Peer-To-Peer News - The Week In Review – December 20th, '03

[JackSpratts]

Quotes of the week:

“Define all the world as an ISP if you like, the validity of a subpoena still depends upon the copyright holder having given the ISP, however defined, [effective] notification. And as we have seen, any notice to an ISP concerning its activity as a mere conduit does not satisfy the condition and is therefore ineffective.

In sum, we agree with Verizon that §512(h) [the Digital Millennium Copyright Act] does not by its terms authorize the subpoenas issued here.”

“Nothing in the legislative history supports the issuance of a [DMCA] subpoena to an ISP acting as a conduit for P2P file sharing.” - Chief Judge Douglas H. Ginsburg.

"Due process is alive and well in the American court system." - Peter Swire.









RIAA Loses Big - Major Victory For Americans

This week the high flying arrogance of the RIAA met the sobering power of the U.S. courts - and crashed. Derisively dismissing the industries position as “silly,” the judges made clear the contest wasn’t even close.

While it will be hard to imagine the RIAA not playing courts and appealing the pro-Verizon verdict on the illegality of automatic P2P subpoenas, it is unquestionably bad news for them by any measure. They went court shopping just last week to get a similar SBC suit moved to such friendlier Washington DC locales, as judges there usually indicate greater misplaced sympathies for media companies and after another pro-industry LA judge granted the move, observers universally agreed it was a blow to SBC. How fast things change.

That the names of the people sued by the RIAA were disclosed illegally indicates to me at least the money paid in settlements should be returned to those individuals immediately, and any “acknowledgments of culpability” must be rendered void as the “fruit of the poisoned tree”… still, I won’t be holding my breath. The RIAA seems to think laws only work when they work in their favor.

If the RIAA still wants the names and addresses behind the IP numbers they’re going to have to labor for them like everyone else. They may in all probability be forced to file expensive and time-consuming “John Doe” lawsuits - and for the first time factor in the monetary costs. It’s one thing to pay with their reputations, which the music industry has proved more than willing to squander. It will be interesting to see if they feel the same way about their cash.

Without question this is a major tactical victory for file sharers - but it is so much more. Indeed it is a huge reaffirmation of every American’s basic Constitutional expectations of fairness and privacy, and re-establishes for all citizens the importance of a presumption of innocence. Automatic robo-writs, created without real evidence of wrongdoing and served without judicial oversight have no place in any land calling itself a democracy.

For the time being at least these draconian McWrits are history, relegated to footnote status with the other ugly examples of undue corporate influence that diminish however temporarily America’s storied systems of checks and balances.

It’s beginning to feel a lot like Christmas.










Enjoy,

Jack.











Appeals Court Reverses Decision on Music Subpoena Case
Mark Wigfield

WASHINGTON -- In a major setback for the recording industry, a federal appeals court on Friday struck down a ruling ordering Internet service providers to identify customers using the Internet to share copyrighted music.

Written by Chief Judge Douglas Ginsburg for a unanimous three- judge panel of the U.S. Court of Appeals for the District of Columbia, the decision was a victory for Verizon Communications (VZ, news) Inc. (VZ, news) and other Internet service providers.

A lower court had ruled that Verizon had to comply with a subpoena from the music industry's trade association, the Recording Industry Association of America, or RIAA, seeking the identity of a subscriber to its Internet service who was downloading copyrighted music and redistributing it through the use of peer-to-peer file- sharing software KaZaA.

The Digital Millennium Copyright Act "does not authorize the issuance of a subpoena to an ISP acting as a mere conduit for the transmission of information sent by others," Judge Ginsburg wrote.

Peer-to-peer software "was not even a glimmer in anyone's eyes" when the law was enacted.

The court said it is "not unsympathetic either to the RIAA's concern regarding the widespread infringement of its members' copyrights, or to the need for legal tools to protect those rights. It is not the province of the courts, however, to rewrite the DMCA in order to make it fit a new and unforeseen Internet architecture, no matter how damaging that development has been to the music industry or threatens being to the motion picture industry and software industries."

The court noted that even as the case was being considered, "committees of the Congress were considering how best to deal with the threat to copyrights posed by P2P (peer-to-peer) file sharing schemes."

Facing plummeting music sales believed to be caused by free music downloads, the RIAA served its first subpoena on Verizon Internet Services about a year and a half ago. Verizon refused to comply on various legal grounds, arguing in part that because it was simply a conduit for music stored on subscribers' computers, there was no authority under law for Verizon to release subscribers' identities.

But a lower court twice rejected Verizon's arguments, and the RIAA last summer began in earnest its controversial campaign to identify people sharing copyrighted music and prosecuting them. The group believes the program has been an effective deterrent, despite the backlash that occurred when grandmothers and college students were hit with large fines for sharing files.

Cary Sherman, RIAA president, said, "Regardless of this decision, we will continue to defend our rights online on behalf of artists, songwriters and countless others involved in bringing music to the public. We can and will continue to file copyright infringement lawsuits against file sharers who engage in illegal activity."

He added that the decision "is inconsistent with both the view of Congress and the findings of the District Court. It unfortunately means we can no longer notify illegal file sharers before we file lawsuits against them to offer the opportunity to settle outside of litigation. Verizon is solely responsible for a legal process that will now be less sensitive to the interests of its subscribers who engage in illegal activity."

Verizon counsel Sara Deutsch said the court "has given a very important victory to all consumers by making it clear that the recording industry can't use radical new subpoena powers to trample on Internet users' privacy, safety and due process rights."

The decision "came just at the right time," she added, because of recent efforts by the RIAA to get multiple identities through one subpoena.

The Digital Millennium Copyright Act provides expedited subpoena powers in copyright matters, allowing a clerk to issue one for a $35 fee without a judge's order. Ms. Deutsch said the recording industry can still get subscriber identities by filing a " John Doe" lawsuit in which a subpoena request would be weighed by a judge.

That's a far more cumbersome and costly process.

"It all has to do with cost and efficiency," Ms. Deutsch said. The recording industry was "trying to gather as many names as possible to change people's behavior. The court said you can't trample on people's rights because it is expedient to do so."

Sen. Sam Brownback (R., Kan.), has shown interest in the subject and in September introduced a bill that would have relieved Internet service providers from the duty to identify their subscribers in a digital copyright matter without a court order.

The bill has no cosponsors. And as next year's election's loom, it's unclear whether Congress will have the time or political will to reopen the complicated digital copyright law.
http://www.quicken.com/investments/n...r&column=P0DFP


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Kazaa Wins In European File-Sharing Court Battle
Eric Bangeman

The Supreme Court of the Netherlands has ruled that P2P software such as Kazaa is legal. In doing so, they rejected the International Federation of the Phonographic Industry's (IFPI) demands that Kazaa distribution be stopped and its owners (Sharman Networks) forced to pay royalties for the files transfered on their network. The IFPI also wanted the Kazaa's code modified to filter out copyrighted material.

"The victory by Kazaa creates an important precedent for the legality of peer-to-peer software, both in the European Union as elsewhere," Kazaa's lawyers Bird & Bird said in a statement. The decision by the Dutch court, the highest European body yet to rule on file-sharing software, means that the developers of the software cannot be held liable for how individuals use it. It does not address issues over individuals' use of such networks.

Sharman Networks has made recent attempts to "legitimize" Kazaa, pushing it as a possible vehicle for software distribution or even sales and legal distribution of copyrighted media. They have also pursued a strategy of distancing themselves from the activities of the end-users as much as possible. In this case, the strategy has paid off. While the court's decision is limited to Holland, it does demonstrate that some jurisdictions are capable of making decisions about the legality of some software tools independent of their possible uses. In this case, Kazaa's potential to be used for sharing copyrighted material (which is by far its most-popular use), does not allow those who might be adversely affected by such usage free rein to try and kill it off.
http://arstechnica.com/news/posts/1071870117.html


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Darknets
Gary Rivlin

When the U.S. military sought to create a secure network over which soldiers in Tikrit could share intelligence on medical supplies and road conditions with nongovernmental organizations in New York and Geneva, it turned to a software package called the Groove Workspace. Using Groove, Central Command set up a so-called Darknet. Darknets allow a group to create a digital utopia that is equal parts socialist and elitist: participants can get information freely as long as they share the same software and have been granted the access code.

A Darknet isn't as much a new technology as an old idea -- the corporate Intranet -- reconstructed for a paranoid age. A Darknet offers all the security of a private in- house network, but it allows users to send encrypted messages and documents around the world through that vast, bustling, danger-filled wasteland of sprawl called the Internet. Sri Lankan human rights activists now trade cloaked electronic communications with one another using a Darknet, as do researchers at GlaxoSmithKline who work in geographically dispersed teams.

Darknets are suddenly au courant among the cybercool as well. This past summer, when, in a frenzy against music downloading, the Recording Industry Association of America started slapping suits on children and grandmothers, hundreds of thousands of music devotees flocked to Web sites like Bad Blue and Waste. Like Napster and KaZaA, these sites let users sift through the public contents of one another's hard drives and swap files on the Internet. But like the soldiers in Tikrit, file-swappers need an invitation to enter. Inside the velvet-roped cyberclub of the Darknet that Bad Blue or Waste creates, members can trade purloined music or movies or whatever it is they want to exchange, having been waved inside by the bouncers at the door.
http://www.nytimes.com/2003/12/14/ma...4DARKNETS.html

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P2P Users Face New Challenge – Update
Thomas Mennecke

"One up-manship" has been a common term in the P2P community, usually referring to the "technological arms race" between pro-filesharing programmers and copyright holders. So far, the P2P community has maintained the upper hand, as its mere existence is testament to its ability to adapt.

Perhaps the P2P community's greatest achievement was the concept of decentralized networking, a direct response to the RIAA's conquest of Napster. While Napster's vulnerable servers proved to be easy to shut down, decentralized networks have proven to be virtually impossible to stop.

As other techniques such as file-hashing have kept corrupt mp3s at bay, protecting users from the RIAA has become top priority for many P2P programmers. Kazaa Lite, and subsequently Kazaa Media Desktop, allows the user to hide their shared directory from outside viewing, while other networks such as FileTopia encrypt file- transmissions.

Other projects, such as PeerGuardian, offer a degree of protection against the RIAA. Multiple techniques used in conjunction, i.e., using PeerGuardian while blocking outsiders from viewing your shared directory (but still sharing!), will significantly decrease your chances of becoming an RIAA target.

Considering the RIAA's lackluster campaign that has only yielded a few hundred successful lawsuits (out of 60+ million American file-traders), circumstantial evidence suggests that the self protective steps are working. In fact, it may be working so well that encrypted and tunneled traffic in and out of college networks is going largely unnoticed.

MesoCom has developed a P2P tracking program, called P2P Watch Dog, that can supposedly track and detect traffic from encrypted networks. The company claims that it has been able to detect traffic on college and corporate networks that had previously gone unnoticed.

"The system was recently installed by a university in Massachusetts, who found that their current system was detecting less file-sharing traffic, but that their bandwidth was still being saturated. Peer-to-peer clients had simply evolved beyond traditional detection methods. After installing P2P WatchDog, it became clear that the students had migrated to clients that their previous system could not detect."

In addition, the developers claim that it was also able to decrypt the supposedly invulnerable EarthStation 5 network.

"NEWS! -- New Encrypted P2P Client is Now Traceable!
(10/27/03) P2P WatchDog has cracked the Earthstation 5 SSL protocol, and found a way to trace the supposedly "untraceable" new P2P client."

Furthermore, MesoCom states that traffic on the ES5 network is easily trackable, due to its unque signiture. P2P Watch Dog explains.

"With the exception of file transfers, and accessing web content for the client UI, all of the traffic generated by ES5 uses UDP, and is either encoded or encrypted. Unfortunately, bandwidth consumption is perhaps the worst among clients we have tested. We routinely see file searches consume 5 megabits. Fortunately this makes it a good candidate for traffic analysis, since the pattern is unique and bandwidth consumption like this on a UDP channel is rare except for streaming video."

So, in the end while P2P Watch Dog's presence may not be earth shattering, it is yet another object of interest to the file-sharing community. In addition, it reiterates that NO P2P network is safe. Will P2P Watch Dog be the grand savior for saturated college networks? Maybe for a while. However, as file-sharing’s short history has taught us, not even the RIAA’s war machine can stop information from being free.

Update

Around 9:00 PM, EST, Slyck contacted MesoCom via land line. We inquired at to which version of ES5 was used for their UPD bandwidth test. They informed us the initial test used ES5 version number 1.1.30, build 2180 (downloaded Sep 29, 2003). After we discussed conducting a retest, MesoCom use ES5's latest version, number 1.1.45, build 2368 (downloaded Dec 15, 2003):

"Search for "U2". After one minute, integrated bandwidth was 1.4Mb in, 0.4Mb out, for 1.8Mb total.

Search for "Garfunkel". After one minute, integrated bandwidth was 0.7Mb in, 0.2Mb out, for 0.9Mb total.

Note, that's all in megabits, not megabytes, and all of it was UDP traffic."

Shortly thereafter, MesoCorp updated their ES5 Protocol description. Although much improved, MesoCom pointed out to us that this is still excessive, and that ES5 is still easily identifiable. Also keep in mind that recent improvements does nothing to help those still using earlier software versions (update if you use ES5!) In addition, MesoCom points out that:

"Note that P2P WatchDog does not decrypt the ES5 SSL stream, and does not attempt to collect information on the file being transferred. It merely identifies file transfer traffic as originating from ES5, so that it can be blocked. "
http://www.slyck.com/news.php?story=345


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Europe Outpaces U.S. as Capital for File-Sharing

LONDON (Reuters) - Europe holds the dubious distinction of become the new file-swapping capital of the world, stealing the crown from the United States, a new survey on Monday said.

In October, 9.35 million Europeans used the popular Kazaa file-sharing software or visited the Kazaa web site compared to 8.24 million Americans, Internet measurement firm Nilsen//NetRatings said.

Kazaa is considered the undisputed kingpin of file-sharing. It is closely watched by the media industry to determine the extent of black market trade in free music, film and video game files between Internet users.

Its popularity has triggered a slew of law suits around the world. The U.S. trade body, the Recording Industry Association of America (RIAA), is trying to shut it down after arguing it's help send CD sales in a downward tail-spin the past three years.

The record industry in the U.S. has also resorted to suing individual file-sharers, many of which are Kazaa users. The move appears to be curbing usage in the U.S. even as it draws criticism from consumer groups.

Between March and October, the number of American Web surfers to use the Kazaa application or visit www.Kazaa.com has nearly halved from a peak of 16 million monthly users, the research firm said.

In Europe, where no such legal threat exists, usage of Kazaa and rivals eDonkey and WinMX, remains robust.

"There would need to be a definitive statement from European music executives for us to see a similar downturn," said Tom Ewing, Nielsen//NetRatings European market analyst.

The London-based music trade body International Federation of the Phonographic Industry (IFPI), could not be immediately reached for comment. In September, the IFPI told Reuters it had no plan to sue individual file-sharers as its sister organization, the RIAA, had done in America.

October is the first month Nielsen//Netratings began tracking usage of the Kazaa file- sharing application although it has been able to track visits to its Web site for some time, Ewing said.

Kazaa is most popular in Germany where 1.95 million surfers used the application in October. France, Spain and Britain, respectively, round out the top four. "These are Europe's biggest broadband markets," Ewing said by way of explanation.
http://www.reuters.com/newsArticle.j...toryID=3995733


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Euro File-Swappers Face Legal Action
Macworld staff

Europe has become the file-swapping hub of the world as US users ease off in the face of aggressive litigation by copyright holders – forcing the music industry to begin litigation in Europe next year.

