Peer-To-Peer News - The Week In Review – June 11th, ‘05

[JackSpratts]

Quotes Of The Week


"In the world of the music business, the live business is one of the best because you can't download it. It boils down to creating an environment for it to be successful." – Jim Guerinot


"When you ask teenagers today if they use file sharing, they usually say, 'duh.' " - Tristan Morris













If RIAA People Weren’t Such Assholes

Father’s day is coming up and I found the perfect album for my dad. Now retired and a master gardener - something he really loves doing - he was born in the early nineteen twenties and his teenage years, critical in the formation of lifelong musical tastes, were spent in the mid thirties. He came of age at the height of the Jazz and Swing eras, two of the most important stylistic genres to come out of the US, as important as rock and roll and hip hop were to later generations, and it’s the musical style he will always come back to. If rock is essentially the rebellious child of swing, stripped of it’s father’s moderation and suave sophistication, and hip hop the runaway son of rock, forever furious at it’s parents, swing is the urbane but distant grandparent, comfortable in its accomplishments and fully aware, even if it’s children are not, that it’s progeny are carrying on the proud family tradition of musical rebellion and maverick innovation. It may be hard to believe from our vantage point but swing was as revolutionary and as frightening to the generation that came before it as rock and rap were to ours. Ask anyone old enough to have heard Hendrix’s Star Spangled Banner when new what they felt and you’ll have some idea how people reacted to Louis Armstrong when he was laying the foundations for jazz. In the way that most people at their deepest levels couldn’t comprehend that the sounds emanating from a Hendrix performance were created by a single guitar, people of an earlier age simply had no basis to compare Armstrong’s work when he lit up his horn. Not only was the music new, the style of it and the rhythms, but the actual sounds he was able to craft seemed totally unrelated to a wind instrument many people thought of as a mere Army heralding device. But out of such creative disturbances are movements made.

So here I am, facing the annual question of what to get the old man for father’s day when to my pleasant surprise I find an album by Paul Anka that not only fits the bill it does so in a delightfully unexpected way. Anka’s new record, Rock Swings, is a collection of rock songs from the eighties and nineties done honesty and faithfully in the best of the great swing style, with integrity and joy, a touch of poignancy and most unusually, a complete lack of irony. In short it’s the musical bridge from my generation to his. Dad can dig my tunes in the flavor he loves and I can dig his with songs I’m hip to.

Before I heard the disc like a lot of people I thought, sure, another vanity piece, probably full of wheezy arrangements and creaky rhythms, not unlike those abysmal Beatles covers from the seventies that were the favorites of elevator programmers the world over. Eleanor Rigby done by a Billion and One Cheesey Strings and god-awful. I didn’t need to listen to that, let alone foist it on the poor guy on a hot Sunday in June, but soon people started talking. At first DJs, then bloggers, with genuine affection for the most part, word of mouth so positive I knew it was worth a listen. Yesterday a handy app obliged, I got the record in about 90 minutes and was instantly hooked. I knew in a flash this would make a great purchase to go with the one I’m getting for his garden, if not for one small matter: I’m boycotting the RIAA. This has come up before, though not so affectingly. Truth be told I don’t like not being able to buy music from recording artists I want to support, and over the last few years since I started my boycott there have been times when I’ve been sorely tempted to break down and pick up a shrink wrapped CD from any number of bands I may have had a soft spot for. But I won’t.

As a DJ I’m used to getting cashless product. When Miles Davis’s producer Teo Macero started a new label he sent me a dozen discs for my perusal. Right through the U.S. mail. That’s pretty typical. So the whole file-sharing thing for me was never as much about scoring free swag as it was the power to thoroughly probe the globe for some obscure object of desire, and the freedom to do so whenever the muse gripped me, which is almost always. Even if the industry didn’t know it or still refuses to admit it P2P is the best promo service yet devised.

As awash as I had been in promo copies of the physical kind I’d never handed them out as birthday gifts. Perhaps the tackiness factor stayed my hand but whatever the reason I wasn’t going to start with downloads. If the stuff was good enough for presents, it was good enough to buy. And so it was. I’d download, listen, promote it at a show then buy a copy to give away. Pretty much business as usual, what I’d been doing since the seventies and the beginning of my professional relationships with the labels.

But things change.

The record companies lost the ball, freaked out and ordered their legions of RIAA undead to respond with writs, lawsuits, legislative bills and a host of gruesome attacks on everything from the Bill of Rights to clueless teenage girls and their scared single moms to basic American decency, none of which were doing this country any favors. Their lies got to me too. The untruth that file-sharing kills sales while sales were actually increasing was repeated conspiratorially by unquestioning media outlets worldwide, by lawmakers and by Judges, and spread like a forest of vibrating Pinocchio noses. It would be one thing if P2P was actually destroying artists and the companies that exploit them, I mean only the coldest of hearts would feel nothing at all, even if the feelings were small glimmers of satisfaction that a business long regarded as evil was getting a little of what it deserved, but in point of fact the record business, and the larger media companies that own them were and are doing better than they ever have, while they hypocritically paint my friends as moral outcasts for doing the equivalent of lending someone a tomato seed, and ironically promoting their products.

Enough was enough and for me to prop up this continuing outrage and attack on America’s fundamental principles of freedom and fairness was no longer tenable and so I supported a boycott. And here I am.

You know, I would’ve really liked to have bought this record for my dad and given it to him. Maybe listen to it together and see his expression during Anka’s swinging take of Van Halen’s Jump and the very personal interpretation of Soundgarden’s Black Hole Sun and the other dozen tunes he covers so well. If RIAA people weren’t such assholes I’d be wrapping up the CD right now but that’s not going to happen, not when they’re suing even more families this year, planning even more legislation to take away even more of our rights, and not when those very rights were fought over, literally, by my father during World War Two. Buying him a copy of this disc when the RIAA will use my money to undermine American democracy would be like slapping dad on father’s day. No thanks, even if he didn’t get the connection I would, and it’s no image I’m taking with me into my old age.

So I’ll get him something cool, something positive, something we can both enjoy in the giving and receiving on Father’s day, and save the CD buying for when the RIAA stop being assholes.

There is one small consolation.

He dropped by today while my felonious promo copy of Anka was blasting out my stereo. The old man has never gotten past the whole rock and roll loudness thing. Bridges are fine as far as they go but they only go so far and some eras just aren’t spanned. Once he figured out how, the first thing he did was turn the CD player off. In an instant I knew I’d made the right decision.

To the man who bought me my first tape recorder; happy fathers day pop.














Enjoy,

Jack












Supreme Court Rejects Lexmark Petition In Toner Cartridge Fight
AP

The U.S. Supreme Court won't weigh in on a closely watched copyright lawsuit in which a printer manufacturer is trying to stop a computer-chip maker
whose parts allowed cheaper toner cartridges to be used in name-brand machines.

Lexmark International Inc. said Monday it looks forward to continuing the fight over what it says are its intellectual property rights. The printer maker wants to block Static Control Components Inc. of Sanford, N.C. from selling the computer chips.

Lexmark's appeal to the Supreme Court was filed late and rejected, a spokeswoman for the Lexington, Ky., company said, meaning that the case returns to a federal district court in its hometown. The spokeswoman, Julane Hamon, declined to estimate what Static Control's chip is costing Lexmark.

Static Control contends that Lexmark engaged in anticompetitive and monopolistic conduct and should pay damages of more than $100 million.

``We have contended that Lexmark, through a variety of their business practices, violated a number of anti-competition laws,'' Static Control general counsel William London said.

Previously, the toner cartridges had to be returned to Lexmark for replacement. Using Static Control's chips, ``remanufacturers'' can make cartridges that work with Lexmark printers and cost less than its brand-name cartridges. Lexmark says Static Control is interfering with its relationship with customers.

``We will continue to ask the courts to enforce existing laws governing contracts and intellectual property so that our laser cartridge customers can get the benefit of full and fair competition,'' Lexmark said in a statement.

Lexmark sued privately held Static Control in 2002, saying the computer chips violated the 1998 Digital Millennium Copyright Act, a federal law to prevent people from tampering with technology.

A federal appeals court in Cincinnati rejected that view last year.

Static Control has continued to sell its Lexmark-compatible chips and last year developed a new generation it said conformed to guidelines set down by the appeals court.

London declined to say how many Lexmark-compatible chips have been sold.

Static Control supplies over 3,000 replacements parts -- including replacement chips for Hewlett-Packard, Canon, Xerox and others copiers -- to more than 10,000 remanufacturers worldwide. The company employs about 1,300 people in Sanford and declares sale of more than $300 million a year.
http://www.siliconvalley.com/mld/sil...l/11831822.htm


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PSP File-sharing Explosion 'Days Away'

The release of a utility onto the web that allows anyone with a 1.0 firmware PSP to 'dump' the data from a UMD to a memory stick is about to trigger a PSP file-sharing explosion.

According to GamesRadar the files are stored on the memory stick as raw ISO files. There is currently no way of playing back such files, but hackers are hard at work attempting to write a utility that does just that and a release may be only days away.

If they succeed we will likely see a flood of illegally copied and distributed PSP games.

There are, of course, several benefits to running games off a memory stick, including improved battery life, so users of the hacks are likely to defend themselves with the claim that they are just copying games for their own use. Yeah right!

PSPs using the 1.5 firmware (so that's most of the US batch) can't take advantage of the dumping software.
http://www.sony-psp-review.com/news/316

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P2P Radio Morphing Into Free Music Search
John Borland

Music start-up Mercora is dipping its toes into the trendy world of Internet search, with a new Web-based tool aimed at finding free music being played on the company's peer-to-peer radio network.

The company is expanding quickly from its roots as an innovative streaming Net radio service, in which it has blended much of the immediate on- demand listening of file-swapping networks with the legal framework of Web radio.

The new tool is aimed at appealing to a new audience of casual Web surfers, allowing them to search the Mercora network and listen to a wide range of songs that approximates on demand. Thus, a person might search for The Beatles and have two dozen or more songs instantly at their fingertips to listen to for free.

"Our strategy comes from the fact that there is no music search site that gives people the ability to listen to music immediately," said Atri Chatterje, the company's vice president of marketing. "Either you have the 30-second clip or a 99-cent download, or you have to go sign up for a subscription service. There's no immediate gratification."

That desire for instant, on-demand music has been a dangerous one for several generations of Webcasting companies, some of which have run afoul of copyright laws as they have added increasingly advanced features. Mercora is part of a new wave of companies that is pushing the boundaries of acceptable Net streaming services, providing as much interactivity as possible while remaining within the letter of the law.

Web radio companies are allowed under law to broadcast whatever music they like without asking permission, as long as they pay copyright owners about seven one-hundredths of a cent per song streamed. But that open-ended invitation comes with restrictions: Digital DJs aren't allowed to let listeners choose specific songs at specific times, aren't allowed to let listeners make permanent copies of songs, and have strict limitations on how many songs by a single artist they can play back to back.

Mercora has adapted to these rules with a peer-to-peer network that turns all its listeners into Webcasters, streaming music from their hard drive at the same time as they're listening. The service keeps track of what song is currently playing at any given time from each member, and allows listeners to search by artist.

As with any peer-to-peer system, the power of this model is in its numbers. With between 20,000 people and 30,000 people potentially streaming music at the same time, odds are good that a song from any given popular band will be on somebody's rotation, and the network can immediately switch a listener to that person's "channel."

The new Web search tool taps into the network the same way, searching the Mercora "now playing" list through a Web browser instead of through the companies' software application. Surfers who want to listen to any of the songs found still must download the software, however.

Chatterje said the company will soon be adding Google-like text ads to the search results, bringing another potential revenue stream into the start- up's coffers. The search tool will likely be expanded to include podcasts and songs from other Web radio sources during the next few months, he added.

As it expands to search broader music offerings online, the company could run into powerful opposition. Sources have said Yahoo is developing a new music search tool, although no details on those plans have emerged.

Mercora's increasing moves toward a nearly on-demand service have drawn scrutiny from Web radio licensing authorities, but as yet there are no indications that the company has gone too far.

"We're looking at their more recent offerings to see if they're in compliance with the (law)," said John Simson, executive director of SoundExchange, the group that collects and distributes royalties from Web radio stations. "We haven't come to a conclusion yet."
http://news.com.com/P2P+radio+morphi...3-5734405.html


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Nokia Sensor Brings File Sharing to Phones

Nokia today introduced the Nokia Sensor, a phone software application that offers a new, exciting way for people to create information and share it with other phone users nearby. With Nokia Sensor, users can create personal pages on their phone, including text and graphics. Nokia Sensor users can also check out the pages of other Sensor users in their vicinity, exchange messages and share files with them. The Nokia Sensor application works over Bluetooth wireless technology, providing connectivity within a range of up to 10 meters from the mobile device. Nokia Sensor is free of charge.

The Nokia Sensor application creates a totally new way of communicating with people in the same location, for example in cafes, get-togethers, busses and trains. People are able to use their creativity and imagination to learn more about other people and their interests. It boosts the opportunities of Bluetooth wireless technology on the mobile device. Nokia Sensor is a spontaneous, sociable application for spontaneous, sociable people.

"The Nokia Sensor application allows users to express themselves and discover new things about others nearby in a novel and simple way. This means that the value of using mobile phones and devices is expanded to connecting with those who share the same space at the same time, acquainted or unacquainted," says Hannu O. Nieminen, Vice President of User Experience Unit at Nokia.

Nokia Sensor is now available for a number of Nokia products including the Nokia 3230, 6260, 6600, 6620, 6630, 6670, 6680, 6681, 6682, and 7610. Nokia Sensor can also be downloaded to PC or directly to the phone from http://www.nokia.com/sensor . A full list of Nokia Sensor's features is available on the website.
http://www.mobiledia.com/news/30968.html


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Some See Benefits of File Sharing

Independent labels use networks as a way to reach consumers, not necessarily make money.
Jon Healey

Many record industry executives think of file-sharing networks as a den of music thieves, but Brady Lahr sees a vein of gold waiting to be tapped.

Lahr, co-founder and president of Kufala Recordings, is one of a number of file-sharing advocates who argue that the networks can play an important role in e- commerce.

While the major entertainment conglomerates argue that popular file-sharing networks have no "commercially significant" use, Lahr and numerous other independent artists, labels and filmmakers are trying to sell their digital wares amid the profusion of bootlegged goods.

So far, though, the results have not lived up to many of the pioneers' hopes.

Despite the enormous number of users on the networks, sales have been slight. Labels that use the peer-to-peer networks say they generate less than 10% of the sales that industry-sanctioned outlets such as Apple Computer Inc.'s iTunes Music Store do.

The networks' ability to become legitimate sources of music, movies and other goods is a key issue for the Supreme Court, which is considering whether two popular file-sharing companies should be held liable for their users' rampant piracy. The major labels, studios and music publishers have asked the court to overturn the U.S. 9th Circuit Court of Appeals, which shielded StreamCast Networks Inc. and Grokster Ltd. from liability.

The court's ruling is expected this month.

Regardless of the low music sales, file-sharing advocates believe the networks are too good an opportunity to ignore.

"We really want to sell our material through this new sales channel," said Lahr, whose Santa Monica-based label specializes in concert CDs. "It really gives new artists or breaking artists an opportunity to expose themselves to a new audience."

To many independent labels, the main goal is simply to introduce music fans around the globe to little-known artists who have no chance of being played on commercial radio stations. The payoff they hope for in the long term is greater CD sales; any downloads they sell on the networks are icing on the cake.

"It is small, but everything starts small," Chief Executive Daniel Glass of Artemis Records said of his company's revenue from Kazaa and other popular file-sharing networks. "To not be part of it is insane."

The amount of piracy on the networks is staggering, with estimates running into the billions of files per month. Executives at four companies that distribute authorized copies of songs and games said demand for their wares was small by comparison yet growing quickly.

The four — Altnet Inc., a subsidiary of Brilliant Digital Entertainment of Sherman Oaks; Intent MediaWorks of Atlanta; Shared Media Licensing Inc. of Seattle; and Trymedia Systems Inc. of San Francisco — estimated that authorized downloads accounted for as many as 20 million files a month. Less than 5% of those downloads generate revenue, either through sales or advertiser sponsorships, according to the companies.

The iTunes Music Store, by contrast, has been selling more than 40 million tracks a month. But iTunes has a distinct advantage: It can offer music from the major labels, which have refused to let their songs be sold on virtually every file-sharing network.

That's a crucial problem for the file-sharing networks, said Chief Executive Eric Garland of BigChampagne, a firm in Beverly Hills that monitors those networks. "If you don't have any top sellers available for sale, then you are not, first and foremost, a place to buy music. I think that's the perception," he said.

President Sam A. Yagan of MetaMachine Inc. said copyright laws forced his company to keep its distance from users of its eDonkey network.

"We have virtually no information on who our users are, what their preferences are, what their tastes are, what their demographic profile looks like," he said. "So we are really shooting blind when we try to market products to them."

Executives of Artemis Records, home to Steve Earle and the late Warren Zevon, said they collected less than $10,000 a month from sales on file-sharing networks, or 3% to 5% of what they are seeing from iTunes. Still, Glass remains enthusiastic, noting the steady growth in sales and the relationships the label is building with advertisers on the networks. "We're not encouraging stealing," he said. "We're going where they want to be."

Beth Appleton, head of new media and business development for V2, the independent label whose roster includes the White Stripes and Moby, said it was important just to give users the opportunity to pay for what they copy. "The Kazaa environment is where we're converting and educating people who download music illegally into legal downloaders," she said.

Part of the process is trying alternatives to the 99-cents-per-download model championed by Apple. For example, Intent MediaWorks and Altnet are using ad revenue to subsidize downloads, and Shared Media Licensing is encouraging people to sell its files to other users by giving them some of the proceeds.

Still, to some executives, trying to sell music on file-sharing networks is a fool's errand.

"The theory that 'if you just give these peer-to-peer users an opportunity to pay for something, they will' is completely wrong," said Tuhin Roy, managing director of the Digital Rights Agency, which helps independent labels and artists sell music online. "The people who are on those networks are there because they want free content."
http://www.latimes.com/technology/la...ck=1&cset=true


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File-Sharing Law To Be Tabled Next Week: CTV
CTV.ca News Staff

The federal government will introduce new legislation aimed at toughening up copyright laws in the digital world, CTV News has learned. Still, industry stakeholders who say file sharing is stealing say the laws are not stringent enough.

About seven million Canadians download music from the Internet and the Canadian market for music downloads is estimated to be $100 million, according to The Canadian Independent Record Production Association.

"Somebody once described it as the the celestial jukebox, because you can find just about anything out there," Internet user Joey de Villa said.

Copyright holders have long been pushing for the federal government to toughen up laws. While new legislation will be tabled next week, industry stakeholders say the legal action is still not tough enough.

"Not only is it not as tough as we would like. It doesn't provide the adequate legal framework that we would like," Graham Henderson, of the Canadian Recording Industry Association told CTV News.

The new legislation will contain rules that will make it illegal to hack or break into the digital locks often used to prevent the copying of movies and software -- although it will remain perfectly legal in Canada to copy a CD for personal use.

"The digital locks themselves can be used to take away rights that users already have," University of Ottawa law professor Michael Geist told CTV News.

The legislation also sets up what is called a notice-and-notice regime to handle complaints of copyright infringement.

Under this system, an Internet service provider will receive a notice from a copyright holder complaining about violations from its provider's customers. The ISP would then send a notice to that customer.

"If a father or mother gets a notice from their ISP that they might be sued because of the activities of their teenaged son or daughter, you could be pretty well assured that that activity is going to change," said Jay Thomson of the Canadian Association of Internet Providers.

This puts the onus on a rights holder to prove a violation has occurred.

But that's still not good enough for de Villa.

"I want to be policed by the police, rather than by the record companies," he said.

This legislation likely won't become law until later this year and experts say it may only be the first of several changes to the legal environment on music downloading. They expect entertainment industry heavyweights to continue pushing to banish Internet-based file sharing.

Last month, Canadian record labels were dealt another legal blow in their quest to curtail online music sharing.

In a unanimous decision, the Federal Court of Appeal dismissed the Canadian Recording Industry Association's appeal to oblige Internet service providers to release the names and addresses of 29 people alleged to be trading music with Net surfers.

As well, the judges refrained from making sweeping conclusions on copyright laws -- specifically about whether downloading or uploading music should be illegal.
http://www.ctv.ca/servlet/ArticleNew...0/?hub=SciTech


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RIAA Targets More i2hub Users

Second Filesharing Lawsuit to Focus on Internet2 Network
Josh Hirschland

Clearly, the Recording Industry Association of America doesn't take a summer vacation.

On May 26th, the RIAA, a copyright protection agency encompassing most major American music labels, filed a lawsuit in the New York Southern District Court regarding three "John Doe" defendants accused of illegally sharing protected music filed over the peer-to-peer i2hub program from Columbia University. The subpoena was a part of a fresh round of lawsuits aimed at 91 students at 33 universities -- including Harvard, Brown, Princeton, and New York University -- on the super high- speed internet2 research network.

The lawsuit does not name the defendants. In these lawsuits, the RIAA regularly issues subpoenas to internet service providers, such as Columbia University, for identifying information regarding the defendants. The University does not monitor activity that goes over its network, but as a matter of policy does comply with the lawsuits.

The move comes just five weeks after the RIAA issued an earlier round of lawsuits at 405 i2hub users at 18 universities, including 25 at Columbia. Until that point, users had assumed that the program, which operated over the private internet2 network that services more than 200 research universities, provided a private and safe means of file sharing.

"Those sued in this round have a somewhat lower number of files [then those targeted in the first round], ... but we are still talking about very egregious and harmful conduct," Jenni Engebretsen, an RIAA spokesperson, said.

"As long as students continue to corrupt this specialized academic network for the flagrant theft of music, we will continue to make it clear that there are consequences for these unlawful actions," RIAA president Cary Sherman was quoted as saying a press release announcing the latest round of lawsuits, which also included 649 individuals who had used programs other than i2hub, including KaZaA, Limewire, and Grokster. He added that "with the multitude of legal music alternatives available to students today, there is simply no excuse for this ongoing, illegal downloading on college campuses." Included in the lawsuits are students at seven schools that employ legal file sharing services including iTunes and Napster.

The Supreme Court is currently deciding the case of Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd., which will determine the issue of whether developing the technology behind these peer-to-peer networks is legal. A decision is expected in the coming weeks. The Electronic Frontier Foundation, an organization that fights for technological innovation, estimates that 60 million Americans share files over these networks.

To date, the RIAA has issued more than 11,000 lawsuits against file-sharers since they began issuing them in the fall of 2003. If found guilty, defendants can be held liable for damages of up to $150,000 per song; however, to date, the lawsuits have all been settled out of court for an average of $3,500 per case.
http://www.columbiaspectator.com/vne.../42a793b061fa7


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International Recording Industry Targets Parents In New Anti-Piracy Campaign
Jane Wardell

The international recording industry signed up a global children's charity Wednesday to promote its anti-piracy message to parents around the world, suggesting that many adults have no idea what their children are up to on home computers.

The International Federation of Phonographic Industries, or IFPI, will use record stores, supermarkets and schools, libraries and websites to distribute a leaflet aimed at educating parents. The organization's national subsidiary in the United States has been criticized for including children in lawsuits against people illegally downloading music from the Internet.

The pamphlet, "Young People, Music and the Internet - a guide for parents about P2P, file-sharing and downloading," has been created by Childnet International, a charity that deals with issues of child security on the Internet .

"This campaign is perfectly timed, and it is aimed exactly at the right audience," said IFPI chairman John Kennedy. "At a time when music on the Internet, both legal and illegal, is being made available everywhere, parents, now more than ever, need to be armed with knowledge about the opportunities and the pitfalls surrounding online music."

The leaflets will be distributed in 19 countries, including Germany, Italy, Spain, Singapore, the United States and Mexico.

The IFPI, which has been waging educational and legal campaigns against music pirates for the past few years, said that millions of young people are regularly downloading music from legal services.

Many others, however, are using illegal file-sharing networks, such as peer-to-peer networks that give computer users access to music files directly from the computers of other users on the network.

The London-based IFPI based the need for the pamphlet on research carried out by the London School of Economics that found while only one in 10 parents know how to download music, some 45 per cent of the 84 per cent of nine-to 19 year-olds who use the Internet regularly do so.

"Whilst children love the Internet and enjoy sharing music and other entertainment files, we believe that most parents have no idea how file-sharing works or what besides music is carried on the global file-sharing networks," said Childnet Chief Executive Officer Stephen Carrick-Davies.

The international recording industry has blamed the prevalence of illegal music downloading for severely crimping the legitimate profits due to artists and record companies.

The Recording Industry Association of America attracted criticism in 2003 when it included children in a series of lawsuits against illegal music file swappers.

The U.S. House of Representatives last year passed a bill that encourages the FBI to use Internet providers to forward warning letters to subscribers whose accounts are being used for illegally downloading music and movies. That provision is aimed largely at parents who may be unaware of their children's activities.
http://www.canada.com/technology/sto...6-8330d8ce69ff


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Record Labels Close Spanish Song Site
John Borland

One of the oldest Web sites offering inexpensive music downloads has closed, after years of legal battles with record labels.

Weblisten.com, which has operated in Spain since 1997, offered subscribers the ability to download an unlimited number of songs for about $40 a month. It also offered shorter, cheaper windows of time that lasted a week or a weekend.

The company had long contended it had permission to offer major-label songs, without any kind of copy protection, after negotiating with Spanish licensing agencies. Record labels around the world disagreed and spent years in court suing the company.

This week, the legal battle ended. The site now contains a terse note in four languages saying it has been shut down, and the trade group representing international record companies says the company finally admitted to criminal copyright infringement in court.

"Despite the long delay in the Spanish court system, this result makes it clear that you cannot offer music online without permission from all of the people that created the music," Allen Dixon, executive director of the International Federation for the Phonographic Industry, said in a statement.

The record industry has had mixed success against companies that have pointed to local licensing authorities as legal shields for unconventional business models.

Another Spanish site similar to Weblisten, called Puretunes, shut its doors not long after being sued by the record labels. However, a Russian site called AllofMP3.com, which offers downloads for just pennies per song, remains open despite pressure from the music industry.
http://news.com.com/Record+labels+cl...3-5730102.html


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UK Developer Quits DVD Decrypting
Matt Loney

The UK-based developer of DVD Decrypter, one of the most popular tools on the Internet for decrypting DVDs, has quit under duress from an unnamed company.

The famously elusive developer, who is known only by the name 'Lightning_UK', posted a resignation letter on the CD Freaks website saying that he had been forced to stop all development of the utility and hand over his own website, www.dvddecrypter.com.

On Monday www.dvddecrypter.com, which is ranked third on Google for searches on the term 'DVD' was inactive, showing only an "Error: Host Not Accessible" message.

"Ok so it has taken a while (almost 2 years), but eventually 'a certain company' has decided they don't like what I'm doing (circumventing their protection) and have come at me like a pack of wolves," wrote Lightning_UK on the CD Freaks site. "I've no choice but to cease everything to do with DVD Decrypter. I realise this is going to be one of those 'that sucks -- fight them!' kinda things, but at the end of the day, it's my life and I'm not about to throw it all away (before it has even really started) attempting to fight a battle I can't possibly win."

The developer went on to say: "If 321 Studios can't do it with millions, what chance do I have with £50?," he said, referring to the US company that in February 2004 was forced to stop producing its DVD copying products when a US judge ruled them illegal under US law.

"So anyway, from this point forward, I'm no longer permitted to provide any sort of assistance with anything that helps people infringe the rights of 'a certain company'," said the UK developer. He added the domain name will be transferred over to the 'company' by the end of the week.

Jan-Willem Aldershoff, owner of the CD Freaks site, said the UK developer was hard to track down at the best of times. "He is hardly traceable. He has hidden his identity very well for obvious reasons." Now, he said, all communication has ceased.

This episode is likely to be jumped on by the developer community as the latest instance of corporations threatening the work of developers and the rights of consumers. Norwegian developer Jon Lech Johansen became something of a cause celebre after being aquitted on charges related to alleged copyright violation after he created the DeCSS de-scrambling program.

Aldershoff said another group of developers had retreated to Antigua to produce their product, called AnyDVD.

Struan Robertson, an IT lawyer with Pinsent Masons law firm, said the developer could have been breaking the law in the UK.

"If he is offering software that decrypts the copy protection mechanisms on DVDs then he risks being found guilty of an offence even in this country," he said. The developer's liability would be under the Copyright and Related Rights Regulations 2003, which implemented the European Copyright Directive.

