Peer-To-Peer News - The Week In Review - July 10th, '04

[JackSpratts]

Quotes Of The Week

"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 trying to make a profit off my labour." - Michael Moore

"At $150,000 per song, that would make Apple potentially liable for $1.5 billion per iPod." – Jason Schultz

"Had you not had peer-to-peer, it’s unlikely prices would have declined as much as they have." - Russ Crupnick

"Is it wrong for someone who's bought a film on DVD to let a friend watch it for free? Of course it's not. I think information, art and ideas should be shared." - Michael Moore


















The CD Roars Back From The Dead
Andrew Orlowski

Analysis The decision by the Bertelsmann Music Group to slash CD prices (http:// http://www.theregister.co.uk/2004/07...no_frills_cds/) in Germany only marks the latest stage in the comeback of a supposedly outmoded medium.

The CD is alive and well after all, it seems. In truth, it never really went away. CD sales have rocketed in 2004 - they topped 300 million units in in the first six months, up seven per cent compared to the same period last year, according to Neilsen research. The other booming sector of the music economy is the peer to peer networks. By some estimates a billion files are being downloaded every month and four million users are logged on at any one time.

Buoyed by a feverish hype from techno-utopians and Apple fanatics, the DRM music stores such as Napster, Apple's iTMS notched up only 54 million downloads between them in the same period, and conspicuously missed their sales targets. OD2 is merging, iTMS missed its target by 30 per cent, and the bricks and mortar retailers have abandoned their plans to offer a rival online downloads service. So much for the "future of music"!

"Right now, we're not forecasting the death of the CD anytime soon," Jupiter Research analyst Michael Gartenberg told CNET recently (http://news.com.com/ Big+music+stores+squelch+download+plan/2100-1027_3-5231175.html).

The stick and the carrot don't seem to be working - and hence Bertelsmann's price cuts.

Such is the power of the Reality Distortion Field, however, that the resilience of both p2p file sharing and the CD format has surprised many. Both channels are proving to have stickability that the online DRM stores would die for. At the New York Times, author Randall Stross offers one suggestion why (http://www.nytimes.com/2004/07/04/ business/yourmoney/04digi.html?position=&pagewanted=print&position=): the audio quality of downloaded music is inferior, and customers aren't getting the real deal. Stross cites Wes Phillips, of Stereophile, comparing "128 [kbps encoding] to an eight-track cartridge, and the combination of iPod and iTunes to "buying a 21st- century device to live in the 1970's."

(Artists and labels who have confidence in their own reputations - Warp Records (http://www.theregister.co.uk/2004/01...o_needs_it_uk/) and They Might Be Giants (http://slashdot.org/articles/04/07/04/0249245.shtml), to name but two - have no worries about making much higher quality music downloads available unencumbered by DRM. Warp's are encoded at 206kbps, Giants at 256kbps.)

But perhaps the problem is deeper. Full marks to Apple for making the experience quick and painless, but maybe it's a little too quick and painless for its own good. Where it can, iTunes Music Store offers individual song downloads, and indeed, there can't be too many people who haven't bought a CD for one song, to find the rest of the album is full of clunkers.

But why stop there? Why not just sell the last 45 seconds of Nessun Dorma - the bit everyone can hum? Or the first two lines of the National Anthem - the only words most of us can ever remember?

Retailers like Napplester (thanks to P2P.net for that one) have exhibited too much faith in their own reputations. But music lovers have a relationship primarily with the artist - a very strong relationship - and sometimes with a record label, if it's seen to embody the values of the artistic community. Motown, Blue Note, Stax and Factory are all good examples of the latter. Fans loyalty to artist and label can survive those duff tracks and albums that they occasionally release - the ones Apple doesn't want you to hear. But certainly not the music store they got it from, or the machine that delivers it. (Apple fanatics and techno-utopians have deep and meaningful relationships with the machine in front of them, of course, but the figures we cite prove that these aren't enough, and they're certainly vastly out numbered by people with a cooler perspective). If in doubt, ask yourself how many people you see wearing a Virgin Megastore T-shirt in public.

So the CD and the pirate networks prosper, and the real issue, of paying the artists, looms larger. With the flat fee issue now mainstream (links here (http:// http://www.theregister.co.uk/2004/06...act/page2.html)), the debate is sensibly shifting away from technology wizardry, and back onto what cultural and legal tweaks we need to compensate the artists. As ever, the answer to a technological innovation isn't technology (http://www.theregister.co.uk/2004/06/11/ biometric_drm_interview/)
http://www.theregister.co.uk/2004/07...sales_rebound/


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Tiawan

IPR Infringement Law Set For Major Change Tomorrow

CLASSIC FILMS: Long a staple of film buffs in Taiwan, pre-1965 films will no longer be exempt from copyright protection laws, and prices will climb
Jessie Ho

Movie buffs are snapping up cheap DVDs and VCDs of classic Hollywood movies released before 1965, because as of tomorrow, the sale of reproductions of unauthorized versions of overseas films will be banned, in accordance with WTO rules.

Taiwan's first Copyright Law was announced in 1965, and therefore films released before that time were not protected by law.

Many companies have continued to reproduce these films and distribute them, without having to obtain the permission of the copyright holders.

However, WTO regulations require member countries to retroactively apply copyright protection for such media, including movies, music discs and comic books within two years of joining the world trade body.

The government revised the Copyright Law to comply with the WTO's rules, and announced the amendment on July 10 last year, giving a one year grace period before the law would take effect.

Violators of the amendment will be sentenced to three years in prison, or fines of up to NT$750,000.

To take advantage of this last-minute opportunity, movie lovers have been snatching up low-priced duplicates of the films, making the products the hottest item in the market, said a cashier of Chien Le Record in Taipei's Kuanghwa Market.

The record shop charges NT$39 apiece for DVDs, including such films as Psycho, The Bridge On The River Kwai, Gone with the Wind, Casablanca and other Oscar-winning hits.

"Half of our stocks are gone, and I believe the shelf will be emptied by Saturday," said the cashier.

"People don't want to spend 20 times the amount the money to buy the same products," the cashier said.

Ann Chien, a director at DVD manufacturer AV Book Corp, which sells 100 classic DVDs for NT$7,700, said the company usually receives about 100 orders on a normal day, but is now getting triple that amount of business as the deadline approaches.

The same shopping rush also hit online shopping sites. Online bookseller books.com.tw's "Oscar classics" film collections, which contain 10 DVDs each for NT$349 per set, have been sold out.

Meanwhile, PC Home Online's shopping site sells 100 DVDs for NT$2,999, and it has also seen huge orders these days, said Joyce Tzeng, a public relations associate manager for the company.

However, the owner of Hsing Chu, another store in Kuanghwa Market, said the shopping spree is unnecessary, as authorized products will not be as pricey as most people expect, as many legal DVDs only cost from NT$99 to NT$199.

"I would rather spend a bit more on quality products ... I get really pissed off when the picture of these poor-quality DVDs gets stuck every time," he said.
http://www.taipeitimes.com/News/fron.../09/2003178231


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Movie Group Picks Glickman as Top Lobbyist

Hollywood cast former Agriculture Secretary Dan Glickman as its new leading man in Washington on Thursday, ending years of speculation about who would replace 82-year-old Jack Valenti as the movie industry's top lobbyist.

At a press conference in Washington's opulent Hay-Adams Hotel, Valenti introduced the former Kansas congressman and Clinton administration Cabinet member as his successor at the helm of the Motion Picture Association of America.

``It's been a long ride, it's been a great ride,'' said Valenti, who has held the post since 1966. ``But everything comes to an end.''

As the public face of the movie industry, Glickman, 59, will seek to stem the unchecked Internet file swapping that threatens to cut into movie sales.

Lawsuits against individuals who share movies online are not out of the question, he said.

``I think there are a lot of strategies to deal with piracy,'' he said. ``Education is one of them, enforcement, litigation is another strategy. I don't think you can just go with one strategy.''

The son of a scrap-metal salesman in Wichita, Glickman served in Congress from 1978 to 1994, including a two-year stint as chairman of the House Intelligence Committee. After he was defeated for re-election, he served as agriculture secretary until the end of Clinton's term in 2001.

He most recently served as director of the Institute of Politics at Harvard University's Kennedy School of Government.

Glickman noted his contacts in Congress and his experience negotiating trade agreements, and he downplayed concerns that a career Democrat might have trouble working with a Republican Congress and White House.

``It's always been my style not to be a bomb thrower but a diplomat,'' he said.

Glickman said his favorite movies include The Godfather Parts I and II, which he said he has seen more than 100 times, and Animal House, ``because I was in a fraternity at the University of Michigan ... and the characters were people that I was with.''

