Peer-To-Peer News - The Week In Review - July 3rd, '04

[JackSpratts]

In CONGRESS, July 4, 1776

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, -- That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. --Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.


He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For Quartering large bodies of armed troops among us:

For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us, in many cases, of the benefits of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.


Signed,


New Hampshire: Josiah Bartlett, William Whipple, Matthew Thornton

Massachusetts: John Hancock, Samual Adams, John Adams, Robert Treat Paine, Elbridge Gerry

Rhode Island: Stephen Hopkins, William Ellery

Connecticut: Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott

New York: William Floyd, Philip Livingston, Francis Lewis, Lewis Morris

New Jersey: Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark

Pennsylvania: Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross

Delaware: Caesar Rodney, George Read, Thomas McKean

Maryland: Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton

Virginia: George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton

North Carolina: William Hooper, Joseph Hewes, John Penn

South Carolina: Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton

Georgia: Button Gwinnett, Lyman Hall, George Walton







* * *






Quotes Of The Week

"In the middle of a song called ‘Sadie,’ Ms. Newsom makes an unexpected admission. ‘This is an old song, these are old blues/ And this is not my tune,’ she sings. Then, quietly yet firmly, she finishes the thought: ‘But it's mine to use.’" - Kelefa Sanneh

"It is noteworthy that the story with the happiest ending — both for the public and for the copyright owners — was the one in which the owners were denied any share in the revenues earned by the developers of the new technology but instead had to develop a new business model to take advantage of it (VCR's)." - William Fisher











File Swappers May Face Civil Suits

Proposed law would allow copyright holders to seek financial remedies.
Mark S. Sullivan

Consumer groups jeered and recording and movie industry groups cheered the easy passage in the Senate of proposed legislation that would allow civil suits against alleged file swappers.

The Protecting Intellectual Rights Against Theft and Expropriation (Pirate) Act of 2004 passed in the Senate by unanimous consent last week. It would allow the Department of Justice to provide greater legal support to content owners who feel their copyrights have been infringed upon online. Under current laws, copyright holders may only pursue criminal suits against file swappers, which can result in jail time. If approved by the House, the new law would allow civil suits, which can result in financial penalties.

Following its passage in the Senate, the legislation was sent to the House Judiciary Committee, where it has yet to be scheduled for a hearing. The hearing may be scheduled when Congress returns after the July 4 holiday, but it is still unclear as to when the Pirate Act will reach the floor of the House for a vote.

Differing Opinions

Already, the proposed legislation is being greeted with mixed reactions.

"The problem here is that major content owners already have an enormous and ever-growing array of legal tools at their disposal to go after file sharers," says Adam Eisgrau, executive director of P2P United, a peer-to-peer trade group in Washington. "This act converts the Department of Justice into a private law firm for Hollywood and the recording industry in the same kind of private suits for damages that these conglomerates previously have been required to bring on their own dime."

But the bill's sponsors say that limiting copyright holders to criminal suits only holds them to a higher burden of proof when attempting to prove copyright infringement. It also requires them to "gamble" their own money on the likelihood of a conviction, they say.

"This [Pirate bill] would not be a game-changing occurrence," says David Green, vice president and counsel for Technology and New Media at the Motion Picture Association of America. "What the Pirate Act does is give the Department of Justice another arrow in its quiver. The DOJ may wish to file a civil suit in cases that are important, yet do not warrant the heavier sanctions possible in a criminal case."

Green says a criminal conviction in a copyright infringement case might result in up to five years of jail time, whereas conviction in a civil suit can result only in financial penalties.

The Pirate Act "will provide federal prosecutors with the flexibility and discretion to bring copyright infringement cases that best correspond to the nature of the crime," Recording Industry of America Chairman and CEO Mitch Bainwol says in a statement.

The RIAA points to piracy as the main cause of a $2.5 billion decline in record labels' wholesale revenues between 2000 and 2003.

Strong Support

Sponsored by Senator Patrick Leahy (D-Vermont) and cosponsored by Senators Lemar Alexander (R-Tennessee), Orrin Hatch (R- Utah), and Charles Schumer (D-New York), the bill has some powerful backers, and according to some, a good chance of passage in the House.

The Pirate Act would "ensure that more creative works are made available online, that those works are more affordable, and that the people who work to bring them to us are paid for their efforts," Leahy said at the introduction of the bill in March.

The bill also calls on the Justice Department to initiate training and pilot programs to teach federal prosecutors across the country how to better impose and enforce copyright law on digital property.

Eisgrau says litigation is not the best means of compensating content owners for material distributed over peer-to-peer networks. His organization suggests an arrangement called "collective licensing," in which content owners would be compensated from a pool of money created from small taxes on such things as blank CDs, DVD burners, or high-speed Internet access.

"That would convert the 60 million Americans who use file sharing software from 'criminals' into 'customers,'" Eisgrau says.
http://www.pcworld.com/news/article/0,aid,116748,00.asp


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Australia

Parliamentary Committee Supports Personal Music Copying
Kristyn Maslog-Levis

Music business analyst Phil Tripp has lauded the Joint Standing Committee on Treaties' recommendations on the Free Trade Agreement between Australia and the US, which support the copying of purchased music for personal use.

Tripp previously submitted a proposal to music industry associations asking to support a change to the Copyright Act that would give consumers the legal chance to copy music for their personal use. Part of the proposed changes include "a levy that will be implemented on recordable media and a separate one on digital music players to provide a pool of income that would be distributed back to music creators in a fair and equitable manner by an agreed rights society."

Tripp admitted, however, that the suggestion on imposing a levy on blank media need to be "finessed" for it to apply in Australia and that it doesn't necessarily have to follow the Canadian format.

The US 'Fair Use' doctrine or Australia's 'Fair dealing', allows for exceptions on when copyrighted material may be used without payment of a royalty. The application of fair use in the United States provides for several unique copyright doctrines, including space shifting.

Space shifting is when digital content is recorded onto a different device than that for which it was originally assigned (for instance, purchasing a CD and copying it into an MP3 player). Current Australian legislation makes these activities illegal.

The committee recommended that "the changes being made in respect of the Copyright Act 1968 replace the Australian doctrine of fair dealing for a doctrine that resembles the United States' open- ended defence of fair use, to counter the effects of the extension of copyright protection and to correct the legal anomaly of time-shifting and space-shifting that is currently absent."

Australian Recording Industry Association (ARIA) chief executive officer Stephen Peach previously said that they do not support changing the Copyright Act and imposing a levy on blank media. Peach also mentioned before that there are "better and more sophisticated ways to ensure people are compensated."

Tripp believes that there is another reason behind the major music companies' opposition to the changes.

"The reason why the record companies are so vehemently opposed to private copying freedom is because they make the most money in compilations and that's where they pay the artists the least money or sometimes the artist even gets nothing for being included in the compilations," Tripp said. He added that they do not want customers to start making their own compilations since the companies will lose money on compilation CDs.

Peach is currently not available to make a comment on the issue.

Last week, the Australian Consumer's Association released their view on the issue saying that "It is absolutely time for Australian consumers to have fair use rights to privately copy material they have legally acquired," said Charles Britton, ACA senior policy officer for IT and communications.

Britton added that the suggestions for a levy on blank recording media will be at odds with the law if there is no right to fair use. "Without a fully protected right of private copying, copyright holders will be able to double dip -- they will pick up the levy but still lock material away with contract or technology."

"Any proposal must also meet some key practical challenges. Any levy must not catch media used for non-infringing purposes -- such as CDs for digital photos, and DVDs for computer data backup and video recording. It must not create problems at the checkout and must not add significantly to prices," Britton concluded.
http://www.zdnet.com.au/news/busines...9151486,00.htm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Canada

ISPs Win Canadian Music Downloading Case

TORONTO - Canada's Supreme Court ruled Wednesday that Internet service providers do not have to pay royalties to composers and artists for music downloaded by Web customers.

Companies providing wide access to the Web are merely "intermediaries" who are not bound by Canadian copyright legislation, the court said in a 9-0 ruling.

At issue was an effort by the Society of Composers, Authors and Music Publishers of Canada, or SOCAN, to force Internet service providers to pay a tariff.

SOCAN also wanted to extend Canadian copyright law beyond the country's borders and apply it to offshore Web sites that serve Canadians.

Opposing the effort was the Canadian Association of Internet Providers, including the Canadian subsidiaries of some of the world's high-tech giants, like Sprint Corp., America Online Inc., MCI, IBM Corp. and Yahoo! Inc.

The service providers argued that artists should seek royalties directly from Web sites offering their work, not from companies providing wider-ranging access to the Web.

The case was closely watched abroad because of the international implications for the computer and music industries. The music industry says it has lost billions of dollars in revenue in recent years as people shunned traditional stores and downloaded music from the Internet.