"In the UK our current laws are similar to some provisions in the DMCA so if you are interfering with copy protection mechanisms then unless you can say you are doing it for purposes of research you run the risk of prosecution," said Robertson.
http://news.zdnet.co.uk/software/0,3...9202135,00.htm


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Long-Playing Plans For Music Copyright Ownership
Peter Ranscombe

POP songs will receive longer protection under new plans to extend copyright laws.

It will mean Beatles classics such as Love Me Do and Please, Please Me, released in 1963, will not automatically lose their copyright in 2013.

The Rolling Stones may also benefit, with songs such as (I Can't Get No) Satisfaction having their copyright extended beyond 2015.

United States copyright law protects songs for 95 years and UK government ministers are reported to be considering a similar length of time for British products.

James Purnell, the minister for creative industries, is expected to announce the plans in a speech this week.

He thinks the extra revenue for record companies will allow them to find new acts and develop their talent.

"Finding talent and artists is expensive," Mr Purnell said. "There is a view that long-term earners are needed so that the record companies can plough money

back into unearthing talent.

"Bands like Coldplay will make enough money for their company to discover around 50 or 100 bands."

The move follows an uproar after early Elvis Presley tracks including That's All Right, Mama came out of copyright in Europe at the end of 2004.

Tessa Jowell, the culture secretary, is also planning to set up a music council, to help with cross-industry schemes. The new body would operate along the same lines as the existing film council.
http://news.scotsman.com/entertainment.cfm?id=618292005


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Lawmakers Want 'Patent Troll' Crackdown
Erica Werner

The high-tech industry calls them "patent trolls" _ people who get patents for products they never plan to make, just so
they can sue for infringement if a company does turn out something similar.

That is how critics describe the inventor from Great Falls, Va., whom Internet giant eBay wants to take to the Supreme Court over online selling techniques he patented.

Now Congress, urged on by a coalition of high-tech companies that includes eBay, wants protection against such people.

"I think patent trolls are abusing the system," said Rep. Lamar Smith, R-Texas, who wrote the bill.

The first major changes to patent law since 1999 are running into opposition from drug makers, fearful an overhaul could stifle their ability to bring innovative products to the market.

A bill introduced in the House on Wednesday would make it harder for patent-holders to get court orders to stop the sale of products that potentially infringe on their patents. Challenging a patent would become easier.

Also, the legislation would commit the U.S. to international standards on patent registration: The patent goes to the inventor who files first.

Smith, chairman of the House Judiciary subcommittee on intellectual property, co-sponsored the bill with the committee's top Democrat, Rep. Howard Berman, D-Calif. A hearing was set for Thursday.

The Information Technology Industry Council, which represents eBay and other high-tech companies, says patent lawsuits in federal court doubled from 1,200 to 2,400 annually from 1998 to 2001.

"The broken patent system right now, and the rise in lawsuits, has unfortunately discouraged our companies from innovating, and patent trolls are gaming the system," said Josh Ackil, the group's vice president of government relations.

The boom of the 1990s led to a rush to patent new kinds of technology, some of which were poorly understood at the time, the industry says.

Unlike high-tech businesses, pharmaceutical companies do not have the same problems with "patent trolls" because drug formulas generally are more difficult to develop than computer technology.

"Any attempts to change or weaken current patent laws could have a profound impact on our companies' ability to create new innovative drugs and save lives," said Ken Johnson, senior vice president at the Pharmaceutical Research and Manufacturers of America.

Representatives of PhRMA, the Biotechnology Industry Organization, high-tech groups and others failed in recent meetings to reach agreement on possible changes to patent law.

A judge now can issue an order to protect patent rights. The House bill would allow an order only if the patent-holder would suffer irreparable harm without one.

High-tech companies contend that judges grant orders almost automatically, giving too much power to patent-holders.

But lawyers and small-time inventors like Tom Woolston of Virginia, who took on eBay, say court orders are not so common and that problem of patent trolls is exaggerated.

Woolston defended his five-person company, MercExchange, as a legitimate business that, before the court case with eBay, hoped to develop online sales techniques. EBay lost in a lower court and wants the Supreme Court to take the case.

The proposed legislation would favor big companies, Woolston said. "If you didn't have your owner's right of patent _ which is the ability to stop somebody from using the invention _ how can a small company raise money to build an invention?" he asked.
http://www.washingtonpost.com/wp-dyn...060801901.html


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Senate Panel Votes To Expand Patriot Act

Forget scaling back the Patriot Act.
Declan McCullagh

Instead, the controversial post-9/11 law would be expanded to give the FBI new powers to demand documents from companies without a judge's approval, according to a vote late Tuesday by the Senate Intelligence committee.

The final text of the Senate Intelligence committee's amendments was not immediately available (here's a draft dated last month), and reporters were barred from the secret session during which the vote was held.

But the proposal appears to grant the FBI more power to seek information from banks, hospitals, libraries, and so on through "administrative subpoenas" without prior judicial oversight. The subpoenas are only supposed to be used for terrorism or clandestine intelligence cases.

One other detail: the FBI may designate that the subpoenas are secret and punish disclosure of their existence with up to one year in prison (and five years if the disclosure is deemed to "obstruct an investigation.")

In testimony in April, FBI director Robert Mueller said: "The administrative subpoena power would be a valuable complement to (existing) tools and provide added efficiency to the FBI's ability to investigate and disrupt terrorism operations and our intelligence gathering efforts."

The ACLU denounced the Senate Intelligence committee's vote. "In a move antithetical to our Constitution, the new 'administrative subpoena' authority would let the FBI write and approve its own search orders for intelligence investigations, without prior judicial approval," the group said in a statement. "Americans have a reasonable expectation that their federal government will not gather records about their health, their wealth and the transactions of their daily life without probable cause of a crime and without a court order."

In theory, the expand-the-Patriot-Act bill now goes to the Senate floor for a vote. But some negotiations are likely to take place between the Intelligence and Judiciary committee, and that could affect the final form of the legislation.
http://news.com.com/2061-10789_3-5736302.html


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Europe To Push Ahead With ISP Snooping Law
Sylvia Carr

Legislation that would require telephone companies and Internet service providers to save information about customers' communications is set to proceed despite being rejected by the European Parliament.

The legislation's draft proposal was introduced jointly by France, Ireland, Sweden and the United Kingdom to aid law enforcement in combating terrorist acts. It will require phone companies and ISPs to retain for 12 to 36 months customer data such as the time, date and location of sent and received e-mails and phone calls. The content of the communications, however, will not be retained.

The European Parliament on Tuesday rejected the proposal, partly on grounds it could be illegal.

"There are sizable doubts on the choice of the legal basis and the proportionality of the measures. It is also possible that the proposal contravenes Article 8 of the European Convention on Human Rights," the report from the parliamentary committee on Civil Liberties, Justice and Home Affairs says.

The committee also criticized the proposal because the data would be difficult to analyze and criminals could find a way around it.

"Given the volume of data to be retained, particularly Internet data, it is unlikely that an appropriate analysis of the data will be at all possible," the report says. "Individuals involved in organized crime and terrorism will easily find a way to prevent their data being traced."

The amount of data collected would be 20,000 to 40,000 terabytes or "equivalent to 10 stacks of files each reaching from Earth to the moon," the report said, and the cost to each affected company would be 180 million pounds per year.

In spite of this rejection, though, Luxembourg minister Nicolas Schmit said Tuesday that the Council of Ministers will stand by the proposal, which has now been referred back to the parliamentary civil liberties committee.

The European Commission is also getting involved. It has said it will introduce a new proposal for communications-data retention with a different legal basis by the summer.

Regardless of the European legislation, in the U.K. communication service providers already retain data on customers' phone calls, e-mails and Web behavior for one year, thanks to the Regulation of Investigatory Powers Act.
http://news.com.com/Europe+to+push+a...3-5739292.html


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China Orders All Web Sites to Register
Elaine Kurtenbach

Authorities have ordered all China-based Web sites and blogs to register or be closed down, in the latest effort by the communist government to police the world of cyberspace.

Commercial publishers and advertisers can face fines of up to 1 million yuan ($120,000) for failing to register, according to documents posted on the Web site of the Ministry of Information Industry.

Private, noncommercial bloggers or Web sites must register the complete identity of the person responsible for the site, it said. The ministry, which has set a June 30 deadline for compliance, said 74 percent of all sites had already registered.

"The Internet has profited many people but it also has brought many problems, such as sex, violence and feudal superstitions and other harmful information that has seriously poisoned people's spirits," the MII Web site said in explaining the rules, which were quietly introduced in March.

All public media in China is controlled by the state, though limits on the Internet have tended to lag behind as advances in technology and the Web's rapid spread outstripped Beijing's ability to keep tabs on users and service providers.

China has more than 87 million Internet users, the world's second largest online population after the United States.

The government has long required all major commercial Web sites to register and take responsibility for Internet content - at least 54 people have been jailed for posting essays or other content deemed subversive online.

But blogs, online diaries, muckraking Web sites and dissident publishing have been harder to police. According to cnblog.org, a Chinese Web log host company, the country has about 700,000 such sites.

Now, however, the government has developed a new system to track down and close those caught violating the rules, the ministry said.

"There's a 'Net Crawler System' that will monitor the sites in real time and search each Web address for its registration number," said one document listing questions and answers about the new rules. "It will report back to the MII if it finds a site thought to be unregistered."

The press advocacy group Reporters Without Borders protested the new rules, saying they would force people with dissenting opinions to shift Web sites overseas, where mainland Chinese users might be unable to access them due to government censorship filters.

The Paris-based group said that in May, many bloggers in China received e-mail messages telling them to register to avoid having their blogs declared illegal.

"Those who continue to publish under their real names on sites hosted in China will either have to avoid political subjects or just relay the Communist Party's propaganda," the rights group said. "This decision will enable those in power to control online news and information much more effectively."

The latest restrictions follow many others. Authorities have closed down thousands of Internet cafes - the main entry to the Web for many Chinese unable to afford a computer or Internet access.

They've also installed surveillance cameras and begun requiring visitors to Shanghai Internet cafes to register using their official identity cards - all in an effort to keep tabs on who's seeing and saying what online.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Four Million Customers

Citigroup Data Is Lost
AP

CitiFinancial, the consumer finance division of Citigroup Inc., announced Monday that it has begun notifying some 3.9 million U.S. customers that computer tapes containing information about their accounts have been lost.

Citigroup, which is based in New York, said the tapes were lost by a courier in transit to a credit bureau.

The bank said the tapes contained information about both active and closed accounts at CitiFinancial's branch network. It said they did not contain information from CitiFinancial Auto, CitiFinancial Mortgage or any other Citigroup business.

The statement said that CitiFinancial "had no reason to believe that this information has been used inappropriately, nor has it received any reports of unauthorized activity."

It was the latest in a series of data losses or breaches that have forced financial institutions and other data collectors to warn customers that their personal information may be at risk.

Last month, media and entertainment company Time Warner Inc. said that computer backup tapes containing data on 600,000 individuals were lost by an outside data storage firm.

The data were on current and former employees going back to 1986, as well as some of their dependents and beneficiaries, the company said. It did not include personal data on Time Warner customers, the company said.

Also in May, more than 100,000 customers of Wachovia Corp. and Bank of America Corp., both headquartered in Charlotte, N.C., were notified that their financial records may have been stolen by bank employees and sold to collection agencies.

In all, nearly 700,000 customers of four banks may be affected, according to police in Hackensack, N.J., where the investigation was centered.

CitiFinancial issued an apology for the latest data loss.

"We deeply regret this incident, which occurred in spite of the enhanced security procedures we require of our couriers," said Kevin Kessinger, executive vice president of Citigroup's Global Consumer Group and president of Consumer Finance North America. "There is little risk of the accounts being compromised because customers have already received their loans, and no additional credit may be obtained from CitiFinancial without prior approval of our customers."

Kessinger said that beginning in July, the data "will be sent electronically in encrypted form."

Citigroup shares fell 11 cents to $47.45 in midday trading on the New York Stock Exchange.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Microsoft To Grant Pirate Software Amnesty To Indonesia: Report
AFP

Microsoft, the world's largest software maker, is to grant Indonesia an amnesty on pirated versions of its Windows program used on government computers in exchange for a token payment, a report said.

Under the deal, up to 50,000 computers running illegal software would be legalized at a dollar each, Information Minister Sofyan Djalil said, according to the Jakarta Post daily. In exchange, Indonesia would promise to purchase authorized Microsoft merchandise in the future and launch a major crackdown on a pirated software racket that is believed to be one of the world's worst. Djalil said the amnesty proposal emerged from a meeting between Indonesian President Susilo Bambang Yudhoyono and Microsoft founder Bill Gates at the company's headquarters in Seattle last month. "Microsoft is being realistic. They can't force developing countries like us to solely use legal software since we can't afford it. They want us to gradually reduce our use of it," Djalil said. A study by the Business Software Alliance, an organisation of representing leading manufacturers including Microsoft, showed that 87 percent of the software on the market in Indonesia was pirated in 2004. Counterfeiting in Indonesia cost the industry millions of dollars, the study said.
http://uk.news.yahoo.com/050609/323/fksev.html


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Microsoft Antitrust Proposal Wins Over EU
David Lawsky and John Chalmers

Microsoft cleared a major stumbling block on Monday and won praise from the European Commission for finally putting forward acceptable proposals to comply with European Union antitrust sanctions.

The risk that the EU executive might hit the world's largest software company with a fine of up to $5 million a day receded because Microsoft's proposal allows non-Microsoft work group servers to interoperate with Windows personal computers and servers.

The plan will be put to industry peers for their opinion over the next two weeks of market testing before the Commission makes a final assessment, but an open-source software group that is a major rival raised immediate objections.

The Commission postponed the most troubling questions about open-source licenses until an EU court rules next year on Microsoft's broad challenge against its antitrust decision.

Open-source software is distributed freely to software developers as long as they make public any underlying source code, and Microsoft's proposal would not allow public distribution of its code.

The Commission, which polices competition in the 25-nation bloc, fined Microsoft a record 497 million euros ($609.8 million) more than a year ago and demanded changes to its business practices, which it found were an abuse of its quasi-monopoly on computer software.

"I am happy that Microsoft has recognized certain principles which must underlie its implementation of the Commission's decision," European Competition Commissioner Neelie Kroes said in a statement.

Worldwide Surprise

Microsoft Chief Executive Steve Ballmer said in a statement the company would "focus on fulfilling all our obligations in every way we can.

"In order to resolve some complex issues over the past few weeks, we've made some tough concessions," Ballmer said.

In a surprise move, the interoperability agreements will now apply worldwide instead of only in Europe as the Commission had required.

That is a two-edged sword, because the company takes the position that the worldwide obligation will also bring into play any and all patent and trademark protection it holds in countries outside the European Union.

Kroes told reporters there were no outstanding issues on Windows Media Player, the second of two antitrust violations for which Microsoft might face fines.

Microsoft was required to make its ubiquitous Windows operating system available without Windows Media Player so that computer makers can buy alternative software from RealNetworks and Apple to play films and music.

Microsoft shares were down 0.2 percent at $25.38 in New York trade at 1538 GMT.

Court Restrictions

Under the Commission's interoperability demands, Microsoft must share information with rival makers of servers used to run printers and retrieve files.

But Commissioner Kroes told reporters on the sidelines of an International Competition Network meeting in Bonn, Germany, that the Commission would have to wait until a court decision this spring to require Microsoft to provide an open-source license.

Microsoft has said it doesn't want to give free access to software code on which it could earn revenue.

A European Union judge placed temporary restrictions on information disclosure in December.

"We can't take risks," Kroes said. "We have to be aware that the Court of First Instance is watching us and rightly so."

If the Commission went too far, Microsoft could take it back to court, risking further delays.

The Free Software Foundation, which distributes open-source Samba server software, was quick to respond to the latest move.

"They set terms which exclude the only remaining competitor in the market -- Samba," said Georg Greve, president of the foundation, in Hamburg, Germany. "They obviously know that you get information but you cannot implement it."

Samba's license requires it to reveal source code to users, while Microsoft bars it from doing so.

Two lawyers -- one for Samba and a second who has represented clients against Microsoft -- said that they needed more information.

"The whole Microsoft strategy is to delay implementation of the measures until the market evolves and they are ineffective," said Samba's lawyer, Carlo Piana, in Milan, Italy.

In the view of some experts, the proposal will allow the Free Software Foundation to develop software, which it must withhold from the market until and unless the Commission wins.

At that point, they said, free software developers would be able to publish the information with their software for non-innovative protocols.
http://today.reuters.com/news/newsAr...CROSOFT-DC.XML


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MSN Site Hacking Went Undetected for Days
Ted Bridis

Password-stealing software planted by hackers was active on Microsoft's popular MSN Web site in South Korea for days before the world's largest software company learned about the break-in and removed the computer code.

Police investigators and Microsoft specialists are continuing to search for clues to the culprits behind this week's high-profile computer break-in. More details emerged Friday about the hacking, which targeted subscribers of an online game called "Lineage" that is popular in Asia.

Microsoft Corp. said it had cleaned the Web site, www.msn.co.kr, and removed the software code that had been planted on its news page. It said another company that operates the MSN Korea site apparently failed to apply necessary software patches, leaving its server computers vulnerable.

Security researchers at San Diego-based Websense Inc. discovered the break-in late Sunday during routine scans it makes against more than 250 million Web sites each week looking for sources of viruses and other infections.

A previous inspection by Websense of the MSN Korea site the evening of May 27 did not detect the dangerous software.

"Our alarms went off (Sunday). We noticed it was infected," said Dan Hubbard, its senior security director.

Hubbard said Websense researchers investigated further and quickly updated protective software to keep its own corporate customers safe. It did not successfully reach Microsoft officials to warn them about the break-in until midday Tuesday, a day after the Memorial Day holiday weekend.

Microsoft said it removed the password-stealing software from the MSN site hours later.

The chronology suggests the hackers could have harvested stolen passwords from visitors to the MSN site for up to three days. But their target - passwords to game accounts - lessened the significance of the break-in since the hacker software appeared not to collect any network or banking passwords.

The Lineage game and its successor boast more than 4 million subscribers, mostly in Asia, who pay about $15 each month, said Mike Crouch, a spokesman for the U.S. subsidiary of South Korea- based NCSoft Corp. Crouch said he was unaware of any significant increase in complaints by subscribers about stolen passwords tied to the Microsoft break-in.

South Korea is a leader in high-speed Internet users worldwide. Microsoft's MSN Web properties - which offer news, financial advice, car- and home-buying information and more - are among the most popular across the Web.

A Microsoft spokesman, Adam Sohn, said the company was confident its English- language Web sites were not vulnerable to the same type of attack.

Microsoft shares fell 36 cents to close at $25.43 on the Nasdaq Stock Market. They have traded in a range of $23.82 to $30.70 over the past 52 weeks.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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File-Sharing Pioneer Turns to Free Internet Calling
Jonathan Krim

About 70 miles from the U.S. border that he will not cross, Niklas Zennstrom is pondering which gets him more excited: making life miserable for entrenched monopoly businesses or making money doing it.

The answer is both, and two of the world's largest industries haven't been the same since he went to work. Neither has the Internet.

In co-creating the file-sharing software Kazaa in 2000, Zennstrom helped fuel an online revolution that music labels and motion picture studios say threatens their existence. Sued by the entertainment industry even though he sold Kazaa in 2002, Zennstrom avoids the United States as his lawyers seek to remove him from the case.

Now, the 39-year-old Swede, whom few consumers have ever heard of, is aiming the same technology at something even bigger: telephone calls.

Skype Technologies SA, Zennstrom's newest venture, allows users of its software to talk to each other, via their computers, for free. That's free, as in no cost for either the software or the calls, anywhere in the world. And with none of the legal issues that surround sharing of music or videos online.

In just 18 months, Skype has become a global telephone firm with 40 million users, making it not just the fastest-growing telecommunications company in the world but one of the fastest-growing businesses of any kind.

By contrast, other voice-over-Internet providers, which charge a monthly fee and use different technology, have fewer than 3 million customers combined. Skype is acquiring as many new customers in a week as the best known voice-over-Internet company, Vonage Holdings Corp., has in total.

Zennstrom has done this by circumventing telephone wires and making the phone call just another computer task, the equivalent of sending an e-mail or conducting an Internet search. All that is required is a high-speed Internet connection, Skype's software, and a microphone or special handset for speaking.

"Skype is a huge threat to most incumbent phone companies," said Kevin Werbach, a law professor at the Wharton School and a telecommunications consultant. "The only reason they haven't trained their guns on it is they don't realize that yet."

Some in the industry argue that the cost of a basic phone call is on a path toward zero.

"In the next 10 years, I cannot imagine a telecommunications company that will be able to charge for telephone calls," said Howard Hartenbaum, a venture capitalist whose Silicon Valley firm is backing Skype.

But Skype has limits, and some experts argue that big, traditional players such as Verizon Communications Inc. and SBC Communications Inc. still have a number of advantages.

"Skype is a good company," said independent telecom analyst and commentator Jeff Kagan. "But Skype is never going to catch up to the major service providers," the large telephone and cable companies that increasingly are offering bundles of services, including local and long-distance calling, wireless, high-speed Internet access and digital television.

Zennstrom, who seems to relish being underestimated, is neither a stereotypical underground hacker nor a nerdy geek. Bespectacled and soft-spoken, he looks every bit the preppy, mid-level executive. He believes in capitalism and is motivated to disrupt markets that operate inefficiently.

"There's a duty," he said between appearances at a recent industry conference in Canada on Internet telephony. "You should not allow big monopolies to be inefficient. . . . If you buy services from a big monopoly that doesn't care about consumers and overcharges you, most people get really upset about that."

His strategy is to use new technology to fight entrenched companies that are too big to react quickly. "Not only is it great fun," he said, "it creates huge business opportunities."

Zennstrom's gift, say those who have followed his career, is his ability to pinpoint the industries most vulnerable to attack.

"Zennstrom is the regime changer," said Timothy Wu, a visiting technology law professor at the University of Chicago. "He makes happen what economists predict would happen" when technology overtakes existing business models.

The Big Efficiency idea underlying Skype and Kazaa struck Zennstrom and his longtime business partner, Janus Friis, when they worked together in the mid-1990s at Sweden's Tele2, the first independent phone company in Europe to take on state-sanctioned monopoly carriers.

Wouldn't it make sense, they reasoned, to allow computers to share information directly with each other rather than routing traffic through centralized networks and equipment?

Watching the music world get turned upside down by the Napster file-sharing service, which still relied on some centralized components, Zennstrom and Friis worked with some Estonian programmers to build a purer, more powerful computer-to-computer system known as "peer-to-peer."

Zennstrom said his goal was not to replace Napster, which was under legal siege and ultimately shut down for facilitating the pirating of copyrighted music.

Instead, he wanted the studios to use his more efficient system to legally put music into the hands of consumers via a payment method that would be negotiated.

Zennstrom said the music studios he visited in Los Angeles, which he declined to name, refused to consider it. A spokesman for the Recording Industry Association of America declined to comment on Zennstrom.

When legal troubles shut down Napster, enthusiasts turned to Kazaa as a way to keep swapping files that was harder for authorities to disrupt because it was so decentralized. By 2001, Kazaa and similar software proved so effective for moving large files (legal or otherwise) that the technology soon accounted for the majority of all Internet traffic.

Although Kazaa withstood early legal challenges, continued battles loomed. Zennstrom did not like the idea of a life spent negotiating music and movie rights agreements, so he sold Kazaa to Sharman Networks Ltd., a firm run by Australians and incorporated in the South Pacific island nation of Vanuatu. After taking some time off, he and Friis began talking about aiming their insight about efficient networks at another big industry: telecommunications.

Today, he just smiles at questions about how Skype will make money on a strategy of giving away basic calling for free.

Yahoo and Google, he notes, never charged for someone to conduct a search. Instead, the rapid adoption of search technology by so many people made the companies hugely valuable and opened the door to moneymaking, add-on services.

So the company offers Skype Out, which charges small toll fees for Skype users to call non-Skype users around the world, at rates below traditional long-distance rates. Already, the service has about 1.5 million users, though the company declines to reveal how much money it is bringing in.

The company also is letting users sign up and test-drive Skype In, which for a fee lets non-users call Skype users and provides voice mail.

Skype backers such as longtime venture capitalists William H. Draper III and his son, Timothy C. Draper, contend that the key to Skype's success is its ability to provide services at vastly lower cost than competitors.

With no networks, lines and poles to maintain, London-based Skype operates with 171 employees worldwide yet has nearly as many users as Verizon has residential phone customers. Verizon's land-line division employs 142,000 people.

Zennstrom is plotting pushing Skype into mobile phones, and he already has cut a deal with handset-maker Motorola Inc.

As long as the mobile phone can connect wirelessly with the home computer, as many now can, Skype users can walk around their homes and talk, rather than be chained to the computer desks.

About 30 percent of Skype's users are businesses, Zennstrom said, and the company is developing a pricing plan for large corporate customers.

As for the next big industry ripe for an attack? Zennstrom just smiles again.
http://www.washingtonpost.com/wp-dyn...060301520.html


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George Clinton Wins Funkadelic Rights
Jeff Leeds

A federal judge here has given the funk music pioneer George Clinton his groove back.

In a decision issued last week, Judge Manuel L. Real of Federal District Court of Los Angeles returned ownership of the master recordings of four albums Mr. Clinton made in the 1970's with his band Funkadelic: "One Nation Under a Groove," "Hardcore Jollies," "Uncle Jam Wants You" and "The Electric Spanking of War Babies."

In winning possession of the recordings, Mr. Clinton can now control licensing and distribution of the music and lay claim to millions of dollars in past licensing fees.

"That feels real good," he said in a telephone interview on Monday. "It feels good mainly because it gives me another shot."

The ruling came as the latest twist in a 12-year legal fight over the rights to the recordings and the copyrights to the songs of Funkadelic and of Parliament, Mr. Clinton's other funk band. The most recent case centered around disputes among Mr. Clinton, several former business associates and a former manager.

Don Engel, a lawyer who represented Mr. Clinton at the trial, says Mr. Clinton may be entitled to millions of dollars in past licensing fees from record labels whose artists lifted samples, or snippets, from Parliament and Funkadelic albums while recording new music. Mr. Engel also said that Mr. Clinton now has grounds to seek compensation for the rerelease of the albums in 2002 by Priority Records, now a unit of the music giant EMI Group.

The flamboyant Mr. Clinton, who said he was 64, must now decide how hard to press for past money, and whether he still has a chance to win control of song copyrights to his old work. In 2001 he lost a court ruling in a case in which he contended that he still owned the songs. They are now controlled by his onetime music publisher, Bridgeport Music. It is not clear whether the latest ruling would provide for a new claim on that issue.

"I'm still writing the whole history of the thing," Mr. Clinton said. "I just want my stuff back."
http://www.nytimes.com/2005/06/07/ar...ic/07funk.html


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China a Weak Ally on Piracy

Country Proves to Be Problematic Partner in Cutting Theft
Peter S. Goodman

Commerce Secretary Carlos M. Gutierrez on Friday engaged in what has become a required ritual for U.S. trade officials visiting China's capital: He walked down the street and surveyed the plentiful supply of pirated Hollywood movies, finding a DVD copy of the new "Star Wars" film selling for a single dollar. Then, he told a room full of journalists that he was here to put a stop to this trade.

"We would like to see greater enforcement," Gutierrez said at an afternoon news conference, underlining that intellectual property is his major talking point on his first official trip to China. "I'll be speaking with Chinese officials. The time is now to see some results."

Most of the journalists in the room had sat through this more than once. By establishing as his primary goal delivering progress on the widespread theft of intellectual property, Gutierrez was taking on a task that has eluded many others and may be impossible, analysts said. From street vendors hawking fake Prada handbags to factories reverse-engineering designs for mobile phones, the brazen counterfeiting of goods and the stealing of patented ideas is part of the basic fiber of Chinese business.

Much like others who have held his post, Gutierrez described his Chinese government counterparts as "partners" in the effort to stamp out the theft of intellectual property, which Washington said costs U.S. companies tens of billions of dollars a year in lost sales. But the reality, say experts and foreign business leaders, is quite the opposite: Far from an ally in a joint undertaking, China's government actively tolerates and even rewards the stealing of ideas as its anointed development strategy. Local governments see the sales of pirated products as a way to keep people working.

"The goal of the government is to create an indigenous technological capacity, and the perception is that all of the technology is controlled by the United States, Europe and Japan," said Arthur Kroeber, managing editor of China Economic Quarterly. "They feel like they need to steal as much as they can for as long as they can until they produce their own technology. They have no incentive whatsoever to enforce, so most of these discussions are not very useful."

