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Old 07-08-03, 10:24 PM   #1
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Join Date: May 2001
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Default Peer-To-Peer News - The Week In Review - August 9th, '03

The PowerFile C200 DVD Studio Jukebox.
Need more than one? No problem.
Daisy-chain a pile!

Casting a Wide Network

I can’t help noticing that so-called Private Networks are growing by leaps and bounds. Not that the RIAA is the cause of this mind you, since the trend started long before their lawsuits were announced - and let’s face it, how much effect can lawsuits have if the user numbers for perhaps the largest file sharing network in the world remain unaffected, regardless of what the press is (mis)representing? So ok, in response to several factors Private Networks are fast increasing in number, but the real story’s in content. The amount of files in each network is now increasing at record speeds.

By “private” I mean file sharing programs that require users to know a password or network name or some secret handshake routine to log into an already established club. For instance here at this board I’ve helped put together a couple of networks using a handy little program called Waste, invented by Justin Frankel of Winamp/Gnutella fame and reminiscent of corporate P2P’s such as Groove Networks. We got it going eight weeks ago and it’s settled into a comfortable group with about 12 regulars sharing a prodigious amount of content well away from the prying eyes of the bad guys. It’s pretty stealthy. As a matter of fact nobody would have any idea anything at all is taking place – even if they were watching, even the ISP’s themselves, because all functions including search and even chat are thoroughly encrypted. The only way to get a handle on activity is to actually join the group, and even then you’d have to be a direct recipient of a transfer to know what was up. So our little corner of the internet hums along 24 hours a day in relative anonymity, unaffected by the swirling tempest of hysteria surrounding the more famous P2P’s like KaZaA and Morpheus.

And if it isn’t one thing it’s another.

One day P2P is accused of destroying capitalism, the next it’s a murky hot-tub bobbing with psycho pedophiles. I mean even the FTC, the guys who regularly yawn when cars roll over or blow up in rear enders, even they have jumped onto the anti P2P bandwagon, issuing “Consumer Alerts” about the “risks of file sharing”, including by the way the really scary legal ones sanctioned by the government. But here’s a news flash: opening my email is a lot more dangerous than swapping stuff on the net and I should know, I do a lot of both each day. But leaving aside the government’s wholesale sellout to giant media companies, its abandonment of the people and journalist’s lax reporting habits, file sharing is what it is; a simple and elegant way to take what you have and get it somewhere else. Like any great invention it fulfills a need and does it better than what came before. It’s this generation’s “way better mousetrap” and they’ve taken to it like nobody’s business. It’s no more evil, immoral or dangerous than a Xerox machine, FedEx or the U.S. Mail. It’s just a lot easier to use, and a hellava lot more fun. Believe me, not only are P2P users not pariahs they don’t feel like them and they shouldn’t. They’re kind of like the first Americans who ate tomatoes, or “love apples” in the 1800’s. They swapped them among themselves and grew them until they had a decent enough supply to play around with. The local ignoramuses thought tomatoes were poisonous and kept waiting for the eater to keel. When he didn’t they figured there must be some nasty black magic happening – and they continued to shun the tasty orbs - but now so many people enjoy them it’s tough getting through a day without having one in something, and nobody remembers what the fuss was about. Tasty, easy to copy and good for you too. A juicy win for all involved and a lesson worth remembering.

Which brings me back to these private networks.

So here we are playing around with these smaller hook-ups for whatever reason, whether it’s focused content, better socialization, or just plain curiosity and what do we find? People are coming in from all over the world asking to participate - and bringing in so much content the quantity of available files is literally increasing exponentially. Just this week I started a new network where one user alone brought in 900 gigabytes of mixed media on five big drives. That’s nearly a terabyte in one box! A number like that would’ve been greeted with disbelief until recently but yet there it was, sitting in the folders I was browsing. I can’t help mulling over the fact that it’s more content than the average Napster local server had at its peak, and more than the Fasttrack network carried in the early days. Even today it’s a healthy fraction of the total Fasttrack network, the largest file sharing system in the world. But then again, maybe Fasttrack isn’t. Think about that for a second. If I can find another 5 thousand people like the one who dropped in Tuesday morning I’ll have the biggest file sharing system on earth – and no one outside of my network would know. Totally private, completely anonymous and far removed from the heat of publicity and the resultant litigious maniacs. I could be presiding over more content than is accessible via KaZaA and Grokster and doing it in full stealth, and I’d only need a hundred or so users from each state to pull it off, less if I went international. But the thing is, how do I know it isn’t being done already? Indeed, who can say that on some DC hub or customized Waste network there isn’t that much content – or more - floating around a tasty little system right now? If you each filled a modified CD carousel (or a PowerFile) with 200 17-gig capacity DVDs you’d have your 3.4 terabytes right there, so you’d only need about 2500 members to beat the Fasttrack numbers, and 2500 is not a lot. A Fasttrack supernode handles 300 people, so you wouldn’t even need all the people found on just ten of those. This is more than theoretical, it’s more than doable – it’s possibly already happening! And nobody knows about it, unless they’re already in on it.

And let me tell you, the thought of that makes me smile.



Court Blocks Some File-Trading Subpoenas
John Borland

A Massachusetts court has blocked several recording industry subpoenas that are aimed at college song swappers, saying the universities involved are not immediately required to divulge the alleged file traders' identities.

The decision comes after officials at the Massachusetts Institute of Technology and Boston College challenged subpoenas from the Recording Industry Association of America (RIAA), saying the trade group's requests for information had not been legally filed.

The judge's decisions give the universities--and the anonymous students or staff file traders who are the ultimate target of the subpoenas--some breathing room. The colleges were objecting only on the technical legal grounds that the RIAA had filed the subpoenas in the wrong court, which means the trade group still can revise its requests in order to comply with the judge's order.

"Ultimately, we will file those subpoenas wherever the courts require us to," an RIAA spokesman said. "This is a minor procedural issue and does not change an undeniable fact-- when individuals distribute music illegally online, they are not anonymous, and service providers must reveal who they are.”

Critics of the RIAA process welcomed even a limited ruling, however.

"I hope this will give other people hope," said Cindy Cohn, legal director of the Electronic Frontier Foundation, a group that has emerged as the chief critic of the recording industry's tactics. "It will be a lot easier for people to address problems in the RIAA subpoenas if they don't have to go to D.C. to do it."

The legal skirmishing in Massachusetts is just one part of a nationwide avalanche of RIAA subpoenas that the group is sending as part of an unprecedented campaign against Internet file trading on networks such as Kazaa and Morpheus.

Since late June, the RIAA has issued more than 900 subpoenas for information that would identify Internet service provider subscribers or university students who have allegedly offered copyrighted material online. The requests for information are a prelude to what the trade group has said will likely be thousands of copyright infringement lawsuits filed against individual file traders, beginning later this month.

Most of those subpoenas have been issued through an unorthodox legal process that's supported by a recent federal court case against Verizon Communications, which fought an earlier round of RIAA subpoenas last year. Verizon had argued that allowing a private group such as the RIAA to initiate subpoenas for subscriber information before any case had been filed was a violation of individual privacy and an unconstitutional process.

Both a lower court and an appeals court rejected Verizon's arguments, however, paving the way for the current wave of industry subpoenas.

The RIAA has used a single Washington, D.C., federal court as a clearinghouse to issue all the subpoenas, no matter their destination. MIT and BC's objections were based on that jurisdictional issue. They argued that they were not subject to orders the federal court issued.

In decisions issued late Thursday, the Massachusetts court agreed, saying federal legal rules required valid subpoenas to be issued in the local court.

The RIAA has also filed separate motions with the federal court asking for enforcement of the MIT and BC subpoenas. That court could rule differently from its Massachusetts counterpart, setting up a conflict between the two jurisdictions.

A California ISP, the SBC Communications subsidiary Pacific Bell Internet Services, has filed a more comprehensive challenge to the RIAA subpoenas. That case will be closely watched in the aftermath of the Massachusetts rulings.


Stealing The Internet
Jeff Chester, Steven Rosenfeld

Ever stop to wonder what is really happening to the Internet these days?

The crackdown by the music industry on illegal downloading tells just part of the story. Even with the dot-com bust, the digital boom is here, as high-speed connections, faster processors and new wireless devices increasingly become part of life. But the thousands of lawsuits are not just about ensuring record companies and artists get the royalties they deserve. They're part of a larger plan to fundamentally change the way the Internet works.

From Congress to Silicon Valley, the nation's largest communication and entertainment conglomerates -- and software firms that want their business -- are seeking to restructure the Internet, to charge people for high-speed uses that are now free and to monitor content in an unprecedented manner. This is not just to see if users are swapping copyrighted CDs or DVDs, but to create digital dossiers for their own marketing purposes.

All told, this is the business plan of America's handful of telecom giants -- the phone, cable, satellite, wireless and entertainment companies that now bring high-speed Internet access to most Americans. Their ability to meter Internet use, monitor Internet content and charge according to those metrics is how they are positioning themselves for the evolving Internet revolution.

The Internet's early promise as a medium where text, audio, video and data can be freely exchanged and the public interest can be served is increasingly being relegated to history's dustbin. Today, the part of the Net that is public and accessible is shrinking, while the part of the Net tied to round-the-clock billing is poised to grow exponentially.

One front in the corporate high-tech takeover of the Internet can be seen in Congress. On July 21, the House Subcommittee on Telecommunications and the Internet held a hearing on the "Regulatory Status of Broadband." There, a coalition that included Amazon.com, Microsoft, Yahoo, Apple, Disney and others, told Congress that Internet service providers (ISPs) should be able to impose volume-based fee structures, based on bits transmitted per month. This is part of a behind-the-scenes struggle by the Net's content providers and retailers to cut deals with the ISPs so that each sector will have unimpaired access to consumers and can maximize profits.

The industry coalition spoke of "tiered" service, where consumers would be charged according to "gold, silver and bronze" levels of bandwidth use. The days where lawmakers once spoke about eradicating the "Digital Divide" in America has come full circle. Under the scenario presented by the lobbyists, people on fixed incomes would have to accept a stripped-down Internet, full of personally targeted advertising. Other users could get a price break if they receive bundled content -- news, music, games -- from one telecom or media company. Anybody interested in other "non-mainstream" news, software or higher-volume usage, could pay for the privilege. The panel's response was warm, suggesting that the industry should work this out with little federal intrusion. That approach has already been embraced by the industry-friendly Federal Communications Commission.

Meanwhile, in the courts, there has been a rash of new litigation spurred by the Recording Industry Association of America (RIAA)'s pursuit of people who have illegally shared copyrighted music. The music industry no doubt hopes to discourage file-swapping piracy, and some big telecom companies, such as SBC Communications, have counter-sued, saying they will protect their clients' privacy. While that's good public relations, there's more to this story as well. Telecoms, like most big corporations, don't want other businesses, let alone the government, interfering in their operations -- so there's plenty of reasons to counter-sue -- even if the record companies and telecoms have parallel stakes in privatizing the Net.

But there's also a technologically insidious element to this side of the story. The software now exists to track and monitor Internet content on a scale and to a degree that previously hasn't been possible. The RIAA is taking people to court because it has the technology to track illegal Internet file swapping. This level of content-tracking is the next-generation application of what's been developed to keep children and teenagers from viewing porn at the local library or home. Consider this typical bit of sales arcana from the Web site of Allot Communications, which says its software can track and filter Internet communications and use that analysis to bill consumers.

"Allot Communications provides network traffic management and content filtering solutions for enterprises, IP service providers, and educational institutions... Allot's QoS [quality of service] and service-level agreement enforcement solutions maximize return on investment by managing over-subscription [unintended uses], throttling P2P [peer-to-peer, the music piracy software] traffic and delivering tiered classes of services."

This new world of metering, monitoring and monetizing Internet content has prompted new business ventures, such as cable firms exploring partnerships with the videogame industry, where there's plenty of money to be made in high-volume interactive uses. In fact, the reason Hollywood has delayed the deployment of next-generation digital television -- besides their fear of digital piracy -- is they have not yet figured out how to impose their pricing model -- to extend their current distribution and sales monopoly.

Of course, the last concern in corporate boardrooms and Congress is how the privatization of the Net will affect free speech and the public interest. Just as C-Span and public broadcasting were crumbs thrown to the public the last time new communications technologies were developed, there's been little talk about insulating public-interest uses from a more 'metered' Internet.

There is undoubtedly a legitimate business case to be made for having people pay for emerging high-bandwidth uses, but whether people will be charged to see streamed videos of political candidates or public meetings is another matter. Moreover, users need to know what part of the 'Net will be public and accessible and what part will be billed to credit cards - - and this is unclear.

While there needs to be a balance between private sector goals and public policy needs, that's hardly a topic of discussion on the Internet's frontline. Currently, America's media giants are planning the equivalent of a 19th-century land grab in cyberspace to ensure they will profit mightily in the 21st century. Metering data transmissions and monitoring content is how they will get there. And the tools and political climate to achieve this are here.

This century's new media giants are now working with Congress, Federal Communications Commission chairman Michael Powell and their industry partners to transform the Internet. The only open question is whether the public will influence this transformation before it's too late.


European Firms Threaten Mass P2P Lawsuit
Matthew Broersma and Munir Kotadia

Legal services giant Landwell says it will prosecute 4,000 peer-to-peer file-traders in Spain because they have been identified as "serious" unauthorized downloaders of copyrighted songs, films and software.

If it goes ahead, the action will be the largest crackdown on P2P users in Europe to date.

Landwell, the legal arm of PricewaterhouseCoopers, earlier this month issued the threat on behalf of clients that have remained unnamed to avoid a backlash by consumers. The company said it had gathered data such as IP addresses on 95,000 file-traders by tapping into P2P systems with older versions of the P2P clients, which don't encrypt such information.

Landwell said it is working with Spain's Technological Investigation Brigade (BIT) on the prosecutions and expects the case to appear in court next month. The action mimics a large-scale assault on alleged file-swappers in the United States by the Recording Industry Association of America (RIAA), which is in the process of filing several hundred lawsuits against them.

However, civil liberties and Internet user groups say they doubt whether the case is valid under Spanish law, or indeed whether it will even be filed, calling it a scare tactic to dampen the use of P2P systems.

Article 270 of the Spanish penal code specifically allows people to share files as long as there is no profit involved. Carlos Sanchez Almeida, a lawyer specializing in Internet issues, pointed out that this provision has led to several previous cases related to P2P networks and entertainment-related files being thrown out of court.

"To make (files) freely available to other users can constitute a civil liability, but never a crime, when it lacks...the spirit
of profit," he wrote in an opinion published on Spanish civil rights Web site Kriptopolis.

Xavier Ribas, the principal Landwell lawyer on the case, asserted in a responding piece that while people might not be selling the files, "profit" could be defined as acquiring a copyrighted work for free. "In the case of works of entertainment, the utility or benefit can arise from the simple act of enjoyment of the work: to listen to a song or see a film without having to pay for it," he wrote.

European Digital Rights (EDRI), a coalition of European digital rights groups, said the case was insubstantial and would probably never be filed, noting that Ribas said in a recent radio interview that the lawsuit had not yet been presented to the court.

"Analyzing and comparing the arguments, it becomes quite clear that the lawsuit is nothing more than an attempt to create fear amongst Spanish users," EDRI's David Casacuberta said in a statement.

Spain's Association of Internet Users (Asociacion de Internautas) said Landwell was unlikely to be able to track down individual users based on the information they had acquired so far. "It is just their IP address, and it's up to a judge to issue an order to disclose the user identity and check if some illegal activity has been taking place", he said.

The Association of Internet Users has joined a storm of protest in Spain against the legal threats, offering the group's lawyers to anyone who is targeted by suits.

Legal proceedings against U.S. peer-to-peer users kicked off earlier this month when the RIAA sent out subpoenas to ISPs in preparation for filing hundreds of lawsuits against P2P users. Web traffic monitoring company Nielsen/NetRatings said that since June, illegal file-sharing activity in the United States has fallen by around 15 percent.

Neither Landwell nor PricewaterhouseCoopers returned requests for comment.


Movie Biz Targets P-to-P Pirates
Ursula Seymour

Following the example of the music business the movie industry is targeting individual peer-to-peer pirates with an advertising campaign currently running in cinemas and on television across the U.S.

The ads, which can be viewed at RespectCopyrights.org, are designed to show the pirates how their activities affect the 'little guys' in the movie business, hoping to shift attention away from the million dollar grossing studios and stars.

Rich Taylor of the Motion Picture Association of America (Miaa), which is running the campaign, told U.S. news site The Pittsburgh Channel: "I think (the public) doesn't get that (movie piracy) is not a victimless crime. They think the only people impacted are those on the red carpet who have plenty of money".

The Miaa has long targeted more traditional pirates, selling bootlegged videos of blockbusters, but now it is realising the treat posed by peer-to-peer movie swappers. It estimates that the U.S. motion picture industry loses around US$3bn a year to pirates, but this figure does not include the losses from internet piracy as they are too hard to calculate.

But the ads are designed to show that these losses are not just hitting the fat cats of the industry and feature a whole host of people who work in movies, such as cinema staff, set painters and musicians.

They give four reasons why people shouldn't pirate movies. Firstly, punters are told they are cheating themselves as the quality of pirated movies are poor and that money lost in cinema takings means less films can be made. Secondly, pirates threaten the livelihood of the 500,000 ordinary Joes who work in the business. Thirdly, the ads claim that by swapping files on a peer-to-peer network you compromise the security of your PC and leave yourself open to legal action by making yourself "a distribution source for illegal downloading of movies". Finally, you are breaking the law.

This last point is one on which, so far, the movie industry has not been as tough as the music business. The Recording Industry Artists Association (Riaa) is using the Digital Millennium Copyright Act to bring legal action against around 75 people per day, including individual file swappers. So far the Miaa has stuck to going after the big guys -- those services set up to facilitate movie piracy, but Taylor says that it still considers pursuing individuals as an option.

In a separate move, designed to keep itself and its employees safe from such legal action, AOL Time Warner Inc. has taken steps to stop its staff from indulging in peer-to-peer file swapping. In an internal memo issued this week it said it plans to scan networks, desktops and laptops to check for peer-to-peer software and MP3 audio files, put in a firewall to stop P2P software from being downloaded, remove all P2P or unlicensed software, take disciplinary action against persistent offenders.

In the current climate of P2P persecution, we can only imagine that many such companies will follow suit.


RIAA Rocks Around the Clock
Cynthia L. Webb

The Recording Industry Association of America's dragnet for people who illegally swap copyrighted music online is the story that just keeps on giving. And like any good epic about money, theft and greed, this one is gaining all sorts of new angles as it rolls along, from college students to senators to pornographers.

Let's start with the college students. The RIAA still is serving hundreds of subpoenas on students and colleges and universities, where high-speed Internet connections make it easy to trade music and other digital files. Earlier this year, several students settled lawsuits with the RIAA for allegedly setting up Napster-like trading systems.

But the trade group, which represents the major music labels, is aware that it could be scaring off potential customers, considering that college-age students are a sweet spot demographic for music sales. With that in mind, the RIAA is working on a backup plan to appease college students, The Los Angeles Times reported today. "Record-industry executives and online music companies are quietly working with colleges and universities to offer legitimate sources of free or deeply discounted music to students if the schools agree to take steps to deter piracy on campus networks. The goal is to give students a carrot to go along with the stick being waved by the Recording Industry Assn. of America, which has been attacking piracy with lawsuits. An online music service picked by a university would let students play an array of songs at little or no cost, potentially curtailing the use of hotbeds of unauthorized file-sharing such as Kazaa. The fledgling online music services involved in the talks are eager to boost their profile among college students and see discounts as a way to attract new customers who eventually will pay full fare," the newspaper said.
• The Los Angeles Times: New Tactic Planned In AntiPiracy Campaign (Registration required)

Wired last week reported on similar efforts to get colleges and the recording industry to work together. "University officials are working with the music and movie industry to find a peaceful solution to the piracy problem, even as they're fighting a firestorm of subpoenas seeking information on their file- swapping students. The universities are exploring technologies that would control illegal peer-to-peer file sharing. In addition, they are working with digital music and movie companies to offer downloading services tailored to universities," Wired music said last week. "The administrators and music executives are trying to solve the piracy problem because both suffer from it. Universities have to deal with the administrative headaches of subpoenas and clogged computer networks, while the record industry is losing sales to its most important group of customers."
• Wired: RIAA, Colleges Seeks Piracy Fix

But "working together" might not be good enough to ease criticism of the RIAA's bullish tactics to end illegal file swapping, especially considering the amount of ink devoted to describing how many of the people named in subpoenas are grandparents and adolescents. There's also no correspondence between the likelihood of a subpoena and the number of songs traded.

All this has attracted the attention of freshman Sen. Norm Coleman (R-Minn.), chairman of the Senate permanent subcommittee on investigations, has launched a probe into the RIAA's lawsuit campaign. He sent a letter to the RIAA yesterday, demanding information on the subpoenas and how the RIAA collects evidence against file swappers, according to various media reports.

Coleman questioned whether the RIAA's tactics have gone too far. In an interview with washingtonpost.com last night, he said he is hopeful that the file-sharing community and recording industry can reach an amicable settlement on the issue. "It would be worthwhile to bring them together so we're not making criminals out of 11-year-olds," Coleman told washingtonpost.com's Robert MacMillan.

The RIAA, responding to Coleman's query, said it would happily comply. "The RIAA defended its enforcement campaign as 'an appropriate and measured response to the very serious problem of blatant copyright infringement confronting the entire music community,'" The Associated Press said. "In the conference call, Coleman acknowledged that he used to download music from Napster, the file-sharing service that a federal judge shut down for violating music copyrights. 'I must confess, I downloaded Napster, and then Napster was found to be the wrong thing,' he said. 'I stopped.'"

While Coleman does not condone illegal file sharing, he said in a statement cited by CNET's News.com, that the "industry seems to have adopted a 'shotgun' approach that could potentially cause injury and harm to innocent people who may have simply been victims of circumstance, or possessing a lack of knowledge of the rules related to digital sharing of files."

Coleman is not the only one critical of the subpoena party. Several universities, along with telecommunications giant SBC Communications, are contesting the subpoenas, largely on procedural grounds," CNET’s News.com said.
• The Associated Press via Kansas City.com: Senator Launches Investigation Into RIAA Piracy Crackdown
• CNET's News.com: Lawmaker Seeks Info On RIAA Dragnet

Pacific Bell Internet Service, a unit of SBC, sued the recording industry and others tied to the subpoena woes in federal court on Wednesday. The Boston Globe explained more about Pacific Bell's stance: "The 1998 law the industry is using to obtain the subpoenas, the Digital Millennium Copyright Act, was written before file-sharing software programs like Kazaa and the now-defunct Napster were created, Pacific Bell argued. Asking the court to quash the subpoenas, the SBC subsidiary said the industry group's use of the act threatens constitutional rights of anonymous expression and due process of law because the industry obtained the subpoenas without the approval of a judge."