Other favorites include Shanhai Noon and Rush Hour, films produced by his son Jonathan.

Glickman has imposing, and dapper, shoes to fill.

In his nearly 40 years at the MPAA, Valenti developed a voluntary movie-ratings system, which has enabled the industry to fend off government attempts to curb explicit sex and violence in the movies.

Valenti was widely criticized for 1982 congressional testimony when he compared the videocassette recorder to the Boston Strangler, comments frequently invoked by technology-industry advocates who say tightened copyright laws could harm innovation.

Congress is currently considering several measures that would tighten copyright laws, including one that would crack down on people who bring camcorders into movie theaters.

MPAA members include Walt Disney Co. ; Sony Corp.'s Sony Pictures Entertainment Inc.; Metro-Goldwyn-Mayer Inc. ; Viacom Inc.'s Paramount Pictures Corp.; News Corp.'s Twentieth Century Fox Film Corp.; Time Warner Inc.'s Warner Bros. Entertainment Inc.; and Universal City Studios, owned by Vivendi Universal and General Electric Co.
http://www.nytimes.com/reuters/arts/...-lobbyist.html


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Share the Music
Kembrew McLeod

On Tuesday, the Recording Industry Association of America filed another round of lawsuits against people who allegedly downloaded and shared copyrighted music. In doing so, the association finally topped the 3,000-served mark.

The association argues that file sharing is directly responsible for the widely reported slump in CD sales from 2000 to 2003. This, however, ignores the fact that the economy was in a post-Sept. 11 recession and that many other industries suffered even greater declines in their sales at the time. Still, it is reasonable to assume that downloading was a cause of some drop in CD sales.

But this simple narrative is a bit more complicated. The two primary direct competitors for young music buyers' dollars — video games and DVD's, both also widely and freely traded on the Internet — continued to do quite well. And during the first quarter of 2004, CD sales in the United States rose 10.6 percent over the previous year, an upturn that the recording industry association confidently attributed to its lawsuits. But a report issued in April by the Pew Internet and American Life Project stated that the number of people who said they had downloaded music files during the same first quarter had increased by 5 million, to a total of 23 million, from the project's previous survey in late 2003.

In other words, at the exact moment file-sharing activity rose, so did CD sales. These numbers supported an economic study by Profs. Felix Oberholzer-Gee and Koleman S. Strumpf. Their findings indicated that file sharing had no measurable effect on music sales. "At most, file sharing can explain a tiny fraction of this decline," the professors concluded. These men are not anti-copyright activists by any measure — Mr. Oberholzer-Gee is a professor at the Harvard Business School and Mr. Strumpf is a visiting fellow at the Cato Institute.

With its new round of lawsuits, the recording industry association is once again demonstrating its failure to recognize the obvious: file sharing isn't going away. Consumers have grown attached to it, and more and more musicians believe file sharing can help promote their music in an age of limited play lists at radio stations. Given its hold in our culture, downloading, in some form, must be part of any solution to this impasse.

A blanket license model, like that legalizing the use of copyrighted material by cable television and radio, can point us to a future system that might work for file sharing. There would be differences, of course, but there's no need to reinvent the wheel. Various lawyers, professors and organizations, including the Electronic Frontier Foundation, a nonprofit group dedicated to protecting individual freedoms in the digital age, have offered workable solutions.

Simply put, these varying proposals go like this: given that the movie, video game and software industries continue to grow — and file sharing's harm to the music industry is debatable — additional fees needn't be exorbitant. The foundation's plan calls for generating a $3 billion pot of money — the amount the industry says it is losing annually — by charging consumers a $5 monthly licensing fee. The fee could come bundled with, for instance, a consumer's broadband Internet access bill and would be similar to paying a cable bill. Rather than replace the music industry's business model, this would supplement it with a steady revenue stream.

Some critics call these plans unrealistic, but a legally sanctioned cable television system also seemed like a pipe dream in the 1960's because of the television industry's resistance.

It would be dishonest, and foolish, to suggest that hammering out a compromise palatable to all sides is going to be easy. But the alternative — to do nothing, or to pass new industry-backed legislation — would continue to criminalize the everyday behavior of millions. And it would continue to stifle an innovative way to distribute artistic works.
http://www.nytimes.com/2004/06/25/op...rint&position=


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Home Movies, Straight to DVD
David Pogue

THIS is the movie that Jack made.

This is the family down by the sea, that Jack camcordered on MiniDV, then edited down on a modern PC, then burned overnight to a blank DVD, then carried downstairs and showed on TV, so family and friends could finally see the wonderful movie that Jack made.

If your video has ever made that exhausting journey from camcorder to DVD, then you already know about the Faustian bargain of the MiniDV cassette format. The blessing is that you can edit your movies on a Mac or PC without losing any of their spectacular quality. The curse is that you can't distribute your masterpieces without a lot of hassle. Why, oh why (ask millions of armchair inventors) can't a camcorder record directly onto a DVD?

Actually, DVD camcorders made their debut a few years ago - but they were big, expensive freaks. This year, though, they're popping up at Little League games, graduation ceremonies and theme parks.

What's changed? First, you have more choices, including the new Sony DCR-DVD101 and 201, Panasonic VDR-M50 and 70, and Hitachi DZ-MV550 and 580. Second, the latest models are no larger than MiniDV camcorders. The Sony measures 2 by 3.5 by 5.4 inches; the Panasonic and Hitachi are only a hair larger (2.5 by 3.5 by 5.7). The prices ($600 to $800) are still about $200 higher than comparably equipped MiniDV camcorders, but at least they're out of nosebleed territory.

Finally, all DVD camcorders accept the same miniature eight-centimeter blank DVD's, sold as mini DVD-R discs. They cost about the same as MiniDV tapes ($20 for a five- pack).

The biggest benefit is, of course, compatibility: you can pop recorded discs directly into any standard DVD player, or send them to relatives so that they can do the popping. The minidiscs fit neatly into the inner ring molded right into the DVD player's tray. Most slot-loading players slurp in the discs equally happily.

There are other perks. You never wait to rewind, ever. Each camcorder shows a "table of contents" screen of thumbnail images; a tiny joystick lets you select one to play back, instantly. (This will be the disc's main menu when played on a TV.) Better yet, these machines do not permit recording over previous material. This is a safety feature of life- changing, marriage-saving proportions.

Yet there are disappointments, too. Those minidiscs may be awfully cute, but they fill up after only 30 minutes of best-quality video. (Lower quality settings give you as much as 60 minutes per disc, but the result is so blocky it's hardly worth mentioning.)

Note, too, that when a disc is full, you can't play it outside of the camcorder until you finalize it using the on-screen menus - a sort of software shrink-wrap. The Panasonic and Hitachi camcorders must be plugged in during this process, which took an agonizing 24 minutes for the same amount of video that the Sony processed in only eight. Using battery power is O.K., although kiss your movies goodbye if the power fails halfway through.

The six DVD camcorder models are surprisingly alike. In fact, the Panasonic and Hitachi are twins. Their design, features and software, and even their mediocre awkward- English manuals, are practically identical. Only the subtlest cosmetic touches differentiate them; for example, one says "Panasonic" and the other says "Hitachi."

Furthermore, although each company offers two models, one is just a dressed-up version of the other. Sony's DVD201 ($790 online) costs $100 more than the DVD101, but offers a slightly larger sensor chip for better video in dim light, and higher resolution for its still photos (1,152 by 864 pixels instead of 640 by 480). On the Panasonic/Hitachi, the extra $100 buys you those same advances, plus an S-video input and a powered accessory shoe instead of an unpowered one. Oddly, the more expensive model ($760 for the better Hitachi, $660 for the better Panasonic) gives you less optical zooming power: 10x instead of 18x.

You might wonder, then, how Sony can justify charging $130 more than, say, Panasonic.

All of these camcorders are aimed at technophobes and hassle-haters, but Sony preserves some of the features that make its tape camcorders so popular. For example, the screen tells you exactly how many minutes are left on your battery. You also get Sony's famous NightShot modes, which lets you record in near or total darkness - a feature that comes in handy more often than you might think. The Sony is also much faster at locking focus, especially in dim light.

There are other nuances, too, like a sharper, brighter screen and an AC adapter that powers the camera even while the battery is still in place. (The Panasonic/Hitachi camcorder is useless while you recharge, because the battery goes into an external charger.) You can insert a naked, shivering disc directly into the Sony, too, without having to fuss with the removable plastic disc holder required by the Panasonic/Hitachi.