Two years ago, Cisco Systems Inc., the giant telecommunications equipment company, sued Huawei Technologies Co., a fast-growing Chinese competitor, accusing the firm of copying its software code and building it into some of its products. Last summer, Huawei settled the suit, which was widely seen as an admission of wrongdoing, though the company denied it. Only months later, the state-controlled China Development Bank extended a $1.25 billion line of credit to Huawei as the company aims to expand sales in markets around the globe.

"Huawei is a cheater, but they have the full faith and credit of the Chinese government behind them," Kroeber said.

General Motors Corp. is pressing Chinese authorities to enforce intellectual property laws in a case in which it says one of its designs was illegally copied by a Chinese upstart, Chery Automotive Co. Chery is making plans to export its cars to the United States by 2007.

Now that China is a member of the World Trade Organization, the United States cannot threaten to impose unilateral sanctions on Chinese products for intellectual property theft, as it did in the 1990s. It must pursue a lengthy case with the WTO first.

Gutierrez has declined to say whether he would support such an action.

The Chinese position is that these cases are an unavoidable part of the free-market system they are embracing as the country continues its transition from communism. Fang Xingdong, a high-technology policy expert at Tsinghua University in Beijing, argues that the government should simply allow domestic companies to develop as best they can, using whatever means available, and not shackle them with strict enforcement of intellectual property laws. Aggrieved parties can use civil courts to seek claims.

"The government should do very little and not interfere," Fang said. "They should let Microsoft and Hollywood file lawsuits against Chinese businesses."

The commonplace theft of intellectual property here is both a symptom and a cause of a dearth of spending on research and development by Chinese companies, which have typically sought fast returns by imitating successful products. Throughout the 1980s and 1990s, China's largest industrial firms devoted less than 2 percent of their sales revenue toward designing new goods and technologies, according to research by George J. Gilboy, a China expert at the Massachusetts Institute of Technology. That is less than one-tenth the level of funding for research and development typically spent by technology firms in the United States, Europe and Japan.

Chinese companies are reluctant to invest in research and development because they typically operate on very tight profit margins: A surplus of competition has driven prices for goods such as televisions and lawn mowers through the floor. Moreover, Chinese companies are intimately familiar with just how easily innovation can be stolen and imitated, with many competitors sharing the profits of whatever new development one company produces.

Tao Xingliang, dean of the school of intellectual property at Shanghai University, said the government has in recent years taken steps to stamp out violations by strengthening laws against counterfeiting. But as the U.S. commerce secretary saw on his visit here, a huge gap separates the existence of laws from real enforcement.

The most tangible area of piracy is the trade in counterfeit versions of branded goods and movies. Last year, the local government in Beijing shut down the open-air Silk Alley market, a city landmark that long nurtured a thriving trade in fakes, while opening a new, indoor market alongside the old site. Among the reasons given was that the new building would be easier to police, allowing authorities to better enforce anti-counterfeit laws.

But on Friday, the new Silk Alley market was abuzz with shoppers snapping up the same products as ever -- fake Armani blue jeans, North Face windbreakers and Louis Vuitton handbags. Merchants offered fake Samsonite suitcases and bogus Calloway golf clubs alongside counterfeit Gucci perfume. Vendors sold the fourth season of the hit television show "Seinfeld" on DVD for $10.

"The police come every now and again, but they let us keep selling," a cashier at the DVD place said.

Gutierrez noted that applications for patents by Chinese companies now exceed those filed by foreign firms, suggesting that this indicates that China is now developing its own innovations and will want to protect them.

"China is beginning to transition from a manufacturer of commodities to an innovator," he said.

But China, it is often noted, is neither simple nor small. Gutierrez is here meeting with central government officials. But their policies -- even were they to opt for stricter enforcement -- do not always filter down to the local level, where officials have their own interests in keeping trade going to keep money flowing.

"Partnership with the central government in Beijing is a good idea, but it has its limits," said Gilboy, the MIT researcher. "Due to the political strength of local interests, Beijing cannot enforce its preferred policies. Partnership has to be extended to the local level, and it has to include both sanctions and incentives to be effective."

Special correspondent Jason Cai contributed to this report from Shanghai.
http://www.washingtonpost.com/wp-dyn...060301835.html


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Shanghai Cracks Down on Pirated Movies
Christopher Bodeen

Shanghai is cracking down on pirated videos ahead of the city's international film festival, putting illegal copies of the latest "Stars Wars" movie and TV shows such as "Friends" out of reach - at least for now.

Stores have temporarily closed or boxed up unauthorized DVDs to avoid having them seized in police raids. Sidewalk sellers who peddle copies out of suitcases are also lying low.

"To crack down against the pirate DVDs is our job and duty," Lan Yiming, deputy head of Shanghai's culture inspection bureau, said in a telephone interview.

"We want to create a good cultural environment for the international film festival and give guests from home and abroad a good impression," he said.

The eighth edition of the annual Shanghai International Film Festival - the only one of its kind in China's vast entertainment market - runs for nine days starting Saturday. It will feature around 200 selections from South Korea, Germany and Japan. Hundreds of exhibitors and film industry professionals are due to attend, including Hong Kong action star Jackie Chan, Chinese director Zhang Yimou and Japanese filmmaker Yoji Yamada.

Lan said the anti-piracy sweep also aims to prevent the embarrassment of actors and film professionals attending the festival seeing pirated versions of their films for sale.

As recently as Saturday, the U.S. commerce secretary warned China of a potential political backlash in Washington amid tensions over product piracy and Chinese trade surpluses. Carlos Gutierrez, in Beijing for official talks, had said U.S. companies are telling him they have not "seen much change" despite Chinese promises to put an end to the illicit trade that they say costs them billions of dollars a year in lost potential sales.

Pirated disks, including high-quality copies of recent Hollywood releases, are usually widely available in Shanghai and other Chinese cities for less than $1. Many stores also sell authorized copies, although these are usually drawn from a narrow selection of older films that cost several times the price of pirated movies and are usually dubbed into Chinese.
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Groups Weigh In on Web Politicking

FEC Urged to Exempt Most Activists From New Regulations
Brian Faler

A raft of lawmakers, campaign finance watchdog groups, election lawyers and bloggers urged the Federal Election Commission on Friday to exempt the vast majority of -- if not all -- individual political activists on the Internet from new regulations.

The comments, submitted hours before an agency deadline, came as the FEC considers whether and how to regulate online political activities, including blogging, advertising and e-mail. The commission had proposed shielding virtually all online political activities from government restrictions. But two sponsors of the campaign finance reform legislation approved in 2002 successfully sued to overturn that and some other policies. The court's decision left it to the FEC to decide which activities to regulate.

That has worried bloggers, in particular, who fear they will have to consult lawyers to ensure they do not run afoul of any new rules. The FEC, which is scheduled to decide the issue later this year, released a draft of its proposed regulations this spring that indicated it intended to take a relatively light hand. The agency also invited public comment on its proposal.

The authors of the campaign finance reform law, Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.) and Reps. Christopher Shays (R-Conn.) and Martin T. Meehan (D-Mass.), filed a joint statement urging the agency to ignore individuals' politicking on the Internet and focus instead on tightening rules governing online activities of unions, corporations and state political parties.

The lawmakers asked the FEC to exempt ordinary individuals and all bloggers from such regulations. They said bloggers who take money from political campaigns should not have to disclose that on their Web sites, as some have proposed. The lawmakers also said that bloggers who incorporate for liability purposes should not have to abide by rules barring corporations from contributing to political candidates.

The lawmakers complained that current rules allow state parties to use large, unregulated contributions of "soft money" to pay for federal election-related communications on the Internet while also allowing corporations and unions to buy and coordinate online ad campaigns with candidates. The lawmakers said the FEC's proposal to restrict such activities is not aggressive enough and ought to be expanded.

"The Commission must tread very carefully in this area so as not to stifle the virtually limitless potential of this exciting medium," their statement said. "At the same time, there is no reason to believe that moneyed interests will not attempt to use the Internet to influence policies and policy as they attempt to do with other modes of communications. Indeed, there is every reason to expect that they will."

Several prominent Washington-based campaign finance reform groups largely echoed the lawmakers' recommendations. The Center for Responsive Politics, the Campaign Legal Center and Democracy 21 filed comments asking the FEC to exempt most bloggers and to crack down on soft money online while not taking a position on whether bloggers should have to disclose being on a candidate's payroll.

Other election lawyers and bloggers filed remarks urging the FEC to adopt far fewer regulations. Several asked it to grant bloggers the same broad legal protections that allow traditional news media companies that are incorporated to endorse political candidates without those endorsements being equated with financial contributions to campaigns. Some suggested that the agency regulate online advertising spending only above certain thresholds.

The FEC has scheduled public hearings later this month and is slated to announce final rules in the fall.
http://www.washingtonpost.com/wp-dyn...060401042.html


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Apple's Next Test: Get Developers to Write Programs for Intel Chips
John Markoff and Laurie J. Flynn

Steven P. Jobs took the stage at Apple Computer's Worldwide Developers Conference on Monday to tell more than 3,000 of his most enthusiastic fans - and occasionally also his harshest critics - that he was giving them a new homework assignment: to rework their Macintosh programs to run on chips from Intel.

Apple's decision to shift the Macintosh microprocessor business to Intel, a longtime rival, after more than a decade with I.B.M. was the latest bold maneuver in his eight years back at the Apple helm, a period in which he has reinvigorated the Macintosh line and overseen Apple's ascendancy in the digital music business.

Mr. Jobs said the company would begin incorporating Intel chips in some Macs reaching the market next year and largely complete the changeover by 2008. For the transition, Apple will offer a new version of its operating system, Macintosh OS X Tiger, that will run on both I.B.M. and Intel chips.

One immediate challenge will be to persuade Apple customers to continue to buy Mac computers based on I.B.M.'s PowerPC chip while they wait for the Intel versions to arrive. But in an interview after his presentation on Monday, Mr. Jobs said he believed that Apple would be able to navigate around that obstacle.

To hear Mr. Jobs describe it, the switch was a logical and straightforward business decision.

"It didn't feel to me like a long march," he said, describing a moment several months ago when he realized he would end his relationship with I.B.M. He said the decision seemed obvious to his small team of top managers. "There was a day when we looked at each other and said, 'this is the right thing to do.' "

Indeed, it was a contingency he had been preparing for since he returned to Apple, he said on Monday. He showed a satellite map of Apple's corporate headquarters and pinpointed the building where a secret engineering project, code-named Marklar, had been tuning Apple's software on Intel-powered computers bought off the shelf.

"Macintosh OS X has been leading a secret double life for the past five years," he said.

Apple had been counting on a version of the PowerPC processor that required less power and produced less heat, but had not gotten one from I.B.M. and its partner, Freescale Semiconductor. In addition, several analysts said they believed that I.B.M. had refused Apple's demands for deep discounts.

No financial details of the Apple-Intel deal were disclosed.

On Wall Street on Monday, both Apple and Intel shares moved down slightly. Apple's stock closed at $37.92, down 32 cents, while Intel's stock ended at $27.17, off 16 cents.

Yet a number of Wall Street analysts said the deal made sense. "My belief is that Apple had to do it," said Eugene Munster, an analyst with Piper Jaffray. "Clearly, they needed better availability, better pricing and a better development community." Mr. Munster has an outperform rating for Apple stock.

For his part, Mr. Jobs did not ascribe his decision to any pique with I.B.M., of which Apple remains a customer for other chips. Rather, he said he had become convinced that over the next three years Intel would win the race to deliver the most computer processing power per watt. He showed a chart projecting a significant advantage for Intel, which has struggled with heat problems in its own chips in recent years.

Several analysts said Monday that they were skeptical of such claims.

"We're not sure about whether Intel is that much better than A.M.D. or I.B.M.," said Richard Doherty, president of the Envisioneering Group, a consulting firm in Seaford, N.Y. The crucial factor in the deal was probably price, he said.

If outsiders are not true believers, however, Intel is. At the event Monday at the Moscone Center here, Paul S. Otellini, Intel's chief executive, gave Mr. Jobs a bear hug and said his company held no grudges for earlier Apple advertisements that poked fun at Intel's Pentium chips.

Moreover, Mr. Otellini was blunt in pointing out that although Apple's chip purchases might not make a significant contribution to his company's income statement, Intel was eager to move its technical innovations to market more quickly.

"It's a chance to reignite innovation," he said.

Indeed, despite Apple's small share of the personal computer market, the Intel-Apple partnership could affect the balance in the industry, providing Intel's labs with a channel beyond the Windows world of Microsoft - a longtime partner but one that Intel has periodically clashed with regarding competing technologies.

In his presentation today, Mr. Jobs painted a picture of a smooth technical transition from I.B.M. to Intel chips. He mustered support from two crucial Mac program developers, Microsoft and Adobe, whose executives said they were eager to move their programs to Apple's new computers.

Moreover, Apple unveiled a technology called Rosetta, a "dynamic software translation" tool that will make it possible for a user's existing programs to run unmodified on Apple's new Intel-based computers.

Mr. Jobs acknowledged that Rosetta was based in part on technology developed by Transitive Ltd. of Manchester, England, which has a novel approach to making it possible to run programs on disparate kinds of computers.

Al Gillen, research director at IDC, a market research company, said he was skeptical that the transition would be as smooth as Apple portrayed.

"They have a history of pushing platforms that is fairly disruptive," Mr. Gillen said. He pointed to Apple's move from its original Motorola 68000-based systems to systems using the PowerPC. Though Apple had promised the transition would be smooth for Mac users, "it was basically a 'repurchase' operation," he said, requiring new software for those purchasing the new computers. "Their concept of 'fairly easy' sometimes requires buying new things."

Mr. Jobs made it clear that he had no plans to sell Apple software to run on Windows computers. But several analysts said that because the Apple and Microsoft operating systems will be running on similar hardware, he would not be able to stop users from retrofitting Apple software to run on Windows computers.

As for the third-party developers of Mac software, the audience chosen by Mr. Jobs for Monday's announcement, most seemed to feel that he had forged a workable strategy, even though it will force them to revise their programs to run on the Intel chip.

Ray Slakinski, an independent Apple developer whose company, iPodderX, makes software for podcasting on the Macintosh, said Apple's strategy would not cause him any development delays. Apple has been reliable in providing developers with tools for smoothing major transitions, he said.

"It's a good sacrifice for them in the long term," he said of Apple's shift away from the PowerPC. Still, as a Mac user, he thinks the short term may be a bit bumpy. "I think Mac sales are going to take a hit for the next few months," he said. "I was in the market for a new laptop, but I'm holding off."
http://www.nytimes.com/2005/06/07/te...y/07apple.html


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Apple Vows to Make Podcasting Easier
Rachel Konrad

Apple Computer Inc. CEO Steve Jobs called podcasting "the hottest thing going in radio" on Monday and promised to make it easier for audiophiles to create and distribute the digital recordings.

Amateur and professional disk jockeys have established more than 8,000 podcasts, downloadable audio files that focus on everything from electronic gadgets to movies and astronomy. They can be played on computers or digital music players, such as Apple's popular iPod.

Business Week, Forbes, Disney and Sirius have podcasts, as do hundreds of individuals including wine aficionados, baseball fans and political junkies.

Productions range from stream-of-consciousness rants to slick shows and, unlike conventional radio broadcasts, podcasts have no time limits, deadlines or government oversight.

At a technology conference on Monday, Jobs previewed iTunes version 4.9. The software allows users to click on and subscribe to different podcasts, then automatically delivers the shows to any connected iPod - far less cumbersome than the third-party applications many listeners now need.

The newest iTunes will include a directory of podcasts, and creators will be able to register their shows with Apple's iTunes Music Store.

"We think it's going to take podcasting mainstream, to where anyone can do it," Jobs told the gathering of software developers.

Jobs' support for podcasting could make the phenomenon more popular, particularly if the iTunes store becomes the Internet's de facto repository of podcasts. Since its launch two years ago, the store has sold more than 400 million songs.

Last month, Jobs said podcasts on iTunes would initially be free. But he's been coy about whether Apple would allow podcasters to sell premium content through iTunes - a move that would make Apple's music service compete against Audible.com and other sites that feature unique content.
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Biggest thing maybe

Limbaugh Crows About Podcasting
Frank Barnako

The nation's No. 1 radio host says Steve Jobs doesn't know what he's talking about.

In a posting on his Web log, Rush Limbaugh disputed the Apple founder's statement that podcasting is the hottest thing in radio. Limbaugh countered: "I am the hottest thing in podcasting."

Limbaugh has begun offering podcasts of programs to subscribers of his online fan club. "This program is the hottest thing in podcasting," he claimed.

He added that he's thinking about bolstering the content distributed by file downloads to include a morning update and interviews he does for his newsletter. "Raw, unedited, just to see what these things sound like," Limbaugh said.

Blog networks cater to advertisers

Web loggers are hoping there's money in numbers. And so are Henry Copeland and John Battelle, two entrepreneurs who want to make it easy for advertisers to use blogs to reach customers.

Battelle, whose publishing credits include co-founding Wired and launching the Industry Standard magazines, said his next venture, Federated Media, could start this fall.

FM will be a group of 10 to 20 "high-quality, high-authority" technology blogs, selected personally by Battelle. They will include his own Searchblog and Boing Boing, which he oversees.

At the Online Media, Marketing and Advertising West conference in San Francisco, Battelle expected to complete a round of financing for the project this week, according to MediaPost Publications.

Battelle said he wants a federation of authors who've already found an audience, according to notes of his presentation published by Jason Calacanis of Weblogs Inc. "We'll work with the agencies to place the advertising," he said.

Meanwhile, Blogads.com has plowed that field for more than a year. Henry Copeland has been placing ads on blogs that have signed up with him. He recently began offering blogs by interest group.

"The bloggers themselves build/maintain the categorical groupings," he wrote on his log. There are 17 networks, including food, baseball and gossip. An advertiser can buy some or all of a category after reviewing a blog's traffic and ad rates. Organizing networks by interest makes selling blog advertising much easier, rather than pitching an advertiser on individual Web logs, Copeland said.

ITunes as popular as free services

Apple Computer's (AAPL: news, chart, profile) iTunes Music Store was used by almost 30 percent of households that downloaded music in March, according to researchers at NPD Group.

While the free peer-to-peer file sharing network WinMX was the most popular distribution source, by 2.1 million households, iTunes and LimeWire tied with 1.7 million households each. Paid a-la-carte music offerings like Napster (NAPS: news, chart, profile) and RealNetworks (RNWK: news, chart, profile) also placed in the top 10.

One of the music industry's questions has been whether paid download stores could compete with free file-sharing networks. "That question has now been answered," said Russ Crupnick, president of NPD's Music and Movies division.

"iTunes is more popular than nearly any P2P service. Digital download stores appear to have created a compelling and economically viable alternative to illegal file sharing," he added.
http://www.marketwatch.com/news/stor...&siteid=google


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Apple Launches iPod Recycling Program
Rachel Konrad

Apple Computer Inc. launched a recycling program Friday for its popular iPod, encouraging owners to bring their digital music players to Apple retail stores for free, environmentally friendly disposal.

The company has been under siege from environmentalists, who say the company hasn't done enough to promote recycling of its products, which often end up in landfills in the United States and in developing countries.

People who bring their iPods to one of about 100 stores nationwide will also receive a 10 percent discount toward the purchase of a new iPod. The discount is only good the day people drop off their older iPod, iPod mini or iPod photo.

Apple representatives declined comment Friday afternoon but referred to a news release, which emphasized that any hazardous material would not be shipped overseas for processing.

Apple has become the darling of the technology sector for its iconic digital music player, one of the hottest gadgets of the new millennium. But scorching iPod sales have also made it the target of the Computer TakeBack Campaign, which in January spearheaded a yearlong campaign to protest Apple's recycling efforts.

The aggressive environmental group, which last year badgered Dell Inc. until it significantly bolstered its recycling initiatives, held protests at Apple's Cupertino headquarters and at retail stores nationwide, and it's championed a letter-writing and e-mail campaign against the maker of Macintosh computers.

Apple doesn't charge consumers to recycle outdated electronics in Japan, Europe, Taiwan and South Korea, but environmentalists say the company is a significant contributor to the growing problem of electronic waste in the United States. IPods cost as little as $99 but contain lead and other toxins.

U.S. consumers retire or replace roughly 133,000 personal computers per day, according to research firm Gartner Inc. Roughly 400 million gizmos will be thrown out by 2010.

Apple's newest initiative only affects its smallest devices. The limited scope of the program prompted Gopal Dayaneni, sustainable technology program director at the San Jose-based Silicon Valley Toxics Coalition, to call the move "a nice baby step" to solving the problem of electronic waste.
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Apple Offers $50 Credit for iPod Batteries
Rachel Konrad

Andrew Westley had high hopes for his iPod, when he purchased the digital music player in 2001 and loaded more than five hours' worth of music for a cross-country flight. But the music died before the San Francisco attorney reached the East Coast - despite claims by Apple Computer Inc. that a fully charged iPod would play continuously for eight or more hours. Disappointed, Westley called a consumer rights attorney and later became one of eight people who sued the computer maker in 2003 over the iPod's battery failures.

As part of a tentative settlement announced this week, Apple agreed to give $50 vouchers and extended service warranties to as many as 2 million customers whose older iPods had batteries that needed to be replaced or didn't fully charge.

"I like Apple's products. I want to own their products and have confidence they stand buy their products," said Westley, 45, who also owns an iMac and volumes of Apple software. "This settlement helps me have confidence again that if I'm going to sink a bunch of money into their stuff, they'll do the right thing."

The settlement applies to consumers nationwide who bought versions of the digital music player through May 2004. Last year, Apple changed its iPod and now advertises battery life of up to 12 hours for its 20-gig model.

Cupertino, Calif.-based Apple confirmed the settlement agreement Thursday but would not comment.

Sales of the iPod have soared since its debut in 2001. With some versions of the device costing $400, the iPod has been a windfall for Apple.

According to the settlement's terms, people who fill out a claim form are entitled to receive $50 redeemable toward the purchase of any Apple products or services except iTunes downloads or iTunes gift certificates. They can redeem the voucher within 18 months of final settlement approval at any bricks-and-mortar Apple Store or online.

Consumers who had battery troubles can also get their battery or iPod replaced. Apple sells replacement batteries for $99, and it also replaces or repairs defective products that are returned within one year. The class-action settlement, if approved by a judge later this summer, extends the warranty to two years.

Consumers who file a claim must have a receipt.

A judge in California's Superior Court for San Mateo County initially approved the settlement last month and consumers began receiving notifications by e-mail and letters this week. A judge will hold another hearing Aug. 25 to give final approval.

"We think all the terms of the settlement are going to stick," said Eric H. Gibbs, a partner at San Francisco law firm Girard Gibbs & De Bartolomeo LLP, which represented several plaintiffs.

It's unclear how many consumers will file claims. Plaintiffs' attorneys did virtually no advertising when they filed the suit, but details spread to Internet sites and blogs.

Within a year, lawyers had received e-mails and calls from more than 12,000 angry iPod owners.

Consumers will be notified of the tentative settlement in three ways: by e-mail, by letters, and through advertisements in USA Today and Parade Magazine in the next month.
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iPod Inventory Concerns Weigh on Apple Shares

Shares of Apple Computer Inc. fell about 5 percent on Friday, fueled by an Internet report of swelling inventory of its iPod digital music players.

Apple, meanwhile, is preparing for a conference next week that may see the launch of a new version of its iPod Shuffle player with more capacity, one analyst said.

The decline in Apple shares came after appleinsider.com, a Web site that discusses issues related to the company's products, said Apple is "overstocked on most iPod models with about a month remaining in its third fiscal quarter." The report cited unnamed sources.

"Apple is believed to be sitting on its most significant inventory of iPod Shuffles since the player hit the market in February," the Web site said. "According to reliable sources of information, tens of thousands of iPod Shuffles remain idle in the channels this week alongside a good number of iPod photos."

An Apple spokesman said the company does not comment on "rumors and speculation."

"I think (the Web report) is right; there is inventory there, and we are only looking for a flat quarter" for iPod unit shipments compared with the period ending in March, said Gene Munster, an analyst with Piper Jaffray.

Apple sold 5.3 million iPods, accounting for 31 percent of revenue, in the second quarter.

"But (Apple's) quarter is going to be fine. There will be an upside to revenue and more upside to earnings," Munster said, adding that growing iPod supplies are not surprising since the company did not introduce any new products during the quarter, and inventory caught up to slowing demand for the gadgets.

On Monday, Apple may discuss faster microchips for its Macintosh computers and possibly unveil an iPod Shuffle music player with more song storage capacity, said Munster. Chief Executive Steve Jobs will take the stage in a keynote at the Worldwide Developer Conference, a traditional venue for Apple product launches.

Current Shuffle models come with either 512 megabytes or 1 gigabyte of memory, enough to store about 120 songs or 240 songs, and cost $99 and $149, respectively.

Jobs could also discuss plans for a low-power version of International Business Machines Corp.'s (IBM.N: Quote, Profile, Research) PowerPC 970 processor, which Apple calls the G5, said Kevin Krewell, editor in chief of the Microprocessor Report.

"The bigger and more important challenge is building a low-power version of the 970," Krewell said. "The G4 (chip) in the notebook is getting long in the tooth."

Apple's shares slipped $1.87 to $38.17 on Nasdaq.
http://www.reuters.com/newsArticle.j...toryID=8694988


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Laptops Outsell Desktops for First Time
Greg Sandoval

In a sure sign that the era of mobile computing has arrived, notebooks have for the first time outsold desktops in the United States in a calendar month, the research firm Current Analysis says.

After tracking sales from a sampling of electronics retailers, Current Analysis says notebook sales accounted for 53 percent of the total personal computer market last month, up from 46 percent during the same period last year.

San Diego-based Current Analysis does not follow worldwide personal computer sales.

Spurring demand for notebooks is their overall price drop as quality has improved, says Sam Bhavnani, senior analyst for Current Analysis. "Just a few years ago, the performance of notebooks was nowhere near where it is today," he said.

Notebook prices fell 17 percent during the past year while desktop prices dipped only 4 percent. Some of the features common in most notebooks are longer-lasting batteries, CD burners and wireless capability.

The computing crowd is increasingly requiring mobility.

Last year, 80 percent of notebooks offered wireless; this year, it's 95 percent, Current Analysis says.

"There used to be a time when people expected a reply to an e-mail within a couple of days. Now they expect a response within 24 hours. People want to stay connected wherever they are," said Bhavnani.

Notebooks will continue to grab bigger shares of the PC market, Bhavnani predicted. "You're not going to see the desktop go away though."
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More Nursery School Children Going Online
Ben Feller

Before they can even read, almost one in four children in nursery school is learning a skill that even some adults have yet to master: using the Internet.

Some 23 percent of children in nursery school - kids age 3, 4 or 5 - have gone online, according to the Education Department. By kindergarten, 32 percent have used the Internet, typically under adult supervision.

The numbers underscore a trend in which the largest group of new users of the Internet are kids 2 to 5. At school and home, children are viewing Web sites with interactive stories and animated lessons that teach letters, numbers and rhymes.

"Young students don't differentiate between the face-to-face world and the Internet world," said Susan Patrick, who oversees technology for the department. "They were born into the age of the Internet. They see it as part of the continuum of the way life is today."

At a preschool age, children need some grown-up help to get online, said Francie Alexander, chief academic officer for children's book publisher Scholastic Inc.

One of their favorite computer activities is writing an e-mail to a grandparent, said Alexander, author of a children's guide to the Internet.

"It's great for letter recognition," she said. "Everybody likes to get mail and little kids don't have great tolerance for waiting. So the whole idea that they can write grandma and get an e-mail back a half-hour later saying, 'I got your note' - they love that."

Scholastic has a section of its Web site that is intended just for children, who go online to read, write and play with "Clifford the Big Red Dog." PBS Kids Online has more than a dozen educational Web sites for preschool children, including "Sesame Street" and "Barney and Friends."

Overall computer use, too, is becoming more common among the youngest learners. Department figures show that two-thirds of nursery school children and 80 percent of kindergartners have used computers.

At the Arnold & Porter Children's Center in Washington, 4- and 5-year-olds have the option to spend time on a computer, working in small teams. They learn basic problem-solving and hand-eye coordination, but the social component of working with classmates on computer exercises is just as important, said Sally D'Italia, director of the center, which a law firm offers for its employees.

"It helps them become more relaxed, more adventurous, and more willing to take risks as they learn," she said. "With adults, we're still afraid that we're going to blow up the computer. You never know if you're going to push the wrong button and lose all your data."

Virtually all U.S. schools are connected to the Internet, with about one computer for every five students, the government reports. Many older students are often far ahead of their teachers in computer literacy and they know their younger siblings are gaining on them.

