Peer-To-Peer News - The Week In Review – April 2nd, '05

[JackSpratts]

Quote Of The Week

"What I worry about is a suit right out of the box."

United States Supreme Court Justice Antonin Scalia










Let Them Take A Look At It

Nearly six long years after Shawn Fanning’s Napster exploded the uneasy 100 year old relationship between record company and music consumer the United States Supreme Court finally heard arguments this week for and against Peer-To-Peer programs and the business plans of the companies that own them. Brought by MGM, a Hollywood marketing concern and unit of The Sony Corporation the suit names Grokster and the operations of the Fasttrack family, which also includes Kazaa, Streamcast Networks and the several other clients that have attached themselves to the dated technology like barnacles on a dying whale. While the specifics of the coming decision as it applies to Fasttrack will have little in the way of relevance for the majority of file sharers who have abandoned that compromised mess for other more up to date and open networks, it remains an important case for file sharers and consumers generally since it will in all likelihood determine the course of future technological development. While it happens that in one writers opinion the best programs are freeware applications created by individuals for non-profit use and which will not be directly affected by a suit that blames the "profit motive" for the "stealing of millions of songs," it will nevertheless embolden both the content industry and the congress to begin a systematic purge of any program, and any program creator not meeting their rigid specifications, and let’s face it, that’ll mean just about all of them. Furthermore, unlike Grokster and friends, the individual players writing code in their bedrooms aren’t exactly the type to resist the attacks of these multimillion-dollar legal onslaughts. I’m afraid that in this instance we can argue from the specific to the general and say that a decision against Grokster will be a serious blow to all of us in this community of peers. But that’s not the half of it.

At the very least the future of technological development will be greatly influenced by the Court’s decision, and they know it, and have told us so. They are not comfortable with a world in which the narrow interests of one industry can determine the fate of many others, and that is a positive sign, but whether it means the Justices will rule for the file-sharing companies is simply too complex to predict. It does not appear they will rule directly against them however, and it may turn out they find a third and weaker way, one that continually sends cases through the lower courts for never ending vettings of business plans, constant probings of statute violations, and especially tests for the evanescent "encouragement of such." Even if the recent statutes themselves are suspect, voted off the record and contrary to generations of accepted cultural behavior the courts would serve at the behest of the content aggregators who created them. I’m not sure what decision would be worse.

Sometime in the next three months we will know their decision, and we will go from there. If it is wrong to cheat our descendents out of the most important communication tool in the history of civilization by allowing a handful of old people to control us, such is the weakness of our system. That whatever the Court decides we will continue using these tools is of course the strength of our democracy. This movement is impossible to stop, and any attempts to do so inexcusable expressions of the vanities of this corporate age, at once enamored of itself and in awe of its own perceived power. Real power rests elsewhere. Its expressions markedly different. It moves with quiet intent. Deliberately, forcefully, thoroughly, until it has transformed old into new. We are well on our way to completing the process and neither Washington, Brussels, nor Sydney can stop it. They will continue to expose and exercise their deeply rooted pathological prejudices for inhibiting the growth of their own people but becoming anything more than an aggravating nuisance is for the present beyond them.

Still a decisive victory would be good, and it would be proper as well, as much as the original Sony Betamax VCR decision a generation ago. That too dragged on for years, taking a year or so longer to reach the Court than the Grokster case but the outcome was as uncertain then as it is today, perhaps even more so. Indeed, had it not been for a last minute change of sides by the lone female Justice Sony would have lost, and had that occurred the Internet would be crippled and unrecognizably so today. That the record companies wanted to “shut down the internet” is well known and they would have, had the Betamax decision gone their way, and that’s a numbing thought. That they could not led directly to this bountiful technological tour de force that is the Internet and that has moved our world closer, created undreamed of fortunes, and from subtle to profound improved our lives in countless ways. Such is the power of well-reasoned law. Said the Court in 1982, "The immediate effect of our copyright law is to secure a fair return for an 'author's' creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good. 'The sole interest of the United States and the primary object in conferring the monopoly, lie in the general benefits derived by the public from the labors of authors.'" The importance is the balance. The process of creating it is messy and imperfect, and finding a perfect balance exceedingly rare. Recognizing this the Court in a democracy must always weigh in favor of the people, who after all are the ones granting the monopoly in the first place.

The Betamax decision had unintended consequences that ultimately led to a financial renaissance for the very movie companies who had fought so bitterly to kill it, proving definitively that what was good for the people was great for business. It was not a lesson well remembered in Hollywood however and was completely forgotten in the hysteria surrounding the launch of Napster in May of 1999.

Now as it happens at the very moment the present case reaches the Court Hollywood begins it’s first tentative deal making with P2P firms, and with Shawn Fanning no less, and like the reels inside a videotape or the discs inside an iPod the circle rolls around again.

So with the tension slowly ebbing from the producer vs. sharer equation had this case taken the year or so longer to reach the Court that the Betamax case did the murky depths now facing the Justices would be clearer to plumb. Physical sales of copyrighted materials are today smartly on the rise and the P2P community’s long insistence that both file sharer and content creator can simultaneously survive and even prosper is being backed by real data, even now giving lie to the worst excesses of paid industry fear mongers. The effect of all this is to cast new light upon the media companies’ political lobbying practices, their disingenuous arguments, their never ending extensions of copyright lengths and their ever decreasing instances of recognizing fair use. It is illuminating the content cartels’ transparent duplicity and continuing concentration of power and in full view of an increasingly skeptical public embarrassingly redefining their inflexible demands from a "must" to a "need" to a "want." Should the Justices care to look they may find that in such things do all things rest.













Enjoy,

Jack












Supreme Court Weighs in on File-Sharing
Ted Bridis

Justice Stephen G. Breyer said the same software that can be used to steal copyrighted materials offered at least conceptually "some really excellent uses" that are legal. Justice Antonin Scalia maintained that a ruling for entertainment companies could mean that if "I'm a new inventor, I'm going to get sued right away."

The Supreme Court expressed concerns today over allowing entertainment companies to sue makers of software that allows Internet users to illegally download music and movies, questioning whether the threat of such legal action might stifle Web innovation.

During a lively argument, justices wondered aloud whether such lawsuits might have discouraged past inventions like copy machines, videocassette recorders and iPod portable music players -- all of which can be used to make illegal duplications of copyrighted documents, movies and songs.

Legal Uses

Justice Stephen G. Breyer said the same software that can be used to steal copyrighted materials offered at least conceptually "some really excellent uses" that are legal.

Justice Antonin Scalia maintained that a ruling for entertainment companies could mean that if "I'm a new inventor, I'm going to get sued right away."

While seeming leery of allowing lawsuits, the court also appeared deeply troubled by efforts of the companies that manufacture so-called file- sharing software to encourage Internet piracy and profit from it.

Justice Anthony M. Kennedy pressed a software lawyer on the question of whether profits from trafficking in stolen property can rightfully be used to help finance a young technology business. "That seems wrong to me," he said.

Two lower courts have sided with the software makers, Grokster and StreamCast Networks. How the justices rule could redefine how consumers can watch television shows and films and listen to songs that increasingly are delivered in digital formats.

Supporters of file-sharing technology say a ruling against the software companies could effectively give the entertainment industry a legal veto over up-and-coming gadgets; they fear the threat of expensive lawsuits could hamper development of new devices.

The case has star power on both sides.

Copyrights Remain

Don Henley, Sheryl Crow, the Dixie Chicks and other musicians are backing the major recording labels, saying their livelihoods are threatened if millions of people can obtain their songs for nothing.

About 20 independent recording artists, including musician and producer Brian Eno, rockers Heart and rapper-activist Chuck D, support the file-sharing technology. They say it allows greater distribution of their music and limits the power of huge record companies.

Regardless of the outcome, it still won't be legal to download copyrighted materials over the Internet without permission, though tens of millions of computer users do so each day. And any ruling won't affect thousands of copyright lawsuits filed individually against Internet users caught sharing music and movies online.

But a victory for the entertainment companies would allow lawsuits that could drive companies that make file-sharing software out of business. It also would effectively overturn rules that have governed technology companies for more than two decades: Manufacturers can't be sued for copyright violations committed by customers using their products illegally.

Dan Glickman, head of the Motion Picture Association of America , said the film industry will keep trying to get consumers to buy legal digital movies. "Consumers want a legal, hassle- free, reasonable-cost way to get their products online," he said in an interview yesterday with editors from The Associated Press.

Mitch Bainwol, chief executive of the Recording Industry Association of America , told the AP editors: "We are doing all the things we should be doing to move into this digital age. That is true no matter what the outcome" of the case.

Uphill Battle

Still, the entertainment companies face an uphill battle with the high court.

The trial judge and a U.S. appeals court quoted the Supreme Court in ruling the same file- sharing software millions of people use to steal music and movies also can be used for "substantial" legal purposes, such as giving away free songs, free software or government documents. They reasoned that gave the software's manufacturers protection from copyright lawsuits based on acts by their customers.

The trial court in Los Angeles and San Francisco-based U.S. Court of Appeals for the Ninth Circuit based their decisions on the 1984 Supreme Court Betamax case. The justices ruled Sony (NYSE: SNE) couldn't be sued for copyright infringement if some customers used their VCRs to make illegal copies of movies.

Entertainment companies argue the file-sharing companies should not have blanket protection from copyright lawsuits, especially when they know about and profit from wide-scale piracy. Court documents said some file-sharing software companies earned millions of dollars annually from advertisements built into their software, and ad revenues climb as more people use the software.
http://www.technewsworld.com/story/software/41853.html


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File-sharing opens musical doors

Indie Artists Back P2P Firms In High Court Case
Alex Veiga

Recording industry executive Andy Gershon sees opportunity in the online file-sharing networks that most of his rivals decry as havens for music pirates. As president of V2 Records, home to such established acts as The White Stripes and Moby, Gershon mines such Internet distribution channels for new fans and revenues.

"The cat is so far out of the bag and so far gone that it's pointless to keep fighting it," Gershon said. "I might as well make as many people fans of our music, whether they illegally download it or not."

A number of mostly independent recording artists and labels have experimented with and embraced the freewheeling digital distribution that the Internet affords. And many worry that a victory by major recording companies in a landmark file-sharing case now before the U.S. Supreme Court could short-circuit the very technologies that they believe are making a more level playing field of the music business.

The nation's high court is to hear arguments next Tuesday on whether the entertainment industry can hold file-sharing software firms Grokster Inc. and StreamCast Networks, which distributes Morpheus, liable for what computer users do with the technology.

Lower courts have sided with the software makers, which assert their so-called peer-to-peer technology is as legitimate as a videocassette recorder or a copy machine.

Several artist rights associations, music publishers and well-known musicians, including Don Henley, Sheryl Crow and the Dixie Chicks, are backing the major recording labels, which accuse Grokster and StreamCast of profiting from a business model that depends on piracy.

From 1999 to 2004, the total value of the U.S. recording industry fell $2.4 billion to $12.1 billion - a decline the industry blames primarily on file-sharing.

But some artists, including Wilco frontman Jeff Tweedy, see an upside to file-sharing.

"I look at it as a library. I look at it as our version of the radio," Tweedy said. "It's a place where basically we can encourage fans to be fans and not feel like they're being exploited, which is basically what the whole industry is geared to do."

Tweedy encourages fans to tape Wilco shows and has distributed tracks over the Internet for free months before releasing them on CDs.

He agrees artists should be compensated, but "you try to encourage people to feel more like a patron of the arts instead of a consumer."

V2 Records taps file-sharing networks and other Internet distribution means by selling songs and offering free promotional materials like music videos. Though results are difficult to quantify, Gershon credits ads on Web sites and song giveaways with raising the profile of The Blood Brothers.

"The CD sales have stayed steady," said Gershon. "For a band like this, a lot of the steadiness of the sales is based on people being turned on to it online."

Mitch Bainwol, chairman of the Recording Industry Association of America, says artists and labels can be creative with online distribution and promotion but those decisions should not be left up to listeners.

"If you want to give up your property for free as a way of trying to drive other commercial advantages, that is certainly a strategy one can employ," Bainwol said. "But it should be the individual (artist's) choice."

About 20 independent recording artists, including musician and producer Brian Eno, rockers Heart and rapper-activist Chuck D, filed a legal brief with the high court in support of Grokster and StreamCast. They insist file-sharing and related technologies help expose new audiences to their music - outside established channels of the recording labels.

The artists argue that file-sharing "has the immediate potential to develop into a significantly more prevalent alternative distribution and promotion system." But a ruling that outlaws or limits it "will block that potential from ever being fully realized," the brief contends.

Some are concerned about the possibility of requiring file-sharing companies to filter out unauthorized works, a move the major labels consider crucial to legitimizing file-sharing as a distribution system.

"It definitely would greatly reduce the amount of traffic," said Chip Schutzman, head of online marketing at Sovereign Artists Inc.

Santa Monica-based Sovereign has promoted and sold tracks by Heart using the online Weed file-sharing format, in which listeners can hear a song for free several times before having to buy it. Weed files are distributed to Web sites and across file-sharing networks.

For Sananda Maitreya, who also joined the legal brief, online music distribution gives him the freedom he says he lacked when he was signed with a major label in the 1980s under his former name, Terence Trent D'Arby. Back then, Maitreya recalled, committees had to sign off on any music released.

"The Beatles could not have faced that criteria and come up with anything other than the most mediocre, conservative music," said Maitreya, who now lives in Italy.

Maitreya and the rap group Fine Arts Militia, featuring Chuck D, have released albums through Weed. Representatives of the groups declined to give specific sales figures.

John Beezer, president of Weed-creator Shared Media Licensing Inc. in Seattle, estimates that fewer than 100,000 tracks have been sold in the 18 months since the software went into use. Beezer said more than 7,000 artists have offered their songs through Weed, and the vast majority aren't signed with recording labels.

But even for unsigned bands, the potential to cheaply target the pool of music fans on file-swapping networks can be tantalizing.

Kevin Martin, vocalist for the 1990s band Candlebox, credits a file-sharing song promotion involving the Yoo-hoo drink brand with generating online interest and some sales for his new LA-based band, Kevin Martin and the Hiawatts.

"We're not doing 10,000 records a week," he said, "but to see yourself go from 15 records to 62, it's pretty exciting."
http://www.bizreport.com/news/8790/


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Billionaire Backs P2P Firm's Battle With Hollywood
Ashlee Vance

Technology entrepreneur, Dallas Mavericks owner, billionaire, blogger and sometime blowhard Mark Cuban has pledged to finance P2P software maker Grokster's legal war with the major record labels and movie studios.

The Supreme Court tomorrow will hear arguments surrounding Grokster and StreamCast's dispute with the media companies. Hollywood is hoping the high court will overturn two lower court decisions that said makers of decentralized P2P software cannot be held liable for users who trade copyrighted files. Cuban, who owns movie theaters and the rights to numerous TV shows and movies, has gone against his peers by saying P2P software should have a chance to thrive.

"We are a digital company that is platform agnostic," Cuban wrote on his blog (http:/ /www.blogmaverick.com/entry/1234000230037801/). "Bits are bits. We dont care how they are distributed, just that they are. We want our content to get to the customer in the way the customer wants to receive it, when they want to receive it, at a price that is of value to them. Simple business.

"Unless Grokster loses to MGM in front of the Supreme Court. If Grokster loses, technological innovation might not die, but it will have such a significant price tag associated with it, it will be the domain of the big corporations only."

Hollywood is not only trying to shut down P2P software makers, but it's also trying to overturn an old Supreme Court decision that made VCRs and the like legal. It's this particular threat against devices that could potentially lead to the infringement of content copyrights that has many technology advocates up in arms.

"It will be a sad day when American corporations start to hold their US digital innovations and inventions overseas to protect them from the RIAA (Recording Industry Association of America), moving important jobs overseas with them," Cuban wrote. "Thats what happens if the RIAA is able to convince the Supreme Court of the USA that rather than the truth, which is, Software doesnt steal content, people steal content, they convince them that if it can impact the music business, it should be outlawed because somehow it will.'

With that in mind, Cuban vowed to fund the EFF's (Electronic Frontier Foundation) defense of Grokster.

As always, Cuban was modest about his gesture and hatred of punctuation.

"This is the big content companies, against me. Mark Cuban and my little content company."

It's not entirely clear what Cuban will be paying for, since his grand move came just two days before the oral arguments - at publicity's height. Perhaps he'll be covering the Tuesday morning coffee and lunch of the EFF staffers involved. Here's hoping the funds are actually more substantial and cover some back costs.
http://www.theregister.co.uk/2005/03..._grokster_eff/


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A Supreme Court Showdown for File Sharing
Saul Hansell and Jeff Leeds

For someone whose business is under attack in the United States Supreme Court, Mark Gorton was remarkably serene last week, sprawled on a couch in his Manhattan office.

Mr. Gorton's company, the Lime Group, publishes LimeWire, one of the most popular software programs used to trade music, video and other files over the Internet.

Tomorrow, the Supreme Court will hear arguments in a case in which the recording and film industries seek to hold makers of file-sharing software liable for the illegal copying and distribution of copyrighted material online. The case is against other file-sharing services, Grokster and Morpheus, which won in lower courts, but Mr. Gorton said that if those rulings were overturned, it could make LimeWire vulnerable.

"If the Supreme Court says it is illegal to produce this software, LimeWire the company will cease to exist," Mr. Gorton said. "But LimeWire the software will continue to be on the Net no matter what we do in this business."

The case, M.G.M. v. Grokster, is in many ways the culmination of five years of escalating legal, technical and rhetorical attacks against file-sharing systems and their users by the music industry. It is being eagerly followed by a range of media and technology companies because the court may use this case to redefine the reach of copyright in the era of iPods and TiVo.

But no matter how the court rules, both music executives and file-sharing advocates like Mr. Gorton agree that it will probably always be possible for fans to find loads of free music with a few clicks of a mouse.

Still, the case will determine whether file sharing can continue to be promoted by companies like LimeWire and Sharman Networks, which makes Kazaa, that operate in public and earn profits from advertising and software sales, or whether the software will be written and distributed by shadowy players on the fringes of the law.

"I think this court decision is a game changer. It will dramatically affect behavior, and behavior will dramatically affect how music is sold and distributed and consumed," said Andrew Lack, chairman of Sony BMG Music Entertainment, which releases music by stars like Usher and Bruce Springsteen. "It will clarify the law and establish right from wrong."

If the music industry loses, it will likely redouble its efforts to sue individuals trading files and intensify its technical efforts to disrupt the networks. So far, those tactics have been modestly effective at best, and a loss in the Supreme Court may well erode the industry's control of copyrighted material further.

Yet, since the court can do little to alter the spread of technology or the interests of copyright owners to protect their material, many expect something resembling a permanent war.

"We are guerrillas fighting the despotic regime," said Alan Morris, the executive vice president of Sharman Networks, the Australian company behind Kazaa, once the leading file-sharing network and the recording industry's leading target, which is being sued by the music industry in both American and Australian courts. "They have some quite heavy guns, but we can see where they are firing from, " Mr. Morris said.

There are some who say that a court ruling, in any direction, may also help define the terms of a cease-fire. The end of litigation could rekindle the back-channel negotiations between some music labels and some file-sharing services to create ways for users to trade some files free while paying for others.

Some executives have discussed a plan in which users could download free, low-quality tracks with an offer to buy higher-quality versions.

The two biggest music companies, Universal Music Group, a unit of Vivendi Universal, and Sony BMG, for example, recently signed deals to provide music through Snocap, a software package intended to control the swapping of unauthorized songs.

Snocap also happens to be the creation of Shawn Fanning, the founder of Napster, the original file-sharing, or peer-to-peer, service. "Peer-to-peer is the way that people access content," said Mr. Fanning. "There is a void in the marketplace, there are people who are willing to pay for it."

Of course, getting people to pay anything is an enormous challenge. There are about 60 million people using file-sharing services in the United States, with roughly 8.5 million logged on at a time, said Eric Garland, chief of BigChampagne, which studies traffic on file-sharing networks.

While some surveys have suggested that file-sharing activity slowed in 2003, when the Recording Industry Association of America began to sue individual users for trading copyrighted songs, Mr. Garland said that the number of people logging on to file-sharing networks had risen steadily and that he expected the number to increase by 10 percent or more this year.

The music industry, meanwhile, is recovering from a long slump. It sold 814 million CD's, cassettes and units of music in other formats last year in the United States, up 2 percent, its first increase in five years, the recording industry association said. It also sold 140 million digital tracks in the United States, the association said. But the industry says it thinks it would have seen a bigger sales rebound had it not been for online piracy.

The recording industry is exploring ways to release new CD's with technology that will restrict copying. Sony BMG is expected to use such technology on at least half their new recordings in the United States by the end of this year.

Some independent record labels are taking a less confrontational stance and trying to tap into the popularity of file-sharing networks by selling their music on them, often alongside pirated versions of the same songs.

Kazaa has been pursuing that idea for several years through an affiliated company called Altnet, which allows labels to put authorized files of songs on its networks. These files are either offered for sale, or they are free for promotional purposes, often with technology that restricts their use to a certain time period.

Altnet is still small, with revenues of less than $1 million in 2004, but it has been used by some independent labels, including V2, the label of Richard Branson's Virgin Group.

V2 sells songs by its acts like the Stereophonics and Moby through Altnet for 99 cents each because file-sharing networks have eclipsed MTV and radio as the place fans discover new music, said Jeff Wooding, its director of marketing and new media. He said that the move would not stop piracy, but could be used to promote the bands' merchandise and concert tickets as well as earn something for download sales.

"No one's kidding themselves that we expect to convert a whole lot of users," Mr. Wooding said, but he added that he thought many file sharers would buy merchandise and concert tickets from bands they liked and that some might eventually purchase a CD.

Altnet is also experimenting with an advertising-driven format developed by Intent MediaWorks, which buys rights to songs from artists for distribution in a special file format. The first time a user tries to play the song, the file opens a Web page with an advertisement on it. Intent MediaWorks is also working on ways to insert audio commercials into the songs.

"The idea for the advertising model is to transform file-sharing networks into radio," said Lee Jaffe, president of Altnet, which is distributing Intent MediaWorks' files. "But unlike radio where artists and labels don't get paid, they will be able to share the revenue."

Major recording labels, however, have been very resistant to doing deals with Altnet and similar systems, fearing that such alliances might undercut their lawsuits against the file-sharing networks. They have demanded that the networks remove all the unauthorized songs before they do any business with them.

Shawn Fanning's Snocap system is an attempt to help file-sharing networks do just that. It creates a way for copyright owners to register the songs they own. The networks, using a technology called acoustic fingerprinting, can identify whether a file being downloaded is in a copyrighted registry. The copyright owner can choose to block the download, offer the song for sale or offer a limited-use version of the song as substitute.

Snocap, in addition to endorsements from Universal Music and Sony BMG, will also be used by Mashboxx, a new file-sharing service started by Wayne Russo, the former president of Grokster, which is based in Nevis, West Indies.

But it still faces some significant challenges. First, the company has not released a working version of the software, and many file-sharing advocates dismiss the concept as thoroughly unworkable.

"Snocap will fail miserably in the market," said Michael Weiss, chief executive of StreamCast networks, which makes Morpheus.

"If I was looking for a download, and I got some sort of truncated file with a message that says buy this or do that, I don't see why anybody would embrace that," he said. "If you wanted to buy music, you could go to the online stores that are doing a great job like iTunes."

Mr. Russo said that his approach did not need to win over all file-sharing users to make some money for him and the record companies.

"There are 2.5 billion music files traded every month," he said. "If we can capture 1 percent of that, 25 million files, and we convert 5 to 10 percent of those to paid, I am very happy."

Aside from these attempts to reach détente with the free file-sharing networks, the recording industry knows it also needs new products and new avenues for distribution.

It has, for instance, placed a hefty bet on DualDiscs, a new two-sided CD format that features music on one side and video on the other. "We are committed to giving consumers what they want, legitimately and in a way that fairly compensates those that work so hard to create content," said Zach Horowitz, president of Universal Music Group, which releases music by acts like U2 and 3 Doors Down.

"If we win the case," Mr. Horowitz said, "all the efforts we are making to launch compelling legitimate alternatives will gain traction. There will be no turning back the clock in terms of the countless ways we are making our music available to take advantage of the new technologies."
http://www.nytimes.com/2005/03/28/te...8grokster.html


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Canadian government plans tougher copyright law

Compromise Proposals Would Adopt UN Standards To Clamp Down On File Sharing Of Music, Video
Andrew Mayeda

The federal government plans to introduce changes to copyright law this spring that would toughen Canada's stance on swapping music, movies and other content on the Internet.

Yesterday, the government proposed amendments to the Copyright Act that would clamp down on peer-to-peer file sharing and make Internet service providers more accountable for the data flowing through their networks.

But it also backed away from a number of hawkish proposals tabled last May in an interim report on copyright reform.

Players on both sides of the issue praised yesterday's proposals, which were issued by Industry Canada and the Ministry of Canadian Heritage. The departments have been leading a review of the federal Copyright Act.

"Canada is one step closer to having a copyright law that will reflect the realities of the digital marketplace and allow the music industry a chance to prosper," said Graham Henderson, president of the Canadian Recording Industry Association, in a statement.

The association represents big music labels such as Warner Music Canada Ltd.

Technology law expert Michael Geist called the proposals a "pretty good compromise" between copyright holders, users and intermediaries such as ISPs.

"It certainly could have been far worse," said Mr. Geist, Canada research chair in Internet and e- commerce law at the University of Ottawa.

"It's good to see that on some critical issues, the government seems to have taken the concerns of the user community pretty seriously."

He said the government appears to have rejected some of the more draconian proposals put forward in a report last May by the Standing Committee on Canadian Heritage.

The music industry is pushing for stricter rules for Internet transfer of music files, which it says has significantly eroded CD sales.

The government proposes implementing a pair of UN treaties that offer broader protections for copyright holders.

Close to 50 countries, including the United States but not Canada, have ratified the "WIPO" treaties. Under the treaties, for example, copyright holders will gain exclusive control over the right to "make available" their works over the Internet.

Experts said yesterday this will likely outlaw the uploading of music files to the Internet. Last March, a Federal Court judged essentially ruled that uploading is not illegal.

The government also suggests compelling ISPs to notify customers accused of copyright infringement, as well as keep customer records when notice of infringement is given.

The proposal is less stern than expected, said Mr. Geist. Some were calling for a "notice and takedown" system in which ISPs would be forced to take down material upon receiving notice of infringement.

Under the current proposal, copyright holders would first have to obtain a court order to force ISPs to block content.

The government also softened its stance on changes affecting security researchers who find flaws in software and hardware, said David Fewer, legal counsel for the Canadian Internet Policy and Public Interest Clinic.

The clinic helped draft a letter submitted this month to the government by a group of IT security firms.

They were concerned that changes to the law would make it illegal for researchers to find flaws in software and hardware. The proposals could provide cover for individuals who expose flaws for research purposes, said Mr. Fewer.

But clearly a number of contentious points remain.

Mr. Henderson of CRIA said the proposals make it "absolutely crystal clear, once for and all, that file sharing is an infringement of copyright."

But Mr. Geist noted the government put off addressing the "private copying regime," a system of tariffs on CDs and other blank media that some say makes downloading legal in Canada.

The file-sharing issue will be reopened next month when the Federal Court hears CRIA's appeal of last March's case when a judge ruled that ISPs did not have to hand over personal information on 29 individuals whom CRIA accused of copyright infringement.

"Nobody has any misapprehension that this issue is over. It's going to be a long summer," said Mr. Fewer.
http://www.canada.com/ottawa/ottawac...7-dc239da989d4


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Brazil: Free Software's Biggest and Best Friend
Todd Benson

Since taking office two years ago, President Luiz Inácio Lula da Silva has turned Brazil into a tropical outpost of the free software movement.

Looking to save millions of dollars in royalties and licensing fees, Mr. da Silva has instructed government ministries and state-run companies to gradually switch from costly operating systems made by Microsoft and others to free operating systems, like Linux. On Mr. da Silva's watch, Brazil has also become the first country to require any company or research institute that receives government financing to develop software to license it as open-source, meaning the underlying software code must be free to all.

Now Brazil's government looks poised to take its free software campaign to the masses. And once again Microsoft may end up on the sidelines.

By the end of April, the government plans to roll out a much ballyhooed program called PC Conectado, or Connected PC, aimed at helping millions of low-income Brazilians buy their first computers.

And if the president's top technology adviser gets his way, the program may end up offering computers with only free software, including the operating system, handpicked by the government instead of giving consumers the option of paying more for, say, a basic edition of Microsoft Windows.

"For this program to be viable, it has to be with free software," said Sérgio Amadeu, president of Brazil's National Institute of Information Technology, the agency that oversees the government's technology initiatives. "We're not going to spend taxpayers' money on a program so that Microsoft can further consolidate its monopoly. It's the government's responsibility to ensure that there is competition, and that means giving alternative software platforms a chance to prosper."

Microsoft has offered to provide a simplified, discounted version of Windows for the program. Though a final decision on which software to install has been delayed several times, as has the program's rollout, Mr. Amadeu and some other government officials have publicly criticized Microsoft's proposal, calling the version's abilities too limited.

Still, Microsoft has not given up just yet. The company, which declined to make an executive available for an interview, said in a statement that it was still "working with the PC Conectado project to see if there's a way Microsoft can help."

Under the program, which is expected to offer tax incentives for computer makers to cut prices and a generous payment plan for consumers, the government hopes to offer desktops for around 1,400 reais ($509) or less. The machines will be comparable to those costing almost twice that outside the program.

Buyers will be able to pay in 24 installments of 50 to 60 reais, or about $18 to $21.80 a month, an amount affordable for many working poor. The country's top three fixed-line telephone companies - Telefónica of Spain; Tele Norte Leste Participações, or Telemar; and Brasil Telecom - have agreed to provide a dial-up Internet connection to participants for 7.50 reais, or less than $3, a month, allowing 15 hours of Web surfing.

The program aims at households and small-business owners earning three to seven times the minimum monthly wage, or about $284 to $662. The government says seven million qualify, and it hopes to reach a million of them by year-end.

That may seem ambitious in a developing country of 183 million people where only 10 percent of all households have Internet access and just 900,000 computers are sold legally each year. (Including black-market sales, the number is closer to four million, still a small fraction of the number sold in the United States last year, according to the International Data Corporation, a technology research firm.)

"We're well aware that we're talking about doubling the domestic market for personal computers," said Cezar Alvarez, the presidential aide in charge of the PC Conectado program. "But it's absolutely feasible."

Some analysts have questioned the effectiveness of such programs, noting that some similar projects in Asia have become bogged down in red tape and, in some cases, have ended up favoring the elite. In Malaysia, for instance, the government is introducing a second affordable-computer program after its first attempt failed because of poor planning and fraud - something Brazilian officials say they are working hard to prevent.

Others say the government should focus its technology initiatives elsewhere, especially in schools. Only 19 percent of Brazil's public schools have computers.

The government says it plans to complement the PC Conectado program with stepped-up efforts to put more computers into schools. It is also investing $74 million to open 1,000 community centers in poor neighborhoods by year-end with computers that run free software programs and offer free Internet access - supplementing similar programs by local governments and nongovernmental organizations.

The drive to bridge the digital divide has drawn widespread praise throughout the technology industry. But the preference for open-source software has been controversial, with critics inside and outside the government saying Mr. da Silva's administration is letting leftist ideology trump the laws of supply and demand.

"The government shouldn't be the one who decides what hardware and software will go into these computers," said Júlio Semeghini, a member of Congress from the opposition Social Democratic Party. "That's undemocratic."

The open-source route, however, has support beyond the da Silva administration. Walter Bender, the executive director of the Media Lab at the Massachusetts Institute of Technology, whose opinion was solicited by the Brazilian government, replied in a recent letter that "high-quality free software" has proved more effective in stimulating computer use among the poor than scaled-down versions of proprietary software.

Though he said he did not oppose giving consumers a choice, he concluded that "free software provides a basis for more widespread access, more powerful uses and a much stronger platform for long-term growth and development."

Whatever the government decides, most industry analysts agree that the program will probably help combat software piracy, which is widespread in Brazil.

And by wooing new consumers, "even if the program doesn't reach its goals, it's going to end up stimulating the computer and software markets," said Jorge Sukarie, president of the Brazilian Association of Software Companies. "It's not perfect, but it's certainly better than nothing."
http://www.nytimes.com/2005/03/29/te...ter.html?8hpib


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Blockbuster Drops Hostile Hollywood Bid

Leading U.S. movie rental chain Blockbuster Inc. dropped its nearly $1 billion hostile bid for Hollywood Entertainment Corp., citing difficulties in getting regulatory approval.

It paved the way for Hollywood's proposed merger with its smaller rival Movie Gallery Inc. which is expected to create the second-largest North America video retail company. That deal, which is still subject to shareholders' approval, has already been cleared by regulators.

Hollywood is second to Blockbuster in the U.S. movie rental business. Movie Gallery is No. 3.

Blockbuster said its tender offer, which values Hollywood shares at $14.50 in cash and stocks, expired at midnight and would not be renewed. All tendered shares and notes will be promptly returned to holders, Blockbuster said.

Hollywood has accepted an $850 million offer from Movie Gallery. The U.S. Federal Trade Commission has cleared that deal and is preparing to go to court to stop Blockbuster's bid because of antitrust concerns, sources close to the case told Reuters last week.

"Given the current circumstances, in our judgment it is not in Blockbuster's best interest to continue to pursue the acquisition," John Antioco, Blockbuster chairman and chief executive said in a statement.

Blockbuster cited Hollywood's recent public filings and the unlikelihood of obtaining regulatory clearance on an acceptable timetable for its decision. A Blockbuster spokesman said the company has no additional comments beyond the statement. Hollywood was not immediately available for comment.

Movie Gallery said in a statement that it expected to close the Hollywood transaction promptly after the Hollywood shareholder vote on April 22.

The combined company will have annual revenue of $2.6 billion and 4,500 stores in the United States, Canada and Mexico. Currently Hollywood is a distant second to Blockbuster, which has more than 9,000 stores in Americas.

Hollywood shares finished at $14.13 on Thursday, above the $13.25 offer from Movie Gallery. Blockbuster has offered $14.50 for every Hollywood share, including $11.50 in cash and $3.00 in Blockbuster common stock.

