Peer-To-Peer News - The Week In Review – June 18th, ‘05

[JackSpratts]

June 18th, 2005


"Black folks are accustomed to sleeping in the same bed, especially if you're five or six deep and you live in a two-bedroom house because it's all we can afford. Michael is accustomed to that kind of behavior, you know, slumber-type parties." - Morris Griffin


"[It is] very difficult to establish a basis to prove a causal relationship between the size of the drop in music sales and the rise of file sharing." - OECD Report on Digital Music


"Consumers requesting help through a Web site set up by Sony BMG to explain the technology receive an e-mail message telling how PC users can work around the CD's software to unlock the music files and make them available for unlimited copying and transferring." - Jeff Leeds


"[Our copy-protected CDs are] a strong educational tool to communicate to consumers that there is a limit of what they're really allowed to do with the intellectual property that they have just acquired." - Thomas Hesse


"Some people are so taken with this new hobby that they have stopped collecting art altogether in favor of their own digital creations." – Katie Hafner


"They don't have a lot of confidence that Congress will do the right thing." - Dan Burton


"Both judges say neither man was communicating with a child younger than 16." – KRNV Nevada





























Internet Piracy Sails On
Robert MacMillan

Combatants and spectators in the Internet piracy war are checking their watches right about now. They're waiting for the Supreme Court to issue a decision that could shape the future of how people in America get their entertainment.

If you're reading this, chances are that the court decided not to release a ruling today in the MGM vs. Grokster case. The court typically releases its decisions around 10 a.m. Eastern Time, and as each week passes without a ruling, everyone with a stake in -- or a beef about -- the case gets a little more nervous.

The ruling is important because it could be the last word, at least for a while, on whether Internet file-sharing networks should be held liable for sucking millions of dollars out of the entertainment industry by creating havens for pirates to swap illegally copied versions of movies, music and software.

On one side, the Hollywood studios and the world's largest music labels say that the makers of file-sharing software should be punished for creating the means for pirates to thrive online. On the other, the software makers say they created products with legitimate uses, even if most people use them to violate copyright law. The artists and consumers, meanwhile, set up camp on whatever side proves most morally -- and financially -- expedient (See our backgrounder on the case).

This, of course, is the traditional summary of where everyone stands. A report just released by the Organization for Economic Cooperation and Development (OECD), meanwhile, says that file-sharing networks are not the sole culprits in the recording industry's problems, and that they could become effective music distribution channels.

"The report said it is difficult to establish a causal connection between the rise of file sharing and a drop in music sales. While the music industry's revenues fell 20 percent from 1999 to 2003, other factors, such as illegal CD copying, might have played a role in the decline, the OECD said," according to an article that ran on Wired.com today. "The report recognized the value of fledgling online stores like Apple's iTunes. Last year represented a "turning point" for legal music downloads, the study said. However, online music distribution only accounted for 1 to 2 percent of music revenues in 2004. The OECD expects to see that climb to 5 to 10 percent of revenues. But growing online sales will depend on expanding catalogs to appease demand and sway illegal downloads, the OECD said. The report also suggested exploring new distribution methods, beyond what the OECD called traditional... transactions."

That line of thinking would send most file-sharing software makers rummaging for their best digital copy of Beethoven's Ninth. If the Supreme Court decided that their primary reason for being was to enable a crime, their only hope of survival would be to marry their accuser. Several file-sharing operators indeed have tried to persuade some of the big labels to embrace them, but outside the somewhat different case of Napster and Bertelsmann, this has not happened.

Wired quoted Adrian Strain of the International Federation of the Phonographic Industry on the entertainment companies' overall feeling toward file-sharing networks: "The report does not recognize the vast proportion of the use of P2P [peer-to-peer] services that is infringing copyright. ... (It) fails to acknowledge the extent of the damage that this does to the legitimate industry and oversimplifies the issues surrounding DRMs (digital rights management) in the development of the online music sector."

Doesn't sound like peace is about to break out, does it?

You could argue that the entertainment nabobs aren't in much of a mood to parley with anyone when you consider a recent report from the NPD Group that says more people have "large video files" on their home computers. They're probably not home videos either, as the New York Times reported: "Some files might have come from movie-downloading services like CinemaNow, said Russ Crupnick, president of NPD's music and movies division. But others were clearly not obtained legitimately, he said, including many movies not yet shown in theaters. 'You see things on people's computers that there's no legitimate way they belong there,' he said, because they had not yet been commercially released."

It would be interesting to determine what percentage of those files contained the words "Revenge" and "Sith," especially if the NPD Group were spying on Forrester Research editor and publisher Jimmy Guterman. In a piece written for the Boston Globe, Guterman described his quest for Star Wars satisfaction:

"Like thousands of patriotic Americans, I spent Memorial Day weekend illegally downloading a copy of the new 'Star Wars' movie. I was shocked by how quickly I was able to locate a copy on the Net (less than five minutes) and how long it took for the whole thing to end up on my computer (two days and change -- talk about holiday weekend traffic). There were no secret passwords, no locations known only to the cognoscenti. All I had to do was Point, Google, Pilfer."

Guterman owned up to his action, he said, but criticized other people who "are playing the relative-morality card."

"Read the discussion groups on the websites that host free 'Star Wars' and you can read hundreds of energetic, typo-ridden postings from fans convinced that, as one put it, 'Lucas owes us,'" Guterman wrote. "One Net service that uses the popular file-sharing program BitTorrent serves only unreleased material by established performers, as if distributing unreleased material without permission or payment is somehow more moral than distributing officially released material without permission or payment."

He also said that his sinful Sith viewing didn't exactly sizzle, noting that "Watching Jedi joust across a laptop screen is not the way to enjoy something as loud, fast and blunt as a 'Star Wars' film." Of course, if everyone felt the way Guterman does, we'd all own widescreen TVs or learn to love letterbox. Not only that, we'd insist on watching David Lean's and Stanley Kubrick's movies in the theater, not some crummy, pirated ripoff online. But that's just wishful thinking.
http://www.washingtonpost.com/wp-dyn...061300540.html



No comment from the boss

Spyware, Adware Hide In BitTorrent Downloads
Joris Evers

BitTorrent users, beware: Your download may include adware and spyware.

Purveyors of the applications that produce pop-up ads on PC screens and track browsing habits have discovered BitTorrent as a new distribution channel. According to observers of the trend, videos and music that hide adware and spyware are increasingly being offered for download on various BitTorrent Web sites.

BitTorrent has grown into one of the most widely used means of downloading files such as movies or software. Unlike peer-to-peer networks such as Kazaa, eDonkey and the original Napster, no central search technology exists for BitTorrent. Instead, links to specific files are posted on Web sites.

While applications such as Kazaa have long been associated with adware and spyware, BitTorrent has not. Until now, that is. Chris Boyd, a security researcher who runs the Vital Security Web site, said he found adware and spyware hiding in BitTorrent files.

In one case, an episode of the Fox TV show "Family Guy" was bundled with several pieces of known adware, according to Boyd. "Under that kind of load, a midrange PC can easily go under," Boyd said. Both spyware and adware are known to hurt PC performance because they use PC resources to run.

In other examples, music files and porn videos came bundled with adware or spyware, Boyd said in an e-mail interview. He suspects that online marketers have launched campaigns to get their software installed on more desktops using BitTorrent.

"This is one of the most egregious spyware infestations that we have seen," said Alex Eckelberry, president of Sunbelt Software, a maker of anti- spyware software. "It is a major concern. It is going to riddle your system with pop-ups, slow your system down and potentially cause system instability."

The downloaded files typically were self-extracting archives that would also install the unwanted software, Boyd said. In most cases, users would be presented with a dialog box advising that the extra software was about to be installed and given the impression that the install was needed to get access to the desired content, he said.

However, Boyd found, it was possible to get access to the entertainment the user wanted without installing the adware or spyware. Simply declining the adware and spyware license a couple of times gives access to the content, he said.

On his Web site, Boyd listed a Canadian company as one of the businesses that send out adware and spyware on BitTorrent. That company's Web site appeared to have been hacked Thursday, with the front page replaced with a picture and a profane message stating that the company should leave BitTorrent alone.

As of late Thursday afternoon, BitTorrent creator Bram Cohen had not replied to an e-mail seeking comment on the issue.
http://news.com.com/Spyware%2C+adwar...3-5750601.html



As Grokster Decision Nears, Hollywood Talks Tough
Roy Mark

As the Supreme Court nears a decision in the Grokster case, Hollywood continued its tough talk against peer-to-peer (P2P) networks dealing in copyrighted materials.

"I'm optimistic that this is going to turn out well for us, but if it doesn't then we have a whole host of other strategies to protect out interests," Dan Glickman, president of the Motion Picture Association of America (MPAA), told a think tank gathering Tuesday.

Hollywood hopes to overturn two lower court decisions clearing P2P companies for the illegal distribution of copyrighted material. The P2Ps contend their technology is neutral and should be covered by the Supreme Court's 1984 Sony Betamax decision.

In March, the Supreme Court heard final arguments in MGM v. Grokster, which makes the P2P technology.

In that case, the court decided the use of new technology that could infringe copyrights did not justify an outright ban on that technology, as long as it provides other, non-infringing uses. A decision in the case is expected this month.

"This case presents an important economic and political question: shall we keep in place legal protections that promote the free market or shall we tear down those protections in such a way to allow the black market to prosper and dominate?" Glickman told the Progress and Freedom Foundation.

Glickman said he is optimistic the Supreme Court will rule in the entertainment industry's favor. But if it doesn't, Hollywood is prepared to protect its interests.

"Regardless of what the court does, we're going to continue to pursue our various strategies to deal with piracy and intellectual property rights protection. That means legislation if necessary," he said. "We also will pursue our litigation strategies, education strategies and our technology strategies, no matter what."

Glickman also praised the entertainment industry for embracing digital media technology.

"We have already entered a new era of digital communications for music services like iTunes and nascent [download] movie sites like Movielink and Cinemanow," he said. "These are just a hint at the opportunities to come. These types of legitimate services will continue to develop and improve but only if only strong intellectual property protection is preserved."

According to Glickman, these emerging services are directly challenged by the P2Ps.

"Threatening the development of these type of services is the prevalence of companies that glean their profits by offering a platform for people to obtain music, movies, software and games for free," Glickman said. "Unfazed by the rule of law or respect for the property rights of others, these companies exploit content and facilitate infringement on a massive global scale."

Hollywood won its initial foray against the file-sharing companies when it shut down file-swapping provider Napster, but has consistently lost in the courts since then. In Napster's case, an index of material available for file-swapping was maintained on a central server. Grokster does not use central servers. In that situation, the courts have consistently ruled, Grokster has no control over the actions of its customers.

"Developing viable delivery systems that provide consumers with the high quality content they desire while at the same time protecting that high quality content from theft and misuse is absolutely critical to the survival of this business," Glickman said. "It is also essential that a marketplace develops with respect and favors legitimate delivery systems and legitimate business models and sanctions those who build business models based on the hard work of others."
http://www.internetnews.com/bus-news...le.php/3512861



Sony BMG Tries to Limit Copying of Latest CD's
Jeff Leeds

The world's second-biggest music corporation is rolling out its latest answer to digital piracy.

The company, Sony BMG Music Entertainment, which is owned by Sony and Bertelsmann, is outfitting a broad selection of its latest CD's with software that restricts copying.

The company's use of the software, which is designed to limit consumers to making no more than three copies of a CD, reflects an effort to alter a format that is two decades old and contains music that can be readily copied and digitally distributed.

With the release of more than two dozen copy-restricted titles so far this year, including albums on sale today from the Backstreet Boys, the Foo Fighters and George Jones, Sony BMG is placing a bigger bet on the technology than other companies have, particularly in the United States, the world's biggest market. Sony BMG, which is second in size to Vivendi Universal-owned Universal Music Group, and the two other major record companies have been releasing CD's with anti-copying software in other countries.

But executives at Sony BMG's rivals have been reluctant to release titles with the restrictive software in the United States. They said the software was too easily defeated and that working versions did not allow consumers to transfer music to portable devices and music players as freely as the industry would like.

The companies have been pressing Apple Computer to amend its software to make it compatible with the tools used to restrict copying.