Nielsen/NetRatings reports that 9.35 million Europeans used the Kazaa peer-to-peer file-swapping network in October while 8.24 million Americans did the same.

Between March and October 2003 the number of US Kazaa file sharers halved, once the RIAA began litigation against individuals.

Today's Guardian reports that the chairman of international recording industry group, the IFPI, will warn that similar legal action against consumers in Europe has become "an inevitability". He suggests it may begin next year.

The IFPI's campaign against illegal sharing of copyright material "will only intensify in 2004," the report says.
http://www.macworld.co.uk/news/main_...fm?NewsID=7511

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File-Sharing Sites Plan To Form P2P Group Next Year
Jessie Ho

Despite being indicted for copyright infringement, two online file-sharing Web sites announced yesterday that they plan to establish a peer- to-peer (P2P) association by the end of next year.

"Widely applying P2P technology beyond music file sharing is an irreversible trend, and Taiwan should not absent from this wave," James Chen (???), chief executive officer of Kuro.com.tw (???), told a press conference.

"We should find a solution to balance the new technology and its impact to existing industries, rather than destroying it," he said.

Kuro, the nation's largest online file-sharing site with 500,000 members, and Ezpeer.com.tw were indicted by prosecutors for violating the Copyright Law (????) after the International Fed-eration of the Phonographic Industry (IFPI) filed charges against them. IFPI filed charges against Kuro in September and against Ezpeer in August of last year.

IFPI, which represents 10 local and international record labels, claimed that such P2P sites allow subscribers to download and share music files without obtaining authorization from the copyright holders.

Both Kuro and Ezpeer charge subscribers a monthly fee. Kuro charges NT$99 while Ezpeer is NT$1 more.

The companies say Taiwan's courts should follow the lead of their counterparts in other countries, noting that US-based Grokster Ltd was found not liable for copyright infringement by the district court in Los Angeles last April.

Unlike Kuro and Ezpeer, however, Grokster does not use a centralized file sharing system. Information is transferred directly between users without the participation of any computers controlled or owned by the company.

Kuro and Ezpeer also offer a title directory for their members, a service which is also considered key to their indictments.

Kuro and Ezpeer had offered to pay compensation to the record labels, but the offer was rejected.

Reaching a profit-distribution formula acceptable to both parties is still the best solution to the case, Chen said yesterday.

"I'm 100 percent sure that we will win the case, because we only provide a platform for users to swap their files -- we don't illegally distribute them," Chen said.

IFPI Taiwan secretary-general Robin Lee (???) is also confident of winning the copyright war.

"We don't oppose P2P, but we do oppose manipulators who use the technology to infringe upon our rights," Lee said. "We are discussing granting online music distribution rights with a total of seven companies who are willing to gain authorization before allowing users to share their files."

Prospective online-file operators include iBIZ Entertainment Technology Corp (???????), Hinet and Acer Inc, Lee said.

iBIZ is an arm of Era Communications Co (???? ??), which said last month that it would launch its online music downloading service by the end of the year.

The lawsuits appear to have had limited impact on Kuro and Ezpeer. Kuro lost 1,800 subscribers, Chen said, while Ezpeer president Weber Wu (???) said his service saw a 30 percent drop in membership. Both Chen and Wu said that their investors were unfazed by the indictments.
http://www.taipeitimes.com/News/biz/.../16/2003079806


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Canada Ruling Won't Stop Music Lawsuits
Jim Hu

A ruling in Canada declaring downloading music through peer-to-peer services legal, but uploading illegal, may do little to prevent the music industry from taking its own action against file swappers.

That's because the country's industry group, the Canadian Recording Industry Association (CRIA), is in lockstep with its U.S. counterpart's plan to sue individual file swappers. And last week's ruling by Canadian regulators will not pose a formidable barrier for CRIA to begin its own round of litigation, according to a legal analyst.

"I don't know that last week's decision has a huge impact on (the music industry's) potential litigation strategy," said Michael Geist, technology counsel for the law firm of Osler, Hoskin & Harcourt in Ottawa.

The CRIA, Geist said, can just as easily find music uploaders as downloaders. Peer-to-peer services such as Kazaa allow a user to download songs from other PCs while simultaneously uploading songs off the user's hard drive for public availability.

Speculation that the CRIA will follow the Recording Industry Association of America (RIAA) in suing individual file sharers reached a boiling point on Tuesday. Canada's National Post, a nationally distributed newspaper, published a top story that said the CRIA was planning to take legal action against music uploaders.

The story, citing unidentified sources, added that the CRIA would begin serving lawsuits as early as January. In an interview with the paper, the association's head, Brian Robertson, said the decision to begin suing individuals came after attempts to educate consumers about why file sharing was wrong.

A CRIA spokeswoman declined to comment on the piece. Instead, she pointed to a press release issued on Dec. 4, a day after the RIAA issued 41 lawsuits against individuals in the United States, that offered bold comments about the CRIA's stance on file sharing.

"CRIA has invested in excess of one million dollars to date in an effort to educate young people on the issues of Internet piracy and we will continue to do so," Roberts said in the release. "For the hardcore group, however, it appears that education has and will not make any impression. They are killing the music they profess to love. They should be aware that they may face legal consequences for their actions."

The U.S. lawsuits have so far attracted considerable negative publicity. Targets of the suits have included preteens and the elderly, as well as some users who claim they were wrongfully accused. The threats may have discouraged file swapping, according to some studies showing a dramatic decline in Kazaa usage. But there are other data that show Kazaa usage reaching all-time highs.

And what may have worked in the United States may not be easy to replicate in Canada, given differing subpoena procedures and different hurdles for litigation.

"It's a more difficult, expensive and cumbersome process than in the U.S.," said Geist.
http://news.com.com/2100-1027_3-5126...l?tag=nefd_top


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Regulator Freezes Copying Media Levy
Jim Jamieson

The Copyright Board of Canada offered a few crumbs to both sides of the personal- copying-media-levy argument on Friday.

The Copyright Board refused a request by the Canadian Private Copying Collective -- a group that acts for the music industry -- to significantly hike tariffs on media such as recordable CDs and cassette tapes and ruled that existing levies be frozen through 2004.

However, the board did agree to widen the reach of the levy to include MP3 players with non-removable memory. A $2 tariff will apply to players with up to one gigabyte of memory, $15 for those with up to 10 GB and $25 for those above 10 GB. The CPCC wanted a levy that would have collected $148 for a 40 GB iPod.

The collective was denied its request to have blank DVDs, removable flash-memory cards and removable micro hard drives added to the levy list.

Vancouver electronics retailers had a mixed reaction to the ruling.

"It's a move forward that the board has recognized that these items are not necessarily being used by individuals to copy music," said London Drugs chief executive Wynne Powell.

"Now, as Canadians, we have to get this act repealed in totality."

The current levy charges 21 cents for a CD recordable disk, for example, while the CPCC had requested an increase to 59 cents.
http://www.canada.com/vancouver/thep...8-7291710973F1


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Altnet Determines That BigChampagne Does Not Infringe TrueNames Patented Technology

Claims Against Eight Other Companies Remain Outstanding
Press Release

Altnet, a subsidiary of Brilliant Digital Entertainment (AMEX:BDE), a leading provider of secure digital media via Internet and peer-to-peer technologies, announced today that, on the basis of information provided by BigChampagne, Altnet is satisfied that BigChampagne is not infringing any issued claim of Altnet's patents.

On November 11, 2003, Altnet issued cease and desist notices to nine companies that it believed were using its patented digital file identifying technology without its permission. BigChampagne is the only company to have responded to the cease and desist letter and to have demonstrated to the satisfaction of Altnet that it has not engaged in any activity that constitutes an infringement of Altnet's patented TrueNames file identifying technology. Further, Altnet is satisfied that BigChampagne did not use such technology to assist the Recording Industry Association of America in identifying people sharing files who then were sued for copyright infringement.

"After discussing the issue with BigChampagne and reviewing the facts they presented, Altnet apologizes to BigChampagne for any miscommunication or false impression created by Altnet's press release that BigChampagne was engaged in any wrongful conduct. Clearly, it was not," said Derek Broes, executive vice president of worldwide operations for Altnet and Brilliant Digital.

Broes added, "However, the fact remains that there are still eight firms who have been served notice and who have failed to respond, let alone provide any evidence of non-infringement. We will not permit companies to use Altnet's TrueNames file identifying technology to spoof, track or interdict files on file sharing networks without our permission."

The eight firms still under notice from Altnet are BayTSP, Cyveillance, Media Defender, Media Sentry, NetPD, Inc., Overpeer, Inc., Ranger Online and Vidius.

Altnet's TrueNames technology facilitates the identification of unique files on a massively distributed network by using a unique file hash identifier that enables one to track, retrieve, monitor and charge for the distribution of content. TrueNames is a method of identifying data based on the actual contact of the file, rather than by the file name, origin, location, address or other information that can be easily changed. A unique identifier, or hash, is assigned to the data using an algorithm in a process protected by United States Patent Nos. 5,97,8,791 and 6,415,280.
http://www.primezone.com/pages/news_....mhtml?d=49784


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Hackers Borrow Networking Tactics From Music Pirates

Money is the motive behind new breed of rogue programs.
John Schwartz

The people who design rogue programs that take over computers from afar are now applying the tactic that made music-pirating programs so effective - and the Internet may never be the same.

The rogue programs, known generically as Trojan horses, have enabled pornographers and others to mask their identities by using the computers of unwitting users as relay stations.

It had been assumed that diligent investigators could ultimately shut down a system by identifying the server computer used as the initial launching pad. But now a researcher has determined that a new kind of Trojan horse could make the systems virtually unstoppable.

Joe Stewart, a computer expert at the LURHQ Corp., a security company based in Chicago, said he discovered this new phase in the evolution of Trojan horses while taking apart a program called Backdoor.Sinit, which has been circulating on the Internet since late September.

Sinit, Stewart said, does something unexpected: It uses the commandeered PCs to form a peer-to- peer network like the popular KaZaa file-sharing program. Each machine on the network can share resources and provide information to the others without being controlled by a central server machine.

"It's like KaZaa, only without all the pesky copyrighted files," Stewart said. And, as the music industry has discovered, when there is no central machine, "these tactics make it impossible to shut down," he said.

Computer security researchers have been watching the evolution of remote-access rogue programs as they have become more common and have put more machines under the control of hackers. The rings of infected computers have been used to send spam, to present online advertisements for pornographic Web sites and to trick people into giving up information like credit-card numbers.

At least one-third of all spam circulating on the Internet is now sent from or relayed by personal home computers that have been taken over, said Jesse Dougherty, director of development at Sophos, an antivirus and antispam company.

Security researchers began to notice an enormous rise in the volume of spam in the summer, when versions of the SoBig virus were making their way across the Internet. SoBig, Dougherty said, "was so big and so virulent that people started to wonder, 'What is the purpose of all this?' "

Clues have started to emerge. Each version of SoBig was programmed with a life span, turning itself off after a month. The regular updating of the program hinted at a commercial use, Dougherty said.

Researchers found further evidence that Trojan programs were used in spamming, Dougherty said, when a new malicious program, MiMail, caused infected machines to attack the computers of organizations that fight spam.

The problem for the hackers was that the system could still be defeated at its weakest point. Many of the early rings were programmed to download software updates and instructions from a single site that could be discovered and shut down by law enforcement agents.

Now the Trojan program designers are taking the "next logical step" and moving to the peer-to-peer model, Stewart said. The Sinit program has been discovered on machines that have been hijacked to serve pop-up advertisements and to download "porn-dialers," programs that cause the victim's machine to turn on the modem and place expensive pay-per-minute phone calls.

"Sinit appears to have been created as a money-making endeavor," Stewart said in a research paper describing his discovery. "This Trojan is also further evidence that money, not notoriety, is now the major driving force behind the spread of malware these days."

There is now a market for the services of networks of infected machines. On Web sites frequented by hackers, spammers and people who identify themselves as practitioners of credit-card fraud, the remote-access networks, or "radmins," are offered openly.

On one such site, Carder Planet, a typical pitch from "r00t3d" reads, "I have a steady supply of FAST radmins. I am wanting to offer these to those of you who need good hosting for your scam pages" for periods of a week to "six months or more" for a price of $50 per machine.

The hacker did not respond to online requests for further information.
http://www.rockymountainnews.com/drm...505512,00.html


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AOL Trumpets New Winamp
Jim Hu

America Online on Tuesday released an upgrade for its free Winamp multimedia software, and a fee-based "pro" version that encodes songs into MP3s is expected to follow.

As previously reported, the Winamp 5.0 update highlights a return to simpler times for Nullsoft, the original developer of Winamp, which AOL acquired in 1999 to jump-start its online music strategy. The previous version, Winamp3, was an ambitious attempt by Nullsoft to create its own programming language, called "Wasabi," and to develop applications for the player. However, Winamp3 was dogged by criticism that it was bloated and slow. It was scrapped earlier this year for the slimmer 2.x version.

Brennan Underwood, who led the development of Wasabi, and another prominent Nullsoft developer were laid off last week, according to sources close to Nullsoft. The layoffs were part of widespread cuts in AOL's California offices.

Nullsoft founder Justin Frankel had hinted on Winamp's Web site that version 5.0 could be launched Monday. But the company waited until early Tuesday morning to officially release it.

Winamp 5.0 is an attempt to combine elements of the 2.x and 3.x versions into a sleeker, faster player. Like previous iterations, it is designed to manage online music and video libraries. New features include Winamp-developed software that can rip and burn CDs using Dolby's Advanced Audio Coding format.

AOL also is expected to release a for-pay version of the software, called "Winamp Pro," as early as Wednesday. The software will cost $14.95, according to the Web site, but it was not available for download as of Tuesday morning. The site, however, shows that Winamp Pro will include MP3 encoding and 48x CD burning.

Germany's Fraunhofer Institute, which owns a patent covering MP3 technology, requires licensees to pay a per-copy fee for software that includes MP3-encoding capabilities.

Other Winamp5 features include quick access to Shoutcast radio stations, which let customers listen to other people's song lists or to broadcast their own, and a similar video-streaming service.

"Winamp continues to be a popular player for digital media enthusiasts who want a lot of flexibility and control over their media experience," AOL said in a statement.

Once a dominant online music player, Winamp has faded into the background under AOL, as competitive products from Microsoft, RealNetworks and Apple Computer have gained market share. In May 2003, Winamp reached 5.5 million users, lagging far behind Microsoft Windows Media's 43.1 million, RealNetworks' 26 million and Apple QuickTime's 13.5 million, according to online measurement firm Nielsen/NetRatings.

Windows Media and QuickTime are both bundled into Microsoft and Apple's operating systems, respectively. RealNetworks' software remains widely used by consumers for playback and by the industry as a streaming-media delivery format.

AOL has recently taken bolder steps to incorporate Nullsoft's technology into its flagship proprietary service. The most recent version of AOL uses Nullsoft's audio and video- streaming technology, and its media player is based on Winamp technology.
http://news.com.com/2100-1025-5125657.html


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A Net of Control

Unthinkable: How the Internet could become a tool of corporate and government power, based on updates now in the works.
Steven Levy

Picture, if you will, an information infrastructure that encourages censorship, surveillance and suppression of the creative impulse. Where anonymity is outlawed and every penny spent is accounted for. Where the powers that be can smother subversive (or economically competitive) ideas in the cradle, and no one can publish even a laundry list without the imprimatur of Big Brother. Some prognosticators are saying that such a construct is nearly inevitable. And this infrastructure is none other than the former paradise of rebels and free-speechers: the Internet.