Finally, the Sony's eyepiece viewfinder slides both outward and upward so that you can shoot from lower angles. (An unusual Record/Stop button on the edge of the flip-out screen makes such shots even easier.) The Panasonic/Hitachi viewfinder doesn't swivel, and it doesn't even extend past the edge of the two-hour battery. Expect your relatives to ask how you got the callus on your cheekbone.

On the other hand, the Panasonic/Hitachi camcorders offer a memory-card slot for storing still photos. The Sony stores its photos only on the DVD, which you'll have a hard time slipping into, say, a Palm organizer for viewing.
http://www.nytimes.com/2004/07/01/te...ts/01stat.html


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Tuning In to Television, Two Ways
Sabra Chartrand

WHEN the Internet first captured the popular imagination, a debate raged over whether the computer would replace the television as the electronic hearth in American homes. Computer devotees predicted that people would one day call up Web sites on their TV monitors or watch favorite shows on their computer screens.

Those forecasts - like many that accompanied the early digital revolution - never quite panned out. Televisions have remained televisions and computers have remained computers, and for the most part, research shows, consumers are happy to keep it that way.

Still, products have emerged with the promise of fusing TV and computers. WebTV, for example, provides a set-top box to access the Internet on televisions. That technology, supported by Microsoft, was hailed as groundbreaking, but it has had limited success with consumers.

In 2000, AOL introduced a product called AOLTV. Subscribers could watch television and receive Internet access through a set-top box and wireless keyboard that would let them check e-mail, send instant messages and use a program guide. AOLTV fared even worse with consumers than WebTV, and the company pulled the plug on it last November.

Now AOL may try again - but this time, instead of trying to change people's television viewing habits, it hopes to add TV to its already popular computer features like Instant Messaging and chat rooms.

Last week, three inventors at AOL in Virginia won a patent for software that allows people to log on to Instant Messaging or chat rooms, call up a buddy list and see what TV shows their friends or even strangers are watching.

"AOL does a lot of ongoing development work on a range of products and features," said Nicholas Graham, a spokesman for AOL, "and the patent is simply an indication of some further, recent innovation at AOL."

Mr. Graham said the three inventors were not available for interviews, and he did not want to say whether the invention would be available any time soon to subscribers.

"As a company practice," he said, "AOL does not comment on possible plans for items it has sought patent rights to, and there has been no determination on how this patent will be used."

But the patent suggests what the system would be like if AOL were to offer it: after showing subscribers what programs their I.M. buddies are watching, the software could switch their televisions to the same channel, either automatically or by giving them a link to click.

"This enables friends to exchange messages that include links to a particular network or TV show," the patent says. "When selected, the browser tunes the set-top box to the channel corresponding to the network or show specified by the link."

If the friends live in different cities with alternative channel numbers and program times, the system can find shows by searching through an electronic programming guide for keywords like a network name, a show's title or an actor's name. If the user misses the show, the patent explains, the "set-top box can store the link and remind a user and/or automatically tune the set-top box when the linked TV show is scheduled for broadcast."

If users are in a chat room, they can see the TV shows that other people in the group are watching. If someone changes TV channels, that would also appear.

The system can also control which chat room the user visits. For example, if people are watching "Friends," the system can be set up to automatically take them to a "Friends" chat group. They can watch and exchange messages with other "Friends" fans. If they change channels to watch a different show, the chat room designation can follow.

"The browser can configure the display so that the chat room text window and the TV show display can be viewed simultaneously," the patent says. It also explains that "if the user tunes from 'Love Boat' to 'Fantasy Island,' the user can be moved from the Love Boat chat room to the Fantasy Island chat room."

There's a brief lag, however, to keep the system from switching frantically if a user is simply channel surfing, the patent adds.

Users can create buddy lists for their favorite shows. So when they tune in to "I Love Lucy," their "I Love Lucy" buddies list will appear for messaging and chatting.

A privacy feature can be activated to block the system, when users do not want every buddy to know what they are watching.

It is not exactly a new electronic hearth, and some might argue that it further isolates people who stay home too much as it is. But in building on the popular messaging forums, it could turn TV watching into a partially active rather than a completely passive activity.

The system relies on a set-top box with technology similar to WebTV's, one that enables a television to be connected to the Internet, a server and a browser. So to use the technology, a user would need a computer, a television, Internet access, an AOL subscription and a WebTV-style set-top receiver.

The system was invented by Carlos A. Silva Jr., a vice president for programming at AOL, and two other employees, Robert M. Cooper and Laurence F. Kirsch. They won patent 6,754,904.
http://www.nytimes.com/2004/06/28/te.../28patent.html


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Study: Most Kids Admit To Stealing Digital Content

Students unabashed by online ethics gap

Most students know it's against the law to share copyright-protected software, games, music, and movies online--yet many admit to downloading such files anyway, according to a new survey.

Educators and others agree that anti-piracy education is a key component to encouraging ethical computer use among students. But only 18 percent of the students surveyed said they learned about copyright law from a teacher or other educator.

The nationwide poll, conducted by Harris Interactive on behalf of the Business Software Alliance (BSA), asked more than 1,100 students-- ages eight to 18--about their attitudes toward copyright law and internet behavior, including uploading and downloading copyrighted files through online peer-to-peer (P2P) file-sharing networks.

According to the survey, 91 percent of students knew that books are protected by copyright law; 88 percent knew that movies are copyrighted; 88 percent, music; 86 percent, software; 83 percent, games; and 64 percent, web sites.

Yet more than half of students (53 percent) admitted to downloading music files, and a third (32 percent) said they download games. Fewer kids said they download large digital files, such as commercial software (22 percent) and movies (17 percent).

"Unfortunately, many kids and teens continue to download copyrighted works illegally--even though more than half of them know there are laws against downloading digital works," said Diane Smiroldo, vice president of public affairs for the industry trade group.

"What's most alarming is that eight out of 10 kids and teens understand the definition of copyright and nearly all of them, especially teens, are aware that software, music, and movies are protected by copyright," Smiroldo said. "The fact that kids know stealing software is wrong, and yet they behave like it's OK, clearly illustrates a challenging ethical dilemma."

Students indicated they are more worried about technological problems while downloading digital media than they are about the ethics of stealing, the survey revealed.

When illegally downloading, young people worry more about accidentally downloading a computer virus (60 percent) than they do about whether they can get in trouble with the law (50 percent) or accidentally downloading spyware (43 percent). Only 29 percent worry that the act is wrong.

Girls worry more about all risks, and boys (19 percent) are more likely to say that none of these things worry them.

Risks aside, those who think it's OK to download software illegally gave the following reasons:

I do not have money to pay for software (51 percent);
I wouldn't use the software if I had to pay for it (35 percent);
Lots of people do it (33 percent);
It doesn't hurt anybody when I do this (26 percent);
No one has ever told me not to (19 percent);
I won't get in trouble for doing it (15 percent); and
My parents have said it is OK (8 percent).

"What's of most concern is that kids take big risks to steal software, and they perceive it as a victimless crime. One in four says it doesn't hurt anybody when I do this,' and that underscores a cyber ethics education deficiency at home and in the schools," Smiroldo said.

Most students said their education about laws protecting creative works online stems from watching television (59 percent). Other sources include a parent (44 percent), the internet (44 percent), advertisements (36 percent), friends (30 percent), and--at the bottom of the list--teachers (18 percent).

Younger kids (ages eight to 12) are most likely to say they learn about copyright laws from their parents (44 percent).

"It's critical that parents and teachers continue to educate our young people about the importance of cyber ethics and respect for intellectual property. Parents should supervise their kids' activities online, since much of this behavior takes place at home," Smiroldo said.

"Our hope is that parents and educators utilize the many resources available to teach youth to become good cyber citizens, so that these kids do the right thing as they get older."

To help teach kids to respect digital copyright law and become "good cyber citizens," BSA offers parents, teachers, and students a number of free cyber-ethics resources, including its "Play It Safe in Cyberspace" curriculum, which was co-produced by the children's publisher Weekly Reader.

Since its initial distribution in 2002, the curriculum has reached more than 13 million students, parents, and teachers, BSA said.

Educators contacted by eSchool News said they weren't surprised by the poll results. They agreed that schools should teach students about the appropriate use of copyright-protected materials--and should enforce these expectations during the school day--but many also said adults are at least partly to blame for the problem.

"I believe students understand the concept of copyright, but have few models of appropriate behavior to follow," said Jim Hirsch, associate superintendent for technology at the Plano Independent School District in Texas.

"Xeroxing of printed works, videotaping, 'TiVo'-ing, ripping CDs, scanning, et cetera, are all techniques used in the workplace and at home by adults-- which provides the illusion of appropriate use."