As one high school student told Patrick recently: "You grew up with music in your blood. Well, we have technology in our blood."

Educators say such access needs scrutiny.

Beyond blocking inappropriate content, schools must be certain the lessons they choose are based on research and geared to the developmental stage of the children, experts say.

"Kids have a tremendous ability to expand their learning, and a computer is just one tool," said Mark Ginsberg, executive director of the National Association for the Education of Young Children. The potential danger, he said, is putting 3- and 4-year- olds in front of a computer lesson that demands graphic skills or word-recognition knowledge for which they are not ready.

Still, Ginsberg said, more educators are using technology creatively - and appropriately.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Israel Uses Sound Technology on Rioters
Josef Federman

Israeli army on Friday unveiled a new crowd-dispersal device emitting painful bursts of sound at a special frequency to help break up a violent Palestinian demonstration, military officials and witnesses said.

Israeli military officials confirmed soldiers used a new "nonlethal" tactic in the West Bank village of Bilin, where hundreds of demonstrators rallied against Israel's separation barrier.

The officials, speaking on condition of anonymity under army regulations, said the weapon uses special frequencies to disperse crowds. No further details were immediately available.

An Associated Press photographer said a military vehicle arrived toward the end of the demonstration, which lasted several hours and became violent at times.

Located about a quarter mile from the demonstration, the vehicle emitted several bursts of sounds, about one minute in length each time. Although the sound was not loud, it caused people to cover their ears and grab their heads in discomfort.

About 400 people, including Palestinians and foreign and Israeli activists, participated in the demonstration, marching toward a site where Israel is building its West Bank separation barrier.

The crowd was prevented from reaching the site, and began rioting and throwing rocks at soldiers, the army said. One soldier was moderately wounded in the eye.

In addition to the sound machine, soldiers used other means to disperse the crowd, including clubs and stun grenades.

Israel has completed about one-third of the planned 425-mile barrier, which it says is necessary to keep out suicide bombers from the West Bank. Palestinians say the barrier is a thinly veiled land grab because it dips into the West Bank in some areas.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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India Gets Low-Cost Windows in Hindi
S. Srinivasan

Microsoft Corp. launched this week a low-cost, stripped-down version of its Windows XP operating system in India targeting users who don't speak English.

The U.S.-based software giant hopes to sell 200,000 Hindi copies the first year, said marketing and business operations director Ranjivjit Singh of Microsoft's Indian division. Nine other languages will be added later.

"It is aimed at first-time users looking for simple, easy and local language-capable software," Singh said.

He declined to give the price for Windows XP Starter Edition, saying it will be bundled with entry-level personal computers that cost $432. Windows XP's full version sells for about $85 in India.

India is the largest of the five emerging computer markets that Microsoft is targeting with its stripped- down operating system. The others are Indonesia, Malaysia, Thailand and Russia.

India has only 16 million computers for more than a billion people, but sales are growing 35 percent each year.

Microsoft enjoys a 90 percent market share in India. It hopes cheaper software will help reduce piracy in a country where only one in five computers use more expensive licensed software. Microsoft also faces a growing threat from the Linux non-proprietary operating system.

The XP Starter Edition can run only three programs simultaneously, lacks capabilities for home networking and multiple users and has lower-resolution graphics than more expensive versions.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Lurid Anti-P2P Propaganda from Korea

Elementary Schoolkids Peddling Online Porn

Children as young as nine are displaying a lively interest in online porn. Seoul Metropolitan Police Agency recently charged a 10-year-old with merging the face of a famous actress with the body of a porn star and posting eight such pictures on a website he created. “It was because it lures a lot of people to my site,” the young pornographer explained.

Police on Wednesday also busted another elementary school student, a nine- year-old fourth grader, and four students in the first year of middle school who created their own community sites and distributed pornography. Since the suspects were all under age, criminal charges were dropped, and they were dismissed after being given a stern talking-to.

Peer-to-peer (P2P) file sharing sites are thought to be the main source of pornography for youngsters, since they do not require age verification process. The Chosun Ilbo logged on to a site and typed “elementary school student” into the search engine. The server found 146 video clips and image files. Only three of them were not of a pornographic nature. The rest bore titles like “Japanese elementary school girl prostituting herself”, “Elementary school boy and girl alone in a room.” and “Elementary school student having oral sex.” One was a two-minute, 38 second clip of two elementary school students having sex.

Chat rooms on portal sites also lure elementary school students to pornography. Around 2:00 p.m. is the “rush hour” for elementary school students on chat sites, as they have just come home from school. At 2:00 p.m. on Wednesday, on a site popular among elementary and middle school students, it was not difficult to find chat rooms under sexual titles like, “Only for elementary school students who are good at flirting,” and “Only for little girls who want sex with middle-aged men.”

According to a survey conducted by the National Youth Commission of 171 elementary school students in March 2004, 14.1 percent had uploaded or downloaded porn. Of 51 respondents who had visited porn sites, about 20 were frequent visitors, who visited them more than once a week.

Im Hye-sung, an official at the National Youth Commission, said that even though children are vulnerable to pornography on the Internet, there is neither legal basis nor technical means of stopping them from logging on to P2P and chat sites.
http://english.chosun.com/w21data/ht...506010026.html


An Internet Banking Hacking and Robbery
Jae-MyoungLee

For the first time in Korea, a bank’s Internet banking system was hacked and a large amount of money was robbed.

On June 3, the Cyber Crime Investigation division of the Seoul Metropolitan Police Agency applied for an arrest warrant against Lee (20), and Kim (19), a woman living with Lee, for allegedly withdrawing (defrauding on the Internet) 50 million won from a bank account after learning a person’s personal identification number by using a hacking program that is readily available by anyone.

In addition, Lee’s younger brother (17), who made a banknote to Lee, and his male friend Kim (17) were convicted without physical detention on the same charge.

According to the police, Lee, a high school dropout, posted an article named “money tech” in an Internet community of a well-known portal site at an Internet café in Chuncheon City, Gangwon Province at the beginning of last month, and hacked the computer of Kim (42, female), who clicked on the article.

Lee made a hacking program, “net devil,” to be automatically installed on the computer of Kim, who read his article.

“Net devil” is a program that shows the intact contents input by wording to the person who installed it and is easily available on foreign Internet sites or on P2P (Peer to Peer: sharing a file between individuals).

Lee found out Kim’s bank, account number, ID, personal identification number, certificate number, security card number, logged into Kim’s Internet banking account and transferred 50 million won to five banknotes held by Kim (male) at around 6:00 p.m. on May 10. Lee then had his living partner, Kim, withdraw the money.

Kim, who fell victim to the case, reported the robbery to the police after learning that her money had been withdrawn from her account at around 10:30 p.m., four and half hours after the incident.
http://english.donga.com/srv/service...=2005060493008


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ACLU To Challenge Utah Porn-Blocking Law
Declan McCullagh

Opponents of a Utah law that requires Internet service providers to offer to block Web sites deemed pornographic will file a lawsuit Thursday to overturn the measure.

The American Civil Liberties Union of Utah is seeking an injunction in federal district court in Salt Lake City as part of its lawsuit claiming that the Utah law violates state residents' rights to free expression and unlawfully interferes with interstate commerce.

The controversial legislation requires the attorney general to create an official list of Web sites with material that is deemed "harmful to minors" and that is "not access restricted." Under the law, Internet providers in Utah must provide their customers with a way to disable access to sites on the list or face felony charges.

Other states, including New Mexico and New York, have attempted to target sexually explicit Web sites but have been rebuffed by courts on First Amendment grounds. Because Utah's law regulates Internet providers rather than sex-themed sites, it represents a different approach that theoretically could fare better--though a similar law in Pennsylvania was rebuffed last year.

Dani Eyer, executive director of the Utah ACLU, said in a telephone interview that plaintiffs in the lawsuit will include Internet service providers, Utah content creators, local booksellers and the American Booksellers Association. The Center for Democracy and Technology, a Washington, D.C.- based nonprofit group, is co-counsel on the case. The team of lawyers will meet with the attorney general on Thursday afternoon to discuss halting enforcement of the law until a trial can be scheduled, Eyer said.

The Utah ACLU wrote a letter to Republican Gov. Jon Huntsman urging him to veto the measure "because it is riddled with constitutional infirmities." But Huntsman signed the bill in March, and a representative said at the time that the governor was not concerned about any legal challenges.

The Utah law says: "Upon request by a consumer, a service provider may not transmit material from a content provider site listed on the adult content registry." A service provider is defined as any person or company who "provides an Internet access service to a consumer," which could include everything from cable companies to universities, coffee shops and homes with open 802.11 wireless connections.

Also targeted are content providers, defined as any company that "creates, collects, acquires or organizes electronic data" for profit. Any content provider that the Utah attorney general claims hosts material that's harmful to minors must give it a rating or face third-degree felony charges.

Lobbying group NetCoalition, whose members include Google, Yahoo and News.com publisher CNET Networks, wrote a letter to the Utah Senate saying the legislation could affect search engines, e-mail providers and Web hosting companies. "A search engine that links to a Web site in Utah might be required...to 'properly rate' the Web site," the letter warned.
http://news.com.com/ACLU+to+challeng...3-5738964.html

[JackSpratts]

A Battle For The Soul Of The Internet
Elliot Noss

With little fanfare, there is a battle going on for the soul of the Internet. The United Nations and the ITU (International Communications Union) are trying to wrest control of domain names, the DNS and IP addresses from ICANN (Internet Corporation for Assigned Names and Numbers). This battle manifests itself through the U.N.-created World Summit on Information Society (WSIS) and the ITU-lead Working Group on Internet Governance (WGIG).

While the Internet is essentially a series of protocols adhered to by common consent, it relies on a single authoritative root at its core. This is what assures Internet users who type "zdnet.com" into their browsers that they end up where they thought they should. Anything but uniqueness with this vital resource would result in collision and confusion. The same is true for e-mail. Unless senders are certain that there is only one unique identifier for a recipient, they cannot use e-mail with confidence.

Both the U.N. and the ITU have their reasons for trying to wrest control of these vital resources from ICANN. For the U.N., ICANN represents a body that transcends the nation-state structure, and could become a model for similar efforts covering subject matter most appropriately dealt with at a global level. For the ITU, gaining control of core Internet resources represents an opportunity to put the Internet-genie back in the bottle and gain a greater measure of relevance in the IP networking world. The ITU doesn't see itself as merely an overseer of the old circuit-switched networks, which it presides over today, but as the overseer of all networks, including the Internet.

While ICANN has its flaws, it also possesses important, unique characteristics. Two are worthy of special note. First, ICANN's form of governance explicitly includes policy, technical, business and user interests under one roof. Each interest group has a formal role and voice in both policy-making and governance. Each has a stake in the proceedings, and each is an important part of the system. (Yes, users' voices need be heard more, and as an active participant in the ICANN process and member of the 2005 ICANN Nominating Committee I will continue to work toward that goal). Having these combined interests explicitly inside the process avoids some of the perversions that we have seen in other forms of governance, campaign finance being perhaps the starkest example.

Second, ICANN is a truly global organization. It is global in the sense that individuals involved represent one of the above-mentioned interests, but not national governments. This is an important concept in that the Internet is truly a global resource, but it is this unique element that creates the greatest challenge. We have no model for managing a global resource of this nature. There are numerous models for managing international resources, resources being managed between nations, but that is not what the Internet is. In this regard, ICANN mirrors the Internet in that it works by "rough consensus." The checks and balances are systemic. This is what has allowed the price of domain names to drop by 50- to 75 percent over the last five years while service levels have increased dramatically. This is what has allowed the Uniform Dispute Resolution Process (UDRP) to eliminate cybersquatting of trademarks.

The U.N.'s WSIS contains 40 delegates, including members from Cuba, China, Iran, Saudi Arabia, Zimbabwe, Tunisia, Pakistan, Syria, Russia and Egypt. If the U.N. controlled domain names and IP addresses, the ability of countries to censor the Internet would be greatly enhanced, as well as the ability to tax or impose other regulatory burdens on these resources in order to fund unrelated projects of any kind.

In fact, if the U.N. and the ITU were successful, it is not difficult to envision a Balkanization of the Internet as whole portions of the Internet decide they did not want to rely on the U.N. and the ITU for their single authoritative root. If that Balkanization were to take place, the damage to the global economy would be incalculable.

In addition, these Internet governance positions would not be plum U.N. postings. We could expect to see the likes of Internet pioneer Vint Cerf replaced by some dictator's wife's third cousin.

The U.N./ITU put forward two main arguments for replacing ICANN. They claim that it's necessary to wrest control of the Internet from the United States and that ICANN is a private organization that is beholden to no one and that represents no one.

To be clear, ICANN is a not-for-profit California corporation that nominally reports to the US Department of Commerce and operates under a memorandum of understanding with the agency that is reviewed and renewed in six-month intervals.

Despite this, ICANN is not American--it is global. There are three Americans on a 15- person board of directors. There are six Americans on the 22-person generic names- supporting organization (GNSO) council, the main policy-making body. Two Americans are on the 10-person at-large advisory council (ALAC). There has not been a meeting in the US since November 2001, and the earliest possibility of a US meeting is in June 2007, a 17-meeting gap (the last North American meeting was in Montreal in June 2003, and the next is in Vancouver in December).

As for it being representative, ICANN has always had one prerequisite for involvement-- a willingness to take the time and effort to participate. There is active representation from Internet communities from around the world. The level of participation, the quality of participation and the output of the process have steadily improved over ICANN's history. Neither the U.N. nor the ITU can make any of these claims. Participation in their processes require a position in or through a national government or a Telco monopoly, neither of which are known for their deep appreciation and understanding of the Internet.

There is no doubt that both the U.N. and the ITU are much more adept at politics than either ICANN staff or the vast majority of participants in the ICANN process. That makes the threat here all the more real.

It is important to remember that we all rely on the rich ecosystem that is the free Internet. We are all beneficiaries of the innovation it spawns, the information it provides and the interaction it supports. We cannot take this for granted.

Companies that rely on a free Internet--and there are few technology companies that don't--need to become active in the ICANN process through the Business or ISP Constituencies; other institutions and not-for-profits through the non-commercial constituency. Companies, institutions and individuals from around the world who have access to their governments' decision makers need to let them know that the Internet needs to stay free and that supporting ICANN supports that principle. Individuals who care about the future of the Internet and believe they can contribute to creating a better ICANN and preserving a freer Internet should think about the ICANN nominating committee's call for Statements of Interest, which seeks qualified candidates to help the organization move forward.

The Internet has contributed more to freedom, education and innovation than any other advance of the last number of decades. It deserves to be protected from the people and the institutions that do not share an appreciation for preserving the values upon which the Internet was founded.
http://news.zdnet.com/2100-9588_22-5730589.html


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Richest Are Leaving Even the Rich Far Behind
David Cay Johnston

When F. Scott Fitzgerald pronounced that the very rich "are different from you and me," Ernest Hemingway's famously dismissive response was: "Yes, they have more money." Today he might well add: much, much, much more money.

The people at the top of America's money pyramid have so prospered in recent years that they have pulled far ahead of the rest of the population, an analysis of tax records and other government data by The New York Times shows. They have even left behind people making hundreds of thousands of dollars a year.

Call them the hyper-rich.

They are not just a few Croesus-like rarities. Draw a line under the top 0.1 percent of income earners - the top one-thousandth. Above that line are about 145,000 taxpayers, each with at least $1.6 million in income and often much more.

The average income for the top 0.1 percent was $3 million in 2002, the latest year for which averages are available. That number is two and a half times the $1.2 million, adjusted for inflation, that group reported in 1980. No other income group rose nearly as fast.

The share of the nation's income earned by those in this uppermost category has more than doubled since 1980, to 7.4 percent in 2002. The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell.

Next, examine the net worth of American households. The group with homes, investments and other assets worth more than $10 million comprised 338,400 households in 2001, the last year for which data are available. The number has grown more than 400 percent since 1980, after adjusting for inflation, while the total number of households has grown only 27 percent.

The Bush administration tax cuts stand to widen the gap between the hyper-rich and the rest of America. The merely rich, making hundreds of thousands of dollars a year, will shoulder a disproportionate share of the tax burden.

President Bush said during the third election debate last October that most of the tax cuts went to low- and middle-income Americans. In fact, most - 53 percent - will go to people with incomes in the top 10 percent over the first 15 years of the cuts, which began in 2001 and would have to be reauthorized in 2010. And more than 15 percent will go just to the top 0.1 percent, those 145,000 taxpayers.

The Times set out to create a financial portrait of the very richest Americans, how their incomes have changed over the decades and how the tax cuts will affect them. It is no secret that the gap between the rich and the poor has grown, but the extent to which the richest are leaving everyone else behind is not widely known.

The Treasury Department uses a computer model to examine the effects of tax cuts on various income groups but does not look in detail fine enough to differentiate among those within the top 1 percent. To determine those differences, The Times relied on a computer model based on the Treasury's. Experts at organizations representing a range of views, including the Heritage Foundation, the Cato Institute and Citizens for Tax Justice, reviewed the projections and said they were reasonable, and the Treasury Department said through a spokesman that the model was reliable.

The analysis also found the following:

Under the Bush tax cuts, the 400 taxpayers with the highest incomes - a minimum of $87 million in 2000, the last year for which the government will release such data - now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000.

Those earning more than $10 million a year now pay a lesser share of their income in these taxes than those making $100,000 to $200,000.

The alternative minimum tax, created 36 years ago to make sure the very richest paid taxes, takes back a growing share of the tax cuts over time from the majority of families earning $75,000 to $1 million - thousands and even tens of thousands of dollars annually. Far fewer of the very wealthiest will be affected by this tax.

The analysis examined only income reported on tax returns. The Treasury Department says that the very wealthiest find ways, legal and illegal, to shelter a lot of income from taxes. So the gap between the very richest and everyone else is almost certainly much larger.

The hyper-rich have emerged in the last three decades as the biggest winners in a remarkable transformation of the American economy characterized by, among other things, the creation of a more global marketplace, new technology and investment spurred partly by tax cuts. The stock market soared; so did pay in the highest ranks of business.

One way to understand the growing gap is to compare earnings increases over time by the vast majority of taxpayers - say, everyone in the lower 90 percent - with those at the top, say, in the uppermost 0.01 percent (now about 14,000 households, each with $5.5 million or more in income last year).

From 1950 to 1970, for example, for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162, according to the Times analysis. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000.

President Ronald Reagan signed tax bills that benefited the wealthiest Americans and also gave tax breaks to the working poor. President Bill Clinton raised income taxes for the wealthiest, cut taxes on investment gains, and expanded breaks for the working poor. Mr. Bush eliminated income taxes for families making under $40,000, but his tax cuts have also benefited the wealthiest Americans far more than his predecessors' did.

The Bush administration says that the tax cuts have actually made the income tax system more progressive, shifting the burden slightly more to those with higher incomes. Still, an Internal Revenue Service study found that the only taxpayers whose share of taxes declined in 2001 and 2002 were those in the top 0.1 percent.

But a Treasury spokesman, Taylor Griffin, said the income tax system is more progressive if the measurement is the share borne by the top 40 percent of Americans rather than the top 0.1 percent.

The Times analysis also shows that over the next decade, the tax cuts Mr. Bush wants to extend indefinitely would shift the burden further from the richest Americans. With incomes of more than $1 million or so, they would get the biggest share of the breaks, in total amounts and in the drop in their share of federal taxes paid.

One reason the merely rich will fare much less well than the very richest is the alternative minimum tax. This tax, the successor to one enacted in 1969 to make sure the wealthiest Americans could not use legal loopholes to live tax-free, has never been adjusted for inflation. As a result, it stings Americans whose incomes have crept above $75,000.

The Times analysis shows that by 2010 the tax will affect more than four-fifths of the people making $100,000 to $500,000 and will take away from them nearly one-half to more than two-thirds of the recent tax cuts. For example, the group making $200,000 to $500,000 a year will lose 70 percent of their tax cut to the alternative minimum tax in 2010, an average of $9,177 for those affected.

But because of the way it is devised, the tax affects far fewer of the very richest: about a third of the taxpayers reporting more than $1 million in income. One big reason is that dividends and investment gains, which go mostly to the richest, are not subject to the tax.

Another reason that the wealthiest will fare much better is that the tax cuts over the past decade have sharply lowered rates on income from investments.

While most economists recognize that the richest are pulling away, they disagree on what this means. Those who contend that the extraordinary accumulation of wealth is a good thing say that while the rich are indeed getting richer, so are most people who work hard and save. They say that the tax cuts encourage the investment and the innovation that will make everyone better off.

"In this income data I see a snapshot of a very innovative society," said Tim Kane, an economist at the Heritage Foundation. "Lower taxes and lower marginal tax rates are leading to more growth. There's an explosion of wealth. We are so wealthy in a world that is profoundly poor."

But some of the wealthiest Americans, including Warren E. Buffett, George Soros and Ted Turner, have warned that such a concentration of wealth can turn a meritocracy into an aristocracy and ultimately stifle economic growth by putting too much of the nation's capital in the hands of inheritors rather than strivers and innovators. Speaking of the increasing concentration of incomes, Alan Greenspan, the Federal Reserve chairman, warned in Congressional testimony a year ago: "For the democratic society, that is not a very desirable thing to allow it to happen."

Others say most Americans have no problem with this trend. The central question is mobility, said Bruce R. Bartlett, an advocate of lower taxes who served in the Reagan and George H. W. Bush administrations. "As long as people think they have a chance of getting to the top, they just don't care how rich the rich are."

But in fact, economic mobility - moving from one income group to another over a lifetime - has actually stopped rising in the United States, researchers say. Some recent studies suggest it has even declined over the last generation.
http://www.nytimes.com/2005/06/05/na...PER-FINAL.html


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The Politics Of .XXX
Declan McCullagh

Now that pornographers have a domain name suffix reserved exclusively for them, look for politicians to become more eager than ever before to target sexually explicit Web sites.

Last week, the Internet Corporation for Assigned Names and Numbers approved the creation of .xxx, a kind of virtual red-light district that's scheduled to go live by the end of the year.

Permitting sexually explicit material online is, of course, only objectionable among advocacy groups that would love to outlaw anything as daring as "Heather Has Two Mommies." (Nobody is forced to click on links pointing to raunch and ribaldry, after all.)

But the politics of .xxx are more complex--and worrisome.

If .xxx remains truly voluntary, that's one thing. But what happens if politicians make it mandatory? What if controversial material like information on homosexuality, abortion and sex education comes under pressure to move to a virtual area that can be easily blocked?

Permitting sexually explicit material online is only objectionable among advocacy groups that would love to outlaw anything as daring as "Heather Has Two Mommies."
This is no mere theoretical concern. ICANN's decision represents an abrupt turnabout from the group's earlier stance: In November 2000, the ICANN staff rejected the first proposal for an .xxx registry.

Then politicians began to ratchet up the pressure. At a hearing a few months later, Rep. Fred Upton, R-Mich., demanded to know why ICANN didn't approve .xxx "as a means of protecting our kids from the awful, awful filth which is sometimes widespread on the Internet." Sen. Joseph Lieberman, D-Conn., complained to a federal commission that .xxx was necessary to force adult Webmasters to "abide by the same standard as the proprietor of an X-rated movie theater."

Like any other bureaucracy, ICANN instinctively shies away from controversy--especially from political bigwigs. No wonder they changed their mind this time around.

Months from now, after .xxx domains become available and popular, expect these same politicians to suggest that adult Webmasters should be forced to permanently relocate from .com.

"You're definitely going to find some pressure on sex sites to move there," predicts David Greene, director of the First Amendment Project in Oakland, Calif.

What's more, the existence of an .xxx suffix will make it more difficult to challenge such a law in court. U.S. Supreme Court Justice Sandra Day O'Connor has suggested that the presence of "adult zones" on the Internet would make a future Communications Decency Act more likely to be regarded as constitutional.

In a split decision, O'Connor voted for and against different portions of the CDA in 1997, but only because "we must evaluate the constitutionality of the CDA as it applies to the Internet as it exists today." In the future, however, O'Connor warned, "the prospects for the eventual zoning of the Internet appear promising."

Even if the U.S. government maintains a hands-off approach, what about other governments that lack the constraints of a First Amendment?

Next steps
Backers of the .xxx domain claim they've thought this through.

Stuart Lawley, a British entrepreneur living in Jupiter, Fla., has created a company called ICM Registry to handle the technical aspects of running the master database of .xxx sex sites. For its troubles, it would charge $60 a domain name and let resellers add their own markup of perhaps $10 to $15 per domain.

A second, nonprofit organization, the International Foundation For Online Responsibility, will be in charge of setting the rules for .xxx. It will have a seven-person board of directors, including a child advocate, a free-expression aficionado and, naturally, at least one person from the adult entertainment industry. As president and chairman of ICM Registry, Lawley gives himself just one vote on the board.

To his credit, Lawley is pledging a legal defense fund of $250,000 to "maintain the voluntary nature of the domain name system."

Robert Corn-Revere, a lawyer who's representing ICM Registry, said that they've laid the groundwork for a possible legal challenge. "You know how regulators are in this area," he said. "They look for something to do. We've anticipated the possibility that some people may think this is such a good idea it ought to be mandatory. That was one of the purposes of my being involved in this area. We've put a great deal of thought into it."

After .xxx domains become available and popular, expect these same politicians to suggest that adult Webmasters should be forced to permanently relocate from .com.
"Our conclusion was that assuming that such an effort were attempted one day, it wouldn't succeed," Corn-Revere said. "You can't compare content regulation to zoning. They're apples and oranges."

The next step is for Lawley and ICANN to work out any last remaining details, and then .xxx can be added to the root servers.

There's one last potential hitch: The Bush administration, hardly a fan of sexual expression, has to agree with the addition. (A government report notes that the Commerce Department "has reserved final policy control over the authoritative root server.")

"For .xxx to go into the root is going to require positive action on the part of the United States government," said Karl Auerbach, a former ICANN board member and frequent critic of the organization. "That would constitute an endorsement of a red-light district on the Internet."

Will the antiporn forces in the Bush administration like the idea of .xxx, as some politicians did five years ago, or will they move to block it? The conservative advocacy group Family Research Council already is trying the second approach. "The '.xxx' domain also cloaks the porn industry with legitimacy," FRC legal counsel Patrick Trueman said in a press release on Friday. "The industry will have a place at the table in developing and maintaining their new property."
http://news.com.com/The+politics+of+...3-5731275.html


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The Trick of Making a Hot Ticket Pay
Robert Levine

Norah Jones fans who wanted to see the singer perform live last summer had little trouble finding tickets. Although she was touring to promote the platinum-selling album "Feels Like Home," Ms. Jones sold an average of only two-thirds of the tickets available for each show, according to Pollstar, which tracks the pop concert business.

She was not the only artist staring out at empty seats. For Incubus, a rock band that had done well in 2003, "sales were brutal," according to Randy Phillips, chief executive of AEG Live, the promoter that booked most of the dates. Even Simon and Garfunkel, whose reunion was the sixth-highest-selling tour in 2003, took in about half as much money a show last year. "Last summer," Mr. Phillips said, "was a disaster."

Nobody felt the trouble more keenly than Clear Channel Communications, the radio conglomerate that became the country's largest live music company in 2000, when it bought the concert promoter SFX Entertainment for $4.5 billion. Clear Channel, which controls many of the nation's big live-music venues, including the amphitheater at Jones Beach on Long Island and the Shoreline Theater near San Francisco, had hoped to exploit synergies between radio and concerts through advertising and tour sponsorships.

Those extra advantages never materialized. But in an effort to control a larger part of the concert business, Clear Channel aggressively raised advance payments to artists, which sometimes pushed acts into inappropriately large houses and drove up ticket prices for an already fickle audience.

"Clear Channel acted like it had to dominate the marketplace and in order to buy everything, it had to pay," said Alex Hodges, executive vice president of House of Blues Concerts, the promotion division of House of Blues Entertainment, a competitor to Clear Channel in the live-music business.

Since then, the company has changed course. A few weeks ago, it announced that it would spin off the Clear Channel Music Group as a separate company, apparently giving up its vision of synergy but also removing some of the pressure to increase its market share at any cost.

Michael Rapino, who last August was promoted from head of the company's European division to run the entire live-music business, is trying to impose discipline on artist guarantees and to make amphitheater concerts, a significant part of the company's business, more appealing. "I think the industry in general used last year as a wake-up call," said Mr. Rapino. "We have to be more aggressive when it comes to motivating the casual consumer."