Mark Wattles, a former Hollywood Entertainment Corp. chief executive, has sought to buy up to half of Hollywood's stores to help win U.S. approval of a takeover by Blockbuster Inc. Wattles, who owns 9.6 percent of Hollywood's outstanding shares, resigned as CEO in February amid the bidding battle.
http://www.reuters.com/newsArticle.j...toryID=8004288


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Toshiba Ordered to Pay $465 Mln to Lexar

Toshiba Corp. has been ordered by a California jury to pay $84 million in punitive damages to Lexar Media Inc. for stealing trade secrets, taking Lexar's total award in the case to $465 million.

The award was a fraction of the $1 billion or more sought by Lexar, which called the award the biggest intellectual property victory ever in California courts. The total damages also dwarfed Lexar's market value of $251 million as of Wednesday's close.

Toshiba, the world's seventh-largest chip maker, suggested it would appeal the Thursday decision.

"Toshiba believes that the verdict rendered by the jury was in error, and we plan to pursue all available legal avenues to correct it," the Japanese company said in a statement.

It said it had no plans at the moment to revise its earnings forecasts for the year ending on March 31, although the total award is 10 percent larger than Toshiba's estimated net profit for the year of 45 billion yen ($423.2 million).

At issue in the case is NAND-type flash memory, which is used widely in digital cameras and photo-snapping mobile phones and has been Toshiba's cash cow in recent years.

Lexar, whose memory cards are used in consumer devices such as digital cameras and music players, claimed its secrets were stolen by a Toshiba executive who sat on Lexar's board.

"Toshiba invented NAND flash memory technologies and has been a pioneer throughout its development," the Tokyo-based company said.

Analysts in Japan said the financial impact on Toshiba would be manageable, even in the worst-case scenario.

"Toshiba had about 400 billion yen in cash and cash equivalent at the end of last year, and its flash memory business posts some 80 billion yen in operating profit (a year) ... I don't see any long-lasting impact," said Yuichi Ishida, analyst at Mizuho Investors Securities.

Lexar shares rocketed 99.3 percent on Thursday, while Toshiba shares closed Friday down 0.45 percent at 447 yen, extending a 3.2 percent slide the previous day.

Lexar also said it had a patent case pending against Toshiba and was seeking an injunction barring Toshiba from selling its memory products in the United States.

Lexar General Counsel Eric Whitaker said the injunction could include popular electronics made by the likes of Apple Computer Inc. as well as products by SanDisk Corp.

SanDisk spokeswoman Lori Barker said there were no grounds for an injunction against her company, which owns a factory jointly with Toshiba. Apple, which uses Toshiba flash memory in its iPod Shuffle, declined to comment.

Ishida at Mizuho said it would not be very difficult for Toshiba to find alternative markets if its flash products were banned in the United States, given strong global demand for the memory chips.

Lexar, which on Thursday reported a fourth-quarter loss of $63.3 million, was in danger of running out of cash this year without the award. CIBC World Markets analyst Daniel Gelbtuch said investors had been concerned mounting losses could force Lexar to seek bankruptcy protection.

"If they did not have this win, they would have gone bankrupt inside of four months," Gelbtuch said. "This is purely a cash-per-share increase in the stock price and it negates the notion that they are going to go bankrupt."

Gelbtuch upgraded the stock to "sector outperformer" from "sector underperformer."

Asked about the concerns, Lexar spokesman Jim Gustke said the company was revamping marketing and improving inventory management, aiming to "compete profitably in this market regardless of the outcome of the trial."

Wall Street analysts have said an appeal from Toshiba could delay the cash influx at a crucial time for Lexar.

Lexar could be forced to try to raise debt or equity while under pressure, according to JP Morgan analyst Paul Coster.

Coster said Lexar may be forced to take on debt or issue shares if Toshiba appeals and the funds are held in escrow.

"In either case turning to the capital markets could be tough ... Nonetheless, the legal payments could be bigger than we anticipated and Lexar probably lives to fight another day (or year)," Coster wrote in a note.

Analysts noted that Lexar also still relies on Samsung Electronics for its components. Rival SanDisk makes its own flash memory and therefore has more control over supply and pricing.

Still, a favorable result in the patent case could boost Lexar's revenue and perhaps help it forge partnerships with memory chip makers, such as Micron Technology or Advanced Micro Devices, analysts said. (Additional reporting by Kiyoshi Takenaka in Tokyo)
http://www.reuters.com/newsArticle.j...toryID=8002002


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New Sony CEO Likely to Boost Outsourcing-Analysts

As Sony Corp.'s new chief executive settles in with a mandate to shake up the struggling electronics company, analysts expect it to increase outsourcing, benefiting large, contract manufacturers.

Sony already outsources production of some of its electronics gear, such as cell phones and its PS2 video game consoles -- but the company is still largely vertically integrated, analysts said.

Analyst Flint Pulskamp of research firm IDC said Sony, which earlier this month promoted U.S. operations chief Howard Stringer to the top corporate spot, is most likely to expand outsourcing to the large companies with which it already does business.

Fitting that bill, he said, are Singapore-based Flextronics International Ltd., the world's largest contract electronics manufacturer and the maker of Sony-Ericsson phones, and Taiwan's Hon Hai Precision Industry, which makes the PS2.

Sony, which invented the Walkman, has been outmaneuvered in recent years in flat-panel TVs by rivals Sharp Corp. and Matsushita Electric Industrial Co. and lost its lead in the portable music industry to Apple Computer Inc. and its market-leading iPod player.

Sony is more than halfway through a three-year restructuring plan in which it aims to cut fixed costs by $3.15 billion by streamlining operations and cutting jobs, but profit margins remain razor-thin.

Piper Jaffray analyst Jesse Pichel said Sony's cost of producing each gizmo -- $14.5 billion in its latest quarter -- represents the company's potential market for outsourcing.

Pichel said the Japanese have generally been reluctant to outsource because of the cultural norms there for lifetime employment.

But analysts said Stringer, a Welsh-born former television journalist, will find it easier to make big shake-ups at Sony than a native Japanese CEO would.

"Stringer doesn't have a lot of the baggage or the cultural inhibitions that a Nobuyuki Idei did," Pulskamp said, referring to Sony's former chief executive.

Economics may well force Sony to deepen its relationship with the likes of Flextronics, Hon Hai and Taiwan-based Asustek Computer, which makes the company's laptop PCs.

"At some point, the benefits of going to China, in particular, are going to weigh on these firms, and they're going to look to outsource a lot more of their production," Pichel said.

If and when Sony increases its outsourcing, it would make sense to do so with companies with operations in China, where the annual salary for an electronics factory worker is about $1,500, much lower than in Japan.

So while Flextronics, Asustek, Hon Hai are the most obvious beneficiaries of any increased outsourcing at Sony, according to analysts, those companies themselves had better watch their backs.

"We're watching the emergence of these large vertically integrated companies in China that make everything from plastic moldings to finished laptops," said Gartner analyst Martin Reynolds. "These large Chinese manufacturers are going to squeeze companies like Flextronics."
http://www.reuters.com/newsArticle.j...toryID=7998882


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Lawmaker Seeks Black Box Privacy Guards
James Warden

Holmberg didn't know his new sedan came equipped with the long arm of the law. The dealer hadn't bothered to mention the "black box," a computer chip that stores information on speed and seat belt use.

The state senator believes his privacy was violated and is taking aim at black boxes.

"When I bought my car," he said, "I didn't realize I was also buying a highway patrolman to sit in the back seat."

The bill Holmberg is sponsoring - now up for Senate consideration after being approved Wednesday by the House - would require buyers to be told if their new car or truck is equipped with a black box. It would also prohibit the data from being used in court unless there is a court order. Subscription services such as OnStar, which can be used to track a vehicle's movements, would be exempt.

Its most vocal critics are auto manufacturers. For General Motors, said lobbyist Thomas Kelsch, it makes no sense to bar information from the computer chip from being used in court.

"What's the societal good that would result from the suppression of valuable crash data?" Kelsch asked.

But Holmberg, a Grand Forks Republican, again raises the privacy issue. He worries the data could be used to track driving habits or be used against a driver who has an accident.

"Most people don't realize these devices are in their vehicle, that the information recorded may be used against them and there's no sort of regulation about who owns that information," he said.

North Dakota is one of at least eight states considering black-box regulation this year, Bob Boerner, an official with the National Conference of State Legislatures, said Friday. Others are Connecticut, Massachusetts, Montana, New Jersey, New York, Virginia and West Virginia.

California has a law on the books requiring dealers and vehicle rental companies to inform drivers when a car has a black box. In New York, it is illegal for rental companies to use global positioning system technology to track drivers and use the data to charge extra fees or penalties.

Accident investigators argue that the privacy concerns are overblown.

"These guys are trying to roll back North Dakota courts to the Dark Ages," said Jim Harris, owner of Harris Technical Services, a Florida-based accident investigation company. "What are you going to do? Leave out videotapes?"

According to the National Highway Transportation Administration, about 15 percent of vehicles - or about 30 million cars and trucks - have black boxes. About 65 percent to 90 percent of 2004 cars and trucks have them, according to the NHTA.

Rusty Haight, director of the Collision Safety Institute, which researches crashes and trains accident investigators, said black boxes were introduced in cars along with air bags in the 1970s.

Air bag sensors already collected the information and it was a small step to allow researchers to see how well other systems were performing, Haight said.

North Dakota Highway Patrol Capt. Mark Bethke said crash investigators must have a warrant to access information from a recorder. He said the patrol collects such information less than once a month and has never used it in court.

John Buchanan, a Miami accident reconstruction expert, said investigators must compare what the recorder says to the physical evidence at an accident scene.

"I'm a big believer in the box," he said. "But you cannot just take a box, read what it says and say that's what happened."

Insurance companies already have limited access to some data.

State Farm requires its customers to help with investigations, including allowing insurance employees to look at their vehicles, said Dick Luedke, a spokesman for the Illinois-based insurer.

Progressive Insurance began a voluntary program last year in which the company gives drivers a chip similar to a black box that can be used to transmit data, said spokeswoman Shannon Radigan.

Progressive offers drivers the possibility of a break on their insurance rates based on when, how much and how fast they drive, she said. The average discount is between 12 percent and 15 percent, she said.

North Dakota auto dealers say they have not heard many complaints about black boxes. Sales people say customers rarely ask about them. And police say the devices are not common.

"They're just not very prevalent," said Fargo Sgt. Joel Vettel.
http://hosted.ap.org/dynamic/stories...TAM&SECTION=US


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Man Sells Device That Blocks Fox News
Emily Fredrix

It's not that Sam Kimery objects to the views expressed on Fox News. The creator of the "Fox Blocker" contends the channel is not news at all. Kimery figures he's sold about 100 of the little silver bits of metal that screw into the back of most televisions, allowing people to filter Fox News from their sets, since its August debut.

The Tulsa, Okla., resident also has received thousands of e-mails, both angry and complimentary - as well as a few death threats.

"Apparently the making of terroristic threats against those who don't share your views is a high art form among a certain core audience," said Kimery, 45.

Formerly a registered Republican, even a precinct captain, Kimery became an independent in the 1990s when he said the state party stopped taking input from its everyday members.

Kimery now contends Fox News' top-level management dictates a conservative journalistic bias, that inaccuracies are never retracted, and what winds up on the air is more opinion than news. "I might as well be reading tabloids out of the grocery store," he says. "Anything to get a rise out of the viewer and to reinforce certain retrograde notions."

A Fox spokeswoman at the station's New York headquarters said the channel's ratings speak for themselves. For the first three months of this year, Fox has been averaging 1.62 million viewers in prime-time, compared with CNN's 805,000, according to Nielsen Media Research.

Kimery's motives go deeper than preventing people from watching the channel, which he acknowledges can be done without the Blocker. But he likens his device to burning a draft card, a tangible example of disagreement.

And he's taking this message to the network's advertisers. After buying the $8.95 device online, would-be blockers are shown a letter that they can send to advertisers via the Fox Blocker site.

"The point is not to block the channel or block free speech but to raise awareness," said Kimery, who works in the tech industry.

Kimery doesn't use the device himself; his remote is programmed to only a half-dozen channels. Plus he occasionally feels the need to tune into Fox News for something "especially heinous."

Business could pick up since the blocker was alluded to in a recent episode of the ABC drama "Boston Legal." The show's original script mentioned Fox News, but ABC had the references removed.

The boisterous conversations on Fox News may be why the station is so popular, said Matthew Felling, media director for the Center for Media and Public Affairs, a nonprofit, nonpartisan media watchdog group. And despite a perception that Fox leans to the right, Felling said, that doesn't mean people who lean left should tune out.

"It's tough to engage in an argument when you're not participating in it," Felling said. "It's just one more layer in the wall that the right and the left are building in between each other."
http://hosted.ap.org/dynamic/stories...=ENTERTAINMENT


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Sharpton Complains to FCC About Rap Music
AP

The Rev. Al Sharpton, upset about violence in rap music, asked the Federal Communications Commission on Thursday to punish artists and radio stations connected with violent acts.

Artists connected to such acts should be denied airplay on radio and television for 90 days, he told reporters after meeting with FCC Chairman Kevin Martin and two other commissioners.

He also urged the agency to fine and review the licenses of radio stations "that encourage a pattern of this, including allowing employees to do on-the-air inciting of violence."

"The outrage of the pattern of violence that has occurred at radio stations requires some action," Sharpton said. "What has been absent is some kind of government move to stop these actions happening on federally regulated radio stations."

A spokesman for Martin declined to comment.

Andrew Jay Schwartzman, president of the Media Access Project, a public interest law firm, said Sharpton's suggestions could trample on free speech protections and may not fall under the regulatory jurisdiction of the FCC.

"They pose tremendous First Amendment problems," he said. "It's very hard to come up with a standard that works. The bottom line is this is not something the FCC was created or equipped to handle."

Sharpton has been especially vocal since a bitter feud broke out between artists 50 Cent and The Game last month. A member of The Game's crew was wounded during a shooting outside a New York hip-hop radio station while 50 Cent was on air criticizing The Game.

Grammy-winning hip-hop star Lil' Kim could face years in prison when she is sentenced in June after being convicted last week for lying about a shootout outside the same New York radio station.

Sharpton also met with Democratic FCC members Michael Copps and Jonathan Adelstein.

"We welcomed the opportunity to discuss media violence," Copps said. "The issue of violence in the media was one the commission ought to take more seriously."
http://hosted.ap.org/dynamic/stories...=ENTERTAINMENT


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New Web Site to Showcase Digital Works
AP

A new Web site backed by some of the Internet's leading thinkers promises to make it easier - and cheaper - for artists, scholars and other creative people to share their digital works. Ourmedia.org seeks to become a central repository for such items.

"They are (now) all kind of scattered, a lot on people's computers (or) hidden away on the Web in faraway crevices," said J.D. Lasica, a veteran journalist who co- founded the project. "We thought it was important to gather a lot of this stuff under one roof."

The site also addresses a chief obstacle to posting video and other large files to the Internet: The more popular an item gets, the more its owner has to pay for Web hosting services.

Ourmedia will offer hosting services for free, and the site pledges to retain home movies, photos, cartoons, software and any other digital work forever. The only exceptions are porn and items under someone else's copyright. More than a dozen volunteers worldwide will monitor.

For each file posted to Ourmedia, the owner must specify what people can do with it, choosing from among a half dozen or so licensing packages. Owners can claim full copyright protections if they want, though the project encourages sharing, Lasica said.

The Internet Archive, a nonprofit online repository, and Bryght, a Canadian publisher of open-source materials, are donating storage and bandwidth services.

Ourmedia's advisory board includes Internet Archive founder Brewster Kahle and Dan Gillmor, a pioneer in citizen journalism.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Hard To Lower Pirate Flag While Legal Alternatives Still Lacking
Andrew Kantor

There's a fun little back and forth going on between Apple and a group of programmers. Apple runs the iTunes music service, where you can download any of a gazillion songs for a buck or so.

But those songs come with restrictions on where you can play them. So Jon Johansen, Cody Brocious, and crew (Johansen is the Norwegian who cracked the encryption on DVDs several years ago) created PyMusique — software that lets you access iTunes, pay for music, and download it without the built-in digital rights management (DRM) restrictions.

Apple responded by closing the "hole" PyMusique exploited, and requiring all iTunes users to upgrade to the latest version of the software.

Johansen and the PyMusique folks responded by "reopening the door" with a new version. (I am writing this on Wednesday. By the time you read this things may have changed.)

To be fair, the PyMusique group said they weren't interested in stripping the DRM, only in making iTunes available for Linux users. But the restrictions aren't in the songs — they are added by Apple's software. Johansen and crew simply decided not to add that feature.

Who can blame them? By adding restrictions to music, Apple is going against decades of an understanding between music makers and music buyers.

Imagine buying a music CD at the mall, bringing it home, and playing it on your stereo. Then you play it on your car's CD player driving to work. But when you get there and pop it into the little player on your desk, you hear a voice say, "We're sorry, but you are only authorized to play this disk on up to two CD players. You have now exceeded that. Thank you."

That's exactly how iTunes and most of the other legal online music service work. When you pay for and download a song, it comes with various built-in restrictions. Maybe you can only pay it while you're subscribed to the service. Maybe you're limited to playing it on certain machines. Maybe you can't copy it to other media (say, a CD to play in your car).

And people wonder why music piracy is so rampant.

It's not just "cheap people want something for free," although that's likely part of it. It is, instead, because the music industry, led by the Recording Industry Association of America (RIAA), forgot a key phrase of capitalism: What the traffic will bear.

Clearly the market didn't bear $15 CDs with one or two good songs. As soon as an alternative was available, people jumped. That it happened to be a free alternative only helped, and that it happened to be an illegal alternative didn't matter.

The industry was incredibly slow to catch up, but finally embraced — in a tentative, distant-cousin-at-the-wedding sort of way — services such as iTunes and Napster (v.2.0).

Both are doing well, but neither is doing as well as the peer-to-peer (P2P) networks, even though music from those is likely pirated, and downloaders are likely lawbreakers.

Those P2P services (I talked about them last week) are doing gangbusters for several reasons. Of course, there are always people who want something free. And there are always people who only want a handful of songs a year and don't want to bother installing software to get it.

But the biggest reason is this: The legal downloading services were started as alternatives to buying a CD. The mindset should have been that they're a legal alternative to P2P networks.

That's the competition now. P2P networks and software are simple to install and easy to use. They have a dedicated user base, and a huge "library" of downloadables.

You can be grabbing (in the worst sense of the word) music, movies, software, what- have-you in minutes. (Although you'd be a fool not to be sure your anti-virus software was up to date.)

And the music you download illegally comes restriction free.

"If there were any such service where you could download a song for a buck and do what you want with it, I'd pay for that in a second," said a friend of mine. But the idea of paying for something and then having to keep track of how and where you use it is too annoying — especially when Grokster beckons from the sidelines.

It's true that when you buy a CD you don't own the music — you own the disk and the right to play that music. No argument.

But, well, the folks at DRM Blog put it best: "I can basically do whatever I want with a CD. When I am done with said CD, I can give it to a friend and he can do with it as he pleases. This is the way it has been for 80 years. Phonographs, 8-tracks, cassettes and compact discs have all worked this way. You went to a store, you bought a piece of plastic, and you took it home."

The music industry seems clueless, or at best stuck in the 1980s. They seem unaware of what the traffic will actually bear. They are suing their users. (Yes, they're suing pirates. But those pirates are also the people who support their artists, buying everything from T-shirts to concert tickets, and yes, music.)

The RIAA's empty-headed, heavy-handed approach to business continues, and consumers will continue to get the shaft. Adding insult to injury, Orrin Hatch, the Utah senator who once suggested remotely destroying the computers of people suspected of pirating music (due process, schmue process) is now head of the Senate Judiciary Committee's Subcommittee on Intellectual Property.

Fox. Henhouse. Chomp.

Hatch's appointment, and his oft-demonstrated industry bias, means you can expect more restrictions on how you can use the music and movies you buy — a continued erosion of copyright at the expense of listeners and viewers, thanks to a Congress that seems to have lost track that they're supposed to be the representatives of the people.

The result won't be less piracy, it will be more.

Because that's what happens when consumers realize they're getting the shaft — they find ways around the system. That's why P2P networks have grown so much and so fast.

And if the music or movie industries think they'll come up with a technological solution to fix things, they've got their collective heads in the sand. Because every time — every time — some new scheme comes out to deny consumers their rights under current copyright law, some programmer finds a way around it.

Maybe it's the instruction to "hold down the Shift key." Or a small program you have to run. Or using a magic marker to draw on a CD. (These are all real examples.) Somehow, someone will find a way to break the copy protection.

This is a losing battle being fought. Unfortunately, it's a battle everyone is losing. Music sales are falling. Teenagers are facing jail. Music lovers are stuck with either restrictive licenses or taking the pirate's way out.

But until the RIAA wakes up — as well as their brethren at the Motion Picture Association of America (MPAA) — this is what we're stuck with.

Yo-ho-ho.

http://www.usatoday.com/tech/columni...5-kantor_x.htm


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Columbia Plans 2nd Master's in Journalism
Emma Daly

More than two years after Columbia University began an intense, even painful, debate on how to revamp the way journalists are trained, it plans a second one-year master's degree program to provide expertise in various subject areas.

The Graduate School of Journalism is adding a one-year Master of Arts program, the first new degree it has offered in 70 years, to its yearlong Master of Science, to give student journalists a chance to specialize in politics, business, the arts or science.

"There is no profession more important in the modern world than being a journalist," Lee C. Bollinger, the president of Columbia and a First Amendment lawyer whose father was a newspaper executive, said this week. "I felt that journalism education had not developed to the same point in terms of providing the richness of what a great university like Columbia can offer."

The contours of the new program represent something of a compromise. When Mr. Bollinger raised the prospect of a revamped journalism program in a speech in 2003, he envisioned a mandatory two-year master's degree program. But some critics worried that students would not be able to afford a second year at an institution where annual tuition and room and board run more than $50,000. Mr. Bollinger, who called for improving journalism education only weeks after taking office in June 2002, stirred controversy among the faculty and within the profession. But his appointment in September 2003 of Nicholas Lemann, the New Yorker writer, as dean of the journalism school, soothed colleagues and eased the path to the new program.

To assuage concerns about tuition costs, Mr. Lemann promised that financial aid would be available for most students and said the school would also help them find better jobs at higher salaries.

The university is helping to subsidize the two dozen students who will begin the new program this fall, he said last week, adding that early fund-raising efforts have already netted more than $20 million.

Mr. Lemann said the students in the new program would be drawn from those who had completed the journalism school's one-year master's program, those who held similar degrees from another university and working journalists who might not have a journalism degree. Each type of potential student would have to apply for admission to the new program.

There will be two compulsory courses, a history of journalism and another, taught by the dean, on evidence and inference, in which students will learn to find and interpret statistics, archives and legal documents.

The program will also feature four yearlong seminars, based on subjects taught elsewhere in the university but intended for journalists. These include arts and culture, economics and business, politics and science. The program plans to add other courses, including immersion courses in Arabic, Chinese, French, Russian and Spanish.

"We were very clear that what's involved here is not farming out students to different disciplines, to simply learn what you learn in any political science class," Mr. Bollinger said, "but, how do you create the materials and subject and form and shape of a deep, professional education for journalists?"

Both men acknowledged that it would take years before they could claim success for the new degree, which is expected to enroll 24 or 25 students for the class of 2006, rising to around 200 after a few years.
http://www.nytimes.com/2005/03/25/ed...25college.html


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Grokster and StreamCast Face The Music

The entertainment industry is taking its battle against illegal downloading to America’s Supreme Court. But attacking the technology behind file-sharing could stifle innovation without tackling the industry’s long-term problems

THE music business should have stuck by Thomas Edison’s technology if it wanted to avoid the threat of piracy. His wax cylinders could record a performance but could not be reproduced; that became possible only with the invention of the flat-disc record some years later. On Tuesday March 29th, America’s Supreme Court will begin to hear testimony in a case brought by the big entertainment companies that is intended to stop the illegal downloading of copyright-protected music and film. The industry’s target is the peer-to-peer (P2P) technology that allows the swapping of files directly over the internet. The defendants in the case are two firms that make file-sharing software: StreamCast Networks and Grokster.

The entertainment business has long been susceptible to copyright infringement—and it has usually blamed the electronics industry. The music industry first cried foul at the introduction of the cassette-tape recorder in the late 1960s. More recently, the digitisation of music has allowed “burning” of music tracks on to CDs with the help of a computer. The latest threat to the record companies is a copying technique of even greater speed, ease and scope. Every day some 4m Americans swap music files over the internet, according to figures from Pew, an independent research organisation. And now the swapping of new films online is gaining ground too, to the chagrin of the movie industry.

This comes at a particularly bad time for the music industry, which is struggling to reverse a long-term decline. According to the IFPI, a recording- industry umbrella group, worldwide music sales plunged in value by 22% in the five years to 2003—a drop of over $6 billion. In 2004, sales fell by 1.3%, though that decline looks less bad when revenue from legal digital downloads is added in. The music industry largely blames illegal file-sharers for its ills, noting that CD sales are dipping steeply in countries where broadband internet access is growing fast.

Some suggest that the latest attempt to curb illicit file-swapping—legal action against the technology that drives P2P networks—threatens the future of innovation. P2P software allows computers to talk to others running the same software without having to use intermediaries. Grokster and StreamCast argue that they are not able to control the use to which their software is put, whether it be searching, downloading or sharing.

In court, the two software firms will no doubt cite the case of Sony’s Betamax technology as a precedent. The home video-recording system, which was eventually superseded by VHS, faced a suit in 1984 in which Disney and Universal called for its ban. The entertainment firms feared that the ability to record on to video would allow considerable infringement of their copyright. America’s Supreme Court ruled that Sony was not liable because the equipment had “substantial” uses other than infringement, such as the recording of TV programmes for later viewing.

Similarly, the software produced by StreamCast and Grokster has significant non-infringing uses, such as sharing music that is not copyright-protected and internet-routed phone calls. In fact, some make the case that P2P technology could make the internet more robust and secure by avoiding the use of centralised servers, and that the entertainment companies’ lawsuit is thus harmful to the web as a whole.

Napster, the first and best-known of the file-sharing businesses, was killed off by the music industry in 2001. Because it used central servers and so had the ability to block users who broke copyright laws, a judge issued an injunction ordering Napster to shut its servers down. At the time, it boasted some 14m users. Since then, the industry has ramped up action against file-sharing and widened its attack by going after individual downloaders as well.

At present, some 8,000 individuals around the world face lawsuits for illegal file-sharing. The industry has backed up its legal moves with a publicity offensive aimed at convincing the public that unauthorised downloading is theft. As well as cinema- and TV-advertising campaigns, 45m instant messages have gone out to users of P2P services, warning them to stop putting copyrighted material on the internet. America’s Department of Justice has weighed in too, even suggesting that P2P services could be used to support terrorism. Others have muttered darkly that the technology is a conduit for illegal pornography.

There are some signs that these measures are working: surveys suggest that internet users are becoming more wary of illegal file-sharing, for instance. However, according to the IFPI’s own figures, the number of unauthorised music files on the web has grown in recent months after falling sharply in the first half of 2004 (see chart). The number of users is also up, with 8.6m offering illegal files compared with 6.2m a year ago.

The music business has employed other defensive measures. Apart from a round of mergers and cost-cutting over recent years, the industry has tried to embrace legal downloading. Napster itself was reborn as a legal downloading service. And in 2004, according to the IFPI, the number of legal download sites increased four-fold to 230 and the number of legal downloads to over 200m (a figure that could double in 2005, according to forecasts). Apple’s iTunes, the largest legal download catalogue, has over 1m songs available and handles over 1m downloads a day.

But even if the entertainment business manages to coax more users into paying for legal downloads and succeeds in court against Grokster and StreamCast, its problems are unlikely to go away. True, a Supreme Court ruling in the industry’s favour would put paid to other P2P services. But it is not clear that curbing illegal downloading will translate into extra sales for the music business. A rush into legal downloading would hardly be good for sales of CDs: some cannibalisation is inevitable. And perhaps the decline in global sales is indicative of a far greater problem for the music industry— consumers simply think that many of its products are just not worth paying for.
http://www.economist.com/agenda/disp...ory_id=3785847


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Cover Me: Introducing the Instant Tribute
Dan Crane

PAYING a visit to a French radio station earlier this month, Conor Oberst, the earnest balladeer beloved of soulful girls and music critics, favored his audience with a few live songs. In fine pop music tradition, he focused on tracks from his new release "I'm Wide Awake, It's Morning," which he was there to promote. But in an equally recognizable gesture, he also played a cover, a tribute to a musician he admired. Within a week, his version was posted on several music Web sites, where fans who recognized the sweetly nostalgic original could download it.

But nostalgia isn't what it used to be. The song he covered wasn't some well-polished chestnut from the annals of recording history. It was "Mushaboom," by the Canadian-born singer Leslie Feist, from her album "Let It Die," which hasn't even been around long enough to establish much of a presence of its own. Yet it's already inspiring variations on a theme.

For decades, rock bands have acknowledged their influences by reinterpreting the old guys' songs. It was a kind of Oedipal tribute: honor thy forebears by reinventing them, as, for example, Devo did in 1978 with its spasmodic update of the Rolling Stones' "(I Can't Get No) Satisfaction," from 1965.

Our post-postmodern era of mash-ups, music blogs, file sharing and near-instantaneous distribution, however, has given rise to a new phenomenon: a certain species of indie bands is covering their peers' brand-new songs - in those first heady days of release when the songs seem to be playing in every cafe and club, or even earlier, before they've made an impression at all. So acts like the Shins and Iron and Wine cover the Postal Service, who cover (and are covered by) the Flaming Lips, who cover the White Stripes, all on songs that were released within months of one another. In the process they bolster their careers, and deflate a bit of the preciousness from a genre that tends toward somber introspection.

The real-time cover has some history, not all of it pretty. In the early days of rock 'n' roll, some white bands covered black artists whose records couldn't get airplay - a white performer's version was said to "cover" any chance of success for the original release. Some songwriters were compensated (Little Richard famously called Pat Boone "the man who made me a millionaire"), but more often they were ignored while white artists got famous off their songs. As rock matured and race barriers broke down, covers became less loaded. In 1967, Jimi Hendrix opened a concert with a cover of the Beatles' "Sgt. Pepper's Lonely Hearts Club Band" just three days after the record came out. As Wayne Coyne, the eccentric leader of the Flaming Lips, imagines it, "It's like he's thinking, 'These are cool songs, I just want to play them!' "

What's different today is the instant gratification: a week after a cover is played, it's being passed around the Web, via file-sharing networks like LimeWire or cheeky music blogs like Fluxblog or Stereogum. Frequently, these are unlicensed live versions on which neither band makes money.

The lack of licensing might not sit well with lawyers, but a lot of musicians seem to think it's just fine. "I'm so excited that these songs have been thrown all over the Internet," says Babydaddy, bassist and co-songwriter for the Grammy-nominated glam-disco sensation the Scissor Sisters. "Bands will record versions of other people's songs and they don't want to go through the process of clearing things and the Internet is the perfect way to release them."

The Scissor Sisters recorded a version of Franz Ferdinand's edgy guitar-driven hit "Take Me Out" for BBC Radio 1 last summer. The group's cabaret-style cover, which sounds as if the original had been blended with a healthy shot of Elton John and then poured through a cocktail shaker, was released online, then as a B-side, with Franz Ferdinand's blessing. "We run into the Franz Ferdinand guys all the time," Babydaddy said, "and the last word was that they were really happy with it."

The Flaming Lips' version of the White Stripes' "Seven Nation Army," another instant cover that had a long life on the Internet, was released this month on a various- artists compilation CD, as part of the "Late Night Tales" series available on azulishop.com.

The electronic duo the Postal Service went one better: "Such Great Heights" an EP of new songs it released in 2003, included covers of those songs by two other bands. It even included the Shins' countrified version of "We Will Become Silhouettes," a Postal Service song that the Postal Service itself didn't get around to releasing, in its original form, until a month later. By that time, die-hard fans had already gotten used to the tribute version, imbuing the song itself with an almost instant history.

And because all three bands are on the Sub Pop label, the whole thing worked as a handy bit of in-house cross-marketing, introducing one band's music to another band's fans. "It almost seems like a huge percentage of the audience is there because of the cover we did," says the Shins' frontman, James Mercer, about recent live shows. "People yell that out so much."

Iron and Wine's cover of the title track strips down the ebullient head-bobbing original and transforms it into a moody whispered secret. That version made it onto the Grammy-winning soundtrack for the film "Garden State," which brought it a much wider audience than it would otherwise have had.

These days, when the Postal Service performs the song live, it's hard to say who's interpreting whom. "It's a very strange turn of events," says Ben Gibbard, the singer- lyricist half of the Postal Service. He is no stranger to strangeness: he lives in Seattle; the other member of the duo, Jimmy Tamborello, lives in Los Angeles; the two communicate, of course, via the United States Postal Service.

"I don't know if postmodern is necessarily the word," Mr. Gibbard added, "but it's a strange occurrence when I write a song with a guy who I barely know who lives 1,200 miles from me and then we get a guy in Miami to do a cover of it, and then I in turn am covering the version of the song that he covered."

More often it's a local affair. In the crowded Williamsburg, Brooklyn, music scene, for example, that kind of hall-of-mirrors effect arose early: in 2002, the repetitive noise-rockers Oneida and the art-punk trio the Liars each covered one of the other band's songs on a split EP titled "Atheists, Reconsider." Brian Chase, the drummer of the Yeah Yeah Yeahs (another Williamsburg band), calls the result his "favorite example of bands covering each other's stuff." In 2003, the Yeah Yeah Yeahs, for their part, released a bombastic, funky cover of a Liars song ("Mr. You're on Fire, Mr.").

TV on the Radio, winner of the 2004 Shortlist Music Prize, which recognizes up-and-coming indie bands, stitched itself into this hipster daisy chain last autumn by turning the Yeah Yeah Yeahs' ballad "Modern Romance" (released a year earlier) into a layered, rhythmic dirge. "We chose it because it's a really good song," says the band's vocalist, Tunde Adebimpe. "It's pretty much just saying: 'You know that song you wrote? I love it. I was singing it all day yesterday, but like this. Please don't sue me.' "

At worst, a few have grumbled - like Mr. Chase, who didn't think so highly of a Yeah Yeah Yeahs "tribute" album that was recently released. "Some of the MP3's are pretty dreadful," he says. And some purists whine that it's all just a cry for attention. To which Babydaddy of the Scissor Sisters has a ready response: "Of course it was an attention scheme," he says of the Franz Ferdinand cover. "We went on the radio to play and promote our album. That's the whole idea!"
http://www.nytimes.com/2005/03/27/ar...ic/27cran.html


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The Future of the 30-Second Spot
Lorne Manly

DEVOTEES of Home & Garden Television, sitting in the comfort of their living rooms on the 33rd floor of a Manhattan high-rise, probably could not care less about commercials for lawn mowers or snow blowers. If they have TiVo, they probably zap right through the ads; if not, they can just change channels.