The restrictive software Sony BMG is using on CD's, like it did earlier this year with "Stand Up" by the Dave Matthews Band - is not compatible with Apple's popular iPod. Owners of Apple computers using iPods are able to copy and transfer music on the restricted compact discs freely; the restrictions block PC owners from transferring music to their iPods. But it allows transfers to music players using Microsoft's Windows software.

Thomas Hesse, president for global digital business at Sony BMG, said Apple could "flick a switch" to amend its programming to work with the restrictive software.

"Its just a proprietary decision by Apple to decide whether to play along or not," Mr. Hesse said. "I don't know what more waiting we have to do. We think we need to move this forward. Time is ticking, infringement of intellectual property is happening all over, and we've got to put a stop to it I think."

Apple declined to comment.

Mike McGuire, an analyst at Gartner G2, said the move by Sony BMG "looks to me like a very interesting public negotiation."

In fact, consumers requesting help through a Web site set up by Sony BMG to explain the technology receive an e-mail message telling how PC users can work around the CD's software to unlock the music files and make them available for unlimited copying and transferring.

Music executives say the restricted CD's the music industry has released so far - most prominently BMG's sale of Velvet Revolver's "Contraband," last year - have resulted in virtually no consumer complaints. But analysts say that may be because consumers still have such an easy time breaking the restrictions or acquiring the music for free on unrestricted online file-sharing networks.

Still, Mr. Hesse said the introduction of limits on CD's would set the stage for record companies establish new business models. For instance, Mr. Hesse said, a record company using restrictive software might be able to charge a premium for the early online release of a forthcoming album. Mr. Hesse said the restricted CDs are "a strong educational tool to communicate to consumers that there is a limit of what they're really allowed to do with the intellectual property that they have just acquired."
http://www.nytimes.com/2005/06/14/bu...a/14music.html



CDs to Restrict Copying of Songs

EMI Group plans to join Sony BMG in including anti-piracy technology in its releases that limit how much music can be burned onto discs.
Jon Healey and Charles Duhigg

Music fans who copy CDs for all their pals, take note: It may be time to shed some friends.

Executives at EMI Group on Monday said they planned to begin rolling out CDs with technology designed to limit copying. The technology allows buyers to burn onto CDs only three full copies of a disc's songs, and the burned discs cannot be copied.

Sony BMG is heading even faster down the same road. About half the discs it releases in the United States today have the three-copy limit, and it plans to have a similar restriction on all its U.S. releases by the end of the year, said Thomas Hesse, president of the company's global digital music business.

The new CD technology still has some compatibility issues — most notably, the songs on the discs cannot be transferred directly to Apple Computer Inc.'s popular iPods. Such limitations are one reason that the two other major record companies, Universal Music Group and Warner Music Group Corp., have yet to make the switch to "secure" CDs.

Nor is the technology foolproof. Executives at EMI and Sony BMG said the point was to rein in copying by the everyday music fan, not to stop determined bootleggers.

Nevertheless, if fans do not rebel, the companies' discs are likely to chart the rest of the industry's path into secure CDs. The goal, label executives say, is to have anti-piracy technology on every track sold, whether it is encased in plastic or downloaded from an online store.

Many music executives blame digital piracy for the prolonged slump in CD sales. That piracy comes in two main forms: free downloading from Internet file-sharing networks and using CD burners to copy entire discs.

The file-sharing issue receives more headlines, but CD burning may be more prevalent. Hesse said a survey by market research firm NPD Group found that fans acquired twice as much music through burned CDs as they did through file sharing.

The labels have been selling secure CDs overseas for several years. But they have been reluctant to bring the discs to the United States until the technology was flexible enough to allow some degree of copying to computers and to blank CDs.

Before merging with Sony Music, Bertelsmann Music Group was the label most willing to experiment with secure CDs in the United States. Its releases included two hits: Velvet Revolver's "Contraband" in 2004 and Anthony Hamilton's "Comin' From Where I'm From" in 2003.

Those CDs used technology from SunnComm International Inc. of Phoenix that blocked the discs from being copied onto a computer. Instead, the discs contained a second set of tracks in Microsoft's secure Windows Media format that could be copied onto a computer, transferred to portable players and burned onto a limited number of CDs.

The technology left several notable holes in the security, however. The burned CDs had no electronic locks to prevent them from being copied an unlimited number of times, and hackers quickly found a way to circumvent SunnComm's technology entirely to remove all the restrictions.

Since then, SunnComm and three other companies have developed a more secure approach. The new versions are designed to allow a limited number of copies that can be burned onto CDs that cannot, in turn, be copied.

EMI plans to begin selling secure CDs in the U.S. in mid-July; the artists affected include 30 Seconds to Mars and OK Go.

Both EMI and Sony BMG plan to let buyers get around the CDs' restrictions so they can get tracks onto iPods. Executives said they were willing to sacrifice security in the name of playability.

Still, the technology leaves at least one analyst skeptical.

"Here you have a product with declining sales, and for the same price you want to decrease the potential value of it," said analyst Phil Leigh of Inside Digital Media. "Basically, music companies are saying, 'We're going to lock up the front door of the store now, but the back door is still remaining wide open.' "
http://www.latimes.com/technology/la...,1538320.story



Macrovision Sues Two Companies
Matthew Fordahl

Macrovision Corp. has sued two companies it claims offer products that break its patented copyright protection technology and allow consumers to make unauthorized duplicates of commercial DVDs.

In the suit filed Tuesday in New York, Santa Clara, Calif.-based Macrovision said the companies - Sima Products Corp. and Interburn Enterprises Inc. - infringe on its patented copy control technology and also violate the Digital Millennium Copyright Act.

"The Sima and Interburn products have very limited commercial uses other than to circumvent Macrovision's copy protection technology and are marketed by Sima and Interburn for use in copying DVDs, among other types of media," Macrovision CEO Bill Krepick said.

The suit is seeking an order to halt the sale of Sima and Interburn products.

Sima, which is based in Oakmont, Pa., has not been served with a lawsuit and declined to comment, said Kathy Ruane, Sima's marketing manager. The company learned of the lawsuit from reporters, she added.

Sima has been selling duplication tools for the past eight to 10 years, she added.

"We have had correspondence back and forth with Macrovision - our lawyers and their lawyers," she said. "As far as we knew, it was correspondence."

Interburn did not return an e-mail message seeking comment. The company, according to its Web site, offers DVD X Copy, a program that allows copyright protected DVDs to be duplicated.

Missouri-based 321 Studios Inc., which created the program, lost several rounds in federal court and eventually retooled the software last year to remove the mechanism that cracked the copyright protection mechanism built into commercial DVDs. Interburn offers older versions of the 321 program.
http://hosted.ap.org/dynamic/stories...stomw ire.htm



Roars and Tears of Joy, But Not All Favor Verdict
Nick Madigan

The word streaked through the expectant, banner-waving throng in a flash: Michael Jackson had been found innocent of all charges.

A roar greeted the news outside the courthouse here on Monday, much like the jubilation that follows a Super Bowl touchdown. Had there been room on the crammed sidewalk, there might have been a joyous undulating wave.

Some broke into tears.

For most of the milling, dancing fans, the verdict was vindication, pure and sweet, a simple affirmation of their belief that the charges against Mr. Jackson were the result of a prosecutor's insistence on persecuting him.

"Victory! Victory!" Omar Reece hollered, barely able to contain his exuberance.

When Mr. Reece, 25, who traveled from Belleville, Ill., to show his support for the entertainer, calmed down he said Mr. Jackson had "proven himself time and again."

"People have been trying to stop him for 20 years, to destroy his character, to destroy his name, and each time he's come back better, stronger, unbreakable," Mr. Reece said. "This man came to court every single day, strong as can be. I'm ready to party. I'm going to party for a week." He then hugged Ronan Davie, 21, who twice came to Santa Maria from Glasgow to shout Mr. Jackson's praises.

"We've known he was innocent all along," Mr. Davie said before rushing off to hug someone else. Neither he nor Mr. Reece would consider the remotest possibility that Mr. Jackson had ever done something improper with a child.

Others did, though.

"It's sad, it's just sad," said Melissa Baez, 18, who had shrieked in apparent delight for the benefit of a television camera, but then admitted it had been a hollow response to the verdict in Mr. Jackson's favor.

"I think he's just going to be able to molest more boys if they're not going to be able to prove what he's done," Ms. Baez said.

Dennis Kemp, a sales manager for a supermarket here, summed up the hysteria around him: "a bunch of freaks," he said, barely concealing his scorn for Mr. Jackson's die- hard fans, and for the jury that found him not guilty. Mr. Kemp's contempt was fueled, he said, by the fact that he has two children of his own.

"Somebody's done this and they can get off, again," Mr. Kemp said. "The last time he paid somebody off. You'd think he'd be more discreet."

His friend John Carlson, a cookie distributor who has six children, was surprised that the jury did not find Mr. Jackson guilty of providing alcohol to minors, at the least. Mr. Carlson said sympathy for Mr. Jackson might have played a role.

"Maybe the jury thought his life was over," Mr. Carlson said. "Maybe it worked for him to have all that publicity about going to the hospital."

Mr. Jackson's frequent emergency room visits during the trial - on one occasion in early March he was more than an hour late for court and arrived in his pajamas - were among the many strange aspects of a trial that focused worldwide attention on the private and sometimes bizarre life of a fading and apparently fragile superstar.

Throughout the long trial - jury selection began in February - the one constant was the unwavering loyalty of Mr. Jackson's fans. Some of the fans took their devotion to extremes, and got into fights outside the courthouse with people who did not share their views, who taunted them for their faith in him. At least seven people were arrested during the course of the trial, mostly for misdemeanors like disturbing the peace.

Some shouting matches erupted Monday morning after it was learned that the jury was ready with a verdict.

"Guilty!" one man shouted, interrupting another, Morris Griffin, who was preaching the benefits of love and peace and mercy toward Mr. Jackson.

"I got a live one here," Mr. Griffin replied, offended at the suggestion that Mr. Jackson might face time in prison. "We're here to make sure they find him not guilty. Shame on you if you are a Michael Jackson hater."

Mr. Griffin, an African-American who identified himself as a community activist in Los Angeles, said the accusations against Mr. Jackson were prompted by a misunderstanding of his race.

"Black folks are accustomed to sleeping in the same bed, especially if you're five or six deep and you live in a two-bedroom house because it's all we can afford," he said. "Michael is accustomed to that kind of behavior, you know, slumber-type parties."
http://www.nytimes.com/2005/06/14/national/14scene.html



Justices Expand Rights to Experiment With Patented Drugs
Andrew Pollack

The Supreme Court gave pharmaceutical companies broad latitude yesterday to study and experiment with drugs covered by other companies' patents, a decision that may help speed the development of medical treatments.

The decision means drug companies can do much of the laboratory, animal and human testing needed to win approval of a drug even if the drug would infringe on the patent on another product. However, the new drug could not be sold until the patent on the other drug expired.

Justice Antonin Scalia, writing for a unanimous court, said that an existing exemption from patent infringement "provides a wide berth for the use of patented drugs" in developing other pharmaceuticals.

The decision reversed a federal appeals court ruling that the exemption should be interpreted narrowly.

E. Joshua Rosenkranz, the lawyer who argued for the victorious side, said the ruling gave drug companies a head start on developing medicines to be ready to sell as soon as the patents on other drugs expired.

"It gave enormous latitude to conduct the testing necessary to bring therapies to needy patients," Mr. Rosenkranz, who is with the Heller Ehrman law firm in New York, said in an interview.

Sarah Lenz Lock, a lawyer for AARP, a consumer group representing older Americans, also praised the decision, saying it would "speed new drugs to market and lower costs of drugs to consumers."

The case pitted Integra LifeSci-ences, a New Jersey company that had patented a class of compounds, against Merck of Germany, which had paid for a scientist to test some of the compounds for potential use as drugs. Integra sued Merck in 1996.

A jury ruled in 2000 that Merck had infringed on Integra's patents and ordered Merck to pay $15 million, which was later reduced to $6.4 million. The appeals court also sided with Integra. But the Supreme Court ruled for Merck, which is not related to the American drug company of the same name.

The Supreme Court sent the case back to the appeals court for reconsideration in light of the new ruling.

Mauricio A. Flores, a lawyer representing Integra, said the Supreme Court decision mainly reversed an interpretation of the law by a lower court but did not deal with the specific evidence in this case. He said Integra was still confident that the jury verdict that Merck had infringed would still be upheld.