Last week, Clear Channel Music announced some steps aimed at getting more people into the cheap seats. For certain shows at 33 of the amphitheaters it controls, lawn tickets will cost $20, about half to two-thirds of the prices in the past. For other shows it is introducing a $39 "grass pass" that includes parking and a $10 food and beverage voucher. It has also struck some vending deals with upscale food suppliers including Au Bon Pain, Ben & Jerry's and even Legal Sea Foods. "Our economic driver has always been our event revenue," Mr. Rapino said, referring to concessions and other so-called ancillaries.

It is not clear whether price reductions will increase demand for tickets. Marquee acts like the Rolling Stones and Paul McCartney, both touring this summer, have no problem commanding several hundred dollars for some seats. Even smaller bands sell the best and most expensive seats first, sometimes leaving part of a house empty.

Mr. Phillips of AEG Live, a Clear Channel competitor, is skeptical. "The bet," he said, "is that lower lawn prices and Cherry Garcia cones will make a difference to get people to see an act they might not have seen anyway."

Mr. Rapino is also trying to control the spiraling costs of booking talent. From the perspective of gross revenue, 2004 was actually a good year for the concert industry - up 12 percent, to $2.8 billion. But booking costs also rose, fueled by overly optimistic projections and competitive bidding.

That led to higher ticket prices, often beyond what some fans were willing to pay. Last year, the average price of a ticket to one of the top 100 tours was $52.39 before Ticketmaster charges and other fees were added, up about 25 percent since 2000, according to Pollstar.

Concert-ticket revenue is split between the performer and the promoter, with the performer receiving most of the money, customarily around 85 percent. To book talent, the promoter pays an artist or his agent an advance against that share - a guarantee, in industry parlance - in the belief that enough tickets can be sold to make the performer's price worthwhile.

This amounts to a high-stakes bet. "The promoter gets 15 percent of the upside and 100 percent of the downside," said Marc Geiger, head of contemporary music at the William Morris Agency. "The same way an airline may have too many flights to one city, there was too much incorrect guessing on what amount of tickets would get sold."

Promoters, led by Clear Channel, bet too big too often.

"The agents loved this - all they had to say is, 'Someone else might do the show,' and the bidding escalated," Mr. Hodges of the House of Blues said. "With the increase in the cost of talent, we increased ticket prices. And when fewer people show up, we can lose money on what otherwise would be a great show."

As he is adjusting the price of some seats, executives in the industry said Mr. Rapino is trying to impose more discipline on the performers' guarantees. "I couldn't charge these prices if our costs hadn't changed a bit as well," Mr. Rapino said. In certain cases, he said, an artist may get all the net proceeds from ticket sales. That kind of deal would presumably be made in exchange for a reduced guarantee.

Managers' reactions to these changes have been cautiously optimistic, in part because for artists the stigma of playing to empty seats can offset the benefit of a high guarantee.

"I believe that acts are being paid far more realistically, based on how they actually perform," said Jim Guerinot, who manages Gwen Stefani and Nine Inch Nails, who will both play at arenas in the fall.

Concert promoters also face some problems beyond their control. Rappers and pop stars dominate radio, but generally do not have the draw of rock bands on the road. Even Eminem, who sells millions of albums, will mostly play at amphitheaters on a package tour. On the rock side, "there's less demand for things people have seen before," said Dave Roberge, manager of the band O.A.R. "Seeing John Mellencamp today might not be that different from seeing him two years ago."

At the same time, there are simply more concerts to choose from. "The pressure on the consumer entertainment dollar becomes very dramatic between Memorial Day and Labor Day," Mr. Guerinot said.

So far, business this summer already looks as if it will improve from last year. "This time last year, we felt we were being run over by a truck every day," Mr. Hodges said. "We feel pretty good now." Several superstar tours, including those by the Stones, U2, Coldplay and the Dave Matthews Band, should give the business a lift.

"In the world of the music business," Mr. Guerinot said, "the live business is one of the best because you can't download it. It boils down to creating an environment for it to be successful."

And Mr. Hodges added: "There's an oft-used expression: 'There are no bad shows, there are just bad deals.' We live and die by that."
http://www.nytimes.com/2005/06/06/bu...ert.html?8hpib


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Voiceover Actors Seek Part of Video Game Profits
Laura M. Holson

To Howard Fabrick, who is handling stalled talks with the Screen Actors Guild on behalf of video game makers, refusing to share profits is a matter of principle.

Video games, he said, are not entertainment on par with movies, though, on average, Americans spend more leisure time playing video games these days than going to the movies. Actors, he said, do little to attract the most avid gamers and do not deserve more than a flat fee.

But most important, caving in to actors' demands would spell trouble for the industry: it could set off a chain reaction of scores of cubicle-bound programmers who would also demand a cut of the action, he said.

Whether it is "two weeks, two months or two years, I see no change in the position," Mr. Fabrick said. "Why establish a precedent in an industry where there is no precedent?"

On Tuesday, members of the Screen Actors Guild will announce whether they will go on strike against video game companies, after months of on-and-off discussions. (The talks also included the American Federal of Television and Radio Artists.) The problem is that game makers will not give voiceover actors extra fees if a game sells more than 400,000 units, a deal-breaker for the Guild. But whether the actors decide to walk out or not, they have already opened a Pandora's box by raising the question: Who deserves to be compensated most for the success of a video game?

In Hollywood, successful producers, directors, writers and sought-after actors routinely share in the profits if they create or star in a hit. And in nearly every other part of the entertainment industry, most actors receive a residual each time a TV show, movie or commercial is shown after its initial broadcast.

But video game companies are taking a hard line with the Guild, looking to stem an erosion in profits as the cost of making a video game rises to as much as $25 million and competitors, like movie studios, invade their turf. "I think they don't want the concept of collective bargaining anywhere in their industry," said Keith Boesky, a game industry consultant. "Publishers want the freedom on a case-by-case base to determine who they give profits to."

That is troublesome for the nearly 2,000 actors who make a living, in part, by doing voiceovers for games. "To use this against us and say game developers are the real stars and not willing to share the wealth with everyone creating the games is kind of sad," said James Arnold Taylor, an actor who is the voice of Obi-Wan Kenobi on Cartoon Network's "Clone Wars" series and of Fred Flintstone for cereal commercials, and also works on about 20 games a year.

He said his performances for video games - including characters in Final Fantasy 10, and the Ratchet & Clank series - make up about 26 percent of the time he spends working, but account for about 9 percent of his income. And unlike a movie actor who often plays one role, he sometimes voices four characters or more for one game. The most, Mr. Taylor said, was 36 different voices.

"It's strenuous," said Mr. Taylor. "You think you are doing 2 pages of dialogue but instead you are doing 20 pages of screaming, 'Die! Die! Die! I'm going to kill you!' Then the directors say, 'We want bigger, bigger, more!' I train like a singer, but even with that it can't help but have an effect on your voice. We understand there are a lot of games not based on dialogue, but then again there are a lot of games that are."

Mr. Fabrick contends a voice is less important in a game than the story and effects created by the artists, writers and programmers. He warned that actors were trying to impose movie business sensibilities in an industry that does not work that way. But he conceded that game makers are becoming more dependent on Hollywood for new game titles, and using a marquis actor is important, if only for marketing.

At the Electronic Entertainment Expo, the video game industry trade show known as E3, in Los Angeles two weeks ago, for instance, video game makers introduced several new games based on movies, including The Godfather, which uses the voice of Marlon Brando, who recorded it before his death.

To be sure, the movie industry has caught on to how valuable video games are, making the actors complaints' all the more timely. More high-profile directors, like Peter Jackson, who is directing "King Kong" for Universal Pictures, are actively involved in game production. And voiceover actors and their supporters protested outside E3 to remind users how important actors are to making quality games.

"All of the people going into the game show have no idea the predicament these actors are in," said James Cromwell, an actor and secretary-treasurer of the Guild who was at the rally. "But if you lower the expectations of the audience so they don't care anymore, then we all are in the toilet."
http://www.nytimes.com/2005/06/06/te...y/06voice.html


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Hollywood Unions Reach Deal With Video Game Makers

Hollywood actors unions have reached a contract deal with video game publishers, accepting higher pay instead of the profit-sharing they had demanded, the unions said Wednesday, removing the threat of a strike.

The three-and-a-half-year agreements with game companies came as the Screen Actors Guild (SAG) and American Federation of Television and Radio Artists (AFTRA) were preparing to announce the results of a strike vote.

Unions had sought to win profit-sharing, known as residual payments, from game publishers.

Under the new agreements, union performers will get a 36 percent increase in minimum pay over the term, increases in benefit contributions and greater protection. The agreements are subject to final approval by the unions.

The unions, which said they struck the deal with reluctance, vowed to continue their bid to win payments for actors for each game sold. Actors who appear in movies and television shows receive residual payments when those works are shown again.

"While we did not get all that we want ... and deserve ... this contract is another important step in building artists' power in this growing sector of the media industry," said John Connolly, AFTRA's national president.

"We will spend the next three-and-a-half years devoting resources to further organize this industry, and return to the bargaining table with renewed strength and vigor to establish a fair participation in the enormous profits generated by video games," SAG President Melissa Gilbert said.

Union members' previous three-year interactive game contracts expired in December. Negotiations started on Feb. 15 but broke down on May 13.

Hollywood plays an increasingly important role in the video game industry -- which, like U.S. movie ticket sales, brings in around $10 billion in annual revenue -- as game developers tap movie stars to bring life to characters.

The best-selling game of 2004, "Grand Theft Auto: San Andreas," featured the voices of actors like Samuel L. Jackson and Peter Fonda.

Just behind it on the sales charts was "Halo 2" with the voices of Miguel Ferrer and Keith David.

And it is now common for movie actors to be required to contribute to related video games.

More than 70 game publishers previously had arrangements with SAG and AFTRA, which together represent about 3,000 performers working in the video game industry.

A spokesman for the coalition of game developers was not immediately available for comment.
http://today.reuters.com/news/newsAr...-STRIKE-DC.XML


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Push For California Violent Game Bill Stalls

A bill before the California Assembly to ban the sale of violent video games has been shelved because of a lack of support, an aide to its author said on Friday.

Assemblyman Leland Yee has deactivated his bill after failing to muster enough votes for it to pass the full Assembly, said aide Adam Keigwin.

"We've put it in the inactive file," Keigwin said, noting there is a possibility Yee may ask lawmakers to revive the bill in the state Senate for a last- minute push this legislative session.

If not, Yee, a child psychologist, will bring his bill up for reconsideration in the state's next legislative session, Keigwin said.

"Dr. Yee is committed to this issue, but he wants to build more support for this bill," Keigwin said.

The Assembly's arts committee passed the bill early last month on a 6-4 vote after reconsidering it. The bill had previously failed to pass the committee when it fell a vote short of the necessary six votes.

Gov. Arnold Schwarzenegger, whose Hollywood film career includes violent movies, has not taken a position on the bill, which allows for $1,000 fines for violators and requires violent video games to be labeled.

The video game industry bitterly contested the bill, and it expects it will have to do so again. "I don't think the fight is over in California," said Doug Lowenstein, president of the Entertainment Software Association.

"We'll continue to wage this effort wherever we have to," Lowenstein added, referring to similar bills in other state legislatures.

Video game developers and console makers say laws restricting game sales are unnecessary because their $10 billion industry does a good job stopping minors from buying "Mature"-rated games.
http://news.com.com/Push+for+Califor...3-5731879.html


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Redefining the Power of the Gamer
Seth Schiesel

Standing outside the apartment on Thursday, Walter could hear the barbs and retorts of a failed marriage's final throes.

Walter's friends, Grace and Trip, had invited him over. Now, though only every third word seeped through the door, Walter could hardly mistake the bickering.

At Walter's knock the voices stopped. The couple adopted brittle masks of happiness. But as their banter moved from Trip's new bartender set to recent Italian vacations to Grace's latest apartment makeover, the couple gradually returned to the needling exchanges of domestic strife.

As Grace and Trip retreated to opposite sides of the living room, sniping about old grievances, Walter appealed to the couple's loyalties, trying valiantly to reconcile his friends.

This is the future of video games. In their modern riff on "Who's Afraid of Virginia Woolf?" Walter was the only human. Grace and Trip were virtual characters powered by advanced artificial intelligence techniques, which allowed them to change their emotional state in fairly complicated ways in response to the conversational English being typed in by the human player.

It was one version of the future here this past week at the first Artificial Intelligence and Interactive Digital Entertainment conference. It is a future where games are driven as strongly by characters as combat, where games are as much soap opera as shooting gallery and as much free-form construction set as destruction arena. The apartment drama, a 15-minute interactive story called "Facade" that is scheduled to be released free next month (interactivestory.net), was one of the demonstrations offered to the roughly 120 game makers and academic computer experts who attended.

"As we try to create more immersive experiences, these artificial intelligence techniques are helping drive games forward and this is one of the areas that could really explode," Bing Gordon, chief creative officer at Electronic Arts, the No. 1 video game company, said after his talk Wednesday night. "We hope that the folks here start thinking about artificial intelligence as a feature, like graphics is a feature or sound is a feature."

While the adaptability and behavioral subtlety in recent classics like "Black & White," "Sid Meier's Alpha Centauri" and "The Sims" have impressed gamers with their seeming-intelligence, those titles have been but an early step.

"For a long time, games have been judged largely on their graphics," said Ian Lane Davis, a conference organizer and chief executive of Mad Doc Software, which recently created the well-received Empire Earth II, a real-time strategy game. "The graphics hardware is now getting powerful enough that basically everything looks good now. So what is starting to differentiate games is what is happening inside the characters, how the opponents behave and make plans, how comprehensively and realistically the worlds respond to what the players want to do."

"At the same time," he added, "players are demanding a lot more freedom. Often they don't want to be put on a roller coaster track that just takes them along one path, no matter how entertaining that one path may be. They want a range of choices and they want those choices to matter in creating the overall experience. You put together all of these demands, and that's why you're seeing all of this attention now on artificial intelligence in games."

Outside the game world, the term artificial intelligence is used to label technologies as disparate as air traffic control systems and automated vacuum cleaners. At the conference, much of the discussion was about specific game activities that, to a human, would seem more intuitive than rational, like using conversational language.

But one of the broadest and most powerful approaches to artificial intelligence may be one that does not focus on determining specific behaviors. ("Does the computer general know that it should use tanks and artillery together?")

Rather, it is a move to structure programs so that they absorb available information and then generate their own strategies to achieve sometimes-contradictory goals ("protect the hostages" versus "kill the enemy," for instance).

Traditionally, game programmers have created activity through explicit if-then statements: if the player attacks the castle, then send pikemen to defend it; if the player corners the market on wheat, then invest in corn. That process is known as scripting. But what should the computer do if the player takes an action that is not in a script?

"The problem now is that the worlds are so complex and the variety of potential actions so vast that trying to direct the environments and the behaviors of computer- controlled agents through traditional scripting can become unmanageable," Jeff Orkin, an artificial intelligence programmer at Monolith Productions, said between sessions.

Three years ago, Mr. Orkin worked on Monolith's campy "No One Lives Forever 2," set in the 1960's. Now he is working on "F.E.A.R.," a game scheduled for later this year.

"We used to manually lay out all of the steps that an agent would take: do this, then do that, and if this other thing happens then try this," Mr. Orkin said. "Now we tell the agent: here are your goals, here are your basic tools, you figure out how to accomplish it."

"For example, let's say you the player are running down a hall and an enemy is pursuing you," Mr. Orkin said. "You get to a door and slam it behind you. The enemy replans and tries to kick it in, but if you hold it closed with your weight he will replan again and maybe come around and dive through a window. In the past, the programmer would have had to explicitly code each of these steps. Now, you put the character in the building and it figures out a plan on its own."

As put by Chris Crawford, a legendary game designer of the 1980's who now focuses on interactive storytelling technology: "As a game designer you are an absolute god. One kind of god says, 'O.K., now this leaf will fall a little bit here, and then this wind will blow a bit over there.' The other kind of god says, 'Here are the laws of physics. Go for it.' "

That conceptual leap from designer-as-determinist to designer-as-prime mover is what has made both the "Grand Theft Auto" and "The Sims" series so popular. The challenge is that even as gamers have come to expect more freedom in their virtual environments, they have also come to expect more explicitly directed cinematic moments, like the D-Day invasion scenario in "Medal of Honor," where players can feel as if they are living a movie.

"There is a real tension between wanting to handcraft the experience to generate a specific emotional response and wanting to allow a more open-ended environment so the player feels they are in control," said Doug Church, one of the designers behind the highly regarded "Thief" and "System Shock" series. "Artificial intelligence will help us bridge the two."

But perhaps that bridge will run in unexpected directions. Until now, artificial intelligence has often involved making computers accessible to humans. With his new project, "Spore," Will Wright of "The Sims" fame means to invert that concept.

"Until now, artificial intelligence has usually meant that the human creates or perceives a model of how the computer makes decisions," Mr. Wright said. "But what if the computer is instead analyzing the player, and the program is customizing the experience based on the internal model it has created of the human?"

"Spore" is meant to tailor a species' entire evolutionary experience - from amoebalike gene pattern to intergalactic emperor - to each user's individual play style. In that sense, future generations of games may process humans just as intensively as humans are playing the software. But not to worry, Mr. Church said: "We have a long way to go before we get there."
http://www.nytimes.com/2005/06/07/arts/07arti.html


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Little-Known Bands Get Lift Through Word-of-Blog
Brian Montopoli

This is how the Internet was supposed to help music: last year, J. P. Connolly, a science teacher in Brooklyn, heard a song by one of his students, a rail-thin 15-year- old named Oliver Ignatius, who is the lead singer for a band called the Hysterics. Mr. Connolly, who had bonded with his student over independent music, loved Mr. Ignatius's song and posted it on Music for Robots, an influential blog he helps run.

That's where Joseph Patel, an MTV News producer and regular reader of the blog, heard the song. He also loved it, and decided to put the Hysterics on the air, despite the fact that they had done little more than practice in drummer Geoff Turbeville's parents' bedroom.

After the segment was broadcast on MTV, Music for Robots (www.music.for-robots.com) found itself with a new audience: teenage girls, who had come to declare their love for the Hysterics. The band is now in talks with a major label.

And now Mr. Connolly and his Music for Robots peers are attempting a coup of their own. The blog recently released a compilation CD, Music for Robots Vol. 1, which features 19 unsigned and independent-label bands, including the Hysterics. The release represents a break from the way most music blogs operate; typically, blogs of this genre feature enthusiastic testimonials about bands and free downloads of the bands' songs, but no songs for sale.

"The fan base we've managed to build up - a lot of them know that what we're trying to get them to buy is something good," says Blair Carswell, one of the Music for Robots contributors.

The blog started out simply as a way for eight friends, most of whom met at Bates College in Lewiston, Me., to tell each other about music they liked. As readership increased, more bands started sending the group music to post on the site.

"It's this great way for bands who aren't going to get on the radio to get exposure," says Mr. Carswell.

Only a handful of music blogs, with names like Fluxblog, Stereogum and Largehearted Boy, have any influence, but even those still have a long way to go to fundamentally alter the landscape of the music industry. Many labels view blogs as little more than potential providers of free publicity; even a blog like Music for Robots, which gets about 8,000 unique visitors a day, is little more than a blip on the radar of major labels.

But blogs are acting as incubators for new talent like the Hysterics. It's doubtful that MTV would have discovered the band as quickly otherwise.

"It sounded like really moody, old-school pop music - the kind of thing that a lot of bands aim for but never get quite right," said Mr. Patel about the Hysterics. "You don't see that from many adult bands, let alone teenagers in Brooklyn."

Many bloggers who post songs can find themselves in ambiguous legal territory, even when they have the permission of bands or labels. And some more-established bands have not embraced blogs, in the fear that they will hurt sales. The Decemberists, a popular independent band from Portland, Ore., recently complained that much of its new album had been posted on blogs before the album was released, and implored bloggers to take the songs down.

One difference between peer-to-peer networks and blogs is that while the former depends on anonymity, the latter fosters a sense of community. Most bloggers exhort readers to buy the CD's of bands they like, and their enthusiastic posts can bring prominence to bands that otherwise might not get much attention.

"Music for Robots has the credibility of a very hip record store," says Glenn Peoples, who runs a popular music blog called Coolfer. Good music blogs, he said, let consumers get the word out about bands that are legitimately good.

As a business venture, the compilation CD is not a threat to the music business yet. Music for Robots created 1,000 CD's, but only around 150 have sold in the two weeks they have been available. Because music fans have come to expect to hear bloggers' favorite bands free, the people behind Music for Robots know they're taking a risk by charging $10 for an actual CD.

For labels, blogs can be fertile testing grounds. Adam Shore, label manager at Vice Records, said he fell in love with the Norwegian pop star Annie, who was at the time unknown in the United States, but was skittish about putting out her album until he saw the positive word of mouth it was receiving on blogs, as well as on the online music magazine Pitchfork.

"Then I knew it wasn't just me - that there was this whole community of people who feel the way I do," says Mr. Shore. "It made me feel more comfortable moving forward. Blogs are this amazing resource for us."

But the most significant force to emerge for unknown bands, in fact, has nothing to do with the Internet. Starbucks, the coffee retailer, has begun selling CD's in its stores, and the experiment has proved a success. The company recently plucked a band called Antigone Rising from relative obscurity, cutting a deal to sell its latest CD exclusively in Starbucks stores. The CD has sold more than 35,000 copies since it was released on May 11, according to a Starbucks spokeswoman.

For many blog readers, however, CD's are old news. "One usually checks music blogs in order to avoid contact with physical objects like CD's and the corporate machinery they imply," says Hua Hsu, a Harvard graduate student who writes about music for the online magazine Slate. Still, he says he thinks there is reason to embrace Music for Robots' efforts.

"If everyone else is putting out horrible CD's," he said, "why not buy something from people with taste you more or less trust?"
http://www.nytimes.com/2005/06/06/te...gy/06blog.html


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United Airlines Approved for In-Flight Internet Service
Jeremy W. Peters

United Airlines plans to announce today that it is the first domestic airline to receive approval from regulators to install wireless Internet networks on its planes.

United passengers will not be able to take advantage of the service just yet. The airline is still at least a year away from having its in-flight Wi-Fi service up and running. When it does, sometime in mid- to late 2006, passengers will be able to check e-mail, send instant messages and surf the Web at 30,000 feet.

Similar services are already available on international flights operated by Lufthansa and Japan Airlines, among other carriers Wi-Fi is also available in terminals across the country. Many airports, like LaGuardia in New York, charge a flat daily rate to use a wireless Internet connection, while JetBlue Airways offers free Wi-Fi at some of its gates.

Dennis Cary, United's senior vice president for marketing, said the airline would charge for the in-flight service but had not yet determined what the cost would be. "We're certainly aware of what the mental price points are for our customers," he said.

Lufthansa, which offers Wi-Fi on many of its international flights, charges a flat fee of $29.95 for an entire flight or $9.95 for a half-hour.

Major domestic airlines like United are trying to find new sources of revenue and rein in costs. Many are cutting back on perks or charging for things that used to be free, including food. American Airlines eliminated pillows from coach on its domestic flights last year, prompting Northwest and Delta to follow suit.

More high-tech amenities have traditionally been a marketing tool of low-fare carriers like JetBlue, which offers in-flight DirecTV service at every seat and is now installing XM Satellite Radio in its planes. Song, the low-fare subsidiary of Delta, offers a touch-screen audiovisual system with on-demand movies, video games and music.

United, a unit of the UAL Corporation, said it was not reacting to competitors but responding to what its customers have said they want. "Regardless of the competitive landscape, it's something we have heard loud and clear from our customers," Mr. Cary said.

Whether in-flight wireless Internet will entice more customers to fly United, which is operating under bankruptcy protection, is up for debate. "It's more bells and whistles that people like," said Betsy Snyder, an airline analyst at Standard & Poor's. "But does it actually lure people? I don't know. I think it's all ticket price."

United's Wi-Fi system will piggyback on its existing onboard phone network, which is operated in a partnership with Verizon. Data will be transmitted to and received from the planes through towers on the ground.

Mr. Cary said the Wi-Fi system would not interfere with communication between the cockpit and ground control. "Between our safety experts and those at the F.A.A., they are completely comfortable that this technology does not conflict with any of the other on-board technology," he said.

With Wi-Fi making its way to the nation's airplanes and the Federal Communications Commission seeking public comment on easing rules banning cellphones in flight, will cellphones be next for United?

Mr. Cary said United had no current plans to begin accommodating cellphones, but "where it goes next, we'll have to wait and see."
http://www.nytimes.com/2005/06/06/te.../06united.html


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Seattle Tops List for Wireless Web Access
Rachel Konrad

Seattle and San Francisco are the most "unwired cities" in America - top spots for computer junkies who send e-mail and surf the Web at restaurants, libraries or public plazas.

Metropolitan Seattle percolated past the San Francisco Bay area this year thanks to an abundance of Starbucks Corp. outlets, which have wireless "hot spots" where patrons linger over latte and laptops, according to Intel Corp.'s annual ranking. Seattle also benefited from wireless access at its Pike Place Market and the Space Needle.

San Francisco finished second, thanks to wireless hubs at bars, convention centers, office parks and strip malls from Oakland to San Jose. Hundreds of residents build wireless access towers on their roofs, providing free connections for neighbors.

Also in the top 10: Austin, Texas; Portland, Ore.; Toledo, Ohio; Atlanta; Denver; the Research Triangle area of North Carolina; Minneapolis; and Orange County, Calif.

Santa Clara-based Intel ranked cities based on the number of commercial or free "Wi-Fi" points from January to April 15 in the 100 largest urban regions in the United States.

Short for "wireless fidelity," Wi-Fi delivers high- speed Internet connections through a small radio tower. About the size of a can of beer, the radio can provide access to any mobile device within 300 feet.

Intel, which makes chips for wireless devices, is bullish about Wi-Fi. But the newest survey shows the nation as a patchwork - not blanket - of access.

College campuses, technology hubs and even golf courses boosted rankings, while poorer urban centers trailed. Low-ranking regions included Jersey City, N.J.; Fort Wayne, Ind.; Allentown, Pa.; Youngstown, Ohio; Bakersfield, Calif.; and McAllen, Texas.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Covad, Earthlink Trial Phone and Internet Service

Covad Communications Group Inc. and Earthlink Inc. said on Monday they would test a service offering telephone lines and high-speed Internet access to residential customers, aimed at competing with dominant phone and cable companies.

Earthlink, one of the larger U.S. Internet service providers, has seen its base of dial-up subscribers steadily erode from competition from high-speed service. Earthlink's shares fell sharply last week after SBC Communications Inc. said it would offer broadband Internet access for $14.95 per month.

Covad and Earthlink said the trial would begin in October in Dallas, San Francisco, Seattle and San Jose, California. Pricing was not announced.

The service will use a technology known as a line-powered system. Covad will lease the copper wires running between customers' homes and the local telephone network, hooking those loops into Covad's own network.
http://www.reuters.com/newsArticle.j...toryID=8708467


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In Japan, Prices Go Down as Web Service Speeds Up
Ken Belson

Hiroki Wakabayashi may be the face of the new cellphone user. The 27-year-old computer engineer happily spends $100 or more a month for high-speed mobile service from NTT DoCoMo that lets him place calls as well as search Web sites, download songs and movie clips, and send e-mail as quickly as he can with a broadband Internet connection at home.

"With my old phone, talking was the focus," said Mr. Wakabayashi, who uses the latest handset from NEC to browse the Web on his train commute to work. "Now, using the phone to talk seems like a waste because e-mailing and Web browsing are so much easier."

Mr. Wakabayashi's enthusiasm should be welcome news to DoCoMo and Japan's other mobile carriers. The companies have spent billions of dollars since 2001 to introduce so-called third generation, or 3G, services capable of transmitting data at speeds up to 40 times as fast as the previous generation of digital mobile voice networks. (In the industry's lingo, the analog cellular networks of the 1980's are the first generation, while the second generation are the digital voice networks of the 1990's.)

These new networks were built to expand capacity for voice calls and allow for high-speed data services that were supposed to generate new revenues to offset declines from standard voice calls. But that has not happened.

That is because Japanese carriers are now locked in a bruising price war for 3G subscribers that has largely undone that promise. DoCoMo, for instance, posted its first- ever decline in revenue and in operating profits in the fiscal year that ended in March.

American cellphone carriers, which are beginning to unveil third-generation data services of their own, should take heed. Like the Japanese carriers, Verizon Wireless, Cingular and others hope faster networks can persuade customers to pay more to use their cellphones for linking to the Internet. But Japan's experience suggests that data services may not turn into a pot of gold.

In the last 18 months, the Japanese carriers have introduced all-you-can-use data plans for about $35 a month, significantly cheaper than earlier data service plans. (Subscribers still pay for bundles of minutes for voice calls, too.)

The faster data services have persuaded millions of customers to upgrade their phones - and made Japan the world's most advanced cellphone market.