Rick Bauer, chief information officer for The Hill School in Pottstown, Pa., took the argument a step further.

"It is wrong to equip our students digitally without teaching them the values of honesty and integrity, and that would include making sure faculty and school machines are up to license specifications as well," Bower said.

He added: "I wonder if students are watching us more than listening to us."
http://www.eschoolnews.com/news/show...ArticleID=5165


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China Is Filtering Phone Text Messages to Regulate Criticism
Joseph Kahn

BEIJING, July 2 - China has begun filtering billions of telephone text messages to ensure that people do not use the popular communication tool to undermine one-party rule.

The campaign, announced on Friday by the official New China News Agency, comes after text messages sent between China's nearly 300 million mobile phone users helped to expose the national cover-up of the SARS epidemic last year. Text messages have also generated popular outrage about corruption and abuse cases that had received little attention in the state-controlled media.

It is a sign that while China has embraced Internet and mobile phone technology, the government has also substantially increased its surveillance of digital communications and adopted new methods of preventing people from getting unauthorized information about sensitive subjects.

This week, government officials began making daily inspections of short-message service providers, including Web sites and the leading mobile phone companies. They had already fined 10 providers and forced 20 others to shut down for not properly policing messages passing through their communication systems, the news agency said.

The dispatch said the purpose was to stop the spread of pornographic messages and false or deceptive advertising as well as to block illicit news and information.

All such companies are being required to install filtering equipment that can monitor and delete messages that contain key words, phrases or numbers that authorities consider suspicious before they reach customers. The companies must contact the relevant authorities, including the Communist Party's propaganda department, to make sure they stay in touch with the latest lists of banned topics, executives in the industry said.

Although text messaging is still in its infancy in the United States, it has become a primary means of communication in China. Chinese mobile phone users sent 220 billion text messages in 2003, or an average of 7,000 every second, more than the rest of the world combined, China Telecom data shows.

Many people with mobile phones like text messaging because it is quieter and less expensive than making phone calls. Messages can also be sent to multiple people at once and, at least until recently, were considered too unimportant or technologically difficult to monitor.

The authorities have become increasingly attuned to the threat posed by mobile messaging, as it has become not only a convenient way to talk and gossip, but also a competitor in the news business.

Phone messaging is faster and easier than using chat sites on the Web, which have also become forums to disseminate information and opinions. China had already taken steps to monitor Web sites more carefully and had arrested several dozen "cyberdissidents" for posting articles or expressing views on the Internet that the authorities deemed unacceptable.

New regulations on messaging appear to have been phased in during recent weeks. Some mobile phone users said they had had trouble sending ordinary text messages around the 15th anniversary of the June 4, 1989, crackdown on democracy demonstrations in Beijing, perhaps because of tighter policing of the service.

One user said that messages he sent that included the numbers 6 and 4 close together were never delivered, perhaps because they were screened as a possible reference to the date of the crackdown.

Wang Hongwei, a 25-year-old air-conditioning technician in Beijing, said he got up to 100 text messages every day - from friends, colleagues and news sites. He said he had found the service slower and less reliable recently, although he had not heard of the new monitoring orders.

"I don't think there's any justification for filtering every single message," he said. "The government should not be deciding what people say to each other."

Industry experts say message filtering technology is relatively straightforward, much like programs to block junk e-mail. The challenge is to provide robust software that can process enormous volumes of text messages without reducing their efficiency.

"You can filter as much as you like, just like a list of words," said Wang Yuanyuan, a sales manager at Venus Info Tech, which sells filtering software to Chinese messaging service providers.

She said the new rules would lead to heavy demand for her company's product.

"I think with the new rules the government will be expecting service providers to govern their content in a more regularized way, and this is what our system can do," she said.
http://www.nytimes.com/2004/07/03/in...hin.html?8hpib


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“At least there has been an increase in the rate at which their prices are falling.”

Falling Prices
Ian Austen

While many consumers might argue that CD’s still cost too much, data from the NPD Group shows that at least there has been an increase in the rate at which their prices are falling. The company’s NPD Music division found that average CD prices at all retailers were down 4 percent during the first quarter of this year compared with the period in 2003. By comparison, the final quarter of last year showed a 2.5 percent decline.

“Had you not had peer-to-peer, it’s unlikely prices would have declined as much as they have,” Russ Crupnick, president of NPD Music, said, referring to music file-sharing services.

Mr. Crupnick added, however, that music downloading was not the sole force behind the price declines. He said that music retailers were increasingly competing with cellphone services, DVD’s and other forms of entertainment for customers’ money.

Mr. Crupnick said services that sell music online, like Apple’s iTunes, have not yet had a significant impact on CD prices.

“The usage of any of those kinds of things is really, really tiny,” Mr. Crupnick said. “I would be surprised to see the industry immediately responding on a pricing level.”
http://www.nytimes.com/2004/07/05/bu...OSTWANTED.html


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File Sharing In Canada
p2pnet.net News

News that the corporate music industry has received its second major legal defeat in Canada continues to hold front pages around the world.

In March, Big Music's hopes of successfully using its CRIA (Canadian Recording Industry Association) to sue Canadians in the same way the RIAA sues Americans were dashed.

It can't get started without first finding a way to identify people it claims have swapped unauthorised music files. And it can't do that without a court order compelling Canadian ISPs to reveal client names - and its recent bid to force five Canadian ISPs to do exactly that, failed.

Justice Konrad von Finckenstein decided, "No evidence was presented that the alleged infringers either distributed or authorised the reproduction of sound recordings. They merely placed personal copies into their shared directories which were accessible by other computer user(s) via a P2P service."

The ruling is under appeal and in the meanwhile, as we reported on June 30, Canada's Supreme Court has decided unanimously that ISPs are "intermediaries" who aren't bound by Canadian copyright legislation.

This second music industry defeat came after Canada's SOCAN (Society of Composers, Authors and Music Publishers of Canada) tried to secure a ruling under which Canadian ISPs would be taxed by up to 10% of their income, "simply because some clients of those ISPs sometimes steal music by downloading".

United States
The Washington Post pointed out SOCAN's effort was "closely watched abroad because of the international implications for the computer and music industries," going on: "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".

Australia
The Canadian Cable Television Association, which represents a number of ISPs, applauded the Supreme Court, says Australia's The Age here. "This decision is a victory for Canadians who have come to rely on the Internet as an increasingly important part of their daily lives," said Jay Kerr-Wilson, the society's vice-president for legal affairs. "The Court has recognized that the Internet is one of the great innovations of the information age and that its use should be facilitated rather than discouraged."

UK
Britain's Out-Law.com quoted Justice Ian Binnie, who wrote the majority opinion for the court, as saying, “It is clear that Parliament did not want copyright disputes between creators and users to be visited on the heads of the internet intermediaries, whose continued expansion and development is considered vital to national economic growth.” The Court particularly considered the question of caching - where temporary copies of data packets (which combine together to create a completed web page or music file) are kept on a local server for a short time in order to speed up transmission - and whether the storage of this on local servers gave ISPs more responsibility for the data than they would otherwise have had, said Out-Law.com. "But, according to Justice Binnie, 'caching is dictated by the need to deliver faster and more economic service, and should not, when undertaken only for such technical reasons, attract copyright liability'."

New Zealand
The New Zealand Herald reported, "Jeff Leiper, editor of Decima Reports - trade newsletters for Canada's communication industry - said the court realised how putting a tariff on the industry could have affected the affordability of the internet to Canadians. "It would have been a 3.5 per cent take on gross revenues," he said. "When you're talking ISPs who have revenues...in the billions, that's a significant amount of money'."

Back in Canada, Soulshine has this to say: "The computer age, with internet music file sharing, has brought to the forefront a practice that has been going on since records were first produced. Music has been copied and shared legally and illegally from the time the first recording device appeared. And as long as record companies continue to charge excessive amounts of money for CDs, music fans have no incentive to stop the practice of sharing music."

Deafeat Number Three?
And Big Music may also have suffered what is, in effect, a third defeat when Paul Martin's unpopular government was returned, but only just, in the June 28 federal elections.

As a p2pnet reader expressed it here:

"Liberal Heritage Minister Helene Chalifour, had been vocal about trying to get legislation passed to ban filesharing in Canada ... Well, in the election, she lost her seat to Roger Clavet of the Bloc Quebecois. Although Prime Minister Martin was also backing banning filesharing, it was Helene Chalifour who really piloted the offense.

"With a new minority government, I can't even picture the topic of filesharing going anywhere fast. It's simply not a
large political issue. There are more important things, to say the least. Also, they'll be a lot of political debate before anything is passed.