"This case isn't over," he said. "We live to fight another day."

Mr. Rosenkranz, representing Merck, said the company expected to prevail.

"The Supreme Court pulled every one of the props out from under Integra's position," he said.

The closely watched case had split the pharmaceutical and biotechnology industries. Many big pharmaceutical and biotechnology companies submitted briefs on the side of Merck, saying that a narrow interpretation of the exemption from patent infringement would slow drug development.

The drug companies were joined in their argument by the Justice Department and by some consumer groups that often find themselves on the opposite side of issues from the pharmaceutical industry.

Backing Integra were many biotechnology companies that make patented equipment and chemicals used in drug research, as well as some universities, which often invent new research techniques.

They argued that granting a broad exemption from patent infringement would basically put them out of business since their products, which include sophisticated chemical testing machines and enzymes that manipulate genes and proteins, have little use outside of drug research.

Some lawyers for these companies also said it was hypocritical of drug companies, which constantly assert the importance of strong patent protection in spurring innovation, to argue that they should be permitted to infringe upon patents held by others.

The Supreme Court said in a footnote that this case was about research using patented drugs themselves, not about tools used to study those drugs. Therefore, it did not address whether drug companies could use research tools without worrying about patents.

"Research tools were not at issue and this decision isn't a license for people to infringe research tool patents," said Edward R. Reines, who filed a brief on behalf of two tool makers, Applera and Isis Pharmaceuticals.

Robert W. Esmond, a Washington lawyer whose firm filed a brief on behalf of another research tool maker, Vaccinex, said the decision "leads to uncertainty over whether or not those patents are enforceable."

The case revolves around a clause in the Hatch-Waxman Act of 1984, which set the ground rules for generic drugs. To enable generic drugs to reach the market as soon as the patent on the branded drug expired, the act permitted generic companies to make and test their drugs while the patent was still in force.

The clause permits drug companies to infringe on patents "solely for uses reasonably related to the development and submission of information" to the Food and Drug Administration. But it is not specifically restricted to generic drugs, so there have been questions about how far it extends.

The appeals court that handles patent cases ruled in 2003 that the exemption should be very narrow, covering, in effect, clinical trials but not earlier work like test-tube experiments to determine which of several compounds might be the best drug candidate.

But the Supreme Court ruled that the exemption applied to more than clinical trials.

"There is simply no room in the statute for excluding certain information from the exemption on the basis of the phase of research in which it is developed," Justice Scalia wrote in the 15-page decision.

He also wrote that the law "leaves adequate space for experimentation and failure on the road to regulatory approval," so that work on compounds that do not move forward into clinical trials can still be protected from infringement.

Still, the court said that basic scientific research on a compound, performed without intent to develop a drug, would not be covered. Some lawyers said that questions of what is covered may still have to be decided case by case. Sometimes, the distinction between a research tool and a drug compound, for instance, cannot easily be made.

"They are saying that this exemption goes only so far upstream," said Stephen B. Maebius, a patent lawyer at Foley & Lardner in Washington who represents pharmaceutical and biotechnology companies but was not involved in this case.

In the 1980's, a class of peptides, or small proteins, was discovered by scientists at the Burnham Institute in San Diego. Integra later obtained the patent rights to the peptides.

In 1994, David Cheresh, a scientist at the Scripps Research Institute, across the street from Burnham, discovered that a particular protein was involved in building blood vessels. So a compound that blocks the protein might be useful in blocking the blood supply to tumors.

It turned out that peptides similar to those discovered at Burnham did that. Merck paid Dr. Cheresh to test some of them and one is now in clinical trials to treat cancer.

The patent on the peptides is expected to expire before that drug comes to market.
http://www.nytimes.com/2005/06/14/bu...4bizcourt.html



Real money

Firm Settles Spyware Suit for $7.5m
Nate Mook

Internet marketer Intermix Media, which was sued in April by New York Attorney General Elliot Spitzer for installing spyware and adware on computers that came in contact with its advertisements, has settled the case for $7.5 million. Intermix also said it would stop distributing its adware, toolbar and redirect programs.

The penalty will be paid over a period of three years, Intermix said, but Spitzer spokesman Brad Maione told reporters that no agreement had been made and the investigation continues. Intermix said it reached "an agreement in principle" that would have to be approved by the courts.

"These fraudulent programs foul machines, undermine productivity and in many cases frustrate consumers' efforts to remove them from their computers," Spitzer said in April. "These issues can serve to be a hindrance to the growth of e-commerce."

Spitzer has made it a point of his tenure as New York's attorney general to go after what he sees as corporate wrongdoing against consumers. He has successfully taken on Wall Street and several insurance industry firms.

Spitzer has now turned his attention to the Internet, as he argues companies like Intermix are a threat to the success of e- commerce.
http://www.betanews.com/article/Firm...75m/1118853575



Come On Music Biz, Embrace P2P
Bruce Gain

File-swapping networks alone are not to blame for the recording industry's woes and might plausibly be converted into legitimate channels for distributing music, one of Europe's most influential economic bodies has concluded.

In a report issued Monday, the Organisation for Economic Co-operation and Development -- a Paris-based alliance of developed nations -- also suggested that it's difficult to establish a link between piracy and the music industry's shrinking revenues.

The report said a "re-evaluation" of music distribution needs to happen to achieve a balance between consumers' desire to access digital music and the industry's copyright protection concerns.

"Online technologies could evolve in a manner in which unauthorized use of copyright works are finally transformed into legitimate businesses," said Sacha Wunsch-Vincent, an OECD economist and one of the report's authors.

The report said it is difficult to establish a causal connection between the rise of file sharing and a drop in music sales. While the music industry's revenues fell 20 percent from 1999 to 2003, other factors, such as illegal CD copying, might have played a role in the decline, the OECD said.

The OECD is an international organization that promotes democracy and free trade. It was formed to administer the Marshall plan after WWII.

The report recognized the value of fledgling online stores like Apple's iTunes. Last year represented a "turning point" for legal music downloads, the study said.

However, online music distribution only accounted for 1 to 2 percent of music revenues in 2004. The OECD expects to see that climb to 5 to 10 percent of revenues. But growing online sales will depend on expanding catalogs to appease demand and sway illegal downloads, the OECD said.

The report also suggested exploring new distribution methods, beyond what the OECD called traditional "fee per economic unit" transactions.

Instead of paying a set fee to download an individual song, music downloads might become part of a subscription package from a cable television company, internet service provider or mobile-phone carrier, the OECD said.

The OECD report said P2P networks have legitimate uses beyond trading copyright music and movies. P2P networking is a "new and innovative technology which finds increasingly useful applications in new communication and other services," the report said.

"We are looking at different value chains and business models," said Wunsch-Vincent. "We also recognize that this is not only about the music industry, it is also about the ISPs, telecom operators, the computer industry and many other players. The interests of the different players are now starting to converge."

Not surprisingly, the study's findings were questioned by the music industry.

Adrian Strain, a spokesman for the International Federation of the Phonographic Industry -- the international equivalent of the Recording Industry Association of America -- described the report's findings as "mixed."

On the plus side, the report recognized the problem of piracy and the value of legitimate, copy-protected online music services, Strain said.

And while Strain said P2P networks could have a role in the music industry's future, right now the bulk of activity is sharing copyright files -- a situation not reflected in the report, Strain said.

"The report does not recognize the vast proportion of the use of P2P services that is infringing copyright," said Strain. "(It) fails to acknowledge the extent of the damage that this does to the legitimate industry and oversimplifies the issues surrounding DRMs (digital rights management) in the development of the online music sector."
http://www.wired.com/news/digiwood/0,1412,67820,00.html



Hollywood's Boogeyman Is Getting Bigger
Alex Mindlin

As Hollywood moves to fight online film piracy, newly released tracking results show that more and more users have large video files on their home computers.

The NPD Group, a market research company, found an increase of about 60 percent over last year in the number of households with video files of 150 megabytes or larger, about the size needed to store a half-hour television program. And these households averaged about 16 such files, nearly twice as many as last year. The data come from monitoring computers of 40,000 volunteers.

Some files might have come from movie-downloading services like CinemaNow, said Russ Crupnick, president of NPD's music and movies division. But others were clearly not obtained legitimately, he said, including many movies not yet shown in theaters. "You see things on people's computers that there's no legitimate way they belong there," he said, because they had not yet been commercially released.
http://www.nytimes.com/2005/06/13/te...dSh7s1H4/cvJLg



Mixtape Crackdown Sends a Mixed Message
Kelefa Sanneh

Late on the night of May 13, a hip-hop promoter named Justo Faison died in a car crash in Virginia. And last week, on June 8, the East Village record and video shop Mondo Kim's was raided by the New York Police Department. What do these two stories have in common? Here's a hint: it's cheap, popular and illegal.

Faison was the industry's most energetic promoter of hip-hop mixtapes, the unlicensed compilations (almost always on CD, despite the name) of unreleased new songs, current hits, never-to-be-released freestyles and unofficial remixes. To keep (or get) hard-core listeners excited, rappers are expected to maintain a mixtape presence by supplying DJ's with tracks and also by collaborating with them to release "hosted by" mixtapes. Thanks to Faison, the mixtape world even had its own annual ceremony: he created and produced the yearly Mixtape Awards, a fittingly raucous celebration; this year's attendees included Sean Combs, who won a lifetime achievement award, and the Game.

In the days after Faison's death, rappers and DJ's paid their respects, tribute rhymes started circulating online and a fund was started to help pay for his burial and to aid his family. Contributions have come in from many leading hip-hop record labels including Atlantic, TVT, Tommy Boy and Interscope.

While artists and record labels were celebrating Faison's life and work, the Recording Industry Association of America was finding another way to pay tribute to the popularity of mixtapes. On May 12, the day before Faison died, it announced a crackdown on stores that sold "pirated CD's," a term that refers to "mixed tapes and compilation CD's featuring one or more artists," among other products. (The association's taxonomy of piracy defines "counterfeit recordings" as illegal knockoffs of existing commercial CD's, and "bootleg recordings" as illegal recordings of live performances or broadcasts.)

In last week's raid officers confiscated hundreds of CD's, seemingly concentrating on the shop's well-stocked section of hip-hop mixtapes. Five employees were arrested and spent the night in jail. All five were charged with failure to disclose origin of a recording in the second degree and trademark counterfeiting in the third degree.

After the raid, Brad Buckles, the recording association's executive vice president for anti-piracy, released a statement saying that the Police Department's "steadfast commitment to the fight against piracy has stamped out yet another significant illegal operation." It continued, "Retailers who are making money on the backs of musicians and record companies by selling pirated CD's should know that this is absolutely no way to conduct a business." Reached by telephone yesterday, Mr. Buckles confirmed that an association representative was present during the raid.

Note that phrase "musicians and record companies." In its war against illegal music distribution, the association has often treated these two groups as one and the same, arguing that piracy-happy fans are hurting the artists they love. But when it comes to hip-hop mixtapes, it is in a trickier position: the artists themselves often help produce the same mixtapes that the association is trying to squelch, and shrewd record labels long ago figured out that mixtapes can help drive sales of conventional CD's.

So while record labels donate money to honor a man who helped promote mixtapes, the trade group representing the labels cracks down on those who sell them. And who goes to jail? Well, suffice it to say that the police haven't arrested any of the major-label record executives who profit from the hype generated by mixtapes.

The raid on Mondo Kim's (the East Village location of the Kim's Video chain) was by no means the first of its kind. The recording association has been campaigning against mixtapes for a decade; the organization's 1995 year-end report warned of "the growing popularity of illicit DJ mixes in CD format." The Kim's 5 (has someone printed T-shirts yet?) are probably lucky that they work in a record store frequented by music-industry types (and, yes, the occasional newspaper reporter). When some shop in the Bronx is raided, those hapless clerks can expect far less press coverage.

Oddly enough, two people charged in the Kim's case are fairly well-known musicians. One employee arrested was Chuck Bettis, a familiar figure in the experimental-music scene and a veteran of the cult postpunk bands the Meta-Matics and All Scars. Another was Craig Willingham, known as I-Sound, whose discography includes "Music Is a Hungry Ghost" (City Slang), a collaboration with the German electronic group To Rococo Rot.