But the deals have lowered total customer spending. Because talking is more expensive than sending data, Mr. Wakabayashi now spends about $30 less a month than he did with his older, slower service because 3G makes it easier to send e-mail messages to friends instead of calling.

"This has had a significant impact on our business," said Masao Nakamura, the chief executive of DoCoMo, referring to flat-rate high-speed data plans, which are unlikely to disappear. "Our hope is to get back to a growth trend within three years, or at least halt the down trend" by introducing new video services and the like to recoup lost revenue.

Coming up with the right pricing plan is just one challenge for American carriers introducing similar 3G services. DoCoMo and its rivals, Au from KDDI and Vodafone Japan, have learned the hard way that networks have to be extensive and reliable, handsets plentiful and affordable and services practical and easy to use.

"The U.S. carriers have watched what has gone on overseas very closely," said Roger Entner, vice president at Ovum, a telecommunications consultancy. "They have to be careful because customers have been burned once or twice with the promises of 3G."

Of course, American carriers have the luxury of learning from mistakes the Japanese have made, particularly when it comes to designing attractive and reasonably priced handsets. A bigger hurdle is persuading Americans to use their phones to write e-mail messages, surf the Web and hold videoconferences.

Sprint's wireless group, for instance, gets just 9.8 percent of its total revenue from data services, the highest percentage among cellular carriers in the United States. DoCoMo, by contrast, receives almost 26 percent of its revenues from data services.

"The American and European carriers are trying to answer the 3G question and the data question at the same time," said Makio Inui, who follows Japanese phone companies for UBS Securities in Tokyo. "Japanese carriers had already solved the data question" because their customers were heavy data service users before 3G was introduced.

Even so, Japanese consumers have only flocked to 3G phones in the last year. It took DoCoMo, the market leader, about two years to attract its first million 3G subscribers - twice as long as expected - because the first advanced handsets were bulky and had weak batteries and few original features. DoCoMo's third-generation network coverage was also spotty. Vodafone has also stumbled with its service because it introduced handsets that were not tailored enough to meet the needs of Japan's finicky consumers.

Yet in the past year, after the addition of more phones, coverage and services, DoCoMo more than tripled its 3G subscribers to 12.2 million, or about one quarter of its total customers. The company expects to double its 3G users this year. The second-largest carrier, Au, which uses a different 3G technology, has persuaded a vast majority of its 19.5 million subscribers to move over, while Vodafone Japan now has more than a million customers for its 3G network.

In total, more than a third of all Japanese cellphone subscribers use next-generation services, one of the highest rates in the world. By contrast, just 200,000 or so subscribe to similar services in the United States.

Despite the influx of new customers in Japan, heavy discounts have taken their toll on revenue. DoCoMo's 3G subscribers spent 9,650 yen ($89.44) a month last fiscal year, 6.1 percent less than the previous year. The company expects monthly spending by 3G customers to tumble a further 11.4 percent this year.

To stem the decline, DoCoMo and its rivals are introducing new services to encourage consumers to transmit more data. The latest phones can download 40-second video clips and ring tones and store hundreds of photos. DoCoMo 3G subscribers can hold videoconferences with up to eight people.

Some 3G handsets even include infrared readers that convert phones into television remote controls. Mr. Wakabayashi also uses the removable memory disk in his handset to transfer two-megapixel pictures he snaps with his phone to his computer.

Many phones now have chips that turn phones into "smart cards" that allow subscribers to pay for tickets, food and other items at 20,000 stores. DoCoMo plans to expand this service so commuters can use phones with special chips as train passes.

DoCoMo's new generation of handsets can even scan two-dimensional bar codes pasted, say, at bus stops, which allows customers to get a bus schedule instantly, and an estimated time of arrival. Once on the bus, they can receive coupons sent to their cellphones from stores along the bus route.

"We think we are doing the same as Alexander Bell did by getting people used to using these services," said Shun Mishima, the director of DoCoMo's corporate marketing group. Whether the carriers will make money from these services is another question.
http://www.nytimes.com/2005/06/06/te...6wireless.html


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Federal Anti-Municipal Wi-Fi Bill Introduced
Mobile Pipeline Staff

A Texas Congressman has introduced a bill that impose a nationwide prohibition on municipally-sponsored networks.

Dubbed by the Author, Representative Pet Sessions (R-Texas), the Preserving Innovation in Telecom Act of 2005, the bill prohibits state and local governments from providing any telecommunications or information service that is "substantially similar" to services provided by private companies.

The bill, HR 2726, is similar to a host of state bills pushed by telecommunications companies aimed at fending off municipally-run wireless networks. Some of those bills, most recently one in Texas, have been stalled in state legislatures.

The telecommunications operators say that such networks represent unfair competition while municipalities claim that the services are needed to promote business and close the gap between digital haves and have-nots.

According to Sessions' on-line biography, he is a former employee of Southwestern Bell and Bell Labs. The bill will first be considered by the House Committee on Energy and Commerce.
http://www.mobilepipeline.com/news/1...GCKHSCJUMEKJVN


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EU Oversight For New Media?
Eric Pfanner

In a world where television is jumping out of the tube and into mobile phones and the Internet, European officials are talking about taking their regulatory oversight along as well.

The possible shift would push European media regulators into uncharted waters. In the United States, where regulators are cracking down on "indecent" broadcasts over the free television airwaves, lawmakers are only now considering giving them similar authority over cable and satellite broadcasts.

In Europe, however, the move to open up new regulatory fronts seems to be driven more by technological change than any desire to crack down on naughty behavior. Long gone are the days when audiovisual media were limited to a handful of analog TV channels or the movies. Digital television - via cable, satellite or the terrestrial airwaves - delivers dozens or even hundreds of channels to more than 20 percent of European homes. Mobile phones offer moving pictures to users on the go. Video-on-demand services deliver movies or television via the Internet.

"Conditions of fair competition require a neutral stance with regard to and between platforms," Viviane Reding, the European information society and media commissioner, said during a speech last week in Luxembourg. "This neutrality will put all service and content providers on an equal footing, guarantee a coherent regulatory framework and reinforce legal security."

While European regulators already treat the content of cable and satellite television the same as over-the-air broadcasts - unlike the current U.S. approach - the European Commission is expected to present proposals to extend content regulation to new media by the end of the year. Any change would require amending the Television Without Frontiers directive, a European Union measure that sets out broad guidelines for television regulation across the 25-member EU.

The directive, adopted in 1989 and revised seven years later, requires member states to ensure the separation of advertising and programming, to restrict hate speech and to protect minors, among other things, but it leaves implementation up to the individual countries. Experts say any change in the directive is likely to let them regulate new media with a lighter touch than the old.

Standards of "decency" already range widely across the EU. On Italian television, for instance, scantily clad women read the "news" and cavort around variety shows in ways that might make viewers in more politically correct places like Britain cringe. German television offers a selection of cheesy late-night erotica that seems to promise more than it delivers.

"I can hardly imagine the European Union telling member states what is decent and what is not," said Susanne Nikoltchev, head of the legal information department at the European Audiovisual Observatory in Strasbourg. "This is an issue that is very near to the hearts of national legislatures and people."

Indeed, the kinds of programming judged offensive in recent years has varied widely from country to country. German regulators, for example, have taken aim at broadcasts from the Middle East deemed anti-Semitic.

The Portuguese authorities persuaded broadcasters to set up a self-regulatory body to monitor reality television after complaints that the "Big Brother" shows violated contestants' "human dignity." And the British have tried to restrict access to Extasi TV, an Italian-owned satellite channel that broadcasts violent pornography from Spain.

In general, however, the European approach seems to be why worry about a few swear words on mainstream TV when far more offensive stuff is readily accessible in many homes at the click of a mouse. That is the direction that Ofcom, the British media regulator, takes with a television code introduced last month.

Under the code, which takes effect in July, broadcasters are given greater leeway to "transmit challenging material, even that which may be considered offensive by some, provided it is editorially justified and the audience given appropriate information."

Ofcom said it was placing greater emphasis on the "context" of a show. Thus the television chef Jamie Oliver, who champions the cause of healthier meals for children, has escaped censure despite sprinkling his dialogue liberally with expletives.

For the first time under the new doctrine, pay-TV services will be able to show films rated for viewers age 15 and over at any time of day, provided that access can be restricted by parents through security technology. Previously, such shows have been available only after 9 p.m. - a cutoff that remains in place for relatively racy programming like "Desperate Housewives."

While hard-core pornography remains off limits on television of any kind at any time of day, Ofcom said it might reconsider that ban if security technology improves so that it is possible to ensure that children cannot gain access to it.

Extending regulation to new media, as Brussels wants to do, could prove to be particularly tricky. The Internet is by nature borderless, making it difficult to police - and doing so might in some cases be counterproductive, critics say.

"The slight worry is that it takes a very regulatory approach to new media, which may have a number of benefits," Robin Foster, an Ofcom official in charge of strategy, told The Guardian newspaper, "but it may not be positive and may stop new ideas developing in a broadband world."

Reding, the EU commissioner, suggested in her speech that the commission might propose a graded system in which some media are regulated more tightly than others, based on how readily available they are. Video-on-demand, for instance, which requires the user to make active decisions about when and what to watch, might get a lighter touch than television, for instance.

Some countries have already shifted to "media neutral" regulatory systems. In the Netherlands, for instance, television, movies and video games are all subject to a standardized set of ratings that uses "pictograms" to alert parents about violence, sex, discrimination and other possible red flags.

With some modification, such a system could be extended to new media, experts say. "You have to look at the content, not the transmission of the content," said Alexander Scheuer, general manager of the Institute of European Media Law in Saarbrücken, Germany.
http://www.iht.com/articles/2005/06/...s/censor06.php


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ILN News Letter
Michael Geist

6TH Circuit Upholds Decision On Copyright Exception

The Sixth Circuit Court of Appeals has reaffirmed their decision that there is effectively no de minimus exception to copyright infringement for sound recordings. The court concluded that even copying of two notes from a sound recording constitutes infringement. Case name is Bridgeport Music v. Dimension Films. Decision at http://caselaw.lp.findlaw.com/data2/.../026521pv2.pdf

Canadian Authors Object To U.S. Copyright Settlement

Heather Robertson, a Canadian freelance writer is who has fought a long battle over freelance copyright rights, is urging Canadian authors to reject a U.S. settlement. The U.S. settlement is far below the Canadian claim. Robertson's case will be heard by the Canadian Supreme Court in January 2006.
http://cnews.canoe.ca/CNEWS/TechNews...072774-cp.html

Photolabs Fear Copyright Infringment With Great Photos

Photofinishing labs increasingly are refusing to print professional-looking photographs taken by amateurs. Apparently photofinishers are afraid of infringing on professional photographers' copyrights, despite the availability of photo-editing software that can be used by both amateurs and professionals.
http://tinyurl.com/8a495


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AOL Offers Free, Web-Based E-Mail
AP

America Online Inc. launched a free, Web-based e-mail service on Monday, departing for the first time from a fee-based subscription model as it moves to compete with free, and increasingly large, e-mail accounts offered by the likes of Google Inc. and Yahoo Inc.

The unit of media conglomerate Time Warner Inc. said the service will provide users with two gigabytes of storage, along with protection against viruses and spam. The mail program is being marketed as an extension of the company's popular chat application, AOL Instant Messenger, and users of that program will be able to use their existing screen name for their e-mail address, the company said.

Google's Gmail service currently gives users about 2.3 gigabytes of storage and is gradually raising that ceiling. Yahoo offers 1 gigabyte for free and Microsoft Corp.'s Hotmail allows 250 megabytes.

The company also upped its offerings for paying subscribers to its traditional America Online e-mail, giving its nearly 80 million accounts unlimited storage space. AOL said it is the first online service to offer unlimited e-mail storage.

The company also said it will allow multiple simultaneous log-ins for dial-up connections, an offering previously reserved for high-speed connections. The change allows members with different screen names, but on the same account, to log in at the same time from multiple locations.

Time Warner shares fell 10 cents to $17.15 in morning trading on the New York Stock Exchange. On the Nasdaq, Google shares rose $10.91, or 3.9 percent, to $291.17, and Yahoo stock edged up 38 cents to $38.30, while Microsoft shares fell 5 cents to $25.38.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Five Words of Wisdom Each From the Web's Winning Sites
David Carr

One of the more charming idiosyncrasies of the Webby Awards, the annual awards for achievement in Web creation, is that recipients get five words, and five words only, to make their acceptance speeches.

So after a night full of award innuendos and one-line haiku at Gotham Hall in Manhattan, the 550 people in attendance were wondering how Al Gore, the former vice president, would respond to his lifetime achievement award.

He did not disappoint.

"Please don't recount this vote," he said. The place went nuts.

Mr. Gore, who was politically savaged during the 2000 presidential campaign for a remark that seemed to imply that he had created the Internet, was introduced by Vinton Cerf, a man who has a more legitimate purchase on that claim. Mr. Cerf, one of the scientists credited with having built the Internet, had his own five-word speech - "We all invented the Internet" - before pointing out that Mr. Gore had been responsible for spearheading critical legislation and providing much-needed political support, which is not exactly creating a paradigm shifting piece of technology, but is not bad for a politician.

Mr. Gore, by virtue of his résumé, was dragged back to the dais to say a few more words.

"It is time to reinvent the Internet for all of us to make it more robust and much more accessible and use it to reinvigorate our democracy," he said, again to thunderous applause.

It was an awards banquet where hype and self-congratulation were mixed with bracing messages about the cultural and civic good that can come from the Internet. Once a raucous celebration of the World Wide Web's potential to change everything, the awards slimmed down along with the digital economy after the bust, forgoing a huge party for an online event in the last two years. But the Web is no longer a bad word among business people, and it has left the hermetic, homey confines of San Francisco for New York, the first time in its nine-year history.

The decision to present the awards in New York is less a recognition of the city's growing role in digital culture than its longer-running one as the media capital of the Western hemisphere. It is also an indication that the Web does not live exclusively in Silicon Valley; its ubiquity has rendered it transparent and free-floating.

"Every year we have done something different to reflect the pulse of the Web, and tonight we are in New York because the Web has been dispersed," said Tiffany Shlain, one of the founders of the ceremony. "Great Web sites are being created and accessed everywhere."

Including Amarillo, Tex. Tyler Morgan, 19, was getting all of a dozen hits a day on the personal Web site he built in his bedroom - Rtm86.com - until Yahoo named it as a site of the day and he was listed as a nominee for the Webby. In May he had 1.2 million hits.

After he learned he had won the Webby, there was the problem of getting to New York.

"I put a personal plea on my Web site, and people sent in something like $1,700 and here I am," he said, wearing one of the red corsages that identified the winners. His five-word speech was to the point: "Desperate - need money for college."

Mr. Morgan took his place in a line that included the likes of Pfizer, the C.I.A. and Geico Insurance, but also The Paly Voice, the Web site of Palo Alto High School, and RatherGood, a compendium of weirdly wonderful things. The broad range of winners was a reminder of the Web's fungibility, an elastic nature that allows the medium to trumpet mass and granular manifestations of what people are thinking about.

Because the Webby sculpture is shaped like a large spring, it invited short-form, salacious annotations, with many speeches that drew hoots from the crowd but might draw flags from the editor of a family newspaper. One of the more demure, low-tech speeches came from a staff member at Vogue.com.uk, who stepped up to get her award in a gorgeous white frock.

"Do you like my dress?" she said. Yes, they did, and her speech as well.

The event was businesslike, as businesslike as an awards ceremony whose central icon is a cartoonishly large spring can be. The host was Rob Corddry, one of the funny guys on "The Daily Show With Jon Stewart," who brought an air of knowing befuddlement to the events at hand.

To the extent that any awards serve as a mood ring on the industry they celebrate - not all that farfetched, if you deconstruct the average year for the Tonys and the Oscars - the Web has become a sandbox where anarchy and commerce have business in common. While these may not be the heady, freaky days of 2000 and 2001, when old- media luminaries presented awards and thousands of people fought for tickets, the Web is still making noise after the boom.

The Webby for Person of the Year went to Craig Newmark of craigslist.org, whose once-tiny community bulletin board now attracts more than eight million people in 120 cities, including Sydney, Australia, and Bangalore, India. Mr. Newmark's various sites have given fits to the classified ad business of both daily and weekly papers.

Innovators in both music and images, two hot buttons of Internet culture, were cited as well. The Kleptones, a band from Britain, received an award for their music site, which uses the music of others, most recently Freddy Mercury of Queen, to mash together new versions of old motifs. The band's "Night at the Hip-Hopera" became a viral sensation after they plopped it out on the Web for mashing and downloading. And Flickr.com, a photo management site that uses elements of community and Web "tagging" and RSS feeds, made a trip to the podium to be honored for its groundbreaking approach to image sharing.

Whimsy always gets a front-row seat at the Webby's, and this year Dogster.com , a San Francisco Web site, picked up the community award for its creation of a virtual dog run for pets and their owners. BoingBoing.net, whose idiosyncratic approach to what constitutes information worth sharing - robot bands, charts on disappearing oil, or an Osama Bin Laden cigarette lighter replete with World Trade Center towers - received top blogging honors.

As was only fitting, there was a significant populist element to the awards, with 200,000 people voting for "The People's Voice Award," one of more than 60 categories in the program, which drew entries from all 50 states and 40 countries. Comedy Central's "Indecision 2004" on "The Daily show," won both a Webby and the People's Voice Award.

(A complete list of the winners is at www.webbyawards.com .)

The Webbys got off to a wobbly but impressive start in 1997. Ms. Shlain, an independent filmmaker and designer who was then designing the Web site for a print magazine called The Web put out by IDG, cobbled $30,000 and in-kind donations from 11 companies to gin up the first annual awards, which drew 700 people to Bimbo's 365 Club in San Francisco. Willie Brown, then the city's mayor, was at the event, which was sponsored by The Web. The following year, the company closed down The Web, but the Webby Awards lived on, with the second show featuring the likes of Scott Adams, the creator of the comic strip "Dilbert," and the well-known Web savant Dennis Rodman - well, he was well known, anyway. The show, feeding off the growing hype surrounding the Web, attracted significant media attention, and Rudolph Giuliani, then mayor of New York City, made an offer in 1998 to bring the Webbys to Radio City Music Hall. Mayor Brown countered and the awards stayed on the West Coast, but this year the Webby Awards decided to come east.

Also in 1998, Ms. Shlain and a partner, Maya Draisin, helped form the International Academy of Digital Arts & Sciences to oversee the awards, enrolling luminaries like the rock star David Bowie, the filmmaker Francis Ford Coppola and the digital thinker Esther Dyson, and securing PricewaterhouseCoopers to oversee the judging process. After the crash, the Webbys were strictly a virtual event, with live Webcasts in 2003 and 2004, but they have since returned to an awards show format, always featuring the now-trademark short acceptance speech. The winning winner on Monday night? It may have been the man from LonelyPlanet.com, the People's Voice winner in the travel category:

"Love your country. Leave it."
http://www.nytimes.com/2005/06/07/ar...bby-extra.html


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Helping Manufacturers Get the Lead Out of Electronics
John Toon

Solder materials based on lead are still widely used for interconnections in such consumer products as cellular telephones and electronic toys. In 2000, as much as 10 percent of the lead used in the United States went into solder for these consumer products – which often end up tossed into landfills after a few months or years of use.

Concern about the environmental and human health implications of conventional tin-lead alloy solder have caused the European Union and Japan to ban its use altogether. Though lead-based solder alloys haven't yet been outlawed in the United States, electronics manufacturers are becoming increasingly interested in alternatives.

An article in the June 3 issue of the journal Science describes progress made in developing alternative materials, including tin-based solders and electrically-conductive adhesives. While none of these materials is yet as good as the lead-based solder they are designed to replace, the article reports significant progress in developing alternatives that would allow manufacturers to get the lead out of their products.

"Though many challenges remain to be addressed, both lead-free solders and conductive adhesives show much promise as a means of replacing conventional solder materials," said C.P. Wong, a Regents Professor in Georgia Tech's School of Materials Science and Engineering. "But before these alternatives become truly viable, we must develop conductive adhesives that can carry high currents, and lead-free solders that have low processing temperatures, high reliability and good thermal-mechanical properties."

Tin-lead alloys have long been used in interconnects that allow electrical current to flow through electronic components installed on printed wiring boards in a broad range of devices. The lead-based alloy is attractive because of its relatively low melting point, high reliability and good mechanical properties.

Lead-free solders that combine tin with other metals such as silver, copper, bismuth, zinc, indium and nickel are already in use. Among the many possible combinations, an alloy composed mostly of tin – to which silver and copper have been added – has been widely accepted as the most promising lead-free solder. This alloy provides the best combination of strength, fatigue resistance, plasticity and reliability, Wong noted.

However, the melting point of this alloy (217 degrees Celsius) is about 30 degrees hotter than that of the tin-lead alloy with the lowest melting point (183 degrees). Processing at the higher temperature creates potential manufacturing problems.

"When you attach a component to a circuit board in a cell phone or PDA using this alloy, you would subject the components to a higher temperature, which increases unwanted stress and reduces the integrity, reliability and functionality of the equipment," Wong said. "The substrate we are now using must also be reformulated because the low-cost organic materials we now use cannot withstand these temperatures."

The temperature problem, note Wong and co-authors Yi Li and Kyoung-sik Moon, could potentially be addressed by the introduction of metal nanoparticles into the tin-based solder.

Electrically conductive adhesives offer another alternative. They consist of metal powder filler – usually silver – that conducts electricity inside a polymeric resin. The resin, an epoxy, silicon or polyimide, provides mechanical properties such as adhesion, mechanical strength and impact strength.

These electrically conductive adhesives offer numerous advantages over conventional solder technology. They are environmentally friendly, require fewer processing steps and allow a lower processing temperature. These advantages bring lower processing costs, allow the use of lower-cost components and substrates, and facilitate size reduction in devices.

However, electrically conductive adhesives have their own set of disadvantages, including conductivity fatigue, limited current-carrying capability, and poor impact strength. As a result, conductive adhesives are currently used only in low-power devices such as driver chips for liquid crystal displays.

"In certain applications that require high current densities, conductive adhesives still do not measure up to metallic solders," Wong noted. "However, progress is being made at improving the properties of these materials."

With support from the National Science Foundation and the U.S. Environmental Protection Agency, Wong's research group has been addressing challenges in conductive adhesives.

"Conductive adhesives have a lot of advantages, but there are a few challenges," Wong noted. "After you attach a component to a board with conductive adhesives and then cure it, you must test the connections under conditions of high humidity and heat. When you do that, electrical resistance in the joint increases and conductivity drops. That is a major problem for the industry."

At first, scientists and engineers believed the problem was caused by oxidation. But Wong and colleagues at the National Science Foundation- sponsored Microsystems Packaging Research Center showed that galvanic corrosion, caused by contact between dissimilar metals in the adhesive and contact, was the real culprit.

"By understanding this galvanic corrosion, we can develop improved materials that use an inhibitor such as acid to protect the contacts from corrosion, and we can use an oxygen scavenger to grab the oxygen required for corrosion to take place," Wong explained. "We can also include a sacrificial material with a lower potential metal that is attacked by the corrosion process first, sparing the conductive materials."

Researchers are pursuing additional techniques to boost conductivity of the adhesives, including use of self-assembled monolayers – essentially molecular wires less than 10 Angstroms long – that provide a direct connection through the adhesive.

Additional work is exploring ways to improve the impact resistance.

"Recent studies show that with incorporation of these self-assembled monolayers, the electrical conductivity and current-carrying capability of conductive adhesives could compete well with traditional solder joints," Wong added. "This could be a significant advance in improving these materials."

Visuals Available: Photographs showing electrically-conductive adhesives being tested; close-up of test procedure.
http://www.newswise.com/articles/view/512304/?sc=swtn


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PSP Hackers Go Retro
Chris Kohler

"Hello World!"

That's the traditional phrase that programmers display when they create their first piece of software for an unfamiliar operating system. Owners of Sony's handheld PSP game system were delighted to hear May 5 that a hacker had managed to write a small program that displayed those words on a PSP. They wondered what would be next.

As it turned out, it only took hackers five days to go from "Hello World" to Mario World.

On May 10, sites like PSP Hacker reported that a Japanese hacker known only by the name Mr. Mirakichi had developed a program called RIN that let the PSP play software written for the original black- and-white Nintendo Game Boy system.

Emulators like RIN, programs that let a computer run software intended for a different platform, have long been popular among fans of classic video games who want to play the games of yesteryear without having to deal with aging hardware. While emulators themselves are freely distributable, the files that contain game data are protected by copyright. This has barely slowed their popularity.

But the development of emulators for a new operating system is usually a slow and laborious process, so the speed and accuracy with which anonymous Japanese hackers have mastered the PSP has been surprising. New, tweaked versions of RIN appear almost daily, and other emulators that run games for different classic systems like the Sega Genesis and Nintendo Entertainment System have appeared as well.

Some of the programs, like a Super Nintendo Entertainment System emulator, are in early stages of development and run games very slowly if at all. But some, like an emulator that runs games from NEC's TurboGrafx-16 hardware, are nearly flawless, featuring full sound, full speed and the option to stretch the game's graphics to fill the PSP's wide-screen display.

There is one catch -- so far, the hackers have only found a way around the security of the original firmware that was installed on the first batch of Japanese PSP systems. Later units, including every one released in the United States, contain version 1.5 of the firmware, which tightens up security.

When it became available, Sony made the version 1.5 upgrade available to users via download, encouraging them to update their systems. Those who did not upgrade are the only PSP users who can run the emulator software, as well as all other PSP "home-brew" applications such as original, user-created games.

Even without knowing that such software was on the horizon, some PSP owners decided not to upgrade. "I'd had previous bad experiences with the PSX (Sony's PlayStation-branded digital video recorder) firmware," said David Coyles, a Tokyo-based software engineer. "A couple of friends and I were suspicious that some functionality might be lost in a firmware upgrade.

"The PSP is very open for a Sony product, and the fear we had was that perhaps its open nature was by mistake and not design. We'd decided we'd always hold off from upgrading until the full effect was documented," said Coyles.

Thus, the PSP community in Japan has been divided into users with "virgin" 1.0 PSPs and those with upgraded 1.5 PSPs. Sony is using even more creative ways to get users to upgrade. New PSP games that are being released in Japan, such as Space Invaders Pocket and Intelligent License, inform the user that they will not run unless the firmware is updated.

"I'll never use my 1.0 PSP to play a new game now that new games are forcing the upgrade whether or not you want it," said PSP owner Jeremy Parish, an editor at gaming-enthusiast site 1up.com. "If anything, I'll buy a second system," he said.

"I'm pretty much back to square one," said Jonathan Lumb, a Tokyo web developer, "waiting until good enough games come out that make me want to buy a second PSP. I'm not too excited about the PSP's lineup right now."

In response to questions about Sony's stance on home-brew PSP game development, a company representative said Sony "has provided a broad technology palette for PlayStation Portable game developers and content producers with the ability to use storage capabilities like the Memory Stick."

"Sony is determined to cripple the PSP end-user experience at every opportunity," said 1up's Parish. "It only reads a limited selection of music formats, (user-created) video can't run at the system's native resolution, and now the company is obsessed with quashing home-brew development. It's a shame, because the PSP would be so much more compelling if the company would let it live up to its true potential."

But as Sony tries to stay one step ahead of the hackers, the anonymous programmers are trying some new tricks of their own -- recent reports on PSP Hacker indicate that some coders might be close to getting programs to load on PSPs with the updated 1.5 firmware.

If they succeed, all sorts of home-brew software might be on its way to a PSP near you.
http://www.wired.com/news/games/0,2101,67742,00.html


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The Scramble to Protect Personal Data
Tom Zeller Jr.

Perhaps more than most corporations, Citigroup knows the perils of moving personal data.

In February last year, a magnetic tape with information on about 120,000 Japanese customers of its Citibank division disappeared while being shipped by truck from a data management center in Singapore. The tape held names, addresses, account numbers and balances. It has never turned up.

And this week the company revealed that it had happened again - this time the loss of an entire box of tapes in the care of the United Parcel Service, with personal information on nearly four million American customers.

Citigroup executives noted with a bit of chagrin that the Singapore incident had helped prompt a companywide transition to "secure electronic channels" for moving sensitive data - a process nearly completed. But not fast enough, it turned out.

Indeed, while handing over the names, addresses, and Social Security and account numbers of millions of customers to a U.P.S. driver may seem anachronistic, it is in fact common, security experts and lawmakers say.

While things are changing, the process of moving away from these vestiges of a bygone era - when the world was not coursing with electronic back alleys and computer- savvy thieves who just might know how to pull data and profits from reams of magnetic computer tape - needs to be kicked into high gear, some experts say.