"Not to mention Jack Layton is pro-filesharing and I don't see the Bloc Quebecois (a pretty socialist Quebec party)
approving big corporations to sue Canadian citizens. Unless the Librals ally with the conservatives on this one (very unlikely!), filesharing's here to stay in Canada.

"So all in all, YAY for Canada! Keep on Sharing."
http://p2pnet.net/story/1820


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Copyright Bill Poses Threat To iPod's Future
Jefferson Graham

Is the iPod endangered?

Apple's sleek digital audio device is one of the most successful tech toys, selling more than 3 million units since November 2001.

But its future, with that of other new tech gadgets, could be in trouble if a controversial congressional bill passes. That's according to opponents of the Inducing Infringement of Copyrights Act in the Senate. It would make operators of media-swap networks such as Kazaa and Grokster liable for users' actions. It also would make it easier for entertainment companies to sue tech firms for copyright infringement.

Opponents say the language is so broad it could apply to makers of MP3 players, such as iPod, and CD and DVD recorders, as well as to media organizations that give consumers tips on using digital content.

The recording and movie industries support the bill to help curb piracy.

But the tech industry is worried. Internet search giants Google and Yahoo, chipmaker Intel, Internet service provider Verizon, auctioneer eBay, Web site operator Cnet Networks and phone company MCI are among 42 companies and groups who signed a letter that will be delivered Tuesday to bill author Sen. Orrin Hatch, R-Utah, requesting hearings on the issue.

Two copyright bills were passed by a voice vote in late June without hearings, which is why the tech industry is concerned.

Hundreds of bills are introduced every year, and many never make it to the Senate floor. What makes the Induce Act more viable are its high-profile co-sponsors. Besides Hatch and Patrick Leahy, D-Vt., there's also Senate majority leader Bill Frist, R-Tenn., and Senate minority leader Tom Daschle, D-S.D. Other co-sponsors are Sens. Barbara Boxer, D-Calif., and Lindsey Graham, R-S.C.

Judiciary Committee Chairman Hatch has been a critic of file-sharing. Last year, when speaking of network users trading copyrighted material, he said: "I'm all for destroying their machines."

The bill follows an April 2003 court win by Grokster in the West Indies and StreamCast Networks of Tennessee that said users — rather than file-sharing networks — were to blame for infringing copyrights. That decision is being appealed.

Other bill supporters include the Business Software Alliance, whose members include Microsoft, Adobe and Intel. Computer-makers Apple and Hewlett-Packard have been silent.

BSA staff lawyer Emery Simon says he hasn't polled members to see how many other firms in his roster disagree with BSA's stance. BSA supports the bill because "we have a serious piracy problem online."

Hatch and Leahy were unavailable for comment. Their aides say they are trying to curb online piracy and add teeth to current law to prevent future court wins by file- sharing companies. They deny opponents' anti-new-technology claims.

Hatch can decide to schedule the bill for a committee vote as early as Tuesday, or at the end of the current congressional session. Hatch spokesman Margarita Tapia says there's no timetable. As for hearings, she says, "We may schedule a meeting if the chairman thinks it's necessary."

The word "induce" and the bill's implication have turned into a firestorm on the Web. Type it into any search engine and hundreds of links to blogs and articles organizing opposition pop up. A new site went up last week, SaveTheiPod.com, encouraging visitors to fax senators urging a "no" vote.

"The act could be used to challenge free speech, which would violate the First Amendment and is a significant concern to us as a media company," says Sharon LeDuy, general counsel of Cnet.

Cnet runs MP3.com, a guide to legitimate digital music sites. Cnet also offers links to both software-fighting spyware and adware and file-sharing services like Grokster and Kazaa at its Download.com.

"We feel this bill adds potential liability to any innovator," says Don Whiteside of Intel's Corporate Technology Group. "We view this as a very significant change in the copyright law, and we're very concerned."

Current laws suggest fines of $750 to $150,000 per song. Apple's top iPod holds 10,000 songs.

"At $150,000 per song, that would make Apple potentially liable for $1.5 billion per iPod," says Jason Schultz, an attorney with the Electronic Frontier Foundation. "That's the worst-case scenario. Even at $750 per song, a loss would completely bankrupt a company."
http://www.usatoday.com/money/indust...duce-act_x.htm


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Kazaa Copyright Trial Set For November
Abby Dinham

Sharman Networks, the parent company of controversial file-sharing service Kazaa, could face the music by the end of the year following an Australian federal court ruling.

On Thursday, Justice Murray Wilcox set a tentative trial date of Nov. 29 and said that directed discovery and affidavit proceedings should be completed by October. Wilcox also dismissed a range of procedural matters that had been raised by Sharman Networks regarding access to evidence seized from its offices and from affiliated parties earlier this year.

On Feb. 6, the music industry's copyright enforcement arm, Music Industry Piracy Investigations (MIPI), raided the Australian offices of Sharman Networks and Brilliant Digital Entertainment, along with the homes of key executives and several Internet service providers. MIPI was seeking documents and electronic evidence to support its case against the peer-to-peer companies.

In doing so, MIPI had obtained an Anton Pillar order, which allows a
copyright holder to enter private premises to search for and seize material that breaches copyright--without alerting the target beforehand.

The evidence is currently in the care of an independent solicitor.

At the daylong hearing Thursday, Sharman attorney Robert Ellicott raised a new motion about the legitimacy of the evidence obtained from the Sharman premises. He also protested a timetable offered by Wilcox, who called for the discovery process to be completed by Aug. 13, with applicants' affidavits filed by mid-August and responses by Sharman filed by early October.

Specifically, Ellicott claimed that the raids executed on the Sharman premises may be in breach of Australia's Telecommunications Act.

The argument refers to section 7 of the act, which states that a person shall not "intercept...a communication passing over a telecommunications system."

Ellicott said that in carrying out the Anton Pillar orders, the act was breached by the "recording of communications from the routers of the raided premises before they had been received by the companies' computers."

He also argued that the action was undertaken without the knowledge of the person making the communication, which is also stipulated as a breach of the act.

However, the music industry--represented by Universal Music--contended that what was recorded may not even fit within the statutory definition of "communication."

Universal said that if Sharman was concerned that a breach of the act had occurred, the company should have taken steps to access the evidence, as any such breach would be recorded.

"Why weren't steps taken earlier if criminal conduct was being considered in regards to the the Anton Pillar orders?" asked Tony Barron, Universal's legal representative.

According to Wilcox, the operation was not carried out "behind the backs" of the operators of various raided premises, and in further response, he told Ellicott that "with all due respect, you haven't produced any evidence from anybody."

Wilcox added: "Frankly, I think the whole thing is a distraction from the case."

Ellicott's submission was rejected because of lack of evidence, and Wilcox ruled that Sharman should cover the cost of that section of the proceedings, as the motion was unnecessary.

The music industry, Sharman and associated parties were originally issued a timetable for the discovery process at a hearing in May. Wilcox ordered those parties to submit applications to specify which evidence they needed to access for the case before June 25.

However, the process has been slowed significantly amid claims and counterclaims over access to evidence.

Universal's lawyers accused Sharman and its associates of trying to stall the case by not complying with orders made at the last hearing. "It's all there; why can't we look it?" Barron said.

However, Ellicott said the process of making copies of the materials had been delayed, forcing the schedule back and leaving insufficient time to go through the files.

"This is one of the most important copyright cases that has occurred," said Ellicott, adding that there were around half a million electronic files to sift through to respond to Universal's case. Ellicott said doing that would take the Sharman parties "at least" a month. Wilcox advised the Universal lawyers to "trim" down their case load.

The parties also disagreed on how the process of discovery and filing affidavits should continue, as Sharman introduced several new motions regarding Universal's statement of claim.

Both parties are expected back in court on July 16 to present the outcome of talks on the procedural issues confronting them.
http://news.com.com/2100-1027-5255741.html


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Got Your Soda, Popcorn, Laptop? All Right -- Action!

With movies increasingly downloadable for free off the Internet, filmmakers fear that their business will go the way of that of the recording labels, with revenue steadily eroded.
Anthony Effinger

DreamWorks' Shrek 2 opened in theaters on May 19. A copy of the animated motion picture -- shot in a theater with a digital camcorder -- hit the Web a day later. Viewed on a laptop computer, the pirated version looked every bit as good as a DVD.

Harry Potter and the Prisoner of Azkaban, a film from Warner Bros., turned up on the Internet three days after it premiered in Britain on May 31. Some theaters there use night-vision goggles to watch for pirates.

American movie companies lose $3.5 billion a year to piracy, not including the burgeoning trade on the Internet, according to the Motion Picture Association of America.