The Kim's case highlights the strange position of hip-hop mixtapes, which have been making a bumpy journey toward the mainstream. There was a time when mixtape fans had little choice but to hit the streets in search of fly-by-night salesmen and out-of-the-way stalls. But when an artist as popular as 50 Cent is releasing new material directly (and sometimes exclusively) to mixtapes, and when hip-hop crews like the Diplomats are supplementing their underground mixtapes with official (that is, licensed and legal) mixtapes, then the boundary between street and store gets harder to maintain.

Nowadays, hip-hop fans across the country can buy mixtapes online, although perhaps it is only a matter of time before those Web sites, too, are raided. Meanwhile, some record shops are trying to find creative ways to keep the police and the recording association at bay. After the Kim's raid, perhaps more retailers will follow the lead of one hip-hop shop (which shall remain nameless), where mixtapes are on display but not, strictly speaking, on sale. To get one, you have to buy a CD holder, priced at $7.99 but worth a small fraction of that; with every purchase, you get a "free" mixtape.
http://www.nytimes.com/2005/06/16/ar...ic/16sann.html



The Downloaders Strike Back
Jimmy Guterman

LIKE THOUSANDS of patriotic Americans, I spent Memorial Day weekend illegally downloading a copy of the new ''Star Wars" movie. I was shocked by how quickly I was able to locate a copy on the Net (less than five minutes) and how long it took for the whole thing to end up on my computer (two days and change -- talk about holiday weekend traffic). There were no secret passwords, no locations known only to the cognoscenti. All I had to do was Point, Google, Pilfer.

I won't pull out the ''I am a journalist and I was just doing research" defense. I acknowledge the indefensibility of my actions. Just because ''The Phantom Menace" and ''Attack of the Clones" insulted the intelligence of anyone over the age of 4 doesn't mean I have the right to swipe George Lucas's latest.

Others are playing the relative-morality card, though. Read the discussion groups on the websites that host free ''Star Wars" and you can read hundreds of energetic, typo-ridden postings from fans convinced that, as one put it, ''Lucas owes us." One Net service that uses the popular file-sharing program BitTorrent serves only unreleased material by established performers, as if distributing unreleased material without permission or payment is somehow more moral than distributing officially released material without permission or payment.

Looking to the Internet for a moral education is a dubious activity, but the new digital world -- in which copyrighted material can be had either for free (unofficially) or at a greatly discounted price (through licensed download services) -- makes me wonder what content is worth nowadays. The time when you had to pay $18.99 to own one great song on an otherwise mediocre CD is gone. Thanks to the licensed download services, you can get a digital copy of that one good song for less than a buck. Maybe this will encourage performers to put more than one song worth buying on a record.

Although the record companies entered this new era kicking, screaming, and litigating, they have started to accept it, experimenting with a variety of innovations to make physical product worth owning. On the film side, dot-com billionaire Mark Cuban is leading an experiment to have films open in theaters and be available on DVD the same day, at a sliding scale of prices. The age of digital media is upon us, and the film companies should stop hunting down individual filesharers (like, er, me) and just keep innovating until they find the right technology and business models.

So, the other night, after everyone else in my family was asleep, I snuck downstairs, put on my headphones, and launched my pirated ''Revenge of the Sith." It looked great, but I closed the file after less than three minutes. Watching Jedi joust across a laptop screen is not the way to enjoy something as loud, fast, and blunt as a ''Star Wars" film. I could transfer the file to a DVD and view it on a larger television screen, but if I want the real experience of seeing the movie, I have no choice but to see it at a theater. Forget legal arguments or feelings of guilt. Paying to see ''Revenge of the Sith" on the big screen is the best way to enjoy this sort of big entertainment -- at least until downloaders figure out how to steal entire movie theaters.
http://www.boston.com/business/perso...s_strike_back/



Enter Avalanche: P2P Filesharing From Microsoft

Researchers at Microsoft's computer science lab in Cambridge have developed a peer-to- peer filesharing system that they say overcomes the scheduling problems associated with existing distribution protocols such as Bit Torrent.

The researchers claim download times are between 20-30 per cent faster, using their network coding approach, than on systems that only code at the server, and between 200 and 300 per cent faster than distributing un-encoded information.

Naturally, Microsoft is very keen to stress that this technology should be used for distributing legitimate content. It even put that in italics in the press material.

The basic principle of the system, dubbed Avalanche, is pretty much the same as BitTorrent. Certainly the problem it solves is: a large file needs to be distributed to many people. One server does not have the bandwidth to deal with all that traffic, so you need to find another way of getting the file to everyone who needs it.

If the file is broken up into smaller pieces, these can be distributed among a smaller number of people, who can then share the pieces to make sure they all eventually have the complete file.

The problem with this approach, as anyone who has ever tried to download content on the system - legitimate or otherwise - knows, is that towards the end of a download, any one downloader could have a while to wait for the particular pieces he needs. As the number of receivers increases, scheduling traffic also becomes more complex, and the whole process slows down.

Microsoft Research's approach gets around this by re-encoding all the pieces, so that each one that is shared is actually a linear combination of all the pieces, fed into a particular function. The blocks are then distributed with a tag that describes the parameters it contains.

Once you have downloaded a few of these, you can generate new combinations from the ones you have, and send those out to your peers. Collect enough of these pieces, and you will have enough information to reconstruct the whole file. Even if you don't have all the original pieces distributed by the person who held the original version of the file.

Peers can make use of any new piece, instead of having to wait for specific chunks that are missing. This means no one peer can become a bottle neck, since no piece is more important than any other. It also means overall network traffic is lower, since the same information doesn't have to travel back and forth multiple times.

Nifty, no?

Have a read of the research paper here (pdf), if this is your kind of thing.
http://www.channelregister.co.uk/200...ing_microsoft/



Censorship

'Freedom' a Taboo Word on Chinese Internet
Elaine Kurtenbach

Chinese bloggers, even on foreign-sponsored sites, had better choose their words carefully - the censors are watching.

Users of the MSN Spaces section of Microsoft Corp.'s new China-based Web portal get a scolding message each time they input words deemed taboo by the communist authorities - such as democracy, freedom and human rights.

"Prohibited language in text, please delete," the message says.

However, the restrictions appear to apply only to the subject line of such entries. Writing them into the text, with a more innocuous subject heading, seems to be no problem.

Microsoft's Chinese staff could not be reached immediately for comment. However, a spokesman at the tech giant's headquarters in Seattle acknowledged that the company is cooperating with the Chinese government to censor its Chinese- language Web portal.

Microsoft and its Chinese business partner, government-funded Shanghai Alliance Investment, work with authorities to omit certain forbidden language, said Adam Sohn, a global sales and marketing director for MSN.

But he added, "I don't have access to the list at this point so I can't really comment specifically on what's there."

Online tests found that apart from politically sensitive words, obscenities and sexual references also are banned.

MSN Spaces, which offers free blog space, is connected to Microsoft's MSN China portal. The portal was launched on May 26, and some 5 million blogs have since been created, Microsoft said.

The Chinese government encourages Internet use for business and education but tries to ban access to material deemed subversive.

Although details of the authorities' efforts are kept secret, users of many China-based Web portals are prevented from accessing sites deemed subversive by the government.

A search on Google for such topics as Taiwan or Tibetan independence, the banned group Falun Gong, the Dalai Lama or the China Democracy Party inevitably leads to a "site cannot be found" message.

Internet-related companies are obliged to accept such limitations as a condition of doing business in China. And government-installed filtering tools, registration requirements and other surveillance are in place to ensure the rules are enforced.

Recently, the government demanded that Web site owners register with authorities by June 30 or face fines.

Sohn said heavy government censorship is accepted as part of the regulatory landscape in China, and the world's largest software company believes its services still can foster expression in the country.

"We're in business in lots of countries. I think every time you go into a market you are faced with a different regulatory environment and you have to go make a choice as a business," he said. "Even with the filters, we're helping millions of people communicate, share stories, share photographs and build relationships. For us, that is the key point here."

The consequences of defying government limits can be severe: at least 54 people have been jailed for posting essays or other content deemed subversive online.

The international media advocacy group Reporters Without Borders has protested the online limits, sending letters to top executives of Microsoft, Yahoo, Google and other companies urging them to lobby Beijing for greater freedom of expression.

"In terms of the reality of the situation, those business deals are going to continue as globalization expands," said Tala Dowlatshahi, a spokeswoman for the group. "But we want to make sure that pressure is being put on the companies to pressure the Chinese government to ensure a more democratic process."
http://hosted.ap.org/dynamic/stories...M&SECTION=HOME



Activist Faces Charges Over Web Posts
Audra Ang

A Chinese political activist goes on trial next week on subversion charges after posting essays and lyrics to a punk song on the Internet, a human rights group said Thursday.

Zhang Lin was detained Jan. 29 in his hometown of Bengbu, in the eastern province of Anhui, after returning from Beijing, where he unsuccessfully tried to attend a memorial service for ousted Communist Party leader Zhao Ziyang.

Zhang goes on trial next week for posting almost 200 essays on the Internet, including one that quotes lyrics from a punk song that authorities say incite subversion of state power, Human Rights in China said in a statement.

Zhang has gone on hunger strikes twice to protest his detention and physical abuse while in captivity, the group said.

China's communist government frequently files subversion charges against political activists. A conviction can carry a penalty of up to life in prison.

Zhao, who died Jan. 17 at age 85, was forced from power in 1989 after sympathizing with pro-democracy protesters who occupied Tiananmen Square in Beijing. Authorities detained dissidents trying attending his memorial service to prevent expressions of discontent.

HRIC said no mention was made in Zhang's indictment about his attempt to pay his respects to Zhao.

Instead, the document issued May 23 by prosecutors in Bengbu said Zhang "used the Internet ... to openly disseminate language that misrepresents and denigrates the national authorities and the socialist system, and which incites subversion of state power and the overthrow of the socialist system."

Zhang, who has been imprisoned several times for pro-democracy activities, posted 195 articles between August 2003 and January this year, the group said.

According to the indictment, his work "damaged national unity, sovereignty and territorial integrity, spread falsehoods, disturbed social order and damaged social stability," HRIC said.

One of his essays quotes lyrics from a song by the Chinese punk group Pangu: "The Yellow River should run dry, this society should collapse, this system should be destroyed, this race should become extinct, this country should perish."

Liu Qing, HRIC's president, said authorities should withdraw their case against Zhang.

"The use of the words of a punk rock song to charge Zhang Lin with subversion shows the lengths to which the Chinese authorities feel compelled to go in persecuting and suppressing those who exercise freedom of expression," Liu said in a statement.

"Zhang Lin has been subjected to constant persecution over the past 16 years, even though his chief aspiration has always been the welfare of China and the Chinese people."

Zhang was introduced to dissident writings while a student at Beijing's prestigious Tsinghua University in the 1970s. During the 1989 movement, Zhang led student hunger strikes in Bengbu and was later sentenced to two years in prison on charges of "counterrevolutionary incitement."

He was sentenced to three years in a labor camp after cofounding an independent labor rights group, HRIC said.
http://seattlepi.nwsource.com/busine...%20Dissi dent



Microsoft Censors Blogs at Chinese Portal
Curt Woodward

Microsoft Corp. is cooperating with China's government to censor the company's newly launched Chinese-language Web portal, a spokesman for the tech giant said.

The policy affects Web logs, or blogs, created through the MSN Spaces service, said Adam Sohn, a global sales and marketing director at MSN.

Microsoft and its government-funded Chinese business partner work with authorities to omit certain forbidden language, Sohn said, declining to provide specific examples.

"I don't have access to the list at this point so I can't really comment specifically on what's there," he told The Associated Press.

On Monday, Agence France-Presse, the French news agency, said bloggers were not allowed to post terms to MSN Spaces such as "democracy," "human rights" and "Taiwan independence." Attempts to enter those words were said to generate a message saying the language was prohibited.

MSN Spaces, which offers free blog space, is connected to Microsoft's MSN China portal. The portal was launched on May 26, and some 5 million blogs have since been created, Microsoft said.

China's government encourages Internet use for business and education but tries to ban access to material deemed subversive.

It also recently demanded that Web site owners register with authorities by June 30 or face fines.

Chinese censors scour Internet bulletin boards and blogs for sensitive material, and block access to violators. Sites that let the public post comments are told to censor themselves or face penalties.

Sohn said heavy-handed government censorship is accepted as part of the regulatory landscape in China, and the world's largest software firm believes its services still can foster expression in the country.