The company "said a cascade of subpoenas and 16,700 take-down notices from an electronic 'bounty hunter' are turning it from an Internet service provider into the Internet police," The San Jose Mercury News said. "Pac Bell said it has been hit with more than 300 subpoenas in the past month from the Recording Industry Association of America and IO Group, an operator of sexually explicit Web sites. Each demanded the names, addresses and, in some instances, the e-mail addresses of subscribers who downloaded copyrighted songs or images. This follows 16,700 take-down notices from MediaForce, a New York-based detection company that works for Columbia Pictures and Paramount Pictures to ferret out Internet file- swappers."

Gigi Sohn, president of consumer advocacy group Public Knowledge, told the newspaper: "This is just the beginning of a revolt by ISPs other than Verizon." Recall that Verizon unsuccessfully tried to keep the RIAA from getting the names of several of its high-speed DSL subscribers accused of downloading thousands of copyrighted songs using the Kazaa file-sharing software.

According to Reuters, the RIAA dismissed SBC's objections to subpoenas as "procedural gamesmanship," and said the telecom was recycling old issues.
• The Boston Globe: SBC Challenges File-Sharing Subpoenas
• The San Jose Mercury News: Pac Bell Internet Sues Over Subpoenas
• Reuters: RIAA Song-Swap Subpoenas Spur Senate Inquiry
• The New York Times: Efforts To Stop Music Swapping Draw More Fire (Registration required)


Despite all this back and forth between the RIAA, Internet service providers and consumers, there seems to be a laissez-faire attitude among the populace toward illegal file-sharing. A Pew Internet and American Life Project survey released yesterday found that two-thirds of Internet music downloaders are not concerned about whether the music files they download are copyrighted or not. The Associated Press reported that the study showed that "35 million American adults use file-sharing software, about 29 percent of Internet users." And no surprise here, younger Americans -- ages 18 to 29 -- were the least to worry about copyrights. Seventy-two percent said they weren't concerned, according to the survey. "Our data shows significant numbers didn't care about copyrights," Lee Rainie, the director of Washington-based Pew, told the wire service. "The (threatened) lawsuits maybe have gotten their attention."
• The Associated Press via The Washington Post: Downloaders Don't Think of Copyright Laws
• BBC News Online: Music Swappers 'Dismiss Legal Fears'

Links, More: http://www.washingtonpost.com/wp-dyn...-2003Aug1.html


Who Cares About Copyright?
A survey shows that the majority of people who download music over the Net are unfazed by copyright issues.

WASHINGTON: A massive music-industry campaign to change public attitudes over the past three years about copying music over the Internet has had little effect on Internet users, according to a survey.

Two-thirds of U.S. residents who copy digital music online say they do not care if that music is copyrighted, up from 61 percent three years ago, the nonprofit Pew Internet and American Life Project found. The recording industry has launched an aggressive legal and publicity campaign against unauthorized song downloading. Prominent music stars have spoken out against the practice, while the industry has filed lawsuits against Napster, Kazaa and other "peer to peer" software providers that allow users to copy songs directly from each others' hard drives.

But only 27 percent of the 1,500 Internet users polled between March and May of this year said they cared whether the music they downloaded was copyrighted or not, the study found.

"Americans' attitude toward copyrighted material online has remained dismissive, even amidst a torrent of media coverage and legal cases aimed at educating the public about the threat file-sharing poses to the intellectual property industries," the report said.

The Recording Industry Association of America downplayed the survey's findings, saying that Internet users were polled before the industry announced it would take song-swappers to court. Two-thirds of young Internet users polled by Forrester Research said the threat of jail or fines would stop them from downloading, a spokesperson said.

"We believe the most powerful deterrent is the message that uploading or downloading copyrighted works without permission is against the law," the spokesperson said. The Pew survey had a margin of error of plus or minus three percentage points.


KaZaA CEO Speaks Out

To the RIAA, Nikki Hemming is public enemy No. 1. That didn't stop the elusive CEO from talking with 'Tech Live.'
Jim Goldman

Her company's technology may be dragging the entertainment industry, kicking and screaming, into a future of file swapping, but the entertainment industry would rather drag Nikki Hemming and her company into court.

Such is the pitched battle shaping up between recording companies and the tiny, Australian software company. Maybe you've heard of it: Sharman Networks, the company that owns and operates KaZaA.

In a rare television interview -- she's sat for only one other interview, which apparently never aired -- Sharman CEO Nikki Hemming answered a host of questions about the challenges she faces running such a controversial company.

Tonight, "Tech Live" gets personal with Hemming for a first-hand look inside the company rocking the world with KaZaA. On Thursday and Friday's "Tech Live," tune in for more with Hemming, including a look at the future of her embattled company. It's an interview you won't see anywhere else.

During the interview, Hemming also responded to a host of charges leveled against her by the Recording Industry Association of America (RIAA), which has likened her to a bank robber.

A bitter battle is brewing between the RIAA's former chairperson, Hilary Rosen, and Hemming. The debate is a kind of "she said, she said," with billions of dollars and the future of the entertainment industry hanging in the balance.

"I think that they don't give a crap," Rosen said of Sharman's intentions in a recent interview with "Tech Live." Rosen has since left the RIAA for a commentator job with financial news network CNBC.

"Hilary has a job to do, and so I," Hemming said of Rosen's comments.

The RIAA vs. KaZaA. It's a fight that pits the huge music industry against the world's most popular file-sharing software program -- or file-stealing program, depending on who you talk to. KaZaA is facing a number of lawsuits filed by some of entertainment's biggest producers. The companies are asking the courts to assess penalties of $150,000 for every offense, meaning the company could be on the hook for billions of dollars in fines.

At the center of the raging debate is Hemming, a 36-year-old British expatriate living and working in Australia. She's worked for Virgin Interactive, Segaworld (a Sydney theme park that ultimately failed), and now KaZaA.

The worst possible news for the recording industry, however, seems to be that KaZaA isn't standing still, won't go away, and will not rest on its success.

"Very shortly there will be a paid-for version of KaZaA that will be ad-free and enhanced and, I think, that will be a very exciting proposition to the users," Hemming said.

She said her service and this software -- indeed the entire P2P movement -- stands to revolutionize digital content, not destroy an industry. Hemming said it'll make the industry bigger by offering more choice and getting products to consumers much faster, just as VCRs and videocassettes transformed the movie industry.

"In the end, consumers and artists are brought together by this amazing technology, and they have a level of interactivity they've never had before," she said. "And the music industry is going to benefit, and the movie industry is gonna benefit, and emerging artists, and independent artists, and people who just want to share their views. They're all going to benefit. This technology is here to stay."


Survey: Two-Thirds Of Adult Music Downloaders Don't Care About Copyrights

Two-thirds of Internet users who download music don't care whether they're violating copyright laws, according to a new survey that highlights the uphill enforcement battle facing the recording industry.

The survey published Thursday by the nonprofit Pew Internet and American Life Project estimated that roughly 35 million American adults use file-sharing software, about 29 percent of Internet users. Those figures were generally consistent with other estimates of 60 million American users across all age groups.

The Pew survey was completed before the Recording Industry Association of America announced its aggressive campaign to sue individual computer users who illegally share ``substantial'' collections of music, so it was unclear from the survey whether the campaign was discouraging online piracy.

``Our data shows significant numbers didn't care about copyrights,'' said Lee Rainie, the director for the Washington-based Pew project. ``The (threatened) lawsuits maybe have gotten their attention.''

The survey said younger Americans, ages 18 to 29, were least worried about copyrights, with 72 percent saying they weren't concerned. It said 61 percent of Americans who were 30 to 49 years old were similarly unconcerned. Full-time students were the least concerned with violating copyright, with 82 percent saying they were not worried.

Pew researchers said differences between men and women, blacks, whites and Hispanics and between income groups were not statistically significant when measuring copyright concerns.

The RIAA, the trade group for the major recording labels, said the Pew study was outdated, adding that it believes its enforcement efforts have affected attitudes toward downloading music.

``We believe that the most powerful deterrent is the message that uploading or downloading copyrighted works without permission is against the law,'' the RIAA said in a statement. ``We have worked hard to educate the public about what the law says and potential consequences, and other studies have shown that that message is beginning to take hold and will serve as an effective deterrent.''

When computer users download a copyrighted song, file-sharing software automatically makes it available for other Internet users to download, too. It is possible -- and increasingly popular -- to reconfigure the software to allow downloads but prevent sharing files, although this undermines the concept of public file-sharing networks.

The Pew survey said about 26 million American adults allow others to download music and other data files from their computers. These computer users were equally as likely to be men or women, and equally as likely to be white, black or Hispanic. But they tended to be younger, most often between 18 and 29.

The survey was based on interviews conducted during random telephone calls by Princeton Survey Research Associates during March, April and May among a sample of 2,515 adults in the continental United States. The margin for error was plus or minus 3 percent.


Gateway Gets Into Portable Music
Michael Kanellos

Gateway released its first portable music player on Tuesday as it continues to expand into consumer electronics.

The Gateway Digital Music Player combines three functions in one, according to Rick Griencewic, director of digital audio at Gateway. It can play MP3 files, it can be used as a portable storage device for shuttling data between two PCs, and it can also function as a digital voice recorder.

The device can be plugged directly into a PC through a USB slot.

"You don't have a cable you can lose, which can generate a support call," Griencewic said.

Like Sony, Hewlett-Packard and to a lesser degree Apple Computer, Poway, Calif.-based Gateway plans to come out with a wide variety of branded household gizmos that can be used, and sold, with its PCs.

Overall, Gateway plans to release 50 products fitting into 15 different product categories this year. Internally, the company has formed groups to devise products for the audio, photography, video and home networking markets.

So far the strategy has produced at least one hit. Sales of plasma TVs helped the company reduce losses in the second quarter. However, Gateway had to delay the release of its first handheld from mid-July to mid-August to conduct more testing.

Other products include DVD recorders and LCD televisions.

Two versions of the music player are on tap for this month. On Tuesday, a version containing 128MB of storage capacity hit the market at a price of $129.99. A $169.99 version holding 256MB of memory is scheduled for release Aug. 14.

These initial players use flash memory to store data. Gateway is also looking at the possibility of coming out with music players with small hard drives, as well as with portable CD players.

"It takes a little bit longer to develop a hard-drive player," Griencewic said. "We saw this as an easy way to get on the scoreboard early."

Flash player shipments should continue to rise, according to Susan Kevorkian, an analyst at IDC, because the cost per bit keeps declining. Manufacturers can now offer 256MB devices for less then $200.

"The price point (of Gateway's players) is very competitive," Kevorkian said. "The form factor and direct USB connectivity is very compelling."

One of the features that Griencewic predicted would resonate with the public is direct connectivity. Currently, the Creative Labs Nomad Muvo player accounts for nearly half of the third-party MP3 players sold on Gateway's Web site. It is also one of the few MP3 players that connects directly to PCs without a cord.

Although the new products mark Gateway's first foray into selling branded portable players, the company has sold music products before. In November 2000, Gateway came out with an MP3 player that connected to stereo systems.

However, the product, like similar jukeboxes from Compaq Computer and Dell, only stayed around for a brief period due to slow sales.


Hackers Look To Hide Communications
Robert Lemos

Hackers intent on anonymously sending data across the Internet have a new tool.

A program called NCovert uses spoofing techniques to hide the source of communications and the data that travels over the network--a potential boon to both privacy advocates and hackers, said Mark Lovelace, senior security researcher for network protection firm BindView, who unveiled the program Thursday at the Black Hat Briefings security conference here.

"I am not going to beat around the bush," Lovelace said. "If you have something to hide, you would use this--so it could help black hats (criminal hackers)."

The technique essentially creates a covert channel for communications by hiding four characters of data in the header's initial sequence number (ISN) field. The header is the part of data packets that tells network hardware and servers how to handle the information. The header also includes source and destination Internet protocol (IP) addresses. Those addresses are used to add anonymity to the communications.

Lovelace, known among the security community as "Simple Nomad," said the key to the technique is to forge the source of the IP address to look like the intended recipient of the information, while the destination IP addresses points to another third-party server on the Internet.

The hacker would then send off a data packet to the third-party server with any valid-looking information in the data fields, but the real message would be hidden in four bytes of the ISN field. The packet would contain a message indicating to the third-party server that a computer wants to start a communications session. The server would acknowledge the message, but because of the forged source address, the message would be forwarded on to the recipient.

The technique makes it almost impossible to track where the original message came from, because the data holds only the addresses of the recipient and the third-party server.

The move to the next-generation Internet Protocol, IP version 6, will make it harder to spoof the address of the sender but will allow far more data to be hidden within the headers of the packets, Lovelace said.

"There's a lot more room for data in IPV6," he said.


New Tactic Planned in Antipiracy Campaign
Jon Healey

Record-industry executives and online music companies are quietly working with colleges and universities to offer legitimate sources of free or deeply discounted music to students if the schools agree to take steps to deter piracy on campus networks.

The goal is to give students a carrot to go along with the stick being waved by the Recording Industry Assn. of America, which has been attacking piracy with lawsuits. An online music service picked by a university would let students play an array of songs at little or no cost, potentially curtailing the use of hotbeds of unauthorized file-sharing such as Kazaa.

The fledgling online music services involved in the talks are eager to boost their profile among college students and see discounts as a way to attract new customers who eventually will pay full fare.

"This is a great opportunity to tap into this university base, show them the promise of digital music, show them the compelling digital offerings," said Peter D. Csathy, president and chief operating officer of San Diego-based Musicmatch Inc.

The discussions still are in an early stage, though several executives said they hoped to launch a trial run by early next year. The biggest hurdle seems to be winning over college administrators, who aren't as motivated as record companies and music services to wean students from piracy.

The most active users of those systems tend to be college students using high-speed campus computer networks.

Many universities are paying for their students' love of file sharing: Campus networks have been clogged by file-sharing traffic and network administrators have been forced to respond to a steady stream of complaints from movie and music companies about illegal downloading.

Still, when university officials were first approached about putting the online jukeboxes on their networks, they weren't convinced that it was necessary, said Peter Fader, a marketing professor at the University of Pennsylvania's Wharton School and a longtime advocate of bringing legitimate services to campus at discounted rates.

"Part of it was that they weren't yet feeling the real heat," he said. "So unfortunately, it will come down to when the threats are large enough, either legal or financial. Then it will happen."

The record companies have been prodding colleges and universities for more than a year to do more to discourage file sharing, but that won't be easy. A study released Thursday by the Pew Internet & American Life Project found that 80% of the full-time students surveyed who had downloaded or shared music online didn't care whether it was copyrighted.

The RIAA and Hollywood studios are exploring technologies that universities could use to deter unauthorized downloading. RIAA President Cary Sherman stressed that the university jukebox initiative is a separate endeavor.

People involved in the discussions say the aim is to provide students with a basic online music service that would allow them to play songs on demand from an extensive online jukebox. The cost, typically $5 to $10 a month, would be waived, discounted or buried in the students' activities fees.

If they wanted to buy songs to burn onto CDs or transfer to portable MP3 players, students would pay $1 or less per track.

"The intent here among all the parties is to find a way to address what is a significant issue for all of us," said Mike Bebel, head of online music services for Santa Clara, Calif.-based Roxio.

But for a legitimate service to succeed on campus, he said, colleges would need to curtail access to unauthorized ones.

Many colleges have been reluctant to block peer-to-peer networks, arguing that it would run counter to the ideals of academic freedom. But they may have to block unauthorized downloads in order to persuade record companies and music publishers to offer lower royalty rates to campus services, people involved in the discussions said.


Study: Software Piracy On The Wane
Matt Hines

The latest report from the Business Software Alliance concludes that software piracy declined in the United States during 2002.

The special interest group, an antipiracy organization that's comprised of members such as Apple Computer, Cisco Systems and Microsoft, released results of its state-by- state analysis of software piracy across the United States on Tuesday. According to BSA's report, the nation's piracy rate dropped 2 percentage points in 2002 compared with 2001, to 23 percent. The International Planning and Research (IPR) conducted the study for BSA.

BSA also reported that some 37 organizations handed down more than $3.1 million in piracy-related settlements as a result of its annual campaign to raise awareness among business users regarding illegal use of copyrighted software.

Among the U.S. states that saw the most significant reduction in piracy percentage rates were Louisiana, Maine, Oregon, West Virginia, Idaho, Hawaii, Alaska, South Carolina, Washington and Oklahoma, according to BSA.

The group listed the top nine states (in addition to the nation's capital) that had the lowest piracy rates in 2002 as: Illinois; Michigan; Ohio; Indiana; New York; Connecticut; New Jersey; Washington, D.C.; Washington; and Virginia.

Bob Kruger, BSA's vice president of enforcement, said the increased amount of revenue loss is a good sign that piracy continues to be a major problem despite state-by- state improvement.

"The piracy rate in the U.S. is as low as it has ever been, but the losses continue to be staggering," Kruger said. "While we've certainly made inroads with corporate users, the issue of individuals downloading illegal software over the Internet is a growing problem."

Kruger said software companies need to follow the lead of the music industry, which has been working hard to keep copyrighted materials from being illegally transferred online.

BSA representatives were quick to point out that, despite the states' lowered piracy rates, the practice of using unlicensed or stolen products continues to have a negative effect on the software industry and the larger U.S. economy.

The group estimates that piracy cost the nation $1.9 billion in 2002, up from $1.8 billion in 2001. As a result, BSA contends that piracy was related to the loss of 105,000 jobs over the course of last year.


Efforts to Stop Music Swapping Draw More Fire
Amy Harmon

The recording industry's stepped-up pursuit of online music swappers faced two new challenges yesterday, as SBC Communications questioned the constitutionality of the industry's tactics in a lawsuit and Senator Norm Coleman opened an inquiry on whether the anti-piracy campaign is violating the privacy rights of innocent people.

"If you're taking someone else's property, that's wrong, that's stealing," Senator Coleman, Republican of Minnesota and chairman of the Senate Permanent Subcommittee on Investigations, said in a telephone interview. "But in this country we don't cut off people's hands when they steal. One question I have is whether the penalty here fits the crime."

Pacific Bell Internet Services, an SBC subsidiary, is one of dozens of Internet providers that have received a flood of subpoenas from the record industry in recent weeks seeking the identity of subscribers suspected of illegally sharing music files. Most of them are turning over the information, which the music industry has said it will use to file hundreds of lawsuits against online traders within the next six weeks.

But in a lawsuit filed late Wednesday in a federal district court in San Francisco, SBC argued that the fast-track process the industry is pursuing — which does not require the approval of a judge — violates the due process rights of its subscribers. The recording industry argues that Internet service providers are benefiting from digital piracy, as subscribers sign up for their services in part because of the appeal of finding free copyrighted music. After trying to stem the illegal distribution of music through threats and educational campaigns, the major record labels said last month that the only way to deter online piracy was by legal intimidation.

"This procedural gambit will not ultimately change the underlying fact that when individuals engage in copyright infringement on the Internet, they are not anonymous and service providers must reveal who they are," the recording industry trade association said.

Congress arranged the legal process to strengthen the ability of copyright holders to enforce their rights in a digital environment where copying on a large scale is easier than ever before. Verizon lost a similar challenge to the constitutionality of the subpoena process earlier this year. Arguments for the appeal in that case are scheduled for Sept. 16.

But on Thursday, Senator Coleman suggested that the statute, part of the Digital Millennium Copyright Act, should be re-examined: "Knowing that we have made it possible to rubber-stamp subpoenas, we have to look at how the law is being used," he said.

In its lawsuit, SBC argues that the subpoenas should have been issued from a California district court, not the District of Columbia, where it will be harder for Internet subscribers living in California to fight the cases. The company also said it should be given more than two weeks to inform subscribers that their information is about to be disclosed, and that it should not be required to turn over e-mail addresses as well as subscribers' names, addresses and phone numbers.

If the statute is held to be constitutional, the SBC complaint argues, the record industry should be compelled to compensate the company for the cost of combing through thousands of records to provide the information it is requesting.

About one-fifth of all Internet users say they make music files available for others to share, according to a report released yesterday by the Pew Internet and American Life Project, and 65 percent of those say they do not care whether the files are copyrighted.

In addition to the recording industry, the SBC lawsuit named Titan Media, a distributor of gay pornography, which had also filed a subpoena requesting subscriber information from Pacific Bell.

"It's not just the record industry that's misusing this subpoena power," said Larry Meyer, a spokesman for SBC. "Because they're so easy to obtain, the potential for abuse is great."

Titan withdrew the subpoena after Pacific Bell indicated that it planned to fight it in court. But Gill Sperlein, the company's general counsel, said the pornography industry might be suffering even more significant losses than the music industry because of Internet piracy. The only way to stop it, he said, is to "send a message that we will prosecute infringers and create a deterrent effect."

"We can't compete with free," Mr. Sperlein said. "It's probably even more true of us, where people have always looked for a way to get our product without going in and buying it off the shelf. Now they have a way to do it without paying for it, too."


Industry Key To Growth Of Online Music, Exec Says
Dawn C. Chmielewski

The Plug.IN digital music conference offered tongue-in- cheek homage Tuesday to Musicbank, MusicBuddha, Mongo Music and 57 other dearly departed digital music services.

These self-professed revolutionaries, once the staple of digital music conferences, promised to drag the century-old music industry into the digital era, only to become dot-bombs.

``Since we've whittled out the dilettantes, the debutantes and the just plain too early for their own good, it's time to get down to serious business -- selling music online,'' said Larry Kenswil, president of eLabs, the new-media technologies division of Universal Music Group. Kenswil delivered Tuesday's keynote address at the conference sponsored by Jupiter Research.

Indeed, after a breathless collection of flaky experiments, the recording industry heralded the spring launch of Apple Computer's iTunes Music Store -- and its more recent imitator, BuyMusic.com, as evidence of an emerging online marketplace for music. But the industry's running battle with unauthorized file-swapping services, which it blames for steadily declining sales, is hardly over.

Kenswil called on his industry colleagues to foster the growth of legitimate online music. Record labels need to release as many songs as possible, he said, as quickly as possible, so music consumers aren't forced to resort to peer-to-peer services to download the latest hits.

The industry also needs to rethink usage rules that make legitimate services unpalatable to online users. Kenswil said Universal Music lifted cumbersome restrictions that treated a digital download differently from individual tracks on a CD, which consumers are accustomed to using to make custom playlists, burn compilation discs and move to portable players. But new services, such as BuyMusic.com, remain hamstrung by confusing use rules that differ from label to label.

``The more utility that consumers derive from any product the more of it they should be willing to purchase. And the more they should be willing to pay for it,'' said Kenswil. ``We can't possibly expect a customer to pay for music that doesn't allow him to use it in a manner consistent with his ability to enjoy the music he's paid for.''

Kenswil said the record industry needs to set a reasonable price for digital downloads -- and stop worrying about whether online sales will cannibalize CDs. That may have been a relevant concern four years ago -- but the wildfire popularity of free services like Kazaa make such arguments moot.