To those exposed to the Panglossian euphoria of Net enthusiasts during the 1990s, this vision seems unbelievable. After all, wasn’t the Internet supposed to be the defining example of empowering technology? Freedom was allegedly built into the very bones of the Internet, designed to withstand nuclear blasts and dictatorial attempts at control. While this cyberslack has its downside—porn, credit-card fraud and insincere bids on eBay—it was considered a small price to pay for free speech and friction-free business models. The freedom genie was out, and no one could put it back into the bottle.

Certainly John Walker believed all that. The hackerish founder of the software firm Autodesk, now retired to Switzerland to work on personal projects of his choosing, enjoyed “unbounded optimism” that the Net would not only offset the powers of industry and government but actually restore some previously threatened personal liberties. But in —the past couple of years, he noticed a disturbing trend. Developments in technology, law and commerce seemed to be directed toward actually changing the open nature of the Net. And Internet Revisited would create opportunities for business and government to control and monitor cyberspace.

In September Walker posted his fears in a 28,000-word Web document called the Digital Imprimatur. The name refers to his belief that it’s possible that nothing would be allowed to even appear on the Internet without having a proper technical authorization.

How could the freedom genie be shoved back into the bottle? Basically, it’s part of a huge effort to transform the Net from an arena where anyone can anonymously participate to a sign-in affair where tamperproof “digital certificates” identify who you are. The advantages of such a system are clear: it would eliminate identity theft and enable small, secure electronic “microtransactions,” long a dream of Internet commerce pioneers. (Another bonus: arrivederci, unwelcome spam.) A concurrent step would be the adoption of “trusted computing,” a system by which not only people but computer programs would be stamped with identifying marks. Those would link with certificates that determine whether programs are uncorrupted and cleared to run on your computer.

The best-known implementation of this scheme is the work in progress at Microsoft known as Next Generation Secure Computing Base (formerly called Palladium). It will be part of Longhorn, the next big Windows version, out in 2006. Intel and AMD are onboard to create special secure chips that would make all computers sold after that point secure. No more viruses! And the addition of “digital rights management” to movies, music and even documents created by individuals (such protections are already built into the recently released version of Microsoft Office) would use the secure system to make sure that no one can access or, potentially, even post anything without permission.

The giants of Internet commerce are eager to see this happen. “The social, economic and legal priorities are going to force the Internet toward security,” says Stratton Sclavos, CEO of VeriSign, a company built to provide digital certificates (it also owns Network Solutions, the exclusive handler of the “dot-com” part of the Internet domain-name system). “It’s not going to be all right not to know who’s on the other end of the wire.” Governments will be able to tax e-commerce —and dictators can keep track of who’s saying what.
http://msnbc.msn.com/Default.aspx?id=3606168&p1=0


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Xbox Live Could Provide New Year Bill Shock
Paul Brislen,

Auckland - Anyone receiving Xbox Live for Christmas could have an unhappy new year if the Australian experience is anything to go by.

Xbox Live, launched in time for the pre-Christmas shopping rush, allows users of Microsoft's Xbox gaming console to play against other users online.

However the Australian experience is that broadband traffic charges will limit demand for the service.

Xbox Live requires at least a 256Kbit/s service - Telecom's new JetStream Home service is aimed at just such a user, however Telecom's billing regime charges users for both upload and download traffic.

In Australia gamers have discovered this can be a costly business. According to posters to Telstra's BigPond gamer forum, traffic downloaded during games range from 7MB per hour for the simplest games, such as MotoGP, while the more popular first person shooters (FPS) like Return to Castle Wolfenstein (RTCW) have been clocked at up to 21MB per hour.

One Sydney user, who has been playing for up to six months, says uploading to multiple users can churn through traffic at a great rate of knots.

"When I host 16 player RTCW on my Telstra uncapped cable I consume about 90MB download and 210MB upload per hour (thats 300MB/hour in total)."

On Telecom's basic JetStream Home package, with a traffic cap of 500MB, the user would end up paying excess charges before the second hour was over. From there on, Telecom charges 20 cents per megabyte even for domestic traffic.

However, that's only the download side of the game - uploading uses traffic as well. Xbox Live in New Zealand is run as a peer-to-peer (P2P) network. That means one player will host a game, and others will log on to play. The host player will be uploading traffic to the other players during the course of the game.

If a game has 10 players that means the upload traffic is increased tenfold, for example. A game with 10 players, each using 10MB an hour of uploaded traffic will cost the host player 100MB an hour, plus their own traffic usage. This would reduce their playing time from 23 hours a month to less than five hours a month.

Xbox Live also includes a headset so players can talk to each other during the game. This voice service will also use traffic, although players are less sure how much this will cost.

Telstra has recently dropped its traffic caps in Australia, relying instead on a soft cap at 10GB of traffic a month, followed by a reduction in the speed of the user's connection. In response, Optus, the number two telco in Australia, has introduced new caps for its cable service ahead of a complete revamp of the service next year. The new plans include an increase in traffic levels from 550MB per month to 3GB per month.

PC gamers can play without incurring traffic charges at all. Telecom introduced its JetStream Games realm several years ago and players who log on to servers within the realm aren't charged for traffic. No such facility is available for Xbox players.

Microsoft did not return Computerworld Online calls.
http://www.computerworld.co.nz/news....C?OpenDocument


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Social Networks
Jon Gertner

Just a few years ago, the network was what people tapped into at parties or business conventions or what they called upon if the market turned sour or they were in desperate need of a job. In the time since, a coterie of ''network thinkers'' have begun to extend the language of the network -- ''nodes'' and ''hubs'' and ''links'' -- to phenomena ranging from the workings of the world economy to the possible spread of a dangerous pathogen. Several network theorists, most notably Albert-Laszlo Barabasi of Notre Dame and Duncan Watts of Columbia, have recently discovered that varieties of systems display a common architecture that governs their dynamics and structure. The way a cluster of neurons fires, for instance, has marked similarities to the way a disease like SARS travels the globe or the way a contagious idea disperses. Apparently, lots of complex networks look like lots of other complex networks (the Internet and the North American power grid, for example). And apparently the idea that everything is connected to everything else no longer seems so far-fetched.

Many software and Web applications now allow us to explore our nearly infinite social connectivity. The most hyped and widely known is Friendster.com, which went online in March and allows users to meet people up to four social degrees away. There is also Tribe.net, which started in late July and focuses less on dating and more on utilizing social networks for professional relationships, as well as Tickle (another dating service) and LinkedIn (another professional contacts service).

All are in hot pursuit of market share -- a good indication that treating the human community as a network may be profitable as well as innovative. Tribe's backers include The Washington Post Company and Knight-Ridder, and Friendster has a number of Silicon Valley's top venture-capital firms betting on it. Users see dollar signs, too. A new social network software application called Spoke, for example, allows businesses to mine their computer databases so that a company's sales force might tap into co-workers' relationships for contacts, thus saving them from the inefficiency of cold calling. Meanwhile, several Democratic contenders, notably Howard Dean and Wesley Clark, have used in-person networking sites like Meetup.com to amass contributions and arrange rallies. At last count, the Dean bloc on Meetup had grown from a small but enthusiastic faction to more than 150,000.

Some of the fledgling social-network companies may indeed mature into powerful business hubs like eBay or Amazon. Yet the more intriguing prospect, from a sociological standpoint, anyway, is whether these applications will actually transform our lives. Ever since the publication of ''Bowling Alone,'' we've been flooded with even more data about the end of community and lamentations for its return. At least in theory, a readily accessible social network would enable more of us to bond with people we regard as far less anonymous than strangers. The larger possibility, that plugging into our social networks might somehow remedy a profound national loneliness, is even more enticing.

What seems just as likely, however, is that social-network applications will further fracture life into disparate spheres -- the online and the offline. Jonathan Abrams (the C.E.O. of Friendster) and Mark Pincus (the C.E.O. of Tribe Networks) see their creations ultimately as a means to enrich offline experiences. But this fact is incontrovertible: technology has outpaced our physical ability to manage the social network. Duncan Watts, author of this year's book ''Six Degrees,'' has wondered whether our primitive ancestry gives us a hard-wired tendency to attend to only our immediate associates, like family and friends. Our online persona may be rich with friends and contacts; it may make us feel popular and deeply valued as we trade tips about the best Australian Shiraz or converse about the best way to get to Burning Man. But our offline persona still gets stuck in traffic on the way to the liquor store. Our online persona may manage a Web-based cocktail party of three degrees -- a party that would include our friends, the friends of our friends and the friends of our friends' friends. But our offline persona, juggling the demands of family and work, can barely return the telephone calls from the first degree.
http://www.nytimes.com/2003/12/14/ma.../14SOCIAL.html


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Cyberoptic Group Releases Digital Rights Director Copywright Protection for Digital Content Owners
Press Release

Florida Internet technologies company to provide copyright protection services for musicians, videographers, and other content owners that prevents unauthorized access and distribution of streaming or downloadable audio and video files.

Boca Raton, FL (PRWEB) December 16, 2003 -- CyberOptic Group, LLC, a Florida-based Internet technologies company, announced today the availability of Digital Rights Director, a new service for musicians, videographers, and other content owners that gives protection against unauthorized access and distribution of streaming or downloadable audio and video files.

Digital Rights Director allows any number of restrictions to be imposed on media files, such as limiting to an expiration date, number of plays, and even the ability to transfer to a portable device.

Digital Rights Director allows streaming and downloadable media to be sold using a Pay-to-Play business model that prevents anyone from accessing the file without first having to remit payment, regardless of how they receive the file. Streaming media/ web casts, web site downloads, CD/DVD distribution, e-mail, or peer to peer file sharing are all controlled, including the number of times the file can be accessed

In addition to asset security for streaming media, Digital Rights Director allows content owners to effectively promote their content while collecting valuable customer information such as names, email addresses, and/or any other desired information.

Jonathan Castleman, CyberOptic Group’s President, states, “Although the Internet is widely used by consumers to access audio and video content, content owners have been reluctant to release their premium content over the web and have resorted to shipping tapes, CD’s and DVD’s. Digital Rights Director allows content owners to take advantage of the enormous distribution benefits offered by the Internet while eliminating the concerns of unauthorized access and distribution of their intellectual property.

Digital Rights Director has numerous business applications including digital media preview-and-purchase, pay-per-view audio or video, corporate presentations requiring protection of sensitive material, distance learning, online promotions, CD/DVD distribution, and subscription audio/video sales models.
http://www.emediawire.com/releases/2003/12/emw94534.htm


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Hold onto that copy of EZ-CD Creator…

CD-Burning Suit Threatens Industry
Macworld staff

A legal challenge has begun that threatens all manufacturers of CD authoring software, including Roxio and Apple.

Optima Technology yesterday sued Roxio, claiming that Napster 2.0's parent company has infringed its patent for burning CDs. Optima wants the courts to issue an injunction against Roxio as well as unspecified damages, royalties and attorneys fees.

Optima also warns that many other companies are infringing its patent.

The story stretches back to 1995, when Optima developed software for burning images, music, video and data to CD. The technology was patented in 1997; that patent is known as a recordable CDROM accessing system, Reuters reports.

The company claims the industry standards from the Optical Storage Technology Association are also covered by its patent. It says any company using those standards is infringing its patent.
http://www.macworld.co.uk/news/top_n...fm?NewsID=7507


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BitTorrent and RSS Create Disruptive Revolution
Steve Gillmor

Disruptive technologies are born for all sorts of reasons—good ideas, market pressure, economic opportunity, and sometimes just plain luck. Many of today's disruptive leaders only emerged when combined with other seemingly unrelated inventions. Wi-Fi and broadband (DSL and cable but not satellite) have prospered in a mutually symbiotic fashion. So too have weblogs and RSS.

For newbies, RSS feeds are XML text files generated by blogs, websites and other web servers that desktop clients—called RSS Readers or Weblog Readers—download on a set schedule, usually once an hour.

As RSS gains momentum, it begins to strain the boundaries of its current infrastructure. Feeds are increasingly containing full text, graphics, and even multimedia files. Strict constructionists are bemoaning the trend, suggesting that syndication is all about signaling rather than transporting. Those of us who've moved to RSS as the gateway to as much information as we can filter reject that notion.

It reminds me of the dawn of the Web, when Internet academics and geeks bemoaned the influx of the point-and-click crowd. Or the Notes administrator priesthood who kept the keys to creating new applications from us lowly users. Weblogs are just the most recent instantiation of that revolution, where users gained control of their pages, data, and voices.

Now we have the same argument from the entrenched Web crowd. RSS should just provide the abstract, the notification, the announcement of new content. But the ultimate target is the Web page, where eyeballs equal dollars. It's the old guard protecting last year's business model – like the RIAA desperately poking a finger in the p2p dike or the MPAA outlawing the distribution of DVDs for Academy Award consideration.

Who's the Jack Valenti of this production? I hope it's not Dave Winer, RSS founding father and author of one of the most popular RSS feeds, Scripting News. Notice I say RSS feed, not weblog. Since the day I first adopted an RSS reader (Radio Userland on the PC, NetNewsWire on the Mac), I have consumed Dave's site through RSS.

Dave has always included the full text and graphics in his feed, but recently he's limited the entries to the current day. I'm not sure why that is, but perhaps it's because it limits the size and bandwidth usage of the RSS file he serves to his subscribers.

Note that my copy of NetNewsWire is set to download at the most rapid interval possible—30 minutes. That's still not fast enough for me, relying as I do on RSS for timely notification of important posts. But bandwidth costs on popular sites like Dave's make this kind of polling economically prohibitive. Or do they?

Here's how Dave put it one morning last week: "Now, should an aggregator be polling every 30 minutes? The convention early on was no more than once an hour. But newer aggregators either never heard of the convention or chose to ignore it. Some aggregators let the users scan whenever they want. Please don't do that. Once an hour is enough. Otherwise bandwidth bills won't scale."

To be fair, Dave goes on to say there are good ways to optimize polling, but that progress in the RSS community is hard to come by. He's probably right – but I'm not dissuaded by that daunting prospect. RSS has forever altered the way I acquire information, and its disruptive quality can surely bond with another such technology to conquer this bottleneck.

Next page: Revolutionary peer-to-peer program to the rescue!

One such candidate is peer-to-peer, as resurrected in the form of Bram Cohen's BitTorrent. It's an elegant protocol for distributing files, one that takes advantage of "the unused upload capacity of your customers." BitTorrent breaks up files into shards that are uploaded around the network as the file is downloaded by multiple clients. The more popular a file, the more endpoints exist. You download a file with BitTorrent by simultaneously collecting shards, assembling them together locally as they arrive.

Map this to RSS feeds: the more popular the feed, the more nodes on the network serving pieces of the feed. That would allow rapid downloads by many users by distributing the data across multiple sites. It's a digital Robin Hood, redistributing the wealth from the server to a network of peers. BitTorrent does cryptographic hashing of all data, so feed owners can be confident the file reaches its target unchanged.

But there's even more to this disruptive alliance: a small amount of special code known as a tracker sits inside the host Web site and emits information to help other downloaders find each other. As Bram Cohen describes: "[Trackers] speak a very simple protocol layered on top of HTTP in which a downloader sends information about what file it's downloading, what port it's listening on, and similar information, and the tracker responds with a list of contact information for peers which are downloading the same file."