"Even with the filters, we're helping millions of people communicate, share stories, share photographs and build relationships. For us, that is the key point here," he said.

Tala Dowlatshahi, a spokeswoman for the international media watchdog group Reporters Without Borders, said such arrangements are common when large technology companies do business in China.

The journalists' group has sent letters to the presidents of Microsoft, Yahoo!, Google, Cisco Systems and other companies urging executives to pressure the Chinese government for reforms on free expression.

But the tempting market for Chinese consumers can quiet such pleas, Dowlatshahi said.

"In terms of the reality of the situation, those business deals are going to continue as globalization expands," she said. "But we want to make sure that pressure is being put on the companies to pressure the Chinese government to ensure a more democratic process."

Sohn said filters on domestic products also prevent some language - generally profane or sexually explicit references - from being posted to the Web.

"We're in business in lots of countries. I think every time you go into a market you are faced with a different regulatory environment and you have to go make a choice as a business," he said.

MSN China is a joint venture with Shanghai Alliance Investment Ltd., an investment company funded by the Chinese government. Shanghai Alliance invests in new economic development in Shanghai and other parts of China.

China's estimated online population is 87 million, second only to the United States.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS



MS Files Suit Against Software Pirates
Ed Oswald

Microsoft took action on Wednesday by filing four lawsuits against companies in Virginia and California, alleging that the companies were engaging in the sale of pirated copies of Microsoft software. The company was tipped off by calls from consumers to its piracy hotline, 1-800-RU-LEGIT.

Microsoft identified the companies as #9 Software, who had 112 complaints across 35 states and Canada, CEO Microsystems with 66 complaints in 20 states, and Super Supplier, with 18 complaints from people in 13 states.

"We have an obligation to protect consumers and legitimate resellers," Mary Jo Schrade, senior attorney at Microsoft said in prepared remarks. "In filing these lawsuits, we hope to curb the amount of pirated and counterfeit software on the market and keep illegal software from finding its way into the hands of unknowing consumers and businesses."

According to Microsoft, the companies named in the lawsuits were warned that their actions were breaking the law and were given an opportunity to rectify the situation. However, the companies ignored Microsoft's requests and continued to sell unauthorized copies of its software.

"We'll continue to do what we can to educate our channel partners and consumers about the risk associated with selling, buying or using pirated and counterfeit items," Schrade said. "As a last resort, we'll take legal action to help ensure that software identified as Microsoft software actually is genuine, legitimate software."

Also named in the lawsuits alleging copyright and trademark infringement were Winston Group, Inc. and East Outlet, LLC. A second suit against #9 Software was filed alleging the company was counterfeiting COA labels.

COA, or certificate of authenticity, labels are the holographic stickers on the back of Microsoft software that are intended to confirm to consumers that a product is genuine. The labels also include the product key in case the operating system requires reinstallation.

Legitimate resellers of Microsoft software applauded Wednesday's legal moves.

"Consumers benefit tremendously from using genuine software and shouldn't be duped into believing that pirated technology is the same as the real thing," Robert Russell, president of Virginia-based Ill Open Technologies said. "Piracy and counterfeiting are unfair to our customers and us. Microsoft is doing the right thing."
http://www.betanews.com/article/prin...tes/1118850575



ICANN Creating Virtual Red-Light District
Anick Jesdanun

A red-light district tentatively cleared for construction on the Internet - the ".xxx" domain - is being billed by backers as giving the $12 billion online porn industry a great opportunity to clean up its act.

A distinct online sector for the salacious, one with rules aimed at forbidding trickery, will reduce the chances of Internet users accidentally stumbling on porn sites, they argue. If only it were so simple:

Zoning in cyberspace has always been a daunting proposition, and participation in the porn domain will be voluntary. Critics wonder why ".xxx" got the OK at all when so many other proposals sit unaddressed, some for years.

Nearly five years after rejecting a similar proposal, the Internet's key oversight body, the Internet Corporation for Assigned Names and Numbers, voted 6-3 this month to proceed with ".xxx."

ICANN staff will now craft a contract with ICM Registry Inc., the Jupiter, Fla., company that made the bid. If the board and ultimately the U.S. Commerce Department approve it, ".xxx" names could appear in use by the year's end.

The market unquestionably exists: Two in five Internet users visited an adult site in April, according to tracking by comScore Media Metrix. The company said 4 percent of all Web traffic and 2 percent of all surfing time involved an adult site.

As envisioned, ICM would charge $60 for each of up to 500,000 names it expects to register, $10 of which would go to a nonprofit organization that would, among other things, educate parents about safe surfing for children.

The nonprofit, run by representatives of adult Web sites, free-speech, privacy and child-advocacy concerns, would determine registration eligibility.

Skeptics argue, however, that porn sites are likely to keep their existing ".com" storefronts, even as they set up shop in the new ".xxx" domain name. And that will reduce the effectiveness of software filters set up to simply block all ".xxx" names.

The ".xxx" domain "legitimizes this group, and it gives false hope to parents," said Patrick Trueman, senior legal counsel at the Family Research Council and a former Justice Department official in charge of obscenity prosecutions.

The adult entertainment industry is also hardly behind ".xxx" as a group. Many of its webmasters consider the domain "the first step toward driving the adult Internet into a ghetto very much like zoning laws have driven adult stores into the outskirts," said Mark Kernes, senior editor at the trade monthly Adult Video News.

ICM insists it would fight any government efforts to compel its use by adult Web sites, but the existence of ".xxx" would certainly make the prospect easier.

"There are going to be pressures" to mandate it once available, said Marjorie Heins, coordinator of the Free Expression Policy Project at New York University's law school. Federal lawmakers have proposed such requirements in the past.

Robert Corn-Revere, a lawyer hired by ICM to address free-speech issues, said the company has pledged $250,000 for a legal defense fund to keep ".xxx" voluntary, and he notes that courts have struck down efforts to make movie ratings mandatory.

"Where governments have tried to use private labeling systems as proxies for regulation, courts have always held those measures unconstitutional," he said.

Even if it's voluntary, supporters say, adult sites will have incentives to use ".xxx."

"If the carrot's big enough, you're going to get sites in there," said Parry Aftab, an Internet safety expert who served as an informal adviser on ".xxx."

Stuart Lawley, ICM's chairman and president, said use of ".xxx" could protect companies from prosecution under a 2003 federal law that bars sites from tricking children into viewing pornography - as ".xxx" would clearly denote an adult site.

All sites using ".xxx" would be required to follow yet-to-be-written "best practices" guidelines, such as prohibitions against trickery through spamming and malicious scripts.

Lawley said those requirements could make credit-card issuers more confident about accepting charges. The online porn industry currently faces higher fees because some sites engage in fraud and customers often deny authorizing payments.

But given the limited effectiveness of a voluntary ".xxx" for filtering, Internet filtering expert Seth Finkelstein calls ".xxx" no more than a mechanism "to extract fees from bona fide pornographers and domain name speculators." (ICANN also gets an unspecified cut of each registration fee.)

Even if it were mandatory, it wouldn't be foolproof.

A domain name serves merely as an easy-to-remember moniker for a site's actual numeric Internet address. David Burt, a spokesman for filtering vendor Secure Computing Corp., said a child could simply use the numeric address when the ".xxx" equivalent gets blocked.

Better technologies exist, he said, including a little-used self-rating system that lets Web sites broadcast whether they contain nudity, violence or foul language, along with the specific forms, such as presence of genitals or passionate kissing.

Burt also favors a ".kids" domain that would serve as a safe haven for children. The U.S. government has approved one under ".us," but support has been cool, with only about two dozen ".kids.us" sites listed.

ICM proposed both ".xxx" and ".kids" in 2000, but ICANN board members resisted them for fear of getting into content control. Instead, ICANN approved ".info," ".biz," and ".museum" and four others.

But pressure has continued to mount for ICANN to expand the number of domain names, and last year it reopened bidding.

ICM resubmitted its application for ".xxx" only, this time structuring it with a policy- setting organization to free ICANN of that task.

That did the trick.

ICANN board member Joichi Ito, who backed ".xxx," wrote in his Web journal that the decision wasn't an endorsement of any type of content or moral belief but a chance for "creating incentives for legitimate adult entertainment sites to come together and fight `bad actors.'"

Anti-porn activist Donna Rice Hughes, however, remains unconvinced.

"They are not going to give up their `.com' addresses," she said of porn sites. "It doesn't take a brain surgeon to figure that one out."
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS



From April

Will TV Indecency Ban Become Censorship?
Frazier Moore

In the minds of many viewers, the current anti-indecency crusade isn't just out to make the airwaves safe for families and children. Another likely goal is to punish TV for its brazen smut-peddling.

With a four-letter word here and a "wardrobe malfunction" there, surely someone in power - the executives, the stars, the creators? - deserves a good thrashing. Viewers may not agree on what indecency is or how to fix it. But they want someone to answer for TV's sins.

No wonder politicians are climbing over one another to yank the chain of the media elite. Cracking down on TV content is the latest rage in the culture wars. And who wants to be seen as a war resister?

Apparently not Rep. James Sensenbrenner, R-Wisc., who recently advocated criminal prosecution for indecent material aired by broadcasters.

A less draconian proposal would expand the purview of the Federal Communications Commission beyond over-the-air broadcasting to add cable and satellite programming - which would place shows from such networks as MTV, FX and even HBO (with its F-word-riddled drama "Deadwood") under the thumb of the feds.

And don't forget a bill passed by the House that would hike existing indecency fines from $32,500 to as much as $500,000 per infraction.

"There's a herd mentality when the issue of indecent programming comes up," says Jeff Chester, executive director of the Center for Digital Democracy. "You can say, `Well, the networks deserve it.' But underneath it all is the First Amendment, and there are very few champions in Congress to warn us about the dangerous consequences of encouraging censorship."

At least one legislator, Rep. Bernie Sanders, I-Vt., has voiced such warnings. And striking back against indecency zealots, he has introduced a bill that would clarify the FCC's authority for policing content as being limited to broadcast television and radio - not cable, satellite or Internet fare. He calls it the Stamp Out Censorship Act.

"We don't need to have United States government commissars telling the American people what they can watch," says Sanders, who is concerned that already, even without new restrictive laws in force, spooked broadcasters are erring on the side of caution. In other words, censoring themselves.

He points to the 66 ABC affiliates that opted not to air the patriotic war film "Saving Private Ryan" last November because of fears that the FCC might rule certain swear words in the film to be indecent (it didn't). And last spring, some PBS stations removed the image of a nude lithograph from "Antiques Roadshow."

Not too much further down this slippery slope, Sanders warns, "you might find some people here in Congress and some right-wing fundamentalists arguing that, in the midst of the war on terrorism, attacks against the president of the United States border on indecency."

A poll released last week reported broad public support for curbing media indecency. But the Pew Research Center survey found something else: By 48 to 41 percent, respondents saw greater danger in the government imposing undue restrictions on the entertainment industry than from harmful material the industry might dispense.

Media scholar and activist Robert W. McChesney understands the public's concern over vulgar programming. But he has his own theory for the underlying cause of it: fewer and bigger media owners.

"Companies that produce the most vulgar fare," he says, "are News Corp. (owner of the Fox network), Viacom (owner of MTV and more than 185 Infinity Radio stations, as well as CBS, which aired Janet Jackson's Super Bowl flashdance) and Clear Channel (with more than 1,200 radio stations). What these companies have found is, once you gobble up a lot of media outlets, the least expensive way to generate an audience is through vulgarity.

"It's a commercially driven phenomenon," says McChesney, creator of a media reform Web site. "A solution to the problem would be more local ownership and more competition. Let the system work through the problem, without having any censorship."

Much to everyone's surprise, the public rose up against the FCC's efforts to oblige Big Media with eased limits on how many outlets a conglomerate could own. Thanks to citizens' outcry, portions of the rules passed by the FCC two years ago were overturned by Congress. Then a U.S. Court of Appeals tossed out most of the rest.

Says Sanders, "I think you're gonna see the same thing here: `Please, don't tell me what I can watch, especially when I'm paying for the privilege of watching it.'"