``There is no other choice,'' said Kenswil. ``It is simply the right thing to do for the entire business. In reality, we are supposed to cannibalize ourselves.''

Well-known artist holdouts, such as the Beatles, must be convinced that withholding their music from legitimate services only serves to foster the growth of pirate services and hamper the growth of sanctioned alternatives, Kenswil said. And byzantine publishing rules -- which obstruct innovative ways of distributing music, such as pressplay's plans to preload thousands of songs onto the hard drive of new Gateway computers -- need to be updated, Kenswil said.

``If we don't work harder than ever as a unified business -- not a divided business -- to conquer these problems today, the only certainty is all of our challenges will become harder to overcome,'' said Kenswil.


Hollywood Hunts For Pirates
Michael McCarthy

If you're thinking about downloading a bootlegged copy of X2: X-Men United or The Matrix Reloaded, you might want to look over your shoulder for the feds.

After watching the music industry be financially hammered by piracy, Hollywood moguls want to follow its recent lead and go after individual consumers who illegally download or file share copyrighted films.

"We can't allow what happened to the music industry to happen to the movie industry," says Jack Valenti, president and chief executive of the Motion Picture Association of America (MPAA). He says the group will "seek enforcement of the breaking of copyright law" by the authorities against offending consumers. The MPAA also is launching public service ads urging consumers to just say no to piracy. (See the first ad at: www.respectcopyrights.org)

The reason for the new stance is that movie executives are having nightmares that file-sharing consumers who've swapped music for years are developing a growing appetite for free movies. And they've been watching the Recording Industry Association of America's increasingly aggressive response to the piracy that is feeding a decline in sales. Four college students were sued in April for online swapping and settled for up to $17,500 each. In June, subpoenas went out to universities and Internet providers to identify more swappers, and the RIAA plans "hundreds" more lawsuits against individuals in September.

To send a strong message that movie piracy is a crime, "There will probably have to be some people charged with the criminal downloading of movies," says Bo Andersen, president of the Video Software Dealers Association, which gathers in Las Vegas for its annual meeting this week. "It has to be made clear this is criminal behavior, and not just something fun to do on your computer."

Worldwide piracy now costs the studios an estimated $3 billion to $4 billion a year. Much of that still is lost the old-fashioned way — sales of bootleg DVDs and videos.

But as the music business has shown, potential losses from online digital piracy are much higher. And more and more consumers have access to high-speed Internet connections, which make it feasible to transmit movie files. They now are downloading 400,000 to 600,00 movie files a day, according to industry estimates.

Digital piracy directly threatens the most lucrative sector of the movie industry: home video. Consumers spent $20.3 billion to rent and buy movies in 2002, according to Scott Hettrick, editor-in-chief of trade magazine Video Business. That's more than twice the record $9.3 billion fans spent on movie theater tickets last year.

In a recent America Online poll, nearly 70% of respondents did not believe or weren't sure that "swapping" movies online was illegal. But studio executives don't buy that.

"They know what they're doing. People are just ripping this stuff off," says Danny Kaye, senior vice president of business development for 20th Century Fox Home Entertainment. "They're more than aware of the economic value. They're just shifting the dollars from the studios and the artists — to themselves."

In MPAA's public service announcement, set painter David Goldstein says piracy hurts him more than it hurts film executives.

David Bishop, president of MGM Home Entertainment Group, says his studio has an internal team constantly checking "how much piracy is going on around our titles," including the upcoming home video release of Legally Blonde 2.

The studios also are working on the next phase of DVD technology, with tougher encryption codes that might solve the problem, but that technology is still three to four years from market. "We're confident the next wave of DVD products will be much more difficult to file share with," he says.

How Hollywood is fighting back for now:

•Jail time. The recent federal prosecution of 25-year-old Kerry Gonzalez of New Jersey for stealing a preview copy of The Hulk and posting it online before the film's release was a warning shot. Gonzalez pleaded guilty to one count of copyright infringement and faces up to three years in prison and a $250,000 fine.

Coming is a likely series of lawsuits and prosecutions against individual consumers who are heavy file swappers.

•Winning hearts and minds. "Consumer awareness" ads will try to educate consumers who think piracy is "no harm, no foul." In the five commercials, workers from the 580,000 in the movie industry — such as a stunt man and a makeup artist — describe how piracy costs jobs. The spots started airing today on 35 network and cable outlets and will show in 5,000 theaters across the country.

•Closing the windows. Studios are moving to open major movies and release anticipated home videos in all major markets worldwide in the same month, rather than spreading rollouts up to a year. The goal is to close the window of opportunity for pirates to step in to sell ripped-off copies awaiting official release. Warner Bros. used this strategy this summer with The Matrix Reloaded and will again with The Matrix Revolutions this fall, spokeswoman Barbara Brogliatti says.


Uni Staff PCs Scanned For MP3s
Kate Mackenzie

STAFF computers at Queensland University of Technology are being scanned for MP3 music files because of a legal battle between universities and music companies.

And other universities are honing their network use policies to help ward off potential legal problems from MP3s stored on their computers.

The universities of Tasmania, Sydney and Melbourne were taken to the federal court by Sony, Universal and EMI in February, and forced to give music industry piracy investigators access to networks and back-up tapes.

QUT has scanned staff desktop computers for MP3s and issued please-explain notices when files were discovered.

QUT issued a written statement in the name of technology, information and learning support deputy vice-chancellor Tom Cochrane.

"We take a number of actions, particularly in the area of education, to regularly remind staff and students of their obligation to monitor and comply with these policies," Mr Cochrane said.

Other universities said they had reviewed or updated their internet and network use policies, and warned staff and students against using university resources for breaching copyright, but none had carried out scans of staff and student desktops. A Monash University spokeswoman said there was no foolproof method of monitoring for pirated material, and to attempt to do so could curtail academic freedom.

Similarly, UTS IT division director Anne Dwyer said there was no policy of scanning, although students and staff were frequently reminded of copyright rules by means such as pop-up messages on computers.

Ms Dwyer said students' usage records being searched would be a concern, but it was in universities' interests to stop copyright breaches.

"It's not just because it's illegal, but it's using our resources in a wasteful way," Ms Dwyer said.

ANU pro-vice-chancellor Robin Stanton said policies had been reviewed, and the issue had been raised with the Australian Vice-Chancellors' Committee.

"A sector-wide or industry-wide code of practice would be a productive instrument to have," Professor Stanton said.


KaZaAm! Destra Plan Is Genius
Garth Montgomery

The stage is being set in Sydney for a showdown over global music piracy.

KaZaA has more than 230 million people using its software but no legitimate access to music libraries on a network awash with piracy. Meanwhile, local Net company Destra has relationships with the record companies that sanction access to the libraries. And slap me stupid if it doesn’t also specialise in digital music distribution and content hosting. How convenient.

Is it possible these two companies could hook up and pull off the coup of the digital millennium? That is, drag the music industry — still kicking and screaming — online, to deliver tracks in a way people want them, legitimise peer-to-peer technology, and solve the global problem of music piracy. A problem which has robbed artists and led to a decline in music sales for three years in a row. And all from Sydney?

Destra boss Domenic Carosa thinks they can. Over an iced water, he championed the Aussie can-do spirit so strongly, he had Dispatch choking back tears. When he thumped the table and thundered platitudes like, "we’re a f**king smart country! If we set our minds to it, we can do it", I swelled with jingoistic pride.

Carosa runs MP3.com.au and the second-biggest Web host in Australia, OzHosting. He also runs WiredEntertainment.com, a digital music wholesale business that encodes and distributes legitimate tracks to online retailers such as Sanity, HMV, Telstra, Yahoo and others.

Destra also runs MusicPoint.com.au, a B2B site that allows record companies to send new music direct to radio stations, and radio stations to add the music to their programming selector.

Yeah, so what? It means that if Destra can convince record companies to let it encode all new music and the back-catalogues, plus work out a business model that suits everyone so they can make loads of money out of us, then the infrastructure to offer music online will be firmly in place.

"There’s an in-principle agreement for us to encode the back-catalogues [of all major record labels] and get access for selling online," says Carosa.

MP3.com.au has 5,000 tracks, mostly independent music, mostly crap. By Christmas, Carosa expects to have 200,000 commercial-grade, radio-friendly unit shifters. It’s taken him five years to earn the trust of record companies. "Two years ago we were Satan. It was all ‘Napster, MP3, you guys are pirates.’ Now they realise MP3 doesn’t mean piracy. The iTunes experiment really showed them they could make some money."

Australian Recording Industry Association (ARIA) piracy investigator Michael Speck is dubious about the so-called trust Destra is building with the record companies. "The motive is clearly to get access to the new-music libraries and back-catalogue," he says. "But it’s interesting that they didn’t put out a press release about their relationship with KaZaA."
Hold them horses. What does he mean? "It has registered KaZaA with its Web-hosting company, and it has access to the record company libraries. On top of that, its chairman is also chairman of the CD-pressing plant Regency Recordings. That’s a pretty nice infrastructure in place.

"KaZaA [also] has detailed consumer behaviour patterns of its users, which are mercilessly sold to marketers."

Yeah, but the names are removed.

"Being nameless makes it more repugnant. They traffic pirated music that can’t be controlled. And you couldn’t get better traffic revenue than a P2P network, not to mention the advertising and a cut of any purchases made. Signing up KaZaA looks to me like they’ve been struck up the arse with a rainbow. For a listed company, I can’t believe they aren’t making more noise about it."

Always the sceptic, our Speck.

Dispatch says bring it on. Stuck in the mortgage belt, it’s not practical for me to splurge on the latest Frenzal Rhomb or Placebo. But if I could get unlimited access to a licensed KaZaA network for, say, $20 a month, then that’s already $240 a year the music industry doesn’t get from me because once you buy a few CDs, with only two good songs on them that are played to death on the radio, you tend to shy away from the whole scam sooner or later.


Generation Download

Teens, young adults who have grown up digital aren't keen to follow analog rules
Sara Steffens

Ask about the latest CD they bought, and many teens respond only with a blank stare.

But ask about the music they've been downloading, and they can't stop talking -- about favorite bands and songs, the relative merits of different file-sharing
services, and the growing size of their digital collections.

Call them Generation Download.

For today's young people, copying songs via the Internet has become a routine as familiar as switching on a television.

And now, the music industry must face the reality of a plugged-in generation that thinks record producers are robber barons and CD stores are for suckers.

"What you have now is a generation of kids, like me, that have grown up with the idea of, 'What, I'm going to pay for music?,'" says 18-year-old Jeff Maher of Moraga.

Over the past few months, the debate about downloading, its ethical implications and its consequences for the music industry's future has reached a fever pitch.

New pay-per-download services are amping up their pitches, hoping to lure music-lovers with discounted prices and the promise of clean, legal downloads.

At the same time, the Recording Industry Association of America has been making headlines with a more Draconian approach to the problem: a campaign to sue hundreds of individual music downloaders for copyright damages.

Easy to be a pirate

"Fighting piracy is our Number One priority," says RIAA spokeswoman Amy Weiss.

Sales of music albums have decreased 25 percent over the past three years, and the industry believes online file-sharing is largely to blame.

"We've always fought against physical piracy where you see (bootleg) CDs in the streets," Weiss said. "With Internet piracy, it is that times a million."

The RIAA's legal assault on file-sharers, which began in June, remains just one arm of the industry's larger campaign against file-sharing, Weiss said. The trade group has purchased ads in newspapers, on MTV and VH1; posted fake files on peer-to-peer networks, hoping to frustrate frequent users; and even sent ominous instant messages to downloaders.

They're also targeting parents, warning that peer-to-peer networks offer their kids access not only to free music, but also to computer viruses and pornography.

And then there's the potential legal liability.

Over the coming weeks, Weiss said, the RIAA will file hundreds of lawsuits against file-sharers who offer large numbers of MP3s. They're seeking the maximum possible damages, $150,000 per song.

"We know we're not going to see miracles overnight, and we know this is going to be a long-term campaign," says Weiss. "We also hope that the message begins to get through that this behavior is illegal."

Downloading 'natural'

So far, though, kids seem utterly unimpressed with the recording industry's "shock and awe" campaign.

"That's stupid," declared Andrew Pira, 16, of Concord.

"They can't sue 4 million people," added his friend, 16-year-old Sado Alhkim of Walnut Creek.

Indeed, among teens who have computers at home, it's hard to find anyone who hasn't at least experimented with "peer-to-peer" file-sharing networks like Kazaa, Grokster and Morpheus. And technology "haves" don't hesitate to share the wealth, burning copies of homemade CDs for their "have-not" friends.

"I think the Recording Industry Association of America is going to have to end up suing 90 percent of the U.S. teen population between the ages of 14 and 25," says Maher, the Moraga teen. "Everybody downloads music. They're trying to move a mountain one grain of sand at a time ... It's gone too far now."

"Inevitable" is a word young people use a lot when talking about music downloading. So is "natural."

"My boyfriend, one of the first things I did was burned him a CD of some of my favorite songs," says Meredith Joyce, 18, of Oakland. "I think it's a natural idea, to want to share music with your friends, and the Web is just a good way to do it."

Eighteen-year-old Joy Tamaki, who's had a computer in her home since elementary school, says downloading is so common, she hears little or no debate about its ethical implications.

"I've never heard any of my friends that use MP3 sharing say anything negative about it ... We're used to doing it, I really never hear anybody talking about whether it's right or wrong."

"The record industry does have a point," Tamaki admits. "I know that all these artists and groups have to make their money ... But I'm just such a fan of sharing MP3s that I can't fully agree with what they say. It's just such a brilliant idea."


Downloading Wars: The Audience

DOWNLOAD WARS: THE AUDIENCE: 15-year-olds think buying music is for suckers. Middle-aged men can't remember the last time they purchased a CD. As the music industry begins its crackdown, GUY DIXON talks to fans who get their fix from their computers. The first in a three-part series. http://www.globetechnology.com/servl...ry/Technology/


Could Asian file Sharers Be Next Target?
John Lui

Asia-Pacific residents have been nervously eyeing the recording industry's blitz on file-sharing in the U.S. and asking: Will this region's users be the next targets?

On the surface, the situation looks grim for Asia-Pacific users of Kazaa, Morpheus or other peer-to-peer (P2P) file-sharing clients.

Countries such as Singapore and Korea boast an IT-savvy population and among the highest rates of broadband penetration in the world, factors which feed the file-sharing habit.

The Recording Industry Association of Singapore's (RIAS) CEO, Edward Neubronner said his organization kept a close watch on P2P activity.

"While RIAS is currently focused on educating users about the need to respect the intellectual property rights of others, we have already taken action in Singapore against infringing activities, including file sharing over the Internet, and will continue to do so," he told CNETAsia.

He declined to give details of the legal action taken.

Copyright protection body the Business Software Alliance (BSA) had also previously said that they will sniff out those sharing software on Asian P2P networks.

The heavy fines and jail sentences given to CD pirates in Singapore and Malaysia imply that the region's courts do not hesitate to take the side of the copyright owners. The recently sealed Free Trade Agreement between Singapore and the United States means more attention will be paid to copyright issues, as most of the business lost through file sharing affects companies in Silicon Valley and Hollywood.

In addition, Internet Service Providers (ISPs) in the region have folded quickly when it comes to revealing the identities of subscribers caught posting libelous or unpatriotic messages, or hosting pornographic or illegal files. They have been known to hand over names without the need for the rigorous legal process observed in Western countries.

However, other factors seem to suggest that for now at least, the hammer won't fall on Asia-Pacific file sharers yet.

The bodies that enforce copyright for recording companies in the region only have jurisdiction over single countries. The Recording Industry Associations of America (RIAA), for example, has powers only within the U.S.. Also, governments in Asia may react with hostility to moves by the predominantly U.S.-based copyright holders taking action against their citizens.

Already, reports say that the legal action in the U.S. have begun to have a chilling effect on file-sharing, and copyright bodies in Asia may want to see how much it dampens trading in their own countries before acting.

Among the RIAA's chief targets have been students with generous amounts of server space, large 24-hour upload pipes and a huge selection of MP3s available for sharing--one Michigan student under investigation made over half a million songs available on his hard drive. Asia may not have the "big fish" file sharers found in the West.

While it's still too early to say if Asia-Pacific P2P users will be looking down the barrel of the gun, chances are if file-swapping carries on as usual, the heat will get turned up.

Said Neubronner: "The recent prosecutions of files sharers by the RIAA in the U.S. will further highlight the legal risk involved in the sharing of music files in Singapore, and we welcome it."


Many Music Lovers Don't Know -- Or Care -- About Lawsuits

Matt, a Forest Hills Middle School student, uses the file-sharing service KaZaA on his computer to download songs from the Internet. So far, he has downloaded 60 songs -- about 59 more than the number needed to make him vulnerable to a lawsuit from the Recording Industry Association of America.

Last month, the RIAA said it would begin filing lawsuits to stop people from using peer-to-peer music file-sharing systems for copyright infringement. Matt didn't hear the announcement. But the 13-year-old said he "probably won't stop" downloading songs by artists such as blink-182.

"Beats buying CDs," he said.

His mother sees things a little differently.

"Maybe he ought not do that," she said, adding that she needs to become more "up-to-date" about technology.

So will many more parents, now that the Washington, D.C., trade group representing the world's biggest record labels has decided to get tough.

In many cases, the computer owners may not be aware that their Internet connections are being used to perpetrate what the trade group calls copyright infringement. And they probably have no idea of the potential cost: Copyright laws allow for damages ranging from $750 to $150,000 per song.

Since June 26, RIAA has filed more than 900 federal subpoenas, seeking information prior to filing lawsuits against individuals illegally sharing copyright-protected material. Those lawsuits might be filed by late August or early September.

One might think Aris Hampers, owner of Aris' Disc Shop in northeast Grand Rapids, would be pleased with the RIAA's attempt to shore up the sagging $14 billion U.S. recording industry. But the longtime Grand Rapids radio personality, now the afternoon voice of WBFX-FM 101.3, is angry at the RIAA's plans.

"I'm in the CD business and the music business, and I think they're morons," Hampers said. "They think by scaring people, this is going to go away.

"A 15-year-old isn't scared of a lawsuit."

One teenager, a Wyoming Lee student, agrees, saying he hasn't even thought about the ramifications.

"I just keep downloading," said the 17-year-old.

But adults may be concerned.

"A lot of customers and my friends used to download, but they've stopped," said Mike Mostrom, 21, a technology specialist at Circuit City in Walker.

Becky Simpson, 46, of Grand Rapids, who works at Family Christian Store, said she doesn't really download music herself but knows people, including co-workers, who do.

"I hear them talking about it a lot," Simpson said. "They're definitely concerned about what's happened."

An estimated 60 million people in the United States have downloaded music off the Internet, using file-sharing software such as eDonkey, Grokster or Limewire. The RIAA blames illegal file sharing for the 14 percent drop in sales of CDs in the past three years.But some CD buyers say they download to take a test drive first.

"I download songs to sample the music, and if I like it, I buy the album," said Adam Wardle, 21, an employee at CD/DVD Exchanges in Comstock Park, who said he owns about 1,000 CDs.

"Without downloads, there's a lot of bands I wouldn't hear," Wardle said.

Others say they can't find what they want in stores.

Angelo Piccione, 54, owner of Domenic's Pizza in Kent City, who was born in Italy, said he uses KaZaA to download Italian songs he can't find in American record stores, then burns CDs of them.

"I'll keep going unless my computer blows up," he said.


Music Industry Groups Targets ISPs To Stop Swapping
Beatrice E. Garcia

Alex Rodriguez and Faisal Imtiaz don't have a dog in this fight, but they're in the middle of it anyway.

Rodriguez and Imtiaz are two Internet access providers in South Florida. Like many of their counterparts here and around the country, they want to protect the privacy of their subscribers. But right now, Internet service providers are feeling the intrusion of the music industry into their businesses.

Recording Industry Association of America is out to crack down on Internet users who download and swap copyrighted music. The Washington, D.C.-based group has filed nearly 1,000 subpoenas in the past two weeks, asking ISPs to provide the names and addresses of subscribers it suspects are downloading music files illegally.

''I do have an issue with being forced to give up a user's information,'' said Rodriguez, president of Miami-based Netrox LLC. ``If I have a court order, I don't have a choice. Fighting [the recording industry] could potentially take me out of business.''

About a dozen major Internet service providers, including America Online, SBC Communications, Earthlink, Charter Communications, RNC and Verizon Communications, have been targeted by the subpoenas.

BellSouth, a major Internet access provider in Florida and in eight other Southeast states, says it hasn't yet received any of the RIAA subpoenas demanding subscriber information.

Comcast Cable and Charter Communications, two cable companies that provide Internet access as part of their slate of cable services, have both received RIAA subpoenas. But the companies wouldn't comment on whether any customers in South Florida had been targeted.

''To make ISPs responsible for what is on their networks is onerous,'' said Joseph Marion, executive director of the Federation of Internet Service Providers of the Americas, based in Orlando.

``It's like holding the U.S. Postal Service responsible if one consumer mailed a CD to a friend that contained a copyrighted song.''

Small, regional ISPs such as SnappyDSL.net and Netrox have not been targeted by the music industry subpoenas so far.

But even before this battle with the music industry erupted into front-page news, ISPs were already the last barrier between the owners of copyrighted material such as video or software and online file swappers who see the Internet as a free-for-all.

Internet service providers have long been thrust into the role of policing their networks. They have been on the receiving end of cease-and-desist orders from software firms, audio and video houses, asking the ISPs to stop users from downloading copyrighted material or making it available on their network.

Imtiaz, who runs SnappyDSL.net in West Miami-Dade, said the firm gets at least one cease-and-desist order a month.

The usual procedure is for a music or movie company to inform an ISP that copyright-protected material has been found on its network or on a subscriber's computer. Then they ask the ISPs to take action.

''If we find illegal activity on our network, we tell [our members] to stop or we'll shut them down,'' Imtiaz said.

He notes that software companies have been far more aggressive in rooting out Internet users offering copies of pirated programs.

''In some cases, the [software companies] didn't even send an e-mail first; they just picked up the phone and called,'' Imtiaz said. ``They weren't pulling any false punches.''

Mark Grossman, director of the technology law group at Becker & Poliakoff, a Miami-based law firm, said ISPs have to respond to a subpoena.

''Yet, no one has to comply with a subpoena without having the opportunity to have it reviewed by a judge,'' Grossman said.

Two of the major ISPs in the country have stood up to the RIAA.

Pacific Bell Internet Services, a unit of SBC, filed a lawsuit in federal district court in San Francisco on Wednesday, claiming the RIAA's use of the subpoena provision in the 1998 Digital Millennium Copyright Act was improper.

Besides the RIAA, PacBell's lawsuit named two other defendants: Titan Media Group, an online pornography producer, and MediaSentry, which does business as Media Force, an online service that combs the Internet looking for users who are downloading massive amounts of data that could be file sharing of copyrighted material.

Titan withdrew its subpoena after it was named in the lawsuit, an SBC spokesman told The Herald.