Soon, however, viewers may no longer be assaulted by ads that all but demand to be ignored. Technology, cable and satellite companies are scrambling to offer advertisers the ability to learn enough about who you are and where you live so that the likes of Home Depot will be able to send a different, more suitable ad to an apartment dweller - say, an ad pushing a kitchen upgrade.

With the growing popularity of digital video recorders like TiVo, as well as video-on-demand, viewers are fine-tuning their relationships with television in ways that would have been unfathomable just a decade ago, watching shows when and how they want - not when some distant, towering network demands.

But the technology behind all that small-screen freedom cuts two ways. The same digital set-top boxes that turn your television into an ad- zapping, instant-gratification device also provide an opportunity for the advertising-dependent television business to rejuvenate and rejigger the time-honored 30-second spot.

The television commercial - a blunt instrument that often reaches as many disinterested people as desired ones - is beginning to behave like a smarter version of direct mail. Ads can be customized, not just by neighborhood, but ultimately by household and perhaps by viewing habits.

If you don't own a dog, you won't be bombarded by ads for Puppy Chow or Iams. If the technology determines that the man of the house has wrested control of the remote from his teenage daughters, he will not have to sit through feminine hygiene ads during the most popular network shows. And if someone watching a commercial for a Mercedes S.U.V. wants to go for a virtual test-drive, or set up a real one, all she will need to do is press a button on the remote.

To make that happen, a host of companies - including Invidi Technologies, Visible World, Navic Networks and OpenTV - are selling their technology and services to cable operators and satellite providers whose set-top boxes afford them direct access to viewers. While the companies' strategies may vary, their ultimate goal is the same: to make ads more relevant to the lives of viewers, so that they might just stick around and watch. Instead of commercials being an annoyance, they become information a viewer needs, perhaps even craves.

But this future will not come easily to an industry known for its reluctance to embrace change. It's also far from clear if typically passive viewers will want to interact with commercials. Privacy concerns loom, too, as advertisers could, in theory, come to know more about a viewer's habits than the viewer may be comfortable with.

For their part, marketers worry that a golden opportunity could be blown if cable and satellite operators keep the new technologies to themselves rather than share them with the networks, which control the bulk of advertising time.

"I hold the purse strings, and I need critical mass," said Jerry Dow, managing director for worldwide advertising and promotion at United Airlines. "If you, the cable operator, are not going to give it to me, I'm going to spend my money elsewhere."

IN every industry, there is a common unit of trade, a shared form of communication. "The 30-second ad is the lingua franca of the global advertising business," said David Verklin, the chief executive of Carat Americas, one of the major media services firms.

The television business did not start out that way. In the medium's early years, ad agencies often created the programming for their clients, resulting in shows like "Texaco Star Theater" and "Kraft Television Theater." Sponsors could plaster their messages into the programs, scatter them during the breaks or just run muted, tasteful nods to their products at the beginning and the end of the shows.

But the networks soon learned that they could make more money selling chunks of time to a number of marketers than by handing the full hour to a single sponsor. At the same time, sponsors were becoming harder to find as programming costs rose and Washington began scrutinizing their dual roles after the quiz show scandals in the late 1950's.

As the medium evolved and advertisers honed their skills at creating entertaining, persuasive television commercials, the industry embraced the 30-second ad. And for more than 40 years, the form has dominated the business.

While company mascots may come and go - then return in a warm bath of nostalgia - and deft camera work and computer-generated images dazzle the eye, the format has remained surprisingly static.

"The advertising business is still largely the way it was when television first started to take hold," said Tom Hagopian, senior vice president and general manager for programming and advertising at OpenTV. "One ad goes to everyone and the ad is relatively passive."

Marketers recognize the need to tailor their messages to different, more finely calibrated audiences. But the lure of a relatively cost-effective way to reach millions of people quickly has kept them devoted to the medium. Last year, advertisers spent more than $70 billion on television, according to Nielsen Monitor-Plus. About $45 billion of that total landed in the coffers of the broadcast networks and their affiliates, even though viewers are spending more and more hours watching the growing number of niche cable networks.

But marketers' passion for the buckshot approach is waning. While the remote control has been with us for half a century, new technologies are giving people increasing power to shape and schedule their television viewing. A new study by Arbitron and Edison Media Research found that about 43 million Americans time-shift, using either their VCR's or the rapidly proliferating digital video recorders to watch shows when they want.

Commercials play little part in this reconfigured landscape. About 6.5 million people own or rent DVR's or TiVo, and that number is expected to rise as cable operators and satellite providers aggressively market the technology to their subscribers. Some studies put the percentage of people who skip past ads at above 90 percent.

Internet advertising, meanwhile, having recovered from the industry's burst bubble, has become more enticing to marketers. They appreciate the ability to pinpoint their audience and to get instant feedback about how well their message has resonated.

"Time is running out," said Eric Schmitt, senior analyst at Forrester Research and the author of a recent report called "What Next for TV Advertising?" "At some point, it's going to be impossible not to acknowledge that the medium is overvalued as an advertising vehicle."

Mr. Schmitt says he expects that by 2007, time-shifting and ad-skipping will begin putting considerable pressure on the prices that television networks can charge for commercial time.

The pain can already be felt. Dozens of big marketers have expressed their frustration with the existing model of television advertising. For its recent reintroduction of Pepsi One, the Pepsi-Cola Company is shunning television completely. While spending on network television has risen in absolute terms, its market share of all advertising expenditures slipped from 2001 to 2004, according to TNS Media Intelligence.

"Clearly, there is a clamoring for proof that their dollars are working harder and better than before," said Tim Hanlon, senior vice president and director of emerging contacts at the Starcom MediaVest Group, one of the country's largest media-buying firms.

The technological dislocations have inspired a flurry of product placements, a return in some ways to the early days of television. Sears for example, pays substantial sums to integrate its Kenmore appliances and Craftsman tools into the action on "Extreme Makeover: Home Edition" on ABC, hoping that the message of uplift in the show translates into good feelings - not to mention sales - for its products. And the major media-buying firms have set up their own entertainment wings to create programming from scratch, the better to embed their clients' products into the heart of a show.

But there is little evidence that product placement has bolstered sales. If anything, measuring its success is even more difficult than gauging that of a 30-second ad. And few companies can afford an entire season of "American Idol" the way Coca-Cola can.

So traditional commercials remain important to both advertisers and networks, making the need to keep viewers from skipping past them all the greater. "If the ad message is more relevant, not just to the programming but to the viewer's mind-set, there's a greater receptivity," Mr. Hanlon said.

IN the last few years, dozens of advertisers have conducted experiments with cable operators and satellite providers to try to discover that elusive relevance. In introducing its offshoot airline, Ted, United Airlines worked last year with Comcast and Visible World to send different versions of its ad to Comcast subscribers with digital set-top boxes. To promote flights to Las Vegas, viewers in Des Plaines, Ill., were greeted with the following message: "Viva Des Plaines. Doesn't quite have the same ring to it. Let's go to Vegas. Des Plaines, say hello to Ted." Crystal Lake also got its own personalized message, as did many other suburbs in the Chicago area.

"We wanted to give Ted a more approachable, friendlier feel," said United's Mr. Dow.

He said he was pleased with the results. "In the traditional way, we craft message, send message, measure message, rinse and repeat," he said. But now an advertiser can almost instantly change its ad, based on changes in its business; United, for example, could have swapped in an ad for a different destination if its Las Vegas flights were already full.

Comcast, the country's largest cable operator, used Visible World's software and expertise to enhance its own targeted ad program, which allows advertisers to home in on specific geographical areas and add a customized message in the last few seconds of an ad, according to Charlie Thurston, president of Comcast Spotlight, the cable giant's ad sales division. The company plans a larger test this summer in Miami with OpenTV.

Visible World's offering also allows advertisers to customize an ad. The Bermuda Department of Tourism, for example, could tinker with the music, the images, the package's cost, even the age of the frolicking vacationers - all tailored to the network being watched or how many days are left in the sale. An ad on the Food Network could play up the trip's dining choices while one on the History Channel could, naturally, touch on the island's history.

A commercial for the Nissan Murano, showing a husband and a wife going antique shopping only to come away with a vintage jukebox channeling Deep Purple's "Smoke on the Water," can become more personalized with locations near the viewers' home superimposed onto the ad. "Now all of a sudden I can relate to this," said Seth Haberman, president and chief executive of Visible World.

To keep viewers interested, cable operators and satellite providers are also tinkering with interactive advertising. EchoStar's Dish Network worked with OpenTV and the Turner Media Group to create a promotion that started this month for the 2006 Mercedes M-Class. As the 30-second commercial runs on cable channels, a prompt appears on the screen, asking viewers if they would like to learn more. An affirmative response takes viewers to an interactive channel on the Dish Network, where they can ask for a brochure, set up a dealer appointment and register for a M-Class road rally near them. Or if the mood strikes them, they can watch a 90-second video of the vehicle's interior and exterior on Turner's CatalogTV, one of its home-shopping networks.

Dish has also done similar but simpler ads for Meineke and American Express, working with Navic, said Susan Arnold, vice president for programming and interactive television at Dish. The Navic technology allows viewers to take action at the end of the commercial. Time Warner, the country's second-largest cable operator, has tested it in its Honolulu and Albany systems.

"The 30-second ad pretty much becomes a navigational tool at that point," said Chet Kanojia, chief technology officer of Navic.

A visit to Invidi's headquarters in Princeton, N.J., offers another glimpse of where targeted advertising is headed. There, executives and engineers are trying to perfect a system that goes beyond using existing census and available marketing data to divine the age and the sex of the audience by their television viewing habits.

Bruce Anderson, Invidi's chief operating officer and chief technology officer, said that the software could even help determine who controls the remote in a household. While there are no guarantees of complete accuracy, Mr. Anderson calls it "pretty accurate guesswork." Men, as anecdotal evidence attests, tend to change channels much more quickly than women, he said.

Invidi executives argue that this level of data will help cable overcome a discrepancy in the marketplace: broadcast television's disproportionate share of advertising dollars. Knowing enough about the demographics of their system's viewers, they can package enough 18- to 49-year-old women or 18- to 34-year-old men across many cable networks to provide the instantaneous reach an individual broadcast network can, and satisfy advertisers' demand for scale. And when that happens, the cable and satellite operators will, theoretically, be able to charge higher rates.

The technology also allows commercials to be swapped into shows taped on the DVR, in case viewers get to the program days or weeks later. "When you watch it on Thursday, the commercials you see will be fresh," said David M. Downey, chief executive and president of Invidi.

Without any live tests under its belt, Invidi lags behind competitors like Visible World, OpenTV and Navic. But Time Warner Cable expects to use Invidi's software in one of its markets, possibly Green Bay, Wis., or Charlotte, N.C., later this year, said Larry Fischer, president of Time Warner Cable's media sales division.

As with any new technology and a bunch of true-believing media entrepreneurs, a word - or more - of caution is necessary. "It sounds great," said Alan Wurtzel, president of research at NBC Universal, "but I just think a lot of time what can sound great on paper, in the crucible of everyday life doesn't always pan out."

For starters, grafting the software companies' applications into a cable operator's set-up isn't easy. Cable companies are also trying to accommodate video-on-demand, DVR's, and even phone service over cable modem lines, in markets that may have a half-dozen or more different set-top boxes, according to Paul Woidke, vice president for technology at Comcast Spotlight.

AND then there are the privacy concerns. Yes, marketers already know quite a bit about you, as the avalanche of direct mail attests. But receiving personalized messages through your television somehow seems more intrusive.

"The ability to address advertising inevitably smacks of Big Brother the first time you hear of it," said Craig Moffett, an analyst with Sanford C. Bernstein. It serves as a reminder that the cable operator could theoretically monitor what you are watching at any given time. "There's a lot of people watching a lot of things they'd rather not be known," Mr. Moffett added.

The software companies as well as the distribution outlets say that private information will remain just that.

Interactivity may also be ahead of its time. Focus groups showed little interest in buying items the stars of the shows may be wearing or in drilling down for more information on a new show, Mr. Wurtzel of NBC Universal said. "It flies in the face of how people watch television," he said, "which is essentially a passive medium."

And lastly, the fact that the technology companies have entered the battle for the future of television advertising on the side of the cable and satellite operators could hinder the widespread adoption of their wares. The companies may have had little choice; the set-top boxes that are the facilitators for all these applications belong to those operators. But the cable operators, in particular, want to use the advent of addressable advertising as way to win what they see as a more equitable split of advertising dollars. And they are in no mood to share.

For now, advertisers and their agencies show little inclination to overhaul the ingrained ways they buy advertising for a local cable market that accounts for about 8 percent of television spending, according to Mr. Moffett of Sanford C. Bernstein. He, Mr. Dow of United and Mr. Hanlon of Starcom MediaVest all suggested separately that national networks, particularly the cable ones, sell these targeted ads across the country. In return, the cable and satellite operators would get a chunk of the revenue.

If not, online and other media will gobble up television's share, they warn. "Unless the ad sales folks and distribution people get together in a harmonized conversation, it will be very challenging for advertisers to step up," Mr. Hanlon said. "While they rearrange deck chairs on the Titanic, advertisers may be building another boat."
http://www.nytimes.com/2005/03/27/bu...ney/27dvr.html


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Censorship

Under New Chief, F.C.C. Considers Widening Its Reach
Stephen Labaton

The television and radio industries are about to come under renewed attack over sex, violence and profanity in their programming, both in Congress and at the Federal Communications Commission.

Leading lawmakers and the new leader of the F.C.C. have proposed a broad expansion of indecency rules, which were significantly toughened just last year. They are also looking for significant increases in the size of fines and new procedures that could jeopardize the licenses of stations that repeatedly violate the rules.

Some senior lawmakers, including Senator Ted Stevens, the Alaskan Republican who is the leader of the Commerce Committee, as well as Kevin J. Martin, the new chairman of the commission, have suggested it may be time to extend the indecency and profanity rules to cable and satellite television providers, which now account for viewership in 85 percent of the nation's homes. And organizations opposing what they consider indecent programming have joined forces with consumer groups that have been trying to tighten regulation over the cable industry and force it to offer consumers less expensive packages of fewer stations, known as à la carte services.

Some of the anti-indecency groups see à la carte services as a way of helping consumers block out programming they consider indecent. "We are at a rare moment when there seems to be bipartisan energy on both sides of the political aisle and both sides of the ideological divide," said L. Brent Bozell, president of the Parents Television Council, a leading advocacy organization that officials say has been responsible for the vast majority of complaints against the broadcasters.

Mr. Martin and the senior Democrat on the commission, Michael J. Copps, have consistently been among the most aggressive members of the agency on indecency issues. President Bush is expected shortly to announce the appointment of two new members to the five-person commission. Those appointments will determine whether the views of Mr. Martin and Mr. Copps on indecency issues will prevail at the agency.

Last year, the agency proposed fines of nearly $8 million in 12 cases involving television or radio stations. By contrast, in 2003, the agency proposed about $440,000 in three radio cases.

The number of complaints has also risen sharply, to more than 1.4 million last year, compared with 111 in 2000. Commission officials say that the number of complaints is misleading, because most of them come from the Parents Television Council. But Mr. Bozell disputes that, saying that the agency has no way of accurately tracking the source of the complaints.

Lawyers for cable companies say any effort to impose indecency standards on paid programming would violate the First Amendment.

Meanwhile, broadcasters have been slow to respond to the new climate. The networks and affiliates have filed papers with the commission seeking a rehearing on the three major indecency cases: the Janet Jackson incident at the Super Bowl, Bono's use of a profanity at the Golden Globe Awards and a racy episode of "Married by America."

But the agency has sat on those appeals, and may not issue rulings for months or longer. As a practical matter, the inaction by the commission has prevented the networks from taking the matter to court.

And for now, at least, the courts are widely viewed as the last hope for the broadcasters.

"The courts really are the only avenue of relief," said Kurt A. Wimmer, a lawyer at Covington & Burling in Washington, which represents a number of broadcasters in disputes with the commission. "The commission and Congress are locked in a political spiral that provides no avenue of relief."

Michael K. Powell, the former chairman of the commission, came under heavy criticism by broadcasters, civil liberties groups and producers for taking a hard line on indecency cases; Mr. Martin and Mr. Copps have taken an even harder line. They have argued in a number of cases that the commission erred by either not finding violations or not imposing tough enough sanctions.

Mr. Martin's views on the limited constitutional protections of broadcasters is summed up in a letter he sent to Mr. Bozell in December 2003 in which he complained that the agency was interpreting the indecency rules too narrowly.

"Certainly broadcasters and cable operators have significant First Amendment rights, but these rights are not without boundaries," he wrote. "They are limited by law. They also should be limited by good taste."

He emphasized that view when he dissented from a decision by the commission in an indecency case over an episode of the "Keen Eddie" show. In that case, decided last November, the agency did not to penalize Fox for an episode in which three men hired a prostitute to get semen from a horse for the artificial insemination of another horse.

"This order involves a television program that the majority admits 'contains references of a sexual nature that were broadcast at a time of day when children were likely to be in the audience,' " he wrote in that opinion. "Yet the majority concludes that the program, in which a prostitute is hired to sexually arouse a horse by removing her blouse and to 'extract' semen from the horse, is not indecent because the prostitute is 'never seen actually touching' the horse. Despite my colleagues' assurance that there appeared to be a safe distance between the prostitute and the horse, I remain uncomfortable. I respectfully dissent."

Mr. Martin's views appear to have broad support in Congress. Last month, the House of Representatives overwhelmingly approved a bill that would raise the amount the commission could fine a station to $500,000, from $32,500.

The bill, proposed by Representative Fred Upton, a Michigan Republican who is chairman of the Energy and Commerce Subcommittee on Telecommunications and the Internet, was adopted by a vote of 389 to 38. The legislation also requires the commission to hold a hearing to consider revoking the broadcast license of any station that has three indecency violations.

In the Senate, meanwhile, a number of similar measures have been introduced. One bill introduced earlier this month would increase the maximum fine to $500,000 and permit the commission to double fines for egregious incidents, such as when the indecent material was scripted.

The legislation would also require the commission to study the V-chip, which some senators say has not been effective in blocking undesired programs, and would force the broadcasters to double the amount of children's programming they offer, to six hours rather than three.

The bill is sponsored by Senators John D. Rockefeller IV, Democrat of West Virginia, and Kay Bailey Hutchison, Republican of Texas.

"I would welcome voluntary actions by the industry to address both indecency and gratuitous violence, but they aren't stepping up to the plate, and that's why Congress cannot wait any longer to protect our communities and our families," Mr. Rockefeller said when he introduced the measure. "If the industry won't protect our children from gratuitous violence and indecency, then we must act."
http://www.nytimes.com/2005/03/28/bu...28decency.html


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Will Cable Quell the Competition?
Michael Grebb

After listening to oral arguments in the controversial Grokster case Tuesday, the U.S. Supreme Court stayed firmly in tech territory as it considered whether cable operators should be forced to open up their broadband data pipes to competition.

The case in question pits the National Cable & Telecommunications Association and the Federal Communications Commission against internet service provider Brand X Internet of Santa Monica, California. The outcome of the case could determine whether consumers can someday choose among different ISPs when receiving broadband access over cable lines.

Cable operators have resisted the concept of "open access" for years, arguing that it would unfairly saddle the industry with new regulations and create potential technical problems.

Critics argue that the industry simply doesn't want to face competition from new broadband ISPs riding its wires.

"More broadly, (the Brand X case) will determine whether a wide variety of innovative voice, video and data services become available, or whether internet users will be limited to only those services their cable company provides," said Dave Baker, vice president for law and public policy at EarthLink, a longtime advocate of open access.

The case largely hinges on arcane regulatory definitions.

Service over traditional telephone lines is considered a "telecommunications service" subject to common-carrier regulations that require telcos to provide access to third-party ISPs.

But in 2002, the FCC defined cable-modem service as an "information service," a designation that allows a cable operator to make itself the exclusive internet access provider over its own cable lines. The vast majority of cable operators have done just that.

The definitions stem from the 1996 Telecommunications Act, which broadly defined the two categories but deferred to the FCC on how to apply them to specific cases.

Brand X -- supported by the wider ISP community and consumer groups -- wants the court to affirm an October 2003 decision by the 9th U.S. Circuit Court of Appeals, which favored Brand X when it found that cable-modem service is partly a telecommunications service.

Shortly after that decision, the government and the NCTA appealed to the Supreme Court.

During oral arguments Tuesday, several justices probed in detail into the supposed logic of the two regulatory classifications, often questioning why cable operators should be treated differently than telcos.

"The question is whether you're still offering a telecommunications service to the public," said Justice Antonin Scalia.

Thomas Hungar, deputy solicitor general in the U.S. Justice Department, cited the different regulatory histories for cable operators and telcos, and pointed out that phone companies -- unlike cable operators -- offer telecommunications services on a stand-alone basis.

NCTA's lawyer, Paul Cappuccio, argued that cable-modem service involves both telecommunications and data services in a bundled offering, which in turn makes it a "separate product" worthy of its own classification.

"We view it as two ingredients forming a product that is a distinct product," he said, arguing that the court should defer to the FCC on such definitional matters.

Brand X's attorney, Thomas Goldstein, said the cable industry's argument "becomes completely circular" if taken to its logical conclusion: Any bundled service can therefore be classified as something different by virtue of its bundled nature.

He said that under such logic, retailers could circumvent laws against selling cigarettes to minors by simply bundling cigarettes with other products and calling it a "smoking service."

Furthermore, Goldstein said such reasoning allows companies to bundle offerings in an effort to "self-deregulate."

After oral arguments, observers said it was unclear how the court might rule.

"It's very hard to read," said NCTA lawyer Neal Goldberg. "I don't think today's oral argument moved the needle one way or the other."

Randolph May, senior fellow and director of communications studies at the Progress & Freedom Foundation, said it was "puzzling" that justices didn't ask more questions about whether the FCC was best suited to tackle the definitional questions so central to the case.

"The cable industry and the FCC have to be a bit concerned that there wasn't more discussion about deference," he said.

But Goldberg cautioned against reading too much into the absence of questions on deference.

"I think that was really laid out in the briefs ad nauseam," he said.

Consumer advocates, who support opening cable wires to competition, said they were pleased that some justices seemed perplexed about the FCC's classification of cable-modem service as an information service.

"The FCC wanted to play a shell game and misdefine basic internet connectivity," said Kenneth DeGraff, policy advocate at Consumers Union.

A final decision in the Brand X case is expected before the Supreme Court recesses in June.
http://www.wired.com/news/politics/0,1283,67064,00.html


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A Service That Aims to Make Cold Calls a Bit Warmer
Daniel Terdiman

As a longtime salesman, Jim Fowler knows how difficult it is to make a cold call. In one instance, it took Mr. Fowler a month of daily e-mail messages and phone calls to a major airline before reaching the right person to hear his pitch for the analytics software that he was selling.

The idea of circumventing the drudgery of finding potential clients helped inspire Mr. Fowler and several colleagues to start Jigsaw Data. The company, based in San Mateo, Calif., is a marketplace of business contacts that are all contributed by and, perhaps more important, vetted by the members. Jigsaw then provides the online organizing infrastructure.

"The power of Jigsaw is that we have thousands of people that collect and maintain the data," Mr. Fowler said. "It's the concept of many people all bringing small pieces of the puzzle, and we assemble them for the benefit of the community."

Each contact, the company has decided, is valued at one dollar of its membership fee. Every month, the service's members pay $25 for access to 25 contacts or, alternatively, the member can contribute 25 contacts. Other members can challenge a contact if they believe it to be invalid, but if the contact lasts 30 days without a successful challenge, the originating member is granted another contact from the pool.

The first question Mr. Fowler is often asked is why anyone would give away valuable contacts for just a dollar. The question gives him an opening for one of his favorite lines: One person's trash is another person's treasure.

To do their jobs, sales agents need constant access to fresh contacts. The problem with the traditional business contacts market, Mr. Fowler said, is that access to existing databases from companies like Hoover's, Harte-Hanks and Dun & Bradstreet can cost thousands of dollars a year and some are frequently out of date. Jigsaw is trying to undercut those heavyweights, and by a mile.

"It makes sense," said Kent Allen, a financial analyst in San Francisco. "They've got a little bit of that Netflix model. A lot of salespeople don't mind spending $25 a month, even if it's just for one bit of information that they might have had to spend a couple of hours getting otherwise."

For now, the company makes its money from members' monthly $25 fees, but it hopes to supplement that with advertising. Mr. Fowler said that while the company reserved the right to resell the contacts, to do so would "kill the goose that is laying the golden egg."

Jigsaw is unusual in that its marketplace is devoted exclusively to business contacts; the company's closest competition comes from online social networking services like Ryze.com and LinkedIn, whose members connect electronically, often to make new business-related contacts.

Kirkland Jue, a member who recently used the service to get a contact at an Alaskan company where he wanted to do business, raved about Jigsaw.

"I couldn't get the e-mail of the C.I.O.," said Mr. Jue, a sales executive at Fiberlink Communications in San Francisco. "No one was allowed to give me his address. So I said, let me check Jigsaw. It's a company in Alaska, for God's sake. Not only did it have his e-mail, it had his direct dial. It kind of blew me away."

Jigsaw currently has about 5,000 active users and a database of 441,000 contacts from nearly 45,000 companies. The database is growing by 3,000 contacts a day, Mr. Fowler said.

The vetting process is central to Jigsaw's system, which attempts to bolster its shared data by letting anyone challenge a contact for any reason. If the challenge stands - meaning the contributor grants that the contact is faulty or does not respond- the challenger receives two new contacts.

The system also tries to prevent inconsistent information by penalizing and sometimes banning those who submit too many spurious contacts or whose challenges are frequently overturned.

"There's some very natural self-policing mechanisms that also reinforce the constant level of quality," says Jeff Crowe, a partner at Norwest Ventures, which, along with El Dorado Ventures, financed Jigsaw with more than $5 million. "So the fact that the users are motivated to keep up the quality level is a very powerful concept."

One approach Jigsaw has taken is paying members with cash for heavy contributions. The company just conducted its first cash distribution and gave out more than $15,000 to some of its most prolific contributors. The Top 10 contributors each received $800, Mr. Fowler says.

"Are they getting their members to do the work for them?" says Michael Danzinger, an account executive at RAE Internet in New York and one of those Top 10 contributors. "They are, but that's where the value for the person adding it comes from. They're getting that value back. No one's forcing me to add anything."

Mr. Fowler maintains that Jigsaw goes out of its way not to intrude on the privacy of the listed contacts. For example, people listed in the database can set preferences on how they want to be contacted.

"At first, there was a bit of a shock factor that I was in there," said Olin Reams, in Larkspur, Calif., the director of sales for Mindjet, who wrote instructions that he should be contacted by e-mail and not by cellphone. "I don't mind being visible. I just don't want to be deluged with calls that aren't appropriate."

Still, Mr. Jue said that sometimes such instructions did not mean much, especially to people who were exceedingly eager to make a sale.

"It's sort of like someone puts up one of those street cones in front of you and you go around it," he said.
http://www.nytimes.com/2005/03/28/te.../28jigsaw.html

[JackSpratts]

Downloaders Of The World Unite
David Rowan

BY RIGHTS, YOU ought really to be banned from reading The Times.

Who knows what injuries the newspaper, rolled up, could inflict as you fight for your seat on the packed 8.13? Later you might wrap it around your chips, all saturated fat, thus exposing News International to vast potential costs in some future obesity lawsuit. The newspaper is a menace. Wouldn’t it be better for Britain if we simply switched off the presses?

Mercifully, that quaint notion of a free press keeps us going. Just as breadknife manufacturers are not held liable for the rare unlawful uses of their products, modern communications businesses are not shut down simply because they have the potential to enable others to break the law. It would be absurd to blame Vodafone for terrorists chatting across their network.

Yet if some of America’s biggest entertainment companies have their way, that presumption of a communication medium’s neutrality is about to disappear. Next Tuesday, the United States Supreme Court will begin hearing a case that affects anyone who has ever downloaded a music track, recorded a television show, or even sent an e-mail. The case, known as MGM v Grokster, is the culmination of a four-year legal battle to determine whether “peer to peer ” file- swapping services are liable for every pirated digital file that passes through their networks. The issues, to non-geeks, may appear arcane, but they affect the very future of technological innovation. They boil down to this: if a technology can potentially be used for ill, should it be banned — so preventing any of its legitimate uses?

The defendants are two American companies that make file-sharing software, Grokster and StreamCast Networks, known for a program called Morpheus. In 2001, a powerful alliance of entertainment companies brought a lawsuit claiming that these software companies should be held responsible for copyright breaches by their users. It was easy for the music industry to shut down Napster, as its technology required all exchanged digital files to pass through the comp any’s central computers. But with Morpheus and Grokster, there is no central infrastructure for the lawyers to target: the software simply lets users find files on each other’s computers.

In 2003, a federal judge ruled that the developers could not be held liable for how their users interact across peer-to-peer networks. The ruling was upheld the next year in California’s Ninth Circuit Court of Appeals. Now the movie and music industries, along with supporters ranging from the National Football League to the Church Music Publishers Association, are going for the big one. If they win, innovation will be the victim.

The complainants want to overturn the famous “Sony Betamax ruling” of 1984, which held that manufacturers of video recorders were not responsible for tape piracy involving their machines. At the time, the court, by a five-to-four majority, decided to protect any technology from liability if it was “merely capable” of “substantial, non-infringing use”. The decision freed manufacturers to develop many of today ’s must-have gadgets, from the iPod to personal video recorders, which may be used both for unlawful and “non-infringing” purposes. In the propaganda campaign that preceded the Betamax case, Jack Valenti, president of the Motion Picture Association of America, declared that the video recorder was “to the American film producer and the American public as the Boston strangler is to the woman home alone”. Strange, then, that video rentals went on to become the film industry’s main source of revenue.

Established interests have never much liked innovation. Back in 1906 the composer John Philip Sousa predicted “a marked deterioration” in musical tastes as newfangled gramophones “reduce the expression of music to a mathematical system of megaphones, wheels, cogs, disks, cylinders and all manner of revolving things”. Similar battles were fought over the printing press, photocopier, mechanical piano, radio and television. Remember how home taping was going to kill music a generation ago? Music seems to have survived.

Yes, most of the traffic flowing through the peer-to-peer networks involves breaches of copyright. And yes, music sales did fall by almost a quarter in the five years to 2003, as fans realised that technology offered a free alternative to extortionate CD prices. But the roughly 10 per cent of “legal” file-swapping on these networks allows programmers to swap code, academics to exchange learned papers and little-known musicians to gain a fan base. Why should the music industry be able to close such communications channels? Just because technology comes along and disrupts existing business models, should copyright owners not find clever ways to adapt, rather than suing 12-year-olds and fighting software developers in court?

If the studios do win, it will be the consumer who loses. The next generation of digital music players, internet telephony, TV recording equipment — all will suffer from a new legalistic caution that will stifle progress. The music lobby may have more star names on its side: a Sheryl Crow and a Brian Wilson for every Terence Trent D’Arby on the software companies’side. But if the music lobby wins, you might as well swap your iPod for a Thomas Edison wax cylinder.
http://www.timesonline.co.uk/article...542213,00.html


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Japan

High court upholds online music file-sharing as illegal

The Tokyo High Court on Thursday upheld a lower court ruling that MMO Japan Ltd violated the Copyright Law by providing an online service for swapping music files and ordered it to pay a total of 71 million yen in damages to a copyright association and 19 record labels.

This was the first high court ruling acknowledging a copyright violation concerning music file sharing on the Internet. MMO Japan, based in Tokyo, has suspended its service following an injunction issued in April 2002. The udge said that MMO could predict that the service would infringe on copyrights and computed the damages based on the assumption that the monthly usage fee for one file was 2,000 yen.
http://www.japantoday.com/e/?content...at=2&id=332532


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A Big First Quarter for Films With African-American Casts
Catherine Billey

Sony's "Guess Who," a comic remake of the 1967 classic "Guess Who's Coming to Dinner" with reversed racial roles, opened at No. 1 at the box office on Friday, part of an unusually strong showing this quarter by films starring African- Americans.

"Guess Who," which pairs Bernie Mac and Ashton Kutcher, brought in $21 million in ticket sales. It joins two other Sony films featuring black actors that opened at No. 1: "Hitch" starring Will Smith, with cumulative sales nationally of $166.5 million (and almost $300 million worldwide), is the top grossing film of the year; "Are We There Yet?" with Ice Cube is the second highest with domestic sales exceeding $80 million.

Sony isn't the only studio with films featuring black actors that opened at No. 1 and performed well: Paramount's "Coach Carter," starring Samuel L. Jackson, has taken in $66.8 million at the box office, and Lions Gate's "Diary of a Mad Black Woman" counts $49.4 million in receipts.

Paul Dergarabedian, president of Exhibitor Relations Company, which tracks box-office numbers, said in a telephone interview Friday that "2005 has been an absolute banner year for films starring African-Americans."

"There seems to be a preponderance of movies doing well that have African-American casts," he added.

One of these is MGM's "Be Cool," starring John Travolta, Uma Thurman and Danny DeVito, directed by F. Gary Gray, who is black, and featuring a strong African-American cast that includes Cedric the Entertainer.

MGM executives say they have made special efforts to cultivate talent in the black film community over the past few years, lining up African-American writers, directors and producers as well as actors for their enormously successful "Barbershop" franchise. The next installment, "Beauty Shop," starring Queen Latifah, opens on Wednesday.

Chris McGurk, vice chairman of MGM, said, "When you add up 'Barbershop,' 'Barbershop 2' and 'Beauty Shop' and the upcoming Showtime TV series, it's the gold standard for the urban entertainment franchises."

Although films featuring black actors have demonstrated unusual strength this quarter, first- quarter box office receipts overall are only 1 percent ahead of last year.

"It would be a fairly solid first quarter," Mr. Dergarabedian said, "if it were compared to anything other than last year," when "The Passion of the Christ" dominated the box office, opening at No. 1 with $83.9 million in sales. "We've been in a slump for the past few weeks compared to last year," he said.