He looks for continued public pressure to buck the government-assisted trend toward bigger media conglomerates. And he expects more people to recognize that, however badly they may want to punish the media, censorship will backfire by punishing them worse.
http://hosted.ap.org/dynamic/stories...stom wire.htm



Victim of “Republican ideology”

Public broadcasting targeted by House

Panel Seeks to End CPB's Funding Within 2 Years
Paul Farhi

A House subcommittee voted yesterday to sharply reduce the federal government's financial support for public broadcasting, including eliminating taxpayer funds that help underwrite such popular children's educational programs as "Sesame Street," "Reading Rainbow," "Arthur" and "Postcards From Buster."

In addition, the subcommittee acted to eliminate within two years all federal money for the Corporation for Public Broadcasting -- which passes federal funds to public broadcasters -- starting with a 25 percent reduction in CPB's budget for next year, from $400 million to $300 million.

In all, the cuts would represent the most drastic cutback of public broadcasting since Congress created the nonprofit CPB in 1967. The CPB funds are particularly important for small TV and radio stations and account for about 15 percent of the public broadcasting industry's total revenue.

Expressing alarm, public broadcasters and their supporters in Congress interpreted the move as an escalation of a Republican-led campaign against a perceived liberal bias in their programming. That effort was initiated by the Corporation for Public Broadcasting's own chairman, Kenneth Y. Tomlinson.

"Americans overwhelmingly see public broadcasting as an unbiased information source," Rep. David Obey (Wis.), the ranking Democrat on the subcommittee, said in a statement. "Perhaps that's what the GOP finds so offensive about it. Republican leaders are trying to bring every facet of the federal government under their control. . . . Now they are trying to put their ideological stamp on public broadcasting."

But the Republican chairman of the House Appropriations subcommittee on labor, health and human services, and education asserted that the panel was simply making choices among various worthy government programs, and that no political message was intended.

The subcommittee's action, which came on a voice vote, doesn't necessarily put Big Bird on the Endangered Species List. House members could restore funding as the appropriations bill moves along or, more likely, when the House and Senate meet to reconcile budget legislation later this year. The Senate has traditionally been a stronger ally of public broadcasting than the House, whose former speaker, Newt Gingrich (R-Ga.), waged a high-profile but ultimately unsuccessful campaign to "zero out" funding for the CPB a decade ago.

The cuts nevertheless surprised people in public broadcasting. In his budget sent to Congress in February, President Bush had recommended reducing CPB's budget only slightly.

Several denounced the decision by the panel, which has 10 Republicans and seven Democrats, as payback by a Republican-dominated House after years of complaints from conservatives who see liberal bias in programs carried by the Public Broadcasting Service and National Public Radio. Broadcasters noted, for example, that the 25 percent cutback in next year's CPB budget was a rollback of money that Congress had promised in 2004.

PBS, in particular, drew harsh criticism in December from the Bush administration for a "Postcards From Buster" episode in which Buster, an animated rabbit, "visited" two families in Vermont headed by lesbians. And programming on both PBS and NPR has come under fire in recent months from Tomlinson, the Republican chairman of the CPB, who has pushed for greater "balance" on the public airwaves.

A spokeswoman for NPR, Andi Sporkin, directly blamed Tomlinson for yesterday's action, saying, "We've never been sure of Mr. Tomlinson's intent but, with this news, we might be seeing his effect."

Tomlinson did not return calls seeking comment. In a statement, he said, "Obviously, we are concerned [by the cuts], and we will be joining with our colleagues in the public broadcasting community to make the case for a higher level of funding as the appropriations measure makes its way through Congress."

John Lawson, the president of the Association of Public Television Stations, a Washington-based group that lobbies for public broadcasters, called the subcommittee's action "at least malicious wounding, if not outright attempted murder, of public broadcasting in America." He added, "This action could deprive tens of millions of American children of commercial-free educational programming."

Rep. Ralph Regula (R-Ohio), the subcommittee's chairman, said the cuts had nothing to do with dissatisfaction over public radio or TV programs. "It's pretty simple," he said in an interview. "The thinking was, there's not enough money for everything. There are 'must-do,' 'need-to-do' and 'nice-to-do' programs that we have to pay for. [Public broadcasting] is somewhere between a 'need-to-do' and a 'nice-to-do.' "

The subcommittee had to decide, he said, on cutting money for public broadcasting or cutting college grants, special education, worker retraining and health care programs. "No one's out to get" public broadcasting, Regula said. "It's not punitive in any way."

In fact, none of the Republican members of the subcommittee publicly denounced public radio or TV funding at yesterday's markup. Public broadcasting drew supportive statements from Obey and Rep. Nita Lowey (D-N.Y.).

Regula suggested public stations could "make do" without federal money by getting more funding from private sources, such as contributions from corporations, foundations, and listeners and viewers.

But the loss of $23.4 million in federal funds for children's educational shows -- which PBS calls its "Ready to Learn" programs -- could mean the elimination of these programs, said an official at Alexandria-based PBS who asked not to be named because the network still hopes to regain the funding. PBS's revenue totaled $333 million in fiscal year 2004.

The Ready to Learn group includes "Sesame Street," "Dragontales," "Clifford" and "Arthur," among others.

The House measure also cuts support for a variety of smaller projects, such as a $39.6 million public TV satellite distribution network and a $39.4 million program that helps public stations update their analog TV signals to digital format.

Small public radio stations, particularly those in rural areas and those serving minority audiences, may be the most vulnerable to federal cuts because they currently operate on shoestring budgets.

"This could literally put us out of business," said Paul Stankavich, president and general manager of the Alaska Public Radio Network, an alliance of 26 stations in the state that create and share news programming. "Almost all of us are down to the bone right now. If we lost 5 or 10 percent of our budgets in one fell swoop, we could end up being just a repeater service" for national news, with no funds to produce local content.

Stankavich, who also runs a public radio and TV station in Anchorage, said public radio is "an important source of news in urban areas, but it's life-critical in rural areas," especially in far-flung parts of Alaska unserved by any other broadcast medium.
http://www.washingtonpost.com/wp-dyn...060902283.html



Lobbyists' Role for Public TV Is Investigated
Stephen Labaton

Investigators at the Corporation for Public Broadcasting are examining $15,000 in payments to two Republican lobbyists last year that were not disclosed to the corporation's board, people involved in the inquiry said on Wednesday.

One of the lobbyists was retained at the direction of the corporation's Republican chairman, Kenneth Y. Tomlinson, they said, and the other at the suggestion of his Republican predecessor, who remains on the board.

The investigators, in the corporation's inspector general's office, are also examining $14,170 in payments made under contracts - which Mr. Tomlinson took the unusual step of signing personally, also without the knowledge of board members - with a man in Indiana who provided him with reports about the political leanings of guests on the "Now" program when its host was Bill Moyers.

While the amounts of the contracts are relatively small, the issues they pose are part of a broader examination by the inspector general of Mr. Tomlinson's efforts to bring what he says is more political balance to public television and radio and what critics say is political interference in programming.

It comes as Republicans in Congress are threatening to cut support for public broadcasting sharply, and as a number of crucial staff members at the corporation have quit and privately cited concerns on Mr. Tomlinson's leadership.

The people who described the inquiry and the declining morale include officials unhappy with the corporation's course under Mr. Tomlinson. Concerned about retribution, they spoke on condition of anonymity.

Mr. Tomlinson, a former editor of Reader's Digest appointed to the board by President Bill Clinton in 2000, said on Wednesday that he would not comment on details of the investigation but was certain that he had done nothing improper.

"We are confident that the inspector general's report will conclude that all personnel arrangements were and continue to be made in accordance with the statutes and rules governing CPB's use of funds," he said in an e-mail message.

Corporation officials said the two lobbyists did not approach lawmakers but provided strategic advice on handling a bill last year that would have given public radio and television stations more representation on the corporation's board. The measure, which died, was opposed by the White House and Mr. Tomlinson but was supported by stations.

One of the lobbyists, Brian Darling, was paid $10,000 for his insights into Senator Conrad Burns, a Montana Republican who sponsored the provision. This year, he briefly served as a top aide to Senator Mel Martinez, Republican of Florida, but resigned after the disclosure that he had written a memorandum describing how to exploit politically the life-support case of Terri Schiavo.

Mr. Darling did not return a telephone call seeking comment.

The other lobbyist, Mark Buse, a former top aide to Senator John McCain, Republican of Arizona, said he provided advice on the legislative process over a month and did not talk to any lawmakers. Mr. Buse, who was paid $5,000, said he was hired at the suggestion of Katherine M. Anderson, a former chairwoman of the corporation and a current board member.

The corporation is financed entirely by taxpayer dollars and is supposed to be a political buffer between lawmakers and public television and radio. For years, it has told groups representing the stations that federal law prohibits it from retaining lobbyists to approach lawmakers or push for legislation.

Mr. Tomlinson has said in recent interviews that he has no desire to impose a political point of view on programming, and that his efforts are intended to help public broadcasting distinguish itself in a 500-channel universe and gain financial and political support. His critics, who include top officials at the Public Broadcasting Service and at National Public Radio, say his actions pose a threat to editorial independence.

The inspector general is looking at contracts signed by Mr. Tomlinson with a man named Fred Mann to monitor the political leanings of "Now." The inquiry was requested by two Democrats, Representatives John D. Dingell of Michigan and David R. Obey of Wisconsin, after they learned about the monitoring.

Officials said the inspector general was examining whether Mr. Tomlinson, as chairman of the corporation, had the authority to approve the contract or the payments.

Mr. Mann, who was listed in the contracts as living in Indianapolis, could not be located, and officials at the corporation said they knew nothing about him.

The inquiry comes as Mr. Tomlinson finds himself at the center of a political battle that threatens to reduce the corporation's budget significantly, and internal turmoil that has sharply eroded morale and recently prompted significant staff defections. The corporation's general counsel, Donna Gregg, left the corporation this month. Last week, Nancy R. Rohrbach, the senior vice president for corporate and public affairs, submitted her resignation.

Ms. Rohrbach has told friends that Mr. Tomlinson repeatedly ignored her advice. She and other officials were described as being upset last week when Mr. Tomlinson rejected a proposed statement by senior officials at the corporation denouncing a vote by a House appropriations subcommittee that would slash the corporation's budget by 25 percent, or $100 million, to $300 million.

The House Appropriations Committee is expected to approve that measure on Thursday.

Officials said that after the panel's vote last Thursday, staff members confronted Mr. Tomlinson about his refusal to approve a statement condemning the Congressional action.

While public television and radio groups denounced the subcommittee vote and called the corporation to seek a similar statement, late in the day Mr. Tomlinson issued a milder response, saying that the corporation was "concerned" and would "be joining with our colleagues in the public broadcasting community to make the case for a higher level of funding as the appropriations measure makes its way through Congress."

The corporation's Democratic and independent members, meanwhile, are preparing to urge the Republican-controlled board to delay the appointment of a new president of the corporation at its regularly scheduled meeting next week. The former president, Kathleen Cox, left in April after her contract was not renewed.

Mr. Tomlinson has said that his top choice is Patricia Harrison, an assistant secretary of state and a former co-chairwoman of the Republican National Committee.
http://www.nytimes.com/2005/06/16/po...roadcast.html?



Viacom Board Approves Split
Seth Sutel

Viacom Inc., the media conglomerate that owns CBS and MTV, said Tuesday that its board had unanimously approved a plan to split the company into two separate entities, one focusing on broadcast television and the other on cable networks.

Viacom said the split will occur in the first quarter of 2006. Viacom CEO Sumner Redstone will be chairman and controlling shareholder of the companies, which will both be based in New York.

The company said the separation will be made through a tax-free spinoff, meaning that holders of Viacom shares will receive shares of a new company called CBS Corp., that will include the CBS and UPN networks, a group of TV stations as well as a major radio and outdoor advertising group.

The new CBS company will be led by Les Moonves, the current head of CBS and co- president of Viacom. The other company, which will retain the Viacom name, will include MTV, Nickelodeon, BET and several other cable networks as well as the Paramount movie studio. That company will be led by Tom Freston, the longtime chief of MTV and Viacom's other co-president.
Viacom had announced in March that it was considering a plan to split itself into two companies, saying it wanted to allow investors to value its array of businesses separately.

The company decided to pursue the breakup after becoming frustrated with its languishing stock price. Viacom's shares traded as high as $75.88 in July 2000, but have generally struggled since then, finishing up 11 cents at $34.21 on the New York Stock Exchange Tuesday.