Grokster Peer To Peer Network Embraces Softwrap DRM Technology
Press Release

Softwrap today announced that Grokster, the advanced, peer to peer, file sharing programme that enables users to share any digital file, has selected Softwrap's DRM technology for a new, advertisement-free, paid version of the Grokster software. This follows the successful distribution and sale of numerous Softwrapped game and utility titles via Grokster and other P2P networks. Content developers and owners can now feel even more confident that their Softwrapped intellectual property distributed through the Grokster Network will be paid for and protected from piracy.

Softwrap are also be building and operating a software storefront, hosted by Grokster, which will reside on the Grokster interface. Grokster joins a growing number of P2P networks using Softwrap's DRM solution to protect content providers' titles from piracy.

Wayne Rosso, President of Grokster, said: "Having looked at a number of DRM solutions, we chose Softwrap to protect the content distributed via our network from illicit copying because their technology offers a complete package - superb security for content providers combined with a very easy to use e-commerce mechanism for end users."

Emma Morris, Marketing Director at Softwrap, added: "As Grokster is one of the world's most popular P2P networks, we're delighted that they've now chosen Softwrap's technology as their DRM solution for their own software too."

This announcement further enhances Softwrap's success within the software industry and the P2P network communities. Utilising the secure Softwrap DRM technology means that content owners can safely distribute their software without the concern of piracy, via peer to peer networks such as Grokster. The adoption of Softwrap's technology means these networks can be used positively to their full potential by generating new and secure revenue streams, as opposed to these channels only being a haven for pirated titles. Perhaps surprisingly consumers are applauding the move as it now means they have a reliable legitimate gauranteed virus free alternative in Softwrap titles.

Leading content developers and publishers including Eidos Interactive, Ulead Systems and Visiosonic (developers of the popular PCDJ software) are already taking full advantage of Softwrap's technology to distribute their intellectual property across P2P networks including Kazaa.


Stopping The Pop-Swappers
Mark Ward

They used to say "home taping" was killing music, now it's meant to be internet downloaders. But the real pirates these days are crime bosses - and the rewards are plentiful.
The net has given rise to many novel ways of doing business but the methods of the Recording Industry Association of America has got every twisted e-commerce scheme beaten.

Last month, the association began suing hundreds of its customers. For the RIAA - which represents the major US recording companies - this makes perfect sense. The people being sued are sharing music with millions of others via peer-to-peer networks such as Kazaa, Grokster and Morpheus. This tidal wave of subpoenas is the latest in a series of steps the RIAA has taken to stop "file-sharing" which, it believes, is causing CD sales to fall through the floor. According to the RIAA, CD sales dropped by 10% in 2001 and a further 6.8% last year, largely because of file sharing.

But the figures tell a different story.

In America and the rest of the world the biggest culprit in falling music sales is large-scale CD piracy by organised crime. In just three years, sales of pirate CDs have more than doubled, according to the International Federation of the Phonographic Industry (IFPI). Every third CD sold is a pirate copy, says the federation. The IFPI's Commercial Music Piracy 2003 report, produced in early July, reveals pirate CD sales rose 14% in 2002 and exceeded one billion units for the first time.

The pirate CD market is now so big, $4.6bn (£2.86bn), it is "of greater value than the legitimate music market of every country in the world, except the USA and Japan". In some countries it is hard to find legitimately produced CDs. Ninety percent of CDs in China, for instance, are pirate copies. Counterfeiters have forced the price of a fake CD down to about $4, which only makes CDs in the music shops look even pricier. Embarrassingly major record labels and distributors have been fined twice by the US Federal Trade Commission for price fixing their products. However, pirates are not solely responsible for the crisis in the music industry. After all, it is actually producing CD titles.

Replacing vinyl

According to the RIAA's own figures, over the last two years the US music industry has produced 25% fewer CDs. The peak of production was in 1999 when 38,900 individual titles were released. But by 2001 this was down to 27,000. Releases grew again in 2002 but were still below the previous high. Musician George Ziemann says if only 3,000 copies of each of the "missing" CDs were sold, the fall in sales would be wiped out. For Mark Mulligan, an analyst with Jupiter Research, the music is weathering a hangover after the 80s and 90s boom, when everyone was buying CD versions of their old vinyl records.

"Now the CD replacement cycle has drawn to a close," he says. Also the global decline in CD sales is taking place against the background of a general economic recession that is depressing sales of almost everything. After piracy and the production of fewer CDs comes the changing dynamics of the music industry. Many of the people using file-sharing systems are looking for singles. By contrast the music industry is focussed on shifting albums. This is reflected in sales figures. In the US sales of CD singles generate only a few percent of the total market. In the UK, it's 10% of all revenues. Typically, singles are used to drum up support for an album, being hyped weeks in advance and played heavily on radio and TV long before they go on sale. With nowhere to get these singles and no desire to buy an expensive CD album just for one song, it is no wonder many fans turn to file-sharing systems. Finally, music just isn't as important to young people as it used to be. There is more competition than ever for the cash in a teenager's pocket.

"Youths are no longer defining themselves by music in the same way they used to," says Mr Mulligan. Now, he says, brands, clothing and lifestyle are as important as music.

Added to this is the rise of the mobile phone, the increasing popularity of computer games and DVDs. In the past the music industry had young fans almost to itself. Now it has to compete for the limited cash in a young person's pocket like never before. The music industry cannot hope to sue everyone using file sharing to find music as that would take hundreds of years and already the US legal system is complaining about the work the RIAA is heaping upon it.

There is no doubt that some piracy is going on via peer-to-peer systems but maybe not to the extent the RIAA fears. Perhaps it is about time they sang a different song.


RIAA's Scare Tactics Bound To Backfire
Declan McCullagh

The Recording Industry Association of America's efforts to scare peer-to- peer users who violate copyright laws began with a promising start exactly one year ago.

Last August, the RIAA asked a federal court in Washington, D.C., to force Verizon Communications to divulge the identity of a Kazaa user, kicking off a legal tussle that ended with the RIAA winning a stunning victory. At about the same time, key members of Congress wrote a letter that asked the U.S. Department of Justice to begin criminal prosecutions of P2P users who "allow mass copying," while an RIAA ally on Capitol Hill simultaneously introduced a bill to allow copyright holders to attack computers on P2P networks used for piratical purposes.

A year later, however, there are some signs that the RIAA's antipiracy campaign is faltering.

Last week, Sen. Norm Coleman, R-Minn., criticized the RIAA's pursuit of music swappers, saying he was "concerned about the potential for abuse in the current system." The Massachusetts Institute of Technology and Boston College are fighting the RIAA, and a new survey found that 67 percent of file swappers in the United States are indifferent to copyright concerns, an unexpected jump from 61 percent just three years ago.

But the most daunting obstacle to the recording industry's dogged efforts to rid the Internet of music piracy is a lawsuit that Pacific Bell Internet Services (also known as SBC Communications) filed against the RIAA last week.

It is carefully crafted to portray the RIAA and its contractors who scour P2P networks for infringers as out-of-control juggernauts who care precious little about due process, the rules of the federal court system, Americans' privacy rights and the U.S. Constitution.

You know what? SBC stands a decent chance of winning. If that happens, the case would deal a sore setback to the RIAA and make the dread subpoena process that the Digital Millennium Copyright Act (DMCA) created far less menacing.

Under section 512(h) of the DMCA, any copyright holder can "request the clerk of any United States district court to issue a subpoena to a service provider for identification of an alleged infringer." The RIAA has repeatedly invoked that section of the law in the last few months, firing off bulk subpoenas in an effort to spread a mix of fear, uncertainty and doubt among file-swappers who, the argument goes, will start panicking over being sued.

If you read between the lines of 19-page complaint, you're left with little choice but to conclude that the RIAA is more interested in maximizing the quantity of subpoenas--and their possible deterrent value-- than in carefully abiding by the letter of the law.

We already saw this happen earlier this year, when the RIAA was forced to apologize to a Pennsylvania State University professor for sending him and dozens of other people legal warning saying that they were violating federal copyright law. The RIAA's automated program apparently confused two separate pieces of information--a legal MP3 file and a directory named "usher"--and concluded there was an illegal copy of a song by the musician Usher.

Some of the arguments SBC is making--such as saying the DMCA does not apply to P2P networks-- are nearly identical to those that Verizon unsuccessfully made in its court case in Washington. Verizon lost dismally when a district judge ordered it to comply with the RIAA subpoenas and an appeals court has declined so far to intervene. Although a lower court decision on the other side of the continent does not set precedent for California, it's still likely to be influential.

Two things have changed since the Verizon decision, though: First, the threat of the RIAA employing bulk-subpoena tactics is no longer merely a theoretical concern. Second, SBC is making additional arguments that Verizon did not.

SBC says it's received hundreds of DMCA subpoenas already, which makes the potential threat to its subscribers' privacy very real. It expects to receive thousands more, saying the RIAA contractors have "inundated" it with thousands of similar, illegitimate complaints of copyright infringement in the past. At the very least, the company says, the subpoenas must come from a California court instead of one in Washington.

SBC also says it needs a different subpoena for each individual (claiming that "multiple demands for individual subscriber information cannot be grouped in one subpoena"), that it needs additional time to respond to each subpoena so that its subscribers can be notified and possibly hire lawyers to oppose their subpoenas and that the DMCA does not authorize the subscriber's e-mail address to be disclosed.

Probably the most important argument is one that could hit the RIAA where it hurts the most: in the pocketbook. SBC argues that it and other Internet service providers "must be compensated for the substantial costs incurred in complying with these subpoenas" and cites rule 45 of the Federal Rules of Civil Procedure. It says the recipient of a subponea must be "reasonably compensated" for the work required to prepare a response.

What all this means is that SBC is trying to raise the costs for the RIAA to learn the identity of P2P users. This is a good thing for privacy and for Internet users: The DMCA subpoena process is hardly privacy- protective, and it allows copyright holders to learn the identity of an Internet user without filing a lawsuit or obtaining a judge's approval. (Remember that even if SBC wins, the RIAA can still sue P2P copyright infringers. They might just have to file individual lawsuits first, a more expensive proposition.)

Matt Oppenheim, the RIAA's senior vice president of business and legal affairs, told me on Friday that the DMCA "contains absolutely no provision whatsoever for reimbursement...If Congress had wanted reimbursement, Congress would have included it. But they didn't." (Oppenheim may be right. Section 512 of the DMCA suggests--but does not say explicitly--that the federal rules that require reimbursement apply.)

The RIAA added in a statement: "It's unfortunate that they have chosen to litigate this, unlike every other ISP which has complied with their obligations under the law. We had previously reached out to SBC to discuss this matter, but had been rebuked."

Poor things.

Sure, it's temping to beat up on the recording industry, but keep in mind that they're not the ones who enacted the DMCA back in 1998. Congress did. Elected representatives chose the interests of well- connected copyright holders over individual rights to privacy. The Senate approved the DMCA unanimously in October 1998, and the U.S. House of Representatives followed suit by a similar margin a few days later.

If the major record labels win their legal skirmish with SBC, and the DMCA remains intact, the fight will return to Capitol Hill. Let's hope the outcome will be different this time.


KaZaA Seeks Higher Court
Simon Hayes

THE controversial case that has pitted the recording industry against Australian peer- to-peer software developer Sharman Networks could end up the the US Supreme Court, as lower court judges adopt conflicting positions on file sharing.

Sharman -- developer of the KaZaA front-end software -- is involved in two legal actions initiated by record companies and movie studios. Sharman's lawyer Rod Dorman, a partner in Los Angeles law firm Hennigan Bennett and Dorman, said he expected action over file sharing would eventually end in the US's highest court. The Supreme Court can issue a writ if it decides a matter is of sufficient importance to be heard, or if circuit courts are split over decisions. The US circuit courts hear appeals on matters decided by district courts.

A conflict already existed between a decision by the San Francisco-based 9th Circuit in the 2001 Napster case, in which the court ruled Napster a "contributory infringer" by virtue of it providing peer-to-peer software, and Chicago's 7th Circuit in the Aimster case, in which the court ruled Aimster had not violated the law simply by providing software, he said. Such conflict could lead to file sharing ending up in the Supreme Court, Mr Dorman said.

"In all likelihood, you will get the Supreme Court addressing the issue late in next years' session," he said.

Sharman is pursuing action on two fronts, tipping it will lodge a motion for recall of US District Court Judge Stephen Wilson's decision to grant the recording industry's motion to dismiss Sharman's antitrust claims. Sharman had alleged major recording companies colluded to drive it out of business. Judge Wilson ruled Sharman did not have standing to make the claim, because it was not directly involved in distributing licensed content. Mr Dorman said Sharman was working in conjunction with Altnet to provide licensed music.

"When Nicola Hemming created Sharman it was created with the intention of working jointly with Altnet to develop a business where peer-to-peer could be used to distribute licensed content for profit," he said.

"Nicola and Kevin Bermeister, chief executive of Altnet, knew each other for years and recognised that only by marrying the technology of each could it work.

"They shared a business vision, but each had separate companies."

At the same time, Sharman is fighting an appeal by the music industry against a decision by Judge Wilson in a similar case against Grokster and Music City, that merely providing software did not constitute "vicarious infringement" of copyright. That appeal is with the 9th Circuit, with a decision expected in November.

"They have accepted and accelerated the appeal and have set a briefing schedule that means the appellants have to get a brief filed by mid-August," he said.

Sharman was a party to that appeal, he said.


The File Swapping Fiasco
Steven Laib

It seems that the Recording Industry Assn. Of America, or RIAA has decided to crack down on people suspected of sharing music over the Internet. One would think that with 60 million people estimated to be using-file sharing services, for any number of reasons, the task would be daunting. Apparently, the RIAA doesn’t think so.

According to free market advocate Ilana Mercer they are getting approximately 75 subpoenas approved each day. Of course if they investigated this many users each day it would take over two thousand years to cover all 60 million, but they appear more interested in developing user fear from a few high profile cases. I’m not sure it will work. After all, the IRS does essentially the same thing and it’s a dead certainty that a lot of people still cheat on their 1040 when they believe they can get away with it, and many do get away with it.

The whole music industry vendetta started with Napster; originally the most popular of the file sharing tools. When Napster was squelched by a lawsuit, other different systems appeared. Instead of having a central file index, as Napster did, the new software searched individual users files until it found a match to download. Since the courts have ruled that this method, known as peer to peer, exempts the software manufacturer from liability, the only remaining options are to give up or go after the individual users.

Total free market advocates have taken the position that this is an invasion of user privacy, which is supportable. After all, the RIAA should not be allowed to go on a fishing expedition any more than the police department should, and if homosexuality is protected by privacy, why not how you use your computer. Additionally, because of what is involved here, it might be reasonable to suggest that there is a violation of the 4th amendment protection against unreasonable search and seizure going on. It may be a civil matter, but if it were in my court I would certainly entertain such an argument. Particularly since the RIAA attitude, if taken to the maximum potential, could amount to unnecessary and avoidable harassment of a large sector of the public.

Of course, the reason for all of this activity is money. Money is involved because works being swapped are copyrighted. The singers, musicians and songwriters all want their cut of sales profits, but more likely, the companies producing and marketing the music are even more interested. They stand to make an even bigger profit, unless I am very much mistaken. Reproducing music CD’s doesn’t cost that much. My handy computer supply catalog advertises bulk CD’s for twenty-five cents each. A record producer, or for that matter AOL, can probably get them for less when buying thousands. How else could AOL afford to send so many free disks. The real costs are elsewhere, and include the royalties paid to the performers. Copyright law asserts that because they performed the music, and in some cases wrote it as well, they have the right to profit from recordings of that music in the same manner as an author would profit from sales of a book he or she wrote. At the same time it asserts, with what some will suggest is highly twisted logic, that while you may own the CD, you don’t own what’s on it.

Copyright law would have no reason to exist if we had no way to mechanically or electronically reproduce these kinds of works. If someone sat down to handwrite a copy of Dante’s Divine Comedy it seems reasonable for him to profit by the amount of work it would take. Of course this was exactly what was done 700 ears ago when Europeans did not have printing presses. But copyists could only turn out a very few editions. The printing press changed all of that. In a strange turn of events on one occasion when a stack of mechanically printed Bibles arrived in Holland the townsfolk refused to accept them, believing that such identical copies could only be the work of the devil. Today, we generally accept new technology without question, and we use it just as rapidly as we can get up to speed with it.

In this age of technology, if someone were to scan the pages of a best seller into a computer, print it and then sell the results would it be proper? Is it different from doing the same with music recordings? Consider that a performer can make money from tours, music videos and sales of promotional items. That’s why the Grateful Dead created such a flap about the unauthorized t-shirt salespeople a few years back. An author expects to make money primarily from selling books. Those who get movie and TV deals are major exceptions to the rule.

Take another example: If someone copied all of the columns posted to their favorite internet commentary site and published them in book form, would it be proper for them to get the profits? After all, they didn’t write anything. They just did the compilation. Shouldn’t the authors get something? Without them there would be nothing to compile.

The current problem is a logical child of electronic data storage and recording of music in CD form. People soon found out that they could beat the system and the system didn’t like it. It didn’t move quickly to encrypting their recordings or incorporate a licensing fee into the sales price to cover potential lost revenue. Each of these would be easier than going through the courts. Apple Computer may be on the right track with its iTunes store where you can buy music for $0.99 a track. It seems like a pretty good solution. You don’t have to buy a full CD to get the one tune you want and the price is right, too.

But there’s another problem. Apple and other on-line music sales entities generally concentrate on what is essentially new or recently produced music. They also tend to stock only recognized recording stars. Let’s take the example of someone who is looking of for a recording of Dick Dale’s “Spanish Kiss” recorded in the early 1960’s. It might be available on a vintage vinyl LP, if you can find one and the price may be outrageous for all you know. Apple’s iTunes store doesn’t have it. I know because I looked. And if you find a vinyl copy, what condition will it be in. Unlike books, LP’s lose fidelity as they are played. CD’s don’t.

So let’s say that by using peer-to-peer software I can find that, otherwise impossible to get, copy of Spanish Kiss, or perhaps even less well-known recordings by, perhaps, the LA Midnighters, Sly, Slick And The Wicked or The Centurions. (These were real bands, by the way.) I’ve found some of them through file sharing software, but they simply don’t exist anywhere else. If they recorded their music 40 or 50 years ago it seems crazy that the RIAA would be trying to police sharing of what is, by modern standards, ancient music. If anything, they should be applauding. Sharing old music from limited markets, regional bands and little known performers helps to keep musical history alive. Things otherwise lost forever can be preserved. Meanwhile, many of us would be willing to buy these recordings if they were available. The RIAA is contributing to the problem by not putting everything they have on sale. In an age of electronic storage it should be easy to do. Alvin Toffler predicted this kind of marketing 25 years ago. Haven’t they read “The Third Wave”?

Finally, maybe we should consider the problem from another angle. Maybe the people who are swapping so much new music on the Internet like the music, but just not enough to pay the price they are being charged. It’s a good question that should be brought to the discussion table.


File-Sharing Networks Strike Back
Simon Doyle

The next stage of the battle being waged by the Recording Industry Association of America (RIAA) over peer-to-peer (P2P) file sharing networks like Grokster, Kazaa and Morpheus has begun — the RIAA is gathering evidence to prosecute individual users for copyright infringement. But this war is far from over; public interest groups, software companies and users are making a rearguard advance in defence of file-sharing.

“It is an obvious attempt to intimidate people off of file-sharing programs," says Bill Evans, President and founder of Boycott-RIAA, an affiliation of self-professed "music lovers" who believe the RIAA over-extends unfair copyright laws. “I think the actions of the RIAA will further alienate music consumers, if that is possible. We've heard from people who don't file share at all, that feel they are being treated as criminals.”

Evans is urging alienated music fans to get involved in localised flyer distribution campaigns across the U.S., scheduled to take place August 2, where Boycott- RIAA "street teams" will stage symbolic CD burnings "in the Boston Tea Party vein."

The U.S. Congress is one current target: Evans, along with P2P networks and public interest groups like the Electric Frontier Foundation, are pushing for public hearings on the P2P controversy.

"The sick think is, we would love to pay [copy]rights' owners," says Grokster President Wayne Rosso. "But it's one of those things where we say, ‘please let us pay you,’ and they won't take our money."

The RIAA plans to launch thousands of individual lawsuits in the U.S. on behalf of its member companies — a second offensive after an April court ruling that stated the networks themselves could not be held accountable for instances of copyright infringement by individuals.

According to RIAA spokesperson Jonathan Lamy, "[The RIAA] are the ones bringing action to something virtually everyone in the music community is supportive of.” He added that the P2P users subpoenaed will be those who distribute "significant" amounts of copyrighted music.

Grokster’s Rosso is responding by forming a lobby group specifically geared to targeting Congress. "I assure you we will be organising the users,” he says. “We want to mobilise them."


Korean Firms Launch Coin-Size MP3 Player

Two Korean firms have unveiled a featherweight MP3 player that is so small it could easily be mistaken for a coin.

Jointly developed by local gadget makers Station Z and EraTech, Emp-Z measures 42 millimeters in diameter and 10 millimeters in thickness, The Korea Herald reported.

The companies claim the new device, which weighs 15 grams and comes with 128MB of non- expandable memory, is the smallest and lightest MP3 player in the world.

Excluding the built-in rechargeable batteries, the Emp-Z is half the weight of the lightest models available in the market today, the companies said.

To miniaturize the device, Station Z and EraTech did away with functions such as voice recording and combined the earphone and USB (universal serial bus) slots into one, the report said. Using a USB adapter, users can now transfer songs from their computers to the Emp-Z through a standard headphone jack.

The two firms said the new portable music player will cost around $120 and mass production is scheduled for later this month.


Music Downloading, File-sharing And Copyright: A Pew Internet Project Data Memo
Press Release

The struggle to enforce copyright laws in the digital age continues to be an uphill battle for content owners. Data gathered from Pew Internet & American Life Project surveys fielded during March - May of 2003 show that a striking 67% of Internet users who download music say they do not care about whether the music they have downloaded is copyrighted. A little over a quarter of these music downloaders - 27% - say they do care, and 6% said they don't have a position or know enough about the issue.

The number of downloaders who say they don't care about copyright has increased since July-August 2000, when 61% of a smaller number of downloaders said they didn't care about the copyright status of their music files.

Of those Internet users who share files online (such as music or video) with others, 65% say they do not care whether the files they share are copyrighted or not. Thirty percent say they do care about the copyright status of the files they share, and 5% said they don't know or don't have a position.



The Download Tide May Have Ebbed
Dan Ackman

Music downloaders tend not to care about the copyright implications of their acts, but there are fewer people doing it than is generally imagined, a recent survey indicates.

Just 29% of U.S. Internet users have downloaded music files and just 12% both download and share music files from their PCs with others, according to the Pew Internet & American Life Project. The rest, 62% of Internet users, do neither. These percentages have stayed fairly constant over the last few years, while the music industry has battled the problem by threatening downloaders with legal action and by creating for-pay music services.