SOCAN's effort contrasted with the legal route taken by the recording industry in the United States, where the usual tactic has been to sue individual file-sharing services and customers who download music.

The Recording Industry Association of America has launched about 2,000 lawsuits against file swappers since last year. The RIAA has settled hundreds of those cases, generally for a few thousand dollars each.

The attempt to collect instead from service providers was significant because they provide an easier target for litigation than tracking down a myriad of individual Web sites and customers.

The Canadian Recording Industry Association lost a Federal Court challenge in March to force five Internet service providers, including Bell Canada, Rogers Cable and Shaw Communications, to hand over the names and addresses of 29 people who allegedly shared hundreds of songs with others in November and December.

The recording industry association wanted the names of subscribers who are currently identifiable only through a numeric Internet address and user handles. The association could not begin civil litigation until the alleged offenders were identified.
http://www.portervillerecorder.com/a.../d83he0ao0.txt


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Hill's Property Rights Showdown
Declan McCullagh

WASHINGTON--The Digital Millennium Copyright Act is under siege.

For the first time since it was enacted in 1998, the DMCA has become the target of a large and growing number of critics seeking to defang the controversial law. The legislation says Americans aren't permitted to circumvent encryption guarding certain digital media products--even if the purpose is to make a backup copy of a computer program or DVD.

On Tuesday, a new group called the Personal Technology Freedom Coalition is planning a press conference to reiterate its members' support for a proposal to repeal the portion of the DMCA that has drawn the most condemnation. Its organizers already have met with representatives of about 20 congressional offices, and they say the coalition includes key tech companies like Sun Microsystems, Gateway and Philips Consumer Electronics North America.

Currently the DMCA says that no one may sell or distribute any product that is "primarily designed or produced for the purpose of circumventing a technological measure." Over the last four years, that wording has alarmed academics, security researchers, librarians and corporate executives who say that it stifles legitimate science and research.

In response, Rep. Rick Boucher, D-Va., introduced a bill called the Digital Media Consumers' Rights Act (HR 107). It would allow the circumvention of copy protection as long as no piracy is taking place. A House of Representatives committee convened a hearing on the reform proposal last month, and supporters are predicting a floor vote by the end of the year.

CNET News.com recently spoke with Boucher about the prospects for his legislation, the counterattack by big-media lobbyists, VoIP (voice over Internet Protocol) regulation and spam.

Q: You've long been a critic of the "anticircumvention" sections of the DMCA. You introduced HR 107 two years ago, but it's still in a subcommittee. Is there any reason to be optimistic about it?
A: I think that our legislation has a good chance of being approved, at least in the House of Representatives, this year. I think that the major push for passage probably will come during the course of the next Congress. There has been a tremendous change in public perception with respect to the appropriate level of protection for intellectual property over the course of the years since the Digital Millennium Copyright Act was passed in 1998.

That change can be reflected in the very broad coalition that today is in support of HR 107, the modest set of corrective amendments to the DMCA that I have introduced. That includes major components of the computing industry, including Sun Microsystems, Gateway, the Computer & Communications Industry Association and others.

It includes the major telephone companies, including Verizon, SBC, BellSouth, Qwest and the trade association that represents local telephone companies. It also includes (librarians and) the two largest consumer organizations in the nation: the Consumer Federation of America and the Consumers Union.

What changed in the last few years, by your reckoning? Was it the Dmitry Sklyarov prosecution or cases like Professor Ed Felten's?
The answer is yes to all of that. Professor Felten's example is particularly egregious, because here is an individual who responded to an invitation to test the strength of a digital rights management system and to determine if it had flaws. He decided to publish the results of his research, and no sooner had he made the statement (that) that was his intent, he was threatened with a lawsuit by the very people who invited him to perform the research in the first place.

Mr. Sklyarov was arrested simply because he brought (Adobe Systems e-book decryption software) into the country. The jury made a very wise decision and refused to convict in that case, but the example of a person being arrested because he brought to the country technology that had potential infringing applications is very chilling.

These may be strong arguments, but they are also abstruse ones. How do you hope to win over your colleagues when you have people on the other side, like Rep. Butch Otter, saying: "Theft is theft, and property is property"?
I think that most people (who) do have an understanding of the role of intellectual property and history do not agree with that rather simplistic statement. Intellectual property is inherently term-limited. It has always been seen as being less of a property right than ownership of a car or land, which is permitted until the owner decides to depart with it and which is rather absolute in its terms.

Our intellectual-property laws have always been intentionally porous, and the porous nature of those laws, accommodating, for example, the Fair Use Doctrine, has enabled the society to have a right to use intellectual property in certain circumstances without having to obtain the permission in advance of the owner of the copyright.

You mentioned that many technology groups were in favor of the bill. But there are also industry groups like the Business Software Alliance and the video game lobbyists who are dead set against it. Could you speak to this split within the technology community?
Many companies that primarily produce intellectual property oppose this measure. So does the Business Software Alliance, which is dominated by Microsoft. It is, some believe, sort of Microsoft's alternative voice in the nation's capital. The passage of the DMCA was the crown jewel of the legislative efforts of the content-creating community of the last two decades, because it was a dramatically blunt instrument. It criminalizes conduct that most people would believe should be innocent, such as circumventing technical protection in order to exercise a fair-use right.

You said that some of the arguments in support of the bill are abstruse. Let me say this: The librarians make a very compelling case. They say the day is going to come very soon when most material gets delivered to the library in digital format.

It is very easy to use the anticircumvention section of the DMCA--for the creator of that content to lock it behind a technical measure. It could be as simple as a password requirement, but then every time someone wants to access that material, a micropayment would have to be paid. So what is available on the library shelf for free today would only become available on a pay-for-use basis in the future. That is not abstruse; that is easy to understand.

Is that necessarily a bad thing? Let's say a library could not afford a journal subscription that costs $10,000. But with an electronic journal that's locked up and pay- for-use, the library might be able to spend 50 cents to let a patron look at it.
I think you can create an argument with regard to certain specialized kinds of materials for which perhaps some kind of licensing arrangement that involves payment for every use would be in the public interest. But the libraries are concerned that this application will not just be with respect to deeply specialized and very expensive materials--but with regard to everything.

The student who perhaps is from a less financially fortunate family who needs to come to the library to do research for a term paper cannot access any materials for that term paper without having to pay a dollar for every reference. By the time you have gone through 30 books, you would spend $50 in a library just accessing everyday run-of-the-mill materials that are available for free today.

I went to an event exactly two years ago that was a celebration on Capitol Hill. You had very prominent politicians there literally toasting the DMCA's anniversary with champagne.

That was an event put on by the companies that had won the victory, because they saw my bill coming. I was talking about it with you and others. This was an event to kind of thump
the chest and show support, and they had members of the judiciary committees in both the House and the Senate who are their allies.

But they did not have members of the committee that is considering my bill--the Committee on Energy and Commerce. Its chairman strongly supports the bill and has announced his intention to mark this bill up and move it forward.

It's always easier to delay legislation than move it forward. You seem to have steadfast foes in the House Committee on Judiciary. How are you going to deal with attempts to block the bill?
Good question. The committee to which a bill is referred secondarily, (in this case, the House Judiciary Committee), may not through either inaction or negative action kill the bill. That committee can recommend amendments, and then the House Committee on Rules can make a decision about which text will be in order as the primary text for floor consideration and to what extent amendments recommended, perhaps by a committee of secondary jurisdiction, will be eligible for floor consideration.

The probable outcome here is that the bill will be reported from the Committee on Energy and Commerce. It would be secondarily referred for a limited period of time to the Committee on Judiciary.

The Committee on Judiciary, as you rightly suggest, will be hostile to the bill. It will offer amendments that would negate the purpose of the bill in all likelihood, and then those amendments will be considered by the Rules Committee. Then it would be up to the full membership of the House to simply make a decision about which direction is more appropriate.

Do you have any commitment from the House Republican leadership to schedule a floor vote?
No, because that is premature. We are not at that point in the process yet, and it would be really the job of the chairman of the committee that reports the bill to navigate the bill onto the House calendar, and so that will be Joe Barton's role. He is a co-sponsor of the bill. He is as enthusiastically in favor of making these changes, as I am.

You've been working on this bill for two or three years. Do you have any commitments from anyone in the Senate to pick it up there?
No, because that is also somewhat premature. I have had conversations with sympathetic senators. I am not at liberty to identify them at this point. Their basic message to me has been: "See what you can get done in the House. When we see forward motion in the House, we will consider a corollary bill in the Senate."

Has the influence of the entertainment lobby, especially the music and movie industry, waxed or waned over the last few years?
I do not think it has changed dramatically. In other words, I do not think the people who have considered themselves to be closely aligned that industry have a significantly different view now. What has changed is the perception of the Digital Millennium Copyright Act.