Viacom hopes that the MTV-based unit will attract investors seeking fast-growing businesses, while those seeking dividends and more aggressive share buybacks will buy shares in the new CBS Corp., whose businesses are slower-growing but still generate a lot of cash.

The splitup also resolves the pressing issue at Viacom of who will succeed Redstone, who turned 82 last month, as chief executive. Before the splitup plan was announced in March, Freston and Moonves had been seen as competing to succeed Redstone as CEO.

Redstone said in a statement that the breakup would create two "strong, focused and nimble companies" that would give investors options that are "more closely aligned with their various investment objectives."

Viacom also said Redstone's daughter Shari Redstone would take the newly created position of non-executive vice chairman of the board. She had been a member of the company's board since 1994.

Harold Vogel, head of the investment firm Vogel Capital Management, said that while the breakup would "focus the stocks a lot more," it would also cause the companies to incur many new expenses, including having two sets of chief financial officers, legal and compliance departments.

Also, the separated companies could lose negotiating clout with other media entities, especially cable operators, Vogel said. A combined Viacom, for example, could withhold from cable companies the rights to retransmit its highly-rated CBS network in exchange for concessions to carry its cable channels like MTV and BET.

Viacom said it would make further announcements in the coming weeks about the splitup's schedule, the management lineups for the two companies and their financial structures.

The move to break up the company essentially undoes Viacom's acquisition of CBS Corp., which was announced in 1999. Viacom's splitup is also the biggest example of a recent trend among media companies to trim down their holdings as they try to regain favor on Wall Street.

Investors have become disillusioned with many large media conglomerates in recent years amid growing skepticism about the "synergies" to be gained from owning such diverse groups of assets.

Radio giant Clear Channel Communications Inc. said in April that it would spin off its live entertainment business, and radio station and magazine owner Emmis Communications Corp. said it would sell its TV stations. And the shares of Time Warner Inc., which has also sold several assets including its music company, are still down about 75 percent from early 2000, when it announced its merger with AOL.
http://hosted.ap.org/dynamic/stories...customwire.htm



High Court Declines Media Ownership Appeals

The U.S. Supreme Court declined on Monday to hear appeals by media companies challenging whether ownership restrictions are constitutional, leaving it up to federal regulators to decide the appropriate limits.

The high court turned down appeals by media companies, including Tribune Co. and Gannett, which have argued that the ownership limits the Federal Communications Commission set in 2003 violate free speech rights and a 1996 law.

The FCC eased several ownership limits, including a cross-ownership ban on newspapers, television stations and radio outlets in some markets, but kept restrictions to protect smaller markets from being dominated by a few companies.

The FCC also eased limits on broadcasters owning more than one television station in a market.

Consumer advocates, arguing that the relaxed limits would hurt diversity in viewpoints and opinions, challenged the regulations in court. A federal appeals court last year agreed to put the rules on hold and ordered the FCC to better justify them.

But many media companies, some of whom were represented in appeals filed by the Newspaper Association of America and other trade groups, contended that the FCC should have eased the ownership restrictions further and appealed the decision to the Supreme Court. They argued that the limits infringed their free speech rights and the 1996 Telecommunications Act.

Tribune Co. publishes The Los Angeles Times, Chicago Tribune and Newsday and operates 26 television stations.

Gannett publishes 102 daily newspapers, including USA Today, and operates 21 television stations.
http://news.com.com/High+court+decli...3-5744239.html



Not Guilty In Hyperlink Case

An appeals court has ruled that Stuttgart media designer Alvar Freude is not guilty of aiding and abetting in incitement to hatred and violence against minority groups. The judges in the jury of the 38th criminal division at the first-instance district court ruled without reservation that Freude's reporting about the Nazi web sites, which caused the district government of Dusseldorf to file charges, constitutes documentation of historical events. In his online documentation, Freude had provided links to neo-Nazi web sites and the homepage of Tasteless, which the district government had incriminated. In the Freedomphone web site Freude operated, users were invited to have banned the web sites read to them on the telephone; the court clearly saw this as a satire.

Freude told heise online that he saw this "ruling as good for the Internet, especially for people who have critical views of current politics." Freude said that the public prosecutor had not yet stated whether he would appeal this ruling. However, the public prosecutor had to listen to some criticism from the presiding judge when the ruling was handed down today. In October of 2004, the first-instance court of Stuttgart sentenced Freude to 120 days behind bars.

The testimony of the state criminal prosecution officer showed how shallow investigations have been. In addition, according to Freude this time the judge quickly emphasized that he did not see any criminal activity in Freude's reporting. Nor did the judge entertain the public prosecutor's reference to the protection of youths; rather, the judge reminded the prosecutor of the Adequacy Clause in Section 86, paragraph 3 of the German Penal Code. In his assessment of the web site rotten.com, the judge also did not feel that the prosecution had demonstrated that the site constituted an act of violence, according to Freude's account.

When asked whether he would be reactivating the links he had deactivated in the meantime, Freude stated that he wanted to wait to see the court's written opinion and the reaction of the public prosecutor. (Monika Ermert) (Craig Morris)
http://www.heise.de/english/newsticker/news/60693



The Web Is in the Air

Alexandria Offers Free Outdoor Access to Wireless Internet
Annie Gowen and Robert MacMillan

A summer afternoon. An iced latte. A park bench in Old Town Alexandria.

All this and free Internet access, too.

This week, Alexandria began providing free wireless Internet access in its historic center, the first local government to offer alfresco Web surfing at no charge.

The one-year pilot program provides outdoor wireless service in an eight-block zone stretching from Washington Street to the Potomac River along King Street -- the Old Town main drag that attracts tourists and residents with its shops and restaurants.

The system, which relies on broadcasting equipment atop City Hall, the Torpedo Factory and a couple of utility poles, is aimed at outdoor cafe patrons or people who prefer parks to workstations, city officials said.

Montgomery and Arlington counties have similar plans for free Internet zones in downtown Silver Spring and around the Clarendon and Court House Metro stations.

Officials said they're thinking of putting one in Arlington's skateboard park. And a nonprofit group, the Open Park Project, is campaigning for wireless access -- known as wireless fidelity or WiFi -- along the entire length of the Mall.

Craig T. Fifer, Alexandria's e-government manager, said the city wants to provide a luxury amenity to its residents while testing a system it could use for more prosaic municipal tasks, such as monitoring traffic.

And it's great public relations.

The service will "promote Alexandria as a high-technology area," Fifer said. "We often market ourselves as a historic area, but this technology helps put us on the high-tech map."

In providing free wireless, Alexandria and other cities -- dozens of which have existing wireless Internet hubs -- in some cases have raised the ire of private network providers. Verizon recently tried to block Philadelphia's $10 million effort to connect the entire city.

Fifer said Alexandria's effort is narrowly tailored not to compete with or replace private providers. He said the network is not secure.

"We're not encouraging you to do anything sensitive with it, like balancing a checkbook or running a business," Fifer said.

Officials in Arlington and Montgomery -- which has WiFi in some of its libraries -- said they hope to entice private companies to install outdoor WiFi systems that would be free to the public and be of minimal taxpayer expense.

Alexandria's effort cost about $20,000 to start and will be $7,800 yearly to maintain.

Verizon, which charges Alexandria customers about $80 a month for wireless access, has no objection to the city's plan, said Eric Rabe, the company's vice president of media relations. But there are better alternatives to city-funded access, Rabe said.

Offering high-speed service, he said, is "complicated, expensive, and there are private providers who are doing it at no cost to taxpayers. But if the city decides they need to do it, we'd like to talk about working with them."

Many businesses in the area and at least one Fairfax County park provide wireless zones for visitors, but not usually for free. A search of http://jiwire.com/ , a national directory of wireless "hot spots," shows 65 locations in and around Old Town. The Holiday Inn on King Street, for instance, offers complimentary wireless service. Starbucks charges $9.99 a day for customers to use its hot spots.

David P. McClure, the president of the U.S. Internet Industry Association, said many municipalities waste taxpayer money when they provide such networks because they are used only by "very affluent techno elites."

"If you don't have a job where you can take your laptop and do your work in a city park, it's not going to benefit you . . . .We're just taking money from hardworking families and giving it to people who can afford [personal digital assistants] and laptops," McClure said.

Roanoke officials realized early that few residents were using the city's wireless zone in its downtown market, said Kathy Cox, the city's acting assistant director of technology.

"The younger crowds grab onto it fast," she said. Older folks without laptops weren't so interested. To attract more users, the city put eight computer stations in the zone. They pull in about 250 users a month, Cox said.

Local governments' venture into uncharted territory also raises questions about community needs that private companies don't often grapple with.

"Do we really want people checking their e-mail while watching a Little League game?" mused Jack Belcher, Arlington's chief information officer. He and his colleagues are still debating whether there should be WiFi at a new sports facility in Barcroft Park.

In Alexandria, anybody with a computer equipped for wireless access can use the service -- and most newer computers are -- though it probably won't work indoors or much farther than King Street. Consumers can click on the wireless icon on their laptop and choose "Wireless Alexandria" from the list of available networks, Fifer said.

Alexandria resident Che Jarrell, 34, a public policy analyst, has used the service to send e-mails fountainside at City Hall and from bookshops and coffeehouses.

"I think it's wonderful," Jarrell said. "I think every municipal government should offer it as a public good. It has positive benefits -- helping the populace in a city to be more linked to information."
http://www.washingtonpost.com/wp-dyn...060901770.html



Most Unwired Cities Survey

Wireless Internet access is growing nationwide. Whether at work, at home or on the go, people now have more choices of where and how they access, share and enjoy information and entertainment.

Intel's 3rd Annual "Most Unwired Cities" survey ranks the top 100 U.S. cities and regions for the greatest wireless Internet accessibility. This year's survey reveals a growing number of diverse locations - both indoors and outdoors - where people can log on and connect to the Internet without wires.+ Today, wireless hotspots can be found at coffee shops, colleges and hotels, but they're also popping up at skate parks, pipe shops, gas stations, bowling alleys and golf courses.

Below are the top 100 cities and regions in the United States for wireless Internet accessibility, where you can unwind and unwire:

1. Seattle-Bellevue-Everett- Tacoma, Wash.
51. Ventura, Calif.

2. San Francisco-San Jose- Oakland, Calif.
52. Knoxville, Tenn.

3. Austin-San Marcos, Tex.
53. Pittsburgh, Pa.

4. Portland, Oregon - Vancouver, Wash.
54. Fresno, Calif.

5. Toledo, Ohio
55. Phoenix-Mesa, Ariz.

6. Atlanta, Ga.
56. Buffalo-Niagara Falls, N.Y.

7. Denver, Colo.
57. Providence, R.I. - Fall River- Warwick, Mass.

8. Raleigh-Durham-Chapel Hill, N.C.
58. Columbia, S.C.

9. Minneapolis-St. Paul, Minn.
59. Little Rock-North Little Rock, Ark.

10. Orange County, Calif.
60. Omaha, Nebr./Iowa

11. San Diego, Calif.
61. Tulsa, Okla.

12. Chicago, Ill.
62. Cleveland-Lorain-Elyria, Ohio

13. Boston, Mass.
63. Norfolk-Virginia Beach- Newport News, Va./N.C.

14. Washington, D.C.
64. Syracuse, N.Y.

15. Colorado Springs, Colo.
65. Indianapolis, Ind.

16. Columbus, Ohio
66. New Haven-Meriden, Conn.

17. Charlotte-Gastonia, N.C. - Rock Hill, S.C.
67. Rochester, N.Y.

18. Sacramento, Calif.
68. Memphis, Tenn.

19. Baton Rouge, La.
69. Tucson, Ariz.

20. Miami-Ft. Lauderdale, Fla.
70. Dayton-Springfield, Ohio

21. New York-Nassau-Suffolk, N.Y. - Newark, N.J.
71. Wichita, Kans.

22. West Palm Beach-Boca Raton, Fla.
72. Mobile, Ala.

23. Dallas-Fort Worth-Arlington, Tex.
73. Honolulu, Hawaii

24. Los Angeles-Long Beach, Calif.
74. Riverside-San Bernardino, Calif.

25. Kansas City, Mo./Kans.
75. El Paso, Tex.

26. Milwaukee-Waukesha, Wis.
76. Middlesex-Somerset- Hunterdon, N.J.

27. Nashville, Tenn.
77. Johnson City-Kingsport, Tenn. - Bristol, Va.

28. Houston, Tex.
78. Akron, Ohio

29. Melbourne-Titusville-Palm Bay, Fla.
79. Grand Rapids-Muskegon - Holland, Mich.

30. Albuquerque, N.M.
80. Bergen-Passaic, N.J.

31. Hartford, Conn.
81. Greenville-Spartanburg- Anderson, S.C.

32. Charleston-North Charleston, S.C.
82. Springfield, Mass.

33. Salt Lake City-Ogden, Utah
83. Oklahoma City, Okla.

34. Tampa-St. Petersburg- Clearwater, Fla.
84. Worcester, Mass.

35. St. Louis, Mo.
85. Stockton-Lodi, Calif.

36. Jacksonville, Fla.
86. Louisville, Ky./Ind.

37. Detroit, Mich.
87. Birmingham, Ala.

38. New Orleans, La.
88. Monmouth-Ocean, N.J.

39. Richmond-Petersburg, Va.
89. Augusta, Ga. - Aiken, S.C.

40. Vallejo-Fairfield-Napa, Calif.
90. Jersey City, N.J.

41. San Antonio, Tex.
91. Sarasota-Bradenton, Fla.

42. Las Vegas, Nev.
92. Gary, Ind.

43. Cincinnati, Ohio
93. Fort Wayne, Ind.

44. Baltimore, Md.
94. Daytona Beach, Fla.

45. Ann Arbor, Mich.
95. Wilmington, Del. - Newark, Md.

46. Albany-Schenectady-Troy, N.Y.
96. Allentown-Bethlehem- Easton, Pa.

47. Harrisburg-Lebanon- Carlisle, Pa.
97. Youngstown-Warren, Ohio

48. Greensboro-Winston- Salem-High Point, N.C.
98. Bakersfield, Calif.

49. Orlando, Fla.
99. Scranton-Wilkes-Barre- Hazleton, Pa.

50. Philadelphia, Pa.
100. McAllen-Edinburg-Mission, Tex.


The survey was sponsored by Intel Corporation and conducted by Bert Sperling, a researcher who specializes in conducting and analyzing data for the nationally known "Best Places" surveys.

Survey findings are based on the number of commercial and public or "free" wireless Internet access points (hotspots), airports with wireless Internet access, and broadband availability. The survey also included community wireless Internet access points, local wireless networks and wireless e-mail devices. The metro areas included in the survey were the 100 largest in the United States, and based on the definitions of Metropolitan Statistical Areas from the U.S. Census Bureau. The data was also calculated at the per-capita level to determine how many people share wireless Internet hotspots within a given city or region. Data was collected from a variety of industry sources between Jan. 1 and April 15, 2005, and weighted across a 100-point scale to allow comparison between categories.
file://localhost/C:/My Documents/News and Information/Articles (single-file html, pdf, doc etc)/Most Unwired Cities Survey .html



No Fi for you!

Some Cafe Owners Pull the Plug on Lingering Wi-Fi Users
Glenn Fleishman

The staff at Victrola Café & Art is sick of talking about Wi-Fi. Given the opportunity, as at a recent cupping in the back of the store to smell and taste the latest in-house roasts, the group prefers to talk about cafe culture, or how to create a nuanced light roasted coffee.

But lately, the subject of Wi-Fi - specifically, the cafe's move to cut back on the free Wi-Fi connection it provides for patrons' Internet use - has been impossible to avoid. "It's distracting," said Jen Strongin, a co-owner.

Victrola started providing free wireless access two years ago after customers asked for it. As in hundreds of other cafes, the owners hoped it would encourage regulars and infrequent patrons to buy more food and drinks. But there was also a disadvantage, staff members said: the cafe filled with laptop users each weekend, often one to a table meant for four. Some would sit for six to eight hours purchasing a single drink, or nothing at all.

Even worse, when lingerers were confronted, they were bellicose. "We get yelled at by people who feel it's their right" to use Victrola's Wi-Fi without making a purchase, Ms. Strongin said. Tony Konecny, the shop's head roaster, added, "It's rarely a pleasant interaction."

But Ms. Strongin and her staff said they were more concerned that the cafe, in the Capitol Hill neighborhood, had turned into a place devoid of sound except the light clack of keys, not the focus of lively interaction that she and her husband, Chris Sharp, had intended.

So last month the cafe discontinued the free service on Saturdays and Sundays - and so far it has proved to be a sound business move. Weekend revenue is up and more seats are filled.

Victrola is part of the emerging expectation that cafes will provide Wi-Fi, free or for a fee. In the United States, more than 8,500 cafes offer Wi-Fi, based on online listings of Wi-Fi locations; 3,500 provide it at no charge, according to MetroFreeFi.com, a site devoted to free wireless access. Those offering it free include chains like Panera Bread as well as independent stores; others, like Starbucks, provide the service for a fee through T-Mobile or other providers.

Some of Victrola's customers were in a slight state of disbelief when the Wi-Fi was disconnected. One regular customer repeated over and over, "That just doesn't work for me," Ms. Strongin said.

Where some see a curse, others see a blessing. A Victrola competitor, the Zoka Roasting Company, which has two branches that offer free Wi-Fi, is doubling its store near the University of Washington, adding 1,400 square feet to accommodate 45 more seats.

"Students and young people are the majority of people who hang out at coffee shops, and they all use Internet and computers as a major part of the day," said Jeff Babcock, Zoka's owner. "And I'm not going to exclude that. If it gets too busy and packed, I'll build another one."

Independent cafes have experienced mixed results with free Wi-Fi, however, according to many cafes and hotspot operators. A cafe's nature can be classified as "office," "social," or a hybrid, according to research by Sean Savage, who recently earned his master's degree from the University of California, Berkeley. His thesis focused on the intersection of technology and society in cafes.

In his work, Mr. Savage found that an office cafe discouraged conversation and was filled with people who came alone and were focused on their work. Social cafes have customers who arrive in groups. "If you come into a place like that and it's a particularly busy time, you get dirty looks if you open a laptop and start zoning out," Mr. Savage said. But the hybrid cafes were more complicated. Many of these hybrid cafes, like the Canvas Gallery in San Francisco, are a "different place at different times of day," he said.

Canvas Gallery is a bar, art gallery, music performance space and coffee shop that has tried several methods to throttle free Wi-Fi use in response to some awkward situations, like laptop users listening to music on headphones while sitting directly in front of a band that was performing.

"People are kind of tired of the laptops," said the manager, Jenny Hay. She said Canvas Gallery experimented with no-Wi-Fi weekends, then went back to full-time availability before deciding last week to set hours of use that end at 5 p.m. weekdays and 2 p.m on weekends.

Ms. Hay said Canvas also tried creating the equivalent of a smoking section for laptop users, but quit after finding that customers moved the signs designating those tables. Ms. Hay said she was still eager to have Wi-Fi users but at appropriate times of day.

Samovar Tea Lounge, also in San Francisco, tried several strategies to discourage lingerers; it was previously an Internet cafe, and some of the expectations from that time remained, said Jesse Jacobs, a co-owner. "When you show up here and there's row upon row of laptop users, it just kind of kills the mood," he said. The store disabled its electrical outlets at one point, but customers did not like it. Mr. Jacobs also tried turning off the free Wi-Fi at busy times, but that left some customers confused as to when the service was available.

Mr. Jacobs said the strategy most recently adopted for dealing with a lingering Wi-Fi user is to have staff members ask, extremely politely and with increasing frequency, whether the patron needs food or tea. "By connecting with them, it's a rare time that there's a problem," Mr. Jacobs said. Ms. Strongin, the Victrola owner, recognizes she cannot force patrons to be gregarious. "Not everybody wants to talk to someone else in the cafe," she said.
http://www.nytimes.com/2005/06/13/te...gy/13wifi.html



T-Mobile: 450,000 People Paid to Use Wi-Fi
Bruce Meyerson

T-Mobile USA disclosed user statistics from its Wi-Fi business for the first time Monday, reporting that 450,000 customers have paid to access the wireless Internet service in the past three months.

The cell phone company declined to provide a year-ago customer tally for comparison, but did release figures showing a sharp increase in usage for the service, which provides high-speed Internet access for laptops at locations such as Starbucks coffee shops, airports and hotels.

For example, T-Mobile Hotspot users are staying online an average of 64 minutes per login in 2005, up from 45 minutes last year and 23 minutes in 2003. The total number of log-ins has totaled 3 million in the past three months, vs. about 8 million in all of 2004.

The Wi-Fi service is a key business for T-Mobile, which unlike many of its mobile phone rivals is not upgrading its cellular network to deliver high-speed Internet access in addition to phone service.

The company, a unit of Deutsche Telekom AG of Germany, does not own the rights to use as large a swath of the airwaves as the competition. It needs to reserve enough of that network capacity for voice service to ensure that its 18.3 million mobile phone subscribers can make and receive calls.

A Wi-Fi connection can be 25 to 100 times faster than a cellular-based Internet service, but the signal can't reach much farther than a few hundred feet from a hotspot. Users of T-Mobile Hotspot can pay by the month, per week or per day.

T-Mobile disclosed the user statistics as it announced an expansion in the number of locations where customers can access the service in the United States and overseas.

The new locations include roaming access throughout 39 more airports in North America for a total of 72, as well as guest rooms at 525 more hotels in the Marriott, Hilton, Ritz-Carlton, Doubletree and Renaissance chains. Previously, the service was only available at Hyatt and Red Roof Inn hotels.

Combined, there will now be 5,700 U.S. locations and 6,500 in Europe.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS



Some Good News For Apple

Research company NPD Group recently released some numbers showing that iTunes is more popular than most peer-to-peer file-trading networks.

NPD's MusicWatch Digital service issued a report stating that iTunes was tied with LimeWire for second place in the hearts of music downloaders. Of course, comparing iTunes with a wide-open P2P is kind of like, dare we say, comparing apples to oranges, with one company legally selling songs online, while the other just makes it easier to folks to swap free tunes on the Internet.

In NPD's latest top 10, which reflects online music downloading that took place during March of this year, P2Per WinMX grabbed the No. 1 spot. Other players included P2P outfits Kazaa, BearShare, Morpheus, Ares Galaxy and iMesh dominating the chart. However, legal song-sellers Napster and the Real Player Store also made a strong showing, with the former placing seven and the latter clocking in at the No. 9 position.
http://www.pollstar.com/news/viewnews.pl?NewsID=4061



One-Fifth of Web Users Prefer Online News—Nielsen
Lisa Baertlein

Nearly one-fifth of Web users who read newspapers now prefer online to offline editions, according to a new study from Internet audience measurement company Nielsen//NetRatings.

The first-time study from Nielsen//NetRatings found that 21 percent of those Web users now primarily use online versions of newspapers, while 72 percent still read print editions.

The remaining 7 percent split their time between online and offline editions. Comparable historic statistics were not available.

"A significant percentage of newspaper readers have transferred their preference from print to online editions," said Nielsen//NetRatings senior media analyst Gerry Davidson.

The statistics reflect a broad trend in the newspaper publishing industry.

U.S. newspaper circulation has been falling as audiences increasingly turn to the Internet for news -- both on newspaper-run sites and through companies such as Yahoo Inc and Google Inc., which display news gathered from various sources.

Newspaper publishing revenue is growing slowly, but remains in a prolonged slump. Internet companies such as Google and Yahoo have been posting booming revenue gains on a revival in more traditional online advertising, as well as fast-growing Web search ads.

In response to the increased traffic to news sites, online editions of newspapers often now include frequent news updates, original content, message boards and editorial blogs.

The online edition of the New York Times Co.'s flagship paper, www.NYTimes.com, is the most visited U.S. newspaper site. It had an audience of 11.3 million in May, up 25 percent from a year earlier, according to Nielsen//NetRatings.

USATODAY.com had the second-biggest online reach, with an audience of 9.2 million in May, up 15 percent. Rounding out the top three was washingtonpost.com whose audience in May grew 10 percent year on year to 7.4 million.

Visits to Yahoo News and Google News, which were not counted in the study, also have been on the rise.

In May, Yahoo News had an online audience of 23.8 million and the audience for Google News was 7.1 million, respectively up 3 percent and 4 percent from a year ago, according to Nielsen//NetRatings.

(Additional reporting by Paul Thomasch in New York)
http://go.reuters.com/newsArticle.jh...toryID=8820047