But despite the massive publicity and legal action surrounding Napster, Kazaa and more recently Apple Computer's (nasdaq: AAPL - news - people ) iTunes service, attitudes about copyrights haven't changed much. The report, entitled "Music Downloading, File-sharing and Copyright," found that just 27% of users who download music files are "concerned" about copyright, 67% don't care and 6% said they don't know enough or don't have a position on the issue.

The study conducted by the not-for-profit Pew Internet and American Life Project notes that the same 29% of Internet users reported downloading in 2001. Since the number of Internet users overall has continued to grow, so has the number of downloaders. But the problem seems relatively contained. In Napster's heyday, it claimed 60 million or even 70 million users. This claim seems wildly overstated if the Pew survey is correct. The study does not address the persistent question of whether, or to what extent, downloading has impacted sales of prerecorded CDs.

Of those who download, most say they do it so they can listen to the music at any time. It's not clear whether these downloaders are doing anything illegal. If, for instance, a computer user "downloads" his own CD onto his own hard drive so he can access it a different way (some would call this act "uploading"), that would seem to create no copyright implications. If, however, the user is downloading files he "shares" from other computers, that's exactly the type of conduct the record industry is desperate to reduce.

The survey indicates that just 12% of Internet users download music or video files and allow others to download files from their computers. Another 17% download such files on to their computers but do not allow others to "share" with them.

In recent years, the record industry and its trade group, the Record Industry Association of America, has combated this problem through litigation and publicity campaigns.

The RIAA says it will file civil lawsuits against individuals who use programs like Kazaa, and it has issued hundreds of subpoenas to Internet service providers to find out who is doing what. Laws that provide for damages could run into the hundreds of thousands of dollars, though actually enforcing these laws has proved near impossible. Some ISPs, like SBC (nyse: SBC - news - people ) and Verizon Communications (nyse: VZ - news - people ), have gone to court to attack record-industry subpoenas.

Downloading is most popular among people in their 20s. This is the only age bracket for which downloaders are a majority at 52%, compared to 51% two years ago. Downloading is more popular in the lower income brackets, among people with three or more years of Internet experience, and among people with less education, the survey says. More than 80% of people aged 18 to 29, and a similar percentage of students, said they did not care about copyright protection. In the higher income bracket of $75,000 or more, 61% said they weren't worried about the status of songs on their hard drives.

Services like EMusic and Pressplay have attacked the piracy problem from a different direction, encouraging downloaders to buy individual songs for slightly less than a buck each--allowing users to buy just what they want, which is what downloaders have said they want all along.
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P2P File Sharing is Legal and Moral
Gary Shapiro

Despite the assertions of the Justice Department, downloading is not illegal.

First, fair use rights are guaranteed to consumers by statute, and applied judicially on a case-by-case basis. This means that, while some consumer practices ultimately could be adjudicated as either fair use or infringement, there is scant basis for challenging them as criminal.

The music and film industries claim that there is no such thing as fair use "rights" in an attempt to disparage the term. They say that fair use is only an affirmative defense to copyright infringement and therefore not a right. But various recognized "rights" only may be asserted as affirmative defenses in a lawsuit. For example, in a slander suit, one may assert the First Amendment right but only as an affirmative defense; this does not diminish the fact that the right exists.

Second, time after time, practices of individuals that were initially equated with "piracy" or "theft" have been shown to be neutral or beneficial to copyright owners, and have either been tolerated or accepted as fair use. Think of the VCR and the Supreme Court decision holding that its use to tape full movies is fully legal.

Third, the 1997 NET Act's requirement of a total retail value of $1,000 per infringement should be taken seriously as a barrier to bringing cases against ordinary consumers. This law should not be re-interpreted, after the fact, as a criminal enforcement vehicle against consumer-to-consumer recording and "swapping" practices.

Downloading is not immoral either. To make downloading immoral, you have to accept that copyrighted products are governed by the same moral and legal principles as real property, thus the recent and continuous reference by the copyright community to label downloading as stealing. But the fact is that real and intellectual property are different and are governed by different principles. Downloading a copyrighted product does not diminish the product, as would be the case of taking and using tangible property such as a dress. At worst, it is depriving the copyright owner of a potential sale. Indeed, it may be causing a sale (through familiarity) or even more likely, have no impact on the sale. My son often will become familiar with artists through downloading their music on the Internet and then go out and buy the CD.

The comparison to real property fails for several other reasons. Real property is subject to ownership taxes. Real property lasts forever and can be owned forever. A copyright can be owned only for a limited period of time. Indeed, the United States Constitution declares this. More, copyright law must bow to the First Amendment that expressly allows people to use a copyrighted product without the permission of the copyright owner. This concern contributes to the statutory and judicial concept of “fair use”. The First Amendment includes, not only the right to send, but also the right to receive. Indeed, in 1984, the U.S. Supreme Court in declaring the VCR a legal product, said that it could be okay to copy an entire copyrighted product. So if the Supreme Court expressly held that VCR copying in the home for non-commercial purposes is a legal activity, how is it suddenly labeled as “piracy” because the device is a computer?

The Beatles 1 album, which contained 30-year-old songs that could have been downloaded for free from Napster-like services from day one, but nevertheless sold some 26 million copies. Why? Because people were willing to pay for the quality of a CD over the often barely acceptable sound quality of a download using P2P services.


Matt Richtel

Audio Distributor Receives $6 Million From 2 Investors

Audible Inc., a company that makes audio versions of books and magazines available over the Internet, plans to announce today that it has received a $6 million investment from Bertelsmann, the German media giant, and Apax Partners, a private equity firm.

Shares of Audible, which is based in Wayne, N.J., and was once a darling of the Internet boom, have fallen under $1, closing Friday at 66 cents.

The company's chief executive, Donald R. Katz, said yesterday that the money would help Audible improve its balance sheet and expand, particularly in overseas markets. With its $2 million investment, Bertelsmann has agreed to help market Audible globally, he said.

Apax Partners, with offices in the United States and overseas, contributed $4 million, Mr. Katz said, and intends to add expertise in global technology markets, where it has made previous portfolio investments.

As part of the transaction, Apax also bought about a third of the company's outstanding shares, making it Audible's largest shareholder. Apax bought those shares of preferred stock from Microsoft, which had held the interest since February 2001. Microsoft has retained about 1.9 million shares of common stock in the company.

Mr. Katz declined to give the amount that Apax paid for Microsoft's preferred shares; Microsoft originally paid $10 million for the shares, Mr. Katz said.

Audible went public in 1999 at $9, and quickly earned some acclaim from various Internet analysts for its service.

But the company struggled like a lot of Internet-centric concerns. Its stock has rebounded slightly from a 52-week low of 15 cents.

Mr. Katz said his company had more than 250,000 customers, who either paid for content à la carte or on a monthly basis of $14.95 or $19.95 for books and magazines they could listen to on their computers or download to digital devices, like the Apple iPod.

He said the investment indicated that his company not only had survived the Internet fallout but was poised to thrive.

SBC to Offer Wi-Fi Access at 6,000 Spots

SBC Communications is expected to announce today plans to provide wireless Internet access at 6,000 hotels, airports, convention centers, restaurants and other public locations. The initiative draws SBC into an intensifying competition with start-ups and other telecommunications giants looking to deploy wireless Internet "hot spots."

SBC, which is based in San Antonio, says it will deploy its network over the next three years at locations mostly in its 13-state territory, which includes Texas, California, and Connecticut. Some service will be available by the end of the year, the company said, but SBC has not disclosed how much it will charge users for network access.

The entrance of SBC comes as little surprise to industry analysts, given the number of companies interested in deploying wireless access based on Wi-Fi, a radio-signal technology. In May, Verizon, the telecommunications company based in New York, announced that it would provide Wi-Fi access from phone booths around Manhattan.

Wireless access is also available in a growing number of restaurants, including Starbucks and McDonald's. The earliest entrants in the wireless access market have been smaller technology companies, like Wayport Inc. of Austin, Tex., which provides Internet access at airports.

As part of its announcement today, SBC said it had entered a partnership to offer access to Wayport-operated Wi-Fi areas in hotels and airports.

Charles Golvin, an analyst with Forrester Research, a market research firm, said SBC "is stepping in where others have done the same thing." He noted that Verizon had already made that move and that he expected BellSouth to follow suit.

But Lydia Leong, an analyst with the Gartner Group, characterized the proposed SBC deployment as "a significant plan" because of its potentially broad scope in the SBC operating territory. "It's a relatively aggressive move," she said.

Brooks McCorcle, a vice president involved in Wi-Fi at SBC, said the company planned to deploy 20,000 Internet access areas in 6,000 locations, meaning some larger locations will have more than one connection point. Generally that is necessary because the Wi-Fi radio signal is not particularly strong; most users must be within 300 feet of a Wi-Fi area to connect to the Internet.

Ms. McCorcle declined to say how much of an investment SBC would be making in the network. She said the investment would be modest compared with technology investments the company usually makes.

She also declined to say how much the service would cost consumers, but said there should be a subscription service available by the end of the year.

Ms. McCorcle said the company intended to market the service first to business customers, who might want to check e-mail or browse the Internet while traveling or at conventions. She said SBC also hoped to persuade its broadband customers to spend a little more each month for access to the Wi-Fi network.

Ms. Leong said that she did not expect the wireless network to be "a gigantic revenue driver in the near term." She said that SBC was laying the foundation to take advantage of the longer-term growth potential of that technology.


Brief History of it All

'Golden Age of Free Music' vs 'Copying is Stealing'
Taylor Walton

The Motion Picture Association of America (MPAA) has launched an advertising campaign using the slogan "copying is stealing" to convey to the public the message that digital copying (eg. over peer- to-peer (P2P) networks) is as serious and criminal as stealing a CD from a record shop or a DVD from a video shop.

This article considers "copyright theft" in the context of developing technology both in the UK and the US, and the intense battle of rights holders against technology suppliers and consumers, some of whom are harvesting the benefits of this "golden age of free music".

Pre-Digital Age
As long ago as the late 1970s, there were legal disputes in which owners of copyright in music/film, etc. claimed that suppliers of new technology were guilty of copyright infringement offences:

(i) In the late 1970s Ames Records allowed subscribers to hire records from it for a small rental charge. Copyright owners considered that this encouraged copyright infringement and affected revenues as it enabled subscribers to copy the records onto cassette tape. CBS took legal action against Ames Records for copyright infringement on the basis that Ames Records had "authorised" the copying by supplying the subscription service.

(ii) CBS also took legal action for copyright infringement against Amstrad in the 1980s on the basis that, by supplying cassette tape- to-tape recording equipment, Amstrad was "authorising" copyright infringement by users of the equipment.

CBS failed in both cases as the court found, in essence, that Ames Records and Amstrad could not control or prevent the use of the equipment whether or not this involved illegal copying and therefore they did not 'authorise' any copyright infringement.

(iii) In another 1980s US case (Sony vs Universal City Studios), the court agreed that video recorders would be used to copy television programmes. UCS claimed that Sony was liable for copyright infringement as it supplied the video recorders.

Sony was not liable for copyright infringement under US law because it did not have knowledge of copyright infringement and the court agreed with Sony that there were 'substantial non-infringing uses' for video recorders.

The Digital Age
The Digital Age has made copying easier. Music and video can be easily and quickly copied across a range of new media such as CDs, DVDs, MP3 players, hard drives and digital cameras.

A series of legal actions (mainly in the US) have shown that, while consumers exploit the opportunities and rights owners desperately try to stem the tide and regain the stranglehold on the market, the law struggles to satisfy either rights holder or consumer.

Rights holders claim that P2P has cost them billions of dollars in revenue. Only a tiny fraction has been recovered and rights holders are becoming increasingly aggressive in their litigation. Rights holders are now targeting consumers, ISPs, operators and even funders of file sharing systems with their large legal budgets/teams.

Napster – con’t



Richard Chirgwin

WebSense Adds Spyware to Kill List

While Internet filtering has had a troubled history in terms of reputation, spyware is a much easier target.

Whether or not it's installed with user permission, there's no doubt that having active software agents inside a company's network, which are able to report
user behaviour back to remote computers, is a scary scenario for the security manager.

With that threat in mind, WebSense has now added spyware protection to its filtering – sorry, employee internet management – solutions.

The company's president Curt Stacker said the company first started looking at spyware blocking in response to activity on its own, internal network. It then took its experience to its corporate customer base, and Stacker said “we were surprised to find that about 25% of the PCs at our customer sites were infected with some kind of spyware.”

Hence the decision to add spyware protection to the options now available to WebSense customers. The known sources are included in the WebSense database, and new sources added on roughly a seven-hourly turnaround (either in response to customer reports or to the company's own research, Stacker said).

The company is positioning the spyware management as being more active than current software like Lavasoft's Ad-Aware or Spybot Search & Destroy (both of which the author has tried). Spyware detection targets the already-infected machine, Stacker said, making it a hugely important tool – but it's unable to identify the incoming traffic as coming from a suspect source.

While `ad-ware' is a relatively harmless manifestation of the phenomenon, the growing awareness of blended-threat security attacks (in which virii or worms report discovered vulnerabilities, or keystroke logs, back to the author) has given WebSense an environment willing to listen to the issue of spyware management.

CommsWorld Comments:

Instant messaging and peer-to-peer networks have added a sense of nervousness to the spyware debate: many P2P vendors have been criticised for commandeering their users' machines as ad servers.

Even more nerve-wracking, the experience of Australian universities now facing court is that copyright owners are increasingly willing to seek out their own sources of information about the networks on which Kazaa hosts reside.

And there's a troubling and difficult question facing both sides of the spyware debate (a question, I'm sorry to admit, that I didn't ask Curt Stacker while I had him on the phone): where should a filter vendor draw the `spyware' line?

There's no doubt that a virus trying to `phone home' should be blocked.

Nor is there any good reason that a company would want its networking bandwidth used by spyware products trying to update remote databases about the clicking habits of its users.

But somewhere down the line, anyone trying to sense spyware is going to find themselves caught in a vice: do they block snoop software from the RIAA? Can a WebSense classify the increasingly-invasive behaviour of legitimate software, from the operating system up, as spyware?
http://www1.commsworld.com.au/NASApp...NT&from=h ome


Stealing the Net
Jeff Chester & Steven Rosenfeld

Ever stop to wonder what is really happening to the Internet these days?

The crackdown by the music industry on illegal downloading tells just part of the story. Even with the dot-com bust, the digital boom is here, as high- speed connections, faster processors and new wireless devices increasingly become part of life. But the thousands of lawsuits are not just about ensuring record companies and artists get the royalties they deserve. They're part of a larger plan to fundamentally change the way the Internet works.

From Congress to Silicon Valley, the nation's largest communication and
entertainment conglomerates -- and software firms that want their business -- are seeking to restructure the Internet, to charge people for high-speed uses that are now free and to monitor content in an unprecedented manner. This is not just to see if users are swapping copyrighted CDs or DVDs, but to create digital dossiers for their own marketing purposes.

All told, this is the business plan of America's handful of telecom giants -- the phone,
cable, satellite, wireless and entertainment companies that now bring high-speed Internet access to most Americans. Their ability to meter Internet use, monitor Internet content and charge according to those metrics is how they are positioning themselves for the evolving Internet revolution.

The Internet's early promise as a medium where text, audio, video and data can be
freely exchanged and the public interest can be served is increasingly being relegated to history's dustbin. Today, the part of the Net that is public and accessible is shrinking, while the part of the Net tied to round-the-clock billing is poised to grow exponentially.

One front in the corporate high-tech takeover of the Internet can be seen in
Congress. On July 21, the House Subcommittee on Telecommunications and the Internet held a hearing on the "Regulatory Status of Broadband." There, a coalition that included Amazon.com, Microsoft, Yahoo, Apple, Disney and others, told Congress that Internet service providers (ISPs) should be able to impose volume- based fee structures, based on bits transmitted per month. This is part of a behind- the-scenes struggle by the Net's content providers and retailers to cut deals with the ISPs so that each sector will have unimpaired access to consumers and can maximize profits.

The industry coalition spoke of "tiered" service, where consumers would be charged
according to "gold, silver and bronze" levels of bandwidth use. The days where lawmakers once spoke about eradicating the "Digital Divide" in America has come full circle. Under the scenario presented by the lobbyists, people on fixed incomes would have to accept a stripped-down Internet, full of personally targeted advertising. Other users could get a price break if they receive bundled content -- news, music, games -- from one telecom or media company. Anybody interested in other "non-mainstream" news, software or higher-volume usage, could pay for the privilege. The panel's response was warm, suggesting that the industry should work this out with little federal intrusion. That approach has already been embraced by the industry-friendly Federal Communications Commission.

Meanwhile, in the courts, there has been a rash of new litigation spurred by the
Recording Industry Association of America (RIAA)'s pursuit of people who have illegally shared copyrighted music. The music industry no doubt hopes to discourage file-swapping piracy, and some big telecom companies, such as SBC Communications, have counter-sued, saying they will protect their clients' privacy. While that's good public relations, there's more to this story as well. Telecoms, like most big corporations, don't want other businesses, let alone the government, interfering in their operations -- so there's plenty of reasons to counter-sue -- even if the record companies and telecoms have parallel stakes in privatizing the Net.

But there's also a technologically insidious element to this side of the story. The
software now exists to track and monitor Internet content on a scale and to a degree that previously hasn't been possible. The RIAA is taking people to court because it has the technology to track illegal Internet file swapping. This level of content-tracking is the next-generation application of what's been developed to keep children and teenagers from viewing porn at the local library or home. Consider this typical bit of sales arcana from the Web site of Allot Communications, which says its software can track and filter Internet communications and use that analysis to bill consumers.

"Allot Communications provides network traffic management and content filtering solutions for enterprises, IP service providers, and educational institutions... Allot's QoS [quality of service] and service-level agreement enforcement solutions maximize return on investment by managing over-subscription [unintended uses], throttling P2P [peer-to-peer, the music piracy software] traffic and delivering tiered classes of services."


File Sharing and How to Save the CD
Christian Hoopes

All right, music industry, it's time you and I had it out about file sharing.

To be up front about it all, I do understand your position: If we're getting it for free, we're not paying you. If we're not paying you, you can't make your boat payment and, pretty soon, you're in the subway, holding a sign that reads, "Will gouge consumers for food." I can't sympathize, but I do understand.

It can't be like you didn't see this coming, though. Did you really expect us to keep paying $17 every time Fred Durst has a Tourette's attack and decided to record it? And let's be realistic. Does it really cost you $17.00 to get CDs out to the public? I received 4 CD-ROMs in the mail from AOL this week alone; if they all cost $17, then in my lifetime, AOL has invested something like $12 million dollars on promoting its services to me personally.

Some would argue the record business is able to reach a market local acts can't reach, or produce CDs in a professional manner. Others would argue that if you bring in a few tracks, K Mart's photo lab will make you a CD, sleeve and a very attractive tracklisting for $2.95, plus you get a coupon for a free personal pan pizza from the Little Caesar's in the food court. For me, the choice is clear.

And OK, so you claim the people really getting hurt by file sharing are the artists, the ones we profess to love and support. Fair enough, but riddle me this: How much money are these artists getting from the sale of each CD? By the time you carry that fraction of a cent out, they probably owe you. Come on, we're not blind. We all know you guys paid U2 like 80 million dollars for that last album, an LP that lacked more balls than a castrati convention at the Lilith Fair. That money came from your $16.98 profit from that Baha Men CD we, as a nation, collectively got drunk and purchased.

The music industry has a label for file sharing: Music piracy. To me, this is a bit of an overreaction. First of all, it implies people who download songs are like eye patch-wearing bohemians, swinging into the recording industry vaults on ropes with daggers clenched in our teeth and sacking the place, making away with the files and the women as we sing chanteys about scurvy. Second of all, doesn't half of piracy involve selling our loot? It's not like I'm making homemade Eminem CDs and selling them on ebay (although, on a totally unrelated subject, my username is Eminemguy and I have VERY reasonable prices).

Plus, piracy seems a very serious name for the digital equivalent of listening to the radio. It's like if they called checking out a book from the library 'literary molestation,' or taping Frasier "video rape." To compromise, can't we just call it 'music borrowing'? This should make everyone happy. It acknowledges in the agreement that someone else owns the song, and that we are just going to take possession of it for awhile and give it back, in the form of letting other people download it. Seems fair to me.


Supreme Court Audio Set For Downloading
Phuong Le

Getting audio recordings of landmark legal arguments is becoming as easy as downloading the latest Snoop Dogg single.

For the first time, Internet users can download, edit and swap many of the U.S. Supreme Court's greatest hits.

Oral arguments available include those for the Roe v. Wade abortion-rights case and the disputed 2000 presidential election.

The audio files come from the OYEZ Project, a multimedia archive that gets its name from the synonymous phrase "Hear ye, Hear ye."

"There's so much more information and emotion in the human voice that a transcript can't do it justice," said Jerry Goldman, the project's director and a professor at Northwestern University.

Goldman said the bitterness in Justice Thurgood Marshall's voice is apparent when he explains his views in Regents of the University of California vs. Bakke, a 1978 affirmative action case. And the silence is deadening in Roe v. Wade when Jay Floyd, representing Texas, makes a joke but no one laughs.

Since 1994, the OYEZ Project, run out of Northwestern, has made audio of the cases available in a "streaming" format that requires a continuous Internet connection. Available were some 2,000 hours of audio dating to 1955, when taping of oral arguments began.

The project is converting the files to the MP3 format, which permits offline listening, use of portable devices and sharing through the same peer-to-peer networks used to swap music and movies. The first batch of MP3 files was released in late June.

Goldman said he ultimately wants to make available in MP3 every bit of Supreme Court recordings, about 6,000 hours in all. He also wants them easily searchable.

"The whole idea is to build a digital commons, make accessible materials that are really valuable in a free and open society," he said.

David Pride, executive director of the Supreme Court Historical Society, said the project appeals to attorneys, particularly those who argue before the court.

"It is the only opportunity you have to see what questioning before the court is like," Pride said.


Tone-Deaf Music Industry
LA Times Editorial

What is euphemistically called trading music online is theft, most of it petty. Songs downloaded free deny artists and record companies their due. Even so, the recording industry has abetted the robbery with its own greed and ineptitude. Though the industry is showing a glimmer that it understands there are better ways to deal with the problem, it also is employing a legal blunderbuss to pursue small-time downloaders as big- time criminals.

In April, the industry launched an assault against a few big-time outlaws, including students who ran on-campus, large-scale music file-sharing operations akin to the defunct commercial operation Napster. More recently, the Recording Industry Assn. of America filed more than 900 subpoenas to get Internet service providers and university administrators to turn over the names of not only mass pirates but also those who pilfer but a few songs.