What else is on Congress' technology agenda?
There is one big one, which is going to be a reopening of the 1996 Telecommunications Act, and that will be driven by two basic issues. One of those is the need to solidify and find new funding sources for the Universal Service Fund that sustains affordable telephone service on a nationwide
basis, and the other one is the arrival of VoIP as a truly disruptive technology that will dramatically change the business models of all of the existing telecommunications marketplace participants.

The rules of the road with respect to VoIP will have to be written then, and that is a big enough question, such that it really needs to be done in Congress, not in a nonelected administrative agency (i.e., the Federal Communications Commission). It is those two issues that will create the opportunity to reopen the 1996 Act.

Except for wiretapping, the FCC seems inclined to keep VoIP lightly regulated. Do you think that once Congress is done rewriting the law, VoIP will stay that way?
I think VoIP should essentially be unregulated. There will be plenty of competition, and competition is always better than regulation in terms of assuring a high-quality product and a reasonable price, and I think that will be the prevailing view.

There are some areas where some amount of government direction is necessary. You mentioned one of those--the need of law enforcement to have access for properly authorized wiretaps. We should make sure that if the FBI needs access, the cost of providing the access, including any equipment modifications that are necessary, would be borne by the government and not by the private-sector service provider.

Also, since VoIP will transplant largely traditional telephone service, (we must require) an appropriate contribution from VoIP providers to the Universal Service Fund.

The third issue relates to access charges. To the extent that VoIP calls originate with an Internet-based service but terminate on the circuit-switched network, access charges should continue to apply to the terminating of those calls.

Eventually, VoIP will migrate to an end-to-end Internet service so that the call will originate as an Internet call, it will travel as a package switch call across the network, and it will be terminated on a broadband connection that is also an Internet-based connection. Until that happens, the access charges should continue to apply to the extent that the circuit- switched network is used. I think that we may need legislation to completely clarify that point.

The Universal Service Fund structure makes most Americans pay more in phone taxes to subsidize rural and low-income phone lines. Will increasingly cheap cellular service let us get rid of it?
Not yet. In the rural areas where universal service is still so much needed, such as my district, there is a paucity of cellular service. In most of my communities, once you get beyond the interstate corridor and the larger towns, there is no cellular service.

I would venture to say that more than half of the people in my district have no cellular service in the communities in which they live, and there is currently no obligation under federal law for a cellular company to build out to serve everyone.

You represent a rural district in the corner of southwest Virginia near Tennessee. What's turned you into a technology activist?
I see the use of advanced information technology as a way to build a bridge between parts of the nation where development is a priority and economic growth, and job creation is a priority in my district and in the American economic mainstream. It is a fact that businesses get a bargain when they locate in rural areas.

Historically, a lot of businesses simply could not do that, because they had to be physically proximate to their clients and their suppliers and their customers. That is not true with the Internet. Now a company can operate portions of its business just as effectively from the most rural place in the United States as it can from the building next to its corporate headquarters.

You're a member of the two committees that have jurisdiction over spam legislation. The Can-Spam Act has been in effect all year, and it hasn't had much of an impact so far.
No, it sure has not, has it?

Will Congress return to the topic of spam any time soon?
The act is in its infancy. We have not had an opportunity for prosecutions to work their way through the system. It takes a while to do the investigatory work necessary for a prosecution, and then the prosecution itself takes time. I think it is too early to really judge its effectiveness.

I will say, though, that this act did not go as far as it should have. There are some things that are frankly beyond the reach of the ability of Congress to address. Many spammers are in countries that do not have extradition treaties with the United States. In some instances, they are in countries that do not even have solid commercial relationships with the United States.

So there may be an international diplomatic component to a long-term successful effort to confront spam. Quite honestly, before diplomatic effort succeeds in persuading these countries that are hosting spam sites to play nice with the United States, we may have technology-based solutions that actually solve the problem.

My guess is that the technology solutions will probably get to the finish line before law-based or diplomacy-based solutions do.
http://news.com.com/2008-1025-5243241.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

One Small Step in Uphill Fight as Linux Adds a Media Player
Steve Lohr

GNU Linux, the free computer operating system, has had far more success in winning converts in corporate data centers than on desktop personal computers. But as more user-friendly software makes its way onto the Linux desktop, the free operating system is starting to make progress in its David-vs.-Goliath competition against Microsoft, the dominant power in PC software.

Another step in the progress of Linux in personal computers will come today, when two large Linux distributors, Red Hat and Novell, are expected to announce that they will ship the media-playing software of RealNetworks in their Linux desktop products.

RealNetworks, founded by Rob Glaser, a former Microsoft executive, was the early leader in software for playing digital music and video files sent over the Internet. Its media- playing software competes with Microsoft's Windows Media Player.

That rivalry has become an antitrust issue, and the European Commission ruled in March that Microsoft was illegally using its Windows monopoly in PC operating systems to try to control the market for media-playing software. The commission ordered Microsoft to offer a version of Windows without a media player - a ruling Microsoft is appealing. Yesterday, the European Commission agreed not to enforce a deadline of today that would have forced Microsoft to sell the unbundled version in Europe, while a court in Luxembourg considers the matter.

RealNetworks had previously reached distribution agreements with TurboLinux, which is strong in Asian markets, and Sun Microsystems, whose Java desktop software runs on Linux.

"Linux is making rapid progress on the desktop, and this makes our technology the de facto standard for media-playing software on Linux," said Dan Sheeran, a senior vice president at RealNetworks.

The media software, RealPlayer 10 for Linux, represents an evolution of RealNetworks' embrace of open-source software. Under the open-source model of development, the source code is published and shared by programmers, who modify and improve a program. Two years ago, RealNetworks started an open-source project, called Helix, mainly to develop media-playing software for devices like cellphones and digital music players. RealPlayer for Linux builds on Helix, but also includes some proprietary software formats known as codecs, for compressing and decompressing digital music and video files.

Open-source advocates are trying to get the same kind of self-reinforcing cycle working for Linux that Microsoft has nurtured for years around Windows. The more popular the operating system becomes, the more applications are written to run on that operating system, which in turn makes the operating system still more popular.

Linux has a geeky heritage - an operating system developed by engineers for engineers - and it has been embraced first by technicians in corporate data centers rather than on the desktop, where acceptance depends on developing applications that ordinary PC users find appealing and easy to use.

But open-source supporters hope that the RealNetworks announcement will be followed by others. "We think this is a great example of the many mainstream products that you will see made available much sooner than most people had expected for Linux on the desktop," said Stuart Cohen, chief executive of the Open Source Development Labs, a group established to promote the use of Linux and other open-source software, which is backed by several technology companies including I.B.M. and Hewlett-Packard.

For the Linux desktop, a number of applications are already available and more are in development. These include word processing, spreadsheet, database presentation, e-mail and Web browsing software. "For 80 percent of the people in the world, Linux is now a perfectly fine desktop environment," a leading open-source advocate, Bruce Perens, said.

Linux distributors like Red Hat, whose chief executive is Matthew J. Szulik, make money charging for technical support and software beyond the basic operating system. The RealNetworks move is evidence that leading commercial software companies believe that Linux is poised for rapid growth on the desktop, said Mike Evans, vice president for partner development at Red Hat.

Though Linux on the desktop is making gains, it has a long, long way to go to challenge Microsoft, which has built its PC stronghold over more than two decades. By the end of the year, Linux will be running on 1 percent of the desktop PC's worldwide, compared with 2.8 percent for Apple's Macintosh, and 96 percent for Microsoft's Windows, according to Gartner Inc., a research firm. Linux does far better overseas than in the United States, and most analysts expect that Linux is on track to overtake Macintosh over the next several years.

"The Real announcement is important to improving the overall Linux desktop experience," said Michael Silver, a Gartner analyst. "But Linux on the desktop is still relatively small. There is a lot of interest in it, but it's not mainstream."
http://www.nytimes.com/2004/06/28/te...y/28linux.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Judge Says Artist Can Make Fun of Barbie
Bill Werde



Seven years ago when Tom Forsythe, an artist and photographer, was searching for a subject for a new project, he settled on Barbie, ultimately producing a series of 78 photographic images of the wildly famous doll showing her nude, and sometimes posed provocatively, in or around various household appliances.

"I thought the pictures needed something that really said 'crass consumerism,' and to me, that's Barbie,'' Mr. Forsythe said. "The doll is issued in every possible role you can imagine and comes with every possible accessory for each and every role."

Mr. Forsythe developed a theme that he called "Barbie's power as a beauty myth." He displayed his photographs at art fairs in Utah and Kansas City, generating a few thousand dollars in sales but otherwise attracting little notice.