So you've got a list of peers connected via known ports, a trusted group of RSS feed subscribers, who can marshall their resources for additional economic benefit. That could take the form of an affinity group marketing their attention to an advertiser or political cause, a secure pool of computing resources for distributing confidential information, and a pathway for signaling information about new content on that particular subnetwork.

Even if none of this were to be leveraged, the combined polling of the group, if staggered by one minute intervals, would monitor a feed even though each client only polled once per hour. But once you were on the BitTorrent feed, you could shut off the polling after the first connection.

Next page: Two great disruptive technologies that taste great together.

There are server solutions to the polling problem, including Dave Winer's sub-element documented on the RSS 2.0 site maintained by Harvard's Berkman Center. Or you could use a service like Dave Sifry's Technorati to inform you of updates as they occur. An email or instant message alert might be too disruptive for some, but building the service into the reader (or information router as I prefer to call it) could prove popular.

Sifry suggests how this might work:

"In order to facilitate an event-based mechanism to eliminate inefficient polling of RSS feeds, the subscriber's information router can request a notification via XMPP (or other notification protocol) whenever the feed is updated. Technorati is notified of the feed update via XML-RPC ping call as the normal result of the CMS' update procedure, and then proceeds to notify all of the information routers that the new content is available, along with the BitTorrent URL - then the information routers collectively download and distribute the new content via BitTorrent. The original feed is only downloaded when it is seeding the BitTorrent peers, and the subscribers get to take advantage of the highly available fresh content."

There we have it: two disruptive technologies coming together to produce an outcome that's win- win for each other. For BitTorrent's peer-to-peer part, the fact that its author controls RSS content takes that bit of digital McCarthyism off the table. And as for RSS, this solution requires no changes to the specification whatsoever. It's up to content providers to support it on the server (no problem, since it cuts costs) and aggregator/reader/routers to support it on the client (those who don't see the benefits ain't paying attention).

As for me, I'm off to listen to some Chris Lydon RSS audio, downloaded via Dave Winer's Enclosure extension and copied to my Microsoft DRM-free iPod. Hi ho hi ho disruptively we go…
http://www.eweek.com/print_article/0...=114581,00.asp


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Will it all go to lawyers?

Roxio Ups Sales Forecast

Roxio has provided an update on its business outlook for the quarter ending December 31, 2003.
Macworld staff

Roxio announced that its digital media software business is "performing ahead of the company's expectations" stating that this is "due to the strong performance of category leading products, Easy CD & DVD Creator 6 for Windows, and Toast for the Mac platform".

The company has raised its current quarter outlook for software sales, increasing guidance to $14.5 million from $14 million. And, according to Roxio's Chairman and CEO Chris Gorog, the release of Creator 7 in the quarter of 2004 will cause "a very substantial increase in software revenues".

Roxio states that the $35 billion dollar music industry is "just beginning its transformation from physical to online distribution". The company also says that Napster has "quickly established itself as one of the top two players in this sector".

Gorag predicts that: "Given this current uptake rate by consumers, we now expect revenue for our online music business to be approximately $3.5 million for the December quarter. This represents a quarterly run-rate of approximately $5 million, given that Napster 2.0 launched at the end of October."

Gorog confirms that Napster-related marketing spend is expected to "decrease substantially going forward as we move away from our launch quarter and into steady-state marketing activities".

He also confirms that Napster schemes such as prepaid retail cards and the Napster BurnPak "should positively impact Napster's financial results starting in early 2004."

Roxio shares rose 14 per cent on the Nasdaq following the announcement.
http://www.macworld.co.uk/news/main_...fm?NewsID=7500


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Philips Will Launch Open Digital Media System Soon
Reuters

Philips Electronics (PHG.AS)said on Tuesday it was six months away from launching a system against illegal copying that will allow consumers to play digital video and music on any digital media player.

Philips hopes the so-called digital rights managementsystem being developed by Intertrust, which it jointly owns with Japan's Sony Corp. (6758.T), will replace a confusing array of proprietary systems.

Digital music stores which have opened on the Internet this year use different DRM methods to protect songs against unlimited copying. But consumers can then only play the music on computers, CD and MP3 players which support the same DRM system.

``Consumers want an open system, and the electronics industry wants it too,'' Ruud Peters, chief executive of Philips's intellectual property and standards unit, told Reuters.

U.S. software maker Microsoft (MSFT.O), for instance, has opened music stores on the Internet that sell music encoded in such a way that they can only be played back with a Windows Media Player.

This player can be installed on any personal computer, and Microsoft has already struck deals with consumer electronics makers to build it into hundreds of devices.

``The electronics industry recognizes that Microsoft is a formidable player, but consumer electronics makers do not want to become dependent on Microsoft. They need an interoperable and independent system,'' Peters said in an interview.

``DRM is an accelerator which will boost digital sales of media, because it will convince media companies their content is protected. It should not be a competitive weapon,'' he added.

``We hope to have an interoperable system between now and six months,'' Peters said. When launched, the new DRM system will be endorsed by a large number of electronics companies and media companies such as film distributors and music publishers, he said.


``When we launch we want to give guarantees that it will be sufficiently supported,'' Peters.

Philips is Europe's largest maker of consumer electronics and the world's No. 3, while Sony is the biggest. Intertrust is the biggest holder of DRM patents, and all digital music players need Intertrust's technology to develop their own DRM system.

Philips and Sony bought Intertrust early this year to make sure key DRM patents would be available to everyone in the electronics industry, and also because they saw that DRM technology would become a crucial part of digital media. They have said they would make them available on reasonable terms.
http://www.nytimes.com/reuters/techn...ips-media.html


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Phone Service Over Internet Revives Talk of Regulation
Matt Richtel

Politicians have worked hard to keep access to Internet connections and many forms of Internet communication free from regulation and taxation. But the debate over how government treats the Internet is likely to reach a new level of intensity now that Internet technology is colliding with one of the nation's most lucrative businesses, telephone service.

Last week AT&T and Time Warner Cable announced that they intended to make Internet-based phone service available to millions of consumers next year, allowing those consumers to bypass traditional phone companies. Those moves signaled the start of a technological shift that could change one of the biggest and most important industries in the American economy. Central to that shift is whether and how Internet phone service should be regulated, a question that the Federal Communications Commission started to explore in hearings two weeks ago.

In an interview on Thursday, Michael K. Powell, the chairman of the F.C.C., said he had not made up his mind on that question. But he was not at all shy about stating his preliminary view - that Internet-based calls are fundamentally different from traditional phone calls and ought to be regulated cautiously, if at all.

"There is no functional or technical difference between an Internet phone call and other data - be it bits, or e-mail or Web pages," Mr. Powell said, during a visit to San Francisco. Up to now, Internet traffic has been essentially unregulated and untaxed because many politicians and regulators have argued that the technology and online commerce would grow more quickly if the Internet were left alone.

Mr. Powell noted that while Internet-based calls might serve the same function as calls over conventional phone lines, the underlying technology was different enough that it would not make sense to subject them to "100 years of judgments" and regulations. "Let's get this thing right and define it as truer to its real nature," he said, referring to the new technology.

His views are far from universally supported, given the many complex political and financial interests at stake.

What is clear is that the existing telephone infrastructure is heavily regulated, on both the state and federal levels, with intricate rules intended to keep phone access universally accessible and affordable.

Gene Kimmelman, the senior director for public policy at Consumers Union, said those regulations existed to satisfy important public policy concerns. He contended that goals like universal access would be gravely threatened if the world went to Internet-based services that were unregulated.

Mr. Kimmelman said that Mr. Powell's views, which seem to argue for far less regulation, would undo "social policy that has made phone service affordable and accessible." He added that one possible result was that basic connections which, under the regulatory structure were essentially subsidized by consumers and the industry, could cost significantly more than they did now.

Besides, he argued, function, rather than technology, should guide the regulatory decision. "It looks, smells, feels like plain old telephone service," he said of Internet service, and therefore it should be treated similarly.

This debate - the latest front in a 20-year-old regulatory battle that started with the breakup of the Bell system - will define the grounds on which various players in telecommunications compete. The question of how to regulate Internet-based calling will be "the communications regulatory issue over the next few years," said Eric Rabe, a spokesman for Verizon, with audible emphasis on the word "the."

For starters, regulators will have to address some central technical questions. Telephone calls are traditionally carried to and from homes on copper lines, with routing of the traffic using circuit switch technology. Internet phone service digitizes voice signals and sends them as Internet data.

Mr. Kimmelman argues that even with Internet-based service, the voice signals are still sent over existing communications networks, whether copper wires, coaxial cable or fiber optic lines. And he maintains that there is nothing sacrosanct about the mere fact that the signals are sent as Internet traffic.

"It's just a different way of assembling ones and zeroes so they can be more efficiently transmitted," Mr. Kimmelman said, noting that Internet calls would still have to travel through traditional phone wires through part of their journey.

Mr. Powell, however, maintains that what is important is not the wires but the technology involved. And, he pointed out, consumers who want to use Internet phones would still have to pay phone and cable companies to get Internet access through those networks, and in doing so, would still be supporting the basic telecommunications infrastructure.

"You pay Verizon $39.95" for high-speed access to the Internet, Mr. Powell said. He argued that once consumers have paid for that access, the providers should not necessarily be paid more for the use of that access to send particular communications, whether in the form of e-mail messages or phone calls.

Telephone and cable companies are staking out different positions, and other members of the F.C.C. may not share Mr. Powell's views.

The phone companies naturally are not eager to compete against Internet-based competitors who can avoid the huge costs of regulation. But some, like Verizon, also say that the solution is not to regulate Internet calling, but to deregulate the phone industry.

SBC, another major telephone provider, said it thinks it could compete against unregulated Internet-based services. The reason, said Dorothy Attwood, senior vice president for federal regulatory strategy at SBC, is that phone companies have a head start on features important to consumers like 911 service and the ability to make calls even when the power fails.

The cable companies have their own perspective on regulation. Atlanta-based Cox Communications, for instance, contends that regulation should be based, not on the technology used, but on the market share of a company, with larger companies subject to more regulations.

Cox, which already offers phone service based on circuit switch technology to nearly one million customers, will start Internet-based phone service in Roanoke, Va., today. But it does not expect the regulatory questions to be answered soon.

"It will be four to five years,'' said Carrington Phillip, vice president for regulatory affairs at Cox Communications, "before we have a good sense of how regulation is going to evolve."
http://www.nytimes.com/2003/12/15/te...y/15phone.html


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Argentina Won't Copy RIAA Tactic
Flavio Bustos

BUENOS AIRES -- As in the United States, online music piracy is on the rise in Argentina. But in contrast to the efforts of the Recording Industry Association of America, the trade group representing major labels here has not employed a flurry of lawsuits to deter the spread of illegal file trading.

"We are not here to go after users who exchange music (files), but rather to stay alert and report infringements to whom it may concern," said Gabriel Salcedo, CEO of the Cámara Argentina de Productores de Fonogramas y Videogramas, or CAPIF. The trade group, which translates as the Argentine Chamber of Phonogram and Videogram Producers, represents the interests of major labels including Warner Bros. and Sony in Argentina.

Today, the major problems facing the recording industry in Argentina are counterfeit CDs and the growth of music downloads through peer-to-peer file-sharing services, Salcedo said.

"In Argentina, 153 million musical files -- about 10 million CDs -- are being shared annually, according to data provided by the main ISPs and other sources," Salcedo said, adding that around 322,000 users are exchanging an average of 10 songs online every week.

But unlike the legal action taken in the United States by the RIAA, in Argentina, education and prevention are the preferred methods of persuasion.

"If we find that employees are swapping songs through the Internet using their employers' computers and time, we'll contact the company to tell them what is happening, so that they take the corresponding preventive and corrective steps," said Salcedo.

A companion to the growth of online music file sharing is counterfeit CDs, which account for 53 percent of all CDs sold in Argentina.

While a large number, it's not as bad as in other Latin American countries where, according to the International Federation of the Phonographic Industries, an RIAA-affiliated Swiss association, the number of pirated CDs increased to 300 million in 2002 from 260 million in 2001. Paraguay (where 99 percent of CDs sold are counterfeit) leads the region, followed by Venezuela (75 percent), Mexico (68 percent), Colombia (65 percent) and Brazil (53 percent).

In Argentina, CAPIF tries to whittle away at counterfeit CD sales through dialogue. When a case of infringement is detected, CAPIF officials inform the offending site's ISP. The ISP then takes down the website.

"In general, we speak fluently with ISPs, and they understand that if they do nothing to cope with this problem, our next step will be to take legal action. But again, we have an open relationship with Internet service providers," said Salcedo.

Between July and October, 309 sites were taken down. Twenty-nine offered direct music downloads, while the remaining 280 promoted home delivery of counterfeit CDs. In the same period, CAPIF disabled 395 e-mail addresses.

In Argentina, where justice sometimes seems absent, the fact that some individuals have been tried and sentenced for this crime is surprising. Seven people -- including five former policemen -- have been in prison for a year and a half on charges of being members of a gang producing counterfeit CDs. In addition, more than 400 others face trial for music piracy.

Amid this tangle of accused and accusers, winners and losers, are the musicians and artists. Litto Nebbia, a popular Argentine rocker, said he uses the Internet to pay for and download legal music files.

"Sound quality is high, and I know that a portion of the money paid goes to copyright fees," said Nebbia. "This reminds me of the discussion on drugs, whether they (should be) legalized or not.

"I don't know how an agreement could be reached (on file swapping). The major labels are the ones that stand to lose more. I think the solution is to adjust to reality, that is, big companies should lower disc prices, because in the middle of this, we artists are the ones who are losing."

Flopa, a young artist who is very familiar with music swapping, said she believes that "P2P services do not damage artists more than big labels do." In any case, she said, "Labels should lobby telephone companies, as the money people are not spending on music is being spent on Internet service providers."
http://www.wired.com/news/digiwood/0,1412,61531,00.html



New York Times Illustration by Frank O’Connell


NYT Q & A

Transpose Your Music From Vinyl Onto CD's
J.D. Biersdorfer

Q. I have a collection of vinyl records, and I have the cables needed to import the recordings onto my computer so that I can burn them onto CD's. Is there a way to eliminate hissing and popping?

A. A good audio restoration program can filter noise and remove many of the crackles, pops and hissing sounds from old albums. There are some options for less than $100 for both the Windows and Macintosh systems.

Pinnacle Clean for Windows is designed to enhance and improve sound quality from a variety of audio sources, including vinyl records, cassettes, MP3 files and other CD's. The software can be automated and comes with its own CD-burning program. It works with Windows 98 SE and later and comes in two versions: Pinnacle Clean Plus for $100, which includes a U.S.B.-based preamplifier and audio cables, and Pinnacle Clean, a $50 version without the pre-amplifier. More information is at www.pinnaclesys.com/audio.

Magix Audio Cleaning Lab, designed for home users with Windows 98 or later, comes with many features to enhance the sound quality of your imported records or tape. The program is available on a CD for $40 or as a download for $30 from site.magix.net.

Macintosh users can clean up their audio files with programs like SoundSoap from BIAS. The software, which works with Mac OS X and Windows XP, costs $100 at www.bias-inc.com/products/soundsoap.