The problem of data security goes well beyond couriers and data tapes. And improving things takes time and money.

When so much commerce is conducted online and when just a few bits of stolen data - a Social Security number, a name, an address, a date of birth - can be turned into cash by opening false credit accounts, thieves have proved themselves skilled at getting the information they need.

ChoicePoint, a commercial data broker, was duped by con artists posing as legitimate businesses, allowing them to download sensitive information on thousands of consumers. And a thriving trade in credit card and bank account numbers continues to unfold on underground Web sites and Internet chat rooms.

Combating the crooks requires a holistic approach to data security, said Mike Gibbons, a security consultant for the global technology services company Unisys, and the former chief of cybercrime investigations for the F.B.I. That includes creating more secure online access methods, robust customer authentication, hiring dedicated data security staff, and improving the way large amounts of consumer data are stored or moved.

"All of these things have cost impacts," Mr. Gibbons said. "Businesses have to pony up the capital to change the way they are storing and holding data."

Given that 10 million consumers are now falling victim to some form of identity theft each year, according to the Federal Trade Commission, the stakes are high.

"I think there are some people who dismiss this as a sky-is-falling problem," Mr. Gibbons said. "But the sky has already fallen and it's just a matter of when a piece hits you in the head."

Citigroup and U.P.S. said that the data loss reported this week at Citigroup's CitiFinancial division - the most recent in a long string of reported data losses and thefts at other banks, colleges and media companies - appeared to be a simple mishap rather than a result of foul play. But Mr. Gibbons said that in terms of public perception, the circumstances of the loss made little difference anymore.

"There's going to have to be a shift in corporate thinking in managing these new business risks," Mr. Gibbons said. "The public won't stand for it."

Anthony A. Caputo, the chief executive of SafeNet, a company that provides encryption technology high-speed networks as well as data-security services for the Pentagon and the Homeland Security Department, among other federal agencies, said that a reason sensitive data is still being transported using tapes and trucks is that "the amount of data being transmitted is frequently too much for an Internet connection," and creating secure, dedicated networks takes money and time.

But, Mr. Caputo added, "over the coming years, or months, with so much focus on this, the data will be moved to networks."

The impetus for change is almost certain to be legislative.

A 2003 California law is widely credited with what Bruce Schneier, a highly recognized data security expert whose books include "Secrets and Lies: Digital Security in a Networked World," calls the "public shaming" method of security enhancement. The law, which requires that the state's consumers be notified of security breaches involving data on them, has prompted a string of previously unheard-of corporate confessions - from big data brokers like ChoicePoint and LexisNexis, and from other financial and investment companies, like Wachovia and Ameritrade.

That is a start, Mr. Schneier said, but he said the fact that highly sensitive data was still being shipped by courier - on unencrypted tapes, as in the CitiFinancial case and in a loss of Time Warner employee data in transit earlier this year - is evidence that data aggregators of all stripes, acting rationally, have no particular incentive to speed the adoption of new and expensive methods of handling data.

"This is a capitalist society," Mr. Schneier said, suggesting that no company can be expected to spend money to improve things simply "for the public good."

Rather, "I believe we need actual liability or penalties associated with doing this," Mr. Schneier said. "It doesn't matter if it's made public or not. There must be a penalty. If you could say you have to pay the government $1,000 per name lost, the risk of the loss triggers the increased security."

Just such a bill, along with dozens of others, are pending at the national level.

Senator Charles E. Schumer, Democrat of New York, has proposed the creation of an Office of Identity Theft under the auspices of the F.T.C., which would establish minimum security standards for any entity handling sensitive personal data, including Social Security and driver's license numbers, medical information and credit and bank account information. Failure to meet such "reasonable standards," according to Mr. Schumer's proposal, could result in fines of up to $1,000 per consumer affected.

Hard lobbying is almost certain to pull some of the teeth out of any such proposal - if shipping by U.P.S. were considered unreasonable, Citigroup might have faced a fine of about $4 billion - but the mission is clear.

"The world has changed and this kind of information is as valuable as cash and any institution dealing with it ought to treat it that way," Mr. Schumer said. "The old systems just aren't good enough."

At least 22 bills dealing specifically with the problem of identity theft have been proposed since January - from both sides of the aisle. Taking a stand against identity theft is, after all, an easy position. Betting sorts have suggested that the legislation most likely to win approval is a national law emulating California's notification law. But as the number of consumers affected by each loss, each theft, each compromise creeps upward through the millions, the odds of getting more comprehensive legislation improve.

Representative Cliff Stearns, Republican of Florida, has proposed his own bill, which would require companies to develop written data security policies, and impose penalties for security failures.

"We've got to get to the point where consumer information is protected," Mr. Stearns said.

Partly because of the very public and embarrassing revelations of mishandling now required by many states, the financial industry and other institutions have begun to see the legislative writing on the wall. Most are, at the least, taking steps to shore up their defenses against phony log-ins and other means thieves use to make their way into consumer accounts and steal money and information.

Late last month, for instance, Bank of America - the largest online banker in the United States - began putting in place a rigorous new method for authenticating customer log-ins. The SiteKey service enrolls customers by having them provide a unique phrase and choose an image from a large library of options. (An example on the company's Web site pictures a Chihuahua).

The bank also stores the customer's computer identity in a "cookie" stored on the user's machine. When customers log in from the computer they used to enroll, they are shown the chosen image and phrase for verification. If customers try to log in from a different computer, they are asked one of three prearranged security questions. Only after all of this does a customer enter a pass code and enter the site.

In March, the investment company E*Trade announced that it would begin offering customers with $50,000 or more on deposit a free digital "token" device from the security company RSA. The device generates a new six-digit code every 60 seconds, which users will need to log in to their accounts.

And the movement of large amounts of stored consumer information - as with the CitiFinancial case - are increasingly being transferred to wide-area networks that deploy encrypted, fiber optic technology on closed systems that connect, for instance, credit reporting agencies with the banks and other companies that routinely supply them with huge amounts of consumer credit data.

Experian, one of the three major credit reporting agencies that receive vast amounts of consumer data every month from the nation's banks and lenders in order to keep consumer credit records up to date, said the company had been actively working with all large data contributors to convert to electronic data transfers.

And even where tape deliveries continue, banks and other companies are learning - if only by horror story - that the data must be encrypted.

"There are social expectations about security that can't be met," Mr. Schneier said. "But the practices are still so shoddy."
http://www.nytimes.com/2005/06/09/business/09data.html


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One Step Closer To Mobcasting? Open Source Peer To Peer Radio
Taran

In 'Mobcasting the Future', I wrote a bit about what Mobcasting could be used for. The general idea is, of course, to allow people to communicate through audio. With mobcasting, one extra step would be to create an archive and allow threaded discussion as well.

Maybe P2P radio is one of those things that can be leveraged for mobcasting; integrated in a larger mobcasting solution. I'm spending time this month looking at such things, because many of the tools to be used with mobcasting already exist - they just need to be integrated.

Standalone, P2P radio is a blend of two things which has a lot of potential on it's own. From the 'About page', emphasis by me:

...P2P-Radio can distribute audio streams in the MP3 and Ogg Vorbis formats and video streams in the NSV format over the Internet. This is done in a peer-to-peer way. The broadcaster doesn't need to send the stream to every single listener, because the listeners distribute it among themselves...
http://www.knowprose.com/node/2198


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Milestones

N.Y. Station Suddenly Dumps Oldies Format
Larry McShane

It's the day the music died. WCBS-FM, the top oldies station in the nation for more than three decades, stunned its legion of listeners by abruptly switching formats this weekend. Goodbye, Buddy Holly and the Beach Boys. Hello, Duran Duran and Jet.

"I'm sure this move angered and bewildered its listeners," said Tom Taylor, editor of the trade publication Inside Radio. "A lot of people punched in WCBS-FM, heard Pink's `Get The Party Started,' and said `Something's wrong with my radio.'"

The station had switched to an oldies format in 1972, initially as a bastion for the doo-wop sounds of the '50s. Although the playlist changed over the years, WCBS-FM always remained the outpost for classic Top 40 radio in the nation's largest radio market.

It was also the home to many of New York's legendary Top 40 DJs, including "Cousin Brucie" Morrow, Harry Harrison, Dan Ingram and Norm N. Nite.

Radio formats came and went _ disco, punk, hip-hop, talk, sports talk _ but WCBS-FM remained unchanged, a warm and welcoming presence at 101.1 on the FM dial.

The station's new format is called "Jack," an eclectic mix of hit music from the '70s through the present. The station's owner, Infinity Broadcasting, made the same format shift Friday at its Chicago oldies station, WJMK-FM, where classic Top 40 had aired for the past 21 years.

"We did a lot of market research and found a hole in the market that wasn't being served by any other station," said Chad Brown, WCBS- FM vice president and general manager.

There are currently about a dozen stations nationally using the Jack format.

"Youth must be served," Taylor said about the changes. "If you look at a lot of media, older Americans aren't important unless you're selling Craftmatic beds."

At 5 p.m. Friday, just as Frank Sinatra's "Summer Wind" faded out, WCBS listeners heard a voice announce: "Why don't we play what we want? There's a whole world of songs out there."

The first song played on the new 'CBS-FM: "Fight for Your Right" by the Beastie Boys.

Until that moment, there were no indications of any imminent change at the station. Earlier in the day, morning show host Mickey Dolenz _ yes, the former Monkees drummer _ celebrated his 100th show with the station by hosting a live broadcast from B.B. King's Blues Club just off Times Square.

In the winter 2005 Arbitron ratings, WCBS-FM was ranked eighth among the city's stations _ a strong showing, but apparently not strong enough.
http://www.washingtonpost.com/wp-dyn...060400999.html

[JackSpratts]

It's not only merely dead; it's really most sincerely dead

U.K. Suspends Vote On EU Constitution
AP, Agence France-Presse

LONDON The British prime minister's office confirmed on Monday that Britain had put off a referendum on the EU constitution, following its rejection in France and the Netherlands.

At issue on Monday evening was whether other nations would follow suit, potentially casting the British government's decision as the "last nail" in the document's coffin.

An official spokesman for Prime Minister Tony Blair said the results of the French and Dutch referendums had to be discussed at the European Council summit meeting later this month.

"Given that, it does not make sense to proceed at this point," said the spokesman.

He said that indefinitely delaying the referendum did not send a message that Britain thought the EU constitution was dead.

"What we are doing is reflecting the fact that we are in uncertain times, and in uncertain times you should not just give a knee-jerk response," the spokesman said.

Confirmation of the government's decision came hours ahead of a statement by the British foreign secretary, Jack Straw, to the House of Commons outlining the government's position.

Straw was given the task of choosing his words carefully before Parliament on Monday afternoon, to avoid making Britain appear as the country that killed the treaty while announcing a temporary freeze of the bill that would have allowed the referendum to proceed in Britain in early 2006.

Straw has insisted on the need for the British government to respect the results of the French and Dutch plebiscites

Two other nations seemed immediately vulnerable to the British decision.

In Poland, President Aleksander Kwasniewski met Monday with a group of advisers to discuss whether or not his country should hold a referendum.

Just before the announcement by Blair's office, the Polish deputy foreign minister, Jan Truszczynski, appealed to Britain not to back out of the ratification process.

"If the British hit the last nail to the treaty's coffin by announcing that they are backing out, then there is the question of what would happen to the ratification procedure in the other countries," Truszczynski said on a private radio station, TOK FM.

In Denmark, a survey conducted during the weekend indicated that a majority of Danes wanted to carry through with a planned referendum on the EU constitution, despite the recent rejections of the charter by Dutch and French voters.

The poll, conducted by Vilstrup and published in the newspaper Politiken, showed that 53 percent think Denmark should still hold the referendum, which is scheduled for Sept. 27, while 31 percent said it should be called off in light of the recent rejections. The rest were undecided. Vilstrup interviewed 1,037 people over the phone from June 2 to 3. The survey had a margin of error of 2 percent. However, several surveys published last Friday showed that Danish opinion of the charter had changed significantly.

Four separate surveys conducted after the French and Dutch votes indicated that a majority of Danes, who earlier appeared to favor the EU constitution, would now oppose it.

On Monday, a political expert in Copenhagen said that Denmark, in light of Britain's decision, could postpone its referendum.

"It might be evident that there is no reason to hold a referendum in Denmark, either," said Anne Mette Vestergaard of the Danish Institute for International Studies.

Danish government officials did not have an immediate comment.

Supporters of the constitution remained outwardly unmoved by the its newly clouded outlook.

President Jacques Chirac of France and Chancellor Gerhard Schröder of Germany have reaffirmed their commitment to the document.

The two leaders have called on other member states to press ahead with ratification.

"We cannot drop the idea of Europe because there are difficulties," the chancellor's spokesman, Bela Anda, told reporters after a meeting at Schröder's office. "The chancellor and the president agreed that the constitutional process must continue.

"We must use this development to make very, very clear that Europe is more than short-term voting behavior - this is about creating lasting peace, bringing about prosperity and freedom."

Chirac's spokesman, Jerome Bonnafont, said that "one country cannot decide on its own the fate of a treaty negotiated and signed by 25 states.

Each member state must be able to express itself in its turn."

Ten countries, including Germany, have ratified the EU constitution, most of them in parliamentary votes.

But the charter must be approved by all 25 EU members to take effect.

In Brussels, the European Commission reiterated Monday that EU countries should avoid any "unilateral decision" on the EU constitution, but declined specific comment on the expected British announcement.

The European Union's executive repeated a call for a period of "reflection" ahead of an EU summit meeting next week that is expected to decide the constitution's fate.

A spokesman noted that commission's chief, José Manuel Barroso, had called on EU members "not to take any unilateral decision" that would have "a negative effect on this process of reflection."
http://www.iht.com/articles/2005/06/06/news/britain.php


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Anti-Piracy Group Broke Swedish Data Laws

Sweden's anti-piracy group, Antipiratbyrån (APB), broke the personal data act in its hunt for illegal file-sharers, the country's Data Inspection Board has ruled.

At the beginning of March, thousands of Swedes reported the film and games industry-backed organisation for its method of tracking the downloading of copyright-protected files. APB used a piece of software to record the IP-addresses of file sharers, as well as the alias, the file name and the server through which the connection was made.

Last week APB's lawyer, Henrik Pontén, told Computer Sweden that he does not believe an IP address could be classed as personal data.

But the Data Inspection Board disagreed, ruling that if an IP address can be linked to an individual it is classed as personal information and therefore falls under the personal data act.

Whether or not the APB's action can be classed as a criminal offence, however, is "tricky", said the Data Inspection Board's Hans-Olof Lindblom.

"It depends on how you assess the significance of what they did. If it classed as a minor infringement then it is not punishable," Lindblom told The Local.

Over the last year APB has reported hundreds of people to the police and has sent up to 2,000 emails a day to internet service providers notifying them of misuse. But according to the Data Inspection Board's findings, the group had no right as a private enterprise to collect the information in the first place.

APB has already stopped using its own data collection software and has already reported over 200 suspected miscreants directly to the police.

"We have other methods than storing IP addresses for tracing people who break copyright laws concerning films and games," said APB's lawyer, Henrik Pontén.

Members of the public have now stopped reporting APB - but file-sharers could find the group back on their case quicker than they thought.

According to the Data Inspection Board, an organisation may apply for exemption from the personal data act.

"I've just heard that APB intend to ask for permission to continue storing data. We expect their application on Monday and then the Board will decide," said Hans-Olof Lindblom.
http://www.thelocal.se/article.php?I...2fa14f43d2b762


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Music Muffled in Star Wars Game
Katie Dean

The massively multiplayer online game Star Wars Galaxies gives gamers a chance to build their own weapons and armor, fly spacecraft, build cities and even train to become Jedis.

But in this world of make-believe, composing music is forbidden.

Players can play Wookiees or bounty hunters and even musicians -- like those in the cantina band from the original Star Wars.
As musicians, the characters play pretend, virtual instruments like the slitherhorn, ommni box or the nalargon, but are limited to a handful of canned tunes. Lawyers at Sony Online Entertainment and LucasArts envision a legal nightmare if musicians were to re-create music copyrighted in the physical world.

"If we allowed someone to play anything they want, they could play a song by Madonna and then we'd have licensing issues," said Julio Torres, a producer for Star Wars Galaxies at LucasArts. "We don't want to give them the option to try, because the bottom line is, if we open that gate, they will go through it," he said.

Torres said the company also wants to keep the game consistent with the Star Wars environment. "To have a player in our game create a song that is Jon Bon Jovi or Metallica would throw people out of the fantasy," Torres said.

But players say making music would add to the fantasy and make the game more fun. They just want more freedom to innovate.

"We'd like to be as creative as we can," said Jonathan Mendez, who has been a "musician" in SWG for more than a year. "I personally have some music background and I would like to be able to use that to make some music."

The role of musicians in the game is to help other players recover from battle fatigue and lift their spirits. Combatants visit a cantina to listen to music and receive a "buff," which gives them added mental strength.

The ability to make their own music has been an issue from the early days of the game, said one former player.

"The entertainer and musician community had been wondering for a while why it is that they couldn't make their own music," said Brian Srivastava, a computer science student from Peterborough, Ontario. He said it was a top issue when the game was first developed in 2003.

And the topic crops up repeatedly in the forums, usually with players new to the game, Mendez said.

"Now, we just give the standard response: 'Yeah, we would like that but it's probably not going to happen because it would open it up to copyright issues,'" Mendez said.

Copyright experts agree there are several tricky issues, which are sure to grow as more people become involved in gaming. For instance, if Star Wars Galaxies musicians were allowed to create their own music, they might demand creator's rights for their compositions, said Eric Goldman, assistant professor at Marquette University Law School. But Goldman said that's something that could easily be handled with a clear user agreement.

The riskier situation is giving people the ability to create music that infringes someone's copyright, which could make Sony Online Entertainment and LucasArts liable.

"(Sony and LucasArts) would have to be pretty vigilant about pulling the plug on users who they thought were engaging in infringement and that just means more cost, more grumbling users and more risk of making a poor decision," Goldman said.

And while performance licenses exist for bars and restaurants to play copyright music in the real world, there are none for their counterparts in the virtual world, said Fred von Lohmann, senior staff attorney at the Electronic Frontier Foundation.

"It's sort of a loss all the way around when LucasArts has no ability to get that license and players are left with this rather artificial restriction," he said. "We've got a system that works reasonably well in the real cantina and it's up to copyright owners to come up with a similar system to handle the virtual cantina."

"Copyright law restricts a lot of perfectly legitimate, worthwhile creative activities," von Lohmann said. "It's not just about stopping pirates."

LucasArts' Torres said another 10 songs will be added to the game in a few months, and players will have more freedom to compose then. Musicians will be able to manipulate blocks of music and harmonize components to show their musicianship. The blocks will fit together "kind of like a Lego system," he said.

"You're composing chunks of music as opposed to note by note," he said. "If we break it down note by note, we open the gate for licensing issues."
http://www.wired.com/news/digiwood/0,1412,67720,00.html


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Get Sued And Earn Your 'Biting The Pigopolist' Merit Badge
Ashlee Vance

When El Reg learned that Hong Kong scouts could earn a copyright proficiency badge for pledging their allegiance to Hollywood, we decided the time was right to award some badges of our own. Sadly, our design department has been too busy designing T-Shirts to spend much time on the demanding hacks' copyright quest. So, we turned to you - our beloved readers.

You came to the rescue with a nice array of "Biting the Pigopolist" merit badges. These awards will soon be found on children everywhere - the thousands who have received lawsuits from the RIAA (Recording Industry Association of America) and MPAA (Motion Picture Association of America). Nothing helps assuage the pain of paying out a huge settlement like a "Biting the Pigopolist" stamp on your shirt.

The winner - one A.P.G.Robinson from somewhere in the UK -- will receive a Register goodie of his/her choice and will be vaulted to great fame by having the design below turned into one of our teaser story graphics posted at the top of the homepage.

Thanks to all of you who entered. Tsk, tsk to the lazy sods who didn't.
http://www.theregister.co.uk/2005/06...est/print.html


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The uncertainty of suing

One Sure Thing: Music Industry's Legal Actions Will Impact Copyright Policy
Michael Geist

The recent Federal Court of Appeal music file sharing case, in which the court rejected the Canadian Recording Industry Association's attempt to uncover the identities of 29 alleged file sharers, raises important privacy and copyright issues. Last week, I reviewed the court's test to protect personal privacy. This week's column assesses the copyright implications of that decision.

Although the court declined to articulate definitive conclusions on important copyright issues associated with file sharing, its decision will undeniably have a major impact on copyright policy. This impact is best addressed by analyzing three questions -- can CRIA sue file sharers? Can it win such suits? And what legal reverberations might ensue if it does win?

The answer to the first question is relatively straightforward. CRIA can sue file sharers in Canada and it has indeed asserted that the decision provides a blueprint for future suits.

In the aftermath of last year's trial decision, the recording industry expressed grave concern about the state of Canadian copyright law and lobbied aggressively for immediate changes. In light of the appellate decision, it is now safe to declare the copyright emergency over. In fact, the fears of a devastating effect never materialized. According to CRIA's own figures, in the 13 months of reported sales since the March 2004 decision, both sales and shipments have increased.

The answer to the second question -- whether CRIA can win file sharing suits -- is open to debate, particularly with respect to suits filed against individuals who download music solely from peer-to-peer networks. The complicating factor is the effect of Canada's private copying system, which establishes a levy on blank media such as recordable CDs. Anna Bucci, the Executive Director of the Canadian Private Copying Collective, the body that administers the $120 million in royalties that have been generated by the levy, last week described private copying as creating "a new right for the Canadian public -- the right to make private copies of music for their own personal use."

There are at least three objections raised to the application of this private copying right to P2P file sharing. First, the right applies solely to copying, not to those who "upload" music on peer-to-peer networks. This objection is certainly valid as neither the Canadian courts nor the Canadian Copyright Board have ever indicated that private copying could be used as a defense against the act of uploading.

Second, CRIA recently argued that the private copying right does not apply to copies made to personal computers. A review of the legislative history of private copying provides little support for this interpretation, however, as the statute was intentionally drafted in a technology-neutral fashion such that it could be applied to new copying media, including computer hard drives.

The primary impetus behind the creation of the private copying system was the Charter of Rights for Creators, a 1985 parliamentary committee report. That report explicitly declined to tie the levy to a particular technology, presciently noting that "future recording devices might not use blank tape, thereby making a tape royalty obsolete. The work could be stored in a computer memory with no independent material support at all."

Eleven years later, the Task Force on the Future of the Canadian Music Industry, co- chaired by the heads of CRIA and the Canadian Independent Record Production Association, continued to press for the creation of a private copying levy to be applied to both media and devices. The technology-neutral levy was enacted into law soon after with the industry celebrating success after 15 years of lobbying but lamenting that the delay had "literally killed dozens of careers."

While the levy was certainly intended to cover computer hard drives, the third objection is whether the provision, as currently drafted, actually achieves that goal. This issue was thrown into some doubt by a Federal Court of Appeal decision last December that upheld the validity of the levy but tossed out its application to MP3 players such as the Apple iPod.

That decision is currently under appeal to the Supreme Court of Canada. If Canada's highest court overturns the decision, the intent of the legislation will be restored and much of the doubt about its applicability to P2P downloaders will be removed.

If the Supreme Court declines to hear the appeal or upholds the decision, the impact will extend well beyond music file sharing. Some P2P downloading would no longer fall under the private copying right, though downloads to many external or removable hard drives would presumably still qualify. More importantly, copying of store-bought CDs onto Apple iPods, a common practice extolled by CRIA itself, would effectively be rendered unlawful in Canada (unless there is an implied right to copy such CDs, which would then call into question the need for a private copying system).

The third question -- what might follow if CRIA is successful in its suits -- raises the prospect for copyright reform. When the federal government established the private copying right in the late 1990s, it also created a statutory damages system. This enables a copyright holder to obtain specified damages of between $500 and $20,000 per infringement without the need to prove actual damages. There is, however, a saving provision that allows a court to order damages well below the statutory minimums if the total award is "grossly out of proportion to the infringement."

The statutory damages provision raises several scenarios in the context of file sharing suits. One possibility, common in the United States, is that cases do not actually proceed to trial since even innocent defendants will settle lawsuits to avoid the risk of a massive statutory damages award. Should a case proceed to trial, another scenario is that a court might indeed award damages of hundreds of thousands of dollars based on uploading 1,000 songs onto a P2P network.

Given that fee-based services such as Napster already offer over 700,000 songs for only $14.99 per month, a raft of settlements or a massive award might lead to vociferous calls to Industry Minister David Emerson and Canadian Heritage Minister Liza Frulla for immediate reform to the statutory damages provisions so that a more appropriate remedy can be implemented.

Alternatively, a court might be faced with a sympathetic defendant who could prove that he or she had legitimately copied store-bought CDs onto a computer and logged onto a P2P network in order to download a public domain document or open source software program. In such a case, the judge might be inclined to use the saving provision and set a precedent of a minimal damages award for P2P activity.

The net result of current Canadian law is that file sharing suits are a risky strategy from both a privacy and copyright perspective. The Federal Court of Appeal may have provided a roadmap for such suits, but it is apparent that traveling down that road raises many more questions than it answers.
http://www.canada.com/technology/sto...4-47c7e93afe3b


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

RIAA Will Keep On Suing
Steve Knopper

The music industry has targeted 11,456 illegal downloaders -- has it done any good?

Nine months after the music industry accused her of illegal downloading, Vickey Sims insists she's innocent and refuses to pay the $75,000 minimum fine. The Alexander City, Alabama, hairdresser had no idea her teenage daughter Nicole Phillips had 1,200 MP3s by George Strait, Kirk Franklin and others on the family computer, and Phillips had no idea getting free songs online was wrong. "We're just like, 'Why are they picking on us? There are so many people doing this,'" Sims says. "People come in my shop, and they talk about their kids and their buddies doing it."

Sims is one of 11,051 "bad-luck lottery winners," as one lawsuit recipient calls them, sued by the Recording Industry Association of America for illegally downloading and sharing copyrighted music. The RIAA says it generally goes after people who have downloaded more than 100 songs but will not reveal any other specific criteria. The suits demand up to hundreds of thousands of dollars in damages -- and even the few defendants who can afford to pay are more inclined to settle for $3,200 to $4,000 than fight a costly court battle against music- industry lawyers.

No case has gone to trial, but so far the RIAA has shown little sympathy for people like Sims and Phillips, who did her file-sharing on Kazaa between 2002 and 2003, when she was sixteen and seventeen, months before record labels announced their plan to sue downloaders. The first thing Sims did after receiving the lawsuit in the mail last August was to hire a local lawyer, Angela Hill, who believes she can get a dismissal because "they're suing Vickey, and Vickey does not even know how to download a song." But many of the RIAA's lawsuits have been filed against the parents of downloaders, and the hundreds of parents who say they had no idea what their children were doing online remain stuck with the bill. "Parents could win the lawsuit, but that doesn't mean a damn thing," says Megan Gray, a Washington, D.C., intellectual-property attorney, "because all the RIAA will do is dismiss the lawsuit and file against the children. Ignorance of the technology is no excuse."

Still, many accuse the record labels of unfairly criminalizing music fans when they could have put the money and effort into educating them about illegal downloading instead. "The RIAA has made a lot of this illusory campaign of education," says Charles Lee Mudd Jr., a Chicago attorney who represents several sued downloaders. "I haven't seen it, and my clients haven't seen it. It's got to be more than a few advertisements on VH1 or MTV."

One thing is clear: The lawsuits have failed to stop, or even slow, illegal file-sharing. An estimated 8.6 million Americans were trading copyrighted songs at any given time in April 2005 -- up 100 percent from 4.3 million in September 2003, when the suits began, according to a study by BigChampagne, which tracks file-sharing trends.

Cary Sherman, the RIAA's president, questions BigChampagne's data and points to other studies that show a decrease in file-sharing. But the BigChampagne data is the most widely accepted -- in fact, BigChampagne compiles it for the record companies for marketing purposes.

"Enforcement is a tough-love form of education," Sherman says, "but it really works. It has made a profound difference in public awareness -- just a sea change from where public perception was before the lawsuits began."

But Charli Johnson, a twenty-one-year-old student in Winfield, Kansas, who settled for about $3,000 last summer, echoes many of the lawsuit recipients when she says, "Personally, I don't think it's going to stop anyone from downloading. All my friends know I got sued and how much I got sued for -- and they're still downloading music. It's not a reality for them."