But his work drew the attention of Mattel Inc., which has manufactured the Barbie doll since 1959. In the summer of 1999, Mattel sued Mr. Forsythe for copyright and trademark infringement.

After a lengthy legal tussle, which included a series of appeals, a federal judge late last week instructed Mattel to pay Mr. Forsythe legal fees of more than $1.8 million.

"I couldn't have asked for a better result," said Mr. Forsythe, 46, of Kanab, Utah. "This should set a new standard for the ability to critique brands that are pervasive in our culture."

Mattel officials and the company's lawyers in the case, the Los Angeles firm of Quinn Emanuel Urquhart Oliver & Hedges, did not respond to telephone and e-mail messages on Sunday. Mattel can appeal the award, but the company would have to appeal to the Ninth Circuit Court of Appeals in San Francisco, which had earlier instructed the district court to consider awarding legal fees.

When Mattel filed suit in August 1999, Mr. Forsythe said, he searched about, often in vain, for legal counsel before the American Civil Liberties Union of Southern California and a team of lawyers from the San Francisco law firm of Howard, Rice, Nemerovski, Canady, Faulk & Rabkin agreed to take his case.

Mattel has aggressively protected the Barbie likeness and trademark. In December 1999, the toy maker sued Seal Press over the book "Adios, Barbie"; the publisher agreed to remove Barbie's name from the book's title and to remove images of the doll's clothing and accessories from its cover. Early last year, the Supreme Court upheld an earlier court's dismissal of a Mattel suit against the record label MCA after the recording group Aqua had released a song called "Barbie Girl" that Mattel said defamed Barbie with sexual innuendo.

In February 2001, Mattel lost a motion for a preliminary injunction in Mr. Forsythe's case. Mr. Forsythe's lawyers then moved for summary judgment, on the grounds that his work was parody, and thus protected under the fair use provisions of the Copyright Act.

In August 2001, a judge from Federal District Court in Los Angeles agreed, granting judgment in favor of Mr. Forsythe but not awarding him legal fees. Mattel and Mr. Forsythe both appealed, with the company seeking a different judgment and the artist seeking legal fees. In December 2003, a three-judge panel from the Ninth Circuit Court upheld the decision against Mattel and sent the matter of legal fees back to Judge Ronald S. W. Lew of the Los Angeles court, with instructions to reconsider the issue.

"Plaintiff had access to sophisticated counsel who could have determined that such a suit was objectively unreasonable and frivolous," Judge Lew wrote in his order. "Instead it appears plaintiff forced defendant into costly litigation to discourage him from using Barbie's image in his artwork. This is just the sort of situation in which this court should award attorneys fees to deter this type of litigation which contravenes the intent of the Copyright Act.''

The order also characterized Mattel's claim of trademark infringement as "groundless and unreasonable.''

Jonathan Zittrain, a professor at Harvard Law School who specializes in Internet and copyright law, said, "It's enough to give corporations with brands they want to protect and expand pause to consider whether to simply reflexively unleash the hounds the minute they see somebody doing something that relates to their brand of which they don't approve.

"It may send a signal that a 'take no prisoner' litigation strategy against the little guy has new risks for the plaintiff," he said.

The Copyright Act allows for tens of thousands of dollars in statutory damages per violation. Professor Zittrain said the risk of such damages "chills'' many defendants, even if they have a strong case.

"Maybe now when an angry C.E.O. picks up the phone to counsel and says 'sue this guy,' " he said, "instead of saluting and sending the bill, the lawyer may say 'I have to warn you, this could boomerang.' "
http://www.nytimes.com/2004/06/28/na.../28barbie.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

An Advance in Digital TV Is Coming. Why Isn't Anybody Excited?
Ken Belson

Nothing, it seems, comes easily when cable providers and electronics companies converge.

Cable companies have a federal mandate, starting Thursday, to provide consumers with a new way to get digital and high-definition television programs without having to pay for a separate digital set-top box.

As part of the government's long-term goal of creating an entirely digital broadcast universe, the plan requires that cable providers distribute cable cards - each about the size of several credit cards stacked - that can be plugged into slots on new television sets for access to encrypted digital programming. Starting Thursday, at least half of all televisions that are 36 inches or larger will have to include a slot for a cable card.

In addition to eliminating clunky set-top boxes, the cable card technology is meant to help bolster television sales and motivate consumers to sign up for digital services. But the reality may be quite different.

The cable cards, unlike set-top boxes, provide only one-way signals: from the cable provider to customers' homes. Consumers with televisions that use the cards will not be able to receive video on demand, interactive program guides and other services that require two-way signals. Indeed, those services are a central selling point for digital programming.

This significant drawback means that people with set-top boxes may be unlikely to switch. Television makers are hoping that the cable card option will be attractive to the roughly 50 million cable customers who do not subscribe to digital programs and are looking for an easy way to receive digital services. But most analysts are skeptical that the market will embrace the technology.

"From a consumer standpoint, this is a nonevent," said Bruce Leichtman, president of the Leichtman Research Group, which tracks the cable industry. "Consumers don't hate their set-top boxes. And there's a reason people still have analog sets. They're not interested in digital television."

Because the cards allow only one-way signals, television manufacturers and retailers are unable, or unwilling, to predict the demand for cable cards. Few companies, though, expect a run on the new card-ready sets.

But electronics industry representatives say consumers may have a hard time getting the cable cards because cable companies are dragging their feet. Though the cards are small and can be sent to consumers by mail, most cable companies plan to dispatch workmen to deliver the cards and charge customers as much as $60 for the installation.

Cable companies say the hand delivery is needed, at least at the outset, because the system is so new.

The hefty fees and wait for installation, though, are tactics meant to discourage customers from using the cable cards, according to Gary Shapiro, president of the Consumer Electronics Association. Cable companies would rather have consumers order two-way services like video on demand because they generate additional income, he said.

"Two-way service is where all the money is for the cable providers, so they don't want one-way cable cards," Mr. Shapiro said. A cheaper and more effective strategy would be to sell the cards to consumers at retail outlets like Best Buy, he said.

In the meantime, the cable and electronics industries are working on developing a two-way card. Unlike the one-way deal, satellite, technology and entertainment companies are also part of the current discussions. One big stumbling block in the new round of talks is finding ways to protect copyrights, said participants in the meetings, who predict that an agreement on two-way cable cards is unlikely to be reached for several more years.
http://www.nytimes.com/2004/06/28/te...partn er=CNET


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Dolby Makes Bold Anti-Piracy Bid

Firm to bet big by distributing millions of dollars of Cinea technology to awards screeners
Benny Evangelista

San Francisco's Dolby Laboratories, known for its high-fidelity sound technologies, is now making noise in the fight against movie piracy.

A Dolby subsidiary is pushing a plan to help Hollywood block piracy that involves screeners -- the tens of thousands of copies of movie videotapes or DVDs sent to people who vote on awards like the Oscars and Golden Globes.

Cinea Inc., which Dolby acquired last year, said it plans to distribute roughly 10,000 specially equipped DVD players to voters and then convince movie studios to distribute screeners on DVDs that can be viewed only on those players.

Cinea plans to start by giving away its $800 DVD players to each of the 5, 800 Academy Award voters by this fall. That strategy amounts to a $4.64 million gamble by Dolby that it can recoup the cost by generating more money from licensing Cinea's protection technology.

Robert Schumann, Cinea's general manager, acknowledges the risk that studios won't use the technology, "but we think it's quite frankly a great solution to this problem.''

In an era when popular films can be downloaded on the Internet before they are shown in theaters, the movie studios are increasingly worried about screeners' being illegally copied and made available on the Web or as bootleg home videos.

The board of directors of the Academy of Motion Picture Arts and Sciences, which runs the Academy Awards, said it believes Cinea's plan "sounded like a good idea'' and gave the company the green light to distribute the DVD players to Oscar voters, said academy spokesman John Pavlik.

But the group is not paying for the devices or the DVDs. It is leaving it up to individual studios to decide whether to distribute the Cinea-protected DVDs when the big Oscar push begins, typically around November, Pavlik said.

Dolby, which is contemplating becoming a publicly traded firm, is also hoping to convince studios to help subsidize the cost of the DVD players for the good of the industry.

There's no clear indication what steps Hollywood will take this year. Last year, the studios were embroiled in controversy over whether to send out screeners.

But the movie industry is clearly stepping up its anti-piracy efforts. The Motion Picture Association of America last week placed ads in the nation's biggest newspapers, including The Chronicle, asking parents to warn their children about illegal movie downloading.

The association also began a program offering theater employees a $500 reward for catching people who use a camcorder in a theater, the biggest source of illegal online movies.