With the RIAA threatening to sue consumers under a law that can impose fines of $750 to $150,000 per file shared, the trade group's heavy- handed tactics threaten to put fans — many of whom continue to buy CDs — into not just the doghouse but the poorhouse. Worse, the recording industry's friends in Congress — Reps. John Conyers Jr. (D-Mich.) and Howard L. Berman (D-North Hollywood) — are drumming up more draconian laws that would help federal prosecutors file felony charges against those uploading even a single file. Penalty? Prison for up to five years. While the music business is on this track, why not execute a few shoplifters? Or, instead, why can't the industry, artists and others recognize technology's march, take advantage of it and stop alienating their potential customers?

Artists and entrepreneurs must get fair compensation. But in this give-it-to-me-now Internet age, American consumers demand instant gratification. They want to easily search for tunes, download them immediately and enjoy their collections on CDs of their own creation or on wallet-sized gadgets. Some executives are getting the idea; Apple's new iTunes music store has already sold 6.5 million songs online. But an attempt by industry execs to offer a discounted music "online jukebox" for college students, while a good idea, won't work if the plan also forces universities to police their own computer networks. It also fails to account for tech-savvy students who, if unsatisfied with the selection, will circumvent the system.

The digital revolution, like it or not, has transported the music industry to a place where it must thrive online. And the more the industry resists creating legal, easy and affordable ways to download all music — pleasing consumers, artists and entrepreneurs alike — the more it will achieve the opposite: making illegal sharing more entrenched and innovative.


Online Music Not Such A Money Spinner

Financial forecasts for web sales cut as supply fails to meet demand
Marc Ferranti

Though new internet music services this past year have sparked headlines, they have failed to fuel a much faster uptake of online music purchases, according to Jupiter Research analysts.

Online CD sales in the US will remain essentially flat in 2003, at $750m, or seven percent of the entire recorded music market in the country, according to research presented by Jupiter analyst Lee Black.

But Black does forecast long term growth for online music sales, whether they're downloaded tracks or CDs bought on the web. By 2008 he anticipates that these sales will be worth $3.3bn, and the internet will account for 26 percent of music spending in the US. This is down from Jupiter's previous forecast of $5bn by 2007.

Black believes that the problem may lie, not with demand for music online, but with supply. "I talked to all the various players, the retailers, the online services, to come up with the figures," he said, "but essentially, unlike what might be expected in other types of markets, supply has not quickly risen up to meet demand".

Legitimate services such as Apple's iTunes Music Store have suffered at the hands of restrictive licensing rules from copyright owners which is curbing consumer enthusiasm.

However, the biggest problem facing paid-for services like the Music Store and rival Pressplay, is the free peer-to-peer file swapping sites. Only 17 percent of adults say the threat of legal action from the recording industry has led them to cut down on illegal file sharing, according to Jupiter.

Jupiter's analysts say that the situation is much the same as in the US across the globe, stating that online music in Europe has been "stuck" in much the same way it is in the States. Indeed, Apple has had to delay the launch of the iTunes Music Store in Europe because of the requirement to meet complex licensing terms over here.

On the bright side Jupiter does believe such problems should start to be resolved, with online music purchases growing from just nine percent this year to 48 percent in 2008.


Congress, The New Copyright Bully
Eric Goldman

Congress has become exasperated with its inability to get Americans to stop engaging in copyright infringement. So Rep. Howard Berman jokes that he "probably" does not favor the death penalty for infringers, Sen. Orrin Hatch half-jokes that he would like to blow up the computers of infringers and Rep. John Carter wants to see infringing college kids thrown in jail for 33 months.

However, in more candid moments, members of Congress admit that they don't know what to do next, from a policy standpoint, to combat infringement. A prime example of this policy vacuum is Congress’ proposal du jour, the Author, Consumer and Computer Owner Protection and Security (ACOOPS) Act.

Having criminalized willful nonprofit copyright infringement in 1997 through the No Electronic Theft Act without much success, some in Congress believe the law is too weak and needs more teeth. Thus, the new bill proposes a clear and simple standard for criminal copyright infringement: You commit a felony if you upload one infringing copyrighted work to the Internet.

Have an infringing MP3 in your shared peer-to-peer software directory? Go to jail. Post a newspaper article to your blog? Go to jail. Upload a photo taken by your wedding photographer to a family album Web site? Go to jail.

The bill does not reflect a well-thought-out policy toward criminal copyright infringement. It cannot even be blamed on pandering to the copyright owner lobby. Instead, the bill simply reflects Congress’ stubborn determination to bully the American people into doing what it wants.

In the past decade, through dozens of congressional oversight hearings where usually only industry representatives testify, Congress has been completely convinced that rampant copyright infringement threatens to destroy the American economy. Having internalized this threat, Congress is now determined to fix that problem the only way it knows how--threaten ordinary citizens with jail, despite collateral consequences.

And yet, just about everyone outside the Beltway knows that criminal copyright law has already gone too far. We necessarily commit copyright infringement as an unavoidable consequence of living in a digital society. But the criminal law already treats much of that conduct the same as it treats the blatant piracy that poses more serious jeopardy to copyright owner interests. With the rules so bluntly delineated, we cannot respect them or comply.


Survey: Users Want DSL But Can't Get It
Jim Hu

Dial-up Internet users are more willing to upgrade to digital subscriber line (DSL) service than to cable modem service, according to a study.

If they can actually get DSL, that is.

In a survey of 7,700 dial-up Internet service customers, 52 percent of the respondents said they would prefer to upgrade to DSL rather than cable service. By contrast, 38 percent said they would prefer cable. The study was conducted by J.D. Power and Associates.

The main reason for switching is price, the survey found. DSL providers, namely the Baby Bells, have been discounting their prices throughout the summer.

But availability of service is a major stumbling block for DSL. That has helped cable modem providers continue to have nearly twice as many subscribers as DSL, the study said.

"Price continues to be the number-one reason to switch providers among dial-up and high-speed Internet subscribers," Steve Kirkeby, senior director of telecommunication research at J.D. Power and Associates, said in a statement. "However, widespread availability is a critical hurdle that DSL providers haven’t yet been able to jump."

The survey also rated customer satisfaction with dial-up and broadband providers. In dial-up, AT&T Worldnet Service ranked the highest in satisfaction, followed by EarthLink, BellSouth and United Online. Microsoft's MSN, SBC Communications' Prodigy and AOL Time Warner's America Online and its CompuServe Interactive Services subsidiary occupied the bottom tier.

For broadband providers, EarthLink ranked highest in customer satisfaction, followed by BellSouth, Time Warner Cable's Road Runner and Cox Communications. Adelphia Communications, Charter Communications, Comcast and Qwest Communications ranked lowest.

Broadband providers all showed gains last quarter, but some companies, including SBC and Comcast, outdistanced their competitors.


Comcast To Extend 3mbps Trials
Jim Hu

Comcast plans to expand consumer trials for a 3mbps high-speed Internet service, the latest step in the cable giant's effort to double the speed of its standard cable modem product.

The new 30-day trial will begin Thursday in Pittsburgh for subscribers who pay $42.95 a month on top of basic cable TV service. A separate 3mbps test is already under way in Knoxville, Tenn. A company representative would not comment on whether Comcast plans to eventually offer 3mbps service to all of its subscribers.

"The reason (for the trial) is to determine how the change affects the network, how users value increased speeds and to help us develop the broadband experience for the future," Comcast spokeswoman Sarah Eder said.

Eder declined to comment on whether 3mbps plans might be offered as a more expensive option to Comcast's standard service.

The trials highlight the ongoing features war between broadband competitors--in this case, Comcast's cable modems and Verizon Communications' DSL (digital subscriber line) service. Because of their overlapping markets, both companies have toyed with boosting service perks in an attempt to lure more customers.

DSL providers, namely Verizon and SBC Communications, have been slashing prices in hopes of attracting new customers and stealing cable subscribers from rivals.

In May, Comcast CEO Brian Roberts said in a speech that speed hikes would be one critical factor in differentiating service from that of competitors.

"We should not be satisfied with 1.5mbps of speed," Roberts said, referring to the standard download speed that Comcast offers.

Indeed, some cable providers are already offering faster broadband speeds. Cablevision Systems, which serves areas outside New York, averages 3.5mbps and has been clocked as fast as 6.3mbps for its download speed, according to Broadbandreports.com, a Web site that tracks industry trends. Comcast was clocked at speeds of 1.7mbps.

DSL companies typically offer lower speeds or charge higher prices for comparable service. Verizon, for example, charges download speeds of up to 768kbps for $34.99 a month. The company also offers a premium service that promises downloand speeds of up to 1.5mbps for $59.99.


Second Quarter Mixed For Broadband Firms
Jim Hu

U.S. broadband growth lagged overall expectations in the second quarter but handed the two biggest cable and DSL providers sizable gains, cementing their respective leads over competitors.

SBC Communications startled analysts last month, reporting 304,000 new DSL (digital subscriber line) customers, dwarfing its closest DSL competitors, Verizon and BellSouth, which added 101,000 and 103,000 new subscribers, respectively.

SBC's DSL service is co-branded with Yahoo and marketed heavily throughout the Web portal. SBC pays Yahoo a percentage of the fees paid by every access customer, while Yahoo shares advertising and e-commerce revenues. Analysts said they are still trying to figure out whether SBC's partnership with Yahoo played a significant factor in SBC's quarterly uptick.

"It seems to speak well (of) partnering with a strong Internet and content brand like Yahoo," Jim Penhune, an analyst at research firm Strategy Analytics, said about SBC. "The flipside is what they give up in terms of revenue and income. They may have captured more customers, but they are presumably sharing the wealth by having an outside partner."

Meanwhile, on the other side of the broadband fence, Comcast maintained its sizable lead against its rivals. The nation's largest cable network reported 350,000 new cable broadband subscribers, compared with Time Warner Cable's disappointing 170,000, Cox Communications' 112,452, Cablevision Systems' 82,700 and Charter Communications' 76,700.

Cable companies claimed that their results, which analysts said came below expectations--with the exception of Comcast--were the result of seasonal factors, such as disconnects from college subscribers. Although it's true that the second quarter is usually slow, Comcast's momentum raises questions about why others disappointed.

Some of this may be due to Comcast's aggressive promoting to customers in the markets of its recently acquired AT&T Broadband.

"There are unique things happening with Comcast," said Mark May, an equity analyst at Kaufman Bros. "They are able to offset competitive pressures and seasonality by increasing their footprint in AT&T markets."

Despite the disappointing quarter for most cable companies, the industry continues to show more inroads into households than does DSL. Numerous DSL price-cut promotions over the quarter highlighted the Baby Bells' determination not to lose more ground to cable companies that are stealing away coveted voice customers.

That's not to say consumers will be seeing price cuts on their cable bills any time soon. Cable's lead in the household remains steady.

"The cable operators so far haven't taken the bait to do price cuts on their own," Strategy Analytics' Penhune said. "I still think they don't have to do it yet and want to maintain their margins for as long as they can."


Patents: An Expensive Tax on the CIO
Lawrence Rosen

SOFTWARE PATENTS cost you money.

Like taxes, they skim from your profit margins, but in this case the fees go to pay for other companies' intellectual property.

For example, your e-mail program, Internet browser and word processor (all patentable) may carry a 5 percent to 10 percent patent license fee. If patented software is embedded in your products or services and the patent holder takes you to court, you could find yourself paying the same markup. Most important, what if this expense comes as a surprise, when a patent holder demands royalties for a patent you didn't even know existed? How would a sudden 5 percent to 10 percent price hike in your product affect your sales, your profits?

That example is not hypothetical. I represented a small computer hardware company that was recently sued, along with 210 other companies, for infringement of a 1985 software patent for processing color images for scanners. My client was unaware of the patent. The plaintiff sought damages in the form of a "reasonable royalty" going back six years. Guess who will pay that royalty? Customers. As far as I know, the lawsuit is still going on, at a probable cost in attorneys' fees alone of $100K per month.

Big software companies create portfolios of thousands of patents (for example, IBM has more than 27,000; Microsoft has 2,400) designed to legally monopolize innovation. Every large company now seeks a patent portfolio relevant to its areas of business to use as a bargaining chip with competitors. They stack their patent portfolios on conference room tables, weigh them against their competitors', and negotiate cross-licensing fees. Small startups usually don't have the resources to build a stack of patents and may avoid the market altogether, limiting choice for CIOs. Regardless, this defensive rush to the patent office is driving up costs—and therefore, prices—for everyone involved.

When CIOs buy software, they often seek patent indemnification—the software company agrees to fight any infringement claims against you as well as itself—but costs are capped by the vendor, most of whom have shallow pockets. And no indemnity provision would ever cover you if you combined patented technology with your own systems.

Worse, the only way to know whether you've violated specific patents is to evaluate those patents one by one. But the very structure of the software industry makes evaluating the torrent of new patents each year impossible. Software is complex and ubiquitous. Developers from around the world cooperate to write software— especially in the open-source community—but patents are national and vary widely from country to country. The analysis task is monumental.

Sometimes the cost of patents is even greater than a licensing fee—it could mean shutting down the business. That's because a patent owner is not required to license his patent. Kodak had to shutter its instant camera business when patent owner Polaroid felt threatened by competition. Could your programming budget survive a sudden requirement to design around a software patent, assuming it is technically feasible?


One Slow User In The Hot Spot Can Degrade Wi-Fi Performance

A group of French researchers said Wednesday that they've spotted a flaw in wireless (news - web sites) LAN technology that could allow one slow user to drag down performance of everyone connecting to a hot spot.

Four scientists, who work for France's Centre Nationale de la Recherche Scientifique (CNRS) in Paris,

said in their research paper that anomalies in the IEEE 802.1x standard -- including 802.11a, 802.11g, and the most widely-used Wi-Fi protocol, 802.11b -- can result in degraded performance for all accessing the Internet through a hot spot when just one slow user connects.

They cited an example where several users, who are enjoying a fast 11Mbps connection because they're close to the hot spot, see their performance dramatically drop when a single user -- perhaps because he is further from the access point -- connects at a sluggish 1Mbps. In that case, the French experts said, all are punished for the sins of the one: those users once connected at 11Mbps will see their speeds dragged down to 1Mbps.

The anomaly, they said, is inherent in the CSMA/CA (Carrier Sense Multiple Access/Avoidance Collision) access protocol, which guarantees equal access to the hot spot by all devices.

While the problem may not be readily apparent to users -- especially when everyone accessing the hot spot is engaged in relatively light-load activities, such as browsing Web pages -- if just one user is downloading files, or accessing audio or video via wireless, others can be penalized.


Senator Wants to Limit Patriot Act
Roy Mark

U.S. Senator Lisa Murkowski (R.-Alaska) introduced legislation Friday
designed to rollback certain provisions of the Patriot Act, including requiring a court order for U.S. law enforcement agencies to conduct electronic surveillance.

According to Murkowski, her bill would not repeal any portion of the Patriot Act, but would curb some the police powers granted under the legislation. The Patriot Act was passed in the immediate aftermath of the Sept. 11, 2001, terrorist attacks.

"We must strike a careful and constitutional balance between protecting the individual rights of Americans and giving our law enforcement and intelligence officials the tools they need to prevent future terrorist attacks," Murkowski said in a statement. "To date it appears portions of the Patriot Act may have moved the scales out of balance. My goal is simply to make sure that our laws are balanced."

The Protecting the Rights of Individuals Act (S. 1552) requires that law enforcement agencies demonstrate a cause for suspicion before courts could issue authority to monitor certain telephone and Internet use and also seeks to limit the FBI's ability to review a person's personal data, including medical, library and Internet records.

Murkowski wants the FBI to meet the standards outlined in the Foreign Intelligence Surveillance Act, which requires law enforcement agencies to have probable cause that surveillance targets are agents of foreign powers.

Just 45 days after the Sept.11 attacks, with virtually no debate, Congress passed the USA Patriot Act. Since then, it has come under fire from a number of conservative and civil libertarian groups for its rollback in privacy rights. The Department of Justice is expected to introduce a sequel, dubbed Patriot II, that, that, according to the American Civil Liberties Union, "would further erode key freedoms and liberties of every American."


Anarchist Web Site Lands Man in Jail

A federal judge sentenced a man to a year in prison Monday for creating an anarchist Web site with links to sites on how to build bombs.

U.S. District Judge Stephen Wilson sentenced Sherman Austin to more than the prosecutor had recommended under a plea bargain.

Austin, 20, pleaded guilty in February to distributing information related to explosives.

Austin told the judge Monday he "wasn't really thinking" when he created the Web site. "I'd be devastated if someone used this information to harm others," he said.

Austin admitted posting links about bombs to enable people to build and use them during demonstrations against interstate and foreign trade. He told FBI agents he wanted the Web site to teach people about police brutality.

Austin must also pay a $2,000 fine and is barred for three years from using a computer without approval. Wilson said he also may not associate with anyone from a group that "espouses physical force as a means of change."

Austin was arrested with other protesters at the World Economic Forum in New York in February 2002 on charges of disorderly conduct and unlawful assembly. While in New York, federal charges were handed down in California.

Austin said he took a plea bargain because he feared his case was eligible for a terrorism enhancement, which could have added 20 years to his sentence. The plea deal had called for him to serve four months.

Top 10 D/Ls - Singles


Caught In The Act
Jo Maitland

The issue of whether the media industy should continue fighting copyright piracy on peer-to-peer (P2P) networks or start thinking of P2P as a new money-making content delivery mechanism came to a rather ironic head recently at Ellacoya Networks Inc.

One of Ellacoya's senior networking engineers was caught downloading a pirated version of The Matrix Reloaded at home and was cut off temporarily by his cable service provider, at the behest of the Motion Picture Association (MPA), acting on behalf of Warner Brothers, which owns the rights to the Matrix cash cow.

The irony is that the engineer (we'll call him Neo to protect his identity) was actually downloading the film for research purposes.

Of course, the term "for research purposes" is sometimes used in questionable circumstances (see: Pete Townshend and the Japanese whaling industry). In this case, Neo concedes he was "killing two birds with one stone." He liked the film -- he'd paid to see it in a cinema -- but he was also downloading it as part of his job at Ellacoya, which makes a switch to help service providers manage and control P2P traffic (see ISP Fixes P2P ).

”As part of my job I look for changes in the signature, or sequence of bits in a P2P stream, so that our software is able to drill down into traffic and see exactly what that stream is. That way we can monitor and control it,” says Neo. "But I might as well download something I’m interested in at the same time."

Neo found the movie on Shareaza, a popular P2P network that aggregates four other P2P networks -- its own, eDonkey, Gnutella, and Gnutella2 (not to be confused with Nutella®, the original hazelnut spread®) -- offering its users four times as many files to download. “I was playing around with it to see if the bit streams for P2P files in this application resemble the same patterns as they do in the standalone versions of the client,” he says. “I downloaded The Matrix Reloaded for the heck of it; I’d seen the movie at the cinema and really like it.”

Unfortunately the Motion Picture Association didn’t view Neo’s actions in quite such a disinterested light. The association ordered Neo’s service provider, also nameless here, as Ellacoya probably hopes to do business with it after this incident, to stop him from illegally sharing the film.

To get his cable service switched back on, Neo had to disable file sharing on his computer. Once he'd done that, service was restored within half an hour. “I turned off file sharing in those apps, which makes it harder to see exactly how they work," he sighs. (Sounds like Neo could use himself a pick-me-up -- perhaps a tasty, yet nutritious, Meringue Nest With Nutella Nutty Eggs!)

Neo was caught in the middle of the battle among content providers, service providers, and end users, all desperate to get a slice of the P2P pie (see Movie Studios to Prowl the Net).

The current situation -- which has the Record Industry of America Association (RIAA) and the MPA filing lawsuits left, right, and center to try and stamp out the problem -- won’t work, Neo thinks. And neither will spiteful attempts to thwart P2P networks, he says. One example of this, which he believes to be the work o f the RIAA, is 20 second clips of songs that are appearing all over P2P networks. “The RIAA is seeding trash copies of songs on the Internet to discourage people from using it, but this won’t stop people." (Fight for the Future©, dude!)

It’s Ellacoya’s belief that eventually service providers and content providers will have to work together to provide users of P2P networks a much better service than they get today -- a view shared by KaZaA Founder, Niklas Zennstrom. Users will have to pay for it, mind you, through premium rates for additional bandwidth, but Ellacoya thinks this is where the industry is headed.

In the meantime, watch out folks -- Jack Valenti is out there tracking you down. Be afraid. Be very afraid.


The Coming Wi-Fi World

Sky Dayton, the serial entrepreneur (who also founded the highly successful EarthLink) predicts where the Wi-Fi industry is going, and what the wireless world will look like.

AlwaysOn: Where do you think wireless is going? What’s your long-term view?

Dayton: I like to take a hundred-year perspective on this stuff. If you look back in history, every time there's been a dramatic advance in communications technology, there's been a similar advance in civilization that follows it. The printing press preceded the Reformation in Europe; telephones, radio, and TV preceded the Information Age. Every time we make it easier for people to communicate with each other, civilization advances to some degree.

The Internet is clearly the greatest medium ever in its ability to allow anybody, at a very low
cost, to communicate with anyone else in the world. I think we’re just starting to see the fruits of that. What wireless represents is clearly the next chapter of the Internet. It’s very early still, but we're rapidly moving towards the time when the Internet will just be in the air that you breath. It won't be in a wire. The backbone and the high-capacity parts of the Internet will still be fiber or wired in some way, but the user's devices are not going to connect with any kind of wire. Wi-Fi is clearly the last hundred feet of the Internet.

AlwaysOn: So you get to be part of the next big advance.

Dayton: Yeah, I guess that's one of the reasons I was so excited about Wi-Fi. To me, it's like the TCP/IP of wireless. It's the single unifying standard around which all the innovation, all the R&D dollars, are concentrated. And unlike CDMA and GSM, or any other attempts at this in the past, there's no bifurcation of that innovation. Any development in Wi-Fi benefits everyone else anywhere else who’s working in it. http://www.alwayson-network.com/comm...id=575_0_3_0_C


Goodbye To Hello In Digital Age – study

A new language has emerged through the use of email and instant messaging which could render "hello" and "goodbye" obsolete within a generation, according to a report.

People using new technologies to communicate are much more likely to start the conversation "hey" and sign it off "laters" than the more formal alternatives, says the study.

Influences from around the world have contributed to a more "familiarised" language which the report has dubbed "globespeak."

Jonathon Green, author of the study, said: "We have a situation where more people use electronic communication than old-fashioned letters. The way these technologies work often results in us talking faster and with more slang.

"It wouldn't surprise me if, in 50 years, there was no longer a need for 'hello' and 'goodbye' in general or certainly in electronic communication," said Mr Green, a lexicographer and author of a dictionary of slang.

Digital CD Decks Challenge Vinyl

The success of a digital system that allows CDs to be scratched and mixed in the same way as 12-inch records could mean the death end of DJs using vinyl, a top DJ and record producer has said.

The system, called the CDJ-1000 and produced by technology company Pioneer, has been designed to replicate as much as possible a traditional vinyl deck, but taking advantage of modern digital technology. The decks, which have already won a number of awards, have been given great approval by Erick Morillo, boss of Subliminal records and one of the most influential DJs in the world.