Mac users can consider Roxio's Toast Titanium software, which includes a CD Spin Doctor program to remove extraneous noise from audio files. Toast Titanium 5 ($90) works with Mac OS 9 and OS X and Toast Titanium 6 ($80 after a rebate) is for Mac OS X only; both are at www.roxio.com. Electronic versions to download are also available at the site.

Q. I want to buy a DVD recorder, but I am confused about formats. What is the difference between DVD+RW and DVD-RW formats?

A. Although both are designed to store more than 4 gigabytes of data and video, the two DVD disc formats differ in technology and manufacturer allegiance. The DVD- RW disc is officially supported by the DVD Forum (www.dvdforum.org), an industry group founded in 1997.

DVD-RW discs generally have greater compatibility with existing DVD players, but many newer DVD players can handle most formats. Supporters of the DVD+RW disc in the DVD+RW Alliance group (www.dvdrw.com) claim that their format is better for recording home movies because of the way the video is encoded onto the disc. You should also check the manuals of the devices you want to play the discs in to see which formats they can handle.

If you do not know which format to choose, consider a recorder that can record and play both DVD+RW and DVD-RW discs, and then buy your blank DVD's based on the type of compatibility you need for data backup or making home movies. Several companies, including Sony, Pioneer and Memorex, make dual-format recorders, and Iomega makes one that plays all DVD formats.

Q. Is it true that the iPod's battery cannot be replaced?

A. At first, Apple Computer did not have a specific repair program for iPods with ailing power cells that had passed out of the company's one-year warranty period. But the company now has a mail-in battery replacement service for $99. Details are at http://www.info.apple.com/support/ap..._service.html.

The company also sells a version of its AppleCare Protection Plan service package especially for the iPod ($59), which extends the warranty and support to two years. More information is at http://www.apple.com/support/product...careipod.html.

If you are a do-it-yourselfer with an out-of-warranty iPod, you can buy a replacement battery. Opening the iPod's case can be challenging, but most batteries include instructions. Batteries are available at Laptops for Less ($49; www.ipodbattery.com) and PDASmart ($59; www.pdasmart.com/ipodpartscenter.htm).

[JackSpratts]

Canadian Panel Says Song Downloads Are Legal

Copyright Board backs private copying but says uploading music to networks is piracy.
Jon Healey

The music industry may soon be singing a new tune: "Blame Canada."

The nation to the north already tempts Hollywood studios with lower production costs and senior citizens with cheap prescription drugs. Now it could start luring music fans with free — and legal — downloads.

The Canadian Copyright Board said Friday that downloading pirated music and burning it onto CDs was legal under Canadian law. Uploading songs onto file-sharing networks remains taboo.

The board's opinion won't necessarily hold up in court, the Canadian Recording Industry Assn. was quick to point out.

But Canadians are likely to be encouraged to download songs from networks like Kazaa instead of buying them online or in stores, said Evan R. Cox, a San Francisco-based attorney at Covington & Burling who specializes in copyright law.

"For people who were self-regulating and said, 'I know this is not proper; I'm not going to do it,' now they've been told it's proper — they're going to do it," Cox said.

Canadian law gives copyright holders an exclusive right to copy and distribute their works. In 1998, however, Canadian lawmakers legalized some forms of personal or "private" copying — in particular, copying onto audio recording media like CDs and cassette tapes — and applied a sales tax to those media to compensate copyright holders.

The Copyright Board's job is to decide which "audio recording media" qualify for the private copying exemption and how much tax to levy.

On Friday, the board said it believed the exemption applied to downloaded songs "as long as two conditions are met: The copy must be for the private use of the person making it, and it must be made onto an audio recording medium." And the board extended the exemption to some portable music players, such as Apple Computer Inc.'s iPod.

The exemption also apparently applies to computer hard drives, which are not taxed because copyright holders haven't asked that they be. The levy on other media ranges from 16 cents for a recordable CD to $19 for a portable device with at least 10 gigabytes of storage capacity.

The Recording Industry Assn. of America declined to comment. Its Canadian counterpart wasn't so reticent.

"The issue of whether downloading is illegal or not is an issue for Canadian courts," said Richard Pfohl, general counsel of the Toronto-based Canadian Recording Industry Assn. "The Copyright Board has no place to opine on the matter."

Pfohl added that it was nonsensical to argue, as the board does, that a song uploaded illegally becomes perfectly legal once downloaded. The board could confuse music fans, he said, making it harder for the CRIA to convince the public that file-sharing is wrong.

The Copyright Board's levy generated $45.7 million in its first three years and is expected to produce an additional $21.3 million this year, said Paul Audley, policy advisor to the Canadian Private Copying Collective, which collects and distributes the money. About two-thirds goes to songwriters and music publishers, and the rest is split between performers and labels.

Pfohl said the music industry would have been a lot better off if people had just paid for all that music instead of copying it: Sales have declined a total of $323.5 million since the tax went into effect in 1999.

Attorney Fred von Lohmann of the Electronic Frontier Foundation, which advocates civil liberties in cyberspace, said the Canadian board's levy had glitches but was a more promising way to address file sharing than the RIAA's tactic of suing users.

"The levy approach puts money in the pockets of artists," he said, "something the litigation approach doesn't appear to be doing."
http://www.latimes.com/technology/la...,7976988.story



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Canadian Music Sharers To Face Lawsuits

Recording industry to borrow U.S. tactic with 'chilling impact' for online siphoning
Robert Thompson

The millions of Canadians who share music files on the Internet should be prepared for the possibility of facing a lawsuit early in the new year, the head of the Canadian Recording Industry Association said yesterday.

Brian Robertson told the National Post his organization will soon begin launching legal action against Internet music uploaders.

Uploaders are those who allow people to access music stored on their computer hard drives. In some cases, uploaders freely share hundreds of music albums with users around the world.

The legal action will target users who upload or share music files over the Internet using services such as Kazaa, Mr. Robertson said. The Canadian Recording Industry Association, or CRIA, represents Canada's major record labels, including Sony Music and Universal Music.

Mr. Robertson would not say exactly when legal action would be launched, noting "it will be sooner rather than later." Sources told the Post that lawsuits are expected early in 2004.

"We've gone through a process, and spent $1-million on a value-of-music education campaign," Mr. Robertson said. "But the industry continues to be devastated by file sharing. It is regrettable that we'll have to take this action, but we've been forced to."

According to CRIA, sales of compact discs in Canada have fallen by $450-million, or 23%, since 1999.

Andrew Currier, an intellectual property lawyer at Toronto-based Torys LLP, said he expects a file- sharing lawsuit will have a "chilling impact" on Canadians who use free online music services.

"What parent wants to bother retaining a $500-per-hour intellectual property lawyer to defend their child against this?" he asked.

In September, the Recording Industry Association of America launched 261 lawsuits against users who uploaded or shared files using software like Kazaa. The lawsuits' targets included a 12-year-old girl who settled her case for US$2,000 and a 71-year-old Texas grandfather.

From the period starting when the RIAA first threatened lawsuits, through to the weeks following the launch of legal action, the number of people using Kazaa fell by 41%, according to Nielsen/NetRatings. After the lawsuits, compact disc sales, which had been slumping for three years, began to increase.

CRIA has retained litigation attorneys in preparation for the lawsuits. Mr. Robertson would not specify how many lawsuits would be filed, but he did say the legal action would be similar to the lawsuits filed in the United States.

For some time, CRIA has been using software that tracks and identifies users involved in trading free music files. "Users should be aware that using file-sharing services is a very public process," Mr. Robertson said.

Canada has approximately 3.5 million high-speed Internet users. Given the high use of broadband Internet connections, Canadians have been pegged as some of the heaviest per capita users of peer- to-peer file-sharing services in the world.

Only one legal service in Canada, called Puretracks.com, charges users who download music from its site. Songs typically cost 99 cents, while an album costs $9.99.

One of the factors leading to heightened free music sharing is that there has been some ambiguity surrounding the Canadian Copyright Act, leading some to believe that sharing digital music files is legal.

The Canadian recording industry currently receives a tariff on blank media such as MP3 players and recordable compact discs in order to compensate music companies for music sales lost to piracy.

Last Friday, in a decision on raising levies on blank media, the Copyright Board seemed to indicate that music downloading over the Internet was not illegal.

Michael Geist, a law professor at the University of Ottawa who specializes in legal matters related to the Internet, said the law is less murky when it deals with uploading, but there could be problems pursuing downloaders in court.

"The Copyright Board decision doesn't preclude them from going after uploaders, but in terms of downloaders, it certainly creates a complication," he said.

Mr. Currier said he has been waiting for a case in Canada where a music file-swapper was taken to court. He thinks it will clarify some of the ambiguity in the Copyright Act.

"I've been waiting for an upload type case to come -- I've been looking for some clarification from the court. My sense is that the Act would catch an uploader."
http://www.canada.com/national/natio...3-a856c5abebe5


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Web Firms To Name Pirates

Internet service providers will reveal music file sharers if compelled by court
Robert Thompson

Three of Canada's largest Internet service providers said yesterday they will co-operate in identifying those accused of violating copyrights, as the Canadian Recording Industry Association prepares to launch lawsuits against digital music swappers.

As first reported in the National Post on Monday, the Canadian Recording Industry Association plans to launch lawsuits against Internet users that upload or share music files using peer-to-peer software. The lawsuits are expected in early 2004.

CRIA says Internet file-sharing of music has caused sales of compact discs in Canada to fall by $450- million, or 23%, since 1999.

Those ensnared by CRIA lawsuits could face fines of up to $1-million if the group successfully pursues criminal charges.

While CRIA, which represents Canada's music recording labels, can track users who share music on peer-to-peer networks, the association is only able to secure an Internet protocol address. An IP address identifies a computer connected to the Internet.

However, CRIA will have to ask Canadian Internet service providers for personal information relating to the IP addresses to identify those it feels have violated copyrights.

To obtain personal information from Internet service providers, CRIA will have to turn to Canada's court system, according to Michael Geist, a law professor at the University of Ottawa.

"It could be a difficult and lengthy process," said Mr. Geist, noting it might take a few months to obtain a court order and the information from ISPs.

However, yesterday, three of Canada's largest ISPs -- Telus Corp., Bell Canada and Rogers Cable -- said they would turn over personal information on their subscribers if presented with a court order.

"If they have a valid court order, our policy is to co-operate," said Taanta Gupta, a Rogers' spokeswoman.
http://www.canada.com/national/natio...7-3b28b10c28ef


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Apple hits 25 million iTunes downloads
Alorie Gilbert

Apple Computer has nearly doubled sales of digital music through its iTunes music store since launching a Windows-compatible version of its iTunes software in October, the company said.

Cupertino, Calif.-based Apple said Monday that customers have downloaded a total of 25 million songs from iTunes since April, when the online store opened, with 12 million songs purchased during the past two months alone.

Apple has been widely credited with sparking a boom in sales of downloadable music following the music industry's crackdown on illegal Internet file-swapping services such as Kazaa and Napster. Unlike its no-pay-to-play predecessors, the iTunes service charges 99 cents per song.

iTunes' rapid growth has exceeded some analysts' expectations. "This really underscores the pace at which people are accepting legitimate online music distribution," said Phil Leigh, senior analyst at Inside Digital Media.

iTunes customers download an average of 1.5 million songs from the service per week, said Apple Vice President of Application Marketing Rob Schoeben. Apple expects that customers will download 100 million songs by the first anniversary of iTunes' launch next April.

Apple executives are "blown away" at the rate at which people are purchasing songs at the company's store, Schoeben said. "You normally have a launch spike, and then you see it taper off," Schoeben said. "We're not seeing that. We're adding more and more accounts. We're not seeing people trying it and then going away. What we see in the numbers is that they're getting hooked."

Though Apple makes very little money on song sales, iTunes helps fuel sales of the company's iPod digital music player, Apple executives have said. As of October, the company had sold 1.4 million iPods, and it expects the device to be a popular holiday gift this year. Apple has introduced electronic gift certificates and a section of the iTunes site that showcases holiday music, both of which should further boost holiday-related sales, Apple said.

Apple has a 70 percent share of the legal music download market, and Digital Insight's Leigh predicts iTunes' sales this year will be at least five times that of all the legal competition combined. But competition is expected to grow. In addition to Musicmatch and the recently revived Napster, iTunes rivals may soon include Microsoft and Wal-Mart. Microsoft and digital music services provider Loudeye said on Monday that they're teaming up to help companies create new online music services based on Windows technology.
http://news.com.com/2100-1027-5124550.html


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SBC Taps Alcatel For Fiber Connections
Ben Charny

U.S. telephone service provider SBC Communications said Tuesday it has reached a four-year deal with Alcatel to supply equipment for its much-anticipated push to build high-speed fiber-optic connections to homes and offices.

SBC evaluated proposals from 20 companies since June before deciding on Alcatel, company spokesman Jason Hillery said. Alcatel was among the favorites because SBC had already used Alcatel equipment to outfit a San Francisco business and residential complex with an example of what's known as "fiber to the premises," or FTTP.

SBC, Bellsouth and Verizon Communications say FTTP will counter the growing threat from the nation's top five cable companies, which within the last year began complementing their cable TV and broadband services with local and long-distance dialing over an Internet connection.

Telephone companies eventually want to sell cable TV and videos on demand to complete their own hat trick of service offerings. But the current copper infrastructure that connects homes to their national network has only enough bandwidth to support broadband and voice.

"With FTTP, the carriers get tremendous, essentially unlimited, bandwidth," said Hilary Mine, Alcatel senior vice president of marketing.

The three major U.S. phone companies all announced their fiber intentions last year, but the plodding pace of the equipment testing they launched in June has sparked concern they were backing away from their original plans. "This is a big first step to advance test and develop this technology," SBC's Hillery said. "Now that we're able to focus on Alcatel, we can complete lab trials and move this out and do a field trial."

In November, Verizon Communications chose Advanced Fibre Communications as its lead supplier of fiber-optic equipment to deliver broadband to millions more homes and offices. It also plans to use equipment from Sumitomo Electric Lightwave, Pirelli Communications Cables and Systems North America, and Fiber Optic Network Solutions (FONS). Financial terms of the deal were not disclosed.

A BellSouth spokesman said that company is still evaluating FTTP proposals from equipment makers, but does not foresee a decision in the near future.
http://news.com.com/2100-1037-5125727.html


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Stop! ID Thief!

Identity theft is common—but keeping a watchful eye on your credit card accounts is now easy.
Simson Garfinkel

Putting technology to work for you

More than three million people in the United States were the victims of identity-theft-related fraud in the past year, according to a recent survey by the Federal Trade Commission. These people have had accounts opened in their names by scam artists, they’ve had their names given to the police by crooks stopped for various infractions, and they’ve had their homes sold out from underneath them. Damages to these victims average more than $10,000 per theft.

Grim as these statistics may be, the growing amount of credit card fraud is even worse: more than five million people had sham transactions dropped onto their credit card statements last year, and more than a million others have had non-credit-card accounts misused, including savings and checking accounts. Fortunately, you can protect yourself using a combination of ingenuity and tech savvy.

The whole foundation of the credit system is fundamentally insecure. A credit card number is really nothing more than a password—a password that’s not even secret, because you need to share it in order to use it. Just about the only way that you can detect misuse is to watch your accounts for unauthorized activity.