They worry that they may end up like the record labels -- with a generation of kids who consider copyrighted music free if can you find it on the Web.

Paul Kocher, a cryptographer from San Francisco who spends half his time in Los Angeles working with the studios, describes a dire ending for his clients: As Internet access gets faster and video compression improves, downloaders may steal a third of the studios' annual revenue -- $3.7 billion for Time Warner alone -- making many unprofitable.

''Then you would get massive consolidation,'' Kocher, 31, said. ``The movie industry knows this storm is coming.''

Encryption specialists like Kocher are just one weapon the studios are marshaling to fend off pirates. They're also pushing consumer electronics companies to add security features to DVD recorders and personal computers, lobbying in Washington for stricter copyright laws and suing companies that violate a 1998 federal law that makes it a crime to circumvent antipiracy systems.

Suits against individuals who download movies may be next, said Jim Gianopulos, co-chairman of News Corp.'s Fox Filmed Entertainment. The Recording Industry Association of America, the record companies' lobbying group, took that step against music downloaders last year.

''When someone steals a movie that cost you $120 million, that's theft on a scale that's unimaginable,'' Gianopulos, 52, said. ``It's like stealing a hotel.''

But lining up against the studios are free-speech advocates, makers of consumer electronics, small businesses, entrepreneurs and some members of the U.S. Congress. They charge that Hollywood is trying to deny them an inalienable right: fair use, or the ability to duplicate copyrighted material for one's own consumption, like taping The Apprentice TV show to watch later.

The Supreme Court guaranteed that right in 1984 when it ruled that Sony could not be held liable for copyright infringement by selling its Betamax video recorder. Now the Digital Age has upended the fair-use concept. With such file-sharing software as Kazaa, distributing a song to the world is as easy as loading it onto your computer to enjoy it yourself. Stopping the first act often means stopping the second.

''It's a major gray area, and it's getting grayer every day,'' says Christopher Chaudoir, a lawyer at Pillsbury Winthrop in Los Angeles who specializes in copyright law.

TorrentBits.org typifies the stealth, ingenuity and speed of websites that traffic in feature films. According to the site, it's run by ''Redbeard'' on a computer server in the Netherlands. According to the Public Interest Registry, the domain name is owned by Ben Dover of Bencity, N.Y., which doesn't exist.

The site connects people who want a film with those who have it, dodging copyright issues that would come up if TorrentBits had its own copy. According to rankings on the website, four days after Warner Bros.' Troy -- starring Brad Pitt in a $175 million adaptation of Homer's The Iliad -- reached theaters, it was the most popular download on TorrentBits.
http://www.miami.com/mld/miamiherald...9086248.htm?1c


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Casinos Left Out In Peer-To-Peer Gambling On Web

Individuals set terms of their wagers
Matt Richtel

A new type of Web site is changing how gambling is conducted, just as the Internet has changed auctions, securities day trading and music sales.

Although Web casinos are not new, a new generation of online services such as Betfair.com, a booming Internet gambling operation based in London, have emerged to let sports bettors wager not against the house but directly against one another.

The services, by letting individuals set the terms of their own wager easily and efficiently, threaten to diminish the role of more traditional casinos, which set the odds of a contest and then assume the risk for paying a winning bet.

Peer-to-peer betting, which has been increasingly popular in Europe, Asia and Australia, is one of the fastest-growing online gambling enterprises, according to industry executives and analysts. Now, several entrepreneurs are introducing similar services to cater to Americans even though such wagering operations are prohibited by federal law.

This is a clearly growing phenomenon, and a cheaper way for players to bet, said Sebastian Sinclair, a gambling-industry analyst with Christiansen Capital Advisors.

He added that the new operations have become a forum in which astute gamblers can solicit hundreds of bets, effectively becoming semi-professional bookies.

The wise guys love it, Sinclair said, because all kinds of squares are out there to be taken advantage of.

John OMalia, a U.S. entrepreneur based in London, is hoping to win a share of that business. His latest venture is 1xInc.com, a company that plans to launch a peer-to-peer betting service July 21 in the United States and around the globe.

The service, called Betbug, is remarkably similar to file-sharing programs such as Kazaa and Morpheus, which let people exchange music and other media over the Internet.

People who download the Betbug software would be able to propose a wager then reach out to everyone else on the network to find a taker of the bet.

For instance, a bettor could offer to take the New York Yankees over the Boston Red Sox, then propose terms for the wager. Betbug would take a 5 percent fee from the winning amount. It would secure the money by making sure both parties had put enough money into an escrow account (in a Cyprus- based bank) when they agreed to the terms of the wager.
http://seattlepi.nwsource.com/busine...betting06.html


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Pirate My Film, Says Michael Moore
Kim Gilmour

Controversial filmmaker Michael Moore has said he's happy to let people share his latest film, Fahrenheit 9/11, across peer-to-peer networks.

The film, which is critical of President George Bush and his administration, won the Palme d'Or award at this year's Cannes Film Festival.

"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 trying to make a profit off my labour. I would oppose that," Moore told the Scottish Sunday Herald. "I do well enough already and I made this film because I want the world to change. The more people who see it the better, so I'm happy this is happening."

Although the movie is being shared by many Moore fans, even his detractors have posted the film for free download on sites including www.moorewatch.com. After initial hesitation, the film's distributor, Lions Gate, is appearing to leave the file-swapping activity alone.

"Is it wrong for someone who's bought a film on DVD to let a friend watch it for free? Of course it's not," Moore said. "I think information, art and ideas should be shared."

According to internet measurement firm Hitwise, in the UK visits to Michael Moore’s official website (www.michaelmoore.com) have increased by 148 per cent since 12 June.

The official film website (www.fahrenheit911.com) also saw an increase in visits of 343 per cent in the two weeks leading up to the film’s release in the US on 25 June.
http://www.webuser.co.uk/news/56254.html


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'Spider-Man' Gives the Summer One of Its Few Box Office Hits
Sharon Waxman

America flocked to the movies this holiday weekend as "Spider-Man 2," the sequel to the blockbuster movie of two summers ago, broke box office records by taking in $180 million in its first six days in theaters, a rare, bona fide hit in a summer filled with pricey "event" pictures.

Meanwhile the anti-Bush documentary "Fahrenheit 9/11" continued to draw huge audiences across the country, taking in $21 million over the four-day weekend for a total of $60 million so far.

"Spider-Man 2" is one of the few blockbuster hits of the summer so far, along with the DreamWorks film "Shrek 2," which has taken in a whopping $410 million. "Harry Potter and the Prisoner of Azkaban" from Warner Brothers has also been a hit, taking in $225 million.

But in a season packed with expensive, effects-laden films — including many costing upward of $150 million to make — there have been many that have not performed up to expectations. They include Universal's "Van Helsing," which has taken in just $118 million domestically so far, and Warner Brothers' "Troy," which has taken in $130 million.

High-price busts have included "The Chronicles of Riddick" from Universal, which has taken in just $54.5 million, and "Around the World in 80 Days," produced by Walden Media and released by Disney, which cost an estimated $120 million and has taken in just $21 million.

"Spider-Man 2," starring Tobey Maguire as the web-swinging title character, opened on Wednesday and immediately broke opening-day box-office records by taking in $40.5 million, beating the record held by "Spider-Man" of $39 million.

"Spider-Man 2" went on to break the record for the biggest six-day opening ever and seemed on track to hit the $200 million box-office mark by Wednesday, which would be another benchmark.

The previous record for a six-day opening was held by "The Matrix Reloaded," which took in $146.9 million in six days. "Spider-Man 2" is playing on a huge number of screens, 4,152, across the country.

Studio executives at Sony Pictures Entertainment, which made "Spider-Man 2," said their film was helped by unusually positive reviews and strong word of mouth. "I can't remember a movie at our studio that was this well reviewed," said Amy Pascal, chairwoman of the motion picture group at Sony. "When you add to it the way people talk about this movie, it was spectacular."

Ms. Pascal said that the theme of the movie, combined with strong performances and action sequences, seemed to resonate with audiences. "I think the movie is about the struggle to be good and how hard that struggle is," she said. "It's about how you choose to be good, and what a sacrifice that is. The villain and the hero are having the same struggle — it's very cohesive."

Avi Arad, a producer of "Spider-Man 2" who is also chief executive of Marvel Studios, said that the emotional content of the film was what made it such a satisfying experience and that this had been lacking in other summer movies.

"The lesson is, Don't be afraid of emotion," he said.

The other movies "are about things not like us," he said. "This movie is very unusual in that you have multiheroes, Peter Parker, Aunt May, to see Mary Jane finally being a woman we love. It's relatable. The hero is not Spider-Man, it's the guy inside."