"I'm letting technology take over," Mr Morillo told BBC World Service's The Music Biz programme.

"With the introduction of the CDJ-1000 I feel like there's a whole new way of DJing these days."

The key to the system - which resembles a small version of a vinyl deck - is a grooved, touch-sensitive jog wheel, which allows records to be stopped and scratched at any time. Until now, the inability to do this was one of the key reasons DJs had shunned performing with CD decks. Additionally, the system has an internal memory that can remember cue and loop points, and allows tracks to be remixed live.

"When I'm DJing with vinyl, I'm bored now," Mr Morillo said. "With CDJs you can loop the records at whatever point you want.

"I take my filters and I'm remixing records on the fly."

Pioneer say that they developed the system with DJs to try and tackle the problems encountered when using traditional CD players.

"What we did here was look at all the objections that DJs had against using our existing range of DJ CD players, and basically overcome them," Pioneer spokesman Martin Docherty told The Music Biz.

"That's why this product has been so successful, and it's now the industry standard across the world."

The system also has a memory card that recalls edit points for tracks, meaning that a DJ can travel with only the card and their CDs. The card is inserted into another CDJ-1000 deck and the player will recognise all cue and loop points.

"Many DJs are still using vinyl, but they're now using vinyl alongside CD, simply because of the extra performance value," Mr Doherty added.

"DJing is becoming very competitive, and DJs are now looking for alternative pieces of hardware to enhance their set and give them the edge over the competition." Mr Morillo confirmed that he and his record label were abandoning vinyl in favour of the new technology.

"It's funny because I was a spokesman for vinyl. About two years ago I said vinyl will never go away, vinyl this, vinyl that," he said.

"But [the decks] really do feel like vinyl, and you can put as big a show with the CDJ-1000 as you can do with turntables.

"So now, I'll probably be the person that is going to spearhead this whole changeover to CDs and being a vinyl label, it's kind of weird to hear me say that.

"With each vinyl release, we're going to include a CD with all the mixes as well, because that's where it's going." Mr Morillo conceded that the complaint most often levelled against CDs by vinyl enthusiasts - that the sound is too clinical and lacks warmth - remained true.

"The specialists will argue there's a certain sound you're missing, and absolutely, they're right," he noted.

"But the convenience far outweighs the little sound that you may be missing."


MP3 Music Goes Hi-Fi
Alfred Hermida

Ever wished you could listen to the hundreds of MP3 tracks on your PC on your stereo? A range of digital music players are springing up that let you listen to songs on a hard drive on a hi-fi. One of these is a gadget called Slimp3, which spans the divide between your computer and the stereo in the living room. California-based start-up Slim Devices came up with the idea to tap into a generation who grew up with the internet and the now defunct file-sharing pioneer Napster.

"They now have a disposable income and they don't think about CDs any more," said Patrick Cosson, vice-president of sales and marketing.

"They like to listen to individual songs and have masses of playlists. The Slimp3 fits in with a shift of behaviour." The gadget went on sale about a year ago. Now, Slim Devices says thousands of people are using the player every day. Unlike many MP3 players, the Slimp3 does not have a hard drive. Instead, it works by streaming tracks stored on a computer's hard drive to a hi-fi. At one end, the player is connected to the PC by a network cable and at the other to the hi-fi using standard audio cables. The player is designed to be discreet and easy to set up. In most cases, it will recognise the necessary settings and automatically set itself up. But an internet firewall could prevent the computer from seeing the Slimp3.

Slim Devices believes its product will appeal to people in their 20s and early 30s who are used to downloading music over the internet, but do not want to have to listen to the songs on tinny PC speakers.

"We really appeal to the MP3 collector, to people in countries where the whole culture has evolved," said Mr Cosson.

"Once you have content, you want ubiquitous access to it."

Listening to music is straightforward enough. Using a remote control, you can navigate, search and organise all the MP3 music files on a computer. You can also set up playlists and change the settings on the computer, as well as add internet radio stations to listen to. Slim Devices boasts on its site that the player enjoys "high spouse approval" and anecdotal evidence suggests this is the sort of gadget that a partner would welcome, rather than resent.

The key element, though, is not the player itself, but the software loaded on a computer that turns it into a music server.

"It is really hard to do well," explained Mr Cosson, saying that the big challenge was coming up with a system that streamed music to the player without any delays or hiccups.


AT&T Sells Software Online
Jo Maitland

AT&T Corp. (NYSE: T) has announced a six-month trial that will link Internet users with its new online software store, but analysts are wary of piracy issues and wonder how AT&T will ultimately make any money from this service (see AT&T Sells Software Online).

The long-distance carrier says visitors to its software store, located on AT&T’s Website, will be able to browse and buy from among 41,000 software titles, as well as download popular packages such as TaxCut from H&R Block, McAfee's VirusScan, and Symantec's Norton AntiVirus software, as well as gaming and graphics products.

Digital River Inc, an e-commerce outsourcing services provider, will build and host the online software store and supply the digital software library, order management, digital product fulfillment, customer service, and fraud prevention as part of its deal with AT&T.

Ma Bell’s goal is to become a one-stop shop for software, which some analysts say is a useful thing. If a user needs, say, anti-virus software but doesn’t know who makes it, he may respond to a big brand-name like AT&T saying, "Just come to us and you'll find what you need."

Others are skeptical of the value AT&T brings by adding another link to the purchasing chain. They point out that this goes against the idea of modern e- commerce, which is to cut out as many "middle people" as possible. “Why not just go directly to the Norton Website?... This service lacks oomph,” says Claudia Bacco, president of TeleChoice Inc.

Another thing customers miss out by not going directly to the manufacturer’s Website is the user support communities attached to these sites. These provide a forum for users to ask support questions, which are answered by other users, not by the manufacturers, and often provide the best tips.

A further drawback with this service involves the issue of online activation and piracy, which plagues all providers selling software online.

It's essentially a battle of wits between the software writers and the hackers. A good example is the DVD copying software, DVDxcopy, which, ironically, is one of the most pirated pieces of software around.

The writers, 321 Studios, keep trying to introduce a password/challenge system to only allow online activation of the software. But the scalawags keep cracking the system so that when a user downloads the pirate version of DVDxcopy from KaZaa, a free file sharing network, they get the cracking software, too.

Beyond all these problems, there’s also the question of how AT&T will make money from this service. Once it stops offering the initial rebates on the software, what incentive is there for customers to use the service? “We will not be sharing the financial details of the agreement we have with Digital River,” says Janet Wyles, an AT&T spokeswoman [ed. note: Hmmm... fishy].

Still, according to IDC, consumers rang up $1.16 billion in sales of digitally delivered software last year, with that number expected to reach approximately $3.46 billion by 2005. Even if AT&T manages to cream off just 1 percent of this, that could be a decent little revenue stream.


Empathy the key to contagious yawning

Empathetic or self aware people are more likely to catch a yawn, according to new research published in the US. The study was carried out by a team from the State University of New York, who wanted to discover what causes yawns to travel from one person to another. Previous research shows that 40 to 60 per cent of people who watch others yawn end up joining in themselves.



DefCon Wi-Fi Shootout Contest Winner

The DefCon Wi-Fi Shootout contest staff decided to award a special prize for the antenna design that represented the most "outside-the-box" thinking, that pushed the limits of the conventional wisdom of this day and time -- an award for the antenna that could improvise, adapt, and overcome.

This unique antenna was designed on Thursday, July 31, its component parts were purchased for $98 at The Home Depot in Las Vegas. The team members report that they were almost thrown out of Home Depot because they stayed so late at closing time, trying to make decisions about the antenna materials.

On Friday, August 1, the antenna was built completely from scratch in the desert, on the side of the mountain, in the rain. The large horn was comprised of metal pipes and window screen wire mesh. It had a transmitting element made from cardboard, duct tape and aluminum foil -- and both components worked spectacularly. A bath towel was used to provide shade over the laptop screen, which was otherwise unreadable in the glare of the desert, even with the clouds overhead.

It is true that this antenna's design is an old one... going back at least as far as the early radio astronomy antennas of the 1930s. But regardless of how old the concept may be, this homemade antenna definitely surpassed all of the commercially manufactured antennas in the field of competition. It may be an old idea, but it was innovative in the unexpected resurrection of the ancient design, and in its superb distance performance. For these reasons, the contest staff chose this antenna as the Most Innovative Antenna of the 2003 DefCon Wi-Fi Shootout.

The 2003 Award for The Most Innovative Antenna is proudly presented to: ASLRulz.


Software Bill Losing Support
Alorie Gilbert

The key supporters of a software-licensing bill that critics say promotes corporate rights over those of consumers have, in the face of mounting opposition, decided to quit lobbying for its enactment.

The Uniform Computer Information Transactions Act (UCITA), drafted four years ago, is meant to protect software developers from intellectual property theft by resolving conflicting software licensing laws that vary from state to state.

But critics have complained that the proposed laws favour corporate interests over those of consumers. They say it grants software makers too much freedom in restricting the use of their products and in dictating settlement terms for conflicts.

UCITA has been enacted in only two states, Maryland and Virginia, since the group of law experts that drafted the bill began its enactment campaign.

The group, called the National Conference of Commissioners on Uniform State Laws (NCCUSL), anticipated that an additional two to five states would pass the bill after the group amended it last year to address concerns about consumer rights. But the bill's opponents, including the American Bar Association and the American Library Association, refused to back down.

Despite being introduced in Nevada and Oklahoma legislatures this year, UCITA never made any further progress. And four states — Vermont, Iowa, West Virginia and North Carolina — have passed anti-UCITA "bomb-shelter" provisions, which make UCITA laws in Maryland and Virginia inapplicable to residents of those states, according to the Americans for Fair Electronic Commerce Transactions. AFFECT is a national coalition that opposes UCITA.

The lack of acceptance has prompted NCCUSL to announce on Friday that it had pulled the plug on all efforts to help states introduce and enact the bill. Without that backing, UCITA is unlikely to gain further consideration from the states, according to Katie Robinson, a NCCUSL spokeswoman.

"Without the conference pushing UCTIA, I don't see any other legislative activity happening on it," Ms. Robinson said.

NCCUSL, which concluded its annual meeting in Washington this week, also disbanded the special committee that oversees its UCITA activity. Ms. Robinson said politics had interfered with the group's efforts in support of the bill, adding that the group may revisit the subject of state laws that govern software contracts and digital information in the future.

"It is heartening to see NCCUSL backing away from a very flawed statute, but it will never be able to write sound law for the information economy until it takes to heart the criticisms of the user sector," Jean Braucher, a member of AFFECT and a professor at the University of Arizona James E. Rogers College of Law, said in a statement issued Wednesday.

"The debate is not just 'politics,'" Ms. Braucher added. "There are fundamental policy problems with UCITA."

Yet UCITA is not completely dead and buried, legal experts say. Because it's on the books in two states, courts across the country could be influenced by it, according to Fred von Lohmann, a staff attorney at the Electronic Frontier Foundation.

"However, the prevailing wind right now is against UCITA," von Lohmann said. "We think that's a good thing."


Grooving In Digital
Ian Johnson

In my last column, I mentioned that more and more people are connecting their stereos to computers so that they can listen to digital music beyond the confines of the desk. The result was a slew of letters asking how to transfer old vinyl, tape and CD collections to MP3 or WMA files, and what the benefits would be.

Well, the benefits are easy. At the top of the list: Instead of a mass of vinyl moldering away in the basement or a stack of hundreds of cassettes and CDs sliding around in a drawer, you can store an entire music collection on a few CD-R discs or a single hard drive the size of a paperback book.

For example, a basic 60GB hard drive that sells for less than $125 (Canadian) at the moment can hold roughly 15,000 songs - a month and a half of continuous music - when recorded at the popular 128 Kilobits per second (Kbps) setting. You can store all your music on your desktop or notebook computer's drive, or invest a couple of hundred bucks in a Firewire or USB hard drive so that your collection can be moved easily between machines. For those with a multi-gigabyte MP3/WMA jukebox player, the entire collection can go with you anywhere in a unit smaller than a personal CD player.

Besides portability, it's also quick and easy to find the songs you want when they're stored as MP3 and WMA files. My vinyl, compact disc and cassette collection is quite large, and it used to take me forever to track down the right album when I wanted to hear a specific song (usually because I'd gotten lazy and put the recording back in the wrong sleeve). When files are digitized, they suddenly become searchable by artist or album name, song title, type of music, and so on. You can have the computer or MP3 jukebox comb through a database of thousands of songs in about a second and start playing the track you want.

Durability is also a factor. Tapes get snarled and the quality steadily degrades the more they are played, while vinyl is prone to warping and to music-massacring scratches, and CDs are easily damaged. MP3s and WMAs are digital, so they don't wear out and the only way to hurt them is to hurt the hard drive or player itself.

Yes, hard drives are delicate and they don't last forever - in fact, I had a hard-drive based player fail on me just a few weeks after I bought it. But once you have all your music digitized, insurance is a simple matter of backing your tunes up on a second hard drive or a stack of CD-R discs in case of emergencies. Hit a few keys on your computer, back up the files and you can stop worrying. I've digitized my entire CD collection for disaster-recovery purposes. I have young children who can reach the CD player now and who think CDs are really cool, shiny Frisbees, so I like being able to keep my music collection safely out of the way inside a computer and backed up.

With everything digitized, I can also build my own custom playlists. At a dinner party, I can put on a playlist of several hundred songs that fit the mood of the evening and not worry about hearing Tom Cochrane's Boy Inside the Man or Big Country's Ships 20 times throughout the evening as I used to when my five-disc CD player was set to random-play.

Load the digital files onto a portable player and you get the added benefit of skip-free mobile music, even if you're listening while practicing your latest trampoline routine.

OK, so how's that for a quick outline of the benefits? Now for the caveat.


SARS Concert Boosts Stones Sales
John Williams

It certainly pays to play in front of 450,000 people.

The Rolling Stones, Justin Timberlake, La Chicane and Sam Roberts all saw recent album releases get a boost in sales after taking part in last Wednesday's SARS-Stock concert at Downsview Park in Toronto, according to data compiled by Nielsen Soundscan.

The Stones compilation "Forty Licks" moved from No. 79 to No. 41, Justin Timberlake's "Justified" from No. 53 to No. 31, La Chicane's "Ent' Nous Autres" from No. 62 to No. 54, and Sam Roberts' "We Were Born In A Flame" from No 20 to No. 11.


Competition Is Clicking In Music

The sanctioned online retailers Buymusic.com, iTunes and Liquid.com have plenty of bargains without a monthly fee, but how much of a selection do they offer?
David Colker

Downloading music from major record companies on the Internet is nothing new, but now you can do it without being a criminal. Currently there are two major, sanctioned online retailers that offer hundreds of thousands of songs or even whole symphonies for download to home computers, for pay. Unlike feeble, early attempts online by the big record companies, these new services -- Buymusic.com and the iTunes Music Store -- offer a large selection without monthly service fees. They aim to not just battle music downloading -- which has been done illegally by an estimated 60 million U.S. computer users -- but also cash in on it. We put them to the test by searching on each for the same 30 music selections, including top pop hits such as Beyoncé's "Crazy in Love" and longtime favorites such as the Eagles' "New Kid in Town." We also looked for popular choices in country, rap, Latin, house, hard rock, oldies and classical music, plus some music that is labeled "alternative," such as Fountains of Wayne's "Bright Future in Sales." Finally, we threw in a couple of rarities, such as an accordion rendition of "It's a Small World," as played by a former star of the Lawrence Welk orchestra. (It was not available -- you can decide if that's a good or bad thing.) The tests were done on the two online music sellers that debuted this year, as well as a third, smaller shop: Liquid.com. Buymusic.com and Liquid. com can be used on Windows-based computers, while iTunes is accessed with Internet software only available for Macintosh computers. Officials at Apple Computer, which operates the iTunes store, say they will have a Windows version set to go online by the end of the year. Because Buymusic.com and iTunes have agreements with all the major music companies, the songs offered on them are much the same. The big difference is what you can do with the music once it's in your computer. In general, the iTunes shop places far fewer restrictions on burning it onto CDs, downloading it to portable music players and transferring it to other computers. Liquid.com, from the Liquid Audio company, offers selections from some majors and independent labels that Buymusic.com and iTunes don't have. But Liquid.com's site is undergoing badly needed renovation. "I'd be the first to admit that the customer experience is not what it should be," said Ole Obermann, who was appointed Monday as the site's general manger. "We are working on it." (For results of how many of our selections were found -- including costs and restrictions -- see the accompanying chart.) Buymusic.com, iTunes and Liquid.com aim to steer online music downloaders away from the free file-sharing services pioneered by Napster.


Both Sides Add Porn to Debate Over File Sharing
Jon Healey

As the battle in the courts and Congress over online music and movie piracy intensifies, both sides are fleshing out their cases by turning to pornography.

The music and movie companies warn that file-sharing sites are rife with graphic pornography that insinuates itself into users' computers. Civil libertarians and Internet service providers argue that music companies' anti-piracy tactics open the door for pornographers and others in the seamy online underbelly to invade Internet users' privacy.

The two camps are playing the porn card in attempts to sway the public as policymakers grapple with the dilemmas posed by powerful and unsettling new digital technologies.

Trade associations for the record companies and Hollywood have prodded lawmakers to view file-sharing networks such as Kazaa as hotbeds of sexually explicit images and video. Members of Congress have held at least two hearings and introduced a bill to require parental approval before minors could install file-sharing software.

Meanwhile, Internet service providers and civil liberties groups have argued that a record industry strategy — using subpoenas to force ISPs to identify customers accused of file-sharing piracy — could enable pornographers, stalkers and other shady characters to obtain the names and addresses of Internet users.

Jonathan Lamy, a spokesman for the Recording Industry Assn. of America, called such objections speculative "straw men." By contrast, Lamy said, "concerns about piracy, security or unwanted pornography on peer-to-peer networks are well documented."

Last week, one adult-entertainment company may have given the RIAA's opponents ammunition in their fight against the subpoenas. San Francisco-based IO Group Inc., which sells gay male adult videos under the name Titan Media, sent Pacific Bell Internet Services a pair of subpoenas seeking the names, addresses, phone numbers and e-mail addresses of at least 59 customers accused of infringing its copyrights on file-sharing networks.


Internet Subscribers Help Charter Cut Loss
Bloomberg News

Charter Communications Inc., the third-largest U.S. cable-television provider, posted its smallest quarterly loss since 1999 as sales of high-speed Internet access surged more than 70%.

The second-quarter net loss shrank to $37 million, or 13 cents a share, from $160 million, or 55 cents, a year earlier, St. Louis- based Charter said. Revenue rose 7% to $1.22 billion from $1.14 billion.

Charter, controlled by billionaire Paul Allen, added 76,700 customers for Web service through the company's cable lines and reduced capital spending by 73%.

But Charter, which serves Los Angeles among other markets, is struggling with $18.9 billion in long-term debt, four years of net losses and accusations that former executives inflated sales and subscriber figures.

"I think they're starting to straighten out," said Seth Glickenhaus, senior partner at investment firm Glickenhaus & Co. "The Internet is working out and that's a vital part of it."

Charter's capital spending on property and equipment declined to $160 million from $603 million a year earlier. That helped boost free cash flow to $56 million, compared with a free-cash-flow loss of $432 million a year earlier.

Chief Executive Carl Vogel said during a conference call with analysts that he expected less than $900 million in capital spending this year, compared with a previous forecast for as much as $1.1 billion.

Charter shares rose 5 cents to $4.85 on Nasdaq. The stock's value has more than quadrupled this year.

Charter was expected to post a net loss of 49 cents a share on sales of $1.23 billion, the average estimate of seven analysts in a Thomson First Call survey. Per-share results reflect the payment of preferred dividends.

Satellite-TV services offered by EchoStar Communications Corp. and DirecTV, a unit of General Motors Corp., have been taking customers from Charter because its management has been distracted by debt and investigations of its accounting, analysts have said.

Charter had 1.35 million customers for its high-speed Internet service at the end of the quarter. Revenue from high-speed Web service climbed to $136 million.


Phish to Offer Fans Free Music Downloads
Kevin Wack

LIMESTONE, Maine - Phish, the jam band whose open taping policy made it one of the nation's biggest live acts, is again sidestepping the record industry to cash in on the online music revolution.

Livephish.com offers a rare service: soundboard-quality downloads of performances within two days of the concert. Fans pay $9.95 for MP3s or $12.95 for a computer file format where no sound quality is lost during compression.

In the first four months after the site's launch on New Year's Eve 2002, the service generated $1 million, said Brad Serling, whose company runs the site as a joint venture with the band.

"It's beyond our expectations," Serling said. "It's been profitable from day one."

Like the Grateful Dead, Phish has always encouraged fans to record their performances. Likewise, their performances vary widely from night to night, and the band has spawned a subculture of hard-core fans who began trading recordings long before Napster (news - web sites).

Since Livephish's launch, many of the band's young, digitally adept fans have proven willing to pay for an improved version of what's already available at no cost. Sound quality is better, and fans appreciate the convenience of being able to access the equivalent of three CDs of music just 48 hours after the show.

During an end-of-tour festival last weekend that drew an estimated 70,000 fans to the remote town of Limestone, a long line of concertgoers snaked outside a white tent called the House of Live Phish. Fans used Apple iMacs to make their own free CDs from a menu of three or four songs performed at each of the band's concert stops this year.

Some burned their CDs, then jumped right back in line. And fans offered rave reviews of the Livephish service.

"To release it two days later in soundboard quality is the ultimate treat for a fan," said Brian O'Neal, 28, of Nashua, N.H. "I think that could be the greatest thing a jam band ever did."

Eighty percent of each concert's sales at Livephish.com come within a week of the show, according to Serling.

"This is totally new," gushed Bret Berman of Boulder, Colo. "And I think a lot of bands are going to start doing it."

Some other bands are tapping into the market for their live performances. Pearl Jam has begun releasing CDs of each of its concerts, and New York- based Rockslide sells CDs of live shows by a number of lesser-known bands.

The biggest hurdle is likely to be record label resistance, said Josh Bernoff, an analyst at Forrester Research in Cambridge, Mass.


A Phishy Tale
Jon Newton

Phish has a message for the Big Five labels, the RIAA and bands such as Metallica.

Downloading can work for you.

Phish is already a virtual cultural symbol not just in Vermont, from whence it hails, but across the US and one of the reasons the band is so popular (other than the fact its members are excellent musicians) is: like the Dead, it's always allowed people to tape.

In other words, Phish is one of the most genuinely progressive bands out there with a huge, intensely loyal following, and now it's a) found a way to make downloading work positively; and b) showed the labels what can be done with a little imagination and goodwill.

What Phish has done is to make its entire Phish summer tour available for download at $9.95 (for mp3s) or $12.95 (for flacs) per concert.

It's an extension of the multi-CD Live Phish series launched in October 2001, the bands says, and, "As with the CDs, the downloads feature complete, unedited, mastered shows from Phish's extensive archives. The download format is a natural progression for the serious collector and the new fan alike, offering an opportunity to listen not only to older shows, but to shows from a current tour very soon after they've happened, mastered directly from the soundboard.