Cinea, based in Reston, Va., is an offshoot of the defunct Digital Video Express, known as Divx. That company was owned by the Circuit City electronics chain, which tried to market a way for consumers to rent DVD movies without having to return the discs.

Those Divx DVDs could only be played back using a special DVD player. But the Divx format never took off, so Circuit City closed the company in 1999.

With Cinea, founded shortly after Divx died, Dolby is targeting its anti- piracy products at movie studios, producers, directors, post-production houses and theater operators.

Cinea has developed technology embedded in a DVD movie so that it can be played only on a special Cinea DVD player, which has a code that is unique to its owner. The DVD movies can be programmed to play on some or all Cinea DVD players.

If the owner tries to copy a Cinea DVD using a video camcorder, an invisible code shows up in each frame of the movie, allowing the studios to trace bootlegged copies back to the owner.

Cinea had one of three anti-piracy technologies used by studios to embed digital watermarks on videotape screeners distributed for voters in this year's 76th annual Academy Awards. Those technologies led to the arrest of a Chicago man for copying several Oscar-nominated films from screeners.

Schumann said tagging the DVD players instead of individual DVDs will be quicker and cheaper for studios, which could also use the technology to protect movies that are still in production or sent to movie reviewers.

Cinea has also obtained a $2 million federal grant from the National Institute of Standards and Technology to develop its Cam Jam technology designed to degrade the quality of video shot by a camcorder in a theater.

However, the Cam Jam technology is designed for use in theaters using digital projectors, a technology that is still far from becoming widespread.


Preventing piracy

-- What: Cinea is distributing 10,000 specially equipped DVD players to voters of the various movie awards.

-- Why: The company has developed technology embedded in a DVD movie so that it can be played only on a special Cinea DVD player, which has a code that is unique to its owner. The DVD movies can be programmed to play on some or all Cinea DVD players.

http://sfgate.com/cgi-bin/article.cg....DTL&type=tech


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

T-Mobile Turns Handsets Into Mini Digital Music Players
Jo Best

With digital music fans spoilt for choice with a number of recent download service launches, T-Mobile is the latest to try its luck with online music.

The operator has launched Ear Phones – a music download service for mobiles. Ear Phones lets users download and play tunes on their T-Mobile handsets, with three of the five majors – Sony, Warner and Universal – as well as various indie labels signing on the dotted line as partners.

T-Mobile is also launching five new handsets compatible with the new service, with seven more to join the stable before the end of the year.

Currently the service just offers music clips – tunes truncated to less than two minutes – but by next year the operator plans to sell full-length songs as well as videos, with a catalogue of some 250,000 downloads available by Christmas.

O2 and Vodafone have already launched their own mobile music offerings but neither has seen stellar take-up. The mobile operators have been hoping to cash in on the MP3 craze that has seen iTunes and Napster tempted to these shores of late.

T-Mobile is hoping that it'll be able to tempt users to mobiles rather than MP3 players by hooking them on price and convenience.

The starting price for an Ear Tunes handset will be around £30, compared to the hundreds usually needed to secure a digital music player in the shops.

T-Mobile is also banking on broadband – or the lack of it – to give Ear Phones a helping hand.

According to figures from communications regulator Ofcom, 67 per cent of internet connections are made over narrowband – which means the average music downloader without a fat pipe would need to wait between eight and 10 minutes for a song, making Ear Phones' two minutes on a 2.5G phone look positively speedy.

The price per track will be £1.50, however, considerably more than rival MP3 sellers charge – iTunes, for example, charges 79p for most songs. Nevertheless, T-Mobile is predicting it will sell one million tracks by the middle of next year and four million by the end of 2006.
http://networks.silicon.com/mobile/ 0,39024665,39121727,00.htm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

BT Lands Student Broadband Deal
Graeme Wearden

From September, the 15,000 students who live in Unite accommodation will be about to get a 512Kbps connection for £5 per month. This works out slightly cheaper than getting a standard BT broadband package.

A spokesperson for Unite, which supplies student accommodation to universities, explained that another factor is convenience, as students will be spared the bother of having to choose a supplier and organise the installation of the connection themselves.

Broadband has been booming in Britain for around two years now, with take-up running at approximately 40,000 new connections per week. Many of today's students will have grown used to having a high-speed connection at home or at school. Unite is confident that there will be strong demand for its service, which will be called uBroadband.

"Our research shows that some 70 percent of our customers want a value for money high-speed broadband service available in their rooms, and this is just what we've set out to do," said Nicholas Porter, Unite chief executive.
http://news.zdnet.co.uk/communicatio...9158761,00.htm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Tune In, Turn On, Skype Out
Kevin Werbach

Somewhere between Sweden, Estonia, and London, a small band of software developers is fomenting a revolution. Their product, Skype, has been downloaded fifteen million times worldwide in less than a year, without any marketing budget. It is provoking consternation among government officials. And it has large incumbents worried.

If that sounds like the profile of peer-to-peer (p2p) file-sharing programs like Napster and Kazaa, it should. Not only is Skype a product of the same team that launched Kazaa, the most popular p2p file-sharing application, Skype is a p2p tool itself. Only, with a twist. Instead of sharing files, Skype shares voices. It is a voice over IP application. And in mid-June, with no fanfare, it blew a hole in the Federal Communications Commission's halting efforts to micro-manage the transition to a VOIP world.

Skype's great step forward is called SkypeOut. A Skype user can now call any telephone subscriber in more than a hundred countries. Fees throughout the US and most of Europe and Asia are .012 Euros per minute, or about 1.5 cents. And Skype is global. There is no difference between domestic and international service: a call to New York from Japan is the same price as one from Philadelphia. Calls to other Skype users still cost exactly zero.

SkypeOut's low rates for global dialing are a boon for users. SkypeOut also shows how quickly a company can innovate when it leverages the open Internet data platform. There is perhaps no clearer proof that voice telephony, which generates hundreds of billions of dollars a year for carriers, will eventually be seen as a feature of the Internet, rather than the reverse.

Yet, there's a catch. SkypeOut creates new fissures in the FCC's shaky VOIP regulatory edifice.

Until now, Skype was a private service. A Skype user could only call another Skype user. Skype also requires a user to plug a microphone and headset into a PC, rather than calling through an ordinary telephone. These aspects, combined with the fact that Skype was free, appeared to bring it squarely within the confines of the FCC's Free World Dialup order. In that decision, the Commission held that a free, private, software-based VOIP service should be treated as an unregulated information service. Three months later, it reached the opposite conclusion with regard to AT&T's VOIP backbone transport offering, holding it subject to legacy access charges as a form of regulated telecommunications.

The FCC, in essence, set up two goalposts. On one end, full regulation, and on the other, complete freedom. Unfortunately, the playing field in the middle has no yard markers. The FCC's distinctions are of little value when a Hail Mary like SkypeOut can take the form of a transparent software update. Skype is also partnering with handset vendors to embed its software, freeing the service from dependence on a PC. In other words, it no longer fits neatly into the FCC's framework.

FCC Chairman Michael Powell recognizes the challenge Skype and similar services represent. Speaking to a conference at UC San Diego in January, he acknowledged that the regulatory approach the FCC had followed for seventy years was dead. Finished. Kaput. Or, in his words, "I knew it was over when I downloaded Skype. When the inventors of Kazaa are distributing for free a little program that you can use to talk to anybody else, and the quality is fantastic, and it's free - it's over. The world will change now inevitably." Powell wasn't just talking about the free, PC-based Skype. He clearly understood that it was a matter of time before Skype bridged the gap to the more than one billion existing phone users. And he understood that it was as much an opportunity as a threat to the FCC's underlying public policy goals.

In such an environment, the FCC should devote itself to facilitating the transition from circuit to packet networks for voice. If it tries to fight Skype, it will face the same war of attrition that has bedeviled the music industry. That would benefit no one, least of all the American people.

As voice telephony becomes a software application, its evolution will accelerate. The bridge from curiosity to mainstream may be short. Regulators should pave the way, or they will find themselves left behind.
http://www.techcentralstation.com/070104F.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Quiet Iconoclast

With KaZaA, Niklas Zennstrom undermined the music industry. Now he has telecoms firms in his sights

THERE is no shortage of aspiring iconoclasts in the technology industry. Start-ups are generally headed by brash,
outspoken types who push their ideas with evangelical zeal, making big claims about how they will conquer the world, topple industry giants and overturn existing business practice. Not so Niklas Zennstrom, a 38-year-old Swedish entrepreneur. Measured and soft-spoken, and fond of historical analogies, he makes big claims but does so calmly, certain that history is on his side. This quiet man has a record that any iconoclast would envy.