Another film that opened last week, "Miss Congeniality 2," starring Sandra Bullock and Regina King, landed in the No. 2 spot at the box office with $14.5 million in estimated receipts. Rounding out the Top 5 were holdovers: "The Ring 2," which took in an estimated $13.8 million; "Robots" with $13 million; and at No. 5, "The Pacifier" with $8.5 million in sales.
http://www.nytimes.com/2005/03/28/movies/28boxo.html


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Should iPods Carry Health Warnings?
Andrew Orlowski

Competition An Australian head teacher has banned (http://www.theregister.co.uk/ 2005/03/24/australian_school_bans_sadpod/) pupils from bringing their iPods into school, because they encourage social isolation. "People were not tuning into other people because they're tuned into themselves," she told the Sydney Morning Herald.

As we noted this week, all kinds of fascinating social possibilities elude the iPodder. Music is a social activity, but the children are only responding to corporate advertising that encourages solipsism - "to shield ourselves," as Oscar Wilde put it, ironically, "from the sordid perils of actual existence".

But there are other solitary pleasures that are bad for us, and nanny governments rarely miss the opportunity to scald us about them.

The EU demands that cigarette manufacturers display excruciatingly personal warnings.

In Brazil, the consequences of smoking are dramatically illustrated.

So we modestly propose that in the interests of consistency, anti-social technology such as the iPod should carry similar health warnings. Reg reader, artist and music activist Mark Splinter (http://www.splinterproducts.com) has risen to the challenge.

It may seem as if we're picking on Apple, but only because they're first into the breach,. Apple is simply pioneering this ugly trend of de-socializing music (http:// http://www.theregister.co.uk/2005/03...l_bans_sadpod/), and others are following suit. Apple has gradually disabling the sharing functions from its iTunes.

So the warning could be specific –



Or personal -



Harsh. But not entirely without foundation. We cite as evidence iTunes' "Party Shuffle" feature, a computer algorithm that Apple describes as "The ultimate DJ at any gathering." Oh yeah? Try it. Shuffle's juxtapositions are so clumsy that it will have cleared the room by the time it gets to Song #3. Clearly, the billionaire fruitarian must employ something, or someone, to retain his guests. Because it sure ain't his music.

Technology has been accepted when it helps us do what we already like doing. But technology companies are now determined not only betray their own consumers, but they also betray the potential (http://www.theregister.co.uk/2004/04/01/ triple_setback_for_music_giants/) of the technology for which we pay them. As ever, we're only one piece of paper away from a fix (http://www.badpress.net/talks/ inthecity2004/index.html) - a trusted, traditional solution - that keeps everyone happy.

Australian school bans iPod (http://www.theregister.co.uk/2005/03/24/ australian_school_bans_sadpod/)
Apple de-socializes iTunes (http://www.theregister.co.uk/2005/03/15/social_music/)
iTunes store 'hole' open again (http://www.theregister.co.uk/2005/03/23/ pymusique_unblocks_itunes/)

Full story, more illustrations here - http://www.theregister.co.uk/2005/03...alth_warnings/


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In Test of Free Speech, Russian Court Rules Against Art Show
Steven Lee Myers

In a criminal case testing the accepted boundaries of artistic expression in Russia, a court convicted a museum director and a curator today for inciting religious hatred when they organized an exhibition of paintings and sculptures that, to many, ridiculed the Russian Orthodox Church.

The court, however, rejected the prosecutor's appeal to sentence them to prison and instead fined them the equivalent of $3,600 each, ruling that the exhibition was "openly insulting and blasphemous."

The case against the exhibition, entitled "Caution! Religion," has deeply divided Russia's religious and artistic communities ever since it opened briefly in January 2003, provoking alternate charges of censorship and animosity to religious believers. Today's verdict satisfied neither side entirely.

Yuri V. Samodurov, director of the museum, which is named after the Soviet dissident and human-rights advocate Andrei D. Sakharov, said he was relieved by the punishment, though not by the court's ruling. He said he had gone to court with his prescription medicines, assuming that he would immediately be imprisoned.

Still, he said, the court's verdict asserted the state's power to dictate the limits of artistic expression. "In essence," he said in a telephone interview, "the court declared a certain kind of art unacceptable."

Aleksandr V. Chuyev, a member of the lower house of the Russian parliament who played a role in pressing prosecutors to bring criminal charges against the museum, agreed that the verdict would set a precedent, but one he considered healthy.

Mr. Chuyev said the case had established the legal foundation for prosecution of other exhibitions, as well as of pornography, films and other works that offend the faithful. He cited a recent exhibition by an artist collective called Russia 2, which addressed similar themes at the First Moscow Biennale of Contemporary Art last month and also prompted calls for criminal prosecution from Orthodox Church leaders.

"The people and the authorities now understand that religion and the feelings of believers should not be touched on," Mr. Chuyev said in a telephone interview. "They should understand that their rights end where the other person's begin."

The exhibition had been open only four days before six men from an Orthodox church in Moscow ransacked the museum, damaging or destroying many of 45 works on display. Criminal charges against four of the men were dropped, while two others were acquitted last year in a trial that led to the new charges against Mr. Samodurov; the museum's curator, Lyudmila V. Vasilovskaya, who was also convicted and fined on Monday, and one of the artists, Anna Mikhalchuk.

Ms. Mikhalchuk, who exhibits under the name Alchuk, was acquitted today. She said the verdict effectively erased the separation of church and state in Russia. "I am afraid the formulation of the court's ruling will be used as a precedent for the authorities," she said. "It practically crosses out Russia on the list of secular nations."

The works - some of which are still on the museum's Web site at http://www.sakharov-center.ru/exhibi..._ostorojno.htm - addressed spiritual and political aspects of the Orthodox Church, whose influence over politics, if not society generally, has grown since the Soviet Union collapsed.

One sculpture depicted a church made of vodka bottles, a biting allusion to the tax exemption the church received in the 1990's to sell alcohol. A poster by Aleksandr Kosolapov, a Russian-born American artist whose work often satirizes state symbols, depicted Jesus on a Coca-Cola advertisement. "This is my blood," it said in English.

The court refused a request by prosecutors to destroy the artworks, ordering that they be returned to the artists who created them.

The Rev. Aleksandr Shargunov, a priest from the church St. Nikolai in Pyzhi, whose parishioners attacked the exhibition, derided the fines as lenient. He described the exhibition as a deliberate and hostile provocation and called for more stringent laws against desecration of icons and other sacred symbols.

"The prophecies say that once God is insulted, expect trouble," he said. "And this is what happened."
http://www.nytimes.com/2005/03/28/in...nd-russia.html


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Writers Reach $18 Million Settlement With Database Operators
AP

A group of companies that operate electronic databases have agreed to pay freelance writers up to $18 million to settle copyright infringement claims
brought under a class action lawsuit, according to a settlement announced Tuesday.

The settlement covers claims brought against the companies by three groups representing freelance writers: the National Writers Union, the Authors Guild and the American Society of Journalists and Authors.

The plaintiffs claimed that the database operators, including ProQuest Co., Reed Elsevier Group's LexisNexis database, as well as The New York Times and Dow Jones & Co., used articles from freelance writers in databases without the authors' permission.

In a related case, the Supreme Court ruled in favor of freelance writers in a 2001 lawsuit they brought against the Times and other companies.

That case, Tasini et al v. The New York Times, set the stage for the settlement announced Tuesday, said Jonathan Tasini, the plaintiff in that case and also the president emeritus of the National Writers Union.
http://www.siliconvalley.com/mld/sil...l/11259959.htm


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NYT Opines

When David Steals Goliath's Music

The battle over online music piracy is usually presented as David versus Goliath: the poor student in his dorm hunted down by a music conglomerate. It is easy, in that matchup, to side with the student. But when the Supreme Court takes up the issue this week, we hope it considers another party to the dispute: individual creators of music, movies and books, who need to keep getting paid if they are going to keep creating. If their work is suddenly made "free," all of society is likely to suffer.

The court hears arguments tomorrow in a suit by music and movie companies against Grokster, which makes "peer to peer" software that allows Internet users to exchange songs and other computer files. At least 90 percent of the material "shared" on Grokster, and perhaps more, is copyrighted. Grokster gives away the software, but it sells advertising aimed at the millions of people who use it.

Many big entertainment companies are backing the suit, along with marquee-name musicians like the Eagles and the Dixie Chicks. But so are some creative professionals - represented by groups like the Authors Guild and the Professional Photographers of America - for whom even a few thousand dollars in royalties makes a big difference.

The technology community has rallied to Grokster's defense. Its most radical members argue that "information wants to be free" online and disparage the whole idea of intellectual property. A more modest argument, and one Grokster relies on in court, is that if it loses, there will be a chilling effect on technological innovation.

The legal case against Grokster is far from a slam-dunk, and we have been wary of it in the past. The court ruled, in a landmark 1984 case, that Betamax video recorders were legal even though they were used to copy copyrighted material, because they had significant legal uses. It is true that there are legal uses for Grokster - not every file exchanged is copyrighted. But it is notable how much illegal use predominates, and how much its business model relies on theft.

The founders wrote copyright protections into the Constitution because they believed that they were necessary for progress. Movies, music and books require investments of money and time. If their creators cannot make money from them, many will be unwilling or unable to keep producing. Or they may have to finance their work in troubling ways, like by building in product placements or taking money from donors with agendas.

Grokster's supporters are justified in worrying that if the courts are too quick to rein in new technology, innovation can be stifled. They are also right to point out that copyright has sometimes been given too much protection, notably in the Copyright Term Extension Act, which gratuitously added 20 years to existing copyrights. But these concerns do not erase the continuing importance of intellectual property, which is unquestionably under assault.

Both the court and Congress should be sensitive to evolving technologies. But they should not let technology evolve in a way that deprives people who create of the ability to be paid for their work.
http://www.nytimes.com/2005/03/28/op...28mon1.html?hp

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USAToday Opines

Industry Opposes File-Sharing — But It Fought VCRs, Too

In the past two decades, Hollywood has come to love the VCR. This little box, and its modern cousin, the DVD player, account for about half of the revenues of an average film.

But it is a romance born in conflict. Between 1976 and 1984, Hollywood warred with consumer electronics giant Sony Corp., arguing that it and other makers of VCRs should be held liable when people tape movies and television shows. The case went all the way to the Supreme Court, which ruled in Sony's favor by a single vote after Justice Sandra Day O'Connor switched sides. TV viewers have taped at will ever since.

Tuesday, in what is widely seen as a rerun, the movie industry joined forces with music labels to argue before the high court that makers of so-called peer-to-peer network software should be held liable for illegal file-sharing. These systems, made by such companies as Grokster, are used to copy vast amounts of music and, increasingly, movies.

This is illegal, just as taping movies on a VCR is. Copyright law views both as stealing the property of musicians, filmmakers and entertainment companies.

But it would be naïve to think either practice will stop. VCRs, not to mention advances such as TiVo, are accepted, and peer-to-peer software, already widespread, will exist even if the companies that invented it disappear.

Instead, shutting down the peer-to-peer software companies would be as damaging to technological development as shutting down VCRs would have been in 1984. Indeed, several of the justices appeared troubled by this prospect during arguments Tuesday.

Today, it is hard to imagine what the world would have looked like had Sony lost in 1984. Presumably, movie viewers would have watched far fewer films at home during the past 21 years. And makers of other devices capable of copying — including the personal computer and myriad handheld devices — would have had to navigate a legal minefield. Some of these devices might have come to market slower, or not at all.

Similarly, a ruling against Grokster now would raise unsettling questions. Peer-to-peer networks offer significant and still-emerging legitimate uses. Stifling their development in what is sure to be a futile attempt to stop copying would do tremendous damage to innovation on the Internet.

Peer-to-peer networks, which send files from one PC or electronic device to another without the aid of a central server, hold promise for routing Internet phone calls. They may also make the Internet more secure since less information would be copied onto servers, which can be broken into.

More generally, a ruling against Grokster would stifle a whole idea of how the Internet should be shaped. If the music and film industries get their way, the free exchange of information would have to be channeled through bottlenecks and checkpoints.

The film and music industries argue there is a third way: Peer-to-peer networks that automatically filter out copyrighted material. They have yet to perfect these systems. And it is far from clear that they will ever succeed. Even if they do, those people who want free copies will find other methods. The answer to property theft lies first in convincing people that it is wrong, and providing them convenient ways of making honest buys. Online vendors such as Apple's iTunes Music Store show how people can be convinced to buy music even if they could steal it.

This may not be ideal. But it does acknowledge reality. And as happened with the VCR, entertainment companies will adjust.
http://www.usatoday.com/news/opinion...ring-our_x.htm


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Supreme Showdown for P2P's Future
Katie Dean

When Grokster and MGM Studios square off Tuesday in front of the Supreme Court, the lawyers will argue copyright law. But the court's decision will affect how people use entertainment and share information.

The highly anticipated case, MGM Studios v. Grokster, pits all the major movie studios and record labels against Grokster and StreamCast Networks, two operators of file-sharing services.

The entertainment companies petitioned the Supreme Court to take the case after the 9th U.S. Circuit Court of Appeals ruled in August that file-sharing companies are not liable for their users' copyright infringement. The decision upheld a lower-court ruling from April 2003.

The appeals court based its ruling on the 1984 Supreme Court Sony Betamax case. In that case, the court ruled Sony's videotape recorder was a legal device because it was "capable of substantial non-infringing uses," even though it could be used to violate copyrights. The case is credited with leading to a lucrative home- video and DVD market for the entertainment companies. The decision also provided innovators with a benchmark to support the development of new products.

A number of emerging-technology companies are among the Grokster supporters who have filed a friend-of-the- court brief in the case, concerned that a ruling for the entertainment companies could stifle innovation and harm their businesses.

"The large content players ... are trying to shift the enforcement burden to the tools manufacturers," said Scott Rafer, CEO of Feedster, a blog search engine. "That directly impacts my business."

Rafer said Feedster already removes copyright material from its site when it receives Digital Millennium Copyright Act takedown notices from copyright holders.

"If we have to look (at) every piece of inbound stuff that comes in for copyright materials, then most of the internet tools that we use every day would be illegal," Rafer said.

"All these internet technologies share this common mass-copying capability: e-mail, web servers, web browsers, basic hard drives," said Jason Schultz, an attorney with the Electronic Frontier Foundation, which represents StreamCast Networks. "There's no principal distinction between (P2P) and other internet technologies in the way it's designed.

"I think the court will find it very, very difficult -- if not impossible -- to draw any distinctions between the programs in front of them in this case and other internet communication programs," he said.

Also signing on to the emerging technologies' amicus brief are companies like Kaleidescape, which markets a product that permits people to store personal DVDs on a secure home server and access them from any room in the house. And Slim Devices, maker of the Squeezebox that people can use to stream music from a home computer to a stereo, has signed on.

But defenders on the entertainment side say the 9th Circuit was wrong, and the peer-to-peer companies should be held liable for the massive copyright infringement occurring on their networks.

"The principal use of the Betamax was for time shifting, and that time shifting is a fair use," said Fritz Attaway, executive vice president and Washington general counsel for the Motion Picture Association of America. "In the Grokster case, the opposite is true. The overwhelming use of Grokster is for infringing purposes."

William Hart, an attorney who represents the National Academy of Recording Arts & Sciences, best known for its Grammy Awards, said the vast majority of people who use file-sharing sites are coming to "lift a copy of a commercial recording and make a copy for (themselves). If that's really the use to (which) the device is put, and that's really why it's attracting people and that's why it's attracting the advertisers, then that has to be factored in to the analysis of whether the device is really an item that is infringement-neutral."

Still, while some artists oppose file sharing, others believe the technology is an important tool they can use to reach new audiences. About 20 artists, including Heart, Chuck D, DJ Spooky and Brian Eno, filed a separate friend-of-the-court brief in support of the P2P services.

"Copyright law as it's being practiced and lived are two different things," said Paul Miller, also known as DJ Spooky. "Shareware culture is here to stay." He said the entertainment industry has a "neo-medieval mentality. They need to update their (business models)."

The Supreme Court is expected to rule on the case in June. Whatever the outcome, observers think the issue may end up in Congress.

In Congress' last session, entertainment companies fought mightily to pass the Inducing Infringement of Copyrights Act, which would have held technology companies accountable for copyright infringement committed by people who use their products. Technology and consumer groups were staunchly opposed to the legislation, and the bill ultimately failed to pass in the Senate Judiciary Committee.
http://www.wired.com/news/digiwood/0,1412,67010,00.html


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Moguls v. millions

Supreme Court Takes Up The Issue Of File Sharing
Linda Campbell

MGM vs. Grokster isn't a monster movie but a monster of a legal fight, with rhetoric invoking political freedom and the Framers' intent, technological creativity and dissemination of ideas.

But make no mistake: This case is about money.

Who's making it, who's not making enough of it and who should be making more of it.

When best-selling musical performers can sell 500,000, 800,000, a million CDs in a few days - even at $15 a pop - there are multi-bucks at stake.

When "The Ring Two", an inferior sequel to a peculiarly intriguing horror flick, can take in $36million in its first weekend, there are fortunes at stake.

When low-budget indie film "Napoleon Dynamite" can make $44million in DVD release in just a week, well, you get the picture.

Arguments before the Supreme Court on Tuesday will focus on application of the Betamax rule, secondary liability for copyright infringement and possibly the intricacies of peer-to-peer file-sharing technology.

But it boils down to this: Will companies that facilitate free downloading of copyrighted movies, music, sports highlights, books, photos and other materials over the Internet be able to continue distributing their software - or will free-riders in cyberspace and their enablers finally have to pay up?

It's notable that the legal precedent at issue, the 1984 Supreme Court ruling in Sony Corp. of America v. Universal City Studios, also known as the Betamax case, represents a telling example of the entertainment industry proving wildly incorrect in its doomsday predictions about the impact of technical innovation on artists, film studios, movie theaters and other copyright holders.

Video recorders didn't doom cinema, after all.

Still, the entertainment behemoths insist that they're losing multi-hundreds of millions of dollars because Internet users illegally share their products for free online. The studios, record companies and songwriters want Grokster and StreamCast Networks, companies that make the exchanges possible, to be stopped.

In the Betamax case, the Supreme Court said the maker of a product that can be used to copy copyrighted material without paying for it can't be held liable for wrongdoing if the product is capable of substantial legal uses.

The entertainment industry argues that 90 percent of the file-sharing facilitated by Grokster and StreamCast's software is illegal, but the companies say that figure is exaggerated.

The software distributors say they don't control what users share, so the industry should go after individual copyright infringers; the industry says the companies should have to police what they've spawned.

The studios and record companies claim that the companies insidiously promote a lawless culture in cyberspace and "inflict massive and irreparable harm because of the viral distribution they make possible."

Grokster and StreamCast say their software provides economic benefits for creators and consumers and enhances political freedom: "It is harder to suppress a book if 50 million homes, not only central libraries, have copies."

The collection of friend-of-the-court briefs - 23 supporting the entertainment industry, 25 siding with the software firms, seven for neither side - includes opinions from law professors and economists.

Intel Corp., AT&T, SBC and Verizon support the companies; the Bush administration, state attorneys general and professional baseball, football and basketball take the flip side.

And don't miss the most curious interest group alignment.

Would an entertainment industry win stifle innovation, as the American Conservative Union and National Taxpayers Union argue - or would it protect personal property rights, as Americans for Tax Reform says?

Does unfettered file-sharing threaten to "spawn a proliferation of anonymous, decentralized, unfiltered and untraceable peer-to-peer networks that facilitate crimes against children" through child pornography and predatory behavior, as argued by an alliance of groups including the Christian Coalition, Concerned Women for America, the National Center for Missing and Exploited Children and the National Fraternal Order of Police?

Or is cracking down on Grokster and StreamCast "akin to enjoining Johann Gutenberg because of some unauthorized reproductions of the Bible," as claimed by the Eagle Forum Education & Legal Defense Fund?

There's something about circumventing the inflated CD prices and inflated movie ticket prices and inflated rental fees we chumps pay that just looks like stealing. Will the justices know it when they see it?

Still, the ongoing debate over online downloading already has stimulated market changes and invention. When the recording industry used the courts to shut down the P2P service Napster several years ago, fee-based operations sprang up, purchasing licenses to distribute copyrighted works, then charging users for access.

The Financial Times reported just this week that "international digital music sales grew sharply last year as consumers embraced legal downloading of tracks, and the number of legitimate music sites grew fourfold."

Maybe supply-and-demand always will outsmart the movie and music moguls.
http://www.tallahassee.com/mld/democ...n/11231526.htm


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Who's Liable For Actions Of People Who Share?
Jefferson Graham

LOS ANGELES — Singer-songwriter Janis Ian has lived through vinyl albums, cassette tapes, eight-track cartridges, compact discs and now, digitized music that is swapped illicitly or bought on the Internet.

The Internet, including the unauthorized song-swapping services at the heart of a fight heading to the Supreme Court on Tuesday, helps sales of her CDs, she says.

"I've seen it happen time and time again," says Ian, who self-produces and releases her albums at www.janisian.com. "Someone downloads one of my old songs on Morpheus or Grokster, then they come to my site and buy my new CD."

A raft of musicians on major record labels disagree. Artists such as The Eagles and Sheryl Crow want to see the Supreme Court shut down Internet song-swap providers Grokster and StreamCast Networks-owned Morpheus. Tuesday, in the biggest tech vs. entertainment industry showdown in more than 20 years, the high court will tackle whether software makers are liable for the actions of people who use their programs.

No matter how the court rules, Ian says, file-sharing isn't going away: "It's way too big."

Consider that Apple Computer has scored big selling authorized downloads at its iTunes Music Store — about 300 million songs since 2003. Just last month, more than 1.4 billion songs were available for swapping with online programs such as Kazaa and eDonkey, says Internet measurement firm BigChampagne. About 8.5 million people were logged into peer-to-peer (P2P) networks at any one time.

That's a huge jump from the 6.8 million who were logged into P2P networks in June 2003, when the Recording Industry Association of America trade group announced it would begin suing online song swappers for copyright infringement.

The RIAA says the lawsuits made people more aware of the ethics of taking music for free. RIAA has sued more than 9,000 swappers for "uploading" — sharing collections online for others to download. Uploaders are easy to catch: Their Internet computer address is posted within share programs such as Grokster and Morpheus.

Now, many digital music fans are zapping songs to friends in one-on-one instant-message programs, e-mails or by finding ways to transfer them from digital music players such as Apple's iPod. The iPod is built to prevent that. But savvy PC users are finding ways to work around the system, accessing many of the new programs — iPodRip, iPod Access, iPod Liberator — available online.

Passionate about free music

Researchers for the Pew Internet & American Life Project interviewed 1,400 users about downloading habits in January. It found that while 43% got music through traditional Internet methods, 35% used workarounds to nab free music through instant messages, e-mail or the iPod.

BigChampagne CEO Eric Garland says the study results show the passion young people have for free music. "This is a generation that's grown up with free online music, and they're not about to give it up," he says. "This generation wants what it wants, when they want it, on demand."

Younger music fans haven't moved en masse to paid alternatives such as iTunes, the new, legitimate Napster and Yahoo's Musicmatch, he says. That's because they're harder to use than the free file-sharing programs. Songs are copy-protected and can't play on all digital music players without a workaround. A song bought at Musicmatch won't transfer to the iPod easily; ditto for an iTunes song and players by Rio, Creative Technology and Dell.

The most popular file-sharing program now is eDonkey, followed by BitTorrent, Garland says. Both take file-sharing to a new level of speed. Instead of just connecting computers to share media, as Morpheus and Grokster do, they tap multiple PCs simultaneously. They acquire pieces, or bits of files, and reassemble them. The process enables faster downloads, especially for huge files, such as movies.

Hollywood studios have joined the labels in suing Grokster and Morpheus and are also suing the growing numbers of downloaders using programs such as eDonkey and BitTorrent to freely acquire films and TV shows.

While Hollywood isn't hurting, the music industry is still recovering from four years of declining sales. CD shipments rose 5.3% last year. Still, the industry is selling fewer CDs than it once did. About 153.3 million were shipped to retailers last year, down from 194.9 million in 1999.

Son of Napster

From his Northeastern University dorm room, then-freshman Shawn Fanning rocked the industry in 1999 when he introduced the first swap network, Napster. It was designed to make finding online music easier until the RIAA shut it down in 2001.

A slew of son-of-Napsters followed, including Morpheus, Grokster, Kazaa and Audio Galaxy. And so did more RIAA lawsuits. But while some sites stopped file-trading, Grokster and Morpheus fought back and won.

In late 2003, Grokster and Morpheus pulled off the first of two surprise court rulings in their favor. Judges said Grokster and Morpheus weren't liable for copyright infringement — their users were. The decision was upheld by the 9th U.S. Circuit Court of Appeals last August.

Those decisions paved the way for the RIAA to petition the Supreme Court. It also spurred a host of Web sites offering subscriptions to "free and 100% legal MP3s," using the so-called Grokster decision to support their claim.

The entertainment industry argues that developers of software used for copyright infringement should be held liable. The opposition — which includes technologists and Internet providers SBC and Verizon — says to do so would set a dangerous precedent that would turn back the clock. They say it would make owners of many popular products today, including the iPod and the TiVo digital TV recorder, liable for copyright infringement as well.

The industry has been down a similar road before. In 1984, the entertainment industry sued Sony over its Betamax video recorder. Hollywood was concerned that excessive home taping of movies would eat into profit.

But the Supreme Court, in a 5-4 ruling, said that as long as a device had "substantial, non-infringing uses" — as the VCR did — it was legal. That paved the way for a host of new gadgets, including the iPod, CD burner, scanner, personal digital assistant and BlackBerry e-mail device.

The Electronic Frontier Foundation, an advocacy group in San Francisco, has been building support for file-sharers by pointing to past products it says wouldn't have survived had the Sony ruling gone the other way. These include the Xerox copier, e-mail and Internet blogs.

"File-sharing will be fine no matter how this case turns out," says foundation lawyer Fred von Lohmann, who represents Morpheus. "If they rule against Grokster and Morpheus, more companies will set up offshore."
http://www.usatoday.com/tech/news/20...ability_x.htm#


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Historical Epic Is Focus of Copyright Dispute
Sharon Waxman

A legal conflict is brewing over one of the summer's biggest potential blockbuster movies, the Crusades epic "Kingdom of Heaven," with a prominent author accusing the film's director, Ridley Scott, and the studio releasing the film, 20th Century Fox, of stealing his research for their screenplay.

In a letter this month, a lawyer for James Reston Jr., author of "Warriors of God: Richard the Lionheart and Saladin in the Third Crusade," accused the studio of violating American and international copyright law by using "events, characters, scenes, descriptions and character tensions" in the film that were "strikingly similar" to his narrative history.

A lawyer for the studio responded last week with a five-page rebuttal that said the creators of "Kingdom of Heaven," to be released on May 6, had never read Mr. Reston's book. The letter added: "The works are not substantially similar. In fact they are completely dissimilar, other than having in common some elements that are historically authentic."

But Mr. Reston's lawyer, Timothy DeBaets, said his client would decide this week whether to pursue a lawsuit, since he was convinced that his painstaking work over three years - including research in original sources in the Library of Congress and several Arab countries - had been lifted by the screenwriter William Monahan, who was hired by Mr. Scott.

"The key thing in the letter is, they say no one read it," Mr. DeBaets said. "We don't believe that, and we have evidence to the contrary. I think they read Jim's book and took material from there, and after the fact it's easy to run around and find stuff, since it's history."

Indeed, the fact that the film and the book are both rooted in historical events may make Mr. Reston's claim difficult to prove in a legal area where claimants regularly accuse studios of stealing their ideas and only rarely prevail. Michael J. Plonsker, a lawyer with the Los Angeles firm Alschuler Grossman Stein & Kahan who litigates such cases, said winning them was difficult but not impossible.

"History is not copyrightable," Mr. Plonsker said. "But if the manner in which you tell about a historical event is a particular expression of character or sequence of events, that is copyrightable. If you can show that the defendant had access and that the works are substantially similar, which is the legal standard, then you can win."

Mr. Reston insists that his history of the Third Crusade, when Richard the Lionheart tried to wrest control of Jerusalem from the Muslim conqueror Saladin, fleshed out many obscure details from the period and brought to life minor historical characters who turn up in "Kingdom of Heaven." The book, published a few months before 9/ 11, has sold about 100,000 copies worldwide.

Among those characters, Mr. Reston said, is Balian of Ibelin, the central figure of the Scott film. Played by Orlando Bloom, Balian is depicted in the film as a knight who maneuvers among the political intrigues of his Christian allies while trying to protect Jerusalem from Muslim attackers seeking to regain the control they lost in a previous Crusade.

In Mr. Reston's book Balian is described as nothing less than a hero: "A tall man of noble bearing, this blue-blood had for years reigned his fief well from his castle in Nablus as his father had done before him." According to the book, Balian found himself in the besieged city of Jerusalem after securing permission from the enemy leader, Saladin, to rescue his wife; once he was there, the locals begged him to stay and defend the city.

But Fox's letter said Balian had featured prominently in original sources and secondary works, including "History of the Crusades," a three-volume work from the 1950's by Sir Steven Runciman.

"The reality is that your client's book concentrates upon Richard the Lionheart and Saladin, and Balian is not a significant part of the text," the letter said. In Mr. Reston's book, Balian is mentioned on only about 10 pages.

Mr. Reston, however, believes he has a smoking gun. In December 2001 the producer Mike Medavoy, who had bought an option on "Warriors of God," sent the book to Mr. Scott with a letter suggesting that they collaborate, after speaking to the director's lawyer, Skip Brittenham. "There are lots of great characters in this story - think 'Lawrence of Arabia' and 'A Man for All Seasons,' " Mr. Medavoy wrote.

He said an assistant to Mr. Scott had called him to decline collaboration. "What was said at the time was, he had a Crusade project of his own," Mr. Medavoy said.

An announcement in Variety three months later confirmed that Mr. Scott indeed had his own Crusades project, which would focus on "the religious Crusades of the 11th century," to be written by Mr. Monahan. In a statement, Mr. Monahan said that he was "astounded by these false, unfounded allegations" and that he had been a student of the Crusades since he was 14.

Mr. Reston, the son of the New York Times editor and columnist James Reston, said he thought the matter was closed until he saw a Times article in August 2004 that revealed the film was about the Third Crusade, in the 12th century - the period covered in his book - and not the First Crusade.

Asked about the matter recently, Mr. Scott, who is still finishing the film in England, said he had not read Mr. Reston's book, nor any book about the Crusades. "Categorically, I don't read anything, for just this reason," he said, referring to the dispute. "I draw the fences up."

He said that Mr. Monahan had relied on original documents and several Muslim authors, and that chronologically "we were between the Second and Third Crusades" from the start.

Mr. Reston remained unconvinced. "I suppose there is a legal argument," he said, "that he had it in mind all along, that they knew of Balian of Ibelin, that he got all this from somewhere else, reading 1950's Cambridge, England, stodgy old histories. But I don't think so."
http://www.nytimes.com/2005/03/29/movies/29king.html


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How Venture Capital Thwarts Innovation

The tech bubble was a boon to start-ups, but it was a bust when it came to truly original ideas.

Venture capital lights fires under scrappy and ambitious start-ups. It can help bring great new ideas to market, some of which go on to disrupt entrenched industries, spawn entirely new ones, and perhaps even change the world. In theory, venture-capital-backed start-ups are the best engines of innovation.

But are they in fact? With venture capital funding an order of magnitude greater today than it was in the early 1990s, now is an excellent time to ask: has all that funding during the past decade brought more innovation or less?

In an article in the April issue of IEEE Spectrum, Bart Stuck and Michael Weingarten explain how venture capital funding works, and proffer four reasons why it produces so little genuine innovation. They are managing directors of Signal Lake Management LLC, an early-stage telecom venture-capital fund based in Westport, Conn., and Boston.

As venture capitalists themselves, the authors reserved judgment until they could accumulate and analyze the data from what has been the most frenzied decade in technology history. They examined 1303 electronic high-tech initial public offerings for a 10-year period ending in 2002, and sorted out those that were VC-funded and compared them to those that were not, rating them on a scale of 1 to 5.

What they found shocked them. Overall, the level of innovation during that decade was surprisingly low. Even more dismaying, it did not correlate well with VC funding: the level of innovation actually dropped sharply after 1996, even as venture funding was going through the roof.
http://www.newswise.com/articles/view/510630/?sc=swtn


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Crackdown Starts on Online Pornography
Moon Gwang-lip

The prosecution has launched a massive crackdown on Web search engines for posting obscene video content on their Web sites.

The Seoul Central District Prosecutors' Office said yesterday they indicted without detention three managers of three leading portal sites for their online services of lewd content.

Twenty other operators of adult-only Internet sites were also indicted on charges of posting video files revealing sexual intercourse on their Websites.

It also requested a court impose 7 million won to 10 million won ($7,000-$10,000) on operators of three other Web portals and 12 other online pornography sites.

The office also asked other district prosecutors to investigate 50 adult Web sites operating out of provincial areas.

The prosecution plans to conduct an additional investigation on 100 people, including employees of local mobile operators, on suspicion of distributing sex videos or photographs via the Internet and cell phones.

``We don't expect the crackdown on online sex content will lead to their annihilation. But we are doing this to prevent more people, especially teenagers, from getting a distorted view of sex through the influence of the obscene content,'' a prosecutor said.

According to the prosecution, the indicted sex content providers earned up to 150 million won ($150,000) a month from membership fees of their Websites.

The membership is given to adults in those Websites, but most of them purposefully leave loopholes in their adult confirmation process to allow visitors to their Web site under 18 to peek into the content with fake identification.

The law-enforcement agency says the content was vulgar enough to cause shame to viewers, even though the genitals of actors and actresses were not seen.

But added most of them were found to have passed the review of the Korea Media Rating Board, the agency in charge of screening all video content in the nation.

For this, the prosecution plans to suggest the relevant ministries and government agencies beef up its supervision of online services.
http://times.hankooki.com/lpage/nati...9251511980.htm


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Court Orders Blogger To Stop Posting Patient Data

The woman had already promised not to do so
Linda Rosencrance

An Alameda County Superior Court judge yesterday ordered Elisa Cooper, a former Web coordinator at Kaiser Permanente, to stop posting and distributing the confidential information of 140 of its patients over the Internet (see story).

Although Cooper, who called herself the "diva of disgruntled," told the court she would keep the promise she made last week not to post the information, officials for the health maintenance organization in Oakland, Calif., sought the injunction anyway.

"We got a preliminary injunction in court," said Kaiser spokesman Matthew Schiffgens. "Both sides had the opportunity to portray why the injunction should or should not be served, and Cooper said, 'Why do we need an injunction?' She promised not to do it, but now if she does it, she will be in contempt of court and subject to court sanctions."