The RIAA campaign kicked off in September 2003, when it circulated 261 lawsuits against downloaders active on Kazaa, Grokster and others. The plan for the lawsuits had begun much earlier, however. By late 2002, record-label chiefs and RIAA officials were meeting regularly -- often in heated debate -- to discuss the issue. At the time, the music industry was in the midst of a downturn, slashing rosters and laying off thousands of employees. CD sales dropped by nearly 200 million from 2000 to 2003. Economic recession was a factor, but executives blamed the problem on Internet piracy. They insisted that something had to be done to stop the millions of music lovers who were using services like Kazaa, Grokster and LimeWire to get their tunes for free. In phone and e-mail conferences, the executives discussed suing the downloaders. Several power players -- including Roger Ames, then chairman of the Warner Music Group, and Hilary Rosen, then the RIAA's president -- insisted the industry take two steps before it began suing downloaders.

First, the labels unveiled a series of ads featuring stars like Britney Spears to remind fans that downloading free music is illegal. Then they began hashing out how to create a legal online alternative to Napster and Kazaa. Around that time, Apple Computer's Steve Jobs showed up at label boardrooms with new software called iTunes, which was quickly accepted as a legal downloading alternative. After that, recalls Rosen, "I think everybody was on board with the lawsuits."

The final piece fell into place in April 2003, when a Los Angeles district judge ruled that the peer-to-peer service Grokster could not be sued for the actions of its users. (That case is currently being heard on appeal by the U.S. Supreme Court.) Only those who used the service to illegally download free music, the court suggested, could be held responsible. Unable to go after the file-sharing services, the labels agreed unanimously to take downloaders to court. "Everyone felt like it was too bad that it had to happen," says a major-label source. "We didn't want to be suing, but there weren't a lot of alternatives. It's one thing when you're looking from the outside and saying how stupid this is -- but it's another thing when half your company gets laid off."

To figure out who to sue, the RIAA hired a team of twenty technicians to surf file-trading sites like Kazaa, identifying users who did the most downloading. The RIAA knew that the lawsuits would generate terrible press -- and by the second day, the campaign had already backfired. Brianna LaHara, a twelve-year-old who lives in a New York housing project, landed on the front page of the New York Post, portrayed as a victim of the music industry's war on its customers.

The RIAA was undeterred. "I thought the publicity was bad," recalls Rosen, who is now a Democratic Party strategist. "But it was New York Post bad -- it wasn't really bad bad."

Eighteen months later, the industry continues to announce another wave of lawsuits nearly every month, including the latest round of 725 in late April. Earlier that month, the RIAA expanded its campaign, suing 405 college students who downloaded free music via Internet2, a faster, more exclusive online network running on many campuses.

The RIAA has settled 2,484 cases out of court, with the average settlement between $3,000 and $4,000. (The association channels all the settlement money back into anti-piracy enforcement programs.) In what the RIAA's Sherman calls a "remarkable coincidence," CD sales started to inch up the month the lawsuits began, and Apple's iTunes Store has sold 400 million legal ninety-nine-cent downloads since it opened in April 2003. Still, overall sales remain down 8.6 percent since 2000, and it's difficult to draw links between illegal downloading and record sales; one could just as easily argue that a lack of steady blockbuster records has caused the declines.

In the process, the lawsuit campaign has created significant financial hardships for thousands of music lovers. Janet Bebell was a freelance accountant in Denver when the RIAA sued her in September 2003: Her twenty-three-year-old son, it turned out, had downloaded music from Kazaa on the family computer. Faced with a settlement of almost $4,000, Bebell raised $250 in donations through Downhill Battle, a group of activists dedicated to fighting the major record labels, and she's considering putting the rest of the settlement on a credit card. "I don't have a fallback option," she says. "That's what they can do -- really destroy my credit."

Cindy Lundstrom, a legal secretary in Scottsdale, Arizona, is also charging the settlement to her credit card. She was sued in March 2004 after her sixteen-year-old daughter, Chelsea, downloaded 700 hip-hop songs. Chelsea, a straight-A student and homecoming queen at North Canyon High School, offered to pay the $3,000 out of her savings from an after-school job at a hair salon, but her mom told her to keep the money. "That is her savings for college," Lundstrom says.

A few have fought back -- so far, without success. Michele Scimeca, an insurance clerk in New Jersey, made headlines last year when she countersued the trade group under federal anti-racketeering laws, accusing the major record labels of bullying their customers for money. But a judge dismissed her suit earlier this year, and Scimeca plans to declare bankruptcy. She says the music industry is demanding a total of $50,000 in penalties and legal fees to settle her case -- more than three times her family's annual salary -- although the RIAA denies her claim. "You watch MTV's Cribs, and all those superstars are making millions of dollars," Scimeca says. "And I'm sitting here with my secondhand furniture with twenty-year-old carpets on the floor, trying to keep my kids in decent clothes." But she's unlikely to get any sympathy from music-industry executives who, whether or not they can prove that suing music fans is a successful deterrent to downloading, are committed to the strategy. "I don't see the lawsuits stopping," says Zach Horowitz, president and chief operating officer of the Universal Music Group. "It's important for people to know there are repercussions for these kinds of actions."

By the Numbers:

A year and a half after the RIAA began suing downloaders, it is estimated that twice as many people are now using peer-to- peer software like Kazaa. Here are some figures (according to the RIAA, BigChampagne) from the music industry's courtroom efforts to stop downloading:

Number of peer-to-peer users in August 2003, the month before the lawsuits began: 3.85 million

Number of peer-to-peer users in April 2005: 8.63 million

Number of people sued by the RIAA to date: 11,456

Number of people who have settled with the RIAA to date: 2,484

Maximum amount you can be sued per song: $150,000

Average settlement: $3,600
http://www.rollingstone.com/news/sto...player=unknown


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MPAA Files New Round Of Swap Suits
John Borland

Hollywood studios filed a new round of lawsuits Thursday against individuals accused of trading copyrighted movies online.

This is the Motion Picture Association of America's fifth round of suits against individual file-swappers, but the group has not provided details about the number or location of people targeted.
http://news.com.com/MPAA+files+new+r...3-5730072.html


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Not Bad: File Sharing Has A Batch Of Benefits
Tristan Morris

Are people who download music or movies stealing from the artists or companies who own the copyrights?

Yes, they are.

But newly developed technologies are sweeping away concerns of what is right and replacing them with the reality of what is possible.

It is not possible to stop file sharing. The technological universe has changed, tilting the scales in favor of the hordes of teenage "pirates" over the corporate "suits." The genie is out of the bottle, and all the litigation, legislation and technological fixes can't put it back into the bottle again.

But that may not be such a bad thing.

File sharing is a technological advance that allows for the free worldwide distribution of digital media, and it is going to greatly enrich the lives of billions of people. Acting as the most comprehensive public library of all time, it brings music, literature, movies and software to people worldwide, regardless of their social status or wealth. Look at how much it has already enriched the lives of today's teenagers, who have access to millions of dollars worth of music and art that they could not have afforded or perhaps even found before.

Opponents of file sharing believe that it will cause the death of our music and entertainment industries because there will be no financial incentive to create. File sharing may very well doom our current business models in these industries. The age of millionaire rock stars may be over, replaced by musicians who make their living on the touring circuit.

But capitalism guarantees that other business models will spring up, even if they are less profitable to major artists. File sharing will not stop people from creating music or movies or other intellectual property, and the industry may benefit from an influx of new talent that previously couldn't get noticed by major producers.

File sharing is unstoppable because it is often out of the reach of U.S. laws, and technological encryption solutions can't stand up to armies of skilled hackers. For example Kazaa, one of the most popular file-sharing softwares, is a network of individual PCs with no center, owned by a company on a South Pacific island, well out of reach of U.S. law.

And repeated attempts by major companies such as Microsoft and Apple to protect copyrights by digitally scrambling songs, movies and video games with encryption software have proved no match for the thousands of highly skilled hackers who will work day and night until they crack the encryption. Plus, if even one unencrypted copy gets onto Kazaa, encryption becomes irrelevant, because digital quality does not deteriorate when copies are made, and eventually one copy can become an unlimited number of copies.

When you ask teenagers today if they use file sharing, they usually say, "duh." Today's technology-empowered youth have decided that the benefits of file sharing exceed the costs, and I think that in the long run they will be proved right.
http://www.journalnow.com/servlet/Sa...=1037645509005


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Warner Gets a Jump on Film Pirates in China
Jon Healey

In a groundbreaking response to movie piracy, Warner Bros. Entertainment released its latest film on DVD in China the same day it debuted in U.S. theaters.

The goal for Warner is to battle rampant piracy in China by giving movie fans a legitimate alternative to bootlegs. But the boldness of Warner's action, which it took last week with no fanfare, was tempered by its choice of movie: "The Sisterhood of the Traveling Pants," a relatively low-budget film that the studio had not planned on releasing in Chinese theaters.

Nevertheless, several industry executives said they believed it was the first time a major U.S. studio had taken a movie scheduled for a wide-scale theatrical run and released it simultaneously on DVD in another country.

"It's a necessary move," said movie industry analyst Tom Adams of Adams Media Research. "It's obviously not as good as having control of the Chinese market, but it's about the next best thing that you can do."

Craig M. Hoffman, a spokesman for Warner Bros.' anti-piracy efforts, said the studio was not necessarily looking to apply the same strategy to combat bootlegging in the U.S. or other countries.

"That region presents, if you will, the 'perfect storm' of piracy," Hoffman said, noting that Chinese pirates do not have to contend with the government quotas and review boards that restrict Hollywood's access to the market. "This region needed something like this to see if [a] legitimate product could compete under these conditions."

The Motion Picture Assn. of America contends that the major studios lose more than $3.5 billion — about 18% of last year's revenue from feature films — annually to disc and videotape bootleggers, plus an undetermined amount to online movie swappers. The MPAA has responded by conducting more raids and seizures against bootleggers, but studio executives have also stressed the need to compete with pirates in the marketplace — particularly overseas.

According to an April report by the U.S. trade representative, at least 90% of virtually every type of copyrighted work sold in China is counterfeit. China has only about 2,500 screens and 1.3 billion people, and the Chinese government allows only a few U.S. movies to be exhibited there. Most of the studios' movies reach Chinese viewers only on disc or videotape, which usually arrive months after the movie had its premiere in U.S. theaters.

Bootleggers in China face no such shortages or delays — they can download illicitly recorded copies of almost any movie within days of its U.S. premiere, then burn those copies onto discs. As a result, Chinese movie fans typically buy pirated versions long before legitimate versions of the films become available.

Warner's accelerated release of the "Pants" DVD in China appears to have beaten the pirates to the market, but it could backfire globally. Bootleggers could use the Chinese DVDs to create high-quality copies that spread quickly around the world, either over the Internet or as counterfeit discs.

Hoping to make unauthorized copies of "Pants" less appealing outside China, Warner included no extra features on the DVD. It also added Mandarin subtitles that cannot be hidden, said Yotam Ben-Ami, an anti-piracy executive at the studio.

Executives at other studios argued that Warner was not taking much of a gamble. The potential market in China and among pirates is small for a "chick flick" like "Pants," which follows four young women who take turns wearing a single pair of jeans that magically fits their different sizes. The movie grossed $9.8 million in its opening weekend at U.S. theaters.

As of Wednesday, no copies of the "Pants" DVD were reported on two websites that track the arrival of bootlegged movies online. Nor were there any versions of the movie that had been recorded illicitly in U.S. theaters.

Even a low-risk movie can provide some insights into the market, though, and particularly into the way customers respond to the early availability of legitimate products. Those lessons could prove valuable in other countries with high piracy rates, such as Russia and much of Southeast Asia.

"We will closely monitor the impact of this release on our other businesses to determine whether to follow this same release strategy with more high-profile titles," said Jim Cardwell, president of Warner Home Video.

The major studios' strategy of delaying home video releases until months after a movie's premiere has guaranteed pirates an exclusive window of sorts. Until the official DVD and VHS release, the only version of a movie available for viewing at home is a pirated one.

Some independent production companies, including Mark Cuban and Todd Wagner's 2929 Entertainment and Morgan Freeman and Lori McCreary's Revelations Entertainment, plan to release movies online or on DVD at the same time as they reach theaters. But even though the major Hollywood studios have been releasing DVDs closer to the theatrical premiere, Adams said, he doubted that they would ever put them out at the same time.

"That would be silly," Adams said. "People are still going and buying several billion tickets a year, and it's that exposure and word of mouth … that drives the DVD payday."

And the DVD payday is the one that really counts. Adams said home video sales and rentals accounted for 60% of the U.S. revenue for feature films last year, while ticket sales accounted for only 23%.

Warner Bros. has been unusually aggressive in its efforts to crack the huge Chinese market. Last fall it began manufacturing DVDs there in a joint venture with a Chinese partner, and it opened a state-of-the-art multiplex in 2002.

Suggested retail prices for the locally produced discs start at 22 yuan, or about $2.65. Still, these discs are more expensive than bootleggers' wares, which sell for about 60 cents, and they often are released no sooner than U.S. DVDs, which come out about five months after the movie makes its debut in theaters.

Other studios have tried different strategies in China.

In December, Sony Pictures released "Kung Fu Hustle," a Chinese-made film, to Chinese theaters. In February, a mere 45 days later, it released the film on DVD in China. Sony did not release the film to U.S. theaters until April.

The studio sold nearly 2 million of the deeply discounted Chinese discs, which was "a record result," said Ben Feingold, president of Sony Pictures Home Entertainment. Sales were boosted by "a massive anti-piracy effort" that was actively supported by the Chinese government, he said.

"A historical way to deal with the pirate market is to put in legitimate [products] at slightly over the piracy price and hope that people will convert," Feingold said, adding, "On Asian pictures, it really pays to be in the local market first, and to get the DVD up fast, and then release it in the United States and other markets."
http://www.latimes.com/business/la-f...home-headlines


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That was fast

Study: iTunes More Popular Than Many P2P Sites
CNET News.com Staff

Apple Computer's iTunes online music store is as popular as most music-swapping networks, according to a study released Tuesday.

The survey by market research firm NPD Group found that approximately 1.7 million U.S. households downloaded a song from iTunes in March. That was good enough to earn the store a second-place ranking with peer-to-peer downloading service LimeWire.

The most popular digital music service during the month, however, was P2P site WinMX, which was used by 2.1 million households to download music during the month.

"One of the music industry's questions has been, when will paid download stores compete head-to-head with free P2P download services?" Russ Crupnick, president of the NPD Group's music and movies division, said in a statement. "That question has now been answered. iTunes is more popular than nearly any P2P service."

On NPD's list of the top 10 digital music services, iTunes was ranked ahead of file-sharing companies such Kazaa and iMesh. Other paid online music services such as Napster and RealNetworks' RealPlayer store also edged onto the list.

"These (paid) digital download stores appear to have created a compelling and economically viable alternative to illegal file sharing," Crupnick said.

According to NPD, about 4 percent of Internet-enabled households in the nation used a paid music download store in March.

Most of those who prefer legal music download sites are over 30 years of age. But many younger consumers still resort to sharing files over peer-to-peer services, NPD said.

Congress passed legislation to curtail piracy on file-swapping networks in April this year. And the Supreme Court is critically analyzing file swapping and is expected to rule on its legality soon.
http://news.com.com/Study+iTunes+mor...3-5735493.html


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Paying For Downloads? Why Not?
John Stith

NPD just released some new figures suggesting that paid musical downloads are catching up to free albeit illegal, peer to peer downloads. This must be sweet music to the ear of the recording industry as services like WinMX and Itunes proliferate.

Go back a few years. You're sitting in your dorm, surfin' the net. Everyone told you about Napster and how you could get free music instead of paying $15 or $20 for the new album from Metallica you've been jonesin' for. You've got Napster now, you've found tons of Metallica material and you start downloading. You do this for weeks and then months.

Then people start telling you it's illegal. Napster runs into a whole heap of legal problems because people are swapping their favorite tunes and it's affecting record sales. What? The RIAA goes after Napster. This was the beginning of the P2P wars.

More service popped on the net that allowed file sharing. You could not only swap maybe an Excel file you were working on, but that Led Zepplin 4 album you're cousin had now is up for grabs. Why go look through the stacks at Disc Jockey's or Sam Goody's when you can get this stuff for free.

The problem you run into is that someone owns this rights to this stuff, namely the record companies, the song writers, and the performers of the said music. This is causing them major losses in revenue. They begin to fight. Artists end up on both sides of the argument, Metallica for prosecution, Keith Richards telling the record companies where to go, the sides began lining up. These MP3s were causing lots of problems as the business world struggles to figure out how to deal with this new format.

Then blank CD sales were higher than recorded disks. The RIAA began to take action. Colleges began to block these types of sites. The Naval Academy at Annapolis even destroyed computers of people engaging in this activity. Lawsuits started and even kids who broke the law were facing real problems.

Enter Apple. This silly, yet expensive little device they call and iPod began to pick up steam. It would hold tons of songs and they could give you whatever you wanted for 99 cents a song. Then they got U2 to do their commercials. They became incredibly hip. And the RIAA took notice. Others like WinMX and Limewire began to move up too. What's happening here? People are paying for music? Why when they could have it for free. The lawsuits don't matter. What's BMG gonna do to me? Take my computer? I don't have the kind of money they're after, I don't care.

But wait, this iPod thing is awfully cool. And they have this cool format for me too. This looks hip. Wait… Playboy has some images for it? EVEN BETTER. This is too cool. That free was sweet but genuine iTune from Apple of my favorite songs and naked chicks while I scroll through the songs? Too sweet.

The report say teens and tweens are doing the illegal stuff still but 30 somethings are looking at the pay services out of security more than anything. They don't want to take a chance of getting arrested. But the real point of this is that pop culture has overcome something many felt like was absolutely free. This is a real coup. Congratulations iPodders, you've saved the recording industry.
http://www.webpronews.com/news/ebusi...adsWhyNot.html


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Not so fast

'iTunes is beating LimeWire'
p2pnet.net

The NPD Group is a market research firm which suddenly appeared out of nowhere in late 2003 and which the mainstream media immediately began quoting as an authority on music and file sharing.

When we first came across it, adidas International, International Flavors & Fragrance and Wrigley typified its client base, but it was nonetheless churning out ‘studies’ and ‘reports’ bolstering entertainment cartel party lines.

We emailed NPD wondering how many years' experience it had in the music research field and asked about the team of interviewers/statisticians we thought it must boast given the nature and number of its outpourings.

We never did hear back, and when we visited the NPD site, we weren't able to find a single music, or other entertainment industry, client, although since then, the company has added movies, music, video, TV, etc, to the list it professes to be expert in.

We mention this because now NPD is touting iTunes as a “formidable competitor against free peer-to-peer (P2P) file-sharing services," an assertion which is, of course, complete and utter nonsense.

The corporate online music business exists only in the minds of the media and those trying to promote it and iTunes’ sales of some 300 million since it started in September, 2003, don’t even merit a statistical blip against what's happening in the real world of online music.There, the p2p applications and networks rule and iTunes is a joke.

P2p research firm BigChampagne says in the US in May, on average 6,290,327 people were logged onto the p2p networks at any given moment. The global statistic was 8,665,319.

And yet, “According to information from NPD’s MusicWatch Digital service, Apple iTunes’s industry-leading a-la-carte download store tied with LimeWire as the second-most-popular digital music service in March, 2005,” says MacDailyNews. “Both iTunes and LimeWire were used by 1.7 million households.”

Is this possible, p2pnet asked LimeWire coo Greg Bildson?

“I wonder at the source for their numbers,” he said. “Our numbers seem rather small here.

"I mean we get 6,000,000 or more downloads a month so we’ve got to assume that we’re in more than 1.7 million households. I don’t think iTunes is getting six million downloads a month on the software itself.”

Nonetheless, “One of the music industry’s questions has been when will paid download stores compete head- to-head with free P2P download services,” MacDailyNews has NPD spokesman Russ Crupnick saying, going on, “That question has now been answered."

And so it has:

Not in Crupnick’s life-time.
http://p2pnet.net/story/5128


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Q n A

Making a Network Members-Only
J.D. Biersdorfer

Published: June 9, 2005

Making a Network Members-Only

Q. Is there a way to set up my wireless network so that only my family's computers – and nobody else's - can join it?

A. Keeping your wireless network protected from squatters and intruders typically requires taking a few steps beyond the basic setup process when you first install your network's wireless router. The security benefits, however, are worth a few extra minutes of fiddling.

One way to allow only approved computers to join your home network is to have the router block any computers not on a specified list. This security scheme is called MAC address filtering.

MAC stands for media access control, and it is a unique identification number that belongs to your computer's network adapter card. After you type the MAC address of each computer in the house into the MAC address filtering settings for your router, the router will block any MAC addresses not on the list from using the network.

Check your router's manual or online help files for detailed information on how to configure MAC address filters for your particular model and brand. You will also need to collect the MAC address of each computer in the family to put on the list of approved machines in the router's settings file.

You can find the MAC address on a computer running Windows XP by going to the Start menu, selecting Run and typing "cmd" (without the quotation marks) in the box. On the command-prompt screen that appears, type "ipconfig/all" (again, without the quotation marks) and press the Enter key.

A screen full of information pops up, including details about your computer's network adapter. The MAC address, a series of letters and numbers, is listed on the line for "Physical Address." If you have both an Ethernet adapter and a wireless card in the computer, you will have two addresses, so be sure to write down the number for the wireless card.

Mac OS X users can find their MAC addresses by opening the computer's System Preferences area and clicking on the Network icon. In the Show menu, select AirPort and write down the number that appears next to AirPort ID. A page at www-dcn.fnal.gov/DCG-Docs/mac/ has basic illustrated instructions for finding your computer's MAC address on most Windows, Macintosh and Linux systems.

Filtering by MAC address is not foolproof, as talented intruders can spoof the information and fool the router, but every security measure you take helps block unwanted users.
http://www.nytimes.com/2005/06/09/te...ts/09askk.html


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Profit Drop Surprises At Lenovo
Chris Buckley

BEIJING Lenovo Group, the Chinese computer manufacturer that recently purchased International Business Machines' personal computer division, reported on Wednesday a drop in fourth-quarter profit that took many analysts by surprise.

The company announced net income of 166 million Hong Kong dollars, or $21 million, for the three months ended March 31, down 12 percent from a year earlier. Sales fell 6.4 percent to 22.6 billion dollars.

Lenovo dominates China's personal computer market with a market share of about 25 percent, but rivals, especially Dell, have challenged its grip on the market and squeezed its profit, said Liu Tong, of the British firm Analysys.

"The sector's just too competitive," he said, "and these results also reflect slowed growth of purchases from government departments, schools and other government institutions."

Lenovo is the largest computer company in China, and more than 90 percent of its earnings have come from the Chinese mainland. Last year, it moved to extend its strength abroad by buying IBM's personal computer division and becoming the world's third-largest computer maker. But many analysts have suggested that the $1.75 billion deal for the IBM division, which is not profitable, may weigh down Lenovo's profitability in the short term, and they have reduced profit forecasts for the company. Lenovo's shares have fallen 9 percent since the deal was announced in December.

Nonetheless, the profit downturn took many investors by surprise. A group of 21 analysts surveyed by Reuters had predicted net income of 194 million dollars. Lenovo's shares ended down 7.5 cents, or 3.06 percent, at 2.375 dollars on Wednesday.

In July, Lenovo shed its poorly performing information technology service business, except for telecommunications-related services, by forming a partnership with AsiaInfo Holdings.

Then in December, the company announced its plan to buy the IBM personal computer business. Under that deal, Lenovo will continue to sell personal computers under the IBM name, while IBM takes an 18.9 percent share in Lenovo.

"These deals have absorbed resources," said Liu, the analyst, "But now they're out of the way. Lenovo now wants to focus on laptop computers as a source of growth, and that's where it hopes IBM's strengths will help it."
http://www.iht.com/articles/2005/06/...ess/lenovo.php


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Dell Apologizes For Sales Rep's E-Mail Disparaging Lenovo
AP

Dell Inc. said Thursday it would take disciplinary action as appropriate against a U.S.-based salesperson who sent an e-mail discouraging former IBM clients from buying Lenovo products.

Last year, International Business Machines Corp. sold its personal computer business to Lenovo Group Ltd., which is partially owned by the Chinese government. That made Lenovo the world's third-largest PC business behind Dell and Hewlett-Packard Co.,

``We have a code of conduct that we uphold here for Dell in the U.S. and worldwide, specific guidelines for not commenting on competitors from an employee's standpoint. We're pretty serious about it,'' Dell spokesman Lionel Menchaca told The Associated Press.

According to China's official Xinhua News Agency, the salesperson's e-mail was published last week in a Chinese business newspaper.

``As you know Lenovo is a Chinese government owned company that recently purchased IBM's desktop business,'' Xinhua quoted the e-mail as saying. ``While the U.S. government has given its stamp of approval to continue to purchase these units, people must understand that every dollar clients spent on these IBM systems is directly supporting/funding the Chinese government.''

Menchaca called the e-mail regrettable and said it reflected the views of one person, not Dell. ``The key point is these views were expressed by one individual,'' he said. He would not identify the trangressor.

U.S.-based spokesman Bob Page of Lenovo said company officials were disappointed by the e-mail but ``don't really feel that that kind of activity should be dignified with a response.''

Menchaca said Dell hasn't apologized to Lenovo directly. ``At this point, I don't think they're asking for one,'' he said.

Dell has six manufacturing centers worldwide, including a 367,000 square-foot facility in Xiamen, China.

``We are strongly committed to growth in China as demonstrated by our investments in manufacturing, design, procurement, operations and business located there,'' Menchaca said.
http://www.siliconvalley.com/mld/sil...l/11799661.htm


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Digital DJs Are Turning the Tables

New software can analyze your music and create pleasing mixes you might never have considered.
Steven Levy

I can't imagine what my life in the early '70s would have been like without Michael Tearson. As the alpha disc jockey on WMMR,
Philadelphia's hippest FM radio station, Tearson spun song sets that seemed to cosmically interact, providing transcendent moments throughout his midnight shift. My pals and I often wondered if he was sending secret messages by his song selection. Only recently, when I finally met Tearson, was the mystery resolved: he was sending us messages—ones of mood, not code—via Beatles, Bowie and Moby Grape.

Personalities like Tearson have all but vanished from the airwaves. But in the era of the iPod and other digital players that store a huge amount of music, there's a rekindling of interest in the art of song sets. Apple's own solution is a double-barreled strategy of handpicked playlists for certain moods and random play for serendipitous discovery. But others are exploring more-sophisticated schemes to algorithmically clone the Michael Tearsons of yesteryear.

This week the Roxio company introduces the Boom Box, a $50 suite of iPod applications that includes a DJ program called MusicMagic Mixer. Originally offered on the Internet, the Mixer is designed specifically to create mood-appropriate yet illuminating combinations of music from your own collection. Its method, according to software architect Wendell Hicken, is to analyze the digital files that store the acoustic information that tells your music player what sound to produce. For instance, by recognizing the bits that encode a drumbeat, the program can divine the volume, tempo and energy of a tune. What's more, by digitally decoding all songs in the same way, it's possible to find hidden affinities between unexpected tunes.

After enduring a long period where MusicMagic painstakingly "fingerprinted" my songs for analysis, I was instantly able to construct some great playlists based on a single "seed" tune that was the keystone of my musical desires that day. Though a seed of alt-country crooner Kathleen Edwards yielded a mix with similar artists like Lucinda Williams and Tift Merritt, it also included an unanticipated but snugly appropriate tune by rocker J Mascis.

A company called MoodLogic takes a different path. Over the past few years it has enlisted thousands of listeners to offer their feelings about specific songs, ultimately collecting millions of comments. Now it uses that "metadata" (MoodLogic VP Christian Pirkner calls it "DJ knowledge") to make playlists that fit a whim. (It plans to license its system to electronics makers.) Like MusicMagic, it will reach into forgotten corners of your collection for the right mix.

Ultimately, we can expect digital DJs to use file analysis combined with metadata, perhaps with more information like song lyrics and personal listening patterns. But even at this primitive stage of robo-DJ'ing, the results can be amazing. Yes, I know that my enjoyment comes largely because the universe of songs I'm working from are all self-selected favorites, and I also know that very special transitions seem more significant because I notice them more than the more common, unremarkable segues. Yet surprisingly often, I get the same satori-esque chills that I did in the days when FM DJs were the oracles of the air.

Back then, of course, the exchange was human to human. "I consciously tried to make each song resonate with the next, which would make each of them more than they would be individually," Tearson told me. "That's really how you bond people with music." How weird it is that now, in our own cones of aural isolation, we may be equally enthralled by an automated selection? No one's sending us messages. But we hear them anyway.
http://www.msnbc.msn.com/id/8100270/site/newsweek/


















Until next week,

- js.














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