KaZaA, the firm he co-founded with Janus Friis, his Danish sidekick, struck fear into the heart of music-industry executives when it became synonymous with internet file-swapping after the shutdown of Napster. Now he and Mr Friis have taken the experience they gained from KaZaA (which is now in decline amid a sustained legal assault) and applied it in another field that is dominated by stodgy, dinosaur-like firms with prehistoric business models: telecoms. Skype, their latest creation, is an attempt to Napsterise the phone business. Whereas KaZaA offered internet users free music, Skype offers free phone calls. Better still, it is entirely legal—and might, some day, even be profitable.

On the face of it, file-swapping and telephony have little in common. But both, it turns out, can be implemented using “peer-to-peer” technology, in which PCs connected to the internet via broadband connections organise themselves into a network. It is then possible to send data, whether media files or phone calls, from one PC to another efficiently. Many of the lessons that Mr Zennstrom and Mr Friis learned from building the file-sharing system behind KaZaA—in particular, the idea that some computers should act as “supernodes” to speed the transfer of data—could thus be applied to internet telephony through Skype. The supernodes, for instance, help to eliminate the delays and drop-outs that can plague internet telephony.

Of course, transmitting sound in real time is far more challenging than delivering a music file or even, say, an episode of “The West Wing”, from one PC to another. But Skype does it, and does it surprisingly well. It is easy to set up and use, the sound quality is impressive, and the software also supports conference calling and instant messaging. Since its launch last August, the Skype software has been downloaded over 14m times, and now has over 6m regular users—and all without any advertising. That was another lesson learned from KaZaA, says Mr Zennstrom: “If you want to spread software to a large group of people, it must be simple, not need configuration, and give you instant gratification.” Skype runs on Windows-based PCs, some kinds of handheld computers and, as of last week, on Linux too.

So far, Skype users have only been able to call other Skype users from their PCs. But the latest version of the software, which is now being tested, allows Skype users to call ordinary telephones too. While Skype-to-Skype calls remain free, users must pay to call ordinary phones: but rates are low, with most calls costing around 1 cent a minute. This puts Skype in direct competition with traditional phone companies, alongside a growing band of other small firms that offer low-cost telephony by routing calls partly over the internet. By bypassing the traditional phone network as much as possible, they can avoid the fees charged by traditional operators for carrying calls over their wires.

But Mr Zennstrom thinks that merely linking traditional and internet-based phone systems is an inelegant halfway house. He is more radical, believing that all calls will migrate to the internet and be provided via software alone, with no need for any dedicated infrastructure. Telephony will be another free internet service, like e-mail and web browsing are today. (Skype plans to make money by charging for extras such as voice-mail, call waiting, multiple lines and calls to the few die-hards who stick with pre-internet phones.) If he is right, the traditional fixed-line voice business will shrivel and die, and telecoms incumbents will be reduced to selling broadband access, and little else.

Mr Zennstrom has competed with telecoms giants before, having worked at Tele2, then a small Swedish operator, during the 1990s. He came to the conclusion that only a radically new approach to telephony would ever be able to challenge the incumbents, whose ownership of national telephone networks gives them a huge advantage over their competitors. Skype is the result. So how can the incumbents respond? Some are rushing to launch their own internet-telephony services, but most are trapped in the monopolist mindset. Mr Zennstrom recalls their attempts in the early 1990s to establish fee-based proprietary e-mail services, in effect clinging to the old idea of the telegram. Such services were wiped out by internet-based e-mail, which was free. The same, he believes, will now happen to telephony.

Another lesson from history

These are all convincing arguments. Mr Zennstrom clearly has long-term trends in his favour. But another historical analogy gives cause for concern. The fate
of KaZaA suggests that Skype will do well, at least for a while. But it also casts a shadow over its future. KaZaA declined in popularity (from 90% of all file- swapping traffic to 20% over the past year, according to one estimate) because its users were being sued by the music industry, but also because it was a proprietary standard. Rival file-sharing networks, based on open standards, are now in the ascendant. The same criticism is being levelled at Skype, which is so far incompatible with a standard (called SIP) used by rival internet-telephony operators. As with KaZaA, it may be that Mr Zennstrom has correctly identified an important trend, but that the software he has written to exploit it will not ultimately prevail. If so, he and Mr Friis will have to find another industry that is ripe for disruption using peer-to-peer technology. If you are a chief executive in a stodgy, old-fashioned industry, watch out.
http://www.economist.com/people/disp...ory_id=2876993


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

New Books Rewire Our Thinking on High Tech
Dave Watson

It's rare that books about technology go much beyond describing the past, even though they usually purport to tell the future. Common subjects are the design of a computer or the evolution of a company, the origins of the Net or of research into virtual reality. Simple documentary stuff. It's a much riskier proposition to attempt to write with a bigger-picture view; you need a bold theory and the means to support your argument.

American academic and media theorist Siva Vaidhyanathan has that dramatic thesis: current technologies such as peer-to-peer (P2P) sharing and systems that sidestep copyright are just the latest incarnation of the age-old ideological battle between anarchy and oligarchy, resistance against authority versus attempts to establish autocratic control. In his new book, The Anarchist in the Library: How the Clash Between Freedom and Control Is Hacking the Real World and Crashing the System (Basic Books, $40), Vaidhyanathan analyzes the ways in which the individual power granted by information technology has led to confrontations with the ruling elite.

The author presents it all in terms of previous social struggles, and not solely those prompted by technological inventions. It sounds like an overreaching and grandiose way to discuss Napster and chat rooms--here comparing them to the role of gossip in turbulent 18th-century Paris--until you read the book. It contains an argument that is well-written, clear, and full of examples (from legal cases over software that defeats copyright protections to movie fans producing their own versions of films like Star Wars: The Phantom Menace), and Vaidhyanathan builds his case very seductively. To him, battles over issues like P2P networking involve "values beyond commerce and crime, including free speech, privacy, and intellectual freedom".

It's clear that Vaidhyanathan's viewpoint is slanted toward supporting the rights of the individual over the corporations (his previous book is Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity), but he acknowledges that total anarchy is unacceptable too. Whenever the wishes of the people are different than the systems they live under, the systems inevitably will be forced to undergo drastic change, and his stated goal is to prompt some intelligent debate in order to forestall a complete societal disruption. He believes there are ways to get through these changes without collapsing into a lawless state or enduring repressive attempts to legislate widespread behaviour out of existence.

Vaidhyanathan writes that this book was originally supposed to be about the control of digital information (in which case it would probably join a bunch of other ordinary books on that topic), but he claims that international events led him to embrace a bigger theory. "By 2004 the future of Metallica's fortune didn't matter much. My concerns moved to the regulation and control of all sorts of information, much of it cultural, much of it political." The result is a very smart and provocative work, a well-researched and skillfully delivered warning of the times to come.
http://www.straight.com/content.cfm?id=3585


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Swappers Log Off Kazaa As Alternatives Emerge
John Borland

The owners of the popular Kazaa file-swapping software have withstood assaults from the record industry for years, but now they're facing a new enemy that may be even harder to fight: competition.

When a federal judge shut down Napster in 2001, Kazaa parent Sharman Networks quickly stepped in as the replacement of choice, signing up millions of users and even surpassing its predecessor in some respects. Since then, however, newcomers such as eDonkey and BitTorrent have been coming on strong amid reports that millions of people are logging off Sharman's network.

Although it's too early to draw broad conclusions about Sharman's future, experts said many people appear to be shopping more intently than ever for file-swapping alternatives that incorporate improvements in peer-to-peer technology that have not yet made it onto Kazaa.

"At heart, most of these peer-to-peer users are lazy," said Chris Hedgecock, president of Zeropaid, a popular portal site dedicated to file-swapping services. "Kazaa was simply the easiest way to get things they were looking for. Now they're being frustrated. It's taking longer to get files, so they're looking elsewhere."

Having traded billions of files over Kazaa, file swappers are trading in the popular peer-to-peer client for a new generation of software, throwing a monkey wrench into Sharman's plans to turn its network into a legal and profitable media distribution channel. It's not clear how many people have jumped ship so far, but one recent study estimated that the service lost some 5 million users between November 2003 and February.

Signs of migration underscore the sometimes evanescent success of media rebels facing attacks from record labels and movie studios. Not only has Sharman itself been hit with lawsuits seeking to shut it down; thousands of its customers have been charged with civil copyright infringement violations, and media companies have flooded its network with fake files to interfere with file-swapping activities.

Sharman Networks declined requests to comment for this story. A company representative said reports of a decline in its user base were inconclusive.

Outside estimates of user numbers for Kazaa have fluctuated in recent months but appear to show some slippage overall. Kazaa's average simultaneous user base reached more than 4 million people a year ago. For May of this year, estimates from several network watchers put average daily usage between 2.9 million and 3.5 million people.