Exit polls from theaters showed that the movie appealed only slightly more to men than to women and that 55 percent of the audience was under 25.

Despite the splashy opening of "Spider-Man 2," Michael Moore's documentary continued to play strongly, with attendance dropping just 12 percent from its record-breaking opening week.

Tom Ortenberg, president of Lions Gate Entertainment, which is distributing the Moore film, said: "We absorbed the blow of Spidey quite well. The picture is still playing well in big cities, small towns. The movie has a lot of fire left in its belly."

"Fahrenheit 9/11" seems to have become a cultural phenomenon in its own right, with Mr. Moore appearing on the covers of Time magazine and Entertainment Weekly.

Mr. Ortenberg said that he would be adding another 200 theaters this week to the run, now at 1,725 theaters, and that he believed the movie would stay in theaters all summer. Industry executives said they thought the movie could eventually reach a box-office total of $100 million.

Robert Redford's new movie, "The Clearing," also opened this weekend and took in $647,000 in 56 theaters. Fox Searchlight will be releasing the film on 500 screens in the next several weeks.
http://www.nytimes.com/2004/07/06/movies/06BOXO.html


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Copy Crime and Punishment

While bills to restore some of our fair-use rights languish in Congress, others that give copyright owners even more ammunition are on the fast track.
Anush Yegyazarian

Exercising fair-use rights over digital media keeps getting harder and harder, with silver linings few and far between in the thickening clouds.

Several months ago, I wrote about the copyright battles between entertainment studios and 321 Studios, maker of DVDXCopy (and other copying programs), and the fallout for consumers. Since then, game makers have stepped up their own attacks on 321 Studios, and the company has continued to lose ground, laying off a hefty number of employees. It may well shut its doors in the near future.

But whether or not you're a fan of 321 Studios, the fact remains that while U.S. courts and Congress have done a lot to help copyright owners defend their rights, they have done comparatively little to help users maintain theirs.

The Digital Media Consumers' Rights Act, H.R. 107, proposed in January 2003 by Representative Rick Boucher (D-Virginia), is one of the few bills that would help consumers get back their fair-use rights--which were practically if not explicitly erased by the Digital Millennium Copyright Act. But H.R. 107 has gone nowhere in the 18 months since its introduction. In late June, the bill was reintroduced and its Congressional backers have mustered more computer industry support. But with entertainment companies bitterly opposed, there's no guarantee it will get anywhere this time around.

Legislation and court rulings favorable to copyright holders, however, have not had that problem.

More Protection for Copyright Holders

Consider two pieces of legislation in the works: One has already passed in the Senate, less than three months after introduction; the other, which is far more troubling, has just been introduced. Both are championed by a bipartisan group of fairly powerful politicians led by Senate Judiciary committee leader Orrin Hatch (R-Utah) and the committee's ranking Democrat, Patrick Leahy (Vermont).

What would these bills do?

The first, the Protecting Intellectual Rights Against Theft and Expropriation Act of 2004 (S. 2237, affectionately known as the Pirate Act), would give the Justice Department the power to bring civil lawsuits--which have a lower burden of proof than criminal ones--against suspected copyright violators. And this would relieve poor little entertainment companies of the burden of paying their own legal costs: Taxpayers will do it for them.

The second bill, S. 2560, appears to target those who "intentionally induce" copyright violations by others--meaning unfiltered peer-to-peer networks, at the moment.

What the Heck Does "Intentionally Induce" Mean?

Primarily sponsored by Hatch, S. 2560 would let copyright owners sue those who indirectly, but intentionally, help cause or induce copyright violations.

Prosecuting those who intentionally induce a crime is an accepted legal concept. Legally speaking, to "induce" implies to essentially aid, encourage, or order someone to perform a criminal act by a variety of means, including coercion, enticement, trickery, and the like. Hatch would bring this legal concept into the realm of civil copyright law. His description of the bill likens it to making sure the courts are able to go after the P2P Fagins of the world, and not be limited to the Oliver Twists (i.e., P2P users) who are currently popular targets of Recording Industry Association of America lawsuits--more than 3000 filed to date, and counting.

Hatch and the bill's other sponsors claim that S. 2560, a comparatively short amendment to the copyright code, won't deter technical innovation, restrict copying technologies in general (copiers, VCRs, and the like), or affect fair-use rights.

Other observers, however, see it differently.

Nasty Consequences

Jessica Litman, a law professor at Michigan's Wayne State University, has specialized in copyright law and Internet law for more than 20 years; she is also the author of Digital Copyright: Protecting Intellectual Property on the Internet (2000, Prometheus Books, 800/421-0351). In Litman's view, the language in Hatch's bill is incredibly broad: Had it been in existence in the early 1980s, it might have killed off VCRs.

In 1984, the U.S. Supreme Court ruled that VCRs were legal because although they could lead to copyright violations, they also had other substantial uses (like time shifting) that did not infringe copyright law. Moreover, although Sony and other VCR makers knew that it was generally possible to use the devices to infringe copyright protections, that general knowledge alone wasn't enough to make VCR vendors themselves guilty of copyright violations. Nor could vendors be held liable for what consumers ultimately did with their products.

In the Sony VCR case, the Supreme Court also specifically stated that Sony did not act to intentionally induce copyright violations when it introduced the machines. Because of that, Hatch says his bill won't affect devices like VCRs or similar copying technologies.

But how do you actually define intentional inducement? Hatch's bill tries to be clear by using a lot of synonyms for "induce." It also helpfully says that intent can be determined by a reasonable person looking at the actions of and information available to the alleged infringer, including whether the supposed inducing activity (read: product) relies on copyright infringement for its "commercial viability."

Under this standard, would Sony's VCR have stood the test? What about DVD or CD burners? Or MP3 players--which certainly faced numerous court challenges when first introduced? How about photocopying machines, for that matter?

P2P: Plague or Progress?

Say we forget those thorny, more ambiguous issues and stick with the evil that is P2P. What kind of impact would this bill have had on P2P technology had it been law ten years ago? Some could argue (and I'd wager Hatch would be among them) that the technology would still exist, but it would exist with built-in filtering or other fingerprinting technology to prevent its use as a large-scale piracy tool. That's a legitimate possibility (pun intended).

I'm a little less optimistic. At the very least, I'm skeptical that P2P would have come to broad exposure in the late nineties. We might be hearing about it by now, maybe, if someone had bothered to keep it in mind while encryption and digital rights management technologies caught up. But would encryption and DRM have developed to the extent that they have without the P2P piracy problem to spur them on? Would digital media be as prevalent? Would legitimate services, like Apple ITunes, exist today?

I'm not saying that massive illegal activity is the best way--or even a good way--to spur progress, but P2P's impact has not only been negative. Even copyright holders can use the technology to make money, just like other technologies that arguably allow infringement. (Movie rentals, anyone?) Heck, there are legal music download services that use P2P technology.

Moreover, P2P networks and other digital technologies can and do warehouse lots of stuff that has never been or is no longer copyrighted: for example, public domain texts such as speeches given decades ago by the likes of Abraham Lincoln, older songs and artwork, and more. The technology has substantial uses that do not infringe copyright.

Hatch's new bill doesn't specifically address how to evaluate a technology that can help infringe copyright while still having other, substantial uses that don't. But in his remarks introducing the bill to the Senate, he says that existing laws dealing with secondary liability--such as intentionally inducing a copyright violation--do not make exceptions for substantial noncriminal uses. The implication seems to be that such legitimate uses should not be a consideration in copyright infringement cases either.

I'm not a lawyer, but it seems to me this reasoning would have made the Supreme Court's 1984 VCR ruling extremely unlikely.

Why Is This Bill Necessary?

Hatch's bill is a direct response to last year's ruling, by Los Angeles U.S. District Court Judge Stephen Wilson, on the P2P case involving Grokster and StreamCast Networks. It was the first time the entertainment industry--represented by songwriters, music labels, and movie studios--lost a major digital copyright violations case. That loss centered mostly around the issue of who (or what) exercises control over copyright violations taking place on P2P networks. From the text of the ruling, this point is important when establishing indirect or secondary infringement under existing copyright rules.

Wilson seems to have ruled the way he did for one primary reason: Unlike the old Napster, the P2P networks he looked at do not give P2P software vendors control over what users do with it.

This is where control versus intentional inducement enters the fray. The original Napster was held liable because its centralized, searchable databases allowed it to control what users were doing with the downloaded files, so it materially contributed to the copyright infringement activity as it happened. When it closed, so did its network for sharing copyrighted material.

P2P networks don't work that way. They're decentralized, linking individual users' computers, each of which hosts a selection of all available files. The P2P software vendors do nothing but offer software support or updates to the products.