"The price of each show is based on format and length. Each show is available in two formats: MP3 (standard) and FLAC (premium). Most shows are two sets, but some (like New Year's Eve for example) are three sets."

So why would anyone want to pay for a show they can tape for free?

Unlike the recording industry at large, the band has been smart enough to understand it has to pay attention to its 'consumers' - its fans and followers - and treat them with respect. This is reciprocated. Phish phans want to see their favourite group flourish.

Does this mean the taping days are over? No, says Phish,

"For the most part, our taping policy remains unchanged. As with other official Phish releases, you may not copy (except for personal use) or trade files offered through Live Phish Downloads."

But it says there is one significant change.

Its policy, "now allows for audience recordings of any show to be traded person to person or through online repositories, whereas previously it was forbidden to offer audience recordings of shows that had been officially released through online repositories. This change applies to live shows released on CD as well as via download."

And it gives back in other ways. For instance, the Mockingbird Foundation is a non-profit organization of Phish fans founded in 1997 to generate $$$ for charity. There are no salaries and no paid staff and Mockingbird exists almost entirely online, meaning it avoids real-time travel and other expenses usually associated with grant-making bodies.

In the meanwhile, could the PhishPhilosophy work for other bands - or for you?

No reason why not. Unless, of course, you've already been drawn and quartered by one of the labels which now owns you - and your concerts - body and soul.


Doing a Perry Smith

You never know when the RIAA site will go down again. Denial of service? Hackers? Typical RIAA screw-ups? No one knows. And no one cares. But that's all changed ; )

Apparently, TST, the RIAA's hosting company, has moved the RIAA's servers to ....

... Verizon's network.

In RIAA ignores court battles, picks Verizon to host site, The Register's Ashlee Vance says Verizon confirmed that, as of July, TST's own site ended up on Verizon's network, as well as the RIAA's.

"We have to provide the service to a customer that asks for it," Vance quotes a Verizon spokeswoman as saying. "TST is purchasing access service from us, and then its their decision what to do with it. It does not change any of our positions on the RIAA case."


The P2P Dark Horse

About seven months ago, you'd typically see four or five different p2p apps named on the Lycos 50 list, says Terra Lycos, which among other things, owns the Lycos search engine.

And up until January, KaZaA (#3) was so dominant in the file- swapping world, "that even though its competitors get searches each week, none of them actually make the list," says the company.

But things have changed with the appearance of QuickMX says Terra Lycos.

QuickMX v1.1 is a WinMX download tweaker and accelerator which allows unlimited find-sources, handles efficient auto-find-sources for broadband connections, resulting in faster sources finding, and threfore - faster downloads.

"Searches for this program seem to have come out of nowhere, as just two weeks ago it received zero searches," says The Lycos 50, adding, "oddly enough, WinMX searches aren't going up despite the newly found popularity of QuickMX."

Twenty-eighth on the list at the time of writing, it's still climbing.


Steal This Book
The latest Harry Potter was digitally pirated. What's next?
Joy Press

Last week, an e-mail with the subject line "Free Stuff" appeared in my inbox. But this e-mail didn't contain a virus or an invitation to enlarge my penis. It was a large file purporting to be the new cookbook from Jamie Oliver, who achieved international celebrity as "the Naked Chef," with several best sellers and a popular cooking series on the Food Network. Complete with well-designed pages and color photos, this digital "book" quickly whipped its way around the world, even after Oliver's British publisher declared it a hoax. These were genuine Oliver recipes, but the book was cobbled together from his previously published cookbooks.

Scam or not, the speed with which the Naked Chef streaked across the Internet suggests that a new, disquieting era for the publishing world may be in sight. In an age when manuscripts circulate in digital form and scanners can swiftly convert hard copy into e-mail-able material, books are clearly vulnerable to piracy. Right now, devastated by file-sharing and bootlegging, the record industry is desperately trying to shut the barn door long after the horse has bolted. Hollywood, too, has been spooked by hackers uploading movies to the Internet. Can the publishing business afford to make the same mistakes?

Bibliophiles find absurd the idea that people will ever abandon the sensuous pleasures of reading—the smell of the paper, the heft of the book—for dematerialized text on a screen. But record collectors said the exact same thing about the compact disc, complaining about the sterile perfection of digital sound and the disappearance of lavish album sleeves. Since then, a new generation has emerged that is totally comfortable with the idea of music as disembodied, digitally encoded information. Instead of records, the new fetish objects are the sleekly futuristic-looking MP3 players and iPods, which are prized more for their portability, ease of use, and ability to amass vast quantities of sound files than for the actual music coming out of them.

Still, most publishers are skeptical that readers will trade paper for pixel, pointing to the relative failure of the eBook as proof that people don't enjoy viewing text on a screen. (There are plenty of other reasons eBooks haven't caught on, though: The technology isn't yet up to snuff, and the lack of a uniform format for eBook players severely limits which eBooks you can access.) But if a book you were dying to read—let's say the new Jonathan Franzen novel—just popped up in your e-mail box, would you delete it? And if you already have it, or know you can get it for nothing, would you really trudge to Barnes & Noble and pay the full hardback price? Be honest: not always. This is what has left record stores like Tower looking like the Marie Celeste.

What steps are publishers taking to prevent piracy? Surprisingly, the answer is: very few. "If it's really important, I hide the manuscript under my desk," laughed an editor at a major house. Security measures are only used with heavily embargoed books, when advance copies are limited to an extremely select few reviewers and in-house personnel. EBook publishers had hoped to protect content from bootlegging with the Digital Millennium Copyright Act, a controversial statute prohibiting the development of technologies that interfere with copyrighted material, but a lawsuit last year suggests these legal issues are still up in the air. Despite the risks of piracy, some mainstream and university press publishers are embracing the idea of digitizing back lists as a step toward creating a system where college students pay for downloaded texts, rather than just photocopy them. Of course, it was computer-savvy college kids who pioneered the whole peer-to-peer MP3-sharing free-for-all.

Now, academic texts aren't likely to fuel a roaring black market trade. And it's hard to imagine anyone going out of their way to pirate collections of literary short fiction or novels (bar the occasional cult figure like Thomas Pynchon or Neil Gaiman). But many categories clearly are vulnerable to piracy, such as self-help, travel guides, cookbooks, technical and reference books—all of which are designed to be used piecemeal rather than read all the way through. Digital versions of these books might actually make for easier use—you can efficiently search for a citation or pasta recipe.

And surely any timely or hotly anticipated book—political memoirs, blockbuster sequels, salacious tell-alls—is highly susceptible to future bootlegging; in the last few months alone, we've seen a sharp increase in publishers embargoing books, hoping to keep contents from seeping out in advance. Just imagine the wildfire Web circulation that would ensue if something like the recent Hillary memoir had somehow leaked in digitized form.

In fact, something equally dramatic has already occurred: A file containing The Order of the Phoenix, the most recent Harry Potter book, did make the rounds on the Internet just hours after the book went on sale, its 870 pages apparently scanned in and distributed by rabid fans. If this doesn't signal that it's time for book publisher to perk up and pay attention, what would?

How exactly would books escape in digitized form? When I worked as an editorial assistant in book publishing in the early '90s, we trafficked in paper manuscripts, and the main fear was leaks to Hollywood scouts. Now leaks are often considered an integral part of creating a buzz; when publishers aren't trying to keep contents to themselves, they're looking to leak them strategically. In some cases, agents and editors e-mail entire manuscripts around town. Even if something's sent out in old-school paper style, today's scanners can quickly convert a whole book to a format that's easily e-mailed or uploaded. That's apparently how Harry Potter pirates got The Order of the Phoenix online, scanning every one of its 870 pages manually. This takes longer than creating a sound file, and digital files don't look as good as a well-packaged book. But the visual experience of reading onscreen may soon improve drastically, thanks to new technology like the TabletPC—screens that are the same size as a piece of paper, more portable than a laptop, and have crisper imaging.

The old argument that no one likes reading on a computer has pretty much eroded. In the last five years or so, we have all become accustomed to reading newspapers online, not to mention the explosion of Web media—from blogs to the magazine you are looking at right now —that don't exist in print at all. This will only become more true not less true. Just because publishing people can't conceive of book piracy doesn't mean it can't happen.


Droppin like a rock…

iTunes Sales Continue to Fall
Ciarán Tannam

iTunes have been one of the few pay for download services that have been very willing to release figures about sales since day 1. Any time anyone has asked for download figures they have been more than forthcoming with regard to weekly sales.

It is easy to accumulate these figures and come up with a sales pattern for iTunes.

In the first day April 28th iTunes sales were at 200,000 per day. By May 5th CNet were reporting that sales had topped 1,000,000 meaning 140,000 songs were been sold per day. By May 14th this figure had fallen to 125,000. While figures published in the The NY Times on May 28th translate the figure into 100,000 per day.

The decline continued from there. 5 million tracks had been sold by June 23rd meaning the average daily sales had now hit 89,000. The figure hit 6.5 million on July 22nd translating into 52,000 sales per day.

The sales figure may reflect seasonal variance and other launch hype related factors. However there is a clear decline in place and with iTunes still failing to sign up some big bands the perceived success of iTunes is not quite what all are making it out to be.

Figures complied with special thanks to John Willsey


Eurocrats To Criminalise Buskers Singing "Yesterday"
Vendors can bend your mind

OUR OLD MUCKER Rupert Goodwins at ZD Net pointed out in a column earlier this week that the proposed European IP Enforcement Directive is a broken crock at the end of a sepia rainbow.

Rupes says that the 54-page long document has lots of meat in there that could make €urocitizens' lives a living hell and get you banged up for such crimes as busking Yesterday in public – and so breaching copyright – as well as putting way too much power in the hand of vendors and way too little €urocitizens' way.

Some examples could include using non-Sony batteries with a Sony MP3 player, getting time in the slammer for finding out whether you've RFID tags in your clothes, or using unauthorised tyres on your Sinclair C6.

As Rupes points out, in his article here, it's turning intellectual property into thought crime.

Mouse Groomy! http://www.elecom.co.jp/news/200307/groomy-mouse/


Opera Claims Big Browser Download Breakthrough

Our stats show IE way up there

SMALL BUT perfectly formed Norwegian browser company Opera claims it's made a breakthrough and had a record number of downloads for its software.

It claims, according to Norwegian newspaper Aftenposten, that it's user base is now near 10 million and rising.

The same article says Opera is going to have a record year in 2003. It's always nice to see a David slinging a stone at the Goliaths of this world.

An investigation of the INQ's July logs throws some fresh light on this phenomenon. We have many many millions of page views a month with readers from all over the world, and one of the functions shows the browsers used to visit this site.

That pretty clearly shows the way the browser cake is crumbling, we suspect. The log software we use has categories for Netscape Navigator and Netscape Compatible, while it doesn't break down what the "others" are, and also includes some oddities, such as Real Player G2, which however are tiny fractions of the big ones.

· Microsoft Internet Explorer 76.2%
· Netscape Navigator 17.53%
· Others 1.63%
· Netscape Compatible 3.16%
· Opera 1.57%
· Lynx 0.03%
· Web TV, OmniWeb, USR IE, Real Player G2, IWENG, NCSA Mosaic, Spry Air Mosaic The rest

So Opera looks like it's doing reasonably well, although the Others, whatever they are, are doing better. We use Web Trends software, which doesn't seem able to detect spoofing, so the results are of course, subject to critical analysis.

Because crafty little Opera can identify itself as Internet Explorer, if users so wish.


GPL May Be Unenforceable Under German Law

Study concludes liability of software developer community is unresolved issue
John Blau

DÜSSELDORF, GERMANY -- German has opened the doors wide open to open source software, with the federal government leading the charge. But users here could face some serious legal issues, according to Gerald Spindler, a professor of law at the Georg-August University in Göttingen.

Spindler was asked by the German software association Verband der Softwareindustrie Deutschland e.V. (VSI) to examine the legal implications of open source software. His 123-page, highly- detailed study comes to several conclusions that could make many existing and potential users of open source software think twice about running the increasingly popular "free" software on their computers. Among them: The General Public License has no legal validity in Germany.

It's worth noting that VSI is a lobby group for closed source software vendors and that any report from this camp is likely to be critical of open source.

However, Spindler, a well-known authority on legal issues concerning e-commerce, the Internet, and telecommunication, and vice chairman of the German Society of Law and Information Science, claims no association with VSI in the way of past or present employment or sponsorship.

His study, "Rechtsfragen der Open Source Software," is currently available in German at: http:// http://www.vsi.de/inhalte/aktuell/st...inal_safe.pdf. Spindler can be reached at: lehrstuhl.spindler@jura.uni-goettingen.de

Interview mit Herr Professor http://www.infoworld.com/article/03/...ceable_1.html.



Now Fans Call The Tune

The same era that has vexed the recording industry has brought more control to the consumer.
Geoff Boucher

If you stroll down to the newest store on the Third Street Promenade in Santa Monica, you will find an elaborate mobile in the front window that spins gently as customers and the coastal breeze come through the door.

Revolving on the arms of that mobile are album covers that suggest a music boutique with a zeal for the eclectic — there's the Who, Willie Nelson, the Ramones, Marvin Gaye, 50 Cent, the Flaming Lips and dozens of others. Inside, though, you will find no CDs, much less vinyl, and with a bit of romantic license, you could imagine it's the winds of revolution that make those album covers dance.

The shop is the new Apple Store, and in its sleek interior you will find the computer company's hardware as well as assorted gear and software. The albums in the front window are essentially an advertisement for a music store that exists only in the digital ether of the Internet and sells songs for 99 cents apiece. It's called iTunes, which you may or may not know firsthand but probably have at least heard about via a series of engaging television commercials with bubbly fans singing their favorite hits.

In a music world in upheaval, iTunes, with its paid downloads of music, is the closest thing to an interim government in the lawless land created by Napster and its revolutionary ilk, and while its future is uncertain there is no denying that the real estate on Third Street in Santa Monica is a foothold in a brash new world.

The sunny visions of those Apple commercials are hard to reconcile with the gloom and doom that have been pervasive in the music industry in recent years. The grim chorus is now as familiar to the public as any Top 40 hit: Piracy has gutted profits, CD sales are going steadily south for the first time since the format was introduced in the 1980s, corporate conglomeration has stultified any art in the commerce of record labels, radio and the concert business.

All of that is true, and in private even the titans of the business express fears that probably echo the anxious mutterings of railroad barons in the days when Model Ts began rolling down the line. But here is the funny thing lost in the histrionics: Today may be the very best time to be a music fan, especially one looking for a connection to a favorite artist or guidance and access to the exotic or rare.

Be it the iPod (the popular Apple portable digital player), alluring satellite radio services such as XM, the fan-beloved minutiae posted on Web sites, the availability of live music performances on AOL, the esoteric music videos streaming off Launch.com or the self-tailored satisfaction of burning a homemade mix on CD at home, there is a singular zest to the modern fan experience today.

All that has been flummoxing to the formal music industry, which has little control or obvious major profit source in any of the above. Mainly because, in the past five years, the experience of being a music consumer has been increasingly determined by that consumer, not the artist or the industry.

The big screen has a map of the United States and, with a click of a mouse, it is filled with red dots, more than 50,000 of them, spread through every state but clustered in metropolitan areas like hot spots on a thermal chart. The dots represent music fans, mostly teens, mostly male, and they are part of a curious and potent community that finds its hub at the Web site of StreetWise Concepts & Culture. StreetWise uses the members to market and promote bands, new films, video games and anything else that skews toward youth, and the members in turn get cool merchandise, backstage passes and, most interestingly, a big say in the shaping of products and projects before they reach the public.

The company is the brainchild of David "Beno" Benveniste, also the manager for System of a Down. The early grass-roots promotion of that band led to the StreetWise model, but now the company has been contracted to use the same "viral" approach for Radiohead, Nokia, Coca-Cola, NASCAR and many others. The lifestyle and wants of the new music fan may be a riddle to major record companies, but they are the basic programming at StreetWise.

"Look, the kids are so smart these days, they can find, retrieve, disseminate, produce any piece of music or technology now on the Internet. They can take a song, send it to a friend in North Africa, remix it how they want, make their own video for it and make it their own. And that technology makes them so powerful. It's not about the radio programmers anymore or promoters. It's about a kid in homeroom in Iowa now. Everything is different now."


Ween Thrives on the Web
Neil Strauss

The first time I met the eclectic rock duo Ween was at a diner in southern New Jersey just over 10 years ago. It was not long after Nirvana had a surprise hit with "Smells Like Teen Spirit," so record labels everywhere were scrambling to sign college-rock bands, even if, like Ween, they had nothing to do with grunge.

Ween at the time was simply two old friends in their early 20's, Mickey Melchiondo and Aaron Freeman (nicknamed Dean and Gene Ween, respectively), who spent a lot of time in their crude home studio, hastily recording odes (at various tape speeds and in different musical styles) to mononucleosis, Mexican food and pumping gas. Excited at having just been signed to Elektra Records, the pair were looking through the diner jukebox to find their labelmates — the Doors, Queen and, a particular Ween favorite, Bread. "How cool is that?" Mr. Melchiondo said, as he realized that he would be part of the Elektra legacy.

Like most pop dreams, the reality was very different. Today, Mr. Melchiondo and Mr. Freeman are celebrating a new turning point in their career: their separation from Elektra Records.

"Anything is going to be better than Elektra was," Mr. Freeman said on Tuesday, speaking by telephone from a tour stop in New Hampshire. "They just didn't do anything."

The door Nirvana opened has long been slammed shut. Most of the surviving alternative bands that were signed to major labels in the wake of the Seattle frenzy (and that, like Ween, were never built for mainstream success) have returned to releasing music independently for a core niche audience. But something has changed between the early 90's and their present-day return to independence: the Internet. Bands no longer need the resources of a record label to stay in touch with their fans, deliver new music to them and make a living.

Since leaving Elektra Records, Ween put out two CD's of live recordings on their Web site, www.ween.com. "On Elektra our best-selling record sold 200,000 copies or more," Mr. Melchiondo said. "But we still owe all this money to the label. Then we sold just five or ten thousand CD's through our Web site and raised $100,000 to make our new album."

Ween is well suited to the Internet. It makes a lot of music quickly, and, unlike most other acts, doesn't mind the songs being freely traded. On the group's Web site, its music is played 24 hours a day. And the band is currently finishing an innovative file-sharing software package that will allow fans to trade Ween files without restriction. The program's working name was Weenamp until the band received a cease-and-desist letter from AOL Time Warner, which owns the Winamp music player.

"Ween has gotten more popular because of our giving attitude," Mr. Melchiondo said. "You can bring a film crew to a Ween concert and do a seven-camera shoot and nobody would stop you."

Until next week,

- js.


Recent WIRs -

http://www.p2p-zone.com/underground/...threadid=17108 August 2nd
http://www.p2p-zone.com/underground/...threadid=17051 July 26th
http://www.p2p-zone.com/underground/...threadid=16975 July 19th
http://www.p2p-zone.com/underground/...threadid=16893 July 12th

Jack Spratts’ Week In Review is published every Friday. Please submit letters, articles, and press releases in plain text English to jackspratts at lycos.com. Include contact info. Submission deadlines are Wednesdays @ 1700 UTC.
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Old 09-08-03, 11:30 AM   #3
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The news seems more positive than negative atm. Good riddance UCITA!

While there needs to be a balance between private sector goals and public policy needs, that's hardly a topic of discussion on the Internet's frontline. Currently, America's media giants are planning the equivalent of a 19th-century land grab in cyberspace to ensure they will profit mightily in the 21st century. Metering data transmissions and monitoring content is how they will get there. And the tools and political climate to achieve this are here.
There needs to be a policy of transparency, not only in government, but in standards (hardware and software) as well. And encryption is your friend!

Lovelace, known among the security community as "Simple Nomad," said the key to the technique is to forge the source of the IP address to look like the intended recipient of the information, while the destination IP addresses points to another third-party server on the Internet.
Untraceable public proxying? Where's our Science Officer?

The cost, typically $5 to $10 a month, would be waived, discounted or buried in the students' activities fees.

If they wanted to buy songs to burn onto CDs or transfer to portable MP3 players, students would pay $1 or less per track.
Nobody will PAY! Higher education isn't meant to subsidise the RIAA's lawyers.

The group estimates that piracy cost the nation $1.9 billion in 2002, up from $1.8 billion in 2001. As a result, BSA contends that piracy was related to the loss of 105,000 jobs over the course of last year.
"Piracy" is down, but losses are up? And what about the $3 billion GNU/Linux revenue for IBM and HP? I sense RIAA logic at work.

Closing the windows. Studios are moving to open major movies and release anticipated home videos in all major markets worldwide in the same month, rather than spreading rollouts up to a year.
Absolute genius! They've had the technology to do secure digital distribution direct to cinema chains worldwide for years now.

The pirate CD market is now so big, $4.6bn (£2.86bn), it is "of greater value than the legitimate music market of every country in the world, except the USA and Japan". In some countries it is hard to find legitimately produced CDs. Ninety percent of CDs in China, for instance, are pirate copies. Counterfeiters have forced the price of a fake CD down to about $4, which only makes CDs in the music shops look even pricier. Embarrassingly major record labels and distributors have been fined twice by the US Federal Trade Commission for price fixing their products. However, pirates are not solely responsible for the crisis in the music industry. After all, it is actually producing CD titles.
No surprise there!

Patents: An Expensive Tax on the CIO
Lawrence Rosen

SOFTWARE PATENTS cost you money.
Patents are bad.

"It wouldn't surprise me if, in 50 years, there was no longer a need for 'hello' and 'goodbye' in general or certainly in electronic communication," said Mr Green, a lexicographer and author of a dictionary of slang.

Crazy Japanese inventions!

Spindler: Regarding such legal principles as liability and warranty, the GPL clauses have absolutely no legal validity. Under the license, developers and distributors of open software are not liable for any problems with their products. The GPL avoids any wording that could imply liability. Such a license is simply unenforceable under German, or even European Union law for that matter.
I seem to recall almost identical wording in almost every MS EULA. Funny he doesn't mention that!
Spindler: This is also unresolved. If, for instance, a company uses open source code to develop a product of its own, there is legal uncertainty as to what extent the GPL covers the new product.
It's pretty clear. link1 link2
If you consider the employee as the author, he is obliged under the GPL to offer the source code for free.
Not necessarily free and only if it's distributed. See above.
There is some uncertainty in the open source community as to how much companies can charge for commercial services linked to a free product.
As much as they like! The market will determine if it's an acceptable price or not. link
Spindler: First of all, the GPL must be written in German and take into account both German and EU law. This isn't the case today. Second of all, and most importantly, the liability clause has to be replaced or adapted. This is definitely in the interest of users, open source developers and competition.
He doesn't understand English. That explains everything! link
Personally, I think that the professor is averse to research and loves receiving a weekly memo (and/or cheque) from Redmond.

Thanks Jack!
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