Keeping such a watchful eye is a lot easier now than it used to be. Credit card companies allow you to view your transactions on secure Web sites. For many people, however, even the few minutes it takes to deal with these sites is a big disincentive. But personal-finance programs like Quicken or Money streamline this process. I use Quicken, which automatically downloads new transactions from my credit cards, bank accounts, and investments with a single mouse click. To use this feature, you first store all of your account numbers and passwords in the program’s “PIN Vault.” There’s no need for you to memorize all those digits: the information is kept encrypted under a master pass phrase.

Getting Quicken set up is only half the battle, of course. You also have to manually review your downloaded transactions every few days to find out if somebody is using your credit card without your authorization. Banks and credit card companies are always looking for fraud as well, but they frequently don’t catch it until it is too late. You can nip the problem in the bud by calling up your credit card company and asking for a new account number at the first sign of fraud.

Another source of fraud is those “convenience checks” that the card companies send in the mail. Crooks steal them out of your mailbox and go on their own personal spending sprees. Protect yourself by calling up your credit card company and asking them to stop sending the checks. A locked mailbox is a good idea, too. And though it might sound extreme, buy a good crosscut shredder for your receipts; identity thieves have posed as homeless people, rummaging through trash, looking for bank statements and other sources of personal information. While you have the credit card company on the phone, have them put a password on your account. This replaces your “mother’s maiden name” and is much more secure. Finally, ask the credit card companies to stop sharing your personal information with other businesses. This will stop some of the junk mail coming into your house, including those “preapproved” credit card offers, which are a primary source of identity theft.

Identity theft is generally hard to prevent because it involves new accounts that crooks open in your name, rather than old accounts for which you have the account numbers. Again, the best way to protect yourself is by getting more information. Both Equifax and TransUnion offer credit-monitoring services. For a monthly fee they’ll watch your credit file and let you know whenever a new account is opened in your name, or when one of your creditors reports that you’re late to make a payment on an already opened account. To notify you, they send an e-mail message that asks you to log in to a password-protected Web site. If you see a suspicious account, you can call up the bank, report the fraud, and try to have the account shut down.

The Equifax service costs $4.95 per month if you want alerts sent within seven days of suspicious activity, $9.95 per month if you want alerts sent within 24 hours. TransUnion charges $10.95 for three months and provides notification within a week. Of course, it is the poor security practices and aggressive sale of credit reports that are largely responsible for the identity theft epidemic in the first place. Still, my advice is to swallow your indignation and sign up for these services.

Finally, don’t click on links in e-mail messages from unknown senders. Thieves are sending out messages that look as if they come from PayPal or eBay, then capturing the usernames and passwords of people who attempt to log in to fake Web pages. Avoid this scam by typing the companies’ Web addresses directly into your browser rather than clicking on links.

Perils abound on the electronic frontier. Taking a few smart precautions will ensure that you don’t have people copping your identity to plunder your bank account and sully your reputation.
http://www.technologyreview.com/arti...finkel1203.asp


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Court Leaves the Door Open For Safety System Wiretaps
Adam Liptak

PEOPLE with sophisticated safety and communications systems in their cars may be getting an unwanted feature. An appeals court decision last month revealed that the government may be able to convert some of the systems into roaming in-car wiretaps.

The decision, by a divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, arose from a criminal investigation in Nevada. An unidentified company challenged a series of court orders requiring it to create a roving bug for the Federal Bureau of Investigation. The appeals court overturned the orders, but its reasoning suggested that the issue will recur.

The technology involved, used by OnStar, ATX and others, combines a global positioning satellite transmitter with a cellular telephone. Drivers can use the services to seek information and emergency help.

Most of the court file in the Nevada case is sealed, and the appellate decision did not discuss the nature of the investigation or specify the brand of the system in question. But the court's description of the system's features is consistent with one offered by ATX, which provides telematics services for cars from BMW, Ford, Jaguar and Mercedes-Benz, among others.

The device discussed in the decision allows drivers to punch one of three buttons: for emergencies, general information and roadside assistance. The phone has a speaker and microphone, and it turns out that the microphone may be activated surreptitiously, allowing government agents to listen in on conversations in the car.

Geri Lama, a spokeswoman for OnStar, said that her company was not involved in the case and that OnStar's setup was not capable of what she called "stealth listening."

"Any time we call into the vehicle, it rings," she said, adding that if a car is stolen, OnStar can retrieve data about its location but cannot eavesdrop on the people inside.

OnStar, a General Motors subsidiary, is the leading provider of telematics services, not only for G.M. vehicles but also models from Acura, Audi, Isuzu, Lexus, Subaru and Volkswagen.

Neither Bennee B. Jones, the Dallas lawyer who represented the company in the case, nor Gary A. Wallace, an ATX spokesman, responded to telephone and e-mail messages seeking comment. ATX is based in Irving, Tex., near Dallas. Natalie Collins, a spokeswoman for the United States attorney in Las Vegas, declined to comment.

The appeals court decision, rendered after the wiretapping had concluded, ruled that the lower-court judge should not have allowed it. But the appellate ruling was narrow, based on the fact that safety features of the system in question had to be disabled to permit the government to listen in.

The majority had no objection in principle to converting the device into a bug; a dissenter would have allowed the eavesdropping even at the expense of safety. The government indicated that it would ask either the three-judge panel or a larger panel of the appeals court to reconsider the decision that disallowed the Nevada wiretap.

Privacy advocates on both sides of the political spectrum said the decision raised troubling questions about in-car communications devices. "If the facts were just a little bit different, law enforcement would have won this case," said Chris Hoofnagle of the Electronic Information Privacy Center, a civil liberties group.

Bob Barr, a former congressman from Georgia and a former federal prosecutor, agreed. "People ought to boycott such systems," he said.
http://www.nytimes.com/2003/12/21/au...s/21SNOOP.html


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Loudeye, Microsoft Team On Music Store
John Borland

Digital music services provider Loudeye and Microsoft announced that they have teamed to promote Loudeye's new service that helps other companies set up online music stores much like Apple Computer's iTunes.

Seattle-based Loudeye and the software giant said Monday that they will work together to handle the infrastructure and distribution for online music services branded by other companies that are looking to sell songs online or to enter the digital media business in some other way.

Loudeye's digital music services, which include its Digital Music Store and iRadio Service that contains 100 preprogrammed music channels, are based on Microsoft's Windows Media 9 Series technology. Early customers of the service include AT&T Wireless and Gibson Audio, a division of Gibson Guitars.

"The problem for companies that want to launch a digital media service with their own brand is that it's very expensive," said Loudeye Chief Executive Officer Jeff Cavins. "We'll charge them a fraction of the cost of what it would take to build it themselves."

Loudeye's plan highlights the growing presence of legal downloadable music, just eight months after Apple launched its iTunes song store.
http://news.com.com/2100-1025-5123634.html


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DVD-Copying Firm Sued By Warners
BBC

Film giant Warners is taking legal action against a US-based firm that distributes DVD-copying software.

Warner Home Video UK said the product sold by 321 Studios Europe gets around the anti-copying protection on DVDs.

It is seeking an injunction to block the sale and distribution of the software, which it says is in breach of new EU anti-piracy laws.

321 - already the subject of a similar lawsuit - previously said it welcomed the prospect of a legal case.

Warners said the new move had been prompted by the Copyright and Related Rights Regulations 2003, which came into force at the end of October.

Previous laws

This law strengthens copyright protection in the UK and amends the Copyright, Designs and Patents Act 1988.

It follows an earlier injunction filed against the company by Warners in September under the previous laws. This is still pending.

The latest lawsuit has been filed on behalf of the Motion Picture Association, which represents the major Hollywood studios.

In a previous statement, 321 Studios has said it welcomes the opportunity in court to clarify the position of copying DVDs for personal use.

The firm sees itself as a leading proponent in the fair use of copyrighted material, fighting its case on both sides of the Atlantic.
http://news.bbc.co.uk/1/hi/entertain...lm/3254234.stm


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China Arrests First Religious Cyberdissident, Rights Group Says

BEIJING (AFP) - A Paris-based rights group called on China to release a 23-year old religious dissident arrested for using the Internet to support unauthorized Christian activities.

Reporters Without Borders called on Chinese Premier Wen Jiabao to order the release of Zhang Shengqi, who was arrested on November 26 for publishing Internet articles supporting China's banned Christian church. "Zhang's is the first case of a cyberdissident jailed for expressing support for the banned Christian Church," Robert Medard, head of the media advocacy group said in a statement Wednesday. "He has been accused of divulging state secrets, when in fact he only published articles on the government crackdown on his religious community." Zhang was arrested at his home in northeastern Jilin province. Police searched his house and confiscated his mobile phone and articles written by another jailed religious dissident, Liu Fenggang. In recent months, China has moved to crackdown on unauthorized religious groups, arresting group leaders and razing unlicensed places of worship and temples, rights group and local officials have said. China permits worship in official versions of the four main religions of Buddhism, Taoism, Islam and Christianity, but keeps them under strict state control. Nevertheless, a series of underground Buddhist and Christian groups, particularly evangelical and charismatic type churches, have expanded rapidly over recent years and drawn in millions of worshippers.
http://uk.news.yahoo.com/031217/323/eh9me.html


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Streamcast Back In Court Today
Chris Clancy

It promises to be a humble homecoming for Streamcast Networks Inc., makers of the peer-to-peer file sharing software Morpheus, which back in March — amid a whirlwind of lawsuits, office turmoil, and bad press — moved from downtown Franklin to Seattle and, later, Los Angeles.

Representatives of the self-proclaimed “digital communications solutions provider” will be standing today before U.S. Civil Court Judge John T. Nixon as part of a status conference regarding a pending lawsuit against twenty-three of the world’s biggest record labels — including Arista Records, Capitol Records, London-Sire Records, and Elektra Entertainment Group.

Defense attorney Chad Vander Wert, an attorney with Nashville law firm Jack, Lyon, & Jones, described today’s meeting as “just a step in the process.”

The record giants filed a complaint against Streamcast and an early incarnation of its Morpheus software, musiccity.com, in late May, charging copyright infringement. The plaintiffs state that Streamcast employees acquired hundreds of compact discs controlled by the record labels, and illegally “ripped” them — that is, reproducing them for the purposes of distribution without securing the required authorization.

“With these thousands of sound recordings, [Streamcast] created a massive database of digitized music that they stored on computer hard drives,” the lawsuit states.

This initial hearing has been a long time coming, as Streamcast’s defense filed a motion to transfer the case’s venue from Nashville to Los Angeles, arguing that since a similar lawsuit is taking place in California’s Central District Court — one wherein Streamcast was sued by twelve of the same record labels, this time for a less direct form of copyright infringement — the two cases ought to be consolidated. Judge Nixon denied that request Dec. 1.

“We felt that because we won a partial summary judgment in the California case, the plaintiffs were doing a little bit of judge- shopping,” said Matthew Neco, general counsel and vice president of business affairs at Streamcast. “Apparently Judge Nixon believes otherwise.”
http://www.nashvillecitypaper.com/in...&news_id=29290


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Film Fans Befuddled by Copyright
Katie Dean

A major studio's recent action to curtail online sales of its films has left some movie buffs confused about where and when purchasing foreign DVDs is legitimate.

In general, U.S. law permits consumers to buy imported DVDs for personal use. But the law is a little murkier for retailers.

Questions arose for Asian film fans after Miramax Film sent a cease- and-desist letter to Seattle-based Kung Fu Cinema, demanding last week that the site stop selling DVDs of Hero, a Chinese film.

Miramax owns the rights to distribute the movie in the United States. While Kung Fu Cinema didn't actually sell Hero, the site linked to HKFlix.com, a U.S. company which sells import DVDs online.

So when and where can film purists seek out the original versions of foreign movies?

In the non-Internet world, if one buys a foreign DVD overseas and brings it home in a suitcase for personal use, that's legal. Hauling 100 DVDs back to the United States and selling them, however, is not.

Ordering a movie online from an overseas distributor, so long as it is not a counterfeit copy, is also permitted under U.S. law.

"There's no reason under the copyright law why I couldn't import a single copy for my private, personal use," said Jeff Cunard, a partner at Debevoise & Plimpton, who represents clients in the media, entertainment and technology industries. That holds true "if I came across the border in Canada carrying it in my baggage or if I order the film from a website in Hong Kong or the Netherlands, or if I asked a friend in London to go to the store, buy it and ship it to me."

Jonathan Zittrain, co-director of the Berkman Center for Internet & Society at Harvard Law School, says most of the laws pertaining to overseas sales of copyright material date back to a time when ordinary consumers had limited access to foreign retailers.

"The rules of copyright were honed and developed in an era when the only people who had to pay attention to this were larger firms that had ready access to lawyers," said Zittrain. "The Internet has changed this. People that are regularly transacting in other people's intellectual property might want to do some basic consultation to figure out if they are crossing any wires."

"In some ways, the best protection is basically being a small fry -- not worth the attention of the whale," Zittrain said.

Unless, perhaps, the whale is Miramax. Currently, martial arts film fans are waging a write-in campaign in an attempt to convince the studio to release Asian movies in their original versions so movie buffs can buy the films in the United States and won't have to buy overseas or turn to downloads or bootleg copies.

"When (Miramax) releases DVDs in this country, they often heavily edit it. They've Americanized the movies. Fans of Asian cinema want the original versions," said HKFlix.com's Stockton, who has joined the write-in campaign. "We feel that it's unfortunate that they have chosen to limit the options of fans and consumers in the way they have."
http://www.wired.com/news/digiwood/0,1412,61598,00.html


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The New Information Ecosystem: Part 1: Cultures Of Anarchy And Closure
Siva Vaidhyanathan

Siva Vaidhyanathan, author of the forthcoming The Anarchist in the Library and a true scholar of the internet age, presents a compelling, five-part panorama of the implications of electronic peer-to-peer networks for culture, science, security, and globalisation. His provocative argument registers peer-to-peer as a key site of contest over freedom and control of information.

Part 1: It’s a peer-to-peer world
In the first of his five-part series, Siva Vaidhyanathan maps the fluid new territory of electronic peer-to-peer networks that are transforming the information ecosystem. Is this a landscape of enlarging freedoms where citizens shape the forms and meanings of social communication, or does it offer an invitation to entrenching state surveillance and closure?

Part 2: ‘Pro-gumbo’: culture as anarchy
Peer-to-peer technologies have precedents in the anarchistic and hybrid processes by which cultures have always been formed. Decoding anxious cultural preservationists from Matthew Arnold to Samuel Huntington, the second instalment of Siva Vaidhyanathan’s five-part series reframes p2p in the light of other technologies and practices – cassettes, creolisation, world music – which likewise reveal the energetic promiscuity of culture. Any attempt to censor or limit this flow would leave cultures stagnant.

Part 3: The anarchy and oligarchy of science
Science is knowledge in pursuit of truth that can expand human betterment. But part three of Siva Vaidhyanathan’s powerful series sees the free information flows at the heart of science being pressured by the copyright economy, the post-9/11 security environment, proprietary capture of genetic databases, and science policies of governments and universities. If commerce and control defeat openness and accumulation, what happens to science impacts on democracy itself.

Part 4: The nation-state vs. networks
In the last decade, the nation-state has survived three challenges to its hegemony – from the Washington Consensus, the California Ideology, and Anarchy. The promise of a borderless globalisation unified by markets and new technology has been buried. The fourth part of Siva Vaidhyanathan’s compelling series asks: what then remains of the utopian vision of global peer- to-peer networks that would bypass traditional structures of power?

Part 5: Networks of power and freedom
The use by non-state networks of new communication technologies is challenging ideas about citizenship, security, and the nation-state. In response, the impulse to restrict or suppress is shared by states as different as the United States and the People’s Republic of China. In concluding his five- part openDemocracy series, Siva Vaidhyanathan maps an issue that will define the landscape of 21st century politics.
http://www.opendemocracy.net/debates...8-101-1319.jsp


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Extract

The Genie’s Revenge: A Response To Siva Vaidhyanathan
Matthew Rimmer

In his essay series on peer-to-peer (P2P) culture on openDemocracy, Siva Vaidhyanathan provides a picturesque account of intellectual property in the digital era. He considers the implications of peer-to-peer networks for law, politics, culture, and science, but is rather shy about analysing legal judgments dealing with peer-to-peer networks. This is a shame because this would challenge and complicate his simple dichotomy between information ‘anarchy’ and ‘oligarchy’.

Siva is a bold polemicist who is not afraid of making sweeping generalisations. Take for instance, the articulation of the thesis of his forthcoming book, The Anarchist in the Library:

“The actors who are promoting information anarchy include libertarians, librarians, hackers, terrorists, religious zealots, and anti-globalisation activists. The actors who push information oligarchy include major transnational corporations, the World Trade Organisation, and the governments of the United States and the Peoples’ Republic of China.”

Some would call this a black and white vision of the world. Librarians tend to be orderly, law-abiding folk. They would not like to be lumped together with hackers, terrorists and religious zealots. Moreover, the United States tends to have a rather complex relationship with both multinational companies, the World Trade Organisation (WTO) and China. These various interests cannot all be aligned under the ugly phrase, “information oligarchy”. We are experiencing a much more contested and varied moment in law, politics, culture, and science.

Siva displays a darting, hummingbird-like intelligence – he moves from topic to topic, making intelligent linkages and drawing fine conceits. He covers an impressive range of material, cutting across a range of disciplines – law, politics, culture and science.

Sometimes Siva can be faulted for his ephemeral, fleeting discussion of issues. For instance, his three-paragraph treatment of the epic litigation over Myriad Genetics’ patents is much too short and superficial. Siva should linger on topics like this, and draw out their complexity and nuances. He should also resist the temptation to take such a holistic view of the world, in which everything is connected – a six- degrees-of-separation universe. His vision of The Anarchist in the Library is a little too tidy and neat for the chaotic maelstrom that the title of the piece suggests.

Siva provides a great sense of the undoubted promise of peer-to-peer networks in culture, politics and science. However, such potential remains latent and unrealised.

Thus far, peer-to-peer networks have primarily been venal creatures of e- commerce. They have been vulnerable to legal actions for copyright infringement because they have facilitated the dissemination of copyright media for profit and gain.

Peer-to-peer networks should therefore pay heed to Siva’s idealistic hopes, if they wish to survive in the future. The courts would be happy to foster such technology if it promoted the freedom of speech, the mixing of cultures, and the progress of science.
http://www.opendemocracy.net/debates...8-101-1639.jsp


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Senate Considers Bill To Limit Peer-To-Peer Security Risks
Wilson P. Dizard III

A bill requiring federal agencies to curb the security risks caused by peer-to-peer file sharing is scheduled to go to the floor of the Senate next year.

HR 3159, the Government Network Security Act of 2003, would require agencies to develop and implement plans for protecting federal systems from the security and privacy risks posed by peer-to-peer file sharing. It also would require the General Accounting Office to assess the plans’ effectiveness.

The House passed HR 3159 on Oct. 8. The Senate Governmental Affairs Committee approved the legislation without amendment Nov. 10, clearing the way for floor consideration of the bill. Because the Senate and House versions of the bill are identical, there would be no need for a conference committee to resolve differences.

Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee, introduced the bill along with Rep. Henry Waxman (D-Calif.), the committee’s ranking member. Davis’ committee held hearings in May on the risks of peer-to-peer file sharing, focusing on computer security for the general public and child pornography issues.

The bill has 28 House co-sponsors. The Senate Governmental Affairs Committee passed the legislation in a business meeting without hearing evidence from witnesses.

HR 3159 would give federal agencies six months to develop and implement their plans for controlling file- sharing risks. It allows agencies the flexibility to use technology, such as firewalls, or other means, such as employee training, to control the risks.

Tens of millions of computer users have downloaded peer-to-peer file sharing programs such as Kazaa, usually to exchange music files. But the programs can allow outsiders to insert malicious spyware, adware and viruses, and to download personal information from users’ systems. During the hearings and consideration of the bill, lawmakers expressed concern that peer-to-peer file sharing could jeopardize national security data or files containing citizens’ personal data.

The House committee said in a fact sheet on the bill that it had found peer-to-peer file sharing at federal agencies that use classified data, such as an Energy Department laboratory, a NASA research facility and Labor Department headquarters.
http://gcn.com/vol1_no1/daily-updates/24468-1.html


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P2PNET.NET IS OFFLINE

Yesterday, the p2pnet.net host, along with NASA and thousands of other machines, came under a massive hack attack.

A lot of sites were defaced and others, completely destroyed, backups included.

Unfortunately, p2pnet falls within the latter category.

"It'll mean re-building the site from scratch, which'll take a while," says founder Jon Newton. "But we'll get it all happening again as soon as we possibly can.

"For now, please bear with us."

Cheers! And thanks .....

the p2pnet crew
http://p2pnet.net/


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Music Industry's Prayers Unanswered

Free downloading just one of many problems, critics say
Robert Thompson

If the music industry prayed for better times in 2003, it's clear those prayers weren't answered.

The past year continued a trend that has plagued the industry for four years: a staggering loss of sales in the face of increasing legions of fans helping themselves to free music over the Internet.

The numbers tell it all: Canadian sales of compact discs have fallen from a high of $1.4-billion in 1998 to an estimated $881-million in 2003. Sales of music in the United States have fallen by US$2-billion since 1999.

Falling sales have been a trend since Napster started the frenzy of free music downloading in 1999. Today, millions flock to such peer-to-peer services as Kazaa to click and receive music for free.

"What we've got here is a change in distribution," music pundit Bob Lefsetz wrote earlier this year. "Distribution is in the process of changing the product and [the people] in power at major labels are completely clueless as to what's going on."

Mr. Lefsetz and others have criticized the music industry's inability to adapt to changing trends. But not everyone seemed so perplexed.

Apple Computer Inc. launched iTunes, the first digital music service of any consequence to use a paid model -- US99 cents for any of the more than one million songs on offer.

By December, iTunes had 25 million downloads, with more than 12 million coming in the past two months, and proved that a paid downloading model could not only attract media attention, but grab consumer dollars, as well.

By the end of the year, companies sensed a gold rush -- Roxio Inc. relaunched Napster and giant retailer Wal-Mart Inc. jumped into the fray.

Wal-Mart said yesterday it will begin offering digital music downloads on its Web site for US88 cents.

Legal digital music sales accounted for US$80-million in sales in the United States, according to Jupiter Media Metrix, and are expected to grow to US$200-million in 2004. It's impressive growth -- but consider that total U.S. music sales in 2002 were US$13-billion.

However, David Card, a media analyst with Jupiter Media Metrix in New York, says the music industry cannot blame all its problems on free downloading.

He said the music recording business failed to properly study the buying habits of its biggest customers -- teenagers. Unlike past generations, he says, teenagers today have many more ways to spend entertainment dollars. No longer is it just movies and music, but an array of new media -- from computer games to multi-tasking cellphones.

"There's been a generational shift," Mr. Card says. "The music industry has been blaming all of its problems on downloading. But I think there have been a series of issues, including downloading, that have impacted what's going on."

In the short term, the Canadian music industry will try to curtail free digital downloading through the courts.

Brian Robertson, head of the Canadian Recording Industry Association (CRIA), has said the group will follow lawsuits launched in the United States this year and start the new year by suing Canadians who have uploaded thousands of songs through free services.

In September, the Recording Industry Association of America sued 261 individuals, including a 12-year- old girl and a 71-year-old Texas grandfather, who swapped music files over the Internet. Traffic on Kazaa fell by 41% in the aftermath and the Canadian industry hopes the threat of lawsuits will create the same chill here.

The industry hopes Canadian consumers will move to paid downloading services, like Puretracks.com, which is Canada's only such service.

"The lawsuits in the United States had a deterrent effect on those using free file-sharing sites," said Phil Leigh, an industry analyst with Inside Digital Media. "But the main thing they did was highlight the legitimate online services in the eyes of the public. You want to slap people for shoplifting, but you also want to have alternatives for them to buy."

In Canada, much of the focus has been on Puretracks.com, a paid downloading service with backing from the music industry that is owned by Toronto-based Moontaxi Media Inc.

The service, launched in October, expects to have more than 350,000 songs available in January, says chief executive Alistair Mitchell.

- - -

On the global front, the music industry wasn't entirely passive. Facing mounting financial losses, Sony Music and BMG Music proposed a merger this month in an attempt to deal with the problem by increasing market share and finding savings.

Weeks earlier, Edgar Bronfman Jr.'s led a group of investors in the US$2.6-billion purchase of Warner Music from AOL Time Warner Inc. Mr. Bronfman's group appears to believe the industry can use new technology to its advantage to return to its former glory.

Mr. Bronfman is betting the music business can derive more revenue from services that are outside of traditional music sales.

For example, the industry expects to have its songs acting as the ringtone on cellular phones in the near future. To date, the ringtone fad has allowed users to download simplified songs, which use notes from touch-tone phones. But soon the music industry expects to be charging users to download parts of actual hit songs, which will then be played when someone dials their mobile phone. It is one example of the way the industry hopes to find further revenue streams.

But don't expect to see wholesale changes at any of the major record labels in the coming months.

They will continue to promote paid downloading and may cut more jobs to curtail costs, but Mr. Card does not anticipate that any of the world's largest record labels will undergo a metamorphosis.

"Given that the entertainment business is not very scientific, I think we're less likely to see a massive overhaul of any of the big recording labels."

LEGAL U.S. ONLINE MUSIC SALES:

In U.S. dollars

'03: $80M

'04: $200M

Source: National Post

CANADIAN MUSIC SALES:

Retail value of pre-recorded audio products sold in Canada

'98: $1.4B

'99: $1.3B

'00: $1.1B

'01: $1B

'02: $922M

'03: $881M

Source: Canadian Recording Industry Association, National Post

U.S. MUSIC SALES:

'97: $12.2B

'98: $13.7B

'99: $14.6B

'00: $14.3B

'01: $13.7B

'02: $12.6B

Source: Recording Industry Association of America, National Post
http://www.canada.com/national/natio...b-b14cce396a33


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The Recording Industry Is Unwittingly Driving Encryption Adoption
Clay Shirky

For years, the US Government has been terrified of losing surveillance powers over digital communications generally, and one of their biggest fears has been broad public adoption of encryption. If the average user were to routinely encrypt their email, files, and instant messages, whole swaths of public communication currently available to law enforcement with a simple subpoena (at most) would become either unreadable, or readable only at huge expense.

The first broad attempt by the Government to deflect general adoption of encryption came 10 years ago, in the form of the Clipper Chip. The Clipper Chip was part of a proposal for a secure digital phone that would only work if the encryption keys were held in such a way that the Government could get to them. With a pair of Clipper phones, users could make phone calls secure from everyone except the Government.

Though opposition to Clipper by civil liberties groups was swift and extreme the thing that killed it was work by Matt Blaze, a Bell Labs security researcher, showing that the phone's wiretap capabilities could be easily defeated, allowing Clipper users to make calls that even the Government couldn't decrypt. (Ironically, ATT had designed the phones originally, and had a contract to sell them before Blaze sunk the project.)

The Government's failure to get the Clipper implemented came at a heady time for advocates of digital privacy -- the NSA was losing control of cryptographic products, Phil Zimmerman had launched his Pretty Good Privacy (PGP) email program, and the Cypherpunks, a merry band of crypto-loving civil libertarians, were on the cover of the second issue of Wired. The floodgates were opening, leading to...

...pretty much nothing. Even after the death of Clipper and the launch of PGP, the government discovered that for the most part, users didn't want to encrypt their communications. The single biggest barrier to the spread of encryption has turned out to be not control but apathy. Though business users encrypt sensitive data to hide it from one another, the use of encryption to hide private communications from the government has been limited mainly to techno-libertarians and a small criminal class.

The reason for this is the obvious one: the average user has little to hide, and so hides little. As a result, 10 years on, e-mail is still sent as plain text, files are almost universally unsecured, and so on. The Cypherpunk fantasy of a culture that routinely hides both legal and illegal activities from the state has been defeated by a giant distributed veto. Until now.

It may be time to dust off that old issue of Wired, because the RIAA is succeeding where 10 years of hectoring by the Cypherpunks failed. When shutting down Napster turned out to have all the containing effects of stomping on a tube of toothpaste, the RIAA switched to suing users directly. This strategy has worked much better than shutting down Napster did, convincing many users to stop using public file sharing systems, and to delete MP3s from their hard drives. However, to sue users, they had to serve a subpoena, and to do that, they had to get their identities from the user's internet service providers.

Identifying those users has had a second effect, and that's to create a real-world version of the scenario that drove the invention of user-controlled encryption in the first place. Whitfield Diffie, inventor of public key encryption, the strategy that underlies most of today's cryptographic products, saw the problem as a version of "Who will guard the guardians?"

In any system where a user's identity is in the hands of a third party, that third party cannot be trusted. No matter who the third party is, there will be at least hypothetical situations where the user does not want his or her identity revealed, but the third party chooses or is forced to disclose it anyway. (The first large scale example of this happening was the compromise of anon.penet.fi, the anonymous email service, in 1995.) Seeing that this problem was endemic to all systems where third parties had access to a user's identity, Diffie set out to design a system that put control of anonymity directly in the hands of the user.

Diffie published theoretical work on public key encryption in 1975, and by the early 90s, practical implementations were being offered to the users. However, the scenario Diffie envisioned had little obvious relevance to users, who were fairly anonymous on the internet already. Instead of worrying now about possible future dangers, most users' privacy concerns centered on issues local to the PC, like hiding downloaded pornography, rather than on encrypting network traffic.

However, Diffie's scenario, where legal intervention destroys the users' de facto privacy wherever it is in the hands of commercial entities, is now real. The RIAA's successful extraction of user identity from internet service providers makes it vividly clear that the veil of privacy enjoyed by the average internet user is diaphanous at best, and that the obstacles to piercing that veil are much much lower than for, say, allowing the police to search your home or read your (physical) mail. Diffie's hypothetical problem is today's reality. As a result, after years of apathy, his proposed solution is being adopted as well.

In response to the RIAA's suits, users who want to share music files are adopting tools like WINW (WINW Is Not WASTE) and BadBlue, that allow them to create encrypted spaces where they can share files and converse with one another. As a result, all their communications in these spaces, even messages with no more commercial content than "BRITN3Y SUX!!!1!" are hidden from prying eyes. This is not because such messages are sensitive, but rather because once a user starts encrypting messages and files, it's often easier to encrypt everything than to pick and choose. Note that the broadening adoption of encryption is not because users have become libertarians, but because they have become criminals; to a first approximation, every PC owner under the age of 35 is now a felon.

The obvious parallel here is with Prohibition. By making it unconstitutional for an adult to have a drink in their own home, Prohibition created a cat and mouse game between law enforcement and millions of citizens engaged in an activity that was illegal but popular. As with file sharing, the essence of the game was hidden transactions -- you needed to be able to get into a speakeasy or buy bootleg without being seen.

This requirement in turn created several long-term effects in American society, everything from greatly increased skepticism of Government-mandated morality to broad support for anyone who could arrange for hidden transactions, including organized crime. Reversing the cause did not reverse the effects; both the heightened skepticism and the increased power of organized crime lasted decades after Prohibition itself was reversed.

As with Prohibition, so with file sharing -- the direct effects from the current conflict are going to be minor and over quickly, compared to the shifts in society as a whole. New entertainment technology goes from revolutionary to normal quite rapidly. There were dire predictions made by the silent movie orchestras' union trying to kill talkies, or film executives trying to kill television, or television executives trying to kill the VCR. Once those technologies were in place, however, it was hard to remember what all the fuss was about. Though most of the writing about file sharing concentrates on the effects on the music industry, whatever new bargain is struck between musicians and listeners will almost certainly be unremarkable five years from now. The long-term effects of file sharing are elsewhere.

The music industry's attempts to force digital data to behave like physical objects has had two profound effects, neither of them about music. The first is the progressive development of decentralized network models, loosely bundled together under the rubric of peer-to-peer. Though there were several version of such architectures as early as the mid-90s such as ICQ and SETI@Home, it took Napster to ignite general interest in this class of solutions.

And the second effect, of course, is the long-predicted and oft-delayed spread of encryption. The RIAA is succeeding where the Cypherpunks failed, convincing users to trade a broad but penetrable privacy for unbreakable anonymity under their personal control. In contrast to the Cypherpunks "eat your peas" approach, touting encryption as a first-order service users should work to embrace, encryption is now becoming a background feature of collaborative workspaces. Because encryption is becoming something that must run in the background, there is now an incentive to make it's adoption as easy and transparent to the user as possible. It's too early to say how widely casual encryption use will spread, but it isn't too early to see that the shift is both profound and irreversible.

People will differ on the value of this change, depending on their feelings about privacy and their trust of the Government, but the effects of the increased use of encryption, and the subsequent difficulties for law enforcement in decrypting messages and files, will last far longer than the current transition to digital music delivery, and may in fact be the most important legacy of the current legal crackdown.
http://www.internetweek.com/story/sh...cleID=17000186


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B'buster Chief: End Regional Codes, Thwart Pirates
Sam Andrews

MARSEILLES, France -- Blockbuster Inc. president and chief operating officer Nigel Travis on Thursday called for an end to regional coding on DVDs, saying they merely create more opportunities for piracy. "I believe, in addition to the elimination of two-tier pricing, the studios should also make another significant strike against piracy with the elimination of regional coding," he said. "The extra time on windows created by regional coding is an opportunity that pirates exploit." Travis, the keynote speaker at the annual two-day Perspectives in European Video conference taking place here, cited "Finding Nemo," which was released on video and DVD in the United States on Nov. 4 but will not be available in the United Kingdom until March 18. "That is a five- month gap and an obvious case where people are going to take advantage," Travis said. Likewise, "Seabiscuit," he said, would be out in the United States on Dec. 16, but would not be released "in the country next door to the U.S. -- in Mexico -- until February and in the U.K. until May 17. Pirates can drive a cart and horses through these holes in the release schedule, and the loss in revenue hurts us all -- studios, distribution, retailers and, most of all, consumers, who are probably totally confused and frustrated."
http://www.hollywoodreporter.com/thr...ent_id=2047010


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Copyright and Fair Use
By eWEEK Editorial Board

Without competition, an industry can stagnate due to high prices, slow product delivery and limited product innovation. Recent lawsuits that invoke the Digital Millennium Copyright Act seek to curb competition and therefore threaten to bring about those conditions. Passed in 1998, the DMCA was written to limit Internet piracy. But a provision of the law—Section 1201—prohibits individuals from circumventing technological measures erected by copyright holders to protect their works. It is this section that corporations are invoking to kill competition.

For example, Chamberlain Group, which makes garage-door-opener systems, sued Skylink Technologies, a manufacturer of universal remote controls for garage-door openers, citing the DMCA and alleging that Skylink's transmitter violated the anti-circumvention provision of the law. Last month, a federal judge in Illinois disagreed. The ruling was a step in the right direction.

Copyright Only Creativity

"Under Chamberlain's theory, any customer who loses his or her Chamberlain transmitter but manages to operate the opener either with a non-Chamberlain transmitter or by some other means of circumventing the rolling code has violated the DMCA," wrote Judge Rebecca Pallmeyer. "In this court's view, the statute does not require such a conclusion."

While we applaud Pallmeyer's decision to dismiss the case, her ruling hinges on Chamberlain's failure to publicly state that other companies' products couldn't be used with its garage-door openers. By sidestepping the DMCA, she shed little light on how broadly the law can be applied.

We encourage the Cincinnati U.S. Court of Appeals for the 6th Circuit to address the use of the DMCA to curtail competition when it rules on an appeal by Static Control Components. In February, Lexmark International used the DMCA to win an injunction that stopped Static Control from making chips that let Lexmark toner cartridges be refilled.

The Skylink and Lexmark examples show that the DMCA is disturbingly susceptible to use as an anti-competitive weapon. Repeated abuse of a statute in this way is a sign that the law itself is defective. We call upon legislators and the courts to attain a balance that will promote the interests of copyright owners while respecting the rights of consumers. Thus, we back U.S. Rep. Rick Boucher's H.R. 107, under which circumvention for the purpose of exercising fair-use rights would be allowed. The Virginia Democrat's bill would also allow making and distributing hardware and software if the technology is capable of substantial noninfringing use.

Precedents in fields as remote as garage-door openers can have far- reaching ramifications, especially in IT, where many innovations are copyrighted. Laws intended to protect against copyright infringement should not inhibit innovation and consumer choice.
http://www.eweek.com/article2/0,4149,1407919,00.asp


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Webcast Alliance To Fight Expansion Of Riaa Antitrust Exemption

Takes up cudgels

A COALITION OF online broadcasters said today it will take up arms against proposed US legislation that would widen the Recording Industry Association of America's (RIAA) exemptions from antitrust law.

According to the Webcast Alliance, the so-called EnFORCE Act (Enhancing Federal Obscenity Reporting and Copyright Enforcement Act of 2003) broadens the current antitrust exemption the RIAA has.

Ann Gabriel, president of the Alliance, said that a federal judge approved a $143 million in a CD price fixing case brought against the RIAA's "Big Five" record labels.

The latest legislation, she said, attaches: "additional language to expand their [RIAA's] antitrust exemptions to a bill they know most legislators would have had a hard time opposing, since it deals with the exploitation of children".

She added: "This is so typical of the RIAA and their manipulative, smoke and mirrors tactics".
http://www.theinquirer.net/?article=13163


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Mute - Encrypted Distributed File Sharing

MUTE protects your privacy by avoiding direct connections with your sharing partners in the network. Most other file sharing programs use direct connections to download or upload, making your identity available to spies from the RIAA and other unscrupulous organizations.

Ants display collectively intelligent behavior when foraging for food or fighting off predators. Each ant in the colony acts in a rather simple way, but together they end up doing something clever, like discovering the shortest path between their ant hill and a food source. MUTE's routing mechanism is inspired by ant behavior.
http://mute-net.sourceforge.net/


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Stephen King: Forget Piracy, Boomers Are Just Tired Of Buying Crap

Stephen King's editorial in the new Entertainment Weekly (not online, but the best part is below) opines that the real crisis in the entertainment industry isn't piracy, it's mental fatigue among moneyed baby boomers.

So what happened in the '90s? I think we're seeing an entire generation -- my generation, the baby-boom generation -- turning off the lights upstairs and putting a sign on the door: SORRY, BUT I'M TAKING A NAP. MIND CLOSED UNTIL FURTHER NOTICE. Pretty much the same deal is going on with music sales. Piracy and illegal downloads, although covered to a fare-thee-well in the press, account for only a fraction of the drop in $$. I think what's happening is all too clear: We baby boomers are just too pooped to party. Oh, we do buy some records -- you may have heard that we love the Beatles, Rod Stewart, and those funksters the Rolling Stones. Just don't try to get us to listen to anyone who isn't registered with AARP! Bob Seger was probably correct when he told us rock & roll never forgets, but it sure gets tired.

Movie-ticket sales have remained strong, but only because the studios are selling a product aimed almost solely at Gen-X and Gen-Y. Most R-rated movies go in the tank. PG-13 rules. A film like ''The Fast and the Furious'' strikes box office gold, while Clint Eastwood's ''Mystic River'' muddles along at the box office. I'd argue that 20 years ago, ''Mystic River'' would have done ''Chinatown'' box office numbers. Now the baby boomers look at the previews on TV and think, Nah, that looks too serious. Too hard. Guess I'll stay home and watch ''Jeopardy!'' And the ''Jeopardy!'' answer is ''Just about the saddest thing Steve King can think of.'' The question is ''What do you call a whole generation going to sleep?''

http://boingboing.net/2003_12_01_arc...58254264789155


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Court Limits Efforts to Unmask Music Swappers
John Schwartz

The recording industry must first ask a judge before forcing Internet companies to disclose the names of people who trade music online, a federal appeals court in Washington ruled yesterday.

The sharply worded ruling, which underscored the role of judges in protecting privacy and civil rights, is a major setback to the record companies in their efforts to stamp out the sharing of copyrighted songs through the Internet. It overturns a decision in a federal district court that allowed the music industry to force the disclosure of individuals simply by submitting subpoenas to a court clerk without winning a judge's approval.

Until yesterday's ruling, the industry could seek information on file traders without filing a lawsuit or even appearing before a judge, a streamlined procedure that opponents of the industry said did not protect Internet users' rights.

"It's a huge victory for all Internet users," said Sarah Deutsch, vice president and associate general counsel for Verizon Communications, which brought the suit against the Recording Industry Association of America to protect the identities of its Internet customers. "The court today has knocked down a very dangerous procedure that threatens Americans' traditional legal guarantees and violates their constitutional rights."

The appeals court did not directly raise those constitutional issues in its decision. The judges said they were "not unsympathetic" to the industry's troubles in limiting music piracy "or to the need for legal tools to protect those rights." But in a decision that focused narrowly on the nuts and bolts of copyright law, they said that the music industry had gone too far.

Cary Sherman, the president of the recording association, said that the case "is inconsistent with both the views of Congress and the findings of the district court." Mr. Sherman said that his organization would continue to sue those who violate copyrights. It "doesn't change the law, or our right to sue," he said. "It just changes the way we get the information."

Mr. Sherman said his member companies had not decided whether to appeal, or whether to press Congress to amend trademark law.

The recording industry has been struggling to counter an army of Internet downloaders — tens of millions strong — who, beginning with the advent of Napster in the late 1990's, have swapped songs on peer-to-peer networks like Kazaa without regard to the intellectual property rights of artists, composers and the companies that record the music.

In September, the industry began suing large-scale file swappers. Although the swappers' libraries of music were out in the open, visible to industry experts who traced the activity, their identities were not. Most file-sharing networks operate anonymously, with only an Internet ID number managed by the service provider to link them to the activity.

The recording industry used a controversial provision of the Digital Millennium Copyright Act of 1998 to demand that companies that provide Internet connections reveal the names of those customers.

The industry ran into a public relations problem when some of its early lawsuits were issued to innocent people — including a Boston-area woman who did not even own a computer that could run the file-trading program she was accused of using — and sympathetic defendants like a 12-year-old girl. The publicity surrounding the suits, however, got the message to file traders that there could be consequences to their illicit listening pleasure.

The opinion in the Verizon case was written by Chief Judge Douglas H. Ginsburg of the United States Court of Appeals for the District of Columbia and represented the view of the three judges who heard the case.

In his ruling, Judge Ginsburg wrote that Verizon, as an Internet service provider, was "acting merely as a conduit" for the music files and did not store the data on its own computer network. The industry's argument, he added, that subpoena power could be applied to an Internet service provider when songs were only momentarily passing through its data pipes, "borders upon the silly."

Jonathan Zittrain, co-director of the Berkman Center for Internet and Society at Harvard Law School, said that the problem for the industry was that "the Internet moves at Internet speed," while law moves at a more deliberate pace. "I don't think anybody had peer-to-peer in mind when the statute was written."

Under the decision, notices sent to an Internet service provider that does store its customers' data, as in a Web site, could still be valid.

The decision will probably have little practical effect on the hundreds of people already sued by the industry. But it changes the music battlefield in many ways.

"For people whose names have been requested but not turned over, this is a reprieve," said Stewart Baker, a lawyer who represents Internet service providers. People who have already settled lawsuits by the industry could conceivably argue that their identities were obtained illegally and demand their money back, but the industry could simply sue all over again, he said.

Mr. Sherman, the recording industry executive, argued that the decision would end up hurting consumers because they would no longer be notified before a lawsuit was filed and they had been given a chance to settle cases.

The procedure that the industry now may have to use is a more conventional process for unmasking anonymous people known as a "John Doe" case that involves filing a lawsuit against the unknown person and then asking a judge to compel Internet service providers to reveal the identity. That process will be more cumbersome and expensive for the music industry and, potentially, for consumers as well. But Ms. Deutsch of Verizon said it "will be much more protective of users' rights."

The recording industry, in the meantime, has begun to pursue other tactics in its fight against file traders. On Tuesday the organization began quietly sending out letters to Internet service providers to propose a new "voluntary notice program" asking that file swappers be notified "without providing us with any identifying information."

The industry appears to be moving away from the expensive and image-tarnishing strategy of suing customers, said Gigi B. Sohn, the president of Public Knowledge, a policy group in Washington. While the threat of lawsuits is unlikely to go away, she said, "I can't imagine that this is going to be the core of their strategy" in the long term. "They know they've got to get people buying music online," and the rise of legitimate services like iTunes from Apple and Rhapsody from RealNetworks suggests that the shift is beginning to occur, she said.

Mr. Sherman said, however, that the goal of the new initiative was simply "expanding the reach" of the industry's enforcement and education efforts, and "not to diminish one over the other."

Representatives of several organizations that have taken a stand against the recording industry stressed that the issue in the case was not whether copyright infringement should be legal.

"People who violate copyright can be punished," said Chris Hanson, senior staff counsel for the American Civil Liberties Union, which has fought the industry in its attempt to force Internet service providers, including a number of colleges, to give up the names of file traders with a simple subpoena. "The record industry had argued that the courts were required to be a mindless tool of the industry" under the Digital Millennium Copyright Act, he said.

The process that the industry had pursued was far too loose, said Peter Swire, a former privacy official in the Clinton administration who served as an expert witness for Verizon in district court.

Like Wednesday's federal court decision in the case of an accused terrorist, Jose Padilla, he said, the music decision asserts the role of the courts in protecting citizens' rights. "Due process," Mr. Swire said, "is alive and well in the American court system."
http://www.nytimes.com/2003/12/20/te...agewanted=2&hp









Until next week,

- js.








Reel Life Funnies: Christmas CD blues - “What a crappy present!”


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Current Week In Review.


Recent WIRs -

http://www.p2p-zone.com/underground/...threadid=18158 December 13th
http://www.p2p-zone.com/underground/...threadid=18087 December 6th
http://www.p2p-zone.com/underground/...threadid=18030 November 29th
http://www.p2p-zone.com/underground/...threadid=17982 November 22nd




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[wwasicek]

God bless you for the time you spend pulling all this data together

[multi]

some funnies....you probably seen them before..

[JackSpratts]

thanks wwasicek!

lol@multi

- js.

[multi]

riaa vs verizon ruling
55k