However, there's little dispute that P2P networks make breaking copyright really easy. And Wilson certainly saw that ease as a primary reason why P2P software products had so many users (sounds like "commercially viable" to me). Do these two facts combined mean that P2P software vendors intentionally induce copyright violations? Hatch definitely thinks so and he wants to amend copyright law to say so.

By the way, Hatch's bill won't do much about any product that isn't distributed by an identifiable company or individual, as could be the case with some freeware programs or open-source programs. I guess we'll save that for another law.

Making Laws Work--For Who?

I'm sure the Pirate Act will save entertainment companies lots of money if it becomes law; I'm less sure what it will do to my tax bill next year. It doesn't seem to me that entertainment companies are hurting for legal recourse, or that the recourse they already have is failing to stop those they see as copyright violators, like the old Napster, vendors of copying programs like 321's, or individual users. But perhaps I'm missing something.

While adding to my yearly taxes, Congress continues to eagerly act on behalf of copyright holders, and it drags its heels when it comes to restoring the balance between copyright holders' rights and consumers' fair-use rights that the DMCA threw out of whack.

As I've said before, I believe that copyright holders should get paid for their work. And peer-to-peer networks, as they exist today and as they are billed to potential users, certainly contribute to widespread piracy and theft. I don't have a simple solution to that problem. But as written, Hatch's solution, though it appears to be simple and targeted on the surface, could curtail far more than even he intends.

In the Beginning

Our legislators need to remember that copyright laws exist because we want progress in both science and arts. According to Litman, we "bribe" creators into creating with exclusive (but not total) copyrights that let them profit from their creations and the distribution of those creations for a specific period of time.

That limit on copyright protection is in the Constitution because this progress benefits society as a whole--we, the people, as it were. The concept of fair use exists in copyright law because Congress did, once upon a time, acknowledge that copyright is not absolute: It has limitations, which directly contribute to the ultimate goal of benefit to the public.

That benefit may be manifest indirectly, by teachers having the right to reproduce works in part or discuss technologies in order to teach them; through free access to information and copyrighted works at libraries; or even (gasp) by allowing occasional copies for personal use of something you've already paid for, which helps you enjoy and appreciate it, and perhaps even be inspired by it.

The benefits of copyright law are easily grasped in its more direct expression: new music, movies, or other art for us to enjoy, which is what many of the proposed laws aim for, including Hatch's.

But it seems to me that any law that limits progress by protecting existing copyright holders at the potential expense of innovation (on the part of future copyright and patent holders) goes against the whole point of copyright.

We can do better, and we should.

http://www.pcworld.com/news/article/0,aid,116791,00.asp


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The iTunes Phenomenon, P2P Networks and Music Lite
Jon Newton

iTunes is a loss leader for iPod, and iPod is in turn a kind of nonloss leader for Apple products in general. The amazing marketing and PR skills of Steve Jobs and the people behind him ensure the mainstream media keeps on pumping Apple as though it's all there is.

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There was an interesting article in the New York Times over the weekend. Called "From a High-Tech System, Low-Fi Music," its focus was on compressed music files that are lossy by virtue of the fact that they've been compressed and, hence, are missing information.

So people who use iTunes for their iPods aren't getting value for money, the story suggests: "Customers are led to believe that they are getting a CD in all respects except the trouble of going to the mall. The iTunes store does not warn about the permanence of its method of compression; once freeze-dried, there is no way to reconstitute the music into CD quality for playing through a good stereo."

In other words, iTunes-cum-iPod users are paying way too much for far too little -- literally.

While this is correct, Apple is far from being the only villain in the piece. The same applies to the other corporate music sales sites.

Loss Leader for iPod

iTunes is a loss leader for iPod, and iPod is in turn a kind of nonloss leader for Apple products in general.

The amazing marketing and PR skills of Steve Jobs and the people behind him ensure the mainstream media keeps on pumping Apple as though it's all there is.

Big Music does the same for the corporate music sites, all offering identical mass-produced "product" manufactured and supplied directly or indirectly by the Big Five record labels in their many and various forms, and all sold for more or less the same prices.

This ensures there's no competition.

However, the vast majority of people who download compressed music tracks don't really care. They don't, after all, get their music goodies from plastic music sites such as iTunes. Nor do they use Apple hardware or software.

The vast majority of people getting their music in digital form get it for free by way of P2P networks.

Immaculate Quality or Music Lite?

What's more, whether they're among the scant few -- relatively speaking -- who cough up a buck per download from the corporate online music stores, or whether they're among the millions and millions who share music via the P2P networks, they're not looking for immaculate quality when they download.

Most people want shrink-wrapped tracks so they can hear music while they're skateboarding, biking, listening in their car or on boat or plane or train -- or whatever.

They don't want to be carrying stacks of CDs or DVDs around. In this kind of context. Music Lite is fine.

Although the music industry flatly refuses to admit it, when downloaders and file sharers find something they like, they go out and buy a CD holding the "full" version.

However, as the New York Times piece implies, forking out a dollar for a Big Music track is dumb, very dumb, and bit rates have nothing to do with it.

Music Industry Knows

A dollar -- or the UK, French, German or Spanish equivalents that are usually more than that -- is grossly excessive whether it's for the world's most perfect recording or a Kellogg MP3 that's full of snap, crackle and pop.

The music industry knows it, and could be turning the tide, fighting its pirate troubles and creating a happy user base with P2P as its distribution and marketing vehicle, selling "product" at reasonable prices.

Data transfer rates and storage capacities are moving increasingly toward mind-boggling sizes. Soon, there'll be no reason why high-fidelity downloads can't be achieved. Purists could then grab perfect recordings for 30 or 40 cents a go, say, while MP3 versions could go for 10 or 15 cents, perhaps.

And there are other models such as the Electronic Frontier Foundation's . But then the labels -- not to speak of the movie studios -- would be forced to compete head-on and up-front with the millions of independent artists and companies around the world.

And that'll never happen.
http://www.technewsworld.com/story/34986.html


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Music Downloading: Harmful Or Helpful?

New study could turn tables for music downloaders
Nikki Jenkins

We have all heard about the controversy surrounding music downloading. CD sales are declining and the music industry is pointing the finger at music-swapping software such as Napster. To back up its claim, the industry has funded research to investigate the effects of music downloading. One such study is that of the retail tracker SoundScan. According to CNET News.com, SoundScan's study examined sales at roughly 9,000 retail stores near more than 3,000 universities. The retail tracker found that record sales have dropped an average of 4 percent in the past two years. This study, and others like it have fueled the record industry's legal battle against file- sharing companies like Napster and MP3.

However, fans of file sharing may have a good reason to celebrate. Recently, several studies have challenged the record industry's accusations. Felix Oberholzer-Gee from Harvard Business School and Koleman Strumpf from the University of North Carolina did an independent study in 2002. The results were extremely surprising. According to their study, file sharing had no effect on the sale of popular CDs in the second half of 2002. Moreover, Oberholzer-Gee and Strumpf found that for the top 25 percent of albums, every 150 downloads increased sales by one copy.

Networks such as Napster have many supporters in the music world. In an interview with The Guardian, Wayne Rosso, chairman of P2P United, asserts that P2P networks actually act as a form of advertisement for artists.

"They're probably right. Downloading probably encourages people to buy music if they like the clips they hear," said Dr. Elliot Frank, a professor at ECU's School of Music and a musical artist.

Even some well-known artists like Dave Rowntree, drummer of Blur, question how researchers could know for certain if people spent less on CDs because they downloaded music. A perfect example would be ECU student Kenneth Taylor Jr., who says that if he didn't download music free, he would simply do without. "

CDs are overpriced," said Taylor. "

"Why would I pay $17 or more for 12 songs? Especially when I only want to listen to one?"

Jack Kirk, manager of Dr. Wax CD store, sides with cash-strapped students like Taylor, saying that the record industry is reaping the consequences of inflated CD prices.

Even economists say the drop in record sales could be interpreted in many ways. Evidence shows that college music store sales dropped even more in 1998 than in 1999 - a year before Napster was written and released. So there may be other reasons for the record industry's sales slump. For instance, competition with online music stores may be partially responsible.

In any case, it is clear that the debate over illegal music downloading is only getting started. While the record industry and file sharing companies battle it out in the courts, unfortunately, everyday consumers are caught in the middle.
http://www.theeastcarolinian.com/vne.../40eb18a218eb4


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Free Music Downloads To Cost
Jennifer Dudley

MUSIC fans will be able to legally download songs for free in future but computers, Internet access, blank CDs and MP3 players may cost more to compensate artists, a Brