.

However, Bahnhof has now completed its own internal investigation and has responded with claims that the infiltrator had himself conducted 68,000 uploads and downloads.

Bahnhof also claims that the infiltrator went so far as to purchase new hardware for the servers to ensure there was enough memory to store all the files.

"It's like handing out matches and petrol to a pyromaniac and then reporting him to the police when he burns a house down," said Bahnhof MD Jon Karlung.

The ISP has released copies of its log files to the media, which it is using to support its claims, and is considering reporting the matter to the police which could potentially see charges brought against the APB.

The APB is already being investigated by the Swedish Data Inspection Board and the National Post and Telecom Agency following accusations that it breached laws covering the protection of personal data and those governing electronic communication.
http://www.netimperative.com/2005/03...orruption/view


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Corporations pleased, people less so

India Alters Law on Drug Patents
Donald G. McNeil Jr.

India, a major source of inexpensive AIDS drugs, passed a new patent law yesterday that groups providing drugs to the world's poorest patients fear will choke off their supply of new treatments.

The new law, amending India's 1970 Patent Act, affects everything from electronics to software to medicines, and has been expected for years as a condition for India to join the World Trade Organization.

But because millions of poor people in India and elsewhere - including by some estimates half the AIDS patients in the Third World - rely on India's generic drug industry, lobbyists for multinational drug companies as well as activists fighting for cheap drugs had descended on New Delhi to try to influence the outcome.

The law, which passed by a voice vote in Parliament's upper house yesterday after days of wrangling over amendments in the lower house, was in the end not as restrictive as the drug activists had feared.

"It's very disappointing, but it could have been worse," said Daniel Berman, a coordinator of the global access campaign for the medical charity Doctors Without Borders. "All generics could have been removed from the market."

Instead, all the generic drugs already approved in India can still be sold, though sellers must now pay licensing fees. There are also provisions allowing companies that make generics to copy drugs in the future.

But there are relatively tough criteria for such copying, and activists predicted that prices for newly invented drugs will be much higher, because drug makers will have the same 20-year patent monopolies as they have in the West. As AIDS patients develop resistance to old drugs, new treatments will become less affordable, they said.

In addition, it is unclear whether makers of generic drugs in other countries, like Brazil, China and Thailand, will fill any increasing demand for cheaper medicines.

But India's governing Congress Party, which sponsored the bill, disputed the contention that prices would soar. "The government will have enormous powers to deal with any unusual price rise," said Commerce Minister Kamal Nath.

All Western countries grant "product patents" on new inventions. Since 1970, India has granted "process patents," which allow another inventor to patent the same product as long as it was created by a novel process. In pharmaceuticals, that has meant that a tiny tweak in the synthesis of a molecule yields a new patent. Several companies can produce the same drug, creating competition that drives down prices.

Before 1970, India's patent laws came from its colonial days, and it had some of the world's highest drug prices. Process patents on drugs, fertilizers and pesticides have extended life expectancy and ended regular famines.

In Africa, exports by Indian companies, especially Cipla and Ranbaxy Laboratories, helped drive the annual price of antiretroviral treatment down from $15,000 per patient a decade ago to about $200 now. They also simplified therapy by putting three AIDS drugs in one pill. Dr. Yusuf Hamied, Cipla's chairman, called the new law "a very sad day for India."

But some other Indian drug makers, along with multinational companies, praised it. The International Federation of Pharmaceutical Manufacturers and Associations, a Geneva-based lobbying group, called the law "a significant step" that would let India "take a leading role in global pharmaceutical research and development."

S. Ramakrishna, chief lobbyist for Pfizer India, a subsidiary of the world's largest drug maker, said the bill's passage abandoned "the utopian concept that every invention should be as free as air or water," according to The International Herald Tribune.

In the United States, Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, the lobbying organization for the American drug industry, said the new law would be "good for India and good for Indian patients," but cautioned that his group was "still measuring the impact on the overall bill of several last- minute amendments."

Some multinationals had refused to invest in India without stronger patent protection, and Indian companies that do original research were also eager for it.

But Mr. Berman said a "mailbox" created by the government two years ago in which drug makers could deposit patents they hoped to file when the law was amended had 1,500 proposals from Indian companies - and 7,000 from foreign ones, suggesting the new law would benefit foreign companies more.

Under the new law, a maker of generics can apply to copy a patented drug, but only after it has been marketed for three years. In addition, the patent owner can object.

Also, the generic's maker must pay a "reasonable" royalty, although the law does not define reasonable. Two years ago, Mr. Berman noted, the London-based company GlaxoSmithKline demanded 40 percent of the sales proceeds of an AIDS drug it licensed to a South African company. (Under pressure from South African regulators and activists, it later licensed it to three rival companies for only 5 percent.)

In 2003, the Swiss drug maker Novartis forced Indian competitors to stop making generic versions of its leukemia drug Glivec, which the Indian companies sold for $2,700 a year. Novartis then priced its version at $27,000 a year, while giving free treatment to a few poor patients.

If a drug is desperately needed, the new law allows the government to declare an emergency and cancel its patent. But Mr. Berman said India had never declared such an emergency, and for years resisted admitting that it had an AIDS problem.

Most governments, including the United States, have such patent powers, though they use them sparingly. When the Bush administration thought it needed huge supplies of the expensive antibiotic Cipro during the 2001 anthrax scare, it threatened to cancel Bayer's patent if the company did not cut its price. Other countries permit generic versions of AIDS drugs, but none have been as aggressive as Indian companies about getting them approved by the World Health Organization and exporting them. Generics made by companies in Brazil go mostly to Brazilians. China makes generics, but also has problems with counterfeiting and, like India, is under pressure to comply with W.T.O. rules.

The Indian bill was amended to prevent "evergreening," in which patent owners try to get a new 20-year monopoly by patenting a variant on the same molecule. To win a new patent, the applicant will have to prove the variant works better.

An editorial in The Business Standard of India said the law is "better put together than seemed possible a month or two ago."

But Loon Gangte, who runs a program in India for people with AIDS, criticized the new law, saying: "I am using generic AIDS drugs because I can afford the price. Since the bill has passed, when I need new drugs, I won't be able to afford them. I could become one of the casualties."
http://www.wilmingtonstar.com/apps/p...386/1004/LOCAL


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Microsoft Criticized For 'IPv6-like' Patent
Ingrid Marson

An antipatent organization has criticized Microsoft for filing a patent that's allegedly similar to IPv6, the next-generation Internet Protocol.

The Public Patent Foundation, or Pubpat, an organization that works to protect the public from damage caused by the patent system, claims that a patent that Microsoft filed a few years ago is invalid because it failed to disclose prior work done by the Internet Engineering Task Force (IETF).

The U.S. patent, number 6101499--titled "Method and computer program product for automatically generating an Internet Protocol (IP) address"-- was issued to Microsoft in 2000 after being filed in 1998.

Daniel Ravicher, the executive director of Pubpat, said that although he is not worried that Microsoft will assert its right over the patent, this may stop companies from using IPv6.

"Microsoft won't ever assert this patent--they know it's worthless," Ravicher said. "But there will still be people who are afraid of it--if someone has a gun and promises not to shoot it, it's still scary."

"This is yet another example of how patents can kill or inhibit standards," he said.

Pubpat was made aware of the patent when it was contacted by a "few large companies" that had been told about it by Microsoft.

Ravicher claims that a "significant number" of prior-art references were not disclosed to the U.S. Patent Office when Microsoft applied for the patent. These include documents from the IPv6 committee of the IETF. The Microsoft employees named as the inventors of the patent were on the IPv6 committee, according to Ravicher.

Because Microsoft has allegedly not disclosed the prior-art references to the patent office, the patent may not be enforceable.

Pubpat is urging Microsoft to throw out the patent. "The right thing for Microsoft to do is to abandon the patent and acknowledge that it should never have been granted in the first place," Ravicher said.

Microsoft was not available for comment.

The news comes only a week after Microsoft demanded reform of the U.S. patent system. Brad Smith, general counsel of the company, said at the time that there needed to be an improvement in patent quality.
http://news.com.com/Microsoft+critic...3-5632062.html


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Australia

Closing Arguments Begin in Kazaa Trial
Meraiah Foley

The owners of global file-sharing company Kazaa told a court Wednesday they should not be held liable for copyright infringements by network users because the company cannot control how the software is used after it is downloaded.

A group of Australian record labels is suing the makers of Kazaa, Sharman Networks Ltd., and the company's directors in the Federal Court in Sydney for copyright infringements by the network's estimated 100 million members worldwide.

The record companies claim Kazaa users freely download up to 3 billion songs and music files each month, costing the industry millions of dollars in unpaid royalties.

In closing arguments Wednesday, lawyers for Sharman Networks acknowledged that some Kazaa users engage in illegal copying, but said the software's creators could not be held responsible.

Lawyer Tony Meagher told the court that once Kazaa was downloaded onto users' computers, the company had "no power to control" its use - just as the makers of photocopiers and video recorders could not control or be held responsible for illegal copying on their machines.

As a result, Meagher said, the main issue in the case was whether Kazaa, in effect, authorized its users to download copyright protected material.

"We tell these users in our Web site and we tell them in our license that they cannot use this (software) for infringing copyright," Meagher told Judge Murray Wilcox.

By consenting to the terms of the license agreement, the users were exempting Kazaa's owners from liability for copyright infringement, Meagher said.

Grinning, the judge interrupted Meagher's submission to ask if it was "unduly cynical" to assume that most people don't read software licensing agreements.

"One is entitled to use one's general experience that most people don't read through legal documents unless they regard them as critically important," Wilcox said.

Meagher responded that users were required to confirm that they had read the license agreements before using Kazaa to download any materials, copyright- protected or otherwise.

Lawyers for the record industry argue that Kazaa not only enables but encourages users to infringe copyright.

The lawyers also said the company collects information about its users that would enable them to control their use of the software.

Record industry lawyer Tony Bannon told the court that Sharman Networks monitors Kazaa users and sells information about them to advertisers, saying the company's claim that it had no control over the software was "completely mind boggling."

The record companies want Sharman Networks and its directors declared liable for copyright breach and loss of earnings in the civil case.

If they succeed, a case next year would likely set the damages the owners have to pay.

The trial, which is being heard before a judge with no jury, is expected to wrap up late Wednesday. A verdict is expected within six weeks.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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US After Aussie On Piracy Charges
Simon Hayes

US authorities have moved a step closer to extraditing Australian Hew Raymond Griffiths over his alleged leadership of the infamous Drink or Die internet piracy ring.

The Federal Court has ruled Mr Griffiths "eligible for surrender" to the US to face charges of criminal copyright violation.

He now has to decide whether he will seek leave to appeal to the High Court

Should the extradition proceed, Mr Griffiths – who arrived in Australia from Britain as a child and never took Australian citizenship – could face eventual deportation to Britain.

Mr Griffiths, 42, of Berkeley Vale on the NSW Central Coast, was indicted by a grand jury in the US state of Virginia in 2003 over allegations he headed a "highly structured criminal organisation devoted to the unauthorised reproduction of copyrighted software over the internet".

US authorities alleged Drink or Die was responsible for pirating software worth $50 million, and that Mr Griffiths was a member, and later the leader, of the organisation.

After a series of police raids in 2001 under the name Operation Buccaneer, the organisation was dismantled and many of its members charged.

In the US 20 defendants have been convicted, and prosecutions have also taken place in Finland, the UK, Norway and Sweden.

The last two Britons charged were convicted at the Old Bailey last week and are awaiting sentencing.

Sydney legal sources said extradition would be "unusual", since all the other defendants faced trial in their home countries.

Mr Griffiths's solicitor, Antony Townsden, earlier described his client as "a man of no means whatsoever" who would have difficulty representing himself in a US court.

The indictment – filed by the US Attorney's Office – claims Mr Griffiths ran the organisation, controlled membership and arranged to reward high-performing members with computer parts.

In court documents, US authorities alleged Mr Griffiths taunted law enforcement in an online interview, claiming: "I cannot be busted, I have no warez here."

The indictment alleges that authorities caught up with him after he asked another member, US citizen James Cudney (who later became a prosecution witness in the US cases), to deliver computer parts to his home address.
http://australianit.news.com.au/arti...-15319,00.html


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BitTorrent Case To Test FTA Laws
Andrew Colley

THE music industry's legal assault on BitTorrent file sharing is set to provide the first major test of new laws designed to limit ISPs' liability for copyright breaches carried out by their customers.

In the Federal Magistrates Court in Sydney, lawyers representing ISP Swiftel argued that the new laws would play a key role in defending the ISP from recent allegations of copyright infringement.

A consortium of music industry interests, including Warner Music Australia, is suing the Swiftel for copyright infringement for hosting web sites that support the file sharing platform.

Preliminary hearings in the case follow raids by industry copyright enforcer Music Industry Piracy Investigations (MIPI) on Swiftel last week. MIPI secured "Anton Piller" orders from the Federal Magistrates Court in order to obtain evidence to support its allegations.

Barrister Stephen Burley, under instruction from Clayton Utz, asked Federal Magistrate Rolf Driver to move the case to the Federal Court in order to deal with complex legal issues that the new provisions threatened to raise.

Mr Burley said that there was "a very real danger that this case is about something broader and we don't know what that is".

In handing down his findings, Justice Driver said that the case may require interpretation of the new copyright legislation, but said that the Magistrates Court shouldn't "shy away" testing new areas of law.

Justice Driver declined the application, leaving the Magistrates Court free to establish legal precedents based on the new legislation.

The new laws were introduced as part of the US Free Trade Agreement. Clayton Utz solicitor John Collins said the case would provide a partial test of the legislation.

Mr Collins said the issue had been touched on by the music industry's law suit against the operators of MP3 enthusiast site mp3s4free.net. However, he said the arguments that surfaced in the case were limited to questions of damages.

"If these people want to make a test case we're very confident of the outcome and we believe we're in the right court for the legislation to be tested," MIPI general manager Michael Speck said.

Mr Collins said Clayton Utz was happy with the outcome of the hearing.

He said the interlocutory regime placed on Swiftel was far less onerous following today's hearing.

Justice Driver ordered material seized in the raids to be returned to Clayton Utz within 28 days and that it was only to be used to discover new respondents in the case.
http://australianit.news.com.au/arti...-15319,00.html


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U.K. Man Threatened With BitTorrent Lawsuit
Graeme Wearden

A British man who runs a Web site that allegedly once supported the BitTorrent peer-to-peer application is facing the threat of being sued by four major U.S. movie studios.

Kevin Reid has been accused of copyright infringement by Paramount Pictures, Twentieth Century Fox, Universal City Studios and Warner Bros. The studios filed a lawsuit in a U.S. court earlier this month claiming that copyright-protected films have been uploaded and downloaded from bds- palace.co.uk, which Reid runs.

Reid has not yet been formally named as a defendant in the lawsuit. However, lawyers representing the four labels have served him with legal papers asking him to reach a settlement. Reid, though, said he plans to fight the legal action.

"This complaint is entirely without foundation. Mr. Reid has behaved entirely properly in running his Web site," said David Harris, an IT and intellectual property lawyer at UKITLaw.com, who is representing Reid and describes the lawsuit as "cynical and premature."

"BitTorrent is an innovative and lawful technology, and while some visitors to the site may have engaged in copyright infringement, Mr. Reid had no role in this. His site did no more than provide a forum for the public to discuss movies and current events relating to films. Mr. Reid deplores copyright infringement, and when made aware of unlawful sharing he immediately removed torrents," Harris added.

With BitTorrent, a single file is broken up into many small fragments which are distributed among computers. To download a file, a person first downloads a "torrent" file which contains a link to a tracker server, which has a log of users who have copies of the relevant BitTorrent fragments on their PCs.

Torrent files may have been shared at bds-palace.co.uk, but Reid apparently removed files that could have been unlawful. Supporters of BitTorrent argue that tracker servers don't violate copyright law as they do not host content themselves, in the same way that a search engine merely points to information.

Reid is at least the second British person to be hit by a BitTorrent-related lawsuit this month. The Register, an IT news site, reported earlier this week that these four music studios also had served a lawsuit against Alexander Hanff, who is involved with a site that the movie companies claim is a BitTorrent tracker server that has been used to distribute copyright-protected films.

Some people who ran BitTorrent tracker servers have closed them down in the face of legal threats from the movie industry, but Reid apparently plans to instead fight back.

"The movie studios are not interested in preventing copyright infringement so much as killing an innovative technology used primarily lawfully but which frightens them because of its potential for abuse," Harris said.

"The studios could have chosen to work with our client and assist him in policing the site; instead they have chosen to posture with meritless litigation," Harris said. "Our client will fight this case aggressively and prevail."
http://news.com.com/U.K.+man+threate...3-5626029.html


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Firms Facing File Sharing Probes
Dan Ilett

Employers whose staff run peer-to-peer applications over their corporate networks could soon face investigation by legal authorities looking for illegal file sharers in UK companies, according to IT services and telecommunications firm Energis.

Security experts at Energis have noted an increase in the amount of network scanning over the Internet and say they have started to see the likes of the FBI looking for people copying movies and music online from work.

"The FBI was definitely one of them," said Malcolm Seagrave, head of security strategy for Energis. "We started looking at bandwidth saturation. It was people scanning trying to find out who is downloading all the stuff illegally. They’ve started investigating. I suspect that companies are going to get hit soon."

After seeing this, Energis started to carry out its own networ"What it means is you have the choice of suing the employer, who has lots of money, or the employee. Chances are you will choose the employer.""What it means is you have the choice of suing the employer, who has lots of money, or the employee. Chances are you will choose the employer."k scanning. It found one company had as much of 33 percent of its bandwidth consumed by file sharing.

As well as the FBI, the Recording Industry Association of America and an organisation called MediaDefender were also scanning networks, Segrave claimed. "When we spoke to the FBI they said they were trying to find out where the legal liability lay. It was all about the legality and breach of copyright," he said.

Employers are often unaware that their staff use file sharing programs, but they could soon given a nasty shock if organisations like the RIAA start to sue them for copyright issues. However, employees could also be in for a rough time.

"The potential vicarious employer liability does not get the employee off the hook," said Mark Smith, solicitor for Olswang. "What it means is you have the choice of suing the employer, who has lots of money, or the employee. Chances are you will choose the employer."

Smith also warned that peer-to-peer programs can spread spyware.

"[It's] a massive source of spyware and that passes on all sorts of risks," Smith said. "Peer-to-peer can be a lot of stuff, but I'm surprised that the FBI is involved."

Copyright infringement is typically a civil offence, although in some parts of the world it can result in criminal penalties. In May 2003, James E. Farnan, deputy assistant director of the FBI's cyber division, told a US congressional committee that the FBI was "working closely with private industry" on the intellectual property implications of peer-to-peer networks.

Last month the RIAA filed law suits against 11 people accused of illegal file sharing on university networks. They were said to have used the programs KaZaa, eDonkey and Grokster.

The FBI was unable to respond in time for the publication of this article.
http://news.zdnet.co.uk/internet/sec...9192583,00.htm


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3D Printer To Churn Out Copies Of Itself
Celeste Biever

A self-replicating 3D printer that spawns new, improved versions of itself is in development at the University of Bath in the UK.

The "self replicating rapid prototyper" or RepRap could vastly reduce the cost of 3D printers, paving the way for a future where broken objects and spare parts are simply "re-printed" at home. New and unique objects could also be created.

3D printing - also known as "rapid prototyping" - transforms a blueprint on a computer into a real object by building up a succession of layers. The material is bonded by either fusing it with a laser or by using alternating layers of glue. When it first emerged in the mid-1990s, futurists predicted that there would be a 3D printer in every home.

But they currently cost $25,000 (£13,000) and so have not caught on as a household item, says Terry Wohlers, an analyst at Wohlers Associates, a rapid prototyping consulting firm in Fort Collins, Colorado, US. Instead, they are used by industry to develop parts for devices such as aircraft engines, spaceships and hearing aids.

Plummeting prices

Now Adrian Bowyer hopes to change that by making the first 3D printer capable of fabricating copies of itself, as well as a wealth of everyday objects. He reasons that prices would plummet to around $500 if every machine was capable of building hundreds more at no cost beyond that of the raw materials.

Better still, the machines could evolve to be more efficient and develop new capabilities, says Bowyer. Once he has the software to guide the self-replicating process, he plans to make it freely available online, allowing users to contribute improvements, just like the open-source Linux computer operating system, he says.

Bowyer dreamt up the idea of the RepRap in February 2004. But now he has he figured out how to print conducting materials in three dimensions without using a laser, a key step if the machine is ever to make copies of itself.

"We are very constrained in our access to materials," he explains. They must be sturdy enough to make up the body of the machine and yet simple enough to be fabricated entirely by the machine. "We have to avoid any design needing lasers and high precision measuring systems," he explains.

Tepid metal

3D printers normally build circuits by fusing together a powdered metal with a laser. But Bowyer plans instead on using a low-melting point metal alloy of bismuth, lead, tin and cadmium that can be squirted from a heated syringe to form circuits.

Bowyer has already produced an electronic circuit by squirting the alloy inside a plastic autonomous robot, which itself was created using a commercial 3D printer. Because the heated syringe he used is very similar to the nozzle that deposits plastic layers in the printer, he envisions squirting both plastic and metal from the same nozzle in future self-replicating machines.

The machine need not be capable of assembling itself, he says, only producing all the necessary parts, with the exception of the microprocessors and the lubricating grease. These could later be added and the various parts clipped together, Bowyer says. "People are quite capable of assembling things if they want to," he adds. "I am not interested in self-assembly, just self-copying."

Whether such a machine would work has experts sharply divided. "I think Dr Bowyer's idea is very plausible," says Matt Moses, a consultant who has built a small self-replicating robot and advises NASA on research into self-replicating machines for space.

But Wohlers disagrees: "[Bowyer] is referring to something that does not exist and has not been demonstrated. Will it develop in the future? Unlikely."

He adds that even if all its components could be replicated by the machine, the concept does not make economic sense. "Many of the components could be produced much faster and cheaper by other machines," he says.
http://www.newscientist.com/article.ns?id=dn7165


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To Cut Online Chatter, Apple Goes to Court
John Markoff

In the fall of 1981, Paul Freiberger, a reporter for the weekly computer industry newspaper InfoWorld, was preparing to run a story that Apple Computer was engaged in two secret development projects. But first, he listened as company co-founder Steven P. Jobs shouted at him over the phone that revealing the code names of products would offer a crucial advantage to the computer maker's Japanese competitors.

In the end, the paper got its scoop - Apple's new projects were called the Lisa and the Macintosh - and the company still managed to handily trounce its competitors.

During the ensuing 24 years, the relationship between the press and Mr. Jobs has remained remarkably consistent: while fostering intense secrecy both at Apple and at Next Inc., the company he sold to Apple in 1996, he has at the same time become a master of orchestrating new product buzz.

Now, however, increasingly concerned about losing control of his product story in the face of the Internet's echo chamber, Mr. Jobs has chosen to sue several sites that traffic in Apple news in an effort to determine if his employees are leaking product information.

Because the lawsuits could potentially force courts to define what a journalist is and to broaden trade secret protection for corporations, Mr. Jobs has been bitterly opposed by public interest groups and some reporters, who cite Apple's status as an underdog in the computer industry and the company's role in creating new avenues for electronic media.

But Mr. Jobs's decision to go after the operators of the small Internet fan sites is not surprising to many Silicon Valley veterans, Apple enthusiasts and former executives of the quirky computer-maker, which is based in Cupertino, Calif.

He has always had a reputation for being iconoclastic and confrontational. As a result, despite Apple's tradition of positioning the Macintosh as "the computer for the rest of us," some Apple watchers said the move could actually serve to strengthen Mr. Jobs's marketing magic by deepening the secrecy - and thus the buzz - he has always tried to maintain around the company's future products.

"He's a master at creating the mystique," said Regis McKenna, a Silicon Valley marketing executive who began working with Mr. Jobs shortly after Apple was founded. "His problem is how to continue to innovate out of the limelight."

In the first of the Apple cases, a Santa Clara County Superior Court judge ruled earlier this month that three operators of independent Web sites devoted to publishing information about Apple must divulge their confidential sources to the company. Apple said that it was seeking the source of information it claims is protected under trade secret law. That ruling is being appealed by lawyers for the Electronic Frontier Foundation, which is representing the three, who had argued they should be protected as reporters.

In the second case, Apple charged Nicholas M. Ciarelli, the Harvard freshman who operates the Web site Think Secret, with illegally attempting to induce Apple employees to violate their confidentiality agreements with the company.

Mr. Jobs, who refused comment for this article, has long turned conventional product announcements into part of the Apple mystique. Since his return to Apple in 1997, he has often unveiled new hardware and software while sitting at a computer keyboard much like a performing concert pianist in front of cheering crowds. "Steve might as well have invented the term 'event marketing,' " said Stewart Alsop, a former Silicon Valley editor and conference promoter who is now a venture partner at New Enterprise Associates. "You focus everything on a moment in time and then persuade everyone to anticipate that moment."

Apple's marketing wizard has deftly used speculation about his next commercial move as an essential component of each new product introduction. The company's customers spend countless hours chattering about whether the company's next new portable computer will include the G5 chip or if an Apple cellphone or media center is just over the horizon. And while Mr. Jobs has fired and even sued his own employees in the past for leaking information, the first news about some Apple introduction has frequently appeared in a news account, on a Web site or, occasionally, in business newspapers in China or Taiwan where the company's products are manufactured.

In the personal computer industry, where Mr. Jobs's company still has a tiny market share, his ability to attract a disproportionate share of media attention has long irritated his competitors. Once, shortly after Mr. Jobs introduced a new version of his iMac consumer PC, his rival, Bill Gates of Microsoft, groused that Apple's innovation was confined to colored plastic.

One measure of Mr. Jobs's effectiveness as a company evangelist is the Web traffic on Think Secret, the Apple rumor site run by Mr. Ciarelli since 1998. During periods when Apple has product introductions, Mr. Ciarelli said that his site receives as many as five million page views a month. That is a level of Internet popularity roughly equal to that of a typical suburban newspaper.

To be sure, the strategy of tight secrecy and surprise was not always an Apple trademark. Between 1985 and 1997, while Mr. Jobs was in exile from the computer maker he founded in 1977, many reporters in Silicon Valley would laughingly refer to Apple as a "ship that leaks from the top."

Indeed, during the late 1980's and early 1990's many of the company's executives seemed to enjoy playing what has long been Silicon Valley's favorite spectator sport - sharing gossip about what the "Next Big Thing" from Apple might be.

Raines Cohen, who worked as a reporter at the MacWeek trade paper, recalled how the staff of the paper would occasionally send "Mac-the-Knife" coffee mugs to random Apple executives. The rationale was that having so many mugs spread throughout the office would make it harder for Apple to figure out which employees were actually talking to the publication.

A co-founder of the Berkeley Macintosh Users' Group, Mr. Cohen said he believed that Apple's fans would be unlikely to be driven away from the company by Mr. Jobs's heightened secrecy obsession. The company's critics were more likely to be computer users who do not use Apple products, such as devotees of the freely developed Linux operating system.

"I've seen a backlash, but it's coming from the open-source community that will criticize Apple at the drop of at hat," he said.

Despite stringent secrecy prohibitions at Apple and an insistence that only a handful of the company's executives speak to the press or public, Mr. Jobs seems to have done a reasonable good job of maintaining employee morale. Several Apple employees, who spoke on condition of anonymity, said that Mr. Jobs was good at convincing his workers of the need for the computer maker to speak with one voice.

The strategy makes sense to many former Apple employees as well. "He's in the fashion business," said Randy Komisar, a former Apple executive. "He has to have a new hit every quarter or he goes out of business. The speculation is worth tens of millions of dollars of public relations."

Mr. Jobs's unique approach to marketing was highlighted last week at the Cellular Telecommunications and Internet Association meeting in New Orleans, when the Motorola Corporation attempted to explain to reporters why its cellphone version of the iPod had not been introduced at a European trade show as expected.

"The first thing you're seeing here is a merger of two different industries with different ideas of launching products," Ron G. Garriques, president of Motorola's mobile phone division, told analysts and reporters at a news conference, according to Reuters. "Steve's perspective is that you launch a product on Sunday and sell it on Monday."

Moreover, nobody expects Mr. Jobs's marketing machine to unravel any time soon. Indeed, the MacWorld exhibitions held in San Francisco in January remain a highly anticipated event for the Macintosh faithful, where as many as 5,000 fans engage in an annual ritual of adulation for the computer maker and its co-founder.

Mystery, anticipation and surprise all lie at the heart of the events, and Mr. Jobs will occasionally tease his audience, pretending to walk off stage, before returning and saying, "Oh! One more thing ..." and then unveiling some new product.

"It's a classic part of a Jobs keynote," said Steven Levy, author of "Insanely Great: The Life and Times of Macintosh, the Computer That Changed Everything" (Penguin, 2000) and a forthcoming book on Apple's iPod. "It's a treat. It's not as much fun for people if they know what it is."
http://www.nytimes.com/2005/03/21/te...y/21apple.html


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Apple Disables iTunes Hack
John Borland

Apple Computer has closed a security hole that allowed an underground program to tap into its iTunes Music Store and purchase songs stripped of antipiracy protections.

The PyMusique software, created by a trio of independent programmers online, emerged last week as a copy protection-free back door into the popular iTunes store. One of the creators was Jon Johansen, the Norwegian programmer responsible for releasing DVD-copying software in 1999.

Apple released a statement Monday saying the problem had been fixed, and that some iTunes customers would need to upgrade their software.

"The security hole in the iTunes Music Store which was recently exploited has been closed, and as a consequence the iTunes Music Store will now sell music only to customers using iTunes version 4.7," the company said in a statement.

Like all other digital music companies, Apple has been dealing continually with hackers intent on finding ways around the antipiracy protections that are added to songs as they are sold online. The company has upgraded its iTunes software several times to block unauthorized programs' access.

Johansen has been one of the most persistent of those programmers, releasing several tools that have helped others tap into the inner workings of the iTunes software, and even remove the copy protections.

PyMusique itself was the creation of several different programmers, including 17-year-old Pennsylvania high school student Cody Brocious, who last week said he was simply trying to create a way for Linux-based computers to use the iTunes store.

A test of PyMusique on Monday morning showed that it was still able to preview songs in the iTunes music store, but no longer able to purchase music.

An Apple spokeswoman declined to comment on whether the company is considering legal action on the issue.

Only about 15 percent of iTunes users would be affected by the need to upgrade to the latest version of the software, the company said in its statement.
http://news.com.com/Apple+disables+i...3-5628616.html


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He’s back

'DVD Jon' Reopens iTunes Back Door
John Borland

A group of underground programmers has posted code online they say will reopen a back door in Apple Computer's iTunes store, allowing Linux computer users to purchase music free of copy protection.

The release comes just a day after Apple blocked a previous version of the program, called PyMusique, in part by requiring all iTunes customers to use the latest version of Apple's software.

In a blog posting, Norwegian programmer Jon Johansen, who was previously responsible for releasing software used to copy DVDs online, said he had been successful at reverse engineering the latest iTunes encryption.

Cody Brocious, a Pennsylvania high school student working with Johansen, said they saw the project as "necessary for the Linux community," despite Apple's opposition.

The programmers' work has been one of the most persistent projects targeting Apple, whose iPod and iTunes Music Store have drawn consistent attacks and experiments by people eager to extend the capability of the products, or simply disarm copy protection.

The cat-and-mouse response is a familiar one in the technology world, as programmers have often sought to write software compatible with larger or more popular applications. Instant messaging companies such as America Online, Yahoo, Microsoft and Trillian have long feuded, blocking and reopening access to each other's software.

The PyMusique programmers say they are primarily interested in allowing people using Linux computers to purchase music from the iTunes store, explaining their goals in a blog posting online. Their software requires users to have an iTunes account and pay the ordinary price for music.

They say they weren't aiming at creating a tool for stripping iTunes copy-protection off songs. However, Apple's system adds the layer of copy- protection inside the iTunes software itself, and so they didn't need to add it in their own version, they said.

Apple's software already allows customers to create an unprotected version of a song, by burning an iTunes purchase to a CD. That file can be ripped into an ordinary MP3.

While Apple has made no public legal threats against the programmers, the iTunes terms of service bars the use of any unauthorized software to access the store. Copyright lawyers have previously said that the PyMusique system, which evades Apple's intention to wrap all purchases in copy protection, may well cross legal lines.

"The work I do is completely legal in my country," Johansen said in an e-mail interview. "Of course, I know very well that not doing anything illegal doesn't mean you won't be prosecuted (or) sued."

Johansen was prosecuted in Norway for releasing the DeCSS code in 1999, but was ultimately cleared of charges.

An Apple representative could not immediately be reached for comment.

Brocious said the updated version of PyMusique would only be available for Linux, and that the programmers would not make a Windows version this time.
http://news.com.com/DVD+Jon+reopens+...3-5630703.html


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U.S. Art-House Movie Chain To Be First With Sony Digital Projectors
Saul Hansell

Landmark Theaters, the U.S. art-house chain controlled by Mark Cuban and Todd Wagner, will become the first chain to install a generation of high-quality digital projectors developed by Sony that show movies at twice the resolution of previous digital projectors.

Landmark will buy six projectors when they become available in July and over the next few years will install others in all 58 of its theaters, Cuban said.

Hollywood has been discussing the use of digital projectors, which show movies without using film, for several years, but fewer than 100 are now used in theaters to show full-length features.

Big questions remain both about the projectors' technical merits and, more important, about who would pay for them. The main advantage of digital projection is the potential to save movie studios the expense of copying movies on film, which can cost more than $1,000 a print. Theater owners are waiting to see if the studios will find a way to subsidize the cost of the projectors, which can be $100,000 each when the costs of the other needed hardware and software are included.

Landmark, however, chose to pay for the projectors itself, largely because it is building a business model different from that of most theater chains. Cuban said Landmark was paying more than $100,000 for each projector and related equipment, about double the cost of lower-resolution digital projectors.

Cuban and Wagner, who together created Broadcast.com, an Internet media site that they sold to Yahoo for about $6 billion in 2001, are building a series of companies related to independent film and high-definition television. In addition to Landmark, they control HDNet, a cable network devoted to high-definition programming, and several companies involved in producing and distributing films.

Cuban, who also owns the Dallas Mavericks basketball team, said the projectors would give his theaters flexibility to show a broader variety of programming, including broadcasts of live events like concerts and sports events. Moreover, digital projection ability will allow Landmark to show works by independent filmmakers who are starting to use the inexpensive high- definition cameras coming to the market.

Landmark chose the new Sony model because it can display images at a resolution of 4096 by 2160 pixels.

Cuban said it took a trained eye and a seat close to the screen to see the difference between the types of projectors, but he said he felt that the new projectors were worth the investment.

Cuban said Landmark was paying more than $100,000 for each projector and related equipment, about double the cost of lower-resolution digital projectors.

Landmark's announcement raised eyebrows among digital cinema specialists, who noted that Sony's technology was under development and that the shipping of the projectors had been delayed several times.
http://www.iht.com/articles/2005/03/...ness/sony.html


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As Sony Wobbles, Samsung Rises
James Brooke and Saul Hansell

Korean electronics firm becomes the new 'factory of ideas'

In 1997, the year Howard Stringer joined Sony, Japan's premium electronics company took little notice of Samsung Electronics, a South Korean television maker fighting a life or death battle to survive the Asian currency crisis.

Less than a decade later, Samsung has twice the market capitalization of Sony, which this week named Stringer as its new chairman.

Samsung also is no longer Sony's only rival. Apple Computer now dominates the market for portable music players. Silicon Valley companies have led the way in digital gadgets like the PalmOne personal organizers and TiVo's digital video recorders.

Sony is even facing strong competition from Eastman Kodak and Canon for digital cameras, a product category it invented.

Samsung has become what Sony could once claim - the competitor with both the breadth of products and the appeal of a premium brand.

This rapid reversal of fortunes illustrates the highly competitive world of consumer electronics that Stringer, a media man, is entering.

Complacency and coasting on best-selling products have contributed to a nearly 75 percent decline in Sony's stock value since its peak on March 1, 2000.

The invincible "factory of ideas" founded almost six decades ago by Akio Morita, the company that brought the world the transistor radio, the Walkman and the Trinitron television tube, seems to have lost its way.

"Samsung is now the anti-Sony," George Gilder, a visiting American technology analyst, said in an interview in Tokyo on Wednesday. "Sony is layered with bureaucracy," he added.

Samsung, by contrast, has kept a lean corporate structure, with authority increasingly delegated to front-line managers around the world, and almost a quarter of the far-flung staff of 88,000 dedicated to research and development.

But in the boardroom purge Monday, Sony demoted the one engineer credited with developing a new, world-beating product line, the PlayStation game consoles.

Ken Kutaragi remains chief executive of Sony Computer Entertainment, but he loses supervision of Sony's consumer electronics and semiconductor business just as it is preparing the Cell Chip, a superchip that is to run the next generation of game machines and also high-definition televisions. With the hand-held PlayStation Portable selling well since it was released here in December, the next PlayStation is scheduled to come out next year, in time to compete with a new Xbox console by Microsoft and a new console by Nintendo.

In the past three years, Sony's electronics division has dragged down company profit. With the division forecasting a loss for 2004, Sony is expecting about $1 billion in profit for the year ending in March, about 1.5 percent of revenue of about $69 billion. By contrast, Samsung, in the year that ended in December, had $10 billion in net income on sales of $52 billion.

A high profit allows Samsung to invest billions in research and development, maintaining 15 laboratory complexes around the world.

"Last year we spent $7 billion in capital spending, the largest for any information technology company in the world," Chu Woo Sik, a spokesman for Samsung Electronics, said by telephone from Seoul. This year, Samsung Electronics, the world's largest maker of memory chips, will invest $10 billion.

Samsung also has a huge capacity to build raw components like memory chips and display panels, lowering production costs.

Samsung was once a back-of-the-store brand with bulky televisions and boom boxes. After the Asian currency crisis, Samsung upgraded its product lines to compete directly with Sony for the premium market, leaving cheaper electronic goods to new companies in China. After spending $3 billion a year in advertising, including extensive Olympics sponsorships, Samsung's $12.6 billion brand value now rivals Sony's, according to Interbrand, the brand consultancy.

Samsung is such a leader in flat screens that Sony swallowed its pride last year and joined Samsung in building a huge factory in South Korea.

With the price of panels for the screens quite volatile, executives of both companies said the deal helped reduce the risk.

Sony, for its part, had clung too long to its innovative Trinitron picture tube technology, and it paid the price at Christmas.

In the last quarter of 2004, Sony's television sales rose 5 percent, but profit fell 75 percent from a year earlier. No longer able to command the premium prices associated with proprietary technology, Sony increasingly competes with high-volume, low-cost producers.

On Tuesday, Stringer met with Japanese reporters and vowed that Sony would be cool again.

But on Ginza, Japan's bellwether shopping street, the cool store was not Sony's showcase building. It was the five-floor Apple store.

On a recent Sunday afternoon, crowds entered the Apple store to inspect the latest iPods, using computer terminals to book appointments with Apple's sought-after technical advisers.

Sony was caught flat-footed with a late introduction of an Internet version of its 25-year-old Walkman, and profit from world audio sales fell 48 percent in the final quarter of last year.

"Samsung is like the old Sony," said Gilder, who edits the Gilder Technology Report. "Samsung has much of the spirit of Sony 10 years ago."
http://www.iht.com/articles/2005/03/...s/samsung.html


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P2P: Music's Death Knell or Boon?
Michael Grebb

Somewhere between the live music showcases on Sixth Street and the endless schmoozing that ran well past midnight, the deep-fried drunkfest known as South by Southwest also squeezed in some discussion of technology and how it's changing the music industry.

In the tradition of the annual Austin music festival, which ended Saturday, panels covered both the industry and artistic side of the music game. Labels and managers, after all, are just as interested as the artists themselves in how the internet, digital downloading and other technologies are turning the music business on its head.

In some cases, talk focused on opportunities. But in many other instances, panelists warned about the perils and uncertainty that face both the artistic and business sides of the industry -- especially when it comes to peer-to-peer file sharing.

"It's stopping new artists from coming forward, and it's killing mid- level artists across the board," charged Jay Rosenthal, a music attorney at Washington, D.C.-based Berliner, Corcoran & Rowe and a board member of the Recording Artists Coalition. "There has never been an issue that has been so galvanizing."

But Wendy Seltzer, an attorney with the Electronic Frontier Foundation, said lawsuits against those who trade or enable the trading of copyright music files online will continue to have little effect on P2P traffic.

She said the Grokster case now before the U.S. Supreme Court could very well determine the future shape of copyright law as it relates to the internet. Oral arguments in that case are scheduled for March 29.

"We feel the future of technology development is at stake here," she said.

Finding business models that capitalize on file sharing is "the next logical step" for artists and labels, said Seltzer, who suggested collective licensing schemes and other mechanisms that would allow copyright holders to get paid when people use P2P networks.

But Rosenthal said most artists are still skeptical that P2P-based models will ever appropriately compensate them.

"I don't think the majority of artists, or even a minority of artists, believe that this is a business model that's going to help them in the future," he said.

Rosenthal said the Grokster case could hinge on whether Chief Justice William Rehnquist, who is suffering from thyroid cancer, will be healthy enough to participate in the decision.

Rosenthal noted that Rehnquist was among the dissenters of the court's Betamax decision, which has become a bedrock of copyright law in the United States.

That 1984 ruling held that products that enabled people to infringe copyrights were legal as long as they also had substantial non-infringing uses. Technologists have credited the Betamax decision with ushering in two decades of innovation ranging from the VCR to the MP3 player.

"No matter which way it goes in the Grokster case, we're going to end up back in Congress anyway," said Rosenthal, noting that one side or the other will likely seek legislation clarifying copyright law even after the decision.

In another panel, Eric Garland, CEO of media research firm BigChampagne, said "there's certainly cause for concern" with P2P because it's fast becoming a primary distribution channel.

"Most of the music people consume most of the time is not generating revenue for anyone," he said. "Music is free right now."

"Break out the hemlock," joked Chris Castle, senior vice president of legal affairs and general counsel of Snocap, which has developed audio-fingerprinting technology to help copyright owners track and potentially collect fees for music trading on P2P networks.

Castle said that even capturing a small portion of P2P traffic could be a boon to record companies and artists. "If you could monetize 10 percent of those tracks, that would be a phenomenal increase in revenues," he said.

Indeed, South by Southwest wasn't all gloom and doom on the technology front as artists anxiously learned about new revenue streams.

One growing market is mobile-phone ring tones. Scott Andrews, senior director of internet and mobile entertainment for royalty collection agency BMI, said ring-tone revenues are expected to double from $250 million in 2004 to $500 million in 2005. "This is a business that has scaled very quickly," Andrews said.

He added that potential synergies with other mobile technologies such as Bluetooth wireless could create even more opportunities for artists.

"Can you imagine being at a concert and saying, 'OK, everyone turn on your Bluetooth. We're going to send you a ring tone for free just for being here at the concert'?" Andrews said.

Furthermore, as the market transitions from polyphonic ring tones, which are essentially a series of beeps designed to mimic a song, to "master tones," which are an actual clip of the song derived from its original master recording, mobile phones could fast become a major music platform.

"This mobile space is going to be the biggest, if not one of the biggest players," said Donald Passman, an attorney with Los Angeles-based Gang, Tyre, Ramer and Brown. "Why do I need to carry around an iPod when I can just dial it up and listen to it?"

At one point, Mark Frieser, CEO of New York City-based mobile-research firm Consect, held up his mobile phone to the audience. "This is your new point of sale," he said. "Forget about record stores."

As artists, record labels and other music players at the Austin conference tried to figure out technology's impact on the music business, a prevailing sense of gradual progress on several fronts seemed to buoy their mood.

"We're at an inflection point here where we have a real chance to change the way the music business works," said Ted Cohen, senior VP of digital development and distribution for EMI Music. "We're interested in making sure everyone survives. I think this will be an interesting year and a turning point."
http://www.wired.com/news/digiwood/0,1412,66959,00.html

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File-Sharing Is A Lot More Than Stolen Music
Andrew Kantor

On March 29, the Supreme Court will begin hearing arguments in what's been tagged the "Grokster" case. A full 28 entertainment companies filed suit against several makers of peer-to-peer (P2P) file-sharing software, including one called Grokster, claiming that, because that software can be used for illegal purposes — spreading pirated copies of songs, movies, and software — it should be banned.

By that logic, knives, baseball bats, and guns should also be outlawed.

Grokster and friends won this suit when it was heard before the Ninth Circuit Court of Appeals (in MGM v. Grokster). The court held that the software — like knives, bats, and guns — has substantial noninfringing uses.

That's the key phrase, and it ties back to the 1984 "Betamax" decision by the Supreme Court (Sony Corp. v. Universal City Studios). It said that if a tool was "capable of commercially significant noninfringing uses" it was A-OK. (I'm paraphrasing. Justice Stevens was somewhat more detailed.)

But now we're back to the Supreme Court, this time with file-sharing instead of VCRs.

Central files

For a lot of people, the whole concept of file sharing is a vague notion: "People can trade files over the Internet." But there's more to it than that, and besides, the whole concept of P2P is interesting and new.

For a long time the only way you got a file on the Internet was to download it from a server, usually run by a company. Someone has the file and "serves" it from their computer so you (and lots of other people) can get a copy — you got the latest copy of Adobe's Acrobat Reader from adobe.com, for example.

There are two problems with this. First, it means that the company offering something has to be ready for potentially thousands of people downloading it; the server has to handle requests from all of them. Just like at a big restaurant with a single waiter, that server is going to be overwhelmed; service will suck.

The other problem is that by having a centralized system you can become a target of someone who doesn't want you to distribute whatever your distributing for political or legal reasons. Call it the Pearl Harbor model — having all your eggs in one basket invites trouble.

That's what killed Napster, one of the original and best-known file-sharing networks. More in a second.

Peer-to-peer file sharing is different. It doesn't use central servers to hold files. Instead, every computer on the network can be a server and send or receive files. You can offer anything you want to other people on the Net, and you can download anything of theirs they make available.

With P2P you don't have to find an "official" server of some sort. All you need is someone else, somewhere on the Net, who has what you want.

Generation gap

The rise of P2P came with the rise of the MP3 music format. Before MP3, individual songs were so large that even with high-speed connections it took a long time to send them to one another. It was impractical to share songs. But the MP3 format shrinks files down to a fraction of their original size, and suddenly music sharing was doable.

This did not make the Recording Industry Association of America happy, because it meant that people were sharing music, not (they claim) buying it.

The first P2P program to hit the public consciousness was Napster. But Napster had a fatal flaw: It required a central server (run by Napster) to keep track of who had what to share. And yes, most of it was music.

This meant the RIAA had a clear target, and it made a convincing case — here was the company running a service that was being used to illegally share music. It eventually drove Napster out of business.

Peer-to-peer users and programmers were smart, so they created the next generation of P2P software with Napster in their minds. This software that didn't require a central server. Without napster.com, Napster couldn't work. But as long as this new P2P software exists, the networks will exist.

So today we have nebulous networks of users who can share their files without being tied to a particular site.

And today, file sharing is huge. Despite claims that its is on the way out, it's getting bigger and bigger. Not too long ago I found almost 600 million files — more than 4.5 million gigabytes (that's 4.5 petabytes) — on a single P2P. Holy wow.

Working knowledge

Most P2P software uses one of three major "networks." Each network has several of clients you can use to access it (kind of the same way both Firefox, Internet Explorer, and Netscape are all clients for viewing the Web). Some clients free, some are supported with ads, and some are commercial software.

big guns are the FastTrack network (with clients that include Kazaa and Grokster); the Gnutella network (with clients that include BearShare, Gnucleus, LimeWire, and Morpheus); and the BitTorrent network, which is a somewhat different model (clients include the original BitTorrent, BitTornado, and my favorite, Yet Another BitTorrent Client).

FastTrack and Gnutella work in similar ways. When you start your client, it uses various methods to find other users on the network — they’re called nodes. Each of those other nodes, because they’re already connected, has a list of other nodes, which it passes on to your software.

In a few seconds you’re connected to dozens of other machines. (It could be hundreds or thousands, but the software sets limits so the network isn’t overwhelmed.)

Let’s say you want to search for the Marc Lindsay’s 1970 song “Arizona.” You enter “Arizona” into the software’s search field and choose “Music” or “Audio,” lest you find things like maps of the state.

Your client then sends your request to the nodes nearest you. If they don’t have the song, they pass your request on to other nodes, until you’ve searched thousands of machines. Hopefully one or more has the song, which will then show up in your search results list. Tell your software to download it, and one or more of those other nodes will start sending it.

(In fact, if more than one computer has it, P2P software can do a “swarm” download, in which it gets different pieces of the same file from different nodes. That means no one node has to supply the whole thing — think of it as spreading the labor.)

At the same time that you’re searching and downloading, the files on your machine are available to others. Not, obviously, all your files — your P2P client has a list of which ones you’re willing to share.

When you set up the software, you would have told it what you want to make available. So while you’re downloading “Arizona,” you might notice someone else downloading something from your machine.

BitTorrent is a little different. Someone who wants to share something first creates another file — a .torrent file — that describes what he’s sharing. (There is special software for this.) He can post that .torrent to his Web site, for example. People who click on that .torrent link will download that file.

The big difference is that BitTorrent clients don’t have a search function. You don’t search the network for a file; you have to find a .torrent for it, using sites such as isoHunt, TorrentReactor, and TorrentSpy which are databases of .torrent files out there on the Net.

BitTorrent clients connect with your Web browser so clicking on a .torrent link starts the download process.

The beauty of BitTorrent is that the people who are downloading something become sources of that file as well. So what starts off as one person sharing (which can eat a lot of his bandwidth) can quickly become a lot of people sharing the same thing. An ad hoc distribution network emerges as long as the .torrent file is out there.

Note, too, that I said “the people who are downloading it become sources of that file…” in the present tense. With BitTorrent, you start sharing a file soon after you begin downloading. It works on a tit for tat basis — “Those that provide the most to others get the best treatment in return,” as the site puts it. It encourages you not to “leech” by forcing you to upload to others as you download.

Forward, march

Whether FastTrack, Gnutella, or BitTorrent, that’s how P2P works: Everybody shares. The RIAA’s nightmare is that one person buys a CD (shelling out $15 for two good songs), then “rips” those songs into MP3 files and makes them available via a P2P network.

In theory, 10 people who download 50 Cent’s “Candy Shop” are 10 people who don’t buy his album “The Massacre.” Eventually the guy’s gonna have to sell one of his Escalades to pay one of his mortgages, and the RIAA doesn’t want to see that happen.

But without a central server like Napster’s, there’s no convenient target for lawsuits. That’s why the RIAA is going after individual file sharers one at a time.

And it’s not just the RIAA. You can download movies via P2P networks as well (a 4 GB DVD of “The Incredibles” can make its way to you via BitTorrent overnight), not to mention software valued in the thousands of dollars.

But pirated music, movies, and software is only one reality of file sharing, and yes, it’s out there. But a lot of people use P2P networks for legal reasons — to share large files without taking a big hit on their servers. In fact, the Internet was built on a similar idea — that decentralization means robustness.

In fact, a fairly large chunk of what’s out there is completely above board. Folks put their photos on P2P networks. Ad agencies release videos that quickly spread over the Net. Smaller software companies that can’t afford huge bandwidth charges put their products out on P2P networks so users can help distribute them just by leaving their computers connected.

Substantial noninfringing uses? You bet.

But even though it may seem that there’s a ton of illegal content out there, getting it, as I discovered, is not quite so simple. That story next week.
http://www.usatoday.com/tech/columni...6-kantor_x.htm

[JackSpratts]

Bertelsmann's Profit Jumps Almost Sixfold
Mark Landler

BERLIN The German media conglomerate Bertelsmann reported sharply higher profit in 2004, propelled by bestsellers like Bill Clinton's memoir "My Life," and deep cost cuts at its music division, BMG, which is now part of a joint venture with Sony Music.

Net income jumped nearly sixfold to €1.2 billion, or $900 million, mainly because of a change in accounting rules. Operating income rose 39 percent to €1.4 billion. Revenue, hampered by the strength of the euro, rose only 1.3 percent to €17 billion.

While four of Bertelsmann's five divisions reported improved results over 2003, the most profit by far came from RTL, the European television group. With €668 million in operating income, RTL earned twice the combined profits of BMG and Random House, the book- publishing unit.

The results underline how Bertelsmann, despite its glamorous assets in the United States, is increasingly becoming a Europe-centered, TV-driven company. Bertelsmann, which is based in Gutersloh, Germany, sold its trophy office tower in Times Square last year, booking a €174 million gain.

Now, Bertelsmann is virtually debt free, and it has more than €2 billion in cash on its balance sheet. Its chief executive, Gunter Thielen, said that the company would use some of that to acquire more television assets. It also is scouting for acquisitions in Eastern Europe and Asia.

"We've shifted into higher gear this year," he said during a news conference. "In addition to the three acquisitions we've completed, there will be two or three additional acquisitions we'll be able to complete." Bertelsmann's recent deals have tended to be small-scale, like the purchase of a German automotive publisher by Gruner + Jahr, its magazine division. It is also building a sophisticated printing plant in Britain, drawing on its roots as a publisher of Protestant hymnals in the 1800s.

Thielen, who will retire in August 2007, said that Bertelsmann was not planning any deviation from the back-to-the-basics strategy that he put into place after the company's controlling shareholders, the Mohn family, ousted his predecessor, Thomas Middelhoff.

He brushed aside suggestions that Bertelsmann might follow Viacom in studying a breakup of the company. "We're always pleased if someone wants to split their business, because they will decrease in size, and we might be able to buy something," Thielen said.

A lingering wild card in the company's future is the status of a 25 percent stake owned by a Belgian investment firm, Groupe Bruxelles Lambert. The firm has the right to sell the stake in 2006, and analysts speculate that it may try to sell the shares through an initial public offering.

Disagreements over whether to go public contributed to Middelhoff's exit. Thielen said that Bertelsmann had no indication that Groupe Bruxelles Lambert was pushing for a sale, although he noted that Bertelsmann was prepared to conduct an offering if that was demanded.

Bertelsmann seemed relieved by the integration of BMG and Sony Music, which Rolf Schmidt- Holz, the venture's chairman, said had gone better than expected, and was 70 percent completed.

After a round of layoffs, Bertelsmann's operating profit from music tripled to €162 million. In the early days of the integration, Bertelsmann officials expressed alarm at Sony's bloated cost structure.

Management upheaval and an advertising downturn plagued another American outpost: Gruner + Jahr USA. Ad revenue declined significantly at the business magazine Fast Company and the teen publication YM, which Bertelsmann sold to Condé Nast in October.

But overall, the tone was upbeat. Thielen said that he expected every division to improve its profit in 2005.
http://www.iht.com/articles/2005/03/...ness/bert.html


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DreamWorks Animation Posts Profit on 'Shrek 2' DVD Sales

DreamWorks Animation SKG, the film studio run by Jeffrey Katzenberg, posted a fourth-quarter profit of $192 million yesterday on sales of "Shrek 2," last year's best- selling DVD.

Net income was $1.99 a share, in contrast to a loss of $36.6 million, or 48 cents a share, a year earlier, said the company, which is based in Glendale, Calif. Revenue more than tripled, to $495.7 million, in DreamWorks Animation's first full quarter as a public company.

"Shrek 2," which ended its theater run in November, generated more than $360 million in the quarter after its debut on home video. "Shark Tale," which opened in theaters in October, brought in $62 million in the quarter.

"There were unbelievable sales of 'Shrek 2' on home video," a Lehman Brothers analyst, Anthony DiClemente, said before the company announced earnings. He has an overweight rating on the company's shares.

"Shrek 2" accounted for about 80 percent of the company's quarterly revenue, Mr. DiClemente said. DreamWorks Animation said last year that the film might sell as many as 55 million video copies.

"Shark Tale," which opened Oct. 1 and closed at theaters in January, generated worldwide box office sales of $316 million through the end of the 2004, the company said.

DreamWorks Animation beat expectations that it would earn $1.56 a share, the average estimate of analysts polled by Thomson Financial. The company, which reported results for the second time since an Oct. 27 initial stock offering that raised $812 million, was expected to have sales of $381 million.

Mr. Katzenberg has promised investors two computer-animated films a year, more than Pixar and other animation studios.

DreamWorks SKG and Universal Pictures, a unit of General Electric, market and distribute DreamWorks Animation's films for a fee.
http://www.nytimes.com/2005/03/18/bu...reamworks.html


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UMass Amherst

Researcher Assesses Keys to Success in Open-Source Software
Press Release

What leads to the success of Internet-based open-source software projects and emerging “open-content” collaborations?

Those questions, which hold the key to a new era of sharing scientific knowledge, are being explored by Charles Schweik, a researcher at the University of Massachusetts Amherst.

Schweik recently received a five-year, $500,000 grant from the National Science Foundation's Faculty Early Career Development (CAREER) program to support his research. “Open source software, and the collaboration that helps develop it, has great promise beyond its use in computer science,” Schweik observes.

Schweik says he will use his research to develop a sequence of courses for students interested in solving environmental or public policy problems. Currently, many individuals and organizations worldwide are unable to pay for special proprietary software needed to conduct such analyses, he says. This curriculum will show students how to use such software and also encourage them to contribute to such collaborations in some form, such as the writing of new documentation or testing.

To develop and teach his courses, Schweik will use the open source computer teaching laboratory created last year on the UMass campus thanks to another grant he received last year from IBM Corp. for equipment and staffing. He says the lab will be critical for teaching of this curriculum and will allow other faculty to teach the use of open source software in their classes as well. This laboratory is designed to serve the non-science major students on campus, he says.

Schweik is an assistant professor of natural resources conservation and the Center for Public Policy and Administration. The NSF's CAREER grants support early career-development activities of those teacher-scholars who are most likely to become the academic leaders of the 21st century.
http://www.newswise.com/p/articles/view/510493/


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Patents For Profit: Dystopian Visions Of The New Economy

The struggle over intellectual property is the concern of more than knowledge economy specialists, says Becky Hogge: it is a contest over freedom as well as technology.

Fights for freedom are not always played out centre-stage. Since 2003, a piece of European Union legislation with the misleadingly arcane title of the “EU Directive on Computer Implemented Innovation” has been slipping unobtrusively through the bureaucratic thickets of Brussels. It has attracted little attention beyond intellectual property (IP) specialists and activists. It is time the interest widened, for the scope of the directive goes to the heart of how knowledge will be produced, consumed, and disseminated in the 21st-century global economy.

The proposed legislation has the potential to lock away information – code – by extending the remit of patent law to cover any piece of code that makes a “significant technical contribution” to the field. The law would bring Europe closer to the United States’s highly promiscuous attitude towards software patents, although how close remains a subject of fierce debate.

Patents are state-granted monopolies designed to nurture technical, scientific and social progress by protecting the inventor’s incentive to invent. Those opposed to software patents in Europe argue that there is no evidence to show that patenting code would ensure such progress in this still young field. As the directive has crawled across the legislative undergrowth, pioneers of technological discovery and commentary – Tim Berners-Lee, Richard Stallman , Lawrence Lessig and Linus Torvalds, among others – have urged the EU to come down against pure software patents. Many of these voices come from the patent-friendly United States: they hope that if Europe agrees with them, the US will be forced to reconsider its position.

Will their hopes for Europe prove to be misplaced? A striking feature of the directive’s two-year journey – from consultation to committee room, lobbying to redraft – is that the two main European Union institutions involved have moved gradually further apart on the issue. The elected European Parliament has been revealed as a space where open debate on intellectual property (IP) issues can occur. There, high-profile lobbyists seek to influence legislators; cross-Europe small and medium enterprise (SME) groups bring their concerns; and representatives from accession countries such as Poland share their experience of how the software industry has bootstrapped their growing economies. The cumulative result of the debate has been significant checks and balances on the legislation and the legislative process.

By contrast, the unelected European Commission has emerged vulnerable to accusations of a culture of closed-door negotiations – favouring secretive, fast-tracked voting that reverses the parliament’s careful work by executive fiat.

The commission’s confirmation on 25 February that it would not reconsider the legislation, despite the recommendations of a three-tiered parliamentary vote, is only the most recent evidence that “Europe” too is a site of contest over the key question of our time: who owns knowledge?

The evidence

The question has been a live one long before it entered the deep entrails of the European Union’s legislative process. Since the commercial software industry emerged around 1990, technologists have argued that code is different from other inventions: it does not need protection by patents. In software creation, open standards – code as common knowledge – are the key to fermenting progress. To patent code is to add disabling and unnecessary burdens on software enterprise that can kill its potential in this crucial, formative stage.

These fifteen years (a shorter timespan than the average patent) have seen the birth and maturing of the World Wide Web, all thanks to a protocol known as Hypertext Transfer (http). Tim Berners-Lee, the man who conceived the code that embodies this protocol, did not patent it. Thus it became an open standard: anybody could use it to contribute new programmes designed to run on the web. And use it they did. To the extent that the multiplying, democratising life-forms of the web now challenge the dominance of corporate media and orthodox models of economic activity.

Software programming has a relatively low financial barrier to entry. It relies on the manipulation of mathematical algorithms between one man and his machine. Progress in the sector takes place in swift but discrete steps. Each step contributes something to the art of programming: each software programme builds on the last. It is this environment – accretive, open-ended and egalitarian – that has allowed rapid progress in the software industry to enhance the utility and connectivity of the computers people use in their daily lives.

In the patent-free environment, contributions to the common pool of programming knowledge come from all corners of the world, from the amateur hacker working until 4am in his bedroom to corporations leasing the most expensive real estate in Silicon Valley. Richard Stallman, founder of the Free Software Foundation, likens reading a piece of software code to walking around a city – the expert eye will recognise “architectural periods”, little stylistic ticks that identify a piece of recycled code with a particular time, even place.

Software patents take chunks of code out of this vast pool of shared knowledge and lock them down using IP law. United States case law already shows how companies can use such patents to claim ownership of code that had previously been regarded as an open standard. The effect is not simply to appropriate and centralise a shared knowledge resource, but to make it impossible to create a new programme without infringing the patent. Where software is concerned, patents obliterate progress.

Software and strong IP

Some leading architects of the software sector are quite explicit about this. Bill Gates set his stall out as early as 1991:

“The solution is patenting as much as we can. A future startup with no patents of its own will be forced to pay whatever price the giants choose to impose... Established companies have an interest in excluding future competitors.”

Companies who have followed Gates’s advice and established a forceful patent portfolio gain another benefit: by subjecting software code to strong-IP protection, they can get around the problem of infringing rival patents by licensing patents to competitors – often generating significant revenues in the process. Already, IBM earns considerable royalties from its patent portfolio in the US. Other major IT companies there have started cross-licensing patented code with rivals.

The logic is as clear as it is chilling. In effect, corporations use software patenting to secure a monopoly and discourage the entrepreneurial activity of start-ups. The result is to freeze, not foster, innovation – the very opposite of patent law’s original intention.

Moreover, as intellectual property law combines with the global shift towards a “knowledge economy”, the regressive effect of such lockdowns acquires a more explicitly political dimension. The application of strong IP law is a game only the big boys, with their dedicated legal teams, can play. Knowledge, once viewed as a commons, becomes a commodity – just like land or labour in an agricultural or industrial economy – whose owners ordain themselves the new economy’s ruling class.

This process is taking place in all areas of the economy. At the moment we still baulk at the idea of knowledge as someone’s out-and-out possession: witness the public disgust when patents prevent life-saving drugs from reaching the dying in Africa. With a little imagination, this reaction can be understood as a contemporary example of resistance to changes in economic reality.

If the shift towards knowledge as commodity is as inevitable as many – including, it would appear, the European Commission – believe, then the future looks bleak. We can look forward to an age of monopolies, where innovation is choked by vested interest and the dynamic economies that software and other innovators have helped create fall to rot.

An alternative vision: knowledge as infinite resource

The patent-free history of the software industry speaks volumes for its own situation: software programming can get along fine without patents, if only it is allowed to. But what about the rest of the knowledge industries? Are they to be condemned to the dystopian, even Stalinist vision outlined above? Perhaps not. A new, much more radical model of the knowledge economy is emerging. And by coincidence, it too has been seeded in the software programming tradition.

Over the same period that the Hypertext Transfer protocol was giving birth to the World Wide Web, a new school of programming was born: Open Source. Within Open Source even traditional copyright protection is reversed: programmers are compelled by a mechanism called “copyleft” to distribute their code freely, allowing others to copy it, modify it and integrate it into their programmes. Within the programming community code is shared without levy. Money comes in from outside the community, through the manufacture of hardware and through companies contracting for expertise, custom- design and support.

The theory behind Open Source is that the “more eyeballs” that are fixed on a problem or “bug” in a particular programme – ie the more people with access to edit the code – the quicker that bug gets fixed. The model has proved a success. Open Source has come to dominate the backend of internet technology (the humming Apache-run servers that currently power 68% of the web) and has been creeping onto the consumer market in the form of the Linux operating system and Mozilla Firefox web browser.

The success of Open Source underlines the fact that knowledge is a different sort of resource to labour or land. While these are finite resources, knowledge can be infinitely replicated, and never more easily than in the age of the internet. The only tragedy of this commons, it seems, would be to censor it using strong-IP law. Because, as Open Source has shown, a solid commons of knowledge fosters a solid knowledge economy around its edges.

Open Source software is providing an attractive metaphor for others in the knowledge industries faced with increasingly obtrusive patent and copyright law, although technologists themselves, wary of being labelled romantic, often shy away from this. The economic success of Open Source programming relies in part on the nature of the programming task itself, but it can provide a model of understanding the world, as more and more of everyday life is becoming reducible to data.

Following the success of the Sanger Institute’s open funding model in the race to annotate the human genome, question marks are beginning to appear over the direct linking of medical r&d to the balance sheets of Big-Pharma. Arguments are also rippling through the creative industries over the use and misuse of copyright law on the internet. And libraries, academies and archives are finally finding their voice over open access to knowledge.

The future of knowledge

The contest between a strong-IP and a commons model will define the character of the knowledge economy worldwide for a generation. In the current transition period, it is being played out in institutions at every level of governance – local, national, regional, global. Thus, the tension between parliament and commission of the European Union is just one example of a wider trend. In 2004, the World Intellectual Property Organisation (Wipo), a specialised agency of the United Nations, agreed to revisit its terms of reference and move away from exclusively promoting strong IP where technical cooperation might be more appropriate to the interests of the developing world. But more recently, Wipo’s announcement that it would invite only “permanent observers” to forthcoming talks will have the effect of excluding “ad hoc observers”, who mainly represented IP reformist associations in previous talks, in favour of observers dominated by rightsholder interests.

The knowledge economy increasingly touches every area of life – work and pleasure, professional and personal life – in every part of the world. It is vital that decisions over its future are made in a fair, accountable and democratic way. As agencies of governance recognise the value of knowledge as any kind of commons, muscular lobbyists for a strong-IP regime, keen to commodify knowledge for the new economy, will be drawn into the fray. These agencies must arm themselves with well-researched models of how knowledge performs in a commons environment. Software is a crucial part of this new landscape. The story of the EU Directive on Computer Implemented Innovation is closer to centre-stage than it appears.
http://www.opendemocracy.net/debates...-8-40-2370.jsp


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Dangling Broadband From the Phone Stick
Matt Richtel

To gauge the potential consumer impact of the consolidation sweeping the telephone industry, look no further than the silver- toned plastic phone gathering dust on the desk in Justin Martikovic's studio apartment.

Mr. Martikovic, 30, a junior architect who relies on a cellphone for his normal calling, says he never uses the desk phone - but he pays $360 a year to keep it hooked up.

"I have to pay for a service I'm never using," he said.

He has no choice. His telephone company, SBC Communications, will not sell him high-speed Internet access unless he buys the phone service, too. That puts him in the same bind as many people around the country who want high-speed, or broadband, Internet access but no longer need a conventional telephone. Right now, their phone companies tend to have a "take it or leave it" attitude.

Consumers "are not forced to go with SBC," said Michael Coe, a company spokesman. "If they just want a broadband connection, I'd recommend they look around for people who can provide just a broadband connection."

The nation's other two largest phone companies, Verizon Communications and BellSouth, have similar policies: broadband service is available only as a bundle with phone service.

That means, even as high-speed Internet service has become one of the most quickly adopted technologies of the computer era, there are few options for the tens of millions of Americans trying to upgrade their dial-up connections.

Some lawmakers and consumer advocates say the issue should be on the agenda as the government considers the market impact of two proposed big telecommunications deals: SBC's planned $16 billion acquisition of AT&T, and Verizon's $6.75 billion offer for MCI, which is being challenged by a rival offer from Qwest Communications.

For many consumers, the main alternative to broadband from the phone company is the local cable company. But cable broadband prices tend to be higher - as much as $60 a month for access, compared typically with $40 or less for phone company broadband. And the cable companies prefer to sell the service as a package with television that can easily exceed $100 a month.

That is assuming cable is even available, which it is not in Mr. Martikovic's apartment in the Nob Hill section of San Francisco - or in 10 percent of the nation's households, for that matter.

Mr. Martikovic says that he has resigned himself to paying SBC $30 a month for a phone bill and $30 for Internet, in addition to $100 for a mobile phone from Sprint. "I bet half of my friends are in this exact same situation," he said.

The question of broadband's availability is almost certain to become part of the policy debate as the Justice Department and the Federal Communications Commission rule on an eventual acquisition of MCI and whether SBC can buy AT&T. And two weeks ago, the House Energy and Commerce Committee held a hearing to discuss the consolidating market power of the phone companies.

Consumer advocacy groups, including Consumers Union, say they plan to ask the F.C.C. to address the lack of "à la carte" broadband when the agency reviews the proposed takeovers.

Despite the market bottlenecks, broadband is increasingly in demand for its ability to let users zip e-mail back and forth with big photo or music files attached; or to play online games; or to quickly open Web pages loaded with video and audio extras. Of the nation's 74.5 million Internet households, an estimated 39 percent now have broadband - up from 36 percent of Internet households at the end of 2003.

So popular is the service, and so few the alternatives for most consumers, that the three biggest regional Bell companies - SBC, Verizon and BellSouth - have been able to expand their share of the Internet broadband market even while declining to sell the service separately.

The cable companies are still in the lead, having moved more nimbly than the phone companies in the early days of broadband back in 2000. But the phone industry's broadband share is now 37 percent, up from 32.7 percent at the end of 2003, and it continues to grow.

While critics say the phone companies are simply squeezing millions of extra dollars from consumers and making it harder for people to move to cheaper Internet telephony in place of conventional phone service, the three big Bells argue that selling stand-alone broadband is not a simple proposition.

In the case of Verizon, the nation's largest phone provider and the dominant one in the Northeast and Middle Atlantic states, the company says that it has based its technology and billing systems on delivering service to individual phone numbers.

Verizon has said it is working to develop a stand-alone broadband offering that could be available as soon as the end of the year.

"It's just very complex," said Michael D. Poling, Verizon's vice president for broadband operations and processes for Verizon. "It's changing the guts of the systems and processes we've built for five years."

But the smallest of the Bells, Qwest, which operates primarily in the Rocky Mountain states and is struggling to grow, has been willing to offer à la carte broadband for more than a year.

One satisfied Qwest customer is Chad Jorgenson, 25, a part-time student in Boise, Idaho, and an intern at a computer chip maker. By cutting off his traditional phone service, he said, he had been able to reduce his monthly bill to $47.92, from $71.40. (That bill could be lower still, but he opted for a particularly high speed of service.)

Richard C. Notebaert, the company's chief executive, said Qwest spent just three days and $134,000 to get regulatory approval to offer the service, now a year old. The company now has around 25,000 stand-alone broadband customers.

"We've had no technical problems; we've had no billing problems," he said. "If the consumer wants it, why are you stiffing them?"

In defending their marketing practices, the other Bell companies argue that they are sinking billions of dollars into building Internet-based networks that will eventually replace their conventional telephone technology even as they are struggling to cope with the erosion of their local telephone business. Last year, the phone companies lost 5.4 million residential phone lines as more subscribers chose to rely mainly on wireless service and abandoned second lines that had been used for dial-up computer modems.

Another threat to the phone company revenues will be Internet-based phone service in which calls are transmitted over high-speed Internet lines, as digital packets, much the way e-mail is transmitted. Once customers have broadband Internet access, they are not limited to their local Bell company to be the provider of Internet phone service.

A relatively new Internet phone company, Vonage, now has 550,000 customers who use its services over phone or cable broadband access lines.

And so while Internet telephony is a business the Bells have all said they plan to embrace, some critics say the biggest Bells are using their current market power to slow its development.

The issue might soon come before regulators and Congress. Representative Edward J. Markey, Democrat from Massachusetts, said he would like to see the Bells' reconsolidated power discussed as part of a pending rewriting of the increasingly outdated Telecommunications Act of 1996.

The F.C.C. is already considering a related issue as it seeks to settle a dispute between BellSouth and four states it serves - Florida, Kentucky, Louisiana and Georgia. Those states have told BellSouth that it must continue to sell broadband to an existing customer even if that customer leaves BellSouth to get local phone service from one of the few competitors that have survived the telecommunications shakeout.

BellSouth is fighting the requirements, in part on the ground that one of its competitive advantages is that it enables consumers to buy phone and broadband in one place.

"Our marketing strategy is that we offer a complete package of our services," said Joe Chandler, a spokesman for BellSouth. Because the company has made the investments in broadband network technology, he said, it should reap the rewards.

"If our competitors want to offer broadband," he added, "they should make the same investments."
http://www.nytimes.com/2005/03/19/te...y/19phone.html


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Bad Wi-Fi. Bad, Bad.

Growth of Wireless Internet Opens New Path for Thieves
Seth Schiesel

The spread of the wireless data technology known as Wi-Fi has reshaped the way millions of Americans go online, letting them tap into high-speed Internet connections effortlessly at home and in many public places.

But every convenience has its cost. Federal and state law enforcement officials say sophisticated criminals have begun to use the unsecured Wi-Fi networks of unsuspecting consumers and businesses to help cover their tracks in cyberspace.

In the wired world, it was often difficult for lawbreakers to make themselves untraceable on the Internet. In the wireless world, with scores of open Wi-Fi networks in some neighborhoods, it could hardly be easier.

Law enforcement officials warn that such connections are being commandeered for child pornography, fraud, death threats and identity and credit card theft.

"We have known for a long time that the criminal use of the Internet was progressing at a greater rate than law enforcement had the knowledge or ability to catch up," said Jan H. Gilhooly, who retired last month as special agent in charge of the Secret Service field office in Newark and now helps coordinate New Jersey operations for the Department of Homeland Security. "Now it's the same with the wireless technologies."

In 2003, the Secret Service office in Newark began an investigation that infiltrated the Web sites and computer networks of suspected professional data thieves. Since October, more than 30 people around the world have been arrested in connection with the operation and accused of trafficking in hundreds of thousands of stolen credit card numbers online.

Of those suspects, half regularly used the open Wi-Fi connections of unsuspecting neighbors. Four suspects, in Canada, California and Florida, were logged in to neighbors' Wi-Fi networks at the moment law enforcement agents, having tracked them by other means, entered their homes and arrested them, Secret Service agents involved in the case said.

More than 10 million homes in the United States now have a Wi-Fi base station providing a wireless Internet connection, according to ABI, a technology research firm in Oyster Bay, N.Y. There were essentially none as recently as 2000, the firm said. Those base stations, or routers, allow several computers to share a high-speed Internet connection and let users maintain that connection as they move about with laptops or other mobile devices. The routers are also used to connect computers with printers and other devices.

Experts say most of those households never turn on any of the features, available in almost all Wi-Fi routers, that change the system's default settings, conceal the connection from others and encrypt the data sent over it. Failure to secure the network in those ways can allow anyone with a Wi-Fi-enabled computer within about 200 feet to tap into the base station's Internet connection, typically a digital subscriber line or a cable modem.

Wi-Fi connections are also popping up in retail locations across the country. But while national chains like Starbucks take steps to protect their networks, independent coffee shops that offer Wi-Fi often leave their connections wide open, law enforcement officials say.

In addition, many universities are now blanketing campuses with open Wi-Fi networks, and dozens of cities and towns are creating wireless grids. While some locations charge a fee or otherwise force users to register, others leave the network open. All that is needed to tap in is a Wi-Fi card, typically costing $30 or less, for the user's PC or laptop. (Wi-Fi cards contain an identification code that is potentially traceable, but that information is not retained by most consumer routers, and the cards can in any case be readily removed and thrown away.)

When criminals operate online through a Wi-Fi network, law enforcement agents can track their activity to the numeric Internet Protocol address corresponding to that connection. But from there the trail may go cold, in the case of a public network, or lead to an innocent owner of a wireless home network.

"We had this whole network set up to identify these guys, but the one thing we had to take into consideration was Wi-Fi," Mr. Gilhooly said. "If I get to an Internet address and I send a subpoena to the Internet provider and it gets me a name and physical address, how do I know that that person isn't actually bouncing in from next door?"

Mr. Gilhooly said the possibility of crashing into an innocent person's home forced his team to spend additional time conducting in-person surveillance before making arrests. He said the suspects tracked in his investigation would regularly advise one another on the best ways to gain access to unsecured Wi-Fi systems.

"We intercepted their private conversations, and they would talk and brag about, 'Oh yeah, I just got a new amplifier and a new antenna and I can reach a quarter of a mile,' " he said. "Hotels are wide open. Universities, wide open."

Sometimes, suspected criminals using Wi-Fi do not get out of their car. At 5 a.m. one day in November 2003, the Toronto police spotted a wrong-way driver "with a laptop on the passenger seat showing a child pornography movie that he had downloaded using the wireless connection in a nearby house," said Detective Sgt. Paul Gillespie, an officer in the police sex crimes unit.

The suspect was charged with child pornography violations in addition to theft of telecommunications services; the case is pending. "The No. 1 challenge is that people are committing all sorts of criminal activity over the Internet using wireless, and it could trace back to somebody else," Sergeant Gillespie said.

Holly L. Hubert, the supervisory special agent in charge of the Cyber Task Force at the F.B.I. field office in Buffalo, said the use of Wi-Fi was making it much more difficult to track down online criminals.

"This happens all the time, and it's definitely a challenge for us," she said. "We'll track something to a particular Internet Protocol address and it could be an unsuspecting business or home network that's been invaded. Oftentimes these are a dead end for us."

Ms. Hubert says one group of hackers she has been tracking has regularly frequented a local chain of Wi-Fi-equipped tea and coffee shops to help cover its tracks.

Many times the suspects can find a choice of unsecured wireless networks right from home. Special Agent Bob Breeden, supervisor of the computer crime division for the Florida Department of Law Enforcement, said a fraud investigation led in December to the arrest of a Tallahassee man who had used two Wi-Fi networks set up by residents in his apartment complex.

Over those Internet connections, the suspect used the electronic routing information for a local college's bank account to pay for online pornography and to order sex- related products, Mr. Breeden said. The man was caught because he had the products delivered to his actual address, Mr. Breeden said. When officers went to arrest him, they found his computer set up to connect to a neighbor's wireless network. Mr. Breeden said the suspect, Abdul G. Wattley, pleaded guilty to charges of theft and unauthorized use of a communications network and was sentenced to two years' probation.

In another recent case, the principal of a Tallahassee high school had received death threats by e-mail, Mr. Breeden said. When authorities traced the messages to a certain Internet Protocol address and went to the household it corresponded to, Mr. Breeden said, "Dad has his laptop sitting on a table and Mom has another laptop, and of course they have Wi-Fi, and they clearly didn't know anything about the threats."

Cybercrime has been known to flourish even without Wi-Fi's cloak of anonymity; no such link has been found, for example, in recent data thefts from ChoicePoint, Lexis/Nexis and other database companies.

But unsecured wireless networks are nonetheless being looked at by the authorities as a potential tool for furtive activities of many sorts, including terrorism. Two federal law enforcement officials said on condition of anonymity that while they were not aware of specific cases, they believed that sophisticated terrorists might also be starting to exploit unsecured Wi-Fi connections.

In the end, prevention is largely in the hands of the buyers and sellers of Wi-Fi equipment. Michael Coe, a spokesman for SBC, the nation's No. 1 provider of digital subscriber line connections, said the company had provided about one million Wi-Fi routers to its customers with encryption turned on by default. But experts say most consumers who spend the $60 to $80 for a Wi-Fi router are just happy to make it work at all, and never turn on encryption.

"To some degree, most consumers are intimidated by the technology," said Roberta Wiggins, a wireless analyst at the Yankee Group, a technology research firm in Boston. "There is a behavior that they don't want to further complicate their options."

That attitude makes life easier for tech-savvy criminals and tougher for those who pursue them. "The public needs to realize that all they're doing is making it harder on me to go find the bad guys," said Mr. Gilhooly, the former Secret Service agent. "How would you feel if you're sitting at home and meanwhile someone is using your Wi- Fi to hack a bank or hack a company and downloads a million credit card numbers, which happens all the time? I come to you and knock on your door, and all you can say is, 'Oops.' "
http://www.nytimes.com/2005/03/19/te... tner=homepage


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Censorship

A New Screen Test for Imax: It's the Bible vs. the Volcano
Cornelia Dean

The fight over evolution has reached the big, big screen.

Several Imax theaters, including some in science museums, are refusing to show movies that mention the subject - or the Big Bang or the geology of the earth - fearing protests from people who object to films that contradict biblical descriptions of the origin of Earth and its creatures.

The number of theaters rejecting such films is small, people in the industry say - perhaps a dozen or fewer, most in the South. But because only a few dozen Imax theaters routinely show science documentaries, the decisions of a few can have a big impact on a film's bottom line - or a producer's decision to make a documentary in the first place.

People who follow trends at commercial and institutional Imax theaters say that in recent years, religious controversy has adversely affected the distribution of a number of films, including "Cosmic Voyage," which depicts the universe in dimensions running from the scale of subatomic particles to clusters of galaxies; "Galápagos," about the islands where Darwin theorized about evolution; and "Volcanoes of the Deep Sea," an underwater epic about the bizarre creatures that flourish in the hot, sulfurous emanations from vents in the ocean floor.

"Volcanoes," released in 2003 and sponsored in part by the National Science Foundation and Rutgers University, has been turned down at about a dozen science centers, mostly in the South, said Dr. Richard Lutz, the Rutgers oceanographer who was chief scientist for the film. He said theater officials rejected the film because of its brief references to evolution, in particular to the possibility that life on Earth originated at the undersea vents.

Carol Murray, director of marketing for the Fort Worth Museum of Science and History, said the museum decided not to offer the movie after showing it to a sample audience, a practice often followed by managers of Imax theaters. Ms. Murray said 137 people participated in the survey, and while some thought it was well done, "some people said it was blasphemous."

In their written comments, she explained, they made statements like "I really hate it when the theory of evolution is presented as fact," or "I don't agree with their presentation of human existence."

On other criteria, like narration and music, the film did not score as well as other films, Ms. Murray said, and over all, it did not receive high marks, so she recommended that the museum pass.

"If it's not going to draw a crowd and it is going to create controversy," she said, "from a marketing standpoint I cannot make a recommendation" to show it.

In interviews, officials at other Imax theaters said they had similarly decided against the film for fear of offending some audiences.

"We have definitely a lot more creation public than evolution public," said Lisa Buzzelli, who directs the Charleston Imax Theater in South Carolina, a commercial theater next to the Charleston Aquarium. Her theater had not ruled out ever showing "Volcanoes," Ms. Buzzelli said, "but being in the Bible Belt, the movie does have a lot to do with evolution, and we weigh that carefully."

Pietro Serapiglia, who handles distribution for the producer Stephen Low of Montreal, whose company made the film, said officials at other theaters told him they could not book the movie "for religious reasons," because it had "evolutionary overtones" or "would not go well with the Christian community" or because "the evolution stuff is a problem."

Hyman Field, who as a science foundation official had a role in the financing of "Volcanoes," said he understood that theaters must be responsive to their audiences. But Dr. Field he said he was "furious" that a science museum would decide not to show a scientifically accurate documentary like "Volcanoes" because it mentioned evolution.

"It's very alarming," he said, "all of this pressure being put on a lot of the public institutions by the fundamentalists."

People who follow the issue say it is more likely to arise at science centers and other public institutions than at commercial theaters. The filmmaker James Cameron, who was a producer on "Volcanoes," said the commercial film he made on the same topic, "Aliens of the Deep," had not encountered opposition, except during post- production, when "it was requested from some theaters that we change a line of dialogue" relating to sun worship by ancient Egyptians. The line remained, he said.

Mr. Cameron said he was "surprised and somewhat offended" that people were sensitive to the references to evolution in "Volcanoes."

"It seems to be a new phenomenon," he said, "obviously symptomatic of our shift away from empiricism in science to faith-based science."

Some in the industry say they fear that documentary filmmakers will steer clear of science topics likely to offend religious fundamentalists.

Large-format science documentaries "are generally not big moneymakers," said Joe DeAmicis, vice president for marketing at the California Science Center in Los Angeles and formerly the director of its Imax theater. "It's going to be hard for our filmmakers to continue to make unfettered documentaries when they know going in that 10 percent of the market" will reject them.

Others who follow the issue say many institutions are not able to resist such pressure.

"They have to be extremely careful as to how they present anything relating to evolution," said Bayley Silleck, who wrote and directed "Cosmic Voyage." Mr. Silleck said he confronted religious objections to that film and predicted he would face them again with a project he is working on now, about dinosaurs.

Of course, a number of factors affect a theater manager's decision about a movie. Mr. Silleck said an Imax documentary about oil fires in Kuwait "never reached its distribution potential" because it had shots of the first Persian Gulf war. "The theaters decided their patrons would be upset at seeing the bodies," he said.

"We all have to make films for an audience that is a family audience," he went on, "when you are talking about Imax, because they are in science centers and museums."

He added, however, "there are a number of us who are concerned that there is a kind of tacit overcaution, overprotectedness of the audience on the part of theater operators."

In any event, censoring films like "Volcanoes" is not an option, said Dr. Field, who said Mr. Low, the film's producer, got in touch with him when the evolution issue arose to ask whether the film should be altered.

"I said absolutely not," recalled Dr. Field, who retired from the National Science Foundation last year.

Mr. Low said that arguments over religion and science disturbed him because of his own religious faith. In his view, he said, science is "a celebration of what nature or God has done. So for me, there's no conflict."

Dr. Lutz, the Rutgers oceanographer, recalled a showing of "Volcanoes" he and Mr. Low attended at the New England Aquarium. When the movie ended, a little girl stood in the audience to challenge Mr. Low on the film's suggestion that Earth might have formed billions of years ago in the explosion of a star. "I thought God created the Earth," she said.

He replied, "Maybe that's how God did it."
http://www.nytimes.com/2005/03/19/na... tner=homepage


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Music Industry Financier Buys 'American Idol'
Ben Sisario

Robert F. X. Sillerman, the music industry baron who recently bought Elvis Presley Enterprises, added another big prize to his vault of media holdings yesterday, acquiring the British company that owns "American Idol" and its many lucrative franchises around the world.

His company, which is in the process of changing its name to CKX, said it would pay up to $161 million and 1.87 million CKX shares to purchase 19 Entertainment Ltd., a private company based in London.

The announcement, coming amid rising viewer interest as "American Idol" moves into its final rounds, drove shares of Mr. Sillerman's company, Sports Entertainment Enterprises, up more than 58 percent, to a close of $26.73 on Nasdaq.

In a telephone interview, Mr. Sillerman did not reveal specific plans for the "American Idol" franchise but said his aim at CKX was to assemble an arsenal of entertainment content with an eye to emerging distribution technologies like on-demand television and hand-held devices.

"I can imagine years from now something being distributed through cellphones, BlackBerries, computers, whatever," he said. The notion that video entertainment should "only go through a TV set is as archaic as the thought that music can only be distributed on a CD."

Besides the "American Idol" television show, which grew out of the British "Pop Idol," the acquisition of 19 Entertainment includes all of that company's management contracts with current and former "American Idol" and "Pop Idol" contestants as well as the Spice Girls, Annie Lennox, and the British soccer star David Beckham and his wife (and former Spice Girl) Victoria Beckham.

Now in its fourth season on Fox, "American Idol" remains one of the most popular shows on television, and its ratings continue to increase. On Wednesday nights, for example, the show this season has been seen by an average of more than 26 million viewers each week, an increase of 8 percent over last season and 20 percent above the season before, according to Nielson Media Research.

It also continues to churn out money-making acts. While no "American Idol" winner has sold in the league of Britney Spears or Usher, most of the albums by "American Idol" winners have been significant hits.

Clay Aiken, the runner-up in the show's second season, has sold three million copies of his debut album, "Measure of a Man," and one million of his holiday album from last year, "Merry Christmas With Love." "Free Yourself," by Fantasia Barrino, last year's winner, has sold 1.2 million copies since its release in November. But Diana DeGarmo, last season's runner-up, has sold only 141,000 of her "Blue Skies." All "Idol" winners' albums have been released by RCA Records.

As part of yesterday's deal, Simon Fuller, who created the "Idol" franchise, will remain president of the company for six years. Bear Stearns, the New York investment bank, lent Sports Entertainment $109 million to finance the acquisition.

"No TV show goes on forever," Mr. Sillerman said. "But somebody could say the Super Bowl is not going to go on forever and the Final Four is not going to go on forever, yet they continue to get bigger and bigger. 'American Idol' has become part of the fabric of America."

Mr. Sillerman has had plenty of experience in bundling entertainment companies and content. He built SFX Entertainment into the biggest concert promoter in the country in the late 90's, buying regional promoters as well as theaters, ticketing companies and artist-management firms.

He sold SFX in March 2000 to Clear Channel Communications for about $3 billion. Later, he set out to take over another artist-management giant, the Firm, based in Los Angeles. After that deal fell apart, Mr. Sillerman was largely out of the public eye until he announced in December that he was buying an 85 percent stake in Elvis Presley Enterprises, the business that controls Presley's name and likeness.

In naming his companies, Mr. Sillerman chooses enigmatic three-letter abbreviations that include his second middle initial, X.

"Management believes that a short name consisting of three letters is an easy way to create brand identification," the company explained in a Securities and Exchange Commission filing explaining its name change. "They have chosen 'C' and 'K' to stand for 'Content is King.'"
http://www.nytimes.com/2005/03/19/ar...on/19idol.html


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TV Station Puts Downloads Up For Sale
Jo Best

In a move that mimics iTunes, British terrestrial TV broadcaster Channel Five has announced that viewers will be able to download digital program snippets for less than three dollars each.

The channel, the most recently launched nondigital station in the United Kingdom, has begun selling online downloads of its motoring show "Fifth Gear," which it promises are DVD quality.

Five and its program makers are hoping that consumers' reaction to TV downloads will match their reaction to the raft of music store openings, with many pirates willing to buy from legitimate sites when offered a legal choice.

TV piracy is already rampant in the United Kingdom and now accounts for one-fifth of the world's TV piracy, according to a recent report.

Online auto fans won't be able to download whole editions of the car show for the price tag of 1.50 pounds ($2.85). The excerpts will be individual features from the series, including reviews of "supercars" such as the Porsche 911, as well as a televised race between a Lamborghini Gallardo and a Ducati 999 motorcycle.

Five is also hoping to entice wannabe Michael Schumachers with downloads available for purchase by cell phone.

The channel picked 7 Digital to supply the download store and will use Microsoft's digital rights management technology to keep the video clips locked down.
http://news.com.com/TV+station+puts+...3-5630243.html


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Three Top US Publishers Buy Stakes In Topix.net

Newspaper publishers Gannett Co. Inc., Knight Ridder Inc. and Tribune Co. on Wednesday said they bought a 75 percent stake in Topix.net, which collects and categorizes online news content from a broad range of sources.

The three publishers each bought 25 percent of Topix.net, while the company's founders retained the last quarter-stake.

Topix.net, which says it gives users links to news from more than 10,000 sources, will expand its services and technology using content and funds from the three new investors. The deal's value was not disclosed.
http://www.reuters.com/newsArticle.j...toryID=7984536


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Book Reviews

BLOCKBUSTER How Hollywood Learned to Stop Worrying and Love the Summer. By Tom Shone.
Illustrated. 339 pp. Free Press. $26. THE BIG PICTURE

The New Logic of Money and Power in Hollywood. By Edward Jay Epstein.
Illustrated. 396 pp. Random House. $25.95.


I Am Large, I Contain Multiplexes
Neil Genzlinger

TOM SHONE and Edward Jay Epstein probably love the movies. No one would immerse himself in the topic deeply enough to write a book about it, as each of these men has, without having an affection for or at least a fascination with Hollywood and its ways. So it's a bit odd that as you read their often absorbing accounts, you can feel whatever joy you still associate with going to the movies slowly draining away.

The ritual of moviegoing had, of course, become a somewhat pale pleasure already, thanks to $10 tickets, impersonal multiplexes and whatever impairment it is that allows Hollywood to combine A-list stars with a $54 million budget and get ''Gigli.'' But Shone, in ''Blockbuster: How Hollywood Learned to Stop Worrying and Love the Summer,'' shows us that the slicksters who market films have become so adept at manipulation that it doesn't even matter anymore whether the movies are any good. And Epstein, in ''The Big Picture: The New Logic of Money and Power in Hollywood,'' suggests that, like quality, the moviegoing audience itself is becoming irrelevant.

Shone's volume is the more entertaining, Epstein's the more illuminating. Shone, a former film critic for The Sunday Times of London, succumbs frequently to a gee-whiz tone and seems especially star-struck by Steven Spielberg. Yet the journey from ''Jaws,'' where his book begins, to ''The Lord of the Rings,'' where it ends, is still a descent into cynicism, for the reader if not the writer. Ah, for those blissful days when one primitive special effect and a two-note musical theme could set the county abuzz!

Shone traces the blockbuster mentality to ''Jaws,'' Spielberg's 1975 phenomenon, and to George Lucas's ''Star Wars'' two years later. His description of the way the success of those two films surprised everyone, including their relatively unknown makers, has the nostalgic glow of another Lucas film, ''American Graffiti.'' Spielberg tells of being floored when he pulled into a Baskin-Robbins and realized that everyone in line was talking about his little shark film, and then being floored again when he arrived home and the television news was showing a feature on ''Jaws'' mania. As for Lucas's space epic, so untried were its production methods that when Lucas showed a preliminary version to friends, they thought they were looking at a catastrophic flop. ''Part of the problem,'' Willard Huyck, a screenwriter who was there, recalls, ''was that almost none of the effects had been finished, and in their place George had inserted World War II dogfight footage, so one second you're with the wookie in the escape ship and the next you're in 'The Bridges at Toko-Ri.' It was like, George, what is going on?''

What was going on, it turned out, was a seismic change in the way movies are conceived, made and marketed. Having seen nine-figure box-office returns from ''Jaws'' and ''Star Wars,'' the big studios set out to duplicate those numbers, in the process discovering toy and burger tie-ins, sequels, prequels and, eventually, video (and now DVD) sales and rentals. The calculated pursuit of the blockbuster led to spectacular financial successes and dandy filmmaking (''Titanic,'' ''Jurassic Park,'' ''Men in Black''), but it also soon squashed the sense of excitement that had accompanied ''Jaws'' and ''Star Wars,'' films people stood in long lines and drove long distances to see. Studios began opening their big films on thousands of screens at once -- no chance for lines to form or word of mouth to be a factor. No chance, in other words, for genuine excitement, just the manufactured variety.

Shone takes a while getting through the chronology of all this, thanks in part to an annoying tendency to lapse into critic mode, dwelling on particular scenes from not- very-memorable movies like ''Speed'' (1994) as if most of us saw them just yesterday. It's also never quite clear how he's defining ''blockbuster.'' ''Alien,'' for instance, which made $40 million in the United States in 1979, receives extensive attention, while ''Star Trek,'' which made $56 million that same year, goes virtually unmentioned. In Shone's dictionary, it seems, ''blockbuster'' means ''whichever big names would give me interviews.''

His book compensates for those flaws with a rich collection of moviemaking anecdotes and effervescent phrasings like this one from a particularly fine chapter on Robert Zemeckis's time-traveling 1985 hit: ''If you are looking for a movie that perfectly symbolizes the state of arrested development that is American cinema, 'Back to the Future' is your movie: an episode of 'Leave It to Beaver' as scripted by Feydeau, a teen sex farce with no sex, a family comedy that contemplates incest, and as sturdy a disquisition on man's place in the webbings of fate as any movie with Huey Lewis on the soundtrack has ever quite managed to be.''

Shone makes an assortment of points in the course of his genial narrative, but the one that registers most starkly comes when he reaches the 1998 remake of ''Godzilla,'' a big-budget mess remembered primarily for a one-joke promotional campaign the marketers drew out forever. ''If you were a 7-year-old child when you first read the slogan 'size matters,' '' Shone writes of the big lizard's catchphrase, ''you were 8 by the time you saw the movie it advertised. If you were a potato crop, you would have been harvested and turned into French fries. If you were a joke, however, there was a high likelihood that you would have worn a little thin.''

YET ''size matters'' did its job, because that's how gullible we all are: the film, terrible by all accounts, still brought in $375 million worldwide. ''By 1998,'' Shone writes, ''what was in place was a system where it is perfectly possible for a studio to buy our curiosity for the space of a single weekend, which was all the time the studio needed to make back its money.'' The art of filmmaking begins to sound like nothing but the art of the carnival barker, with us as the suckers.

But wait: perhaps that equation, glum as it is, is too simplistic. Shone hints now and again that Hollywood's figures on production costs and box-office receipts don't reflect a meaningful reality, but he basically buys into them anyway; Epstein, in ''The Big Picture,'' dismantles them. In a succinct, startling opening chapter, he outlines the transformation of the movie business since the end of World War II, a time when studios didn't have to worry about getting people into theaters because weekly moviegoing was a national habit; now, they have to cultivate an audience for each movie individually. ''In 2003 they wound up paying more to alert potential moviegoers and supply theaters with prints for an opening than they were getting back from those who bought tickets,'' Epstein says, adding bluntly, ''Even if the studios had somehow managed to obtain all their movies for free, they would still have lost money on their American releases.''

Epstein, whose previous books have zeroed in on targets like the Warren Commission and television news, sets the scene by transporting us back to Oscar night, 1948, a moment in time when the old studio system, with its self-made titans and starry glamour, seemed invulnerable. In fact, it was about to topple, thanks to antitrust litigation and to an insidious little invention called television. The story of how the system rose again, in a profoundly different form, takes up the first part of Epstein's book.

He details the way, one after another, the old studios were acquired by multinational corporations, and he profiles some of the men who were at the heart of the transformation, like Akio Morita of Sony and Sumner Redstone of Viacom. Their stories leave you admiring their ability either to force innovation or to adapt to it -- Morita pushing CD technology; Redstone ironing the kinks out of the video rental system and making it mesh with the studios' interests. These changes were taking place amid a swirl of acquisition, so that today what used to be proud, self-contained studios are relatively small parts of giant conglomerates: Viacom, Time Warner, G.E., News Corporation, Sony and Disney.

Having sketched this framework, Epstein tries to shed light on how movies exist inside it: where their budgets and revenue fit in, how creative and corporate decision making mesh (a complex subject indeed, as demonstrated by the recent Oscars: none of the best-picture nominees even cracked the top 20 in earnings for 2004). Many of his insider details involve two movies, ''Gone in 60 Seconds'' (2000) and ''Terminator 3: Rise of the Machines'' (2003), but hey, in the closed world of Hollywood accounting, one takes the leaks one can get.

Epstein gets us closer than most to a comprehension of the movie world's numbers games, but he doesn't quite take the final step of putting it all together in terms that residents of the real world can grasp. He breaks down the $187.3 million budget for ''Terminator 3'' into its component categories, for example, but never tells us specifically why everything is so darned expensive. More than half a million dollars for makeup? That's a lot of lip gloss. And $691,000 for ''dubbing in dialogue''? Since when is there dialogue in a Schwarzenegger movie?

Still, by the time Epstein is through it's abundantly clear that what we think of as Hollywood is, in accounting terms, a high-stakes hall of mirrors. The same corporations that own the studios own the television and cable outlets where films are rebroadcast, the theme parks that promote film characters, the record companies that make soundtracks, and on and on. Studios, he notes, are not so much makers of movies as they are clearinghouses, collecting money from a hundred enterprises associated with any given film and then parceling it out to an army of participants and investors. Those Monday morning box-office figures we hear every week suddenly feel as phony and naïve as the Oscars.

One thing, though, seems beyond dispute: the studios don't care whether any of us go to the movies or not, or whether their movies stay in theaters for a day or a month; the real money is elsewhere -- for instance, in home video. ''The benefits of prolonging a film's run in the theaters are now negated by the loss that would be sustained by delaying its video opening past the point at which it can benefit from the movie's advertising campaign,'' Epstein writes. ''And box-office grosses, which may reflect no more than expensive advertising campaigns, are clearly no longer the principal concern of the studios.''

It's a disillusioning notion -- all that advertising, all those awards shows and low-cut gowns, sustaining a fiction. A suspicion arises when reading Epstein's somewhat dizzying book: these corporate giants don't actually need us at all, whether in the theaters or in the video stores or in line at Disney World. If our ten spot for a movie ticket is irrelevant to them, wouldn't our $15.99 for the DVD be as well? So much paper-shuffling and shell-gaming seems to be going on in the clearinghouses- formerly-known-as-studios that if you showed up there with a boxful of actual cash, no one would know what to do.

Hollywood, like the world of ''Terminator 3,'' seems on the verge of becoming a self-perpetuating machine, no human participation needed. The audience is obsolete. Large parts of many films are already computer-generated, so flesh-and-blood actors may become extinct too. Movies will be made on microchips and marketed to microchips, while still other microchips tally the profits. And out here in the real world we'll go back to doing what we did before there were movies. Er, what was that exactly, anyway?
http://www.nytimes.com/2005/03/20/bo...020GENZLI.html


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Study Criticizes Government on Cybersecurity Research
John Markoff

A report released Friday by a panel of computer experts criticizes the federal government, saying that its financing of research on computer network security is inadequate and that it is making a mistake by focusing on classified research that is inaccessible to the commercial sector.

The report, commissioned by the Bush administration, calls for the government to spend $148 million annually on Internet security research through the National Science Foundation, over the current $58 million. It also urges more research spending by the Pentagon's Defense Advanced Research Projects Agency, or Darpa, and by the Department of Homeland Security.

The report, "Cybersecurity: A Crisis of Prioritization," was prepared by a subcommittee of the President's Information Technology Advisory Committee, a group of industry and university experts.

Research in Internet security is needed to protect systems that run the government and military operations, as well as other areas, including the electric power grid, the air traffic control grid and financial systems, the report said.

"The federal government is largely failing in its responsibility to protect the nation from cyberthreats," said Edward D. Lazowska, chairman of the computer science and engineering department at the University of Washington and co-chairman of the panel. "The Department of Homeland Security simply doesn't 'get' cybersecurity. They are allocating less than 2 percent of their science and technology budget to cybersecurity, and only a small proportion of this is forward-looking."

Michelle Petrovich, a spokeswoman for the Department of Homeland Security, disputed the criticism. "We take cybersecurity seriously and have taken aggressive measures to address various needs," she said. "Our cybersecurity budget has gone up every year."

Peter Neumann, an independent computer scientist at SRI International, a research center in Menlo Park, Calif., said that both Congress and the Bush administration had been neglecting civilian Internet security research.

"The problem is that there is no sense of the importance of research in this Congress or in this administration," said Mr. Neumann, who consults for the government.

The panel also found that the Internet security research community was too small to meet a government goal of at least doubling the size of civilian Internet security researchers by the end of the decade. Fewer than 250 Internet security researchers are now at United States universities, largely because of unstable funding levels, the panel said.

The authors argue that because universities have provided many crucial ideas, technologies and talent, both the civilian and the military sectors are likely to be hurt by the recent trend.

The panel also criticized a recent shift, at both Darpa and the National Security Agency, toward short-term classified research over long-term academic research.

The report found that efforts to transfer federal research to Internet security businesses were inadequate and that there was a basic absence of leadership and coordination. The authors recommended that a federal interagency group take responsibility for coordinating Internet security research.

The report says the current commercial approach to security problems tends to consist of a series of patches. "Even if all the best practices were fully in place, in the absence of any fundamental new approaches we would still endlessly be patching and plugging holes in the dike," the report states.

The report also lists 10 Internet security research priorities, including authentication technologies, secure protocols, improved engineering techniques, monitoring and detection tools and cyberforensics.
http://www.nytimes.com/2005/03/19/te...9computer.html


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Home Sweet Studio
Jon Pareles

THERE'S a tambourine in Adam Pierce's bedroom, two upright pianos and some Balinese gamelan instruments in his living room, a Celtic harp near his television set. Piled up next to the basement stairs are four drum kits in their cases. Take a left at the laundry room and there's the recording studio, a low-ceiling den where drums, a guitar and a vibraphone are set up and battered amplifiers and reverb units are stacked against a wall. The control room, where Mr. Pierce records nearly everything on an old 16- track reel-to-reel tape recorder - 13 of the tracks still work - is a few steps away. It smells a little dank, since bathroom pipes run behind the mixing board.

Here, at the house he shares in Mount Vernon, N.Y., Mr. Pierce has recorded nearly all of the music on the five albums he has made as Mice Parade (an anagram of his name). "Try not to move that microphone," Mr. Pierce said, dodging a stand as he showed a visitor around the studio space. "It was getting a certain sound in that spot."

Mr. Pierce is part of a quiet revolution in music-making: the move from professional studios to home recording. Making an album used to mean booking a fixed amount of very expensive time in a well-equipped but unfamiliar room; now, it can be a matter of rolling out of bed and pressing a button. Whether it's Mice Parade's indie-rock, Aesop Rock's underground hip-hop, the twilit ballads of Keren Ann, the mercurial California rock of the Eels or sweeping Top 40 contenders from Moby, more and more music is emerging not from acoustically perfect state-of-the-art studios, but from setups tucked into bedrooms and basements or simply programmed onto a laptop.

The growth of home recording is a convergence of technology, thrift and shifting musical tastes that has been building for decades. In 1984 Bruce Springsteen released "Nebraska," with its songs recorded as demos on a four-track cassette recorder. It had a haunted sound that more professionally recorded versions of the same songs could not improve; he had tried. But "Nebraska" was an anomaly.

Then along came hip-hop, and hit songs made with two turntables and a microphone, convincing musicians and listeners that lo-fi sound has its uses. And along came digital recording: first in elaborate studio machines and then, as processor speed increased, in home computers. Now a virtual recording console, effects and instrumental sounds are all tucked into software like Pro Tools, the nearly ubiquitous program that was introduced by Digidesign in 1991. It simulates a multitrack studio capable of recording, overdubbing, mixing, editing, even tuning up missed notes or placing a sound on the beat. In the 21st century, homemade recordings can be indistinguishable from studio products.

"I avoided the computer generation for a very long time," said Aesop Rock, a rapper who produces most of his own tracks; he made his first albums with a turntable, a sampling keyboard and a few instruments. But after he invested some tour profits in a Pro Tools setup, he was hooked. "The ease of manipulating everything is amazing," he said. Studio costs vary widely, but can easily run hundreds of dollars an hour. A basic 32-track Pro Tools LE system, to interface with a computer, costs about $450.

Studios still excel at recording ensembles and making them sound lifelike (or better). Songs with the grandeur of Phil Spector productions or 1960's Motown hits, which had a full studio band chiming away, are unlikely to come out of home studios. And musicians working alone, or mostly alone, can't count on a group's creative friction - or an engineer's involuntary smirk - to sharpen their ideas. But for music that can be built by overdubbing - like the intricate patterns of guitars and drums that Mr. Pierce spins as Mice Parade, or the sampled and looped riffs of hip-hop, or the layers of synthesizers within Moby's songs - a home studio is just the thing.

As home studios gain, actual studios suffer. "They're dropping like flies," Mark Oliver Everett of Eels said mournfully. This year such well-known studios as the Hit Factory in New York, Cello Studios in Hollywood (formerly Western Recorders, where the Beach Boys made "Pet Sounds") and a renowned rock and soul crucible, Muscle Shoals Sound Studios in Sheffield, Ala., have all closed.

Under the same pressures as any commercial real estate, studio rooms that can hold orchestras or big bands in prime acoustics are disappearing. When Jazz at Lincoln Center built its headquarters in the Time Warner Center, it defied that trend, and ensured itself a place to record, by earmarking some of its precious midtown space for a rehearsal room that can accommodate a symphony and a jazz band, effectively building the first large New York City studio in years. It also wired its acoustically isolated theater and its club spaces for recording.

Home studios can be shoehorned into tighter quarters. Years ago, Moby moved his bed into a closet and converted the bedroom of his downtown Manhattan loft into a neat, skylighted studio full of keyboards, patch cords and computer gear. Out of it have come million-selling albums like "Play." Aesop Rock's studio is an alcove littered with cigarette packs and running shoes, tucked between the living room and kitchen of his ground-floor apartment in the Carroll Gardens neighborhood of Brooklyn.

When a musician lives in the studio, family and neighbors have to adapt. "The neighbors prefer I don't do vocals at night," admitted Aesop Rock. "It gets a little iffy when I'm screaming."

Songwriters have always recorded tales of their romances. Now, they might be doing it with their subject nearby. Mr. Everett records while his wife, upstairs, tries to ignore what he calls "the constant thumping and banging from the basement." Speaking by telephone from his home in the Silver Lake section of Los Angeles, he deadpanned: "She's not even a fan of my music. If the song's not about her, she doesn't care. I've started telling her they're all about her so she'll like them."

Home recording is subject to interruptions not generally found in professional quarters. During one Eels session for "Blinking Lights and Other Revelations" (Vagrant), which is due in April, Mr. Everett's dog, Bobby Jr., was sprayed by a skunk. "And I'm the one that has to give him a tomato-juice bath in the recording-studio bathroom," Mr. Everett said. Bobby Jr. actually appears on the album, howling what Mr. Everett called a solo vocal.

Mr. Everett works with a recording engineer in his home studio because, he said, "It's too advanced for me - I don't know how to turn some of the stuff on now." But many other home recordists work entirely alone as performer, producer and engineer.

"It's so nice not having to wait for other people to show up," Moby said by telephone from Amsterdam. "It's a very lonely process, and you miss the gregarious interaction you'd have with musicians. But the flip side of that is your equipment doesn't argue with you, so it's easier being a megalomanical home studio despot."

Working in solitude can nurture more eccentric, more private songs. Keren Ann recorded the hushed ballads of her new album, "Nolita" (Metro Blue), in two private studios: her soundproofed apartment in Paris and one in the downtown Manhattan neighborhood that gave the album its title, often working in the predawn hours when the city was quietest. Guest musicians could drop by after the last set at a jazz club.

"Going back and forth, I often arrive here jet-lagged, so I'm awake at 5 a.m.," Keren Ann said in an interview at her loft, where tom-toms sit on a kitchen shelf above pots and pans. "It happens that I have this idea on an instrument or an arrangement, and I'll wake up and turn everything on and record. It's also different when you can record your own vocals and nobody hears you. You can confess more. If I had not done 'Nolita' this way, it would have been less intimate, less naked."

When it's easy to record at any time, musicians don't hold back. "Because I work a lot," Moby said, "I figure I've got four or five thousand unreleased songs. A lot of them are not very good. If you're trying out a new idea in front of your friends or your bandmates, if it's a terrible idea they're going to throw stuff at you. I have a lot of terrible ideas. But working at home, you can be as embarrassing as you want, and you'll be the only person who will ever hear it. And sometimes the really dumb idea that you had could be a good piece of music."

Home recordists still venture out when they need improved equipment and acoustics: a $10,000 vocal microphone, a specialized guitar setup. It's a relief, they say, to have someone else responsible for the technical details. They also take their songs to full-fledged studios for final mixes to try out the music on speakers and systems that are too big for a basement.

While working in a rented studio can mean pressure, working at home can mean procrastination and endless second-guessing, and some home recordists appreciate the sense of urgency that the clock brings. "When I record in a studio," said Aesop Rock, "I know that on Tuesday at 3 o'clock I've got to go be creative."

Mr. Pierce said: "At home I don't know what I'm going to record before I'm about to record it, or how the pieces of the song will be put together. But in a studio, the way a transition is going to be made has to be decided in the next 30 minutes."

Although computers can mimic the reverberations of anything from a cubicle to a stadium, there's still no substitute for physical space. Mr. Everett compared his basement studio to a vintage keyboard warehouse. "It's so annoyingly small that it's gotten to the point now where I can't even buy another guitar. Every time I want to play an instrument I have to move another five instruments to get to it." So when he needed a string section for an Eels song, he went to a professional studio. "I could fit 32 people in the basement," he said, "but I'd have to stack them all on top of each other, and it's hard to play the violin like that."

Moby's new album, "Hotel" (V2), simulates concert halls and pulsating clubs, although nearly all of it came from a space he describes as claustrophobic. "I'm a small person, and the studio is built to scale," he said. "Occasionally I'll invite friends over, but it's a place that I spend so much time in by myself that when anyone's over I feel like the moment they leave, homeostasis has returned."

For musicians who record at home, the studio becomes a sanctuary: part sandbox, part confessional. "One of the greatest luxuries is having a permanent small studio space that's always waiting for me," Moby said. "It's secure when I leave, and it sits there waiting patiently for me when I get home. It's the perfect companion."

And there's a certain symmetry in the fact that the music that emerges from home recording is increasingly heard by one person at a time, between the headphones of portable music players like the iPod. The sounds musicians have made alone at home end up in an equally private sphere. "It's not about being lonely," Keren Ann said about recording at home. "It's about being apart."
http://www.nytimes.com/2005/03/20/ar...ic/20pare.html


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Toshiba Brings Forward 4GB 0.85in HDD Debut
Tony Smith

Toshiba will put its 4GB 0.85in micro hard drive into volume production next month, rather sooner than it anticipated when it announced the product in January this year.

Back then, Toshiba said (http:// www.theregister.co.uk/2005/01/06/ toshiba_2gb_phone_hdd/) it would begin shipping the 2GB version of the drive at the end of the month. It said it would offer a two-platter version of the product, taking the capacity up to 4GB, mid-2005.

According to Japanese-language site PCWatch, Toshiba will now ship the 4GB part in April, punching out 20,000-30,000 units a month, though the company intends to raise that figure over successive months.

Toshiba announced (http://www.theregister.co.uk/2004/09...hiba_tiny_hdd/) its 0.85in HDD in December 2003. In September 2004, it said it would put the unit into mass-production by the end of the year (http://www.theregister.co.uk/2004/09/29/ toshiba_tiny_hdd/), though that ultimately slipped to early 2005. That may explain why it's being a little more conservative about the availability of the 4GB version.

Both versions spin at 3600rpm, weigh less than 10g and operate at 3.3V. They can stand 1000G of operating shock, Toshiba claims.

The manufacturer is pitching the parts at mobile phones, PDAs and compact MP3 players. Earlier this month, Samsung demoed a music-oriented smart phone, the i300, which incorporates (http://www.theregister.co.uk/2005/03/11/ samsung_hdd_handset/) a 3GB hard drive.
http://www.theregister.co.uk/2005/03...gb_0-85in_hdd/


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Surveillance

Investigators Argue for Access to Private Data
Tom Zeller Jr.

Diany Castillo, a 54-year-old home health care aide who lives in Brooklyn, says she is grateful that the fragmented bits of her past - her moves from one state to another, her marriages and her name changes - can be found in the vast commercial databases that contain personal information on tens of millions of Americans.

Last October, a private investigator in Los Angeles used those digital bread crumbs to track down Ms. Castillo and send her a letter. Her estranged daughter, Diani Ramos, adrift for nearly a decade on the streets of southern California, was looking for her, the letter said.

The two were reunited in November.

In the heated debate over privacy rights and the sale of personal information by the data-mining industry, the story of Ms. Castillo and Ms. Ramos may represent a contrarian's view.

But Bernard Cane, the private detective who found Ms. Castillo, says this kind of happy ending could become much rarer if lawmakers begin to limit access to commercial databases, which can include, among other personal information, Social Security numbers. In many ways, the interests of Mr. Cane and his clients highlight the difficulties in finding a one-size-fits-all solution that both protects consumer privacy and makes some information available for tasks like this one.

"How does a doctor do surgery without a scalpel?" Mr. Cane asked. "You've got to have the right tools to do a job."

Until now, the Sam Spade lobby has had surprising success in arguing that civilian investigators, like insurance brokers, employment screeners and other businesses, have a legitimate need for some sensitive consumer information. But over the last month, as one company after another - first ChoicePoint, then Bank of America and two weeks ago, LexisNexis - revealed the loss or theft of millions of bits of sensitive consumer data, Americans have been forced to contemplate the vulnerability of their personal information.

Congressional hearings into that vulnerability - and into the loosely regulated data trade - have already begun. And as privacy advocates, federal and state lawmakers and ordinary consumers beat the drum for new regulations on the commercial handling of consumer data, private investigators - who are major buyers of personal information from data brokers - have been bracing for more scrutiny of their access.

The digital information available to Mr. Cane and others in his business was greatly enhanced in 1993, when the Federal Trade Commission made a formal distinction between full credit reports, which are governed by specific rules of access, and the identifying information at the top of a credit report. The latter, which is known as the "header," includes the person's name, most recent address, date of birth and Social Security number.

That distinction allowed credit reporting companies to sell the header information to the growing data-brokering industry, which was already amassing dossiers on millions of Americans using public information sources like court filings and criminal records.

The commercial data trove quickly got filled with millions of Social Security numbers, and the question of just who ought to be able to gain access to those databases has been fiercely debated and haphazardly regulated ever since.

The Federal Trade Commission permitted a working group formed by several database companies to come up with self-regulating guidelines in 1997. But privacy advocates argue that individual commercial data brokers still decide themselves who is eligible to buy personal information.

The Gramm-Leach-Bliley Act, which went into effect in July 2001, reversed the credit header rule and prohibited credit reporting agencies from selling that information outside the rules set out by the Fair Credit Reporting Act. But the law did not clearly address what data brokers and their subscribers could do with the information already in their systems.

The access now enjoyed by private investigators troubles privacy advocates.

"We're concerned generally about accountability in this profession," said Chris Jay Hoofnagle, an associate director for the Electronic Privacy Information Center, a digital rights group based in Washington. Mr. Hoofnagle pointed out that investigators were not licensed in all states, and that in some jurisdictions licensing was a mere formality.

Data brokers could conceivably limit access to investigators in states with robust licensing rules, like California, Georgia and New York, but there is little evidence that this is done in practice. And other critics have argued that inaccuracies in the databases make them dubious sources for conducting investigations.

Organizations like the Privacy Rights Clearinghouse, for instance, have gathered information on hundreds of cases in which consumers were wrongly denied credit or, worse, wrongly associated with a crime or a debt.

And still other critics suggest that investigators could get all the information they need the old-fashioned way - by hitting the streets, reviewing court records and asking questions - without ever having to look at anything like a credit header.

"Private investigators using information brokers are simply lazy," said Robert Ellis Smith, editor and publisher of a newsletter, Privacy Journal. "They don't want to do the legwork."

But Kirsti Ekeholm, a licensed private investigator based in Atlanta, says her profession is too frequently dismissed in just this way. Investigators with expertise in databases know how to handle information that can often be incomplete or incorrect, she said.

"These records were never designed to be exploited as a commodity to be sold," Ms. Ekeholm said. "And while it's not possible - you can't stop private information from being available - you can limit how it's sold and limit what industries will have access to it."

Indeed, Ms. Ekeholm is among the many private investigators who have tried to stop big brokers like ChoicePoint from making even their less-sensitive data widely available, particularly to the general public. Part of this, of course, is simple turf protection for their business. But Ms. Ekeholm also argues that her industry shares the public's concerns over privacy, and that licensed investigators are trained to know how to protect it.

"The P.I. industry gets a black eye in all this," Ms. Ekeholm said. "But we have just as much interest in protecting privacy as anyone else. I don't want my information readily available to just anyone."

Several past Congressional efforts have sought to limit that availability across the board - including to investigators. But so far none has emerged from committee.

In such cases - and in numerous negotiations with the Federal Trade Commission, privacy advocates and state and federal legislators - the National Council of Investigation and Security Services, a trade group representing civilian investigators, has mounted vigorous campaigns to stifle new regulations.

But major security gaffes at companies like ChoicePoint, which was fooled by thieves masquerading as legitimate subscribers, might make things considerably tougher for the industry this legislative session.

"One of our strongest arguments has been that we are vetted," said Bruce Hulme, a private investigator in New York City and chairman of the trade group's legislative committee. "And if ChoicePoint and others do not properly vet their customers, then we're all in trouble."

One bill introduced in January by Senator Dianne Feinstein, Democrat of California, would require companies to notify consumers when breaches of security occur. It has won support from the investigators' lobby. But another of Senator Feinstein's bills, the Privacy Act of 2005, is opposed by investigators because it would limit access to all kinds of information that they use every day - including the credit headers, Mr. Hulme said.

And if that happens, investigators insist, reunions like that between Ms. Ramos and her mother would become a much rarer thing.

In an interview, Ms. Ramos explained how, at the age of 18, suffering from an abusive past, clinical depression and a mental fog induced by an antipsychotic drug, she left her family, which was then living in Fort Myers, Fla., and headed to California, seeking what she called "a better life."

She did not find it. Instead, she says, she drifted for years between halfway houses, shelters and the streets in Compton, Hollywood, Bell Gardens and, finally, San Diego. During her time in California, Ms. Ramos said, she was raped, robbed and jailed, and by last fall, she wanted desperately to go home.

But after nine years, all ties to her family back in Florida had evaporated. Phone numbers were long forgotten and, in her troubled mind, even names and places had become sketchy.

In a strange twist, Ms. Ramos reached out to the Privacy Rights Clearinghouse in San Diego for help. She had become convinced - wrongly - that her identity had been appropriated by thieves. The group put Ms. Ramos in touch with Certified Investigative Professionals, a membership organization in Santa Monica, which then put her in touch with Mr. Cane.

Ms. Ramos recalled names and middle names that her mother used - Diany, Ziani, Janet. She had surnames, married and maiden, but the spellings varied, and were only guessed at phonetically - Pechouka, or Pacheco, she thought. Or Mourra. And there was the street in Fort Myers where they had once lived - Seminole Street.

The information turned up thousands of possible leads and duplicate names, Mr. Cane said. But as he narrowed the field, it was his ability to view Social Security numbers that allowed him to link various records associated with Ms. Castillo, even as her name and location changed.

The process took about two weeks, Mr. Cane said. He did not charge Ms. Ramos.

"Given the holes in the information, it might have taken six months to a year" without the header information, Mr. Cane said. "I'd have had to retain folks, do background records searches on the ground, flown back and forth to Florida."

If new legislation were to force such globe-trotting, Mr. Cane said, he could not afford to do it - and neither could the justice system, which, he says, relies more heavily on private investigators using the data bazaar than anyone wants to admit.

"I don't want to find a new vocation," Mr. Cane said. "But if they knock any more teeth out of my tiger, I'm going to have to retire my tiger."
http://www.nytimes.com/2005/03/21/te...gy/21data.html


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The Music Goes on Side A and the Flip Side Is a DVD
Robert Levine

When Matchbox 20's lead singer, Rob Thomas, was planning his first solo release late last year, he thought about ways to make the album a better value, in part to entice consumers who might be tempted to download his songs illegally.

"Obviously, I don't want people to download my album," he said. "But you can't just complain that people are downloading music and not do anything."

In the last couple of years, some artists have included a second disc with bonus songs or a short DVD in order to win over potential file-sharers. But Mr. Thomas's "Something to Be," due April 19 from Atlantic, part of the Warner Music Group, is among the first by a major artist to be released only on DualDisc, a new format being introduced by the major labels that includes a traditional CD on one side of a disc and DVD content on the other. The DVD side includes the same album mixed in surround sound so that it can be heard through home theater systems, as well as about 20 minutes of video - in Mr. Thomas' case, some documentary footage.

At a time when the music business is still suing illegal file-sharers whom, the industry claims, are causing them to lose sales, the major music labels are hoping the DualDisc format will give them a multimedia carrot that can be used along with the legal stick. Because DualDisc albums have additional content but sell in most stores for only a dollar or two more than traditional CD's, they are marketed as a better value.

"They're trying to find some way to add value to the physical product," said David Card, an analyst at Jupiter Research.

They would also like to add some convenience. When Andrew Lack started as the head of Sony Music, now Sony BMG Music Entertainment, in January 2003, he would bring home stacks of CD's and DVD's every night to become more familiar with the company's artists. New to the music business - he had come from NBC, where he had been president of the network - Mr. Lack was struck by how inconvenient it was to switch between the two formats.

"I was thinking, 'Wouldn't it be nice if we could flip this disc over and learn something about the artists?' " he said. The idea was already in the works, so Mr. Lack decided to make the product one of his priorities. Over the last year, all the major labels agreed on specifications for the DualDisc, and no one label will control it. The logo will probably be licensed by the Recording Industry Association of America.

Retailers, who have been squeezed in recent years by file-sharing and by cuts in promotional money from music labels, are enthusiastic about the prospects of the DualDisc. Since the beginning of the year, two major albums have been released in both CD and DualDisc formats, "O" from Omarion and "Rebirth" by Jennifer Lopez. About a third of consumers purchased the DualDisc in the first week, according to Sony BMG Music Entertainment, which produced both. On April 26, the company will release Bruce Springsteen's new album, "Devils & Dust," exclusively as a DualDisc.

"The feedback I'm getting from retail accounts makes me cautiously optimistic," Mr. Lack said. "I think the CD is coming to the end of its run, and I think this might - might - be a replacement."

When the format was introduced before Christmas, there were technical concerns. The discs, imperceptibly thicker than ordinary CD's because two sides are fused together, are incompatible with a fraction of older slot-loading CD players. So far, however, few consumers seem to be having problems. "We have had a below- average return rate," said Bryan Everitt, director of music operations at Hastings Entertainment, which operates 153 music stores under various names.

Artistic advances have been made as well. "The initial DualDisc releases, some of them might have only appealed to the fan club," said Robert J. Higgins, the chairman and chief executive of Trans World Entertainment, which owns F.Y.E., Coconuts and other music chain stores. "But the newer ones have solved that problem."

"When you see a great artist come out in DualDisc," Mr. Higgins said, "that will really write the rules for this."

So far, Sony BMG has been the most aggressive of the major labels in involving marquee artists and promoting the format, according to several retailers. Since the DualDisc incorporates formats that already exist, it will have an advantage over other recent products, such as Super Audio CD and DVD-Audio, and retailers believe DualDisc will capture more of a market. Of the four major labels, only EMI Music has not yet announced DualDisc releases but it is expected to do so this year.

Among the encouraging signs for DualDisc is the recent growth in sales of music DVD's, which nearly doubled in 2004 from the previous year. "We think that consumers have shown a great desire for video," said Paul Bishow, a vice president in marketing for Universal Music Group. "And one of the great engines for growth of DVD video is the additional features. Now you see the beginning of that with music."

Retailers hope consumers see the parallels with DVD. "We need something where, when the consumer picks up a CD, they'll think it's as good a value as a DVD," said Mr. Higgins of Trans World Entertainment.

Like many retailers, Trans World usually charges up to $1.50 more for a DualDisc version of a title. But music companies hope low prices will expand the size of the market, as they did for DVD's."By Labor Day, we'll know," said Mike Dreese, the co-owner of Newbury Comics, a chain of record and movie stores in New England. "This will either be a mildly interesting niche product, or by next year, half of the albums by major artists will be DualDisc," Mr. Dreese said. For now, given the problems the music business has suffered over the last several years, "it's exciting to see something that when you put it in a rack, it sells."
http://www.nytimes.com/2005/03/21/bu...ia/21dual.html


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Blank Discs Not Created Equal
Aaron Weiss

There was a time when burning a blank CD-ROM in your own home sparked feelings of wonder and joy as if you were performing a minor miracle. What once seemed like a technical marvel has, like so many small wonders, become routine.

Now we can also burn our own DVDs. Sprinting down to the local mega-mart for a stack of blank CDs seems like a no-brainer, and it's quickly becoming so for DVDs. But the story doesn't actually end there.

Blank media still possess an air of mystery, at least to some people. When you buy a stack of shiny new platters packaged by Fujifilm, TDK Electronics, Ritek, Verbatim, Imation, Hewlett-Packard or another recognizable brand, you cannot count on the name that appears on the label to reveal the whole story. In fact, most of this blank media is manufactured by a short list of companies: India's Moser Baer, Japan's Ricoh and Taiyo Yuden, and Taiwan's CMC Magnetics, Prodisc Technology and Optodisc Technology.

Taiyo Yuden is the granddaddy of them all. Together with Sony and Philips, it invented recordable CD media in 1988. Today, these manufacturers produce a variety of product lines. Some are in-house formulations bought and resold under brand names, while other lines may be designed to the specifications of a particular vendor.

Just how much of each is out there "is an area where speculation takes hold more than fact," says Kevin Pieper, who maintains the resource site digitalFAQ.com. In Pieper's experience, the name brands "purchase the media being made by the manufacturers, and put their pretty little logo in it -- nothing more."

Verbatim spokesman Andy Marken describes the company's facilities in Singapore and Japan as using "our own processes and procedures" and says "our own production and quality engineers monitor the work flow."

It is not uncommon for brand names to draw on more than one manufacturer to fill their inventories, selling blank media with different ancestries. And so ... who cares?

People who take their burns seriously care a lot. They hang out in online forums such as Club CD Freaks, a community with more than 100,000 members and 5 million visitors a month. A smaller community of about 10,000 members frequents CDRLabs.com. Hot topics at these sites include reviews of the latest DVD recorders and hot tips on blank-media bargains.

"Good," by these standards, has several meanings. Most importantly, people don't want to wind up with coasters -- discs that fail to burn properly and are rendered useless. It used to be that producing coasters was a fact of life, back when recording technology was immature. These days, most coasters are the result of poorly made media. In fact, says Pieper, "there is actually more bad media now than there was just two years ago."

Even with a successful burn, the question of durability and longevity remains key. All burns produce a certain number of errors -- the CD and DVD data protocols are designed to handle this. But too many errors can result in a disc that does not stand the test of time -- readable in the short term, but possibly not years later.

Some media can burn reliably faster than its rated speed. A DVD+R might be rated at 4X burn speed, yet with certain recorders, it can be burned at 8X. The factors that contribute to high- or low-quality media are varied. Several choices of dye are on the market, and which one is used can affect a disc's reflectivity, and thus its readability. But beyond that, says Pieper, "if your dye is unevenly spread, or the other materials and workmanship are shoddy, it doesn't matter what dye is used." Also, Pieper says if the glue job on the platter is sloppy, "the media literally falls apart."

Taiyo Yuden media stands as the golden child for blank-media enthusiasts. Popular opinion swings the other way for manufacturers such as CMC Magnetics and Princo.

Individual community members, however, have their own personal favorites. Wesley Novack, a system administrator in Phoenix, is a review coordinator for Club CD Freaks. He prefers Maxell and Verbatim media along with the reigning favorite. But in these murky waters, he cautions that Verbatim media made in Singapore is generally preferable to Verbatim media manufactured elsewhere, because that plant is directly owned by the company.

Every blank platter is encoded with an MID, or manufacturer identifier, which indicates the real manufacturer of the media. The MID can only be read with software such as the popular recording suite Nero 6, and niche utilities such as DVD Identifier and KProbe, all for Windows.

A roar of excitement goes up on message boards when someone buys a discounted pack of, say, Fuji DVD+R and discovers the blanks have an MID of YUDEN000T02 -- in other words, a Taiyo Yuden batch.

But you can't read MID codes in a store aisle. Community members share clues that are almost mystical for identifying "the good stuff" on the shelves. One poster suggests that Verbatim-branded DataLife DVD-R discs on a gray spindle are made by Ritek (considered above-average) while those on a black spindle come from CMC.

Another secret shared by the connoisseurs: Fuji-branded package labels may read in small print either "made in Taiwan" or "made in Japan." Like children combing store shelves for that cereal box with the special decoder ring inside, media sleuths know Fuji discs made in Japan are the sought-after Taiyo Yudens. Another clue, according to Novack, is that with Taiyo Yuden-made media, "the cakebox bubbles out and is wider at the bottom of the spindle."

Despite all the back-room whispering and tip-of-the-day gossip, it's easy to buy Taiyo Yudens online -- just order them. Taiyo Yuden discs, like those from many of the other original manufacturers, can be bought straight up -- no brand-name middleman needed.

So, why all the fuss? What everyone wants is a great deal. Sure, you can visit online retailer Newegg.com and pick up a 50-pack of 8X DVD+R discs guaranteed to be Taiyo Yudens for just under $40.

But the bargain hunting keeps these communities buzzing. Unlike most online retailers, the big-box chains run heavy loss-leader discounts on recordable media. Nearly every week, recordable media go on sale for half-price or even less at a local mega-mart. And sometimes, just sometimes, these bargains reveal a gleaming stack of gems beneath the brand label.

"About a month or two ago," Novack says, Club CD Freak members hit upon a mother lode at Best Buy. "You could find a 25-spindle of Fujifilm 8X Taiyo Yuden DVD+R discs for $9. Now even though that was a sweet deal already, many stores had a shelf tag marked at $4 for a 25-spindle!"
http://www.wired.com/news/digiwood/0,1412,66911,00.html


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Euro Software Patents Pending
Wendy M. Grossman

The European Parliament appears set to introduce U.S.-style software patents, which critics have denounced as too broad and business-friendly.

Software patents continue to be one of the most hotly contested legislative initiatives in Europe. On Feb. 28, the European Commission declined the European Parliament's request to restart the legislative process from scratch.

A week later, the EC sent the Patentability of Computer- Implemented Inventions Directive, or CIID, to the European Parliament for a second read, a stage heavily weighted toward passage. The directive would allow software to be patented provided that it makes a "technical contribution ... to the 'state of the art' in the technical field concerned."

If the CIID passes, all EU member states will be required to pass supportive national legislation.

The United States has been granting software patents since the early 1990s, but in Europe they remain controversial. Opponents like the NoSoftwarePatents campaign and the Foundation for a Free Information Infrastructure, or FFII, argue that software patents make it impossible to write free and open-source software. They also believe patents favor large companies at the expense of small ones.

Critics point to the U.S. experience, in which a massive number of patent applications have been made and many patents have been criticized as overbroad, obvious or invalid because of prior art.

The CIID is widely described as bringing software patents to Europe, though this is only partially correct.

Jeremy Philpott, a marketing executive and former senior examiner for the U.K. Patent Office, noted that although the EU Patent Convention of 1973 specifically prohibits patenting software, in practice many such patents are granted.

"The intended purpose of the directive is to clarify the law while maintaining the status quo," Philpott said. "Anything unpatentable now, such as business methods, should remain so when the directive comes in, whereas software which has a technical contribution and is patentable now would still be patentable."

Philpott is correct that the United Kingdom already patents software. But, says Florian Müller, the Munich, Germany, manager of the NoSoftwarePatents campaign, the same is not true in other European countries.

Germany and Poland, for example, have specifically rejected patenting software. In Germany, only devices that involve natural forces may be patented. So, software can be patented only as part of a physical device, such as a recent Adidas patent on a new shoe with a computer chip in it that enables the shoe to respond to different surfaces.

"Of the various national patent offices in Europe," Müller said, "the U.K. Patent Office has the most liberal practice, surpassed only by the European Patent Office. The directive in its present form would standardize on that. It's like harmonizing taxes by taking the highest rate and saying that gives clarity for all."

A lot of the patents granted by the U.K. and European patent offices, he said, are not enforceable in Germany even though all European Patent Office decisions to grant patents are binding upon all EU member states, who must issue national patents.

Harmonizing patent law across the European Union is seen as an important step toward lowering the barriers to internal trade. In addition, the so-called trilateral offices -- the patent offices of the United States, Japan and the European Union -- have met regularly since 1983, attempting to establish common standards in patent search and examination practices. Japan allows software patents, but they must be "a creation of technical ideas utilizing a law of nature."

The next step under the European Union's codecision procedure (.pdf) is the European Parliament's second reading, which must begin within three months of formal delivery of the commission's text, translated into all 20 official languages, to the Parliament.

The second reading is expected to take place this spring or early summer. At that time, the European Parliament may accept, amend or reject the directive. Normally, no new amendments could be introduced at this stage, but the election of a new Parliament since the first reading voids this prohibition.

Still, there's a twist: To pass an amendment or reject the directive outright requires an absolute majority -- half plus one of all 732 elected members of the European Parliament, not just those present for the vote. The default is therefore weighted heavily toward passage of the directive.

It was for this reason that the FFII and the NoSoftwarePatents campaign both lobbied the council to restart the legislative process from scratch. The directive text agreed upon last May was voted upon by the commission only 17 days after 10 new member countries joined the EU.

Having failed in that effort, they now hope either to have the directive text amended substantially or to get it rejected completely with a view toward drafting better legislation later.

At the very least, said James Heald, a spokesman for the FFII, the phrase "technical contribution" must be clearly defined. "If the directive is to have meaning we have to be able to see what its intent is. The worst case is what's just come out of the council -- green-lighting software patents with no protective provisions."
http://www.wired.com/news/politics/0,1283,66938,00.html


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Court Ruling May Force EBay to Scrap 'Buy-It-Now' Feature
Chris Gaither

EBay Inc.'s U.S. site could be forced to abandon its popular "buy-it-now" feature — which accounts for nearly a third of the value of goods sold by the online auctioneer — as a result of a court ruling this week, analysts said Thursday.

The U.S. Court of Appeals for the Federal Circuit in Virginia on Wednesday upheld a key element of a patent infringement case against EBay by MercExchange and said a lower court was wrong to deny a permanent injunction against the online auction giant.

EBay shares Thursday fell 36 cents to $36.12 on Nasdaq. Scott Kessler, Internet equity analyst with Standard & Poor's, said investors underestimated the potential threat the ruling posed to the company's business.

"There are potentially far-ranging implications," he said.

After throwing out a $4.5-million judgment against EBay regarding comparison-shopping technology Wednesday, the court upheld an earlier ruling that ordered EBay to pay $25 million for infringing the no-haggle pricing feature from September 2001 to April 2003.

An attorney for plaintiff Thomas Woolston, president of Great Falls, Va.-based MercExchange, said he would ask the lower court as soon as next month to tack on more than $100 million to cover the nearly two years since then.

Unlike the auctions EBay is known for, the "buy-it-now" feature lets people snap up items immediately for a fixed price. Last year, EBay sold $3 billion in merchandise that way, or 31% of the global total.

The court ruling applies only to the U.S. sales, which EBay does not break out in financial statements.

EBay said in a news release that any injunction would have no effect because it changed its fixed-price system after the court's original verdict in 2003.

But in a filing with the Securities and Exchange Commission, EBay said that if it failed to persuade the lower court that those changes weren't infringing, the company "would likely be forced to pay significant damages and licensing fees or modify our business practices in an adverse manner."
http://www.latimes.com/business/la-fi-ebay18mar18.story


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iPod Therefore iAm
Douglas Kern

Ordinary people narrowcast; always have, always will. It's human nature to want to surround ourselves with like-minded people, familiar music, comfortable art, and unchallenging surroundings. Who can be surprised that our technology reflects this basic impulse?

Andrew Sullivan, that's who. In his recent essay, "iPod World: The End of Society?" Sullivan broods over the popularity of America's new favorite gizmo, the iPod:

"Americans are beginning to narrowcast their own lives. […] Technology has given us finally a universe entirely for ourselves -- where the serendipity of meeting a new stranger, or hearing a piece of music we would never choose for ourselves, or an opinion that might actually force us to change our mind about something are all effectively banished. Atomization by little white boxes and cell-phones. Society without the social. Others who are chosen -- not met at random.

"Human beings have never lived like this before."

On the contrary: human beings have always lived this way. Until very recently, most people lived their lives -- culturally and otherwise -- within the confines of small homes, small towns, and small places. Geography dictated your language, religion, political beliefs, cultural preferences, and artistic tastes. You didn't need a cell phone or an iPod or an Internet connection to link up with your tiny little subculture -- you just needed to get out of bed in the morning. To be sure, there was room for variety within geographical areas -- but for most of human history, location was destiny. Cultural jostling was largely restricted to merchants, soldiers, peripatetic clergymen, and perhaps the very rich. And while the constriction of cultural experience was hardly ennobling or intellectually fulfilling, it doesn't appear to have made most people miserable.

The history of the modern world is the history of culture transforming from a geographical phenomenon into an ideological phenomenon. As information technology has blossomed, ideas no longer rely upon locations for transmission. But while the unit of atomization in the bad old days was the small community, the unit of atomization in the present is the individual. Either way, the constant is atomization.

Human beings are parochial animals; in the modern age, we dwell in parishes of the mind. Sooner or later, one form of homogeneity replaces another. The old differences -- North vs. South, city vs. country, black vs. white -- give way to the new: Red America vs. Blue America, investor vs. consumer, new wave vs. old school. We select our style of narrowness, but the narrowness never changes.

And what's wrong with a little narrowcasting, anyway? Social life is a difficult thing -- fraught with awkwardness, quirky taboos, the fear of rejection, and the discomfort of confrontation. The unfamiliar and the unexpected can stimulate but they can also exasperate -- and exacerbate ill will. We surround ourselves with the familiar and unthreatening precisely because ordinary life is threatening enough, even within the confines of the familiar. To be sure, a select few will always strive to broaden their cultural horizons -- but then, a belief in the value of broadened cultural horizons is itself a cultural position, and a surprisingly comfortable one at that.

The question is not whether we will narrowcast our lives. The question is how to create a broadcast society out of narrowcast people.

Our true concern is not cocooning, but rather the intellectual indolence that it permits. It's fine to surround ourselves with the familiar and unobtrusive, provided that we use that comfort to create a mental space for reasoned, virtuous reflection. If every New York iPod zombie engaged his or her chosen style of music in a focused, intelligent way, we wouldn't mind the rise of the iPod a bit. But it seems likely that the familiarity of our favorite iPod tunes isn't making civilized thought easier -- it's allowing civilized thought to be avoided altogether. How many iPod-heads poison their brains with soulless pop drivel because it's the same crap to which they've always listened? As Christine Rosen warns in her New Atlantis article, "The Age of Egocasting:"

"TiVo is God's machine, the iPod plays our own personal symphonies, and each device brings with it its own series of individualized rituals. What we don't seem to realize is that ritual thoroughly personalized is no longer religion or art. It is fetish. And unlike religion and art, which encourage us to transcend our own experience, fetish urges us to return obsessively to the sounds and images of an arrested stage of development."

But fetish is an old enemy. Since time out of mind, most people stayed in the village because it was easier than venturing out into the city. Most people thoughtlessly accepted whatever music the cultural elites presented at the orchestral performances, or whatever art the smart-set displayed at the museums. Even today, most people accept the religion, culture, and mores of their upbringing without question. Do iPods encourage fetishes, or simply transform them?

Perhaps the new and the unfamiliar are just as likely to close the indifferent mind as to open it. Perhaps iPods are merely symbols of the insularity that characterizes the average intellect.

Sullivan identifies the real problem later in his essay:

"But what are we missing? That hilarious shard of an over-heard conversation that stays with you all day; the child whose chatter on the sidewalk takes you back to your own early memories; birdsong; weather; accents; the laughter of others; and those thoughts that come not by filling your head with selected diversion, but by allowing your mind to wander aimlessly through the regular background noise of human and mechanical life."

The iPod is a tool of choice. With it, we can download exactly the music that we choose, and play it when we choose, and where we choose. And ours is a nation swooning over the joys of choice. We learn the lesson over and over, in movies and TV shows and commercials: be yourself. Do what you want. Don't live by the rules and expectations of others. Pursue your own destiny. What we forget -- but what Sullivan remembers -- are the joys of not choosing. To accept what life offers, not numbly but deliberately, placing our beloved autonomy into abeyance, is to open the door to unforeseen surprises, happy coincidences, and profound affirmations. Good as it is to choose who we love, it is even more intoxicating to be chosen. Good as it is to seek out what we like, it is just as pleasant for what we like to seek us. And given our society's endless fascination with questions of identity, it seems that we are desperate to find those qualities of ourselves that are unchosen, unchanging, and fundamental. As our tools for choosing grow ever more powerful, our hunger for the unchosen can only increase.

I am not afraid of iPod nation. I am not so naïve as to think that good music will triumph over awful music. I am not so optimistic as to forget that we lose something vital when choice barricades the walls of our minds against the adventure of the unknown and unselected. And I accept that every iPod- like innovation tips the scales a little further in the direction of the chosen over the unchosen -- a dangerous trend in an era when choice always seems to win. But like everything else in modernity, iPods have increased our capacity to take pleasure in our unique pursuits, even as they have increased our responsibility to choose our pursuits wisely. Will we live up to that responsibility? Maybe so, maybe not; either way, the fault, dear Andrew, dear Christine, lies not within our iPods, but within ourselves.
http://techcentralstation.com/031805B.html

[JackSpratts]

Record Sales Up. Credit File Sharing
Richard Menta

For the last few years the record industry has experienced drops in CD sales and blamed it all on file sharing. All of it.

They did not blame the recession, which conveniently coincided with this sales drop. They did not blame the DVD, which held no floor space in record stores when Napster first appeared in 1999, but now accounts for 50% - as in half - of all the floor space in every record store in the nation (another interesting bit of timing).

They did not blame a number of other factors that may have accounted for this drop. That's OK, the movie industry also blames file sharing for lost sales and they have never experienced a loss, setting yet another box office record this year.

Now the record industry is reporting a gain. According to the Record Industry Association of America "the number of CDs shipped domestically from record companies to retail distribution channels rose 5.3 percent -- a 2.7 percent increase in value -- in 2004, compared to the previous year".

At the same time as CD shipments jumped, file trading became more popular. According to Big Champagne the numer of US monthly average simultaneous file shareres in January of 2004 was 3,528,419. By November of 2004 that number was up to 5,445,200, almost 2 million simultaneous users more!

If CD sales are up and file sharing is dramatically up AND according to the RIAA there is a direct coorelation between file sharing activity and CD sales then the answer is simple.

File sharing sells CDs.

This is the RIAA's reasoning, not my own, though I have made a strong case for it in articles such as my October 2000 essay " Did Napster Take Radiohead's New Album to Number 1?" and others.

There you have it. File sharing sells CDs. Now repeat it again and tell it to the Supreme Court.

Call it a non-infringing use.
http://www.mp3newswire.net/stories/5002/salesup.html


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The Strange Decline Of Computer Worms
John Leyden

Computer worms are becoming less commonplace as virus writers diversify their malware spreading tactics to create the maximum effect for the least possible effort. Email-borne worms, such as NetSky, Bagle and Sober, remain perennial favourites with malware authors but Slammer-style worms are becoming rarer, according to anti-virus firm F-Secure.

Mikko Hyppönen, director of anti-virus research at F-Secure, said that with the single exception of the Santy worm (which targeted vulnerable PHP installations) little new has been seen of computer worms since the May 2004 outbreak of Sasser. The hiatus follows a string of high-profile worm outbreaks including Blaster, Nimda, Slammer, Welchi and Code Red over recent years. The decrease in computer worms noted by F-Secure ironically comes at the same time many vendors, such as HP, Cisco, Check Point and others, are aggressively marketing worm-throttling technology.

One explanation for the dip in computer worms is that the widespread use of XP SP2 and greater use of personal firewall had rendered worms far less potent in the same way that boot sector viruses died out with Windows 95 and the introduction of Office 2000 made macro viruses far less common. Thwarted worm attacks could be explained by security improvements but Hyppönen notes that virus writers have not even attempted to spread computer worms over recent months. Computer worms exploit software vulnerabilities to spread automatically and are technically more difficult to write than other types of malware. Hyppönen reckons this factor might have a lot to do with explaining their relative decline.

Whilst standard computer worms have experienced a relative decline, email worms have remained a problem and instant message security threats are becoming a greater concern. "A worm that exploited an IM vulnerability to spread could spread very quickly and travel straight through firewalls," Hyppönen warned. Spyware, Trojans and other types of software that turn PCs into zombie drones in botnets, and the increased sophistication of viruses capable of infecting mobile phones also remain key security concerns. F-Secure recently released a free toolkit designed to root out 'stealth' software that can hide malicious programs from conventional anti- virus and anti-spyware packages, a tactic adopted in the Invisible Keylogging spyware package and viruses such as Maslan and Padodor that F-Secure expects will become increasingly common over time.

Hyppönen made his comments during the Websec 2005 Conference in London on Thursday 17 March.
http://www.theregister.co.uk/2005/03...secure_websec/


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JackBe Makes Dial-Up Connections Bearable
Arik Hesseldahl

The day you need to work from home is definitely a bad time for your broadband Internet connection to crash.

A case of "something going around" sidelined me for a few days last week but I was secure in the knowledge that I could still get some work done. Thanks to my DSL line I could connect to the office network via a virtual private network and stay in the loop on office e-mail. I was also planning to read the news online and do some banking.

But like a lineup of dominos something went awry with the DSL line, which made my wireless router and the Wi-Fi card in my laptop useless too. It's for moments like this that I keep a dial-up account with Earthlink.

But I had forgotten how lousy narrowband life can be. A connection to the office VPN was out of the question, and what really slowed me down was checking in with my financial institutions. I wanted to transfer some money between accounts and pay some bills. Getting these chores done took the patience of a saint.

It turns out there are a lot of patient saints out there. More than half of the Web users in the U.S. are narrowbanders, according to Bruce Leichtman, principal analyst with The Leichtman Group in Durham, N. H. Liechtman says there are 38 million dial-up users compared to 33 million broadband users in the U.S. However he says broadband should catch up and then surpass dialup sometime this year.

While waiting for my banking requests to complete--something akin to waiting for a half-full bottle of ketchup to start pouring--I thought of a company I met recently called JackBe. Founded in Mexico City and now based in a McLean, Va., it specializes in making Internet applications run faster, whether they're being served up over a fast connection or a slow one.

Luis Derechin, 36, is chief executive and his brother Jacob, 33, is chief technical officer. Luis says that when people do Internet transactions, speed goes a long way toward making that experience seem pleasant. But most companies just aren't very good at building Internet applications that run fast.

JackBe's product is called the NQ Suite, and it helps companies build simple, streamlined snappy user interfaces on top of complex applications, using nothing more involved than Dynamic HTML.

For companies building Web applications there are traditionally two ways to get the job done. One is through a client-server application, where part of the application runs on a server and the other on a user's PC. Performance can be fast in part because the server doesn't have to work very hard, but the downside is that users have to install some software on their machine.

The other way to build an application is simply to rely on the Web and let the application run on the server, and then serve up the results directly via the Web browser. There's no software for a user to install but running the application can eat up server time, which can yield a slower overall experience.

JackBe takes some of the good bits from each approach. There's no software to install on a PC and the overall performance is fast.

Luis showed me a few demonstration applications with interfaces built using NQ Suite. One happened to be a banking application. Moving funds from one account to another happened in a matter of seconds. No other parts of the page seemed to be reloading or refreshing.

The experience, he said, would be roughly the same over a broadband connection or on dialup. Pages load faster because they're using only a fraction of the code they would normally require, while portions of the page that don't change just don't get reloaded.

JackBe already counts Citigroup as a customer, and its technology is being used to develop an online banking site that will be aimed at customers in Latin America. Several other banks are using it, including Banco de Bogota and Banco de Occidente Credencial in Colombia. The Mexican building-materials concern Cemex used it to build the interface through which customers order its products. The home products company Tupperware used it for the interface through which it distributes products to its sales force. Between its 20 customers, two million people are interacting with JackBe-enabled Web sites every day, Luis says.

While waiting for my bank balances to refresh, I wished I was one of them.
http://www.forbes.com/technology/200...18tentech.html


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



Review

SanDisk Digital Audio Player

“This is the first dedicated flash MP3 player I have tried out, and I have to say I am extremely happy with its quality, navigation, size, and price.”
http://www.geek.com/news/geeknews/20...0324028713.htm


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Review

The Album Leaf - Seal Beach
Acuarela, 2004

Kara Tutunjian

There is something very wrong with me: I wasn't born in the '80s.

I didn't grow up with all of the music-scouting advantages of the modern teenager and college-goer. I worked hard to find a "find" in rural suburbia and to pay for it. Tapes made by friends were as free as music got, and MTV was a new bay window to the world.

But there is at least one disadvantage to being a music fan born on or beyond 1980: you learn to like too much stuff ... like electronic music. Every kid able to afford some sort of computerized music-composing device thinks that he or she is an acclaimed musician. And they are able to disseminate their treasures to a number of targets at a rapid pace through the miracle of the Internet. And hey, if it's out there, it must be interesting.

Standards have been lowered. True, they were previously lowered by others, but the strides taken to achieve their very own genre of "lame" were akin to all of the heart and soul of a John Tesh career. There is so much now that is "instantly lame," thanks to cables and Pro Tools.

Or maybe I'm also bipolar. If something must be happy and pretty, then it better be real bubblegum or fairy dust. I don't like in-between styles, white stucco ranches, or pre-fab porches. I like gothic architecture, Le Corbu, art-deco, pop art, surrealism, and of course Hieronymous Bosch. Pastels look best with black, brown looks great with purple.

The Album Leaf is the pair of tan pants that you will never see me wear. It's painful to admit, because as I make this vow, I can't help but understand how appropriately this project fits into Acuarela's wonderfully sublime family of records. I have so much respect for that label, its earnest attempts to stay true to an impressionist aesthetic, the amazing talent it attracts (Mus, Vitesse, Viva Las Vegas, Damien Jurado, the Clientele). The guilt doubles as I admit that I do indeed like electronica, although you'll find my personal collection to be dwarfed by post punk and lo-fi twee. But good post rock is hard to come by.

Jimmy LaValle of Tristeza fame is the Album Leaf. People recognize him as an acclaimed musician, a label I do not reject. His new EP, Seal Beach, is a pleasant bicycle ride and repose on the beach -- as described by the Fender Rhodes. I know, nothing wrong with that -- I love the Rhodes, I love bicycle rides, and I grew up on the beach.

So let's see. The first track, "Malmo," starts with a bright, diffused series of tones that becomes a wavering melody of the same handful of outward and inward steps, slightly bolstered by syncopated background beats. "Brennivin" is waiting for sunlight, and has the same innocuous electro beats propelling its travel through time and an imagined early dawn. Tiny pipe-like noises emerge from ground level, and the piece warms and swells with a violin, abiding the direction of a bland distorted electronic background. The Rhodes makes a safe comment or two in the bridge, then moves to speak more boldly, and in dialogue with the initial instrumental sounds and rhythmic elements. The song is sipping coffee, and is about to breakfast under a half-risen sun. The title track is the watercolors of an oceanfront gently applied to damp paper, and the liquid image is abandoned before it dries. "Christiansands" is a finger- plucked acoustic guitar, footprinted lightly by high synthetic notes. And "One Minute" is the hum-drum reprise to "Malmo," echoing the almost New Age instrumentation of the opening piece.

There are layers, there is tonal variation, there is continuity. There are points of real interest, especially within "Brennivin" and "Christiansands." But ultimately, for me, a House of Seven Gables New Englander, this kind of electro post rock is synonymous with stucco-ranch California, and with the stoner muzak pavillion of the Dylan Group. The Album Leaf won the "Best Electronic" category at San Diego's 2003 Music Awards, and has just been signed to Sub Pop. Professionally, LaValle keeps company with the likes of the Black Heart Procession, Sigur Rós, Her Space Holiday, and On!Air!Library!. If you are an electro post rock fan, you might have been born in the '80s, and you will most likely enjoy this release.

I like the dark, cinematic little outfits found on Monopsone, or the strange adventures of Gastr del Sol, Fontanelle, Talk Talk -- but maybe that's because they are able to move me, to appeal to my teenage sensibilities and practicality, to convince me they are worth ownership and continual listenership. If you think you are like me, there might be something very wrong with you ... but you will still ditch Jimmy LaValle for his much more intriguing friends.
http://www.earlash.com/ar.php?albid=122


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Scott G (The G-Man) Credits Peer-to-Peer Filesharing with Launching His Career
Press Release

In view of the upcoming Supreme Court hearing in the landmark MGM vs. Grokster lawsuit, it is more important than ever to consider the case of Scott G (The G-Man), who began with a self-released album and got signed, got on iTunes, and launched his own music production company, all by initially giving his music away for free via P2P.

Defying the RIAA (Recording Industry Association of America) and the major record labels, Scott G (recording artist The G-Man) offered all the music on his first album for free via P2P (peer-to-peer filesharing).

The G-Man went even further, sending individual tracks of his songs (bass, guitar, drums, synthesizer, etc.) to anyone who wanted to mix a new version of his work. And while the Hollywood studios and the major record companies fret and litigate in an attempt to shut down P2P, Scott G feels it actually created his career.

"Everything started to happen for me once I began giving those first songs away for free," G-Man states. "The results have changed my life, both personally and professionally."

He is now signed to Delvian Records, a part of The Gate Media Group, all his albums are on Apple's iTunes, and he is running his own production company, G-Man Music & Radical Radio, where he has created commercials for Verizon Wireless, Goodrich, Micron, NASSCO, the Auto Club, and more.

The full text of the article is on more than a hundred websites, including these:
http://www.audiocourses.com/article337.html
http://diariaa.com/article-gman.htm
http://www.musicdish.com/mag/?id=9433
http://www.mpeg3.net/news/music/article040412.htm
http://www.bitchinentertainment.com/contributors.html
http://www.indiemusician.com/2004/05...peertopee.html
http://www.emediawire.com/releases/2...rweb116996.htm
http://www.lamusicproductions.com/Ne.../15_g-man.html
http://www.dcia.info/News/newsletter_2004-06-14.htm

Scott G, whose fourth album, SONIC TONIC, is being released 04/04/05, is president of G-Man Music & Radical Radio, a creative director of the National Association of Record Industry Professionals (NARIP) and a member of The Recording Academy (NARAS). He writes about music for MusicDish and the Immedia Wire Service. His music and commercials are at: http:// www.gmanmusic.com.
http://www.prweb.com/releases/2005/3/prweb218338.htm


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Guitarist Rod Price of Foghat Dies at 57
AP

Guitarist Rod Price, founding member of the blues boogie band Foghat, died Tuesday after falling down a stairway at his home, a family friend said. He was 57.

The London native's solos drove Foghat to three platinum and eight gold records during the band's quarter-century career. After many years of touring he settled in Wilton in 1994.

Many in town knew Price as a loving father who never missed his son's baseball, soccer or basketball games. Fewer people knew of Price's musical background.

Price had played with Champion Jack Dupree, Eddie Kirkland, Muddy Waters, John Lee Hooker, Willie Dixon and Honey Boy Edwards.

In recent years, Price concentrated on his blues projects, cutting several CDs and giving private guitar lessons at his home.
http://hosted.ap.org/dynamic/stories...=ENTERTAINMENT


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Hackers Reach Beyond Windows, IE
Robert Vamosi

Commentary--Like cockroaches that you stop at a hole in the wall only to have them reappear under the door, criminal hackers are finding new and better ways to compromise your computer and electronic devices. So concludes a new Internet Security Threat report out today, based on data collected at Symantec's Security Response facilities worldwide. The report is one company's snapshot of malicious Internet activity during the last six months of 2004.

I asked David Cole, director of product management for Symantec Security Response, to use the information uncovered in the report (more than 70 pages long) to talk about what he's already seeing in 2005. In our conversation, he covered trends such as the discovery and exploitation of flaws in non- Internet Explorer browsers and non-Windows operating systems and the recent reach by criminal hackers (crackers) into nondesktop computer systems such as handhelds and smart phone devices.

Overall, the news is mixed

The good news, says Cole, is that today, companies are much better at defending our network perimeters than they were a few years ago. Traditional Internet attacks are down. Unfortunately, attackers are opportunistic and are now going after end users-- employees who log in from home or while on the road. Since companies are doing a good job protecting their e-mail systems--either at the gateway with corporate defenses or on desktops with antivirus apps--virus writers are frequently frustrated and have begun targeting instant-messaging apps, Internet Relay Chat (IRC), and peer-to-peer networks (P2P) in addition to e-mail. Symantec reported threats related to P2P, IM, IRC, and CIFS make up 50 percent of its top 50 threat submissions, up from 32 percent covering the same period one year earlier.

Browsers beware

But viruses and worms aren't the only Internet threats. Phishing scams, spyware, and now pharming attacks are becoming more common. By now, most of us know that Microsoft Internet Explorer harbors many security vulnerabilities. So as people move away from IE (now below 90 percent usage), attackers are turning their attention to Mozilla and other Internet browsers, according to Symantec.

An example might be what crackers have done with the vulnerability found in Internationalized Domain Names (IDN) that affects most non-IE browsers. IDN renders specialized character sets such as non-English domain names in a standardized way using Unicode characters, a standard that attempts to assign a unique computer number for every computer character, no matter the platform or the language set used. The IDN standard allows foreign companies to register domain names in different languages; however, criminal hackers have discovered that they can use this loophole to fool end users onto their phishing sites by substituting specific letters from alternative character sets.

Oddly, IE does not support IDN (although rumors suggest the upcoming Windows XP- only IE 7 will support IDN). Mozilla and Firefox have since patched their IDN flaw.

But if you thought that IE would be a safer browser as a result of recent attention to non- IE browsers, you'd be wrong. Cole said that while there were a greater number of vulnerabilities reported in Mozilla during the last half of 2004, Symantec found that the most severe vulnerabilities still reside within Internet Explorer. Of the 13 Internet Explorer vulnerabilities rated by Symantec from June to December 2004, 9 were considered high.

Other OSs under attack

The Symantec report also predicts that crackers will become more interested in Macs during 2005, specifically mentioning sales of low-priced mini Macs. As more casual, less tech-savvy users adopt Macs, expect to hear more about vulnerabilities exposed within the Mac OS, which is based on the Unix system. Other security companies are seeing an uptick in Mac flaws. For example, security company Secunia also saw an increase in reported Mac OS flaws during 2004.

Other electronic devices under attack

As more people leave their desktops and start accessing the Internet via mobile devices, so too do the crackers. Last summer, someone released the Cabir worm, designed to infect Symbian OS-equipped Nokia series 60 smart phones. These phones are popular in Europe, but have only recently started selling here in the United States. Since the first of this year, however, the Cabir worm has been reported in nearly two dozen countries, including the United States. Cole says these attacks will continue to grow as Bluetooth and smart phone adoption sets in. In fact, crackers recently launched CommWarrior, a smart phone-enabled virus that is able to infect either Bluetooth systems or those using Multimedia Messaging Service. Expect hybrid or multiplatform worms to remain the norm with mobile technology devices.

All is not lost

What's fueling the spread of Internet threats to other platforms? Money. As I wrote during the Sobig virus attacks in 2003, spammers and perhaps organized crime are now paying virus writers to push the limits and infect as many systems as they can. But that's good. We've moved from a strictly ego-fueled virus culture to one where the tools of law enforcement work best. Instead of finding a random, rogue programmer, law enforcement officials are following the money, and they're making some major busts against cybercrime.

As you adopt new technology, stop and think about the possible security pros and cons. Just because someone hasn't written a devastating worm to hit the Mac OS platform doesn't mean it won't happen. Same with your Nokia smart phone. Proceed with caution. If we've been successful in frustrating crackers by having antivirus and firewall solutions on our desktops, I think there's a chance we'll also prevail in these other areas as well.
http://news.zdnet.com/2100-1009_22-5628404.html


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Boston College Warns Alumni About Hacked Computer
AP

Boston College officials have warned 120,000 alumni that their personal information may have been stolen when an intruder hacked into a school computer
containing the addresses and Social Security numbers of BC graduates.

BC spokesman Jack Dunn told The Boston Globe on Thursday that officials don't believe the hacker accessed the personal information, but instead planted a program that could be used to launch attacks on other machines. Still, amid rising concerns about identity theft, the school sent letters to its alumni.

``As a precaution we have chosen to alert the entire database,'' Dunn said of the letters sent last Friday.

The letters urge alumni to protect their identities and financial accounts by contacting their banks and warning them that their Social Security numbers may have been stolen.

The compromised computer at Boston College was not run by the school, but by an outside contractor Dunn did not identify. It was used to look up the names and phone numbers of graduates for the purpose of soliciting donations.

During a routine security check last week, school employees found the machine had been invaded, and it was taken off-line.

``There's no evidence to suggest that this involved anyone from the Boston College community, but instead was an external hacker,'' Dunn said.
http://www.siliconvalley.com/mld/sil...l/11162721.htm


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

Calif. University Says 59,000 Affected by Hackers

Hackers attacked computer servers of a California university and may have gained access to the personal information of 59,000 people affiliated with the school, a university spokesman said on Monday.

California State University, Chico in northern California is alerting students, former students, prospective students and faculty that their personal information, including Social Security numbers, may have been compromised in the attack three weeks ago, said spokesman Joe Wills.

"It looked like it was illegal access to do some, perhaps, some downloading of files," Wills said. "In investigating it we realized the hackers had some access to a great deal of personal information."

"We have no indication that the hackers used the information ... But we can't say for sure," Wills said. "My understanding is that to this point we haven't had any success in figuring out who did it."

The school will continue probing the attack on its servers, Wills said.
http://www.reuters.com/newsArticle.j...toryID=7964776


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China Clamps Down on Campus Bulletin Boards

China has blocked off-campus Internet users from accessing several bulletin boards operated by universities as part of a government clampdown on

outspoken domestic Web sites.

Shuimu Tsinghua, a popular bulletin board run by Beijing's prestigious Tsinghua University, was among the sites sealed to outside participants last week, the Beijing Times reported over the weekend.

"The Ministry of Education made the decision to shut the site because the bulletin board was only supposed to be a platform for internal exchange within the university," a Tsinghua University student who requested anonymity said on Monday.

"Students are calm about it, but it seems that non-student users are angry because they can no longer get access."

A note posted on the bulletin board's home page (www.smth.org) on March 16 announced the move and said it had been made in keeping with a new policy passed by the Ministry of Education. There were no further details.

Internet bulletin boards at Wuhan and Nankai universities were also barred to outside users earlier this month, the newspaper said.

Such university bulletin boards had become popular forums for discussion of everything from politics to pop culture between students, faculty, graduates and others.

A ministry spokesman declined to comment when contacted by telephone.

China has been cracking down on Internet content -- from politics to pornography -- but has struggled to gain control over the medium as more Chinese have got Web access and have used it to gain information beyond official sources.

Yitahutu, a bulletin board operated by Peking University, was shut down altogether last September.

China had 94 million Internet users at the end of 2004, the government said this month, adding that the number should jump 28 percent to 120 million this year.

Beijing has created a special Internet police force believed responsible for shutting down domestic sites posting politically unacceptable content, blocking some foreign news sites and jailing several people for their online postings.
http://today.reuters.com/News/TechSt...NTERNET-DC.XML


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

AOL

Time Warner to Pay $300 Million to Settle SEC Charges

The U.S. Securities and Exchange Commission on Monday said it has approved Time Warner Inc.'s proposal to pay $300 million to settle charges that it overstated its AOL online advertising revenue and the number of its subscribers.

As part of the agreement, the company agreed to restate financial results by reducing its reported online advertising revenues by roughly $500 million for the fourth quarter of 2000 through 2002, in addition to $190 million it has already restated, the SEC said.

Time Warner said it had restated its results in its 2004 annual report filed on March 11.

The settlement brings an end to the SEC investigation into accounting at America Online, which was also the target of a Justice Department investigation. The two probes went on for some two years, helping to wipe away more than $200 billion in shareholder value since AOL purchased Time Warner in 2002.

"It's nice to finally have the investigations in the past so people can increase their focus on core operations," said Richard Greenfield, an analyst at Fulcrum Global Partners.

"It means you can take a footnote out of the annual report," Dennis McAlpine of McAlpine Associates said.

Time Warner Chief Financial Officer Wayne Pace, Controller James Barge and Deputy Controller Pascal Desroches also settled SEC accusations that they caused the reporting violations and consented to cease-and-desist orders, the SEC said.

Time Warner, Pace, Barge and Desroches all agreed to the settlements without admitting or denying the SEC charges.

"We have confidence in our top financial officers, and we're pleased that they will continue to serve our company in their current positions," Time Warner Chief Executive Dick Parsons said in a statement.

Time Warner announced in December that it would pay $210 million to resolve criminal charges that its America Online unit fraudulently inflated revenue figures and that it would pay $300 million to settle SEC charges.

Stephen Cutler, the SEC's director of enforcement, said, "Our complaint against AOL Time Warner details a wide array of wrongdoing, including fraudulent round-trip transactions to inflate online advertising revenues, fraudulent inflation of AOL subscriber numbers, misapplication of accounting principles relating to AOL Europe, and participation in frauds against the shareholders of three other companies."

Attorneys for Pace, Barge and Desroches could not immediately be reached for comment.

The company also faces more than 40 shareholder lawsuits. Analysts say the fact that there were no admissions of wrongdoing in the settlements with both the Justice Department and the SEC could mute the impact of the suits.

Time Warner shares closed down fell 28 cents, or 1.33 percent, to $18.42 on the New York Stock Exchange.
http://www.reuters.com/newsArticle.j...toryID=7968120


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Sony BMG Seen Mulling Music IPO If Warner Succeeds

Hard-hit Sony Corp and German media giant Bertelsmann AG may sell shares in their joint music company if rival Warner Music Group's IPO scores a hit, analysts said on Monday.

Officials at Sony and Bertelsmann declined comment on prospects for an IPO of their combined music company, which together with market leader Vivendi Universal's Universal Music control about half of the global music market.

Analysts and other experts believe a Sony music IPO is highly likely if Warner takes in the $4 billion to $6 billion it is estimated to raise. Warner recently filed to raise up to $750 million in an IPO of common stock.

"My sense is that a Sony BMG IPO is completely possible. They've already taken the first step by creating a separate organization and it puts them in a better position than if either of them were by themselves," said Karl Slatoff, a partner with ZelnickMedia, a media holding company.

"If they think they can get a lot of value, it's something they should consider," he said.

Sony's new chief executive officer, Howard Stringer, charged with reviving Sony's core electronics business and turning the company around after a rocky five years under predecessor Nobuyuki Idei has previously expressed interest in spinning off entertainment assets as separately quoted units.

Analysts believe Stringer's new appointment will likely raise the question again.

Additionally, Viacom Inc.'s recent move to explore breaking up its entertainment assets as a means of increasing its stock price reinforced these views.

Back in November, while still vice chairman of Japan's Sony Corp. and chairman and chief executive officer of Sony Corp. of America, Stringer said it was "worth considering" a flotation of the international film, music and television operations.

"It's conceivable Sony BMG would file for an IPO, but we'd have to see how Warner's IPO does," said Harold Vogel, a veteran media analyst at Vogel Capital Management.

"If Warner sells at a multiple of twice sales, or about $6 billion, then Sony BMG would jump on it," he said.

Some market watchers believe the market is poised for pure-play music stocks, given the buzz surrounding revenue generators like Apple Computer Inc.'s iTunes and iPod players.

"Music was seen as a negative and potential exposure, but time and again, new technologies have always benefited content providers," said Slatoff. "So I think the fact that iTunes has been the first successful play in digital music has given people hope and it's generating buzz around music," he said.

Both the Sony BMG merger and the $2.6 billion acquisition of Warner Music from Time Warner Inc. last year set in motion industry-wide cost-cutting that collectively eliminated more than a half-billion dollars in expenses and 3,000 jobs.

Some analysts believe Vivendi Universal could also try an IPO of its Universal Music division if Warner Music takes off.

A spokesman for Universal Music declined to comment.

"Everybody's searching for ways to get money to pay off all of the debt they've incurred because of their purchases, so an IPO is within the realm of possibility," said entertainment lawyer Jay Cooper.

"A few years ago, everyone was trying to combine motion picture and music companies into one, and now that trend is in reverse and everyone's trying to separate the assets. I guess we're in a cycle of separation," he said.
http://www.reuters.com/newsArticle.j...toryID=7968119


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Bertelsmann To Offer P2P Download Platform

German media giant Bertelsmann, a former partner of file-sharing network Napster, is launching a new Internet platform for downloading and sharing movies and games over the Internet, it said Tuesday.

Arvato, Bertelsmann's services and technology arm, said it would sell the service, dubbed GNAB, to mobile phone operators, Internet providers and TV stations, which could then offer their clients legal downloads of large files under their own brands.

In addition, the service could allow them to share the files they have received over the network, effectively outsourcing the storage of the files and their download to the users of the network.

Sharing of legally copied as well as bootlegged music and movie files is hugely popular among Internet users, which have made services such as eDonkey and Kazaa big hubs for music downloads, while the music industry stood on the sidelines.

But easy-to-use services such as Apple Computer's iTunes have let the music industry discover its sympathy for music downloads and led to a surge in legal online-music sales.

Bertelsmann, which with Sony co-owns the world's second-largest music label, Sony BMG, teamed up with Napster in late 2000, when the service was already being sued by the industry for helping copyright infringements.
http://news.com.com/Bertelsmann+to+o...3-5629713.html


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New Sony President Admits Consumer Misses
Yuri Kageyama

Sony Corp.'s engineering prowess helped the company develop an array of nifty products but those gadgets often failed to appeal to consumers, the electronics maker's new president said Thursday.

Ryoji Chubachi, a production expert appointed president earlier this month to lead a turnaround at the struggling manufacturer, said Sony often struck out with buyers because engineers had sometimes strayed from market trends.

"Engineers have always been Sony's heroes," Chubachi said, addressing a small group of reporters at the company's Tokyo headquarters. "A lot of work is going into producing megapixels, ultra- thin super-light gadgets, long-lasting batteries or zooms, and Sony has that kind of power. But we strike out."

In a major management reshuffle, Chubachi was appointed Sony president, overseeing the electronics business, and Howard Stringer, who has led Sony's entertainment business, was chosen chairman and chief executive.

Stringer, who holds British and U.S. citizenship, is the first foreigner to lead Sony, a company that made its global fortune over several decades on the success of its Walkman portable music player, Trinitron TV and other popular products.

But in recent years, Sony has been fighting competition from cheaper and more profitable Asian rivals such as Samsung Electronics Co. Ltd. of South Korea. Sony's brand image was also battered as smaller Japanese rivals such as Sharp Corp. took a lead in booming products such as liquid- crystal display TVs.

Chubachi compared Sony to a wrestling champion being forced to take on 100 challengers at once.

Sony, which also has entertainment businesses including video games, movies and music, is an all-around player and is getting beaten in certain products by "specialists," Chubachi said, pointing to Apple Computer Inc.'s iPod music player as an example.

"There's an illusion that Sony is somehow getting totally defeated, but that's just one business for Sony," he said. "It is going to be tough for Sony to beat all the specialists."

Sony needs to shift to "growth" areas such as flat TVs, DVD recorders and mobile gadgets, Chubachi said, while declining to give specifics about products.

He also acknowledged Sony's problems require time to fix. Another critical problem has been Sony's inability to quickly and thoroughly communicate management goals through its ranks, he said.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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A Takeover Roils Japan: Politeness Out, Hostility In
Todd Zaun

It has happened before in the United States: a fast-growing Internet start-up sets its sights on an old-line media company, and, in the end, gets it. That was the AOL takeover of Time Warner in 2000.

Until now, though, something like that seemed unlikely in Japan, where only a handful of hostile takeovers have been attempted. But a court ruling on Wednesday set the stage for a 32-year-old entrepreneur, Takafumi Horie, and his Internet company, Livedoor, to gain a majority stake in Nippon Broadcasting System Inc., a 50-year-old radio broadcaster.

In addition, Mr. Horie's company, which offers Internet services and operates a Web portal similar to Yahoo, has a chance to gain significant influence over the management of Nippon's larger affiliate, Fuji Television Network, the core company in one of Japan's largest media groups.

Because the contentious battle for control of Nippon, which began last month when Livedoor announced that it had bought a controlling stake in the broadcaster, is a rarity for Japan, the clash is being followed with a media blitz befitting a celebrity murder trial. The spike-haired Mr. Horie, who prefers T-shirts and khakis, is being portrayed as the representative of a young, more Westernized Japan taking on the country's clubby corporate leaders.

"This is a young Japanese who has got a vision, and he's got the guts," said Jesper Koll, chief economist for Merrill Lynch in Tokyo. "The Japanese are no longer afraid to take on their own elite."

The battle also highlights the shift in Japan from what is known as stakeholder capitalism, under which the interests of a company's employees, business partners or managers were often given higher priority than increasing the company's bottom line. Taking its place is an increasingly Western approach in which companies are under pressure to think first about their shareholders.

The ruling on Wednesday by the Tokyo High Court blocked a planned move by Nippon to transfer a majority stake in itself to Fuji TV by issuing share warrants to the television company. Fuji would then have been able to convert the warrants into new shares in Nippon, potentially more than doubling the number of outstanding shares in the radio company. That would have greatly diluted the holdings of Livedoor and other current shareholders.

But the High Court, upholding a lower court, said that the only purpose of the sale was to keep Nippon under the control of its current management and that the sale, therefore, did not have any strategic value.

"It's regrettable, really regrettable," the president of Nippon, Akinobu Kamebuchi, said after the ruling. "We were sure justice would be on our side but that was not accepted. It's really too bad."

He added that Nippon would scrap the warrant sale and was now evaluating what to do next. It could appeal the decision to the Supreme Court.

The ruling clears the way for Livedoor, with a market capitalization of 236 billion yen, or $2.2 billion, to take over management of Nippon, with a market cap of 206 billion yen, or $1.9 billion, later this year. Livedoor had a 49.78 percent stake in Nippon Broadcasting as of last Thursday and was expected to be able accumulate a majority stake in time to elect its own directors to the broadcaster's board at the next shareholder meeting in June.

Livedoor raised the money it needed to buy the Nippon stock with a sale of 80 billion yen (about $750 million) in bonds, arranged by Lehman Brothers. The bonds would then be convertible to Livedoor stock after the purchase.

"We want to work now to raise the value of Nippon Broadcasting and its group companies," Mr. Horie said after learning of the court's decision.

Mr. Horie has said he wants the radio broadcaster so he can advertise on its programs and draw listeners to his Internet sites and services. He also said he believed that traditional media and the Internet would inevitably become more closely integrated and he wanted to be at the forefront of the change in Japan.

"I tried to do business with broadcasters over the last five years but they are too slow to make decisions," Mr. Horie said in a speech this month. "We have to speed up this process. Of course, everyone would prefer a friendly approach but I felt we don't have time for that friendly approach."

Gaining control of Nippon could also give Livedoor a strong say in the boardroom of Fuji TV, Japan's largest private television network, because Nippon is Fuji's largest shareholder, with a 22.5 percent stake.

Media reports have said Mr. Horie has set his sights on increasing his stake in Fuji even further and the network has been beefing up its defenses against a takeover attempt.

This week, Fuji said it was prepared to issue up to 50 billion yen in new shares to fend off an unwanted bidder. The company also announced that it would raise its fiscal year-end dividend to 5,000 yen a share from the previously announced 1,200 yen, giving shareholders a strong incentive to hang on to their stocks.

But a Livedoor executive suggested Wednesday that the company would take a more conciliatory approach toward Fuji TV than it had in its pursuit of Nippon. Livedoor does not intend to raise its stake in Fuji without the approval of that company's management, Livedoor's senior vice president, Fumito Kumagai, said Wednesday, according to a company spokesman, Koichiro Ohta.

Mr. Horie, a college dropout, built Livedoor into one of the country's best-known Internet companies by combining a portal site with online brokerage and banking and a host of other Internet services. The company posted a profit of 3.58 billion yen for the year ended Sept. 30 on sales of 30.87 billion yen. By that measure, the company is still a long way behind its top rival, the Yahoo Japan Corporation, which had sales of 75.78 billion yen in its most recent fiscal year, which ended March 31, 2004.

Aside from shaking up corporate Japan, Mr. Horie's takeover bid also promises to change the landscape for mergers and acquisitions in Japan.

Although Mr. Horie is Japanese, his aggressive tactics and early success have unleashed fears that a horde of foreign companies might try to buy up Japanese firms using his methods as a model. Although analysts say a wave of such acquisitions is unlikely, ruling-party politicians are nonetheless threatening to delay long-anticipated legal changes that would have allowed foreign companies to buy Japanese companies through stock swaps.

On the other hand, many analysts and lawyers say that the attention the battle has generated could lead to a more thorough overhaul of laws governing takeovers that would benefit the industry in the long run.

"This is a very good event to educate Japanese people," said Nobutoshi Yamanouchi, a lawyer in the Tokyo office of the American law firm of Jones Day. "Some people don't like to see Japan transforming into a Western-style society but in my opinion in order to have international or global competitiveness, this step is necessary."

Many ordinary Japanese have also applauded Mr. Horie's effort even if they find his aggressive style somewhat distasteful. Polls show that he has broad support for his takeover attempt among both younger and older Japanese.

"I like what's happening," said Hitashi Suzuki, a 35-year-old employee of a construction company in Tokyo. "It is very modern and suits the time we live in. I wouldn't say I support Mr. Horie personally, but I think it is good that he fights for what he wants."
http://www.nytimes.com/2005/03/24/bu...4livedoor.html


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Creative Labs Owes You $62

Little known lawsuits of our time
Simon Burns

SINGAPOREAN soundcard maker, Creative Labs, has agreed to settle a class action lawsuit related to misleading marketing of its Audigy and Extigy range. Actually, it appears this settlement was agreed in principle at the end of last year, but few potential claimants yet know about it.

Creative claimed that the products in question could handle 24-bit audio at 96Khz – indeed this was stated on the product boxes in bold letters, and in all advertising. But complaints filed in 2003 pointed out that this was only true in a very limited set of circumstances, and pretty much all of the audio passing through the cards would actually be processed at lower quality.

The difference probably wouldn't concern the average gamer or casual MP3 enthusiast, but many of those planning to use the Creative cards for professional-quality audio were outraged by the labelling.

Owners of all of the original Audigy series are included in the proposed settlement. This includes the Audigy ES, Audigy Platinum, Audigy Platinum eX, Audigy Gamer, Audigy MP3+ and also the original Extigy external USB sound module.

Creative did not admit liability, but graciously agreed to settle the embarrasing case. Anyone, anywhere* who purchased one of these products before the end of 2004, and is unhappy with the audio processing, will be able to get 25 per cent off the cost of their next purchase from Creative's website, up to a limit of $62.50.

Hurry, this great offer ends September 25, 2005.

Meanwhile, the lawyers who helped inflict this savage punishment on Creative will get up to $470,000 for their work, it seems.

Interestingly, the three individuals who originally filed the complaint receive a mere $1000 to $3000 for all their trouble.

* IN NORTH OR South America only, apparently.

http://www.theinquirer.net/?article=22019


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Runway Scarecrow Machine Lost in Translation

China imported a U.S.-made scream machine to scare away the birds at Beijing airport -- except they didn't recognize the noises and refused to budge.

The bird-dispersing equipment had recorded the screams of American birds or the sounds of the birds' natural enemies, the Beijing Evening News said.

"Local birds did not understand the foreign language," the newspaper said.

So Chinese experts "translated" the U.S. bird noises into those of their Chinese counterparts.

"The workers have already recorded six or seven bird screams which are common in Beijing," it said, adding that the new scare tactics were undergoing tests.
http://www.reuters.com/newsArticle.j...toryID=7985896


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Rival Calls Microsoft Unready to Carry Out European Order
Paul Meller

Microsoft is failing to comply with a European Commission order to sell an unbundled version of its Windows operating system, competitors that were asked to examine the program said on Tuesday.

A year ago, Mario Monti, then the European commissioner for competition, ordered Microsoft to sell a second version of Windows in Europe that has its music and video-playing program, Media Player, stripped out.

The order was intended to restore competition. The second version, installed with a rival alternative to Media Player, is supposed to be introduced in the next few weeks.

But David R. Stewart, deputy general counsel for RealNetworks, said Tuesday that Microsoft was still not ready to comply with the European ruling. RealNetworks, of Seattle, which makes rival software, has the most to gain from enforcement of the order.

The commission has yet to decide whether Microsoft's proposal for introducing the unbundled version of Windows meets its requirements. Mr. Stewart contended that "the version of Windows Microsoft is proposing to sell has technical problems that render it less functional than the existing version of Windows."

RealNetworks said that Microsoft had deleted registry entries associated with media-playing functions in Windows. Without the registry entries, Mr. Stewart said, rival media players installed in the second version of Windows could not work with other applications like Word documents and some Web sites.

A spokesman for Microsoft, Dirk Delmartino, said the company was aware of the commission's concern about its plan to delete the registry entries. He acknowledged the problem, but said it was a direct result of having to comply with the commission's order.

"We told the commission there would be certain functions that don't work," Mr. Delmartino said, adding, "This is a result of the removal of 186 Media Player files."

Last week, in a sign of growing impatience, the commission, the administrative arm of the European Union, said it had "strong doubts" that Microsoft was complying with a separate order in last year's ruling to disclose information about Windows that would allow rival producers of server software to make programs that work with the Windows operating system.
http://www.nytimes.com/2005/03/23/te...gy/23soft.html


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ILN News Letter

Maine CT. Issues Decision On Identifying Anonymous Posters

The Maine Supreme Judicial Court has released its decision in Fitch v. Doe, ruling that a plaintiff who claimed that he had been injured by an anonymous Internet user could enforce a subpoena to identify the person who sent the email. The defendant had sent the email in the plaintiff's own name, and the plaintiff claimed that this constituted both identity theft and other torts under state law.
Decision at http://www.courts.state.me.us/opinio...s/05me39fi.htm

EC Files Complaint Over Copyright Directive Implementations

The European Commmission has referred Italy and Luxembourg to the European Court of Justice for failure to implement fully into national legislation the "public lending right" provided for by a 1992 Directive. In a related development, the Commission has also launched infringement proceedings against Belgium, Finland and Sweden because these Member States have not complied with the 2004 rulings of the Court requiring them to implement the 2001 Copyright Directive.
http://eccopyrightcomplaint.notlong.com/

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One In Five Downloaders Has Copied Files From Other People’s iPods Or MP3 Players

About 36 million Americans—or 27% of internet users—say they download either music or video files and about half of them have found ways outside of traditional peer-to-peer networks or paid online services to gather and swap their files, according to the most recent survey of the Pew Internet & American Life Project.

The Project’s national survey of 1,421 adult Internet users conducted between January 13 and February 9, 2005 shows that 19% of current music and video downloaders, about 7 million adults, say they have downloaded files from someone else’s iPod or MP3 player. About 28%, or 10 million people, say they get music and video files via email and instant messages. There is some overlap between these two groups; 9% of downloaders say they have used both of these sources.

In all, 48% of current downloaders have used sources other than peer-to-peer networks or paid music and movie services to get music or video files. Beyond MP3 players, email and instant messaging, these alternative sources include music and movie websites, blogs and online review sites.

The survey of internet users has a margin of error of plus or minus 3 percent.

“Though much public attention has been paid to the file-sharing activity that happens on peer-to- peer networks, it’s harder to monitor the type of everyday sharing or ‘privatized’ file-sharing that is taking place between informal networks of friends and family,” said Mary Madden, a Research Specialist at the Pew Internet Project who wrote a new Project report on file-sharing. “We’ve seen the recording industry lawsuits deter some peer-to-peer users and many have migrated to paid music services. But the most striking new observation is the incidence of workarounds and alternative ways people are using to trade files.”

There are several other highlights in the new Pew Internet Project survey:

# 49% of all Americans and 53% of internet users believe that the firms that own and operate file- sharing networks should be deemed responsible for the pirating of music and movie files. Some 18% of all Americans think individual file traders should be held responsible and 12% say both companies and individuals should shoulder responsibility.

Almost one in five Americans (18%) say they do not know who should be held responsible or refused to answer the question.

# The public is sharply divided on the question of whether government enforcement against music and movie pirates will work, but broadband users strongly believe that a government crackdown will not succeed. Some 38% of all Americans believe that government efforts would reduce file-sharing and 42% believe that government enforcement would not work very well.

Broadband users are more skeptical about government anti-piracy efforts. Some 57% of broadband users believe there is not much the government can do to reduce illegal file-sharing, compared to 32% who believe that enforcement would help control piracy.

# Current file downloaders are now more likely to say they use online music services like iTunes than they are to report using p2p services. The percentage of music downloaders who have tried paid services has grown from 24% in 2004 to 43% in our most recent survey. However, respondents may now be less likely to report peer-to-peer usage due to the stigma associated with the networks.

# The percentage of internet users who say they download music files has increased from 18% (measured in a February 2004 survey) to 22% in our latest survey from January 2005. Still, this number continues to rest well-below the peak level (32%) that we registered in October 2002.
http://www.internetadsales.com/modul...p?storyid=5102


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File Sharers Go Beyond P2P
Rob McGann

Approximately 36 million Americans, or 27 percent of Internet users, download music or video files. About half have done so outside of traditional peer-to-peer networks (P2P) or paid online services, according to a study by the Pew Internet & American Life Project.

A full 28 percent (10 million people) say they obtain music and video files via e-mail and instant messages. Another 19 percent of current music and video downloaders (7 million adults) say they've acquired files from someone else's MP3 player.

Pew used the term "download" generically in the survey, without differentiating between legal and illegal means of acquiring video and music files online.

"The findings of this study suggest that people looking to download video or music files are certainly willing to look beyond peer-to-peer networks and paid download services," said Mary Madden, research specialist at the Pew Internet & American Life Project.

The findings are based on a telephone survey of 1,421 adult Internet users conducted between January 12 and February 9, 2005. The margin of error is plus or minus three percentage points.

Pew conducted the survey to create a snapshot of public sentiment before the MGM v. Grokster file-sharing case begins Supreme Court proceedings on March 29. The key issue is whether providers of P2P file-sharing technology are liable for illegal use of copyright music and video files by people who use their services. P2P companies were victorious in prior decisions upheld by the 9th Circuit Court of Appeals.

"It will be interesting to see the reaction from the public and the technology companies," Madden said about the significance of the pending case. "It we see a ruling favoring entertainment companies, it might be more difficult to find third party software that allows you to rip music files off an iPod or an MP3 player, for example. Also, we may see a lot more copy protection on files, where it would cost less if you want to use the file one time only, and more if you want to use it for a month."

Despite the attention file-sharing will command this spring, Pew found a 42 percent of Americans believe government efforts will be ineffective in reducing file-sharing. Broadband users were much more pessimistic about government regulation; 57 percent of respondents with high-speed connections say there's not much Uncle Sam can do.

Other key findings include:

49 percent of all Americans (and 53 percent of Internet users) believe firms that own and operate file-sharing networks should be held responsible for the pirating of music and movie files.
18 percent of Americans believe individual file sharers should be held responsible; 18 percent said they didn't know who should be held responsible, or refused to answer.
The percentage of music downloaders who have tried paid services has grown from 24 percent in February 2004 to 43 percent in the current survey.
The percentage of Internet users who download music files, legally or illegally, has increased from 18 percent in February, 2004 to 22 percent in the current study. The peak level measured by Pew was 32 percent, recorded in October 2002. Pew notes respondents may now be less likely to report P2P usage due to associated stigma.

http://www.clickz.com/stats/sectors/...le.php/3492356


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Hobbling Grokster -- and Innovation, Too

Hollywood's case against the online file-sharing service gives the Supreme Court a chance to defend the future of new technologies

When Elliott D. Frutkin, chief executive of Time Trax Technologies, set out to raise $3 million in venture capital to develop his company's fledgling audio-recording system, would-be investors typically had two reactions. "The first was 'Wow, this is really cool,'" Frutkin recalls. The second: "What about Grokster?"

Although the U.S. Supreme Court won't hear arguments in MGM Studios (MGM ) v. Grokster until Mar. 29, the case is already having a chilling effect on technological innovation. Feeling the sting of the massive theft by users of peer-to-peer (P2P) software made by Grokster and other defendants, movie and music studios are asking the court to hold tech companies liable for copyright infringement if people use their products to steal films, songs, or other protected works.

BETAMAX PRECEDENT. The justices might just need their grandchildren to explain MP3s and downloads. But they should be on notice that if they side with Hollywood, they could put an entire up-and-coming generation of technological innovation at risk.

The nation's highest court has been down this road before. Twenty-one years ago, it ruled Sony (SNE ) couldn't be held responsible if its customers used their Betamax VCRs to copy movies and TV programs illegally. The 5-to-4 opinion protected any technology from liability, as long as it is "merely capable" of "substantial, noninfringing use." That language created a legal safe harbor that fostered many of today's popular consumer gadgets, such as Apple's (AAPL ) iPod and TiVo (TIVO ).

But that safe harbor is under siege, thanks to the legal uncertainty surrounding the Grokster case. Some companies are so fearful of getting sued they are consulting copyright lawyers at every step of the design process. "Our engineers have become very conversant in these legal matters," says Michael Malcolm, chairman and CEO of Kaleidescape, a Mountain View (Calif.) outfit that makes home viewing systems for DVDs.

RELUCTANT INVESTORS. And venture capitalists are reluctant to place their bets on promising technologies that might be subject to lawsuits from movie and music companies. "It's difficult to invest when you don't have any certainty about the legal environment," says Hank Barry, a partner at Hummer Winblad Venture Partners, a leading VC outfit. "Betamax gave us a pretty good degree of certainty about where the line would be drawn." That reluctance has hit Time Trax hard. "We have been put on hold by quite a few people," says Frutkin, whose Gaithersburg (Md.) company makes gadgets that let audiophiles copy satellite-radio programming onto their personal computers and MP3 players. "If the Grokster case did not exist, our round of financing would be closed."

Studios have little sympathy. Online content theft has reached epidemic proportions, with users of P2P software stealing millions of songs and films every day. Music, movie, and software execs say rampant piracy is the lifeblood of companies such as Grokster. Studies show illegal file-swapping accounts for at least 90% of the activity on P2P sites.

LIABILITY MINEFIELD. Grokster profits in part by selling advertising displayed to those millions of users. "This is a business model based almost exclusively on getting people to take what they haven't paid for," says Dan Glickman, president and CEO of the Motion Picture Association of America.

Movie studios and record companies want the court to set a new standard. Hardware and software companies should be liable for infringement if they know their technology is being misused, or if they could have designed it to reduce that risk. P2P sites, for example, could be shut down if they know their customers are stealing but don't stop it.

But that standard, if made law, would give the content industry free rein to second-guess the design decisions of tech companies and expose nascent innovations -- such as P2P -- to potentially ruinous litigation. And the existence of controls doesn't give content owners the right to force third parties to use them.

UNEXPECTED WINDFALLS. "Just because there could be filtering [on P2P systems] doesn't give the content industry the right to demand it," says Michael Weiss, CEO of Streamcast Networks, a defendant in the Grokster case. And even when companies do try to install content safeguards, third parties often come along and thwart those efforts.

No one can predict the effects of squelching a technology on the drawing board. Even inventors of new technologies often fail to anticipate all the potential uses or commercial value -- and the content providers often win big despite themselves.

When Hollywood fought Betamax, studios didn't anticipate that video rentals would become the movie industry's leading source of revenue. "Every company morphs, every technology ends up being used for purposes that no one thought of at the beginning," says Hummer Winblad's Barry.

BENEFITS ABOUND. P2P technology already is winning adherents within the very industries that oppose it. A small group of musicians, including Ann and Nancy Wilson of Heart, rapper Chuck D, and songwriter Janis Ian, has sided with Grokster at the Supreme Court. They say P2P has introduced new audiences to their music, brought them new fans, and helped them find collaborators.

P2P sites host plenty of other content, too. Programmers use it to swap code, and academics are sharing scholarly papers. During the 2004 political campaign season, such advocacy groups as MoveOn.org circulated political ads using P2P software.

Ever since the invention of the player piano, the reigning entertainment titans of the day have fought new technologies, most recently taking up arms against VCRs, CDs, and MP3 players. Each time, they eventually came to recognize the value of these innovations, for themselves and for their customers. P2P -- and whatever as-yet-unimagined technologies might follow -- will be no different. The Supreme Court needs to keep the way clear for innovation.
http://www.businessweek.com/technolo...50324_0001.htm


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Millions Keep Downloading Free Music

New study notes 7 million Americans do it; the Supreme Court is set to weigh in.
Krysten Crawford


A Supreme Court case is drawing a lot of interest from many places.
Here's a look at the how the camps are split.

The online store that supplies 99-cent songs for your iPod just celebrated its 300 millionth sale. But a new study suggests that free music downloading is alive and well in the virtual world.

The Pew Internet & American Life Project, in a report released Wednesday, found that 7 million Americans -- or about 9 percent of Internet users -- are currently making unlicensed copies of music from someone else's iPod or similar MP3 device. About 10 million are getting bootlegged music and movies through e-mail and instant messages.

To some analysts, the study offers further proof of the myriad ways that piracy is thriving despite efforts by the entertainment industry to curb it.

"Apple Computer has spent a couple of years working its way to 300 million songs sold (for its iPod)," said Eric Garland, the CEO of file-sharing tracker BigChampagne. "We think, very conservatively, that 750 million unauthorized or free songs are swapped online every month."

Next week, entertainment companies will ask the U.S. Supreme Court for help in a case that is remarkable on many fronts, including the extraordinary interest it has drawn not just from the technology sector but also from myriad groups like the Christian Coalition of America, the American Civil Liberties Union, the National Taxpayers Union and the commissioner of major league baseball.

The case, MGM v. Grokster, is about an increasingly popular method for Internet downloading known as "peer-to-peer" file sharing. The technology first gained national attention four years ago when a startup called Napster fueled massive music piracy before record labels won a court order shutting down the service.

Last summer, the appeals court that shut down Napster refused to do the same with the developers and distributors of the Grokster and Morpheus software, which allow users to trade music and movie files without going to a central site like Napster. The court found that there were critical differences between Napster and its Grokster & Co. successors.

The ghost of 'Betamax'

The key question in Grokster is whether peer-to-peer software providers should be held liable for illegal uses of their technology.

Both sides of the battle portray the outcome in apocryphal terms. It appears that no less than the future of the Internet -- and possibly the U.S. economy -- is at stake.

"This case is not about bad actors," said Michael Weiss, the CEO of Morpheus developer StreamCast Networks, at a press conference early this month. "It's about technology and who gets to control it, plain and simple."

Weiss and other peer-to-peer defenders say a ruling against them could apply to Apple or any other technology company that manufactures any device used to steal copyrighted works online.

Hollywood and the music labels call the scale of online piracy "mindboggling." They argue that billions of dollars worth of lost sales and licensing fees are at stake.

Critics say those claims are overblown and point to signs that the industry is in good health. Overall the music business sold 817 million units -- including albums, singles and digital downloads -- in 2004, a 19 percent jump from the prior year, according to research firm Nielsen SoundScan.

Much of the increase was attributed to digital music sales, through Apple's iTunes and other paid online services, as well as resurgent CD sales.

Movie piracy is still considered nascent because it takes far more technological might to download a flick than it does to download a song. But that's changing with the emergence of newer, better peer-to-peer programs such as BitTorrent and eDonkey.

Odd alliances

The debate has created some strange bedfellows. For instance, religious and "pro-family" groups have set aside their gripes over on-air nudity and profanity to support the entertainment industry because they think peer-to-peer is widely used by pornographers and other miscreants.

The Grokster debate hinges on dueling interpretations of a 21-year-old landmark Supreme Court decision that allowed Sony Corporation's Betamax to stay on the market. In Sony v. Universal City Studios, the high court found that home video recorders had primarily legitimate purposes that far outweighed their illegal uses.

So Grokster is likely to be decided on whether peer-to-peer technology has enough legitimate uses to satisfy the court.

According to BigChampagne's Garland, the vast majority of the 6.2 million Americans who were using peer-to-peer at any given time in February were using the technology for illicit purposes.

But that doesn't mean that will always be the case, argues StreamCast lawyer Fed von Lohmann. "You don't want to condemn a technology in its infancy before non-infringing uses have had a chance to take hold," said von Lohmann, who is a senior staff attorney with the Electronic Frontier Foundation, a digital rights advocacy group.

Grokster is one battle in a long war

The Supreme Court will hear oral arguments in Grokster March 29, with a decision expected by early summer.

No matter who wins the case, both sides acknowledge that the battle over piracy will continue -- in Congress and in the courts.

Hollywood and the recording industry have already sued thousands of individuals for allegedly illegal downloads using Grokster, BitTorrent, eDonkey and others.

Garland predicts the litigation blitzkrieg against individuals will continue no matter what happens in Grokster. The Betamax case was about an actual device that, had the high court ruled the other way, would no longer have been manufactured. Grokster is about lines of indestructible computer code. "All you can do (in Grokster) is remove a company from the equation," explained Garland.

"At a certain point it will always comes back to the end users and the lawsuits again individual users," he said.
http://money.cnn.com/2005/03/23/news...e500/grokster/


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MP3 to go

Music lovers will find it easier to take their favorite tunes on the road thanks to a new family of radios that will debut on the Chevy HHR and other GM vehicles starting later this year.
Press Release

The new radios include an auxiliary channel and front mounted auxiliary input jack, so that an iPod or other audio source can be easily plugged in and played through the vehicle audio system.

"The Chevy HHR will help launch a new family of radios that will bring iPod connectivity to a broad range of GM vehicles," said Paul Nadeau, director, infotainment displays and controls, for GM Engineering. "We think the ability to easily connect an iPod or other audio source directly into the vehicle audio system will be a big hit with customers."

Radios featuring the new auxiliary input jack will debut starting in late spring. They will be standard equipment on 2006 models of the Chevy HHR, Impala and Monte Carlo; Saturn VUE and ION; Pontiac Solstice; Buick Lucerne; and Cadillac DTS. The radios will be fitted to other new GM models over the next several years.

Auxiliary audio inputs in the console of GM vehicles equipped with DVD players also allow an iPod or other source to be played through the vehicle sound system using a simple adapter cord.

"General Motors has a long tradition of leading with technology that provides real benefits to our customers," said Mark LaNeve, GM North America vice president, sales, service and marketing. "We are excited to be part of the iPod revolution by offering our customers an easy way to play their favorite music in their GM cars and trucks."
http://i-newswire.com/pr11244.html


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Skype, Others Connect Far-Flung Strangers
Ethan Todras-Whitehill

John Perry Barlow is pretty open, but he's no simpleton.

So when he signed on to Skype, a free Internet phone service, and a woman identifying herself as Kitty messaged him, saying, "I need a friend," he was skeptical. He figured she was "looking for 'friends' to come watch her 'relax' in her Webcam- equipped 'bedroom.' "

Nevertheless, he took the call. "Will you talk to me?" she said. "I want to practice my English."

Kitty turned out to be Dzung Vu My, 22, a worker at an oil company in Hanoi, Vietnam. They spoke for a long time, exchanging text, photographs and Web addresses, and discussing everything from the state of Vietnam's economy to My's father's time in the army.

"One doesn't get random phone calls from Vietnam," Barlow, 57, the former Grateful Dead lyricist and co-founder of the Electronic Frontier Foundation, a nonprofit advocacy organization for an unfettered Internet, wrote on his blog. "At least, one never could before."

Barlow's experience is not unique. Skype users report unsolicited contacts every day, and contrary to such experiences with phone and e-mail, the calls are often welcomed.

Skype was founded by Niklas Zennstrom and Janus Friis, the creators of Kazaa, a peer-to- peer file-sharing service. Skype is one of a few hundred companies in the United States that let people talk to one another over the Internet using just their computers and a headset, a microphone or a conventional phone.

The technology, known as voice over Internet Protocol (VoIP), is offered by phone and cable companies like AT&T and Comcast as well as instant-messaging services like Yahoo's and MSN's. Skype says that it has more than 2.8 million customers in the United States and 30.6 million worldwide and that it is adding customers at a rate of 155,000 a day. Skype's biggest competitor, Vonage, a paid VoIP service, has about 550,000 customers.

It actually works

A reason Skype is so popular is that it is free. Another is that it works. That may not seem like much, but it matters when calls with other free VoIP programs sound more like walkie-talkie conversations than phone calls. Skype also has unusual features: Customers can search the database of fellow Skype users by such fields as age, language and nationality.

When Skype began, in August 2003, this search feature resulted in unwanted calls for some people. In response, Skype added the Skype Me feature in 2004. People can now set their user status to Skype Me if they are interested in receiving calls from strangers and search for others in the same mode.

A preponderance of the random calls involve people "Skyping" one another to practice a certain language (as with Barlow's experience), but other people seem to be calling simply because they can.

In February 2004, John Andersen, 57, a software engineer in Juneau, Alaska, was contacted out of the blue by two retired couples in Sydney, Australia, planning a cruise through Alaska's Inside Passage region that summer. They wanted to know the best helicopter glacier tours and fishing excursions in Juneau, and Andersen was happy to send them links through Skype.

They made plans to meet, but Andersen was away when the couples visited. "I did get a very nice e-mail from them saying the trip had gone off without a hitch," Andersen said. "It's like ham radio for the Internet."

This was something I had to try. I picked up a $25 headset and microphone combination, downloaded the free software from the Web site (skype.com), put a few personal details in my user profile (male, New York, favorite color green) and set my user status to Skype Me. Despite what I had heard, I wasn't convinced that I would get any calls.

Within 15 minutes, I had more callers than I could handle. In the five days I was in Skype Me mode, I received more than 30 calls and messages from Morocco, Russia, China, Poland, Argentina, Israel and several other countries.

One of my most interesting chats was with Billy Einkamerer, 27, a freelance Web developer in Johannesburg. I messaged him first, the Skype equivalent of knocking on the door before barging in. He taught me a little Afrikaans, and we commiserated over our mutual inability to multitask.

I do some Web design myself, so through Skype's instant messaging feature we traded links to sites we had done; he found an error on one of mine, which I quickly corrected. It was a pretty afternoon in Brooklyn, so I took a snapshot out the window and sent it to him.

Near the end of our conversation, Einkamerer got a call from his friend Gerhard Jacobs, also 27 and from Johannesburg. Jacobs runs an information technology company. Einkamerer conferenced him into the call, and the three of us made jokes about our accents.

It felt like the early days of AOL, another environment in which people contacted others randomly. But voice brings to life the other person in a way that typing cannot, like hearing Einkamerer laugh at my jokes. The instant messaging environment is anonymous; with voice, you cannot hide from the other person.

Moreover, the voice quality over Skype is actually superior to traditional phone service. Standard telecommunications are restricted to the 0 to 3.4 kilohertz range to limit the bandwidth consumed; Skype transmits at 0.5 to 8 kilohertz, according to a Columbia University study in 2004. It feels intimate because it is; more of the users' voices reach each other.

Not free of problems

There are problems with Skype Me mode. Skype Me users are subject to the undesirable solicitors familiar to e-mail and phone users: spammers, scammers and perverts. Skype is starting to see its fair share of all these groups: One person who contacted me was a Nigerian "model" who requested my help depositing $4,000 in an American bank account--a classic scheme.

In addition, the blogging community is reporting scattered Skype telemarketers, and women who identify themselves as such in their profile report a bombardment of unwelcome advances when they enter Skype Me mode. These problems appear to be growing.

Skype users can limit callers to people on their contact list, so if the nuisance calls become substantial, the number of users who choose Skype Me mode--already only a tiny fraction of users, according to Kelly Larabee, a Skype spokeswoman--could disappear entirely.

Government intervention is not a likely fix. In February 2004, the Federal Communications Commission issued the Pulver Order, named after the VoIP pioneer Jeff Pulver, which states that "pure" computer-to-computer VoIP services like Skype and Pulver's Free World Dialup are no different from the unregulated instant messaging programs and are not subject to the traditional phone service taxes and regulations.

The Pulver Order is viewed as a victory by many in the VoIP community, including Skype, but it has potentially negative implications for the Skype Me callers: no regulation means no do-not-call list, which means Skype Me users, particularly women, will continue to receive unwanted and unfriendly calls.

Formalized social networks

Even without government intervention, however, random Skyping appears likely to continue in some form. The next phase may be more formalized Skype-enabled social networks like Jyve, which connects people with similar interests and desire to practice a certain language, and SomeoneNew.com, which connects people for romantic purposes. Only a few English- language social networking sites currently use Skype, but such sites in Asia have been very successful.

Jyve, according to Charles Carleton, a co-founder, will be introducing a feature in the next few months that Carleton hopes will protect the medium's social capabilities: an eBay-like feedback system to help users reject callers with a track record of inappropriate conversation. Skype is happy to leave these functions to other companies. "We're probably never going to run a dating service or language seminars," Larabee said of Skype. "Our business is the technology, not the networks."

Barlow, who has been inviting people to Skype him for three months, with 20 takers, believes that Skype's intimate feel will be sufficient to keep the Skype Me phenomenon alive.

"There's something confessional about this space," Barlow said about Skype. "It's like a long over-the-ocean flight where the other guy starts telling you stuff that you're astonished to hear and you start talking about stuff you're astonished to say. The combination of anonymity and intimacy creates a special kind of environment."
http://www.wilmingtonstar.com/apps/p...394/1010/STATE


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Keep In on the Down-Load
Benedikt Koehler

The British Phonograph Industry has levied over £50,000 in fines against various individuals guilty of swapping pop music downloaded from the internet. This successful conviction of music file-swappers in Britain made a great impact. To begin with, millions of panic-stricken British parents charged into their teenage children's rooms on suspicion that junior's collection of Moby and Franz Ferdinand may force them to take on a second mortgage to pay for copyright infringements. The bigger picture is that the BPI's action was a volley fired in the copyright cyberwars, where the next battle is joined on 29th March, when the US Supreme Court hears MGM v Grokster.

In the general scheme of things £50,000 is small change in the entertainment industry, barely enough to kit out a single Eminem stage set. The point the BPI is making is that when copyrighted material changes hands, copyright owners expect somebody somewhere to pay them. In Europe, the BPI thinks they have a case against cybersquatters. In the US, MGM is going after Grokster, blaming the problem on software which enables file-sharing in the first place.

To date, MGM's suit has not had much luck. The Court of Appeal held against MGM citing the 1984 Betamax precedent. The issue at the time was whether manufacturers of video blanks were accessories to copyright pirates who taped movies and sold them on the black market. Then as now the court decreed that manufacturers were not culpable if customers used products illegally.

It would be a stunning turnaround if the Supreme Court overruled the Court of Appeal. No matter which outcome, the Supreme Court's judgment will set out ground rules for competition in markets where high-tech clashes with copyright. The decision is key to information markets on both sides of the Atlantic. The precedent in European courts is Magill (1991).

At the time of Magill each broadcaster in Ireland issued individual TV guides. Magill, a Dublin publisher, thought it was absurd viewers had to check three separate magazines to find out what was on TV and spotted a market for a single magazine combining all three listings. The broadcasters sued Magill for copyright infringement, and won. However, the court's affirmation had a sting in its tail. Though upholding broadcasters' copyright, the court charged broadcasters with abuse of dominance for "preventing the emergence on the market of a new product." In due course a consolidated TV guide came to the market.

There's the rub. Grokster's software not only challenges copyrights, but also the way artistic output reaches the public. The world's entertainment industry is built on a business model where a substantial element of revenues comes from managing distribution. The industry's logical riposte to its challenge has been to permit distribution via internet, provided users pay a fee. However, at issue is not only whether customers should pay, but at what price. The cost of disseminating information via the internet is substantially lower than via CD sales outlets. It is a fact of life that consumers will challenge prices unless they are justified by costs. As Alfred Marshall put it succinctly, "no one could get extra high wages for making eggs stand on their ends after Columbus's plan had become public property."

The BPI's successful raid on file-swappers may turn out to be a Pyrrhic victory. The Ninth Court of Appeal observed "we live in a quicksilver technological environment" and that "the introduction of new technology is always disruptive to old markets." Producers take note. Whenever producers offer products at prices higher than they could be, markets will undercut them. Courts will protect copyrights and patents, but business models have to survive on their merits.
http://www.techcentralstation.com/032405F.html


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Apple's Legal Drive to Stifle Web Sites Is Fruitless So Far
John Markoff

Since Apple Computer filed a lawsuit in January against Think Secret, a Web site operated by a 19-year-old Harvard student, accusing the site of publishing Apple's trade secrets, the company has sent a series of cease-and-desist letters to the student, Nicholas M. Ciarelli.

So far, the letters appear to have done nothing to reduce Mr. Ciarelli's enthusiasm. He has continued to publish articles about Apple's new product plans.

Apple's continued legal barrage has also stirred up the community of Web sites and Web logs that routinely speculate on the company's product plans. Several operators said that Apple's legal campaign does not appear to have slowed the flow of information about details and announcement dates of new Apple products.

On Monday, another Web site, macosXrumors, removed an article describing Apple's recent distribution of a test version of its new Tiger operating system, stating that it had done so at the request of Apple's lawyers.

The Web site operator, Alexandros Roussos, is a college student at Université René Descartes Paris 5. He said in an online interview that much of the information published on the site, which he has published since May 2002, comes from anonymous sources.

"I'm a bit disappointed by these moves," he said. "I think Apple should protect itself from trade secret revelations, but not this way." He said that he was currently seeking legal advice on how to respond to Apple's legal threat.

At the same time, Mr. Roussos said the dispute between Apple and Web sites operators did not appear to have reduced gossip about Apple.

"Even though we lost contact with some sources, the rumor flow is still quite the same," he said. "The fact that there are quite reliable ways to share information anonymously is probably the reason why sources sometimes persist."

Apple refused to comment on the letters sent to Mr. Ciarelli and Mr. Roussos.

Mr. Ciarelli, who still considers himself a fan of Apple, said he was a journalist and should be protected by laws that shield journalists from having to divulge the names of confidential sources. "The important part is that I've done nothing wrong," Mr. Ciarelli said in a telephone interview on Tuesday. "We're staying focused on providing our audience with news. It's business as usual."

So far this month Mr. Ciarelli has reported that Apple is planning to introduce the newest version of its operating system, known as OS X Tiger, in April and that it is also planning newer versions of its iMac and eMac computers.

In a separate case, Apple filed suit in December against unnamed individuals, presumably Apple employees, who might have leaked information about new music software to several Apple enthusiast Web sites, including PowerPage and AppleInsider. The Web sites were not named in the suit.

In that case, a judge in Santa Clara County Superior Court in California ruled earlier this month that the Web sites could not block a subpoena from Apple to the e-mail provider for one of the Web sites, seeking messages that might identify the confidential source of the information.

Apple said that it was seeking the source because it claimed the information was protected under trade secret law. Lawyers for the Electronic Frontier Foundation, which is representing the Web site operators, have argued that the journalist's privilege blocks Apple's subpoena. They filed an appeal this week to overturn the ruling.

Mr. Ciarelli's attorney, Terry Gross, of Gross & Belsky in San Francisco, said that Apple's attorney had refused to identify the specific trade secrets contained in articles published on the Think Secret Web site.

Separately, Apple said on Wednesday that it had reached a settlement with Doug Steigerwald, a 22-year-old college student whom the company had accused of illegally distributing a test version of the Tiger operating system over the Internet. Apple still has legal action pending against two other men in the case, which was filed in December in federal court in San Jose, Calif.
http://news.com.com/Apples+battle+ag...l?tag=nefd.top


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Apple Settles Lawsuit with One Tiger Leak Defendant
Misha Sakellaropoulo

"While Apple will always protect its innovations, it is not our desire to send students to jail," said Apple spokesman Steve Dowling. "We are pleased that Mr. Steigerwald has taken responsibility for his actions and that we can put this lawsuit behind us."

Apple (Nasdaq: AAPL) has settled a lawsuit with one of three defendants it sued for distributing developer versions of Mac OS X 10.4 Tiger, the company said today.

Doug Steigerwald, a student and Apple Developer Connection member at the time, was sued in December 2004 after Apple determined that he was the source for pre-release copies of Mac OS X 10.4 Tiger that were floating around various BitTorrent file sharing sites.

Criminal Probe

"While Apple will always protect its innovations, it is not our desire to send students to jail," said Apple spokesman Steve Dowling. "We are pleased that Mr. Steigerwald has taken responsibility for his actions and that we can put this lawsuit behind us."

As part of the settlement, Steigerwald will pay an undisclosed sum to Apple and said he will not discuss the details of the case. Steigerwald also revealed that he is the subject of a criminal investigation by the U.S. Attorney's office and said he is "working toward a resolution with the federal government."

"I disseminated it [Mac OS X 10.4 Tiger] over the Internet and thousands of unauthorized copies of Apple's software were illegally distributed to the public," Steigerwald said in a statement. "As a result, Apple sued me for copyright infringement and trade secret misappropriation. All of the claims regarding me in Apple's complaint are true.

"Although I did not mean to do any harm, I realize now that my actions were wrong and that what I did caused substantial harm to Apple, and for that I am truly sorry. I am grateful for the chance to resolve this lawsuit and move on with my life, and hope that any publicity generated by this lawsuit discourages others from making the same mistake as I did."

Other Defendants

Apple said it had no comment on the other two defendants in the lawsuit, Vivek Sambhara and David Schwartzstein.

In February, Apple co-founder Steve Wozniak threw his support behind the students in the case, saying in a blog posting regarding Sambhara: "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."
http://www.linuxinsider.com/story/article/41711.html


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Online Politicking Receives Temporary Reprieve
Declan McCullagh

Political bloggers would continue to be exempt from most campaign finance laws, according to highly anticipated rules that federal regulators released Wednesday.

The Federal Election Commission also proposed that online-only news outlets and that even individual bloggers should be treated as legitimate journalists and immune from laws that could count their political endorsements as campaign contributions.

The 47-page outline of proposed rules (click here for PDF file) takes a cautious approach to the explosive question of how Web sites and e-mail should be regulated, with the FEC saying throughout that its conclusions are only tentative ones and inviting public comment. The comment process is expected to be approved by the FEC at its meeting Thursday.

Ever since FEC Commissioner Bradley Smith warned of the possibility of a crackdown on bloggers in an interview with CNET News.com in early March, politicians and political junkies have been closely following the commission's deliberations. While one senator has proposed a near-complete inoculation of the Internet, some of the Bipartisan Campaign Reform Act's original sponsors have warned of "creating loopholes" through insufficiently aggressive regulations.

"These proposals are intended to ensure that political committees properly finance and disclose their Internet communications, without impeding individual citizens from using the Internet to speak freely regarding candidates and elections," the FEC said in a statement.

The initial reaction from bloggers was cautiously positive. "The blogosphere has indeed flexed its muscles here, and we've been heard," said a post on the conservative-leaning Democracy-Project.com.

The FEC's proposed regulations also say:

• Political spam must be labeled, a relaxation of a current regulation that requires disclaimers when more than 500 bulk messages endorse or attack a political candidate. Now only such e-mail sent to addresses purchased "through a commercial transaction" must sport disclaimers.

• Linking to a campaign's Web site will not be counted as an "expenditure" that could trigger campaign finance law unless money changes hands. Also exempt are "distributing banner messages" and "blogging."

• Someone simply running their own Web site from their own computer or hosted on a service like Blogger.com does "not make a contribution or expenditure" that must be reported as a campaign contribution.

• Forwarding e-mail from a political candidate "would not constitute republication of campaign materials," which could have triggered another complex section of campaign finance law.

In one area, the FEC seems unsure about where to proceed and asks for input from Internet users. The agency notes that online-only news sites such as Salon.com, Slate.com and DrudgeReport.com have no print equivalent. But, the FEC asks, should individual bloggers qualify? What if a blogger receives payment from a political campaign? And "should bloggers' activity be considered commentary or editorializing, or news story activity?"

The initial reaction from bloggers was cautiously positive. "The blogosphere has indeed flexed its muscles here, and we've been heard," said a post on the conservative-leaning Democracy-Project.com.

Since Smith's interview appeared, an unusual alliance of conservatives, libertarians and liberals have coalesced around the idea of heading off overly intrusive government regulation. An online petition has garnered thousands of electronic signatures, and the Wall Street Journal on Wednesday wrote in an editorial that "this was always going to be the end result of a law that naively believed it could ban money from politics."

Michael Bassik, a self-described Democrat who co-created the online petition, was cautiously enthusiastic about the FEC's draft rules. "It appears as though the FEC did a good job of listening to those in the online community in the past few weeks and seems to have incorporated the comments that individual bloggers and journalists have voiced in the past few weeks," Bassik said late Wednesday.

Some bloggers have created a "free speech pledge" endorsing civil disobedience if the government eventually goes too far, while some Democratic bloggers have fretted that the three Democratic members of the FEC could be blamed for choosing not to appeal a federal court decision from last year that ordered the commission to revisit its regulations.

In 2002, the FEC largely exempted the Internet from campaign finance laws by a 4-2 vote, but U.S. District Judge Colleen Kollar-Kotelly last fall overturned that decision. "The commission's exclusion of Internet communications from the coordinated communications regulation severely undermines" the campaign finance law's purposes, Kollar-Kotelly wrote.
http://news.com.com/Online+politicki...3-5632346.html


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Rockers Flex BitTorrent's Muscle
Katie Dean

With MTV and VH1 now crowded with programs like Date My Mom, The Ashlee Simpson Show and Celebrity Fit Club, there's little room for music videos, especially from independent artists.

That's why one up-and-coming group, the Decemberists, opted to release its new music video, Sixteen Military Wives, for free using BitTorrent. The high-quality video file has logged more than 1,700 downloads since it was released over the weekend.

"For the most part, MTV and VH1 won't touch video unless bands have sold a huge number of records," said Dawn Barger, manager of the Decemberists. "It's impossible to get rotation."

BitTorrent provided a way for the band to efficiently get the video out without paying a lot of money for bandwidth. The group also hopes to gain exposure from fans passing along the video to others.

"No matter where you stand on issues of copyright, a network like BitTorrent is really for exactly this kind of thing -- when you have content that you want to freely distribute," said Slim Moon, founder of Kill Rock Stars, the Decemberists' record label. "It seems like ... the most logical way to distribute."

Aaron Stewart, the director of the video, said the idea to use BitTorrent came from a friend. He said the fans on the Decemberists' message board helped get the video out by acting as seeders -- people who share their download of the video file with others to speed up download time and share bandwidth. Two fans agreed to host the tracker, which provides the link to the torrent file, on their server.

The video has also aired on MTV2, Stewart said, but he believes using BitTorrent is a more reliable and effective way to reach a larger audience. And providing fans with a high-quality video file is a better option than the low- quality videos in the "postage-stamp-sized window" hosted on sites like Launch.com and MTV.com, he said.

The video for "Sixteen Military Wives" was shot for less than $6,000 at a high school in Portland, Oregon, and features members of the band participating in a Model United Nations, a simulation popular in high schools to teach students about problem-solving and international relations. In the video, Decemberists singer Colin Meloy represents the United States and boldly declares war on Luxembourg, a not-so-subtle jab at the Bush administration's decision to go to war.

The video "address the political subtext (of the song) but not in a heavy-handed way," said Stewart, who conceived the idea. "I'd rather be snarkily juvenile in our feelings about the current administration."

The video also features cameos from other musicians from the Pacific Northwest. Chris Walla, a guitarist for Death Cab for Cutie and producer of the Decemberists' new album, Picaresque, plays a reporter. John Roderick from the Long Winters takes on the role of a teacher.

Both Barger and Moon said they plan to use this method of online video distribution with other bands.

One P2P advocate was excited to hear about the band's use of the technology.

"This is an acknowledgement of the cost-effective power of peer-to-peer technology in the service of, by and for the artists," said Adam Eisgrau, executive director of P2P United, the trade association for the file-sharing industry. "It's one of the first steps along a road that many people feel is inevitable to the self-empowerment of artists in a world that for too long has had the landscape shaped by large, impersonal, copyright-aggregating multinational companies.

"The lie that you can't compete with free, that peer to peer will be the death of the music industry, that it will be a disincentive to create, has been disproven every time a band takes advantage of the real power of this technology," he said.
http://www.wired.com/news/digiwood/0,1412,66969,00.html


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Rapper's New Single Features Ringtone Innovation

The new CD single "Baby" from rapper Fabolous allows UK consumers to choose which part of the song they want to use as a mobile phone ringtone, a feature that Warner Music said on Thursday was a first for the industry.

Until now, the 30-second ringtone clips packaged with singles have been pre-determined by record companies.

The Fabolous single from Warner's Atlantic Records, which includes built-in software that lets listeners isolate any part of the song and load it onto their phones, retails for 3.99 pounds ($7.51), the same price as other CD singles.

"It's the next step for music lovers," said Crispin Futrille, whose company Bounce supplied Warner with the technology. "Ultimately the idea is to get this included on all CDs."

Record companies are seeking new ways to capitalize on the desire among consumers to use their favorite songs as ringtones as the industry reshapes itself amid a fight against piracy and illegal downloading.

Some analyst estimates have put the global ringtone market at more than $3 billion. Industry trade magazine "Billboard" last year even launched a weekly ringtone chart of top sellers.

Warner Music, smallest of the four major music companies, declined to comment on prospects for the ringtone technology, citing its announcement earlier this month that it would sell shares to the public and the related prohibitions on discussing forward-looking plans.
http://www.reuters.com/newsArticle.j...toryID=7996749


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Our Declaration of Technology and Independence
Veronica O'Connell

Until recently, the United States has been the world center for creativity. We have attracted the best, the brightest and most creative people from around the world. Unfortunately, trends to restrict new technologies are discouraging creativity and threatening our ability to compete in a global marketplace.

The debate is no longer just about piracy and profits. The unbalanced importance given to protecting intellectual property (IP) is stifling creativity and steering America toward a cold war on new technologies. For America to compete globally, the issues must be redefined, including striking the right balance between protecting IP and encouraging creativity and innovation.

We need to advance the fight against the unbalanced importance given to protection of IP and the increase in litigation against innovators. Public policies should encourage innovation and allow people to make full use of the opportunities provided by new technologies. IP issues need to be redirected to focus on encouraging and advancing creativity rather than on protecting existing business models.

We have a technology and intellectual property statute. We call it our Declaration of Technology Independence. It sets forth principles to bring balance to the debate to protect and advance innovation.

WHEREAS, The Supreme Court in 1984 held that it is legal under the copyright law to sell a product if the product has substantial non-infringing uses.

This Betamax holding paved the way for the introduction of revolutionary technologies enabling recording, storage and shifting of content in time and space without the prior permission of the copyright holders.

Technologies such as MP3 encoding, the PC, the Internet and digital and audio recorders have supported a creative renaissance that has enriched the content community, empowered consumers and helped establish the United States as the world’s economic leader.

Our nation attracts the world’s smartest and most innovative people because our society embraces and encourages entrepreneurship. Our nation of immigrants has created the world’s largest technologies and communication systems. Currently, our leadership in innovation is being threatened by the content industry’s misguided attempts to protect intellectual property.

The recording and motion picture industries have often resisted, opposed or sought to stifle new technologies and products, despite the fact that these technologies transform markets and create new avenues for profitable content creation and distribution.

The influential content lobby has in many respects shaped the current state of copyright law. Copyright terms have been unreasonably extended so that the reporting of history itself is subject to permission. Makers of pioneering technologies are now routinely subject to expensive and time-consuming lawsuits that discourage innovation and impede U.S. companies from competing globally.

Moreover, false equations have been drawn between intellectual property and real property, noncommercial home recording and commercial piracy, and national creativity and sales of particular products and formats, such as CDs.

THEREFORE, as Americans concerned about preserving our rights of freedom of expression and striving to be leaders in advancing creativity, and who understand that new technologies promote and enhance creativity, communication and our national welfare, we hereby ask policymakers to:

Recognize that our founders instituted copyright law to promote creation, innovation and culture rather than to maximize copyright holders’ profits, and that it can do this only if new technologies are not stifled and fair use rights are upheld;

Reaffirm the Betamax holding that a product is legal if it has significant legal uses;

Resist pleas by big content aggregators for new laws, causes of action, liabilities and ways to discourage new product introductions;

Re-establish the fundamental rights of consumers to time- shift, place-shift and make backup copies of lawfully acquired content, and use that content on a platform of their choice;

Re-examine the length of the copyright term and explore avenues for content to be reliably available for creative endeavors, scholarship, education, history, documentaries and innovation benefiting society at large; and

Realize that our nation’s creativity arises from a remarkable citizenry whose individuality, passion, belief in the American dream and desire to improve should not be shackled by laws that restrict creativity.
http://www.ce.org/publications/visio...marapr/p06.asp


















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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