Schiffgens said he doesn't know what the sanctions are because Kaiser hasn't seen the injunction yet. "But this gives us remedy and gives our members an additional level of security to know the court takes this matter seriously," he said.

Kaiser learned of Cooper's actions in January from the U.S. Office of Civil Rights -- the enforcement arm under the Health Insurance Portability and Accountability Act. Cooper said she filed a complaint against Kaiser with the OCR after coming across the information on a public Web site. She also linked to the site from her weblog, and when Kaiser had the site taken down, she posted copies of the information on the Internet.

Schiffgens blamed Cooper for posting the information to a public Web site, saying the information was available only on a nonpublic corporate internet.

An internal investigation into the incident, he said, indicates that Kaiser inadvertently posted patient information -- including names, addresses, telephone numbers and, in some cases, lab test results for the 140 patients -- on an intranet site for IT employees that was not secured. The information was included in schematic diagrams related to an application that generated letters for the lab reporting systems.

"It's safe to say ... that we were the ones who inadvertently posted patient information to our unsecured, unpublished intranet site," Schiffgens said. "It would not have been discoverable by a Google search as [Cooper] indicates. Someone posted it.

"It was copied by, we believe, Miss Cooper and placed on a [public] site that could be found, and she used information that she gathered through her terms of employment to make that available," he said.

Schiffgens acknowledged that some other Kaiser IT employee could have made the information public. "I can't say definitely she was the one who posted it," he said.

Last Friday, the California Department of Managed Health Care issued a cease-and-desist letter to Cooper for unauthorized use of patient information. She has 15 days from that date to request a hearing on the matter.

In an e-mail to Computerworld, Cooper said she has not yet responded to that letter.
http://www.computerworld.com/securit...100615,00.html


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Lawmaker aims to outlaw hunting, killing animals online

Shoot To Kill Real Animals Using Your Computer Mouse For $300

A lot of people fire fake guns playing video games. But now there's a way to use your computer to fire an actual gun and kill live animals.
Linda Eggert

If you've never heard about this it's hard to believe, but the Texas Web site, Live-Shot.com aims to collect money from hunters who hope to kill something big with a tiny mouse.

Think you need a weapon to go hunting? Think again. Inside a shed in Texas is a robotic 22-caliber rifle system people all over the world are tapping, literally. The Web site Live-Shot.com lets computer users log on and start firing a remote rifle by clicking a mouse. Right now, there are only targets to shoot, but starting next month you can hunt live animals. The first live hunt is set for April 9. For $300, you'll get control of a remote camera and rifle and be able to fire real-time bullets at non-native Texas animals, such as baraby, big horn sheep, antelope and wild hogs, on Lockwood's 200-acre fenced ranch. Many Wisconsin hunters are outraged. Rep. Scott Gunderson, R-Waterford, is trying to outlaw Internet hunting. "When I first heard it, I just thought it was crazy. I mean, I just said, 'What are we doing allowing people to sit at their desk maybe 1,000 miles a way and you know, move your mouse to you know to shoot a deer?'"

Gunderson, an avid hunter, said Internet hunting violates the ethics of fair chase. He's drafted a bill to effectively ban it in Wisconsin. "It would say that you have to be in physical possession of a firearm to be able to shoot an animal," Gunderson said. Lockwood said he understands that people think his system is a little wacky, but he insists his Web site is useful -- for new hunters and for persons with disabilities, such as Dale Hagberg, 38, who is paralyzed.

Hagberg said he hopes to use his mouth to become only the second live shot user to kill a feral hog. Lockwood vows to stay open as long as it's legal. But that may not be long. Maine has outlawed Internet hunting, and Gunderson predicts Texas will do the same probably by May. Regardless of what other states do, Gunderson wants Wisconsin to ban Web sites like this. There will be a public hearing next Wednesday.
http://www.channel3000.com/technolog...59/detail.html


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ILN News Letter

Japanese Study Finds P2P Has No Impact On Sales

A Keio Universtity Economics professor recently released research that indicates that the use of "Winny", the most popular P2P application in Japan, has no effect on CD sales. In fact, the study found that P2P helps to promote music sales and allows for new music discovery.

English translation at http://www.iir.hit-u.ac.jp/file/WP05-08tanaka.pdf

Japanese report at http://internet.watch.impress.co.jp/...3/08/6754.html

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Microsoft To Rename Media Player-Less Windows
Ina Fried

Microsoft will rename a product it was ordered by the European Commission to offer--a version of Windows with its media player removed.

The product, which Microsoft had wanted to be called Windows XP Reduced Media Edition, will now be known as either Windows XP Home Edition N or Windows XP Professional Edition N.

Earlier this year, Microsoft said it was working with the commission on naming options after antitrust regulators balked at the "reduced media" name. Microsoft said the name was selected by European regulators over nine other alternatives proposed by the software maker.

"We have some misgivings about the chosen name as we fear it may cause confusion," Microsoft spokeswoman Stacy Drake said on Monday. "We will adopt the commission's name in order to move forward and accelerate the pace of the implementation process."

Among other options Microsoft suggested were Windows XP Not Incorporating Windows Media Player, Windows XP/N and Windows XP/B.

In addition to challenging the name of the new Windows version, the commission has expressed concern about the degree to which Microsoft has complied with its order requiring the company to license Windows communications protocols to rivals.
http://news.com.com/Microsoft+to+ren...3-5643117.html


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Stolen UC Berkeley Laptop Exposes Personal Data Of Nearly 100,000
AP

A thief has stolen a computer laptop containing personal information about nearly 100,000 University of California, Berkeley alumni, graduate students and past applicants, continuing a recent outbreak of security breakdowns that has illustrated society's growing vulnerability to identity theft.

University officials announced the March 11 theft on Monday under a state law requiring that consumers be notified whenever their Social Security numbers or other sensitive information has been breached.

Notifying all of the 98,369 people affected by the UC Berkeley laptop theft could prove difficult because some of the students received their doctorate degrees nearly 30 years ago, university officials said.

The laptop -- stolen from a restricted area of a campus office -- contained the Social Security numbers of UC Berkeley students who received their doctorates from 1976 through 1999, graduate students enrolled at the university between fall 1989 and fall 2003 and graduate school applicants between fall 2001 and spring 2004. Some graduate students in other years also were affected.

The stolen computer files also included the birth dates and addresses of about one-third of the affected people.

University police suspect the thief was more interested in swiping a computer than people's identities, UC Berkeley spokeswoman Maria Felde said. She said there been no evidence so far that the stolen information has been used for identify theft. Scam artists often use the data to borrow money by posing as someone else.

The UC Berkeley theft follows several other high profile instances in which businesses and colleges have lost control of personal information that they kept in computer databases.

Recent breaches have occurred at ChoicePoint Inc., a consumer data firm duped into distributing personal information about 145,000 people; Lexis-Nexis, where computer hackers obtained access to the personal information of 32,000 people; and Chico State University, where a computer hacking job exposed 59,000 people to potential identity theft.
http://www.siliconvalley.com/mld/sil...y/11252045.htm


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HP Sues Firms That Refill Ink Cartridges
Stephen Shankland

Hewlett-Packard, much of whose profit comes from selling printer supplies, has sued two companies that sell refilled ink cartridges, but it stopped short of trying to block the refill business altogether.

On Friday, HP sued InkCycle in U.S. District Court for the western district of Wisconsin, alleging that the company's ink violates three HP patents. And on Monday, HP sued RhinoTek in U.S. District Court for the northern district of California, accusing RhinoTek of false advertising by using packaging that indicates its refilled HP printer cartridges are new.

Refilling ink cartridges is "a giant problem, not just for HP, but for everybody in the printing business," said Gary Peterson, an analyst with GAP Intelligence. "I would say at least 10 to 15 percent of all consumables purchases are refills. That's a huge chunk of profit taken away from HP and all the other printer companies."

But HP said the suits aren't a change in HP's policy that customers have a right to refill legally purchased cartridges or buy refilled cartridges. "We still believe it's the customer's choice," said spokeswoman Monica Sarkar, adding that HP believes its products have better quality and reliability.

The Palo Alto, Calif.-based printer powerhouse requests that InkCycle stop--in HP's opinion--infringing the patents and pay damages and HP legal fees. Brad Roderick, vice president of marketing for InkCycle, said Monday that a settlement in that suit is expected soon.

"We've been in direct communication with HP and expect a very near-term full resolution," Roderick said. He declined to comment on terms or whether InkCycle will continue to sell its products, but he said, "We're a company that has always been respectful of intellectual-property rights."

The ramifications of the InkCycle case could spread beyond the company if it's using ink that other refillers use as well. Roderick wouldn't comment on the origin of the company's ink.

In the Rhinotek case, HP asserts that the company's "packaging and promotional materials are calculated to give consumers the impression that defendants' cartridges are new." HP wants a requirement that Rhinotek use the words "used" and "refilled" prominently on its packaging of refilled HP ink cartridges. HP also wants all Rhinotek profits from the time of the alleged deceptive advertisements.

Rhinotek didn't immediately respond for this story.

HP has been less aggressive in legal attacks against printer supply companies than one rival, Lexmark. HP lashed out against Lexmark's attempt to use the Digital Millennium Copyright Act, or DMCA, to stop ink refillers.

"We think it is stretching it," HP printing unit exec Pradeep Jotwani said in a 2003 interview. "The DMCA was put in place (to protect) things like movies, music and software applications."

"We consciously make sure that our cartridges are reusable and refillable," Jotwani said at the time. The company does put some limits on the practice, such as adding software that makes some of its cartridges unusable after a certain expiration date--either four-and-a-half years after its manufacture or two-and-a-half years after its installation.

In the case against InkCycle, HP claimed the company has violated three patents: Nos. 5,165,968; 5,428,383 and 5,488,402. The first concerns fast-drying ink that works well on plain paper, and the second two concern methods for preventing color from bleeding.

HP said in its suit against Rhinotek that it holds 9,000 patents related to imaging and printing, 4,000 of them for consumable supplies such as ink and cartridges.
http://news.com.com/HP+sues+firms+th...3-5643687.html


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Surveillance

RFID Cards Get Spin Treatment
Mark Baard

Conspiracy theorists and civil libertarians, fear not. The U.S. government will not use radio-frequency identification tags in the passports it issues to millions of Americans in the coming years.

Instead, the government will use "contactless chips."

The distinction is part of an effort by the Department of Homeland Security and one of its RFID suppliers, Philips Semiconductors, to brand RFID tags in identification documents as "proximity chips," "contactless chips" or "contactless integrated circuits" -- anything but "RFID."

The Homeland Security Department is playing word games to dodge the privacy debate raging over RFID tags, which will eventually replace bar-code labels on consumer goods, said privacy rights advocates this week.

An RFID tag is a microchip attached to an antenna, which transmits unique information to a reader device that can be anywhere from a few inches to several feet away. The technology, with its many names ("contactless chips" has been around for some time), is used in security access cards, E-ZPass automatic toll-paying devices and ski-lift tickets.

Computer scientists and data-encryption experts, the editors of an RFID industry journal -- even the makers of the contactless chips themselves -- all agree that the Homeland Security Department is using RFID technology.

But the Homeland Security Department is very carefully avoiding use of the term "RFID." The department, along with Philips, is also backing a trade group that is branding ID documents with RFID tags as "contactless smartcards."

"We'd prefer," said Joseph Broghamer, Homeland Security's director of authentication technologies, "that the terms 'RFID,' or even 'RF,' not be used at all (when referring to the RFID-tagged smartcards). Let's get 'RF' out of it altogether."

The Homeland Security Department this spring will begin issuing RFID-tagged employee ID cards (which include fingerprint records) to tens of thousands of its employees. Homeland Security's employee ID card has "contactless" technology to speed workers' access to secure areas, said Broghamer. He also wants to replace conventional reader devices, because their metal contacts break down after repeated use.

The department is also evaluating technology pitches from several RFID tag manufacturers, including Philips, for an RFID-tagged passport containing biometric data. The government's plan will earn billions of dollars for the RFID suppliers while helping security officials track individuals more effectively by detecting their ID documents' radio signals in airport terminals, or wherever reader devices are present.

The Homeland Security Department and Philips said they worry that the public will confuse the RFID tags in ID documents with those used by retailers, such as Wal-Mart, to track consumer goods. Contactless chips, said Broghamer, are more sophisticated than retail RFID tags, because they can carry more information and can better protect sensitive personal information.

But there is another problem with the "RFID" name: Many people associate the term with radio chips "that blab personal information indiscriminately" to any reader device, said Lee Tien, senior staff attorney at the Electronic Frontier Foundation.

Privacy rights groups such as the EFF, the American Civil Liberties Union and CASPIAN have for years argued that RFID tags on consumer goods could be used to spy on individuals.

That is why Homeland Security is engaging in doublespeak, to dupe Americans into accepting RFID tags on their passports, said Barry Steinhardt, director of the ACLU's Technology and Liberty Program.

"It's a frightening, Orwellian use of the language," said Steinhardt, referring to the "contactless" branding effort. Steinhardt called the RFID tags the Homeland Security Department is using, which have faster processors and more storage capacity than retail tags, "RFID on steroids."

Government agents will use reader devices to track individuals wherever they use their RFID-tagged identification documents, Steinhardt and Tien said.

"They can call it a contactless chip," said Tien, "but it is still RFID. And it shares virtually all of the same vulnerabilities."

Identity thieves will be able to lift an RFID-tagged passport holder's personally identifiable information with reader devices that can be purchased for less than $500, said Steinhardt.

Terrorists could also track down and kidnap Americans oversees by secretly reading their chipped passports.

"Let's say you are in Beirut, carrying a passport with an RFID tag," said Steinhardt. "A terrorist with a portable reader device could easily tell who is the American (in a public space)."

University of California at Berkeley assistant professor David Wagner, who researches computer security and cryptography, has reviewed engineering studies of the type of RFID tag that will be used in passports. Wagner called Steinhardt's terrorist scenario "absolutely conceivable."

"And," said Wagner, "unlike an ID with a bar code or magnetic strip, you'd never know your card has been read."

Homeland Security's Broghamer insisted that the contactless chips for ID documents are vastly different from RFID tags used in retail supply chains, because contactless chips must be held very close to a reader device to be activated and to transmit their data.

RFID manufacturers are typically making radio tags for ID documents that comply with ISO/IEC 14443, the contactless chip industry technology standard. This standard limits transmission ranges to a distance of about 4 inches. Other RFID tags can be read at distances up to 30 feet, making them easier targets for identity thieves trying to capture their data, said Broghamer.

Broghamer would not admit to something engineers testing ISO/IEC 14443-compliant chips have demonstrated, however: that electronic eavesdroppers up to 30 feet away can capture data (including biometric records) while it is being sent by the chips to an authorized reader device.

ISO/IEC 14443-compliant chips can also be read directly over much longer distances by specially built devices, according to a Tel Aviv University study (.pdf).

Broghamer seemed eager to stay on-message about the Homeland Security Department's name for its RFID technology, despite its apparent vulnerabilities.

"I nearly fell out of my chair," Broghamer said, when he read a Wired News report that the Homeland Security Department's employee ID card will include an RFID tag. "I never used the term 'RFID,'" said Broghamer, describing a presentation he made at a technology conference last month. "I only used 'contactless chip' or 'proximity chip' to describe it."

A Philips sales executive, however, testifying last summer to the House Committee on Energy and Commerce, called contactless smartcards "RFID systems with advanced computing power, storage and strong encryption accelerators, offering advanced services with enhanced security and privacy protection."

The Homeland Security Department's employee ID card will use state-of-the-art authentication and encryption systems to protect the department and its employees from identity thieves and spies with unauthorized RFID tag readers, said Broghamer.

But the chips in passports will not have any of those digital security features, said Homeland Security Department spokeswoman Kimberly Weissman. "We want it to be compatible," she said, "with as many reader devices used by other countries as possible."
http://www.wired.com/news/privacy/0,1848,67025,00.html


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Maybe they’ll just destroy each other

Companies in Radio Tag Business Broaden Legal Dispute
Barnaby J. Feder

A skirmish over patents between suppliers of gear that uses radio signals instead of bar codes to identify commercial goods expanded yesterday into a much broader legal battle.

Intermec Technologies, a subsidiary of Unova, said it had filed claims that Symbol Technologies was infringing on six major Intermec patents covering technologies used in wireless communications products that Symbol sells. Intermec's complaint is a counterclaim to a lawsuit that Symbol filed this month in a federal court in Delaware, accusing Intermec of infringing on basic Symbol patents in the wireless networking field popularly known as Wi-Fi.

But most investment analysts are focusing on the dispute between the companies over their patents in radio tagging, a technology that Wal-Mart, the Defense Department and other major buyers of commercial goods are promoting as a far more efficient way than bar codes to track products in their huge supply chains.

The dispute over the scope of the patents is the first such lawsuit since the use of radio frequency identification, or RFID, began to expand rapidly with the backing of Wal-Mart and major consumer products manufacturers.

Analysts and pioneers in the radio-tagging industry greeted it as an unmistakable if unpleasant indicator that the technology was maturing into a major business opportunity.

By some estimates there are more than 3,000 RFID patents, with some dating back to the 1940's. Intermec's claims are based in part on a core group of patents it bought from I.B.M.

Analysts said the litigation with Symbol might eventually go a long way toward determining who, if anyone, will wring substantial royalties out of the technology.

So far, there is no sign that the uncertainty about future royalties is slowing down investment in RFID.

"This is more about who gets the pie than when it gets baked," said Peter Lieb, general counsel for Symbol. But he added that overall investment could slow if Intermec gets the 5 percent royalty on every RFID tag it is seeking from Symbol, and if other patent holders start demanding similarly large royalties.

Symbol, a leader in bar code systems, invested heavily in RFID last July when it paid $230 million to acquire Matrics, a maker of RFID tags and readers.

That acquisition came just weeks after Intermec sued Matrics, a start-up that had balked at licensing the rights to use Intermec RFID patents. Negotiations resumed when Symbol acquired Matrics but reached an impasse when Symbol and Intermec, which buys laser scanning systems from Symbol, could not agree on cross-licensing proposals.

When Symbol responded with its own patent infringement lawsuit this month, it also terminated its agreement to supply the laser devices. Intermec said yesterday that Symbol's move freed it to file its broader claims against Symbol.

"Symbol walked out on negotiations two weeks ago," said Thomas O. Miller, president of Intermec. "If they want to walk back, we'll talk to them."
http://www.nytimes.com/2005/03/25/te...gy/24tags.html


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Co. Develops System to Track PDF Documents
AP

A Canadian company has developed a system for businesses to track PDF documents in much the same way they can keep tabs on Web visits.

Before, businesses could count the number of times documents were downloaded, but they had no way of knowing whether the files were passed around or even opened.

With the service from Remote Approach, companies can insert a small programming script into documents using the popular Portable Document Format from Adobe Systems Inc.

The script sends a message over the Internet with such details as the file name, the computer's Internet address and any unique identifier the company might have included.

Remote Approach is also working on a feature that would let a company block a document from being read if there's no Internet connection. Another feature in the works would allow tracking on a page-by-page basis.

Privacy and security experts say the PDF tracker doesn't appear worse than what's already done elsewhere, but independent consultant Richard Forno worries about any requirements to be constantly online.

``What if that link is disrupted or goes down?'' Forno asked. ``What if I'm on an airplane?''
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Engineers Develop Undetectable Means of Measuring Speed, Motion

Research aimed at teaching robots to “see” may soon make it possible to bag speeding motorists, track enemy planes, and automatically safeguard the nation’s borders and resources without any chance of detection.

Research aimed at teaching robots to “see” may soon make it possible to bag speeding motorists, track enemy planes, and automatically safeguard the
nation’s borders and resources without any chance of detection.

A University of Florida engineering researcher is developing a method to determine speed and other characteristics of a moving object using computer algorithms, or instructions, that rely on data from standard visual cameras rather than radar or lasers. The technique has the potential to render current detection systems in so-called “fuzz busters” and some military technologies useless. That’s because, instead of painting a target with radar waves or laser beams, a camera merely needs to capture an image or series of images from the target.

“If it can view the object moving, that’s all it needs. The computer figures out everything else,” said Warren Dixon, a UF assistant professor of mechanical and aerospace engineering. “We’re trying to use both regular and infrared cameras, so night or adverse weather conditions don’t present a problem.”

Dixon’s most recent co-authored article on the research appears in the March issue of the journal Automatica. Related articles, also co-authored by Dixon, are scheduled to appear shortly in the journal Transactions on Robotics and Automation.

Achieving computerized speed and motion detection requires overcoming several challenges. One is figuring out how to get a computer to understand the surrounding environment by interpreting images recorded by a video or still camera.

“The information from a camera is just a flat-screen, two-dimensional image,” Dixon said. “The challenge is figuring out the mathematics of how do you take two images and understand how things are moving in our three-dimensional world.”

People and animals can perceive depth because their brains combine each eye’s snapshots. Two cameras can also achieve stereo vision, but computers can make sense of it only if they know the exact position of each camera. That allows them to triangulate the target and learn its position relative to the camera. Part of Dixon’s achievement is developing the underlying mathematics and software to circumvent this requirement.

“With my work, you don’t need to know that specific location information,” he said. “You could have one camera taking an image from an airplane and another mounted on a car taking a picture of the same image -- and not know how the airplane and car are related to each other -- and through this new mathematics you can understand how they’re related to the target.”

The technology has law enforcement and military applications.

Police in moving or parked squad cars could use the computer-camera systems much as they do radar and laser guns to track and ticket suspected speeders. The target would have to be within the line of sight, with the range varying according to the power of the lenses in the camera. Dixon said the UF engineers have not built such a system, but “any camera with the right software could be used,” and a prototype could be built within a year.

Soldiers, meanwhile, could mount the cameras on airborne drones or truck convoys and set them to look for and automatically report potentially hostile objects moving toward the convoys – again, without any fear of giving away the convoys’ locations.

Robotic drones or remote camera-based monitoring posts outfitted with the technology also could be used for applications ranging from private security in warehouses and shopping centers to continuous remote monitoring of borders to protecting water supply reservoirs.

In addition to the robotic applications, the technique is being refined for a project led by Andy Kurdila, a UF professor of mechanical and aerospace engineering, to provide vision systems for tiny airborne surveillance drones called micro air vehicles.

The goal of that five-year project, which is jointly funded by a $5 million grant from Eglin Air Force Base in Florida and by the Air Force Office of Scientific Research and involves several UF faculty members, is to give the drones the ability to fly without the assistance of a remote human operator. Instead, they would base navigational decisions solely on what onboard cameras view in the terrain as they fly, mimicking a human pilot.

Dixon also has been also been working with Thomas Burks, a UF assistant professor of agricultural engineering, to apply the technology to robotic harvesting in orange groves.
http://www.newswise.com/articles/view/510744/?sc=swtn


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The State

FBI investigating incidents on subdomains hosted by flag.blackened.net.

OK folks, here's the real deal as far as I can share it legally at the moment. Consider it as a press release if you wish and feel free to distribute it for whatever reason you deem necessary.

I'm under court order not to speak about specifics and have my attorney trying to find out what the maximum penalty for disclosure really is. I hate to have to keep my mouth shut in areas where the Gestapo is involved, but I also have to weigh things against the overall security of flag and it's subdomains and also the wellbeing of my family.

I have been ordered to submit IP info on two separate incidents having to do with subdomains hosted on flag. Both of these are in regard to claimed or threatened responsibility for acts of propaganda by the deed. Both incidents involve topics which are completely out of line for consideration here at flag and really I can only view them in two ways. Either people are simply ignorant about the murderous history of the FBI, or, as is my belief in one case, they are trying to make flag vulnerable to government intrusion.

At this point let me say, in all honesty and conviction, that if I end up dead by strange means - suicide, overdose, drunk driving accident (I never, ever, ever drink and drive), "accidental" gunshot to the back of the head while sleeping ala Fred Hampton, car jacking, or anything else reasonably suspicious, contact the FBI in Chico, California for more details.

I have called numerous friends nationwide, anarchists and otherwise whose opinions I respect and who I know will be honest and forthwith in their opinions to ask them how I should proceed. The unanimous consensus is that I comply with the wishes of the FBI and provide the IP addresses responsible. The only point of discussion, really, has been whether or not I should reveal the specific information in violation of two court orders.

Really, I am not left with much of a choice. Here are my two choices as I see them:

1. Do not comply with the wishes of the FBI. This will most likely lead to the seizure of flag and a compromise of all the sites and information online. It will probably also lead to me being imprisoned, I would guess. I personally do not fear this, but I am the sole support for my wife and infant daughter. There can be no doubt we would probably lose our home as a result.

2. Comply with the wishes of the FBI, provide the IP addresses, and count on the fact that I will catch a lot of heat and hatred from my comrades in the anarchist movement worldwide.

Though it pains me to comply with the State in any manner, I have to choose option #2. The people who have foolishly compromised us all will shoulder the burden for their selfish actions. Frankly folks, they know better - we all know better.

I was first contacted by the Oakland FBI. Many of you know their history. We are talking COINTELPRO for real - not a perceived or mythical fear. They are proven murderers and automatons for the state who will blindly follow any order to kill or disrupt without question. Read the history of their disinformation campaign against the panthers if you don't believe me. The panther comic book which they completed and distributed, the fake letters between Huey and Eldridge, the fires of hatred and murder they faked and inflamed between the panthers and the US or "united slaves" which led to the murder of Bunchy Carter and John Higgins in L.A., the list goes on and on.

But, the real point is that I feel like a coward and traitor to my comrades, even in the face of what is essentially a coerced decision. I'm the last one who will criticize or disagree with any of you who want to deride me. I'm also aware that this will probably cause quite a few of you to lose faith in me, flag, and it's subdomains. This can't be avoided and it's something I weighed into my decision. I post this mainly to inform you all and give you opportunity to make your own decisions as to whether I've handled this correctly and whether you wish to use flag or it's subdomains in the future. If you don't trust me, I understand, believe me.

It is by far the most agonizing decision I've been faced with in relation to my anarchist opinions.

This is why we do not discuss certain things as if they are a legitimate part of anarchism. Resist the extra y-chromosome influenced urge to sound more hardcore than the guy next to you. Nobody is impressed and the powers that be are sitting on the edges of their seats waiting for an excuse to shut down flag. Freedom of speech does not exist, don't try to test it. They will come bust down your door - for real - point a gun to your head and pull the trigger if you refuse to comply.

Believe it.

Your admin,

Dave

http://flag.blackened.net/forums/vie...er=asc&start=0


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High Court Appeal For Accused Pirate
Simon Hayes

AN Australian man alleged to have headed a massive software piracy ring will appeal to the High Court over an extradition order that would see him face criminal charges in the US.

Hew Raymond Griffiths, 42, of Berkely Vale on the NSW Central Coast, faces extradition to the state of Virginia following a lengthy extradition process that reached as far as the Federal Court.

Mr Griffiths was indicted by a US federal grand jury in 2003 over allegations he headed a "highly structured criminal organisation" that had pirated countless popular software packages.

The US indictment alleges Mr Griffiths was the leader of the infamous 'Drink or Die' internet piracy ring that taunted US authorities for several years.

The indictment claims Drink or Die pirated software to the value of $50 million.

The ring was shut down in a series of police raids in 2001, with members convicted in the US, the UK, Norway and Sweden.

Legal Aid Commission solicitor Antony Townsden said Mr Griffiths - who was ruled "eligible for surrender" to the US by the Federal Court earlier this month - had sought special leave to appeal to the High Court.

It is expected to take about two months before the High Court will hear the appeal.

If he is extradited, Mr Griffiths - who arrived in Australia from the UK as a child and never took out citizenship - could face eventual deportation to Britain.

Earlier this month two Britons were convicted of conspiracy to defraud in an Old Bailey trial. They will be sentenced in May.
http://australianit.news.com.au/arti...-15319,00.html


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Out-of-State Telecommuter Ruled Liable For N.Y. Taxes
AP

A man who lives out of state while working by computer must pay New York tax on his full income, the state's highest court ruled Tuesday in a case
that could have wide implications for the growing practice of telecommuting.

The Court of Appeals said computer programmer Thomas Huckaby, who lives in Nashville, Tenn., owed New York income tax for his full salary, not just the time he spent working at his employer's New York offices.

Huckaby, whose home state doesn't have an income tax, paid New York state tax on about 25 percent of his income over two years for the time he spent working there for the National Organization of Industrial Trade Unions.

The court upheld a state tax department ruling that all his income should be taxed. That amounts to $4,387 plus interest. However, the ruling could lead to much greater income for the state as it is applied to the growing field of telecommuting.

The U.S. Census Bureau's latest statistics show that nearly 4.2 million people worked at home in 2000, up from 3.4 million in 1990.

``The way the workforce is evolving and that companies are evolving, you are going to see more people working for companies from different states even across the country,'' said Bob Smith of the International Telework Association and Council based in Silver Spring, Md.

Smith said the issue of which state gets their income tax is a growing debate.

``It can be a damper on telework,'' he said. ``What's important in our country overall is to make sure laws keep up with technology developments and the needs of both the employee and the employer, because there are benefits for both.''

In February, President Bush proposed several new tax changes, including one to encourage telecommuting.

Huckaby's attorney, Peter Faber, said the case is the first of its kind involving the income tax liability of a telecommuter. He said he may appeal to the U.S. Supreme Court because most states base income tax liability on the residence of the taxpayer.

``To say a person's taxability depends on where his employer is wrong,'' Faber said.

But Marc Violette, spokesman for state Assistant Solicitor General Julie Mereson, said: ``New York provides the job, New York provides the professional opportunity, and New York should be able to tax that income, even if the employee for his own convenience was working outside of New York state.''

The issue split the court, and the majority acknowledged the decision could discourage telecommuting.

``New York has the right to tax 100 percent of a nonresident employee's income derived from New York sources,'' according to the 4-3 decision by Court of Appeals. The court relied on a fairness rule called the ``convenience of the employer'' that says a worker's income is taxable if he chooses to live outside the state, as opposed to if he or she was transferred there.

In dissent, Judge Robert Smith argued that the basis of the majority's decision that all income is taxable is ``that the commissioner says it is. ... The majority cites no authority at all, and offers no persuasive reason, in support of this new interpretation.''
http://www.siliconvalley.com/mld/sil...l/11259955.htm

[JackSpratts]

Camping Out for the Grokster Case
Katie Dean

Forget Star Wars premieres. A seat at the MGM Studios v. Grokster Supreme Court hearing Tuesday morning was the hottest ticket in town.

Gray skies, with intermittent rain and cold, didn't deter a group of staunch file-sharing supporters -- as well as a number of hired line-standers -- from queuing up starting at around 2:30 p.m. Monday to secure a seat in court for the landmark copyright case.

"I feel very strongly (about) the case," said Nick Disabato, a graduate student in information science who drove up from Chapel Hill, North Carolina, and was first in line. "I share music with my friends constantly and that's how I get a lot of my recommendations. Ever since I started downloading MP3s, I've purchased three times more music. I haven't purchased as many dud albums."

Some observers consider this file-sharing case, which will determine whether Grokster and StreamCast Networks should be liable for the copyright infringement of their users, to be the most important copyright case since 1984's Sony Corp. of America v. Universal City Studios. Then, the court ruled 5-4 that Sony's Betamax videotape recorder was a legal device because it was capable of "substantial non-infringing uses." The ruling paved the way for the development of the thriving home video and DVD market.

Many standing at the foot of the Supreme Court building hoped the justices would preserve that landmark decision. Supporters passed out "Save Betamax" shirts courtesy of the Consumer Electronics Association. Old Betamax tapes from the 1980s were handed out as inspirational souvenirs.

Those hoping to be in the gallery came prepared. A few brought comfy folding chairs with canopy tops to block out the rain. Others had sleeping bags, hats, wool socks, gloves, tarps, a tent, umbrellas and blankets. One brought a video camera to film the experience for a documentary on copyright reform. Some chose to stash their court clothes a few blocks away in a hotel, or planned to have friends deliver a respectable change of attire.

For entertainment, the file-sharing faithful brought laptops and books. Disabato also brought an iPod shuffle loaded with controversial music from Dangermouse, a DJ known for causing a kerfuffle when he illegally mixed the Beatles' White Album with Jay Z's The Black Album. He also included a bootleg mix called "Piracy Funds Terrorism," by MIA and Diplo, on his iPod. He brought some small speakers to broadcast the music to others in line but wasn't sure if the security guards around the court would let him use them.

As the night wore on, Seth Schoen, staff technologist for the Electronic Frontier Foundation, ordered five pizzas to be delivered to the Supreme Court. Others took turns going for coffee.

Peer-to-peer software engineer Francis Crick (the grandson of Francis Crick, one of the discoverers of the double-helix structure of DNA) made the trip from Los Angeles. He said if the entertainment companies succeed in shutting down peer-to-peer networks, the case will impair the development of new technologies in the United States.

He said his opinion on the case is "very pro-American" for that reason.

"I feel split down the middle," said Beatrice Murch, who made the trip across the country from San Francisco with her husband. She said some of her relatives work in the movie industry and she understands "where the content providers are coming from."

At the same time, she said, "these guys are trying to squash technological innovation."

"I definitely feel that peer-to-peer systems have legitimate uses. Copyright law is out of whack and needs to be changed," Murch said.

By 9 p.m. Monday, there were about 40 people in line to fill the estimated 50 available seats in court. Other space is reserved for the press and members of the Supreme Court bar.

Hired line-standers were paid between $200 and $500 for the night to hold spaces for various people with an interest in the outcome of the case, according to one line-stander who declined to give his name. People can be sent to the back of the line if they are caught swapping places with a hired line-stander at the last minute. Those who pay the personal placeholders usually show up an hour or two before the court opens.

But many of those lined up Monday were willing to wait themselves, even in the cold and rain.

"It's a once-in-a-lifetime experience," Murch said. "I'm not going to melt."
http://www.wired.com/news/digiwood/0,1412,67061,00.html


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Brouhaha Over Kazaa Means Nada
Patrick Gray

Millions of music lovers will soon know if the Kazaa file-sharing software will survive the recording industry's legal assault on the technology in Australia's federal court.

The case against Sharman Networks, maker of the Kazaa peer-to-peer software, is winding down. A decision in the case, which first made headlines in February last year when the music industry executed its controversial civil raids on the Sydney offices of the Australian software maker, is expected in May.

Reporters, law students and observers filled a Sydney courtroom this week to hear the lawyers' final oral submissions to Justice Murray Wilcox. Closing arguments wrapped up Wednesday, with the predictable rhetoric emanating from both camps. The music industry said Kazaa is a "system" that encourages piracy on an unprecedented scale; Sharman Networks says it can't be held responsible for the illegal actions of its users, and that its software has legitimate, non-infringing uses.

Meanwhile, outside the courtroom, peer-to-peer technology continues to thrive. Web, e-mail and instant-messaging applications are the three pillars of the internet, and it's not far-fetched to imagine peer-to-peer technology becoming the fourth. Peer-to-peer has matured and is poised to jump the divide that separates the early-adopting geek from the mainstream internet user, a feat achieved by instant messaging in just a few years.

The explosion in the popularity of BitTorrent and other peer-to-peer software has proved the technology is here to stay. Unless the music industry is completely naive, it knows this much.

It also surely knows that in the grand scheme of things, Kazaa is unimportant software, and Australia is an unimportant jurisdiction. A ruling of interest to cyberlaw boffins and technologists won't force the U.S. attorney general to call an emergency meeting. Regardless of the outcome in the Sharman trial, little will change on U.S. shores, and even less will change on a global scale. It's almost certain the losing side will appeal, and the whole thing will drag out for another year.

Bigger issues are at play. Technology is inextricably linked to progress, and progress is seldom reversed. In the end, the people decide; hot showers will stay hot, computers will continue to sit where typewriters did, cars will be driven by engines and not horses, and peer-to-peer networks will operate as long as people want to use them.

While it's easy to think the music industry has ignored the internet to its peril, it knows a great deal more about the technology landscape, and how to manipulate the public's perception of technology, than many net-savvy observers will admit.

It may surprise some readers in the United States to know that most uses of an iPod in Australia are prohibited. Making a copy of a copyright sound recording in Australia, even between formats, is completely and utterly illegal. Want to put your CD collection on your iPod? Sorry. Too bad.

Considering the iPod was on sale in Australia before legal music-download sites were launched, it's fair to assume that most iPod users in the country were breaking the law. It may also be possible for the music industry to argue, in Australia's courts, that Apple Computer authorized and even encouraged piracy through its marketing and advertising campaigns.

But it's not Apple in the federal court, it's Sharman; the music business knows how to pick its battles. It would look silly attacking the iPod, which has become a cultural object, but its attack against a commercial peer-to-peer operator was a predictable move.

The music industry attacked Sharman, insiders say, because the software maker was earning money as a direct result of the unauthorized distribution of the industry's product, and was doing it in a very public and noisy manner. Whether that's a legal point that can be proved, it's a logical point that stands up to the most cursory analysis. No MP3s on the Kazaa network means a greatly reduced number of users, which means less advertising revenue.

Public perception is important to the recording industry. Could it be seen to be doing nothing while its songs were freely and illegally traded with impunity?

Most who take an interest in the music industry's war on piracy will remember the Recording Industry Association of America's PR disaster when, in 2003, it filed suit against a 12-year-old girl, a Kazaa user, for copyright infringement. The organization was slammed by the press and slated a heartless, lumbering menace. After all, it had sued poor, sweet little Brianna, who was among 261 the RIAA attacked in a sweeping anti-piracy campaign that targeted peer-to-peer users.

Those who were disgusted by the action took comfort in the idea that the RIAA had at least lost some face by wringing thousands of dollars in recompense from a child.

The music industry, both inside and outside the courtroom, seems more than happy to play the bad guy. Scaring the wits out of peer-to-peer users by suing a 12-year-old girl isn't a PR disaster, it's a masterstroke. It's heavy- handed, bordering on brutal, but from the music industry's perspective a sensational story like that is just what the doctor ordered. What were the consequences? The detractors were disgusted. Then they went out and bought CDs.

In modern society, few consumers boycott. If the music industry started selling CDs in baby-seal fur covers, there'd still be buyers. But Brianna's story would have made some people think twice before they downloaded the latest inane pop single, and that's powerful PR: "Could I be the next one sued?"

Technology has delivered a cruel blow to the music industry. Peer-to-peer has given thousands of consumers a taste of what it's like to have an enormous music collection. The effect on a large chunk of the collective consciousness was akin to putting the engine in the horse carriage or adding hot water to the shower. They have thousands of music tracks. They don't want to go back to CDs.

Until the music industry tweaks its business models to suit the peer-to-peer user -- say, 100 tracks a month for a reasonable subscription fee -- it's never going to stamp out internet piracy. The practice will continue and so will the court cases. The irony is that recording cartels continue to contribute to the phenomenon by allowing a market vacuum to stay in place.

The well-paid lawyers, the only guaranteed winners in the Sharman action, are finished arguing before Wilcox. But it's worth remembering that technology has a habit of winning in the end, and an adverse finding against a bit player in a backwater jurisdiction won't kill peer-to-peer. If the music industry wants to survive, it needs to think outside the box and stay out of the courtroom.
http://www.wired.com/news/digiwood/0,1412,67006,00.html


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Court Ruling May Not Hinder Music Theft
AP

Even if entertainment companies win their Supreme Court battle for new authority to protect movies and music on the Internet, lawyers say it won't be easy to shut down the decentralized computer links used to trade songs and films.

However, entertainment executives say expanded grounds for lawsuits are needed to discourage inventors from profiting from cool gadgets of the future that could be used for stealing.

``This sort of thing is out there now and you can't go -- and I may be wrong about this -- but I don't you think you can go into people's homes and pull (software) out, or that anybody's likely to do that,'' said Theodore Olsen, the former U.S. solicitor general now working for entertainment companies. ``But it would be an important statement; an important point here is to stop the worst of the activity, stop the people who are making money.''

Richard Taranto, the lawyer for software-maker Grokster Ltd., told the Supreme Court on Tuesday that modern file-sharing tools like Grokster's are ``autonomous communications products,'' underscoring the evolution of such software since the entertainment industry's landmark victory in July 2001 shutting down the centralized Napster online service.

Taranto said the case presently facing the Supreme Court is ``critically different'' from the Napster legal fight. He argued that since Grokster isn't directly involved in the activities of its customers illegally swapping music and movies online, it can't be sued for violating copyrights.

Justices appeared divided on important issues during courtroom arguments. In a lively hourlong debate, the court openly worried that new lawsuits could stunt the next iPod. Justices also wondered aloud whether lawsuits against manufacturers might have discouraged past inventions like copying machines, videocassette recorders and MP3 music players -- which consumers can use to make illegal copies of documents, movies and songs.

Justice Antonin Scalia said a ruling for entertainment companies could mean that if ``I'm a new inventor, I'm going to get sued right away.'' Scalia, 69, referred to the company as ``Grokster, whatever this outfit is called.''

The chief executive for Sony BMG Music Entertainment, Andrew Lack, said Grokster ``doesn't pass the smell test with a lot of the justices.'' Lack was in the courtroom Tuesday.

``There were some concerns that they don't want to see technology or innovation stifled,'' Lack said. ``Grokster is wrong from a variety of perspectives.''

The entertainment industry's lawyer, Donald Verrilli Jr., maintained that, unlike Grokster's customers, most iPod buyers are honest consumers who pay for their digital music, effectively shielding Apple Computer from such copyright lawsuits.

But Justice David H. Souter said even iPod users will steal music if they believe they can. Souter questioned why the entertainment industry wants to sue Grokster but under the same legal theory wouldn't also sue Apple so aggressively the iPod's developer would ``lose his shirt.''

``I know perfectly well if I can get music on my iPod without paying that's what I'm going to do,'' said Souter.

Yet the court appeared deeply troubled by Grokster's efforts to encourage rampant Internet piracy and profit from it. Verrilli called its software ``a gigantic engine of infringement'' thieves use to steal 2.6 billion songs, movies and other digital files each month.

Justice Anthony M. Kennedy pressed Grokster's lawyer on whether profits from trafficking in stolen property can rightfully be used to help finance a young technology business. ``That seems wrong to me,'' Kennedy said.

Regardless of the outcome, it still won't be legal to download copyrighted materials over the Internet without permission, though tens of millions of computer users do it each day. A ruling won't affect thousands of copyright lawsuits filed against Internet users caught sharing music and movies online.

Besides the lawsuits, the entertainment industry has deliberately polluted file-sharing networks with poor-quality copies of songs and falsely named files, among other tactics, to frustrate Internet thieves.
http://hosted.ap.org/dynamic/stories...MPLATE=DEFAULT


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'Write a Mac Virus Competition' Halted For Legal Reasons
Dan Ilett

Plans to hold a $25,000 competition to write a virus designed to infect the Apple OS X have been scrapped after the company behind the scheme backed down over "legal problems" and complaints from Mac customers.

Apple accessories company DVForge announced the competition after security company Symantec claimed OS X was likely to come under increasing attack as Apple's market share in the computer market grew.

DVForge said it had so much faith in the security of OS X it did not believe a virus writer could disable the operating system.

"The contest was only cancelled because I was convinced on Saturday morning that there was some minor risk of federal law violation in continuing," the head of DVForge, Jack Campbell, wrote on the company's website. "I have been stunned by Mac users writing to us who seem to prefer to live in fear and uncertainty, with their heads down, feeling 'lucky' for the moment, rather than to actually know the truth."

Before it was pulled, virus writers were invited to to infect PowerMacs connected to the internet and running the latest version of OS X, apparently without antivirus or firewall security.

The plan has been heavily criticised as a publicity stunt but the company has rejected these claims, saying it was better to settle the matter of the security of Apple's flagship operating system once and for all.

"Interestingly, this was actually a serious PR risk for us," wrote Campbell. "It is always safest to avoid controversy and to simply sit quietly on the sidelines and let the issues of the day drift by. The issue of the world at large constantly misstating the Mac OS X virus susceptibility was something we decided as a company to try and do something about."

Despite multiple attempts to contact Apple, the company did not respond for comment.
http://software.silicon.com/malware/...9129049,00.htm


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Symantec Details Flaws In Its Antivirus Software
Matt Hines

Symantec has reported glitches in its antivirus software that could allow hackers to launch denial-of-service attacks on computers running the applications.

In a notice posted on its Web site this week, Symantec detailed two similar vulnerabilities found in its Norton AntiVirus, which is sold on its own or bundled in Norton Internet Security and Norton System Works. The flaws, which could lead to computers crashing or slowing severely if attacked, are limited to versions of the software released for 2004 and 2005.

The Information-Technology Promotion Agency of Japan, a government-affiliated tech watchdog group, identified the first instance of the problem in the AutoProtect feature of the Norton AntiVirus consumer product, Symantec said. AutoProtect is used to scan files for viruses, Trojan attacks and worms.

The flaw essentially causes Symantec's software to crash when it is asked to inspect a file specifically designed to exploit the problem, which Symantec said could be submitted either remotely from outside a system or internally by someone with physical access to a computer.

The second flaw, discovered by the Japan Computer Emergency Response team, can be used to launch denial-of-service attacks by scanning specific file modifications using the SmartScan feature in Norton AntiVirus. Symantec said that any malicious use of that vulnerability would specifically require someone with authorized access to a computer to exploit the issue. SmartScan is designed to scour for viruses hidden in file extensions, as well as in executable and document files.

No attacks related to either problem have been reported so far, according to Symantec. The company also said in its warning that both vulnerabilities are "low impact" threats to its customers.

Cupertino, Calif.-based Symantec said it has informed its customers of the problems and has issued patches to correct the flaws, including sending out an automated fix to subscribers to its Automatic LiveUpdate service. The company recommended that people who have not already applied the patches should do so immediately in order to protect against potential attacks.
http://news.com.com/Symantec+details...3-5646871.html


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India Surveys Aftermath Of New Patent Law
Padma Tata

India is facing the aftermath of a new patent law that bans making cheaper copies of new patented drugs. What exactly can be patented remains to be determined, and there are unallayed fears of a drug price hike that could seriously damage healthcare and battle against HIV in the developing world.

India's 1970 patent law recognised only patents on processes, not products. This enabled Indian firms to use alternative methods to produce cheap "generic" copies of drugs that were patented in other countries. Multinational companies that spend billions of dollars in research and development complain these "copycat" drugs cause annual losses of over $500 million.

But after joining the World Trade Organization in 1995, India had to change its patent laws by 1 January 2005 to meet its commitments under the WTO's agreement on Trade Related Intellectual Property Rights (TRIPS). The new bill, finally passed by the Indian Parliament on 23 March, now recognises both product and process patents.

The government argues this will boost Indian pharmaceutical research, attract foreign collaboration and help the nation emerge as a force in global pharmaceuticals.

Research rising

There are already "winds of change in India", notes Raghunath Mashelkar, director general of the Council of Scientific and Industrial Research in India. There has been a 400% increase in private research and development spending on drugs and pharmaceuticals in the four years to 2005, he told New Scientist.

The number of pharmaceutical patents filed by Indians under the Patent Cooperation Treaty (PCT) - a global system for simplified multiple filing of patent applications - has also increased, from 43 in 1999 to 291 in 2003.

But some private and public sector scientists warn of a scarcity of trained pharmacologists, few successes in identifying new candidate drugs and a lack of high-quality animal testing facilities.

The Indian pharmaceutical industry's reaction has been mixed. Big Indian firms welcomed the changes, but small and medium companies have criticised the grey areas.

These include ambiguous definitions of what can be patented and a weak framework for opposing grants before they are granted. Mashelkar says an expert committee will now look into the exact criteria for inventiveness and patenting.

Stringency and flexibility

The new law attempted to find a balance between stringency - desired by multinational drug firms - and flexibility - demanded by public health campaigners. The latter argue the bill is stricter than required and ignores the flexibilities under TRIPS intended to safeguard public health in emergencies. Indian firms will now have to wait for three years before they can apply for compulsory licensing of newly patented drugs to meet an emergency need.

There are also over 8000 product patent applications pending in India, which could now be granted. If so, Indian firms currently making generic versions of these drugs would have to pay royalties.

International humanitarian agencies fear this will lead to a price monopoly, increasing charges. Of particular concern are anti-HIV drugs. Médecins Sans Frontiéres (MSF) says half of the 700,000 HIV-positive people who currently receive anti-retroviral drugs in the developing world depend on Indian generics. It cautions the new bill may "drastically restrict, perhaps even prevent" the supply to developing countries.

Indian public health experts fear the changes will worsen access to medicines in India itself. Government data shows the number of Indians unable to afford medical treatment rose sharply from 10% to 25% in the decade up to 1999. "More poor people will stop going for treatment," says Ritu Priya, at the Centre of Social Medicine and Community Health at Delhi's Jawaharlal Nehru University.
http://www.newscientist.com/article.ns?id=dn7205


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Blockbuster to Settle 'No Late Fees' Claims

Blockbuster Inc., the top U.S. movie renter, has agreed to pay $630,000 to settle claims from 47 states that said its "No Late Fees" rental policy deceived customers, the Pennsylvania attorney general's office said on Tuesday.

Under the agreement, Blockbuster will also be required to make full refunds to customers who claim that they were misled and were charged restocking fees or the full price of movies rented if they were returned seven days after the due date, a statement from Attorney General Tom Corbett's office said.

It said the agreement, which also includes the District of Columbia, would dramatically alter the way Blockbuster advertises its "No Late Fees" policy in the future.

New Jersey last month had filed a lawsuit that accused Blockbuster of failing to disclose key terms of its new rental policy.

Under the "No Late Fees" policy, Blockbuster said customers would have a one-week grace period after the rental due date. If a movie or game were returned after the grace period, the customer would be charged for the purchase of the item.

If the item were returned within 30 days, the customer would receive an account credit but would be charged a restocking fee of $1.25.

Full details of the settlement were scheduled to be released later on Tuesday, Corbett's office added in a brief news release. The Pennsylvania attorney general's office was one of six leading state agencies to negotiate the agreement with Blockbuster.

A Blockbuster spokesman did not immediately return calls seeking comment.

Blockbuster -- which recently abandoned a bitter takeover battle for No. 2 U.S. movie renter Hollywood Entertainment Corp. -- unveiled the "No Late Fees" policy in December in an attempt to reinvigorate its business amid growing competition from online renters to discount retailers including Wal-Mart Stores Inc.
http://www.reuters.com/newsArticle.j...toryID=8026034


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Intel, Bertelsmann Team Up for Online Media Venture

The world's largest chipmaker, Intel, and German media conglomerate Bertelsmann plan to cooperate in developing technology for downloading and sharing films, music clips and games from the Internet.

Intel will make chips for PCs, notebooks and mobile phones that are compatible with a new online media file-sharing platform from Bertelsmann's services and technology arm arvato, capitalising on the huge and growing public appetite for accessing music and other media online.

"One of the major environmental changes in the electronics industry is this convergence -- a combination of computing, communications and content," Intel Chief Executive Craig Barrett told Reuters in an interview on Wednesday.

"This thing we call the digital home really is the combination of all three of those things."

The deal represents a surprising alliance between two of the largest players in the media and technology industries, which have clashed in recent years because consumers have used cutting-edge products to copy billions of movies and songs without paying for them.

On Tuesday, the U.S. Supreme Court considered whether "peer-to-peer" software makers should be held liable for the millions of copyrighted files their users download each day.

Through a trade group, Bertelsmann's music company has pressed to shut down software makers like Grokster and Morpheus, while Intel has sided with other technology companies that fear anti-piracy efforts could deter the next generation of innovative products like Apple's iPod music player.

But Bertlesmann also has shown more flexibility and daring than its peers.

The company struck an alliance with the Napster file-trading network in 2000 at a time when its own record company, BMG, was seeking to shut it down, and said last November that it was in talks with Grokster to develop a legitimate peer-to-peer service.

Digital Home

Intel has for decades been closely and almost exclusively associated with the personal computer, but it is now beginning to expand beyond the slow-growing PC market into the $200 billion consumer electronics industry.

It is a founding member of the Digital Living Network Alliance, an industry association that promotes open standards to make personal computers, consumer electronics and mobile devices in the home compatible with each other.

But so far, the chipmaker's efforts to get inside television sets and cellphones have been stymied by tough competition.

Bertelsmann's arvato unit announced the launch last week of a new Internet platform, which it plans to sell to mobile phone operators, Internet providers and TV stations.

The software platform, called GNAB, will allow makers and distributors of music, games, movies and ringtones to offer legal downloads of large files to clients under their own brands.

"Our emphasis with the digital home is obviously to do the architecture, the user interface, the platform," Barrett said.

Bertelsmann also owns half of the second-largest record company in the world, Sony BMG, with Japan's Sony Corp.
http://www.washingtonpost.com/wp-dyn...2005Mar30.html


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Supreme Court Weighs Piracy, Technology Innovation In 'Grokster' Case

The powerful interests of the entertainment and high-tech industries clashed at the US Supreme Court in a case pitting the freedom to innovate against the battle against digital piracy.

The powerful interests of the entertainment and high-tech industries clashed at the US Supreme Court in a case pitting the freedom to innovate against the battle against digital piracy.

The nine justices heard oral arguments in a case which seeks to determine if companies that distribute peer-to- peer (P2P) software can be held liable for copyright infringement if the networks are used for illegal copying of songs, movies and software.

Legal analysts said the case, likely to be decided in June, has broader implications for the battle against rampant online piracy and for whether new technologies can be introduced without fear of litigation.

Activists on both sides of the issue demonstrated outside the court. Some carried signs reading "Hands off my iPod." Others, highlighting the losses for artists, carried banners reading "Feed a Musician."

Donald Verrilli, arguing for plaintiffs including the movie and music industries, said the companies being sued for the file-sharing systems built their businesses on the theft of copyrighted material.

Verrilli said that allowing the defendants, Grokster and Streamcast Networks, to continue unchecked, "gives them a perpetual free pass" to facilitate illegal swapping of music and films.

"The recording industry has lost 25 percent of its revenue since the onslaught of this," Verrilli told the court, saying that the distributors of peer-to-peer software "are draining all the money out of the system."

But Richard Taranto, arguing for the defendants and a broad coalition of technology firms and others, said the court should reaffirm a standard set in a 1984 case involving the Sony Betamax video recorder, when it upheld the use of technology that could be used both legally and illegally.

"Any alternative would be worse," Taranto said, adding that if the Betamax legal standard were overturned, "virtually every business (involved in new technology) would be subject to litigation."

Taranto added that while peer-to-peer networks may be used for illegal copies, this applies to other technology, "including the personal computer, the modem, the Internet service provider. Every piece in this chain is essential."

Verrilli cited studies showing that 90 percent of the use of Grokster and Streamcast were for illegal copies, but said it is "not a numerical question," but a question of what the companies set out to do.

But Justice Stephen Breyer said such a standard could mean a death blow for many types of technology, saying that under the terms proposed by the plaintiffs, "Would we ever have a VCR? Would we have the Xerox machine? Would we have an iPod? Or for that matter the Gutenberg press? ... In each of those cases there would be vast amounts of infringing uses."

Justice David Souter made a similar point, saying, "If a guy is sitting in his garage figuring out whether to invent the next iPod, how do we know in advance anything that would give the inventor the confidence he would not be sued?"

Justice Anthony Kennedy, appearing to give some weight to the plaintiffs' arguments, said something is amiss about a company building a business around distribution of unauthorized copies.

He said it appeared that "expropriated property can be used as part of the start-up capital" of these firms, adding, "that sounds wrong."

The court was weighing the Sony Betamax precedent, but another case involving the Napster internet site, which under its former owners had some 60 million users downloading mostly illegal copies of songs from its central servers.

Taranto argued that this case is different from Napster, which was eventually shut down by the courts, because that firm encouraged people to copy songs from its own computers. Moreover, he said P2P networks have many legal uses and should be no different than iPods or photocopy machines.

In order to shut down Grokster and Streamcast, Taranto argued, the plaintiffs would have to show they encouraged piracy or were guilty of "willful ignorance."

Up to now, courts have ruled in favor of the technology industry.

Some technology groups have filed briefs that support neither side, but urge the court to uphold the Betamax precedent while leaving open options to curb piracy.

The case stems from legal action filed by 28 Hollywood studios and music firms in 2001, arguing that the free swapping of digital content threatens creators of virtually any creative work that can be illegally copied over digital networks.

Kazaa, a popular Australian-owned file-swapping network, is a defendant as well but its case is being heard separately.

The case has attracted widespread interest, with over 50 supporting briefs filed on behalf of prominent firms including Intel, Yahoo and Apple; the US government; groups as diverse as Consumers Union, the National Basketball Association and Business Software Alliance; and musicians such as Elvis Costello and Avril Lavigne.
http://www.bakutoday.net/afps/englis...t_1_visu2.html


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Supreme Court Hears P2P Case
John Borland

Supreme Court justices quizzed attorneys for file-swapping software companies and Hollywood studios Tuesday, in a case that will help determine the future of both the technology and entertainment industries.

In their questions, the justices were critical of the entertainment industry's proposal, which would hold companies "predominantly" supported by piracy liable for copyright infringement. However, they showed little sympathy for the file-swapping companies' business model.

"What you are suggesting is unlawful expropriation of property as a kind of start-up capital," said Justice Anthony Kennedy. "From an economic standpoint and legal standpoint, that sounds wrong."

The case, which pits big record labels and movie studios against file-trading software companies Grokster and StreamCast Networks, is the culmination of five years of legal battles against the peer-to-peer networks that entertainment companies believe are undermining the viability of copyrights.

Two federal courts have already ruled in favor of the file-swapping companies, saying that the software should be compared to a photocopying machine or a VCR--that it has enough legal uses to protect the file-swapping companies.

Record labels and movie studios dispute that idea, saying that Grokster and StreamCast, the parent of the Morpheus service, have deliberately built their business on the existence of widespread copyright infringement. They're asking the Supreme Court to rule that any company whose business is predominantly supported by piracy should be liable for that infringement.

Dueling protesters lined the sidewalks outside the court building before the hearing got underway. Black-T-shirt-wearing supporters of file sharing carried signs proclaiming "Save Betamax" and "RIAA keep your hands off my iPod."

Meanwhile, another group of 18 singer-songwriters from Nashville carried guitars and signs reading "Feed a musician. Download legally."

"We're hear to give a face to people being hurt by illegal download," said Erin Enderlin, one of the songwriters. "When we don't get paid, we can't pay our rent."

That argument has sent ripples of anxiety through Silicon Valley. Technology companies are leery of being held responsible for unforeseen or unauthorized uses of their software, and many are deeply concerned that the entertainment industry's proposal would force a potentially crippling legal review of virtually every product before its release.

Intel, the Consumer Electronics Association, and other technology and venture capital groups have appealed to the court to avoid placing new liability on technology manufacturers, rather than on individuals who are infringing copyrights.

As influential as the case is likely to be, few believe the issue will end with the Supreme Court, whose decision is expected in June. Many observers expect the losing side to take its case to Congress after the court rules.

Indeed, many legal observers say the high court is likely to leave the law largely as is and if it wants a different outcome, to ask Congress to change the copyright law.

"I think the court is going to affirm (the lower-court rulings)," said Ronald Katz, a copyright attorney with Manatt, Phelps & Philips. "This doesn't fit in with the way copyright law is written. But it's not surprising that the law doesn't fit with something that didn't exist at the time the law was made."
http://news.com.com/Supreme+Court+he...3-5644861.html


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FAQ: Betamax--Tech's Favorite Ruling
John Borland

On Tuesday morning, lawyers from Hollywood and the technology industry will meet at the U.S. Supreme Court to argue over the fate of peer-to-peer software. But they'll be spending much of their time talking about the VCR.

At the core of the file-swapping dispute is an interpretation of the 20-year-old decision that made Sony's Betamax legal to sell in the United States. Much of the subsequent consumer electronics industry has been built with that decision in mind, and now companies are worried that it's open for review.

The following list of frequently asked questions is a layman's guide to why the Betamax ruling matters today.

Isn't Tuesday's Supreme Court case about Grokster and file-swapping? What's all this about Betamax?
Two lower federal courts have ruled that file-swapping software companies--in this case, Grokster and Morpheus parent StreamCast Networks-- aren't legally liable for the copyright infringement that happens on their peer-to-peer networks. For support, both courts pointed to the 1984 Supreme Court ruling that said Sony Betamax VCRs could be legally sold.

Many people inside the technology industry believe that the Betamax decision laid the foundation for much of the subsequent computer and consumer electronics industry. Some worry that a new ruling on the issue could change the legal ground rules for technology businesses.

How would my life be different without the Betamax decision?
The Betamax ruling established that it was possible to record media at home, as long as it was for personal use. It made sure that companies producing recording devices couldn't be sued, even if some people used them in illegal ways. If Betamax had gone the other way, the explosion in VCRs, rental movies, home DVDs and digital video recorders couldn't have happened, or would likely have been slower and more expensive.

The case also let personal computers, which can digitize and record audio and video, develop without restrictions.

What started the fight?
Sony released the Betamax video recorder for the United States market in 1976. Universal City Studios and Walt Disney Productions promptly sued Sony, contending that recording video at home was copyright infringement.

Why did they sue Sony, instead of the people making the recordings?
The studios made an argument called "contributory copyright infringement," saying that Sony was responsible for making large-scale copying possible.

What were video recorders actually being used for?
The case largely took place before the tape rental market had taken off. Surveys by Sony and the studios showed that the primary use for VCRs, at least in 1978, was recording TV content so it could be watched later.

Was recording a show at home actually illegal?
At the time, it wasn't clear. The studios said home recording was illegal if permission hadn't been granted beforehand. Some shows explicitly gave viewers the right to record, or gave guidelines on how long tapes could be kept before being erased.

How did the case get to the Supreme Court?
The District Court initially ruled in favor of Sony, saying that "time-shifting"--recording a show so it could be watched later--was legal. But even if it had been deemed copyright infringement, the court said Sony couldn't be held legally responsible for those actions.

A court of appeals decision upended that judgment, saying that copying TV programming at home was not fair use. Because videocassette recorders were sold primarily for making copies of copyrighted works, the court said Sony should be liable for damages, and potentially should be barred from selling VCRs.

Who supported the studios?
Amici, or "friends of the court," briefs were filed in support of the studios by the Association of American Publishers, CBS, the Motion Picture Association of America, the National Music Publishers Association, the Recording Industry Association of America and the Writers Guild of America, among others.

Who supported Sony?
Amici briefs were filed in support of Sony by the American Library Association, the Consumer Electronics Association, GE, Hitachi, Sears, Toshiba and 12 states, among others.

What did the Supreme Court rule?
In 1984, after seven years of litigation, the Supreme Court largely upheld the lower court's initial ruling. In the most far-reaching portion of that decision, that court said flatly that a product is not liable for contributory infringement if it is also used for legitimate purposes. "Indeed, it need merely be capable of substantial noninfringing uses," the court wrote.

The court also held that home recording, at least for the noncommercial use of "time shifting," was not infringement.

If copying at home is OK, why are people being sued for file-swapping?
People who are uploading music though peer-to-peer networks aren't viewed as doing it for personal use. Their actions potentially have an effect on the market for music or videos in a way that recording a TV show and watching it later does not. Record labels have said that "ripping" a CD to MP3 files, or burning a few copies, as long as they're for personal use, is OK.

OK, but why isn't DVD-copying software legal?
Home copying is legal, but entertainment companies aren't required to let you do it. There's another law called the Digital Millennium Copyright Act which makes it illegal to break through any antipiracy protections put on digital media. Movie studios protect their DVDs against copying, and so all the software that breaks through this protection is illegal to distribute in the United States.

Most memorable quote on the issue:
In 1982, testifying in front of Congress before the Supreme Court had ruled, MPAA President Jack Valenti said, "I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone."
http://news.com.com/FAQ+Betamax--tec...3-5637912.html


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MGM v. Grokster: Innovation On Trial
Grant Gross

During opening arguments yesterday, Supreme Court justices yesterday voiced their concerns that should the entertainment industry get its way, technology companies may stop innovating.

The entertainment industry wants to sue the distributors of the Grokster and Morpheus peer-to-peer (P2P) software packages for their users' actions.

During oral arguments in the MGM vs. Grokster case, justices peppered a lawyer for the entertainment industry with questions, saying a move away from a 21-year-old standard on technology and copyright could have major effects on the technology industry.

Ents industry wants control

Donald Verrilli Jr., representing the music and movie industries in the case, told justices that Grokster and Morpheus distributor StreamCast Networks built their business plans around copyright violations, and the vast majority of files traded with the Grokster and Morpheus software violate copyright law. The Supreme Court's 1984 Sony Betamax ruling exempts makers of technology from secondary copyright liability lawsuits when their technology has "substantial noninfringing uses," but Grokster supporters can point to just a few hundred thousand legal files among the 2.6 billion traded with P2P software each month, he said.

"That's the whole business," Verrilli said. "What they're talking about as lawful is a tiny, teeny little fraction."

Verrilli called Grokster and Morpheus a "gigantic infringement machine that was built on inducement" of copyright violations.

Control versus innovation

But Justice Stephen Breyer questioned how the court could draw the line between Verrilli's assertion that P2P software enabled "substantial" infringements and the Betamax ruling. If the court recognized a new standard penalizing technologies enabling substantial copyright violations, the copying machine, the VCR and the Gutenberg printing press might not be legal, Breyer said.

Using the same logic, the entertainment industry could argue that Apple’s iPod also encourages copyright violations, added Justice David Souter. "If I can get music to the iPod without buying the CD, I'm not going to buy the CD," he said. "How do we know in advance on your test anything that gives the inventor or the developer the confidence to go ahead?"

The 9th Circuit Court of Appeals erred in rejecting the entertainment industry's case because it "basically adopted a test of theoretical noninfringing uses," answered Paul Clement, acting solicitor general of the Bush administration's Department of Justice, which is siding with plaintiffs Motion Picture Association of America, the National Music Publisher's Association of America and the Recording Industry Association of America in the case.

Technology under threat

But a tougher definition of secondary liability would open up technology companies to many more lawsuits, said Justice Antonin Scalia: "I'm going to get sued right away before I get a chance to do business," he said.

Justices didn't spare P2P lawyer Richard Taranto from tough questioning. Justice Ruth Bader Ginsburg noted that the Sony Betamax decision continued on for 13 pages after establishing that the Betamax VCR technology was capable of substantial noninfringing uses. The Supreme Court in 1984 recognized that the VCR's primary commercial use was for "time shifting" television programs by recording them and watching them later, a legal use, she said.

Justice Anthony Kennedy questioned why the Supreme Court should stick to the Betamax standard when most commercial uses of P2P are related to copyright violations. Taranto told justices that the Grokster case focused only on the current actions of the P2P vendors, not past actions that may have encouraged users to violate copyright law, but Kennedy questioned how Taranto could separate past actions from the current business plans.

"What you want to say is unlawfully appropriated property can be used for (a business') startup capital," Kennedy told Taranto.

Ginsburg also questioned how the distributors of Grokster and Morpheus could shield themselves from charges of willful ignorance of their users' copyright violations. Justices noted the 9th Circuit Court, in 2001, ruled against file- trading service Napster.

Not Napster

Unlike the old Napster service, which operated centralized servers, Grokster and StreamCast Networks don't know what's being traded by users of their software, Taranto said. Their decision to offer decentralized file-trading software went beyond avoiding Napster's fate, he said; P-to-P technology also frees the vendors from the cost of operating central servers.

Outside the courtroom, advocates for the Grokster side wore T-shirts saying, "Save Betamax." Some slept over night outside the court.

Grokster supporters said they were encouraged by the justice's questions during the hearing. "I thought the justices asked exactly the right questions," said Fred von Lohmann, senior staff attorney at the Electronic Frontier Foundation and lawyer for StreamCast Networks in this case. "Is it right that the entertainment industry should be in charge of the nation's technology sector?"

A Supreme Court decision is expected in about three months.
http://www.macworld.co.uk/news/index...ge=1&pagePos=4


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Justices ask about innovation

Court Reviews Peer-To-Peer File-Sharing Case
Don Jordan

Regulating music and movie-sharing programs on the Internet could hinder innovation, some Supreme Court justices said Tuesday in a case that could shape the commercial future of entertainment.

The court is reviewing a ruling that software companies that provide free "peer to peer" file-sharing technology cannot be held liable for copyright infringement by the software's users. In the case, called MGM Studios v. Grokster, the court is considering whether to shut down Grokster and other Internet programs that allow computer users to obtain music, film and other products for free.

Justice Antonin Scalia said during oral arguments that if he were an inventor, "I know I am going to get sued right away if I start this business."

Justice Stephen Breyer compared the software's copyright infringing capabilities to that of the iPod, the portable device that can be used to store thousands of illegally downloaded songs.

Attorney Donald Verrilli, who represents the motion picture studios and recording companies that are appealing the lower court ruling, argued there is a difference between the two that makes Apple's iPod legal.

"There are significant commercial uses" for the iPod, Verrilli said. The file-sharing companies "intentionally built a network of infringing users."

Justice John Paul Stevens pointed out that file-sharing technology is used legally millions of times a year.

Verrilli responded that illegal downloading accounts for more than 90 percent of the file-sharing software's uses, adding that the companies "operate in the shadows."

Grokster and StreamCast Networks, which produces the Morpheus file-sharing program, are both named as defendants in the case. A decision could be months away.

Verrilli said the recording industry has lost 25 percent of its revenue since the "onslaught" of the file- sharing companies.

But Richard Taranto, who represents the file-sharing companies, said the entertainment industry has no credible evidence that file sharing is harming business. He cited the 1984 case Sony Corp v. Universal City Studios, in which the high court ruled that Sony was not liable for copyright information committed by people using Betamax home video recorders.

"The Sony ruling safeguards legitimate uses," Taranto said. "Changing the rule would have an overriding bad effect on other industries."

Some of the nine justices also raised concerns about the software companies encouraging illegal file- sharing to gain new users and increase profits.

But the targets of the entertainment industry's lawsuit argued that there is much more at stake than copyright infringement.

"There is nothing illegal about innovation," said Michael Weiss, the chief executive officer for StreamCast.

Outside the Supreme Court, record company supporters played guitars and sang as others carried signs that read, "Feed a Musician, Download Legally," and "Thou Shalt Not Steal."

Nashville songwriter Erin Enderlin, 23, said illegal downloading has forced some smaller Nashville record companies to shut down and has reduced the number of artists signed to contracts.

"We're not anti-technology, but just pay us for the songs you're downloading," Enderlin said.

Motown songwriter Lamont Dozier, famous for helping write many hits, including Stop! In the Name of Love and You Can't Hurry Love, attended the arguments and said he was optimistic his songs would be protected.

"We're in a very traumatic situation," he said.

Members of the Consumer Electronics Association march- ed along the court stairs in support of file-sharing companies.

Spokeswoman Megan Pollock said a decision against the file-sharing companies could stifle the availability of technology for consumers.

"In the long run, you don't know what is next," Pollock said of new technologies. "If you stop it now, it's sad."
http://www.chron.com/cs/CDA/ssistory...h/news/3108813


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Lively Debate as Justices Address File Sharing
Linda Greenhouse

The much-heralded Supreme Court showdown in the Grokster case between old-fashioned entertainment and newfangled technology found the justices surprisingly responsive on Tuesday to warnings from Grokster, the software maker that allows Internet users to share computer files on peer-to-peer networks, that a broad definition of copyright infringement could curtail innovation.

Justice David H. Souter asked Donald B. Verrilli Jr., the lawyer arguing for the Hollywood studios and the recording industry, to envision "a guy sitting in his garage inventing the iPod."

"I know perfectly well that I can buy a CD and put it on my iPod," Justice Souter said. "But I also know if I can get music without buying it, I'm going to do so."

Because that possibility was so obvious, he continued: "How do we give the developer the confidence to go ahead? On your theory, why isn't it a foregone conclusion from the outset that the iPod inventor is going to lose his shirt?"

That Justice Souter, the least technically minded of the justices - he still drafts his opinions by hand on a legal pad - could even invite a dialogue about Apple iPods, much less suggest that he could be tempted to engage in illegal file sharing, was an indication of how this confrontation of powerful interests had engaged the court.

But by the end of the lively argument pitting Grokster and its allies on the electronic frontier against the entertainment community's stalwart defense of intellectual property rights, any prediction about what the court will actually decide appeared perilous. The justices themselves seemed taken aback by the procedural complexities of the case, Metro Goldwyn Mayer Studios v. Grokster Ltd., No. 04-480, which moved through the lower federal courts on summary judgment, without a trial.

Some justices appeared tempted by the prospect of allowing the studios and record companies to get to trial on a legal theory that the lower courts did not address: that Grokster and the other defendant, StreamCast Networks, which offers the Morpheus file-sharing service, are liable for copyright infringement for having actively induced consumers to use their software to download copyrighted material on an immense scale.

The Federal District Court in Los Angeles, in a decision affirmed last year by the United States Court of Appeals for the Ninth Circuit in San Francisco, took a different approach, ruling that the file-sharing networks were not liable because their services were "capable of substantial noninfringing uses."

The lower courts took that test from the Supreme Court's 1984 decision that absolved the Sony Corporation, manufacturer of the Betamax video recorder, of copyright liability for infringing uses that consumers might make of the product.

The Sony decision provided the right answer, and that should be the end of the case, Richard G. Taranto, arguing for Grokster and StreamCast, told the court. He said it was "critical" for the Supreme Court to adhere to the "clear Sony rule" for the sake of "innovation protection."

Justice Ruth Bader Ginsburg objected, noting that the 1984 decision "goes on for 13 more pages" after articulating the test that provided Sony's defense.

"If the standard was that clear, the court would have stopped there," Justice Ginsburg continued. "I don't think you can take one sentence from a rather long opinion and say, 'Ah-hah, we have a clear rule.' "

In briefs filed as friends of the court, allies of the file-sharing networks in various technology industries and civil liberties organizations have depicted file sharing as a useful, if not vital, means of expanding knowledge through the inexpensive transmission and Internet archiving of lawful material in the public domain. As long as the noninfringing uses were not "far-fetched," Mr. Taranto said, the defense that applied to videocassette recorders should be available for his clients' "autonomous communication tool," as he described file sharing.

Whether this argument makes headway may depend on the technological universe that the court considers in applying it. Grokster and StreamCast are asking the court to look at all possible uses of file sharing, not just the use that is made of their own software. The plaintiffs, backed by the Bush administration, are asking the court to focus on the business of the defendants.

Paul D. Clement, the acting solicitor general, told the justices that while the Ninth Circuit had used as its test "the mere theoretical capability of noninfringing uses," the Supreme Court should look at the actual "business model" used by the defendants. It was an "extreme case," Mr. Clement said, a model built on "copyright infringement without liability, with the full knowledge that the draw is unlawful copying."

"Sony could have set up a 'theoretical capability' test, but it didn't," Mr. Clement continued. Instead, he pointed out, the Sony decision required evidence of a "substantial" noninfringing use. The court in that decision found that consumers used their VCR's primarily for recording television programs that they could watch later, a noninfringing use referred to as time-shifting.

Justice Antonin Scalia said he was concerned that legitimate uses of a new technology might need some time to become established; in the meantime, the developer would be defenseless against a copyright infringement suit. "What I worry about is a suit right out of the box," he said. "Do you give a company a couple of years to show 'substantial' noninfringement?"

Mr. Clement replied that in the government's view, there should be "a lot of leeway at the beginning." But that was "not this case," he said, asserting that Grokster and StreamCast had "a business plan from Day 1 to capitalize on Napster."

Napster, the original file-sharing network, was put out of business by a ruling by the Court of Appeals for the Ninth Circuit in 2001 that it was secondarily liable for the copyright infringement committed by its users. The Ninth Circuit found that Grokster differed significantly from Napster because its software permits users to share files with one another directly, rather than going through a central computer server.

Mr. Verrilli, the lawyer for the plaintiffs, urged the justices not to rely on that distinction. "There is a shell game going on here," he said. "Our position is that we're entitled to injunctive relief against the continued operation of this gigantic machine that was built on infringement."

In a second argument on Tuesday, the court heard an appeal by the Federal Communications Commission and the cable industry of another Ninth Circuit ruling, this one with implications for the development of the business of providing high-speed access to the Internet. The Ninth Circuit rejected the commission's view that companies offering cable modem service should be considered in the "information service" rather than telecommunications business, and as such should be exempt from the extensive regulation to which federal law subjects traditional telephone companies.

At issue is the ability of Internet service providers to force cable companies to open their broadband lines. The outcome of the case, National Cable and Telecommunications Association v. Brand X Internet Services, No. 04-277, is likely to depend on how much deference the justices decide to give to the F.C.C. Based on the argument, the outlook is uncertain.
http://www.nytimes.com/2005/03/30/te...0bizcourt.html


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Will High Court Dodge P2P Decision?
Roy Mark

One thing that distinguished the Supreme Court debate Tuesday morning over peer-to-peer (P2P) networks and copyright infringement liability was that the justices meted out tough questions for both sides.

By the end of the one-hour hearing, the tough questions were enough to give both the entertainment and technology industries serious pause as to which way the court will rule.

The justices repeatedly peppered MGM attorney Donald Verrilli with questions about how far Hollywood wanted to move the line on secondary copyright infringement. Far enough to stifle innovation? Far enough to cause inventors to quit innovating over fear of lawsuits?

That line of questioning pleased technology advocates who want the court to uphold the principles laid out in the 1984 Sony Betamax Supreme Court decision. In that decision, on a close 5-4 vote, the court said if a technology had substantial non-infringing uses, it was immunized from lawsuits even if some people use the technology for illegal purposes.

But P2P pleasure quickly dissipated when the justices accused them of using stolen copyright materials as "seed capital" to build their businesses.

"There were, in short, questions from the court that would provide both comfort and discomfort to both sides. And any prediction about the outcome would be hazardous, indeed," Jeffrey Knowles, a San Francisco intellectual property attorney who attended the hearing, said in an e-mail comment.

That said, Knowles then ventured a prediction: "I think this court is prepared to resolve at least some part of the ongoing debate about the copyright accountability of peer-to-peer file-sharing services -- and in the process add new insight into the Sony Betamax decision's application in the digital era."

Blair Levin, a senior analyst with Legg Mason, was also e-mailing opinions after the hearing.

"The Supreme Court justices were dissatisfied with the implications of the extreme positions each side presented, and we believe they likely will try to develop a way to send the case back to trial on a narrower theory of infringement," Levin wrote.

If they do, it will likely be on the issue of "active inducement." Under current copyright law, companies can be held liable for secondary copyright infringement if they actively encourage users to infringe.

Up to this point, that has not been an issue in MGM vs. Grokster. Both a district court and the 9th Circuit Court of Appeals ruled in favor of Grokster based on the Sony Betamax standard established by the Supreme Court.

But when Verrilli told the court the standard that Hollywood uses when deciding to pursue lawsuits against different types of technology, he said it wasn't the percentage of non-infringing uses, but the business model being developed by a company.

"That's an inducement argument," Justice Antonin Scalia shot back.

"On several occasions, the justices' questions implied that they might be able to resolve the case without reaching the issues of Sony's scope, perhaps on the grounds of active inducement," Knowles, who has represented music interests against P2Ps, wrote. "They noted, however, that this would not go very far in resolving the next case in which, perhaps, the evidence of such inducement might be absent."

Levin said a lower court decision on active inducement "would be a better result for the content industry than a 9th Circuit ruling, but offers less protection than they are seeking at the Supreme Court."

He also noted an active inducement case would represent a "more livable outcome for both the tech and network companies than the test advocated by the content industry and the government."
http://www.internetnews.com/bus-news/print.php/3493961


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The Web On Speed: P2P And Epidemic-Based Protocols
Chris Jablonski

Emerging technologies like Web services, trading exchanges, XML market data, and pervasive computing will not tolerate the current state of information latency on the Web. For example, a domain name currently takes days to propagate through all the DNS servers and caches distributed around the globe.

According to Meta Group's Nick Gall, a new generation of P2P (peer-to-peer) protocols is almost ready for prime time that will drastically reduce the time it takes for information to spread over the Internet. He points to Cornell's Project Quicksilver that pulls together a set of technologies based on peer-to-peer and epidemic-based protocols, "which can quickly and reliably spread large amounts of information throughout a globally federated network in seconds and minutes, versus hours and days," according to Gall. As an indicator of increasing commercial interest, he points to Amazon's hiring last year of Cornell's Werner Vogels to design such protocols into its next-generation architecture.

"Leading-edge users should be pursuing this technology for their next-generation business service networks; otherwise, they will face an expensive rip and replace of conventional registry/repository technology in three to five years," Gall asserts.

To get a head start, you should get familiar with Cornell's Ken Birman, who is leading the Quicksilver project, the fourth generation of a similar set of technologies. His new book, Reliable Distributed Systems: Technologies, Web Services, and Applications, is due out any day now.
http://blogs.zdnet.com/Research/index.php?p=128


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Grok This

Artists deserve to be paid — but the entertainment industry’s bid to outlaw innovation is wrong-headed and doomed to fail

THE QUESTIONS that Supreme Court justices ask during oral arguments are notoriously unreliable as guides to how they will eventually rule. Nevertheless, the justices appear to have focused on the right issues this past Tuesday in the matter of MGM Studios v. Grokster, which has been described as potentially the most significant copyright case in a generation.

The justices made it clear that they have no sympathy for those who use Grokster and other peer-to-peer file-sharing programs to download music and movies illegally, thus depriving artists, actors, and other creative types of the rewards that are justly theirs. But the court also seemed unwilling to solve the problem by stifling technological innovation. As Justice Stephen Breyer observed, the entertainment industry’s arguments in favor of banning P2P software could just as easily be used to outlaw photocopiers, VCRs, and portable MP3 players such as the iPod, given that all those products can be used to violate copyright law. Said Breyer: "You see the problem here. It could be that in each of these instances there are vast numbers of infringing uses."

There is a major difference: Grokster and Morpheus, similar file-sharing software owned by co-defendant StreamCast Networks, do not appear to have any legitimate business applications, which makes them quite different from the examples Breyer cited. And the justices were right to be troubled by the notion that they should offer legal protection to businesses that profit from theft. But the court needs to craft a solution that somehow manages to punish illegal activity without stifling innovation.

Illegal file-sharing is a real problem, and the entertainment industry’s attempts to shut down companies that facilitate it are understandable. But though suing may make sense in the short term, in the long term the industry must overcome its reluctance to come to terms with new technology — a reluctance that is not only hurting its own bottom line, but that of the creative community as well. Remember, it wasn’t that many years ago that the industry did try to ban the VCR, because it feared people would tape movies and shows off their television sets and sell them surreptitiously. Fortunately, in 1984, the Supreme Court ruled that that the Sony Betamax could be sold legally because it could be used for legitimate purposes, such as time-shifting. The main difference between the Grokster case and the earlier one is that, by most accounts, at least 90 percent of P2P activities are illegal. Yet in the early days of the VCR, industry leaders did not foresee the rise of prerecorded videotapes and video rentals, developments that helped revitalize and enrich Hollywood. The same could happen with P2P. We are in the midst of a very fluid situation, and it’s impossible to know how technology will develop over the next few years.

Rather than standing in the way of innovation, the music and film businesses need to embrace it, and to understand that today’s threat can become tomorrow’s profit center. Consider the case of Apple. In 2001 the company began selling Macintosh computers with built-in CD read-write drives and software that made it easy to download music and transfer it onto compact discs. Apple’s advertising slogan — "Rip, Mix, Burn" — was a virtual invitation to steal. Two years later, though, Apple entered into a partnership with the major recording labels, which had finally become desperate and scared enough to try something new. And Apple has since sold well over 100 million songs — legally — through its iTunes Music Store. The partnership provided a huge boost to Apple’s iPod music players, and helped to revive the record industry as well, even if it did have to be dragged kicking and screaming into the 21st century.

The entertainment business can also combat the illegal file-sharers by offering innovation that promises greater value for consumers. One of the dirty little secrets of online music is that it often doesn’t sound all that great. The reason: compressing it for rapid transfer over the Internet removes so much data that a true audiophile can discern a significant difference. Yet CDs aren’t perfect, either. In the past several years, the record labels have gingerly embraced new formats such as Super Audio CD, which offers much richer sound when the disc is played on the proper equipment. The industry benefits because the file sizes produced by formats such as SACD are so huge that transferring them over the Internet simply isn’t practical. Likewise, an increasing number of albums are now being released with the music CD on one side of the disc, and videos, concert footage, and other extras in DVD format on the other. The idea is that fans won’t want to miss out on the DVD goodies by downloading the music for free.

Dire predictions to the contrary, illegal file-sharing has not killed the music business, nor is it likely to destroy the film industry, either. Recorded-music sales were up two percent last year, the first increase in some time. That doesn’t mean the business is healthy — CD sales are still far lower than they were just four years ago, largely because of illegal downloading. But it does mean that there is still time for the industry to get its act together. Moreover, artists themselves do not agree on the hazards of file-sharing. Sheryl Crow and the Dixie Chicks have sided with the record industry in the Grokster case. Others, such as Chuck D and Brian Eno, have taken the opposite position, arguing that P2P makes it easier for them to distribute their music and limits the power of the international media conglomerates that control their work. It’s hard to see how Chuck D and Eno’s utopianism is ever going to put money in any artist’s pocket. But they are among the most thoughtful observers of the music scene, and their views need to be taken seriously.

None of this is to countenance theft. Stealing music, films, and other content is wrong, whether said theft takes place via Grokster or by slipping a copy of a CD under one’s jacket and walking out of a store. The old online saw that "information wants to be free" has never made any sense. After all, musicians, actors, writers, and other artists — as well as the companies that make their work possible — deserve to be properly compensated for what they produce.

Ultimately, though, dealing with the challenge of technological innovation by trying to outlaw it is as futile as commanding the tide to stop coming in. The Grokster case is fundamentally different from the Napster ruling of several years ago: Napster actually provided a central directory to facilitate theft, and it made some sense to shut that directory down. This time, the industry is trying to ban an idea. Even if Grokster and Morpheus are shut down, P2P software will continue to proliferate — if not here, then overseas, which the Internet makes just as accessible as the record store next door.

So, whether we like it or not, illegal file-sharing is here to stay. The industry’s goal should not be to eliminate it, which is impossible, but rather to reduce it to a manageable level through a combination of legal action against particularly egregious violators and better value for consumers who play by the rules. That’s what will best serve everyone’s interests, including those of the artists themselves. Those are the principles the Supreme Court justices should keep in mind as they prepare to decide this case three months from now. That doesn’t mean Grokster and Morpheus shouldn’t be put out of business; perhaps they should, given their officials’ utter contempt for the rights of artists. Developers and marketers of such software should have some economic responsibility to those who are being financially damaged. The onus should not be placed only on the copyright holders who are being ripped off. Nevertheless, the entertainment business needs to invest at least as much effort in embracing new technology that would benefit everyone.
http://www.bostonphoenix.com/boston/...s/04576696.asp


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Creative work makes for slippery private property online

As The Supreme Court Weighs The Legality Of File-Sharing On The Web, Some Are Calling For A New Kind Of Copyright
Gregory M. Lamb

You might have to go back to Johannes Gutenberg's printing press to find a publishing technology as disruptive. The Internet can reproduce content and distribute it almost anywhere at nearly light speed. Call it the perfect copying machine - with an out tray to everyone.

And that's the trouble. For any creator of "intellectual property" - text, software, music, videos, and so on - the Internet is challenging the fundamental notion of who owns the content and how it can be used. This week, the issue reached the United States Supreme Court in a case that may go a long way toward deciding what rights creators have. The issue isn't clear cut.

Protect the creators too much and it may inhibit technological progress and chill artistic expression, some argue. Others say the technology and culture of sharing electronic files has made the philosophy of "all rights reserved" obsolete.

What's needed, some observers urge, is a new copyright that recognizes a middle ground between all rights and no rights to a work of art.

In court, the big music and film companies "can win every single case from now until the cows come home, but they cannot put the genie back in the bottle because people have discovered that they have the tools of participation," says Andrew Zolli, founder of Z+Partners, a think tank in New York. What the Internet has done is wrest away from a few producers the ability to sell scarce goods to a large group of consumers through expensive and highly controlled channels, he adds, such as when three commercial networks controlled what TV viewers saw in the 1960s. Now everyone with access to a computer has "the tools to produce as much media - if not more - than they consume."

Indeed, the Internet hasn't only made copying easy, it also has helped foster a culture in which some artists create new work by literally reusing or remixing the work of others. Hip-hop music, built on the idea of "sampling" the beats or sounds of earlier music, is the most obvious of several examples. "The very works that we seek to copyright are built from found objects of other cultural products," Mr. Zolli says.

Some say this remix world demands a new attitude toward copyright, one that still respects the artist's need to make a living, but acknowledges that a carrot works better than a stick to pay the bills.

That was John Buckman's idea in 2003 when he founded Magnatune.com, an independent record label that sells music through online downloads and CDs and also licenses music for both commercial and noncommercial use. His business plan was simple: Let people listen to the music all they want for free over the Internet. If they like an album so much they want to own it, they can pay a range of prices from $5 to $18 per album, which they can choose. (On average, he says, buyers are paying $8.20.)

Whatever they pay, half goes directly to the musician, a much larger share than in conventional record deals. The company has 180 artists signed up, most of whom produce music in niche categories, such as classical or new age. So far, no one's getting rich. The highest earners, Mr. Buckman says, make a little more than $20,000 a year, barely enough for a couple of Britney Spears's wardrobe changes.

The company's slogan is "We Are Not Evil." That's a direct swipe at major record labels, whose pricing policies and crackdown on illegal file- swapping have angered many. That activity, known as peer-to-peer (or p2p) file-sharing, is shrinking a bit, and legal downloading from sites such as Apple's iTunes music store is increasing, according to a recent poll from the Pew Internet & American Life Project. But it's unclear whether illegal swapping really is decreasing, or whether respondents are reluctant to admit to it for fear of being sued by music companies.

While iTunes has sold 300 million songs online in its first three years, some 750 million songs are traded for free online each month, according to estimates by BigChampagne, a firm that tracks file-sharing on the Internet. Those p2p trades are illegal, according to current law.

P2p lies at the heart of a case argued before the US Supreme Court Tuesday. In MGM v. Grokster, lawyers for the entertainment industry and others argue that p2p software such as Grokster is used almost exclusively for illegal sharing of copyrighted material, such as songs. They want it shut down or hemmed in by strict safeguards.

Those supporting Grokster, mostly from the high-tech community, argue that such restrictions would inhibit future technological innovation and creative energy. They say that the software has legitimate uses.

The Grokster case will turn on one issue: whether the technology has substantial uses that are legal uses, says Manny Pokotilow, the managing partner of Caesar, Rivise, Bernstein, Cohen & Pokotilow, an intellectual property law firm in Philadelphia.

In a narrow 5-to-4 decision in 1984 involving the Sony Betamax videocassette recorder, the Supreme Court said Sony wasn't liable if some people used the machine to make illegal copies because the technology had substantial legal uses as well.

With Betamax as precedent, Mr. Pokotilow isn't so sure the argument from the entertainment companies will hold up. "To me, someone could have enjoined the use of the Xerox machine when it first came out," he says, because it could be used to make copies of copyrighted materials.

If the court does crack down, and if entertainment companies continue to sue individuals who use p2p, Buckman says, he expects a boon for his business. "The harsher the atmosphere is for pirates, the more angry they will be, and the more they'll seek out fairer alternatives," he says.

Buckman operates under a unique kind of copyright called Creative Commons, developed by Stanford University law professor Lawrence Lessig, in which "some rights reserved" is the operating principle. Under Creative Commons, artists can choose to relinquish all rights (release to the public domain) or keep some, such as requiring attribution (giving the author credit). They may ask for permission and payment for commercial use, but not for noncommercial use. And they can mandate that the user agree to "share alike," meaning that if the work of art is used to help create a new work (such as a new song), that new work of art has to allow others to use it in the same way.

More and more companies springing up will recognize the new economics of copyright, Zolli says. "Some of them will flame out badly. Some of them will go down and take some of their customers with them.... But a new crop of companies will eventually emerge to take advantage of the participation and create economic value out of it."

One successful model already exists in Amazon.com, he says. "Amazon actually puts huge amounts of their intellectual property [online for free]. You can read many of the books that you can buy from Amazon right on the website."

Letting customers sample content creates new demand and not just for a few blockbusters. Some 90 percent of the books listed on Amazon.com sell fewer than 1,000 copies each, he says. People are "buying books they've never heard of" until Amazon.com introduced them.

The technique isn't new, Buckman says. "Music has always been given away for free to create demand." It's been sold through being played on the radio and more recently through music videos on MTV or free CDs stuck into magazines. "All we're doing is giving it away through a different medium," he adds.
http://www.csmonitor.com/2005/0331/p01s01-stin.html


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In the Competition for DVD Rentals by Mail, Two Empires Strike Back
David Pogue

YOU might not imagine that there's a single movie-distribution channel left to invent. These days, a movie can reach you by pay-per-view, on a plane, at the video store, on a TV movie channel, on the Internet, at the front of a Greyhound bus, in the second row of a minivan or even - get this - in a movie theater. (Hey, it could happen.)

Not to seem ungrateful, but none of these mechanisms deliver the holy grail: any movie, any time. There is, however, a low-tech distribution channel that comes pretty darned close: DVD rentals by mail.

Seven years ago, Netflix invented the category, the business model and the prepaid two-way shipping envelope. Now, as three million subscribers are helping Netflix hit its profitable stride, Blockbuster and Wal-Mart have entered the market, taking a page from the Netflix playbook.

Actually, they've taken pretty much the entire playbook. All three services look and work almost exactly alike. Netflix must be furious.

The fun begins at each company's Web site, where you can look over its DVD collection. Netflix and Blockbuster list 40,000 and 35,000 titles, many times what you'll find at the video store. Wal-Mart brings up the rear with 16,000 movies.

Using a Search box, New Releases lists, movies by category and so on, you build a list of the movies you want to see, in the order you want to see them. This movie queue is a big deal; building it and customizing it give you the same sense of achievement as setting up your iPod playlists.

A day or two later, the first three discs arrive by mail, packed in a three-layer shipping envelope. After watching a movie, you rip off the top layer of the envelope, revealing the return address. When the company gets that DVD back, it mails you the next one in your queue.

Where you live determines the mailing times. Netflix has 30 distribution centers all over the country; Blockbuster has 23, and plans to add 7 by June. (Wal-Mart brings up the rear again with 14.) In metropolitan areas, if you ship a movie back on Monday, you'll generally get the next one on Wednesday or Thursday.

The appeal of these companies lies primarily in their convenience, vast selection and accommodation of your quirky tastes. But there may also be an economic attraction. Each company charges a flat monthly fee. For example, Netflix's three-DVD plan costs $18 a month; Blockbuster's, $15; Wal-Mart's, $17.36. (What's the matter? Focus groups didn't go for $17.37?)

For that money, you can watch as many DVD's as the Postal Service can bring you, as long as you never have more than three at a time. (Other plans are available for lighter or heavier appetites.) If you watch and return three movies a day, you could theoretically watch 40 DVD movies a month, all for the same $15. True, you wouldn't have a life, but you'd be paying only 38 cents a movie.

The best part is no late fees and no deadlines. A DVD can sit on your shelf for weeks, waiting for the mood to strike you. (That tends to happen with movies you've heard are great but depressing, like "House of Sand and Fog.") The rental company doesn't care; it is paid the same amount whether you return the thing or not. In other words, these plans banish one of life's nagging worries: the fear of racking up huge late charges.

As you can imagine, starting a DVD-by-mail operation is an enormous logistical challenge. In the early days, Netflix horror stories (scratched or lost discs, long delays) were commonplace. These days, though, Netflix's act is decidedly together; its customer service stories sometimes verge on the heroic. ("I once somehow managed to mail back one of my own DVD's in a Netflix return envelope," one reader wrote to me. "I was certain that I would never see that disc again, but I sent an e-mail to customer service anyway. I got a prompt reply saying that they would locate my DVD and send it back to me - and they did. No charge.")

Netflix (netflix.com) has the most subscribers, too: three million customers, versus 750,000 for Blockbuster. (Wal-Mart doesn't disclose its membership numbers.) And as it turns out, 800-pound gorilladom has its privileges. You'll find far more customer movie reviews on Netflix, which can shield you from renting duds. And Netflix's power in the industry occasionally translates into exclusives and early availability; Netflix had "The Incredibles" in my mailbox on the very day it was released by Pixar. (Blockbuster - no small industry player - says that it will soon announce exclusives.)

By their admission, Blockbuster (www.blockbuster.com) and Wal-Mart (www.walmart.com/dvdrentals) are still playing catch-up. Wal-Mart, for example, has only a small fraction of its rivals' movies and distribution centers. It is often the last of the three companies to get a new movie in stock. Its Web site doesn't offer any customer reviews. Surprisingly, its three-DVD plan is not even the price leader (Blockbuster has that distinction). So unless you believe in rooting for the underdog - has that word ever appeared in the same sentence with Wal-Mart before? - there's no good reason to choose it.

Blockbuster's DVD-rental Web site is a joy to navigate, but its status as a fledgling seven-month-old service is sometimes evident. For example, it tends to be overly cautious when estimating when you'll get the movies in your queue. The day before its release, "The Incredibles" was listed as "very long wait (six weeks or longer)," but it arrived in three days. And the Blockbuster site occasionally greets you with: "Sorry, but we needed to do a little housecleaning. Please check back later."

But Blockbuster offers an irresistible feature that its rivals will find impossible to duplicate: two downloadable rental coupons a month for anything from a Blockbuster store: DVD movies, VHS tapes or even video games. Movies-by-mail is great, but it doesn't approach that "Sorry about your day, honey; let's go pick up a movie" spontaneity.

Nor is that the only twist Blockbuster has, ahem, in store. Later this year it will increase the number of distribution centers by as much as 15,000 percent when it invites its 4,500 local stores to become DVD mailing centers. This audacious master plan ought to shave DVD shipping times drastically. (If the local store doesn't have the movie you want, one of the regular centers will send it out instead.)

There are, in other words, two winners here. Blockbuster is the value king, undercutting Netflix by $3 a month and offering in-store rentals; it's as though it is reimbursing you for tolerating its start-up glitches.

Netflix is the service king, the smoothest and the most reliable program. It's the only outfit with highly evolved features like separate queues for each family member (including individually addressed envelopes), each limited by movie rating, if you like. Netflix also offers far more plans than Blockbuster or Wal-Mart; you can sign up to have any number from two to eight discs out at a time, at prices from $12 to $48 a month. For busy people, a two-DVD plan is especially attractive; Blockbuster offers no such plan.

Before you cancel HBO and tear up your Blockbuster card, though, some words of caution. All three companies ship each DVD in a bare-bones envelope, so you don't get to see the artwork or the liner notes. Bonus discs count as separate titles. Scratched or unplayable discs are an occasional nuisance. (At each company's Web site, you can report the damage with one click. The company takes the DVD out of circulation and sends you a replacement.) Discs sometimes disappear in the mail, too; fortunately, you're not charged (at least if it doesn't happen with suspicious frequency).

Otherwise, though, the DVD-by-mail distribution channel is a brilliantly conceived solution to a classic new-millennium problem. You get exactly the movies you want, almost when you want them. Don't look now, but "movie channel" has just acquired a whole new meaning.
http://www.nytimes.com/2005/03/31/te...ts/31stat.html


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Hollywood Seeks iTunes For Film
Stefanie Olsen

Sony Pictures Digital Entertainment is trying to develop and own the next iTunes--but for films.

"We want to set business models, pricing models, distribution models like (Apple Computer CEO Steve) Jobs did for music, but for the film industry," Michael Arrieta, senior vice president of Sony Pictures, said at the Digital Hollywood conference here.

"I'm trying to create the new 'anti-Napster,'" he added.

To that end, Arrieta said, his group plans to digitize Sony Pictures' top 500 films and make them available for the first time in various digital environments within the next year. He said the distribution for films like "Spiderman II" will go beyond just Movielink, the video-on-demand joint venture of Sony Pictures and several other major studios, which to date has hosted a limited library of Sony's.

For example, Sony plans to sell and make films available in flash memory for mobile phones in the next year, Arrieta said. It also will further develop its digital stores for downloading and owning films on the PC, he said in an interview.

Sony's plans--and similar moves by other studios--are likely to avoid empowering any one technology company--such as Apple in the music equation--and allow studios to pocket more of the profits. The philosophy in Hollywood is "Define your own agenda or someone else will for you."

Equally important is trying to avoid the rampant digital theft in peer-to-peer communities that the music industry has suffered, media executives say.

At the Digital Hollywood conference--a three-day event beginning Wednesday--media executives including Arrieta ruminated on ongoing hurdles to giving consumers access to unlimited films, TV shows or multimedia on a range of devices, anywhere at anytime.

They agreed that issues surrounding digital rights management, consumer adoption, and simple and compatible consumer electronics remained bottlenecks in the industry.

Still, Hollywood is working with technologists to help deliver the promise of the "digital home" more than ever before, according to entertainment executives. It's just that the two sides may still be speaking different languages.

"The plumbing of IT is converging," said Adam Bain, vice president of technology and production at Fox Sports Interactive. "But there are so many different devices the trends are of a divergent nature."

Advertising's future
Media executives during the "Digital Home" panel also discussed the future of 30-second TV commercials in a digital environment that lets consumers skip over the ads.

Charles Swartz, executive director and CEO of the University of Southern California's Entertainment Technology Center, said that because ads are the most effective sales tool ever invented, they will not disappear. But, he said, there's an opportunity to customize and target the ads to people's homes with advanced technology.

"Commercials aren't dead; they'll just get more interactive and effective," said Shahid Khan, managing director of Bearingpoint, an entertainment consulting firm. "But someone has to figure out how to better measure this animal."

Whatever the case, entertainment, advertising and technology will increasingly meld into a seamless product, executives say, and it remains to be seen who will be the powerbroker. Sony Pictures, whose parent company develops a wide range of consumer electronics, reiterated that it's trying to set its own agenda for new entertainment distribution.

"The future is about creating an entertainment ecosystem," in which players, platforms, content rights, and the user interface are fluid, Arrieta said. The industry's "in a transition period, but there's a high-level dialog (with technology partners) going on now."
http://news.com.com/Hollywood+seeks+...3-5647682.html


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Microsoft Launches Video Download Service
Dinesh C. Sharma

Microsoft on Wednesday formally launched its video download service for handheld devices deploying Windows Mobile.

Owners of Portable Media Centers, smart phones and pocket computers will be able to download daily programs and other video content from MSNBC.com, Food Network, Fox Sports, IFilm, and other providers, the company said. The service was announced at the Consumer Electronics Show in January.

Microsoft said about 20 content partners, including CinemaNow, MTV, Napster and TiVo, have agreed to make video formatted for devices using Windows Mobile since the launch of Portable Media Center last year.

"The launch of Portable Media Centers in 2004 began a new era of portable entertainment, and today's announcement solidifies the continued momentum we've seen for portable video," John Pollard, director of Windows mobile applications at Microsoft, said in a statement.

Microsoft said subscribers will be able to select content like sports clips, news headlines and music videos from the video Web site. Some content can also be downloaded to PCs running Windows XP. The service is available in the United States for an annual subscription of $19.95. Some free content also be available without a paid membership.
http://news.com.com/Microsoft+launch...3-5647078.html


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Microsoft Expands Antipiracy Program
Ina Fried

As part of its growing antipiracy program, Microsoft plans to require customers that want to download a local language add-on to Windows first verify that their copy of the operating system is legitimate.

Over the coming months, Microsoft will require all customers that want to download one of 22 "Language Interface Packs" to first authenticate their copy of Windows.

"They are significantly valuable add-ons to Windows," said David Lazar, director of the Genuine Windows program at Microsoft. The language packs add localization options beyond the dialects for which Microsoft offers full-fledged Windows versions.

The move is the latest expansion of a broad program in which Windows users are asked to verify their copy of Windows before downloading various add-ons.

When the pilot program began last year it was purely optional, with no benefit for verifying one's operating system and no penalty if the OS was found not to be genuine. Over time, Microsoft has added perks for those whose Windows copy passes muster, and the company has announced plans to withhold software downloads from those whose copy is determined to be unauthorized.

Microsoft has said that piracy costs the company millions but has not been specific about its losses. The Business Software Alliance, of which Microsoft is a member, has pegged annual industrywide losses at $29 billion, though that figure has been disputed.

Lazar noted that the language packs are still relatively new, allowing Microsoft to blend two strategies together--increasing the number of languages in which Windows is available while at the same time clamping down on piracy.

The company is starting this week with its Vietnamese language pack and plans to add the validation requirement to four or five of the language packs each month.

Microsoft has been gradually shifting its Windows Genuine Advantage from an opt-in program to one that will be required for most downloads. The program has been optional in all but three countries: Norway, the Czech Republic and China. However, Microsoft plans to make it mandatory for all users by the middle of this year. Lazar said Wednesday that the company was on track to meet that goal.

In countries where Microsoft is requiring customers to verify their version of Windows, the software maker has been offering a discount on a legitimate copy of the OS to those whose copy is found to be pirated. Lazar did not say what percentage of customers have opted for the offer but said there has been "good uptake."

The company is also being clearer about which security updates will be made available to those whose Windows copy fails to pass the test. In the past, Microsoft had said customers would not be able to use Windows Update to get security patches at will but noted that users would still be able to keep their machines current via Automatic Update. Lazar noted Wednesday that customers can also download individual patches from the Microsoft Download Center, although that requires a customer to know what patch they're looking for.
http://news.com.com/Microsoft+expand...3-5647224.html


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RadioYourWay Great for Radio Junkies
Ron Harris

Today's technology consumer devours lots of different media, and that has taken the luster away from some old- fashioned information stalwarts - namely AM/FM radio.

These days, I'll squeeze in time for my favorite radio programs right after I'm done reading a boatload of e-mails, listening to voicemails (home and work), uploading digital photos to my blog, reading my RSS feeds and updating my Netflix queue.

Oh, and did I mention that my cell phone ringtones are getting stale?

Thankfully, Pogo Products' latest gadget, RadioYourWay LX, has worked plain old radio programming back into my busy day.

RadioYourWay is about the same size, shape and color as a full-sized iPod, though lighter. It's an AM/ FM radio that can be programmed to record the radio programs you want and save them on its internal memory for later playback - on the go.

Think of it as a pocket-sized VCR for radio.

The model I tried sells for $200 and comes with 128 megabytes of onboard memory. That might not sound like much storage given today's 40 gigabyte digital audio players, but 128 megabytes will hold hours of decent quality audio encoded at lower bitrates, which is fine for talk radio.

For instance, at the lowest quality 32 kbps audio encoding setting (plenty good for AM), I was able to record more than eight hours of talk shows to the unit's internal memory. RadioYourWay also includes a slot for adding an SD memory card for more storage.

I used the menu screen to set up some daily recording schedules. It was quick and painless to set the unit to record KGO-AM 810's Ronn Owens from 9:00 a.m. to noon each weekday; some KNBR sports talk radio at 2:00 p.m.; and the creepy world of George Noory and Art Bell on "Coast to Coast AM" in the wee hours of the night.

The files can be saved as MP3s or Windows Media Audio files. Once I filled the unit with hours of radio, I connected it to my PC via the provided USB cable and transferred the files over to free up more room on the radio.

RadioYourWay appeared as a removable disk in the "My Computer" folder. There's a CD with some drivers included with the unit, but I never needed it on two of the three computers to which I connected the unit, which is compatible with both PC and Mac.

Audio can be recorded at 32, 64, 96, 128, and 256 kilobits per second, but anything higher than 64 kbps demanded too much storage space for something I wasn't planning on keeping very long anyway.

Speaking of digital audio files, the Supreme Court has just heard an Internet file- sharing case. The court is attempting to determine if companies that make file- sharing software are liable for what users do with it.

Pogo executives say they don't expect their device, which can turn FM songs into MP3 files on the fly, will draw heat from the broadcasting industry.

"Equate this to the VCR in your home," said Pogo's vice president of sales and marketing, Robin McSurley. "If you're time-shifting a broadcast program for your own viewing pleasure on your own VCR, that is your legal right."

I give RadioYourWay high marks for excellent radio reception, digital volume control and the handy line-in jack for recording external audio. The rechargeable battery boasts 10-hour life while in record mode, and I got about that during my tests.

Griffin Technology has conquered time-shifting radio as well with its RadioSHARK product ($100). But that device must remain plugged into the computer since it has no onboard memory or power source.

RadioYourWay does it all from the comfort of your pocket.

At $200 (or $250 for the 512 MB model), RadioYourWay is a little pricey for a fancified radio, but Pogo really built this one well.
http://hosted.ap.org/dynamic/stories...LATE=DEFA ULT


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Review

Creative MuVo Micro N200 MP3 Player
Tony Smith

The N200 is Creative's most diminutive MuVo yet - hence the 'Micro' in the title. The feat has been achieved by ditching the MuVo family's integrated USB connector in favour of a slimline, D-shaped port of the kind you find on digital cameras and the like. Yes, you now need a cable, something not required by other MuVos, but you get a much more compact player.

It's shorter than Apple's iPod Shuffle, but wider and thicker. Ditto older MuVos and even the V200. It's heavier than the Apple player too - 34g to 22g - but when you're down to this level, a few grams here or there make little difference. Like the Apple device, and other MuVos before it, the N200 is eminently pocketable, but unlike its rival, Creative bundles an armband and a belt holster, though a neck lanyard would be more useful - particularly since the N200 has a loop on the back to connect one to.

The Shuffle may lack the N200's tiny display, but it does have a better controller. The MuVo family is still in the jog-dial era, and I found the N200's to be rather spongy - it was too easy to push the wheel in, the equivalent of a mouse click, when I was actually trying to flick it up or down.

Equally fiddly is the power/play/pause, which is recessed into the body of the player, making it hard to push if you don't possess small fingers. Does Creative believe only little kids want to play these toys?

Unlike other MuVos, the N200 is a single-part device, so the AAA battery from which it takes its power fits snugly into a bay on the back of the machine. Creative claims an alkaline cell will give you 15 hours' playback, more than the Shuffle's 12 hours and easy replaced when it had run down.

On the base of the player, behind a rubber cover, is the aforementioned USB socket. Next to it is the 2.5mm line-in port. Creative bundles a 2.5-to-3.5mm cable, allowing you to connect the N200 to other audio/video kit and record their output direct to MP3. Encoding is limited to 96, 128 or 160Kbps.



It's a slightly tricky system to use. You set the record level with the volume keys, though you can't adjust them once you've started encoding. And I found that while the music coming through the earphones sounded fine, it was too high for the encoder, causing the recorded sound to be clipped. You can get it right with some experimentation, but there are better ways of getting audio onto the device. That said, once you've got the record level right, the N200 is good at spotting the gap between tracks and creating a new file at each break.

Speaking of noise, there's an audible whine when the screen's backlight is on. Fortunately, you can keep the backlight off, and in any case this wasn't a problem I noticed with the N200's sibling the V200.

Playback of WMA and MP3 files, by contrast, is flawless, and unlike many other comparable players, the N200 fully supports DRM-protected WMAs from music download services. If the sound's not quite right for you, there's the usual EQ pre-sets and a custom equaliser to help you adjust the sound to your taste. Rolling the cursor over each pre-set is enough to trigger it, so you can rapidly sample each one with any given song.

FM playback is similarly fine - well, within the limits of any analog radio of this size that uses the earphones as an antenna. In short, the sound is a little hissy and it's easy to move just off-station as you're travelling around. You can record radio programming, though the files are saved in WAV format rather than MP3. Ditto whatever you record off the player's built-in microphone.

Like past MuVos, the N200 works with Creative's own Windows-only jukebox software, but since it also operates as a generic USB storage device, you can drag and drop compatible music files too - good news if you're a Linux or Mac OS X user (use Chris Shull's free WinFSCleanser to zap all those invisible Mac meta files that just confuse the MuVo).


Verdict

Creative's Flash players just keep getting better. The N200 looks good, sounds great and if its controls are a little too fiddly, it's nonetheless sufficiently compact for the smallest of pockets. It doesn't have the iconic look of Apple's iPod Shuffle - and with it quite the same level of 'must have'-ability. It's a little more expensive, too. But it's the clear winner on features.


Creative MuVo Micro N200

Rating
80%

Pros
Compact size; display; looks good; great sound quality.

Cons
Fiddly controls; weak line-in recorder; no integrated USB jack.

Price
£90/$120 (512MB), £130/$170 (1GB)

http://www.theregister.co.uk/2005/03...ive_muvo_n200/


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Supports MP3, WMA and OGG

Pez To Dispense MP3s Instead Of Candy
Matt Hines

Rap impresario 50 Cent may be riding atop the Billboard charts on the strength of his hit single "Candy Shop," but music lovers of all kinds will soon be able to mix their passions for beats and sweets if one gadget maker's plans come to fruition.

That's right, the candy market's best-known handheld device, the iconic Pez dispenser, is about to go digital. Under a recently granted licensing agreement with Pez Candy, a gadget design company known as Lincoln West Studios will soon begin selling MP3 players modeled after the big-headed plastic treat sleeves.

Based on Lincoln West's plans, which were first detailed Thursday in a blog posted to the company's Web site, the Pez MP3 will arrive sometime this summer, built around a Samsung chip, and featuring 512 megabytes of capacity, as well as an LCD screen. The device will look exactly like a traditional Pez dispenser from at least two sides, and will come in a variety of colors, said Patrick Misterovich, president of the Springfield, Mo., design company.

And while the Pez MP3 will not hold any hidden capacity for carrying the time-honored candy onboard, the device will mate with any of the plastic heads produced to snap onto actual Pez Candy dispensers. This feature alone could play out in a gadget geek's dream, as Pez recently added characters from the Star Wars trilogy to its legions of swappable hinged craniums.

The first production run of the devices, built for Lincoln West by a third-party manufacturer, will deliver roughly 1,000 of the MP3 players to the United States. The music players, which will come with ear-bud style headphones and a USB cable to connect with PCs, will sell for $129 apiece and be sold directly through Lincoln West's site. The lightweight devices will have six control buttons and an LCD readout that mimics the design of other smaller players, Misterovich said.

The designer said he was inspired to create the Pez MP3 after following a competition launched by breath mint maker Altoids, which challenged participants to create something original out of one of the company's pocket-sized tin containers. The winner of the competition was an individual who stuffed a speaker for use with Apple Computer's iPod digital music player into one of the tins.

"I saw that and I thought, that's pretty neat, taking something that you wouldn't think of as electronics and turning it into a device," Misterovich said. "When I started thinking about how I could do that, the Pez idea came to me, and I figured it was something that was pretty cool that could appeal to a lot of people."

The gadget stylist has previously marketed MP3 players aimed at younger audiences, including so-called "tweeners," or boys and girls between the ages of 10 and 13, who fall between traditional children and teenage marketing segments. While those players, dubbed as Secondhand Monkeys, produced only mixed results, and relatively small sales, Misterovich said, the designer is convinced that the cult-like following already dedicated to the ubiquitous Pez candy dispensers will help spur greater interest in his newest creation.

"The (Secondhand Monkey) was just an experiment, it was probably a bit too early to market at that demographic, but it will be there someday," Misterovich observed. "Pez dispensers are something people have already shown that they're very willing to grab onto."
http://news.com.com/Inventor+turns+P...tml?tag=st.pop


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Potential of Lesser Known Audio Formats
ToM

Back in on dialup in 2001, I'd queue gigs upon gigs of MP3 audio via Audiogalaxy, rarely giving the quality of the files I was about to download a second glimpse. 128kbps, even 96kbps CBR MP3, as long as it sounded like the original song, it'd do. Hard drive space was an issue back then too. With less than 30GB to spare, I didn't want to waste precious space on small music files. Besides, what were LAME and Xing encoders? Back then, it didn't seem to matter.

Nowadays, my music downloading habits have changed a lot. Whether it's a single or an entire album, I now find myself spending time going after the best encodes I can find. With my PC now carrying close to a Terabyte of storage, I can download near endless amounts of music without skipping out on quality.

One open format of compression, Ogg Vorbis (.ogg), has appealed to me the most, and for the past couple of years has been my choice when ripping CDs to my shares.
Another lossy format that caught my eye was Musepack (.mpc). Although not my preference for encoding, I often download high quality MPC encoded albums from the likes of MPC Donkey.

"Lossy" is a term given to compressed music such as MP3, OGG, MPC, WMA and iTunes. These types of file have been compressed to an extremely small file size after being ripped from a CD. Quality varies depending on the format, bit rate and encoding technique used.
"Lossless" is the term used for formats which maintain their original CD-quality sound after being ripped from a CD. These are much larger than lossy audio.

One big advantage of downloading lossless audio is that you're free to compress it to your favorite lossy format afterwards for playback on, say, your portable MP3 player. Keep the original CD quality file or delete it after compressing, it's your choice.

Trans-coding from one lossy format to another simply doesn't work as you can't realistically make already-compressed audio a higher bit rate than the source.

Compared to lossy audio, lossless rips are much harder to get hold of online, particularly of older and rarer music. The newsgroups are probably the place you'll find the most lossless audio publicly, carrying an array of lossless binary groups. Much like with other media, eDonkey is also often a great resource for archived lossless rips.

Now, onto pay services. With lossless audio being a rarity, wouldn't you think pay services would want to fill the void? In the eyes of the experienced file sharer (this one at least) pay services such as Napster offer absolutely nothing new in comparison to what's already available - for free. In fact, with the inclusion of DRM (Digital Rights Management) restrictions, limited content and other annoyances, pay services offer substantially less than conventional P2P.

The one service I know of that's been offering lossless and alternative lossy encodes for sometime now is the Russian-based AllOfMP3.com. "Online encoding", as it's dubbed on their website, gives the customer the ability to choose from a range of different audio codec’s, ranging from MP3 to OGG to FLAC and so on. This variety appeals to me, and together with reasonable prices and the lack of DRM makes AllOfMP3 the only service currently on the market worth paying for, in my opinion.
Unfortunately, AllOfMP3 has been under legal attack from the American Recording Industry, and only remains legal due to its location. Back at the beginning of the month, AllOfMP3 was deemed legal under current Russian law.

The use of lossless and high-bitrate audio formats is a relatively recent trend; the MP3 format preceded consumer broadband by several years. As more people continue to migrate from dialup to broadband internet service, and with broadband speeds as well as hard drive capacities increasing, the popularity of lossless audio should continue to rise, perhaps even becoming the dominant format within the next few years amoungst file-sharers.

So, "Why waste time offering alternative codec support? .XXX is the most popular - all the hardware out there supports it!" Unfortunately, I believe this will be the excuse pay services will be using for some time to come. Also, supporting other formats would, in the eyes of a greedy distributor, give the consumer too much control over their purchase which would be free of the DRM Windows Media Audio can support.

Though it's true WMA, AAC (iTunes) and MP3 are the most widely used format by consumers, I still believe accounting for other formats could potentially attract a market that would otherwise not give pay services a second thought.
http://respectp2p.org/article/4/


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The Grokster Case's Silent Majority
Chris Anderson

This week the Supreme Court received an avalanche of friend-of-the-court filings for its hearing of the Grokster case, which pits a peer-to-peer file-trading technology against MGM. Yet the outpouring of concern in the case only hints at the true number of interested parties.

Two decades ago, when the famous Betamax case set a precedent that protected the VCR, it was consumers versus the studios and record labels. But now there's an equally important third party: the creative amateur — people like you and me who not only consume but also produce content. And they're on the side of Grokster and the extraordinary power of the new distribution networks.

As anyone who's played with the software now shipped with any new PC or Mac knows, the same tools that allow you to easily copy and share music and video also allow you to make your own. As a result, we're seeing the rise of a peer-production generation, such as teenagers using Apple's Garageband to create or remix their own music and snowboarders distributing highlight videos of their tricks to, yes, bloggers like me.

Once upon a time, the ability to manufacture and distribute media and entertainment was the domain of professionals alone. Only pros could harness presses, airwaves, trucks, warehouses; only pros could command shelf space in the media and entertainment markets. Videotape and audiotape were the first cracks in this wall, giving consumers the power to do a weak form of manufacturing and distribution. But digital technology collapsed the wall. Using no more than my laptop and any one of a hundred cheap or free online services, I can be recording studio, record label, music store and marketing machine.

The Amazons, EBays and iTunes of the world have broken through the distribution bottlenecks. Increasingly, their endless aisles of shelf space hold not just the manufactured hits of the traditional media and entertainment powers but also the remarkably diverse output of countless niche producers. Each may not sell a lot, but together they represent a cultural force that can rival the mass market.

And they are not just in it for the immediate sales. Britney Spears may consider file-trading a threat to her royalty stream, but there are other musicians who would be delighted to find they had become a peer-to-peer hit. Getting heard is the challenge for most bands; once they have fans, there are lots of ways to make a living off them, from touring to T-shirts to CD sales. Even legends like David Byrne are on their side. As he put it in a National Public Radio interview, "Most artists see nothing from record sales — it's not an evil conspiracy, it's just the way the accounting works. So as far as the artist goes — who cares?"

What's at stake is the realm of ideas, sliced and diced a million ways. The peer-to-peer music sites are the closest current approximation to the celestial jukebox we all want. Kazaa, for instance, has 25 million unique tracks, dwarfing iTunes' measly 1 million. BitTorrent has more videos than Blockbuster. Much of it is pirated, to be sure, but a significant portion of it — videogame highlights, say — was never intended to be moneymaking in the first place. The problem is that we don't know how to stop the piracy without chilling the creativity.

The main flaw in the case against Grokster is that the action attempts to criminalize a technology rather than a specific use. It also fails to distinguish between commercial content and noncommercial content. Restricting these powerful new distribution tools to fight piracy would hobble the new emerging creative class too. The potential collateral damage to legitimate users is much higher than in the Betamax case.

The Supreme Court should recognize that there is a silent majority in this case, made up not of pirates or the pop stars but the millions of individual talents who risk getting caught in the crossfire.
http://www.latimes.com/news/opinion/...mment-opinions


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New Dr. Who Leaked on Purpose?
Daniel Terdiman

The pilot episode of the BBC's highly anticipated new Doctor Who series may have been intentionally leaked onto file-sharing networks to generate buzz, a source who instructed the network on viral advertising told Wired News.

Earlier this month, the 45-minute premiere episode, entitled "Rose," showed up on BitTorrent. The appearance of the episode generated a flood of discussion in online forums, blogs and the mainstream media. As a result, interest in the show, which debuts March 26 on BBC One, has skyrocketed.

The new series stars Christopher Eccleston as the time-traveling doctor. The long-running sci-fi series began in 1963 but has been absent from TV screens since 1989, except for a one-off TV movie, which was widely panned.

To one advertising consultant, the leak is clear evidence the BBC is taking advantage of some recently learned lessons on the power of viral advertising it got from a collection of hired guns known as the Broadcast Assassins.

The Broadcast Assassins were a group of entertainment and technology veterans brought in last year by the BBC's entertainment group to "discuss the impact of new technologies on viewing/ listening behavior," said Asa Bailey, a veteran advertising expert and member of the group. "We told them all about the how-tos, and how to do viral advertising," said Bailey, who is also founder of the Viral Advertising Association.

Bailey said the BBC asked the group how to use viral advertising to inform the public of its programming.

"I told them they should release things before their time, like what they've done with Doctor Who," he said. "Give out the first episode online, because it's going to be valuable. You've got that cool factor, and it's the whole, 'I've seen it before you have' kind of thing."

Bailey said the leak "is great, and it's the first time we've ever seen them do it, and so we're really impressed with them."

Bailey said although he didn't have definite knowledge the leak was official, the quality of the episode is highly suspicious. If it were an unofficial leak, it would likely be of poor quality, he said.

The BBC denied any part in the distribution of the episode.

"The leak of the first episode on the internet was not a publicity stunt," BBC spokeswoman Annie Frederick told Wired News in an e-mail. "It was a significant breach of copyright which is currently under investigation. The source of it appears to be connected to our co-production partner. We would urge viewers not to spoil their enjoyment and to wait for the finished version."

Frederick didn't say whether the leaked pilot is the final version. Although the episode is high quality, it may be a rough or incomplete cut.

The co-production partner, the Canadian Broadcasting Corporation, also denied involvement, and said it is conducting its own investigation.

"We believe it was one of our suppliers," said CBC spokeswoman Ruth-Ellen Soles, who wouldn't elaborate on the nature of the supplier. "And at the moment, the investigation isn't complete."

But to Broadcast Assassin Bailey, denials of leaking the "Rose" episode are disingenuous. "It's a classic," Bailey said. "The best viral advert they could have done for that program would be to release the first (episode). You couldn't have come up with a better viral advert than that."

According to a study by Envisional, which monitors internet traffic, the United Kingdom is the No. 1 country in the world when it comes to downloading TV content from the internet. The study suggested that U.K. residents account for 20 percent of all TV shows downloaded from the net.

Meanwhile, although the BBC denies any role in the leak, the broadcaster has for months said it plans to implement digital downloading through the internet as a significant part of its broadcast offerings. The network said it will soon release a media player that would allow viewers to watch TV content online.

In any case, buzz about the Doctor Who episode has certainly paid off, whether the BBC takes credit for it or not. Word about it has reached countless sites, and, more importantly, the episode seems largely well-received.

"It's nice to have it back, and I'm looking forward to watching it with my daughter when it airs on the BBC in a few weeks," said writer Warren Ellis on his blog.
http://www.wired.com/news/digiwood/0,1412,66913,00.html


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MGM vs Grokster - The Lover's P2P Quarrel
Thomas Mennecke

On March 29th, 2005, legal representatives from Grokster and MGM will present their arguments before the United States Supreme Court. At issue is whether Grokster can be held responsible for copyright infringement. Copyright holders contend that Grokster should be held directly responsible for the infringing activities of its users.

While Napster quickly fell to the RIAA (Recording Industry Association of America) in 2001, this has not been the case for Grokster. Unlike Napster, Grokster functions on a decentralized network, specifically FastTrack. While Napster maintained centralized indexing servers at their headquarters, the FastTrack network distributes this functionality throughout the community via "SuperNodes."

SuperNode functionality is built into the Grokster software. Anyone with a fast enough computer and internet connection can become a SuperNode.

Since Grokster cannot control these SuperNodes, two Federal courts have negated the copyright industry's claim that P2P developers are liable for copyright infringement. The only course of action left for the copyright industry is their upcoming appeal to the United States Supreme Court. Below we present to you, in perhaps a more jovial fashion, the conflict and arguments that surround each party.

Grokster: How was your day?

MGM: I'm not talking to you, Grokster...

Grokster: I'm sorry, what's wrong dear?

MGM: Don't play stupid with me, you know exactly what's wrong...

Grokster: Honey, I swear, all I asked was how your day is going.

MGM: Well, where should I begin? I woke up this morning, and noticed that you were stealing almost all of my most popular music and movie files.

Grokster: That's ridiculous honey. I have been sitting here programming all day. In fact, I don't think I've left the house all morning.

MGM: I'm sure you would like me to believe that, and I'm sure you would like to convince everyone else of that also. But whether you would like to admit it or not, you're helping millions of individuals each day to violate my copyrights.

Grokster: And what exactly does that have to do with me? Like I said, all I have done is sit here and program all morning. How do the actions of my users have anything to do with me? I don’t keep track of them, they aren't my children you know...

MGM: It has everything to do with you. You have full knowledge of the infringing properties of your service. This makes you libel as a contributory infringer. Your software is designed to assist in the massive infringement of copyrighted material, and is constantly being upgraded to aide in this end.

Also, you are guilty of vicarious liability. With all the advertising and third party software that coexists with the software, you have been making millions of dollars in revenue. You have been gaining financial advantage by exploiting my copyrights. And I haven't seen a dime.

Grokster: Money? Is that what it boils down to with you? Let me tell you something. First, stop using such misleading words as "service." We do not provide a service, we write software that creates a network. Those are two very big and distinct differences.

Second, what is this about contributory and vicarious liability? Because my software can be used to violate your copyright, I am guilty of this?

What you describe also paints a picture for just about every other piece of technology out there...iPods, CD writers, DVD writers, etc. To protect people like me from people like you, the 9th Circuit Court agreed with the Supreme Court’s Universal vs Sony Betamax decision in 1983. The Supreme Court ruled in 1983 that Sony's Betamax recorder was legal, which absolved Sony of contributory copyright infringement, as it does me. The Supreme Court ruled this way because the Betamax recorder was "capable of substantial or commercially significant noninfringing uses.”

In addition, the 9th Circuit Court of Appeals ruled that I was not guilty of vicarious infringement because I do not control the indexing of files. Napster did control the indexing of files because their servers were centrally located. Since no communications exist between me and my users, save for the transmission of advertising, we are not guilty under this provision either.

MGM: I really can’t believe you're trying to pull that Sony Betamax crap with me right now. That's so typical of you.

Let me first say that you're right, the Supreme Court did find in 1983 that Sony's Betamax was capable of "substantial or commercially significant noninfringing uses.”

However, there are some big differences. All the gadgets you mention, iPod, CD Writers, etc, DO have substantial noninfringing uses. Video recorders DO have noninfringing uses. But do you expect me to use that logic with your software?

Let’s put things in perspective. According to some estimates, over 2 billion files are transferred over P2P networks every month. In addition, over 90% of those files are copyrighted works. I find it very hard to believe that any of those other electronic devices are used 90% of the time to distribute millions of copyrighted files each day.

You have obvious knowledge of copyright infringement. Why else have you stuck Napster metatags into your website to redirect web traffic? Hmmm? Why else did you choose a name so similar to Napster?

Grokster: Well, er-

MGM: I'm not finished! Do you think I forgot about the time when you created that nifty little AudioGalaxy migration tool? When I had those guys shut down, you went right ahead and created a program that easily transferred AudioGalaxy shared files to your service.

Lastly, let me reiterate that the 9th circuit court misapplied the Sony Betamax case. The Supreme Court ruled the majority of the Betamax’s use was for “time shifting” purposes of already free material. In addition, the application of “time-shifting”, or the recording of material for future viewing, has no effect on the artist’s incentive to create. The videocassette recorder, the court found, is not capable of massive copyright infringement and is protected under “fair use” laws since most people use the technology for home use.

I’m afraid that P2P technology and Betamax technology are on opposite ends of the spectrum here. P2P is fully capable of replicating copyrighted works beyond the Supreme Court's vision in 1983. Today, just about anyone can distribute thousands of copies of my material, multiplied by millions. How exactly does that constitute fair use?

Grokster: You really like to play around with that 90% figure, don’t you? Well let’s see, there are over 2 million people on the FastTrack network. Even if you number is correct, that leaves 10% sharing legal content. That equates to around 200,000 people. If you ask me, that is a substantial amount of people engaging in noninfringing activities. If you don’t believe me, let me break it down a bit.

Numerous recording artists, such as Janis Ian, Bela Fleck, John Mayer, Phish, Pearl Jam, and the Dave Matthews Band have authorized their work to be distributed via P2P. Numerous businesses, such as Prelinger Archives, GigAmerica, Reel Mind, and J!ve Media have built commercial businesses by using peer-to-peer file-sharing to promote and distribute hundreds of thousands of authorized copies of music, video, and video-game content. The Linux Operating System is frequently distributed by BitTorrent.

Many independent record labels are now opting to distribute their content via P2P also. Altnet, SnoCap, MashBoxx and BitMunk all have agreements with various independent labels to distribute their work. Should they suffer because you feel your business model is not in agreement with the P2P philosophy?

Lastly, the Supreme Court has shown in the past that it is not necessarily interested in what proportion technology infringes on one’s copyright. In the Betamax case, the Supreme Court ruled in favor of Sony because their technology is “merely capable of substantial noninfringing uses.” While Grokster may be used for infringing uses right now, the future of P2P may not necessarily be this way. The technology must be allowed to develop without stifling innovation.

P2P technology has proven time and again to be a very practical and money saving way to distribute legal content.

MGM: Well that’s really great for those artists and companies, Grokster. It really is. But how does that help my situation? You know what really irks me?

Yes, that 90% figure really is important to me. While I can appreciate that many artists are now using P2P to distribute their work, you are doing nothing to prevent the infringement of my copyrights.

The technology readily exists for you to implement into your software. Several vendors exist that can and will recognize the unique fingerprints of copyrighted work. It will then prevent those files from being shared or distributed across the network. But of course, you won’t do this because it will threaten your business model.

If you did filter copyrighted material, people would simply go to another network. Your former CTO buddy over at StreamCast said “the question is not whether file- sharing companies can filter, but whether they will.” So I suppose the question is why you refuse to filter out copyrighted material?

Grokster: Note that he was the former CTO of StreamCast, not current. I have to strongly disagree with him. First, he said that back in 2003. Back then, perhaps it was easier to filter copyrighted works.

But remember, Napster tried doing this on a centralized network. If searches are routed through a central point, then perhaps it is possible. However, can you imagine trying to do this on a decentralized network? Such a feat would be near impossible. You don’t seem to realize that we do not see what happens on an individual’s computer. Even if we did by some miracle of science develop the technology, it would require individuals to download a new version of the software.

I’m sure that will be real successful. I can see it now “Hey everyone, we have a new version that filters out copyrighted material, download it now!”

MGM: You know, Grokster I wouldn’t be so mad if you at least showed some effort to help me out here.

Grokster: I don’t want to be the bearer of bad news, but both Federal courts have agreed that we are not liable for copyright infringement. I have a strong suspicion the Supreme Court will think so too. I have tried to make amends with you MGM, I really have. But you just don’t want to listen to what I have to say.

MGM: I have listened, but you are so set in your ways that it doesn’t appear we will be able to settle these issues ourselves. I’ll see you in court.



Arguments for this story were derived from the MGM, Grokster and Napster briefs.
http://www.slyck.com/news.php?story=723


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Listen To The Supremes With Care

The current file-sharing legal battle in the US could well shape consumer technologies used around the world for the next decade, argues technology analyst Bill Thompson.

It would be nice to think that the argument currently taking place in front of the US Supreme Court over whether the Grokster and Morpheus peer- to-peer (P2P) network services are unlawful was just another piece of legal theatre that did not really concern us over here in Europe.

Sadly, history tells us we need to pay more attention to the outcome of the case than we might like to.

The outcome could well shape the consumer technologies used around the world for the next decade.

The court is being asked to decide whether Grokster and similar services are breaking the law because their networks can be used to distribute unlicensed content, like songs or movies.

What you do with it

Until now, P2P networks have relied on a decision from 1984 that protected Sony from being sued for producing video recorders.

The argument back then was that just because a technology could be used for copyright-infringing purposes that did not make it unlawful as long as there were also legitimate uses.

But the movie and music industries want to abandon this principle, and are arguing that courts should decide on a case-by-case basis.

This would let them sue Grokster, whose P2P network can be used for both licensed and unlicensed copying, but allow them to leave Apple alone even though iPods can do just the same.

The decision matters over here even though the case only concerns US law.

It matters in part because the US has a lot of influence over international organisations that write the wide-ranging treaties covering things like global trade and intellectual property law.

So if the Supremes go against Grokster it will not be long before WIPO, the World Intellectual Property Organisation, proposes extending the principle into international law.

But mostly it matters because the US is still the powerhouse of technological innovation.

If banks, venture capitalists and company directors are worried about being sued for marketing a cool toy that can be used in unanticipated but illegal ways then they will play safe.

The inventiveness that created the TiVo hard drive recorder, the MP3 player, and the dual-layer DVD writer will go into developing expensive games for locked-down consoles, new forms of keyword advertising for search engines and better ways around spam filters, or other equally useless activities.

In 10 years' time this may not matter much because China, India and Brazil will be leading the next wave of technological innovation, based around open source development and their own manufacturing capacity.

But they are not there yet.

While a decision to allow the entertainment industry to choke innovation in order to sustain its old business model in an online world could speed up this process, none of the aspirant players is yet ready to drive things forward.

Blogs bothered

It has certainly been entertaining to see the blog postings, Flickr feeds and other online activity coming from the copyfighters who queued all night to get one of the few places in the same room as the Justices while they consider the arguments.

And so far it seems to be going Grokster's way, with questions focusing on the impact on innovation and the degree of uncertainty that a change in the law would bring.

So I am optimistic about the final outcome, at least this time around.

This weekend I am speaking at the Edinburgh Science Festival, along with Lawrence Lessig, the Stanford law professor who has done so much to challenge the extremist view of copyright law put forward by large entertainment companies.

We will be arguing over the limits of the law, about how initiatives like the Creative Commons can make a difference and about how we can ensure that new technologies enhance freedom rather than simply give established players more control.

Lessig is one of the most prominent defenders of a more flexible approach to copyright.

It is one which would not make criminals of anyone who writes software that allows easy file sharing or simpler copying, and an outspoken opponent of a more restrictive law.

But he is a lawyer and an academic, not the CEO of a large software house whose business will be destroyed if the decision goes against Grokster.

It has been really disappointing to see how little support the P2P networks have got from the computing industry, even though they share a common cause.

Intel has filed a supporting statement with the court: the rest have been silent.

A few weeks ago, the Danish press reported that Microsoft's Bill Gates might re-consider the presence its research labs in Denmark if Europe did not allow software patenting, because he believes patents are vital to protect Microsoft's commercial interests.

The story has been dismissed outright by Microsoft. But it seems a reasonable position given how important patents are to Microsoft's strategy.

I may disagree with him but at least he is being consistent.

It is just a shame that he is not sitting in Congress with other representatives of the technology industry telling the politicians that giving the entertainment cartel the power to limit technological innovation will fatally undermine the US computing industry.

Then they might start to listen.

http://news.bbc.co.uk/1/hi/technology/4400373.stm
















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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[Fantom]

Excellent WiR as always, thanks for your efforts Jack.