It's unclear whether the statistics point to a temporary or more lasting trend. Declines over the last few months may be seasonal. Many of Kazaa's most avid users are students at universities who go home or otherwise lose their fast Net connections during winter and summer breaks but return when school restarts.

Although Kazaa's numbers could yet rebound, they contrast sharply with results for some competitors.

The number of people using eDonkey and its associated Overnet network has doubled since the beginning of 2004. That network showed an average of more 2 million people simultaneously online in May, according to BigChampagne, a company that sells peer-to-peer market research to record labels, among other customers.

Fast growth in newer networks may reflect a growing hunger among broadband users for video files such as movies and TV shows, a development that could spell trouble for Hollywood studios.

"I think people are more interested in larger content, like whole albums and movies," said Jed McCaleb, the founder of the rival eDonkey network. "People are looking for a wider variety of things than just MP3s."

Like another fast-growing technology called BitTorrent, eDonkey was designed from the outset to provide efficient distribution of big files. Copyright companies say they see these new networks as the focus of demand that is increasingly shifting toward downloads of video and software.

"We see eDonkey as being the file traders' network of choice now for large files," said Mark Ishikawa, chief executive officer of BayTSP, a company that monitors copyright infringement on file-trading networks.

Slow change
The file-swapping universe has already seen two generational changes in its short history. The first came when Napster was forced by courts in mid-2001 to begin filtering out trades of copyrighted songs, leading it to shut down.

The second was in early 2002, when Sharman disconnected competitor Streamcast Networks from the FastTrack network. The incident, attributed to a licensing dispute, affected millions of file swappers then using Streamcast's Morpheus client, pushing many to Kazaa.

Change this time around has been more gradual.

Lawsuits from the Recording Industry Association of America have helped spread concern about liability among casual file swappers, many of whom previously were unaware of legal risks to trading files. Most of the RIAA's early subpoenas and lawsuits targeted Kazaa users, although it no longer breaks out this information in its filings.

In recent months, the practice of seeding networks with fake files that appear to be popular songs or movies has spiked, as copyright holders have tried to divert file swappers. Overpeer, one of the leading companies that provides this service to copyright holders, said it sends more than 25 billion files, or pieces of files, to file swappers every month.

"Kazaa has been the centre of a lot of this activity, because it is a leading network," said Marc Morgenstern, Overpeer's chief executive officer.

Part of the plan?
Another force also may be at work.

Along with joint venture partner Altnet, a subsidiary of Brilliant Digital Entertainment, Sharman has said it ultimately hopes to turn the Kazaa network into a distribution platform for authorised, paid versions of music and movies, crowding out copyright-infringing trades.

"By relegating non-(copy protected) files to a subordinate and comparatively unattractive access location... Sharman intended to promote and encourage only business appropriate file sharing and to share the net payments for (copy protected) works lawfully exchanged by users of the (Kazaa) software with Altnet," court papers filed by Sharman last September said.

Sharman itself has not provided any financial updates, but Brilliant Digital Entertainment's publicly available financial statements show a project that remains in its financial infancy. The company has touted growing use of Altnet by independent musicians, filmmakers and video game companies. In February, it said it was distributing more than 50 million authorised files a month.

However, revenue from this venture remains small, and may even be shrinking. According to documents from the Securities and Exchange Commission, Brilliant made just $124,000 (£68,280) from its online content distribution in the first quarter of this year, down from $171,000 in the first quarter of 2003.

Altnet executives did not return requests for comment.

File-swapping observers say the coming fall will be a test for Kazaa's future. A strong surge back from its seasonal decline might mean that the onetime leader will simply have to share the limelight with rival networks. If it continues to drop, a more significant shift might be under way, they say.

"If in September we don't see massive pile on (back to Kazaa), it will be something worth looking at," said BigChampagne chief executive officer Eric Garland. "If we see a whimper rather than a scream, there is a good argument to be made that at least some sizable population is moving on."
http://insight.zdnet.co.uk/software/...9159284,00.htm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

File Swappers Targeted in Steve Winwood Promotion

Veteran rocker Steve Winwood has tied up with "Access Hollywood" in an experimental marketing tie-up intended to demonstrate the commercial potential of file-sharing networks such as Kazaa, according to people involved in the project.

The deal is one of the first to use sponsored downloads to support commercial music on the same peer-to-peer networks that the music industry has blamed for an explosion in piracy and weak CD sales in recent years.

"The major record labels are so afraid of file-sharing that they're missing the opportunity," said Bruce Forest, a principal in Jun Group, which brokered the unusual marketing alliance and helped place the free tracks on Web networks.

Winwood, a founding member of the group Traffic, has made a previously unreleased, eight-minute live version of "Dear Mr. Fantasy," freely available to digital file swappers.

A separate video file, which is also freely circulating on networks such as Grokster, includes footage of the Grammy-winning musician in rehearsal.

Each file includes a commercial blurb of about five seconds, similar to a radio ad, directing users to the Web site of syndicated TV program "Access Hollywood," which features other Winwood tracks and offers fans a chance to register to win an autographed guitar.

A separate link on the same Web site sells Winwood's new independently released CD, "About Time."

The promotional deal was put together in conjunction with TV station owner Hearst-Argyle Television, Inc., which has a stake in the syndicated TV program.

In addition to driving traffic to the "Access Hollywood" Web site and collecting more information from viewers, the deal was also a chance to experiment with broadband media, said Hearst- Argyle vice-president for marketing Marv Danielski.

"It's really more like TV," Danielski said, adding that if sponsored peer-to-peer content can work as a way to promote music, it might also work in the future as a way for media companies to distribute mainstream TV shows and movies.

That would also allow media companies of all kinds to distribute content without having to maintain expensive network capacity, said Jun Group's Forest.

"This is the first time that legitimate content is being distributed in this way," said Mitchell Reichgut, also a principal at Jun Group.

NBC Universal Television, a unit of General Electric Co., produces and sells "Access Hollywood."

New York-based Hearst-Argyle Television owns 24 U.S. TV stations, including 10 NBC affiliates, making it the second-largest owner of stations affiliated with the network.
http://www.reuters.com/newsArticle.j...toryID=5536766


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Review

Whimsically Poetic, She Soars and Sails
Kelefa Sanneh

When Joanna Newsom played Bowery Ballroom on Monday night, people were leaning on the stage, singing along with every word — and that was precisely the problem. "I like it when people are a bit more skeptical," she said after facing a quieter (but no less smitten) crowd on Tuesday night at the Mercury Lounge. "I like having to work a little bit harder to convince people."

It's not getting any easier for Ms. Newsom to find listeners in need of convincing. Since the release in March of her debut album, "The Milk-Eyed Mender" (Drag City), a growing number of devotees have been gripped by a reckless but unshakable thought. They — all right, we — are convinced that a 22-year-old harp virtuoso from Nevada City, Calif., happens to be one of the country's greatest young singer-songwriters.

Start with the voice: weird and riveting, swooping wildly from elegant sighs up to throaty yawps and back. More than one critic has described Ms. Newsom's fearless and whimsical singing style as childlike, a description that she finds misleading. "I guess it sounds kind of young, but it sounds kind of old, too," she says, and it's true. Even her most playful songs seem like weird antiques, rescued from some extraordinary attic.

The first song on "The Milk-Eyed Mender" is "Bridges and Balloons," which starts with a mesmerizing harp figure and some seafaring lyrics: "We sailed away on a winter's day/ With fate as malleable as clay." The journey soon dissolves into giddy wordplay and, after a series of far-fetched rhyming couplets, she breaks the scheme with a lovely non- rhyme: "And a thimblesworth of milky moon/ Can touch hearts larger than a thimble."

For the chorus, she sails skyward, fierce and tender, "O my love, O it was a funny little thing." Then three sharp iambs bring her back down, "To be/ The ones/ To've seen." It's a perfectly simple ending, and also a cunning rhetorical trick. That odd contraction forces you to hear the meter. Her songs may sound sweetly serendipitous, but she knows exactly what she's doing.

Ms. Newsom started playing the Celtic harp when she was 8, and by the time she moved up to a full-size pedal harp, at 14, she was already drawing not only from Celtic and classical traditions but also from West African kora music. You can hear the kora's influence throughout the album, especially in "Swansea" (named for a California ghost town, not the Welsh city), where she plucks a glimmering, mutating riff. "It's 5 against 4, intersecting every 20," she says. And it's somehow satisfying to hear the luminous song expressed as a mathematical formula.

After high school Ms. Newsom moved to the Bay Area to attend Mills College. At first she studied composition (working with the electronic-music composer Chris Brown), but she eventually switched to creative writing. Soon her music and her words began to converge.

She self-released a couple of CD EP's, "Walnut Whales" and "Yarn and Glue," and played some low-profile concerts in the Bay Area, still unsure how people would react. "I thought I had a voice that no one would ever want to listen to," she said, with her usual mix of modesty and self-possession: from the first performance, she knew exactly what kind of voice she had.

Similarly, she says she doesn't have any regrets about "The Milk-Eyed Mender," her marvelous debut: "For better or for worse, it sounds the way I wanted it to sound." Along with her producer, Noah Georgeson (lead singer for the retro-rock band the Pleased, for whom Ms. Newsom used to play keyboards), she tried to find different ways to capture the harp's reverberations — "47 different strings rising into prominence, then receding back into this field of sound," she says.

Some listeners have claimed to hear something pure or innocent on this album, but they're wrong. What makes it so addictive is the way Ms. Newsom's intensely self-aware songs flirt with nonsense. Ornate, seemingly indecipherable lyrics ("There are bats all dissolving in a row") turn shivery and direct, "O morning without warning like a hole/ And I watch you go." And in "Cassiopeia," a simple arpeggio blooms into a glorious spray of harp chords.

Ms. Newsom is currently on tour with Devendra Banhart, another idiosyncratic neo-folkie, and she lists among her biggest influences a couple of American originals from an earlier era, the Virginia folk warbler Texas Gladden (1895-1967) and the folk-obsessed composer Ruth Crawford Seeger (1901-53). And it's appealing to imagine that one of our most original young singers is also, in an odd way, one of our most traditional.

In the middle of a song called "Sadie," Ms. Newsom makes an unexpected admission. "This is an old song, these are old blues/ And this is not my tune," she sings. Then, quietly yet firmly, she finishes the thought: "But it's mine to use."
http://www.nytimes.com/2004/06/26/ar...ic/26NEWS.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

How to Please a Critic
Pamela LiCalzi O'Connell

How to Please a Critic

As a songwriter, Loren Jan Wilson admits to an "unhealthy obsession" with music reviews. At his new site, pitchformula.com, he tries to turn that obsession into an advantage.

Mr. Wilson, 25, has created a computer-assisted songwriting method based on a statistical analysis of more than 5,500 record reviews he downloaded from the music site Pitchfork (www.pitchforkmedia.com), with which he is not affiliated.

His idea was to look for "the words and phrases that the reviews have in common with each other" and to use the results "to try and make some 'critic-friendly' music." Based on the analysis, he wrote two songs available as MP3's on the site.

The site is a Derrida-worthy deconstruction of music criticism, although its creator insists he is more interested in making music than in criticizing critics.

For instance, Mr. Wilson, a data network engineer at the University of Chicago, has established that when reviewers hate a record, they are more likely to use words referring to consumerism and business or insulting the intelligence of the musicians or listeners.

How did the analysis affect his songwriting process? He noted that the "sadness" word group was by far the highest-scoring mood. So, contrary to his own preferences, he made his songs as sad as possible (one deals with a heroin addict, the other with a particularly bad relationship).

One of Mr. Wilson's goals was to establish whether critics "display a particular, consistent and demonstrable set of aesthetics through the use of a specific language." Since the site serves as his final project for a bachelor's degree in interdisciplinary studies at the university, I'll leave it up to his professor to decide if he succeeded.

As for the songs? "I guess his formula works,'' said Keith Harris, a music critic who has written for Rolling Stone and Slate. "This sort of wan indie rock over layered electronic beats is pretty trendy right now in certain circles.''

He added, "Most good music critics don't equate 'sad' and 'profound' quite so readily.''
http://www.nytimes.com/2004/07/01/te...ts/01diar.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

'Fahrenheit' Targeted By Pirates

One opponent to Michael Moore's film "Fahrenheit 9/11" is lashing out by encouraging piracy of the film off the Internet.

The site www.MooreWatch.com, urges visitors to download the film and quotes Moore as saying, "I don't agree with the copyright laws, and I don't have a problem with people downloading the movie and sharing it with people. As long as they're not doing it to make a profit, you know, as long as they're not trying to make a profit off my labor. I would oppose that," according to The Hollywood Reporter.

Distributor Lions Gate Films is considering legal action.

"I think it's deplorable what enemies of 'Fahrenheit 9/11' are doing," says Tom Ortenberg, president of Lions Gate Films Releasing. "We are currently looking into our legal options. We are not going to tolerate anybody trying to infringe on [this film's release]."

The first downloadable copies of "Fahrenheit" cropped up in May, around the time of the film's debut at the Cannes Film Festival. The more recent version, obtained by camcording the projected film in a theater, began on Sunday, on the third day of its official release.

The MooreWatch.com downloadable file of the documentary is in BitTorrent, a peer-to-peer file-sharing client. Downloading the movie require several complex steps and has reportedly been a slow process.

"Fahrenheit" won the top prize at May's Cannes Film Festival for its highly critical look at President George W. Bush's connections with high-ranking Saudis and his hawkish Iraq policies. On its opening weekend, the film topped the box office, breaking numerous records, and earned $21.8 million.
http://www.zap2it.com/movies/news/st...-22068,00.html

Meanwhile "Fahrenheit 9/11" is already the largest grossing feature documentary in history, and has been from Day One of it’s release. File sharing is doing nothing to slow this juggernaut. It may very well be increasing ticket sales. – Jack.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Don't Beat Them, Join Them
William Fisher

With 40 million to 60 million Americans having swapped music files over the Internet, taking a few hundred of them to court as the Recording Industry Association of American did this week is, as the legal scholar Randal C. Picker has remarked, "a teaspoon solution to an ocean problem." For a few months after the lawsuits began last year, file sharing diminished, but it has now rebounded. If lawsuits aren't the answer to this problem, what is?

History may give us some guidance. After all, file sharing isn't the first new technology to have destabilized the entertainment industry. The way in which the industry responded to the introduction of three earlier inventions — radio, the VCR and Webcasting — offers important clues for music executives today.

In the 1920's, the advent of radio transformed the way most consumers gained access to musical "performances." Ascap, then a fledgling organization for composers and music publishers, initially allowed the infant radio stations to use its members' compositions without charge. When radio prospered, Ascap demanded compensation, but kept its fees low. The result was that radio continued to flourish, and the copyright owners enjoyed increasing incomes. By 1940, the broadcast industry earned gross revenues of $200 million, of which $4 million (2 percent) went to Ascap members. By 2000, Ascap and its sibling organizations were collecting approximately $300 million per year from American radio stations, roughly 3 percent of the stations' total revenues.

The film industry had its own challenge in the 1970's, when the development of VCR's allowed consumers to record television broadcasts. The major film studios feared that the new machines, by letting viewers skip advertisements, would end up hurting television networks and thus their licensing revenue. But the Supreme Court rejected the studios' claim that the manufacture and distribution of the devices constituted "contributory copyright infringement." Did the film industry collapse? On the contrary, it created a VCR- (and DVD-) dependent market of video sales and rentals, which today earns the studios approximately $10 billion a year.

Finally, in the mid-1990's, when Webcasters began "streaming" music over the Internet, they were compelled to pay fees to the owners of the copyrights of musical compositions, but not to the owners of the copyrights of sound recordings (that is, the record companies). Fearing that the new technology would erode CD sales, the record companies then persuaded Congress to give them a right to compensation from Webcasters.

But, in contrast to the modest compensation that Ascap got from radio more than a half-century earlier, the record companies got through arbitration rates that were so high that, within a year, the number of Webcasters had shrunk by about a third. The result has been to slow significantly the development of this industry — cutting into the fees that record companies could have collected.

It is noteworthy that the story with the happiest ending — both for the public and for the copyright owners — was the one in which the owners were denied any share in the revenues earned by the developers of the new technology but instead had to develop a new business model to take advantage of it (VCR's). The next best outcome occurred when the copyright owners first allowed the new technology to take root and then worked out an arrangement in which they obtained modest license fees (radio). The least satisfactory outcome occurred when copyright owners demanded fees that were so high they hurt the growth of the new technology (Webcasting).

If the pattern holds, then the record industry's response to file sharing — trying to block the technology altogether — would generate the worst of all possible results. To its credit, the industry has started to participate in paid music download services like iTunes, but a better solution would be to institute a monthly licensing fee paid by Internet users. History suggests that the record industry, and society at large, would be better off in the long run if it approached this new challenge with more open minds.
http://www.nytimes.com/2004/06/25/op...rint&position=





























Until next week,

- js.














~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Current Week In Review.





Recent WiRs -

June 26th, June 19th, June 12th, June 5th, May 29th, May 22nd, May 15th

Jack Spratt's Week In Review is published every Friday. Please submit letters, articles, and press releases in plain text English to jackspratts (at) lycos (dot) com. Include contact info. Submission deadlines are Wednesdays @ 1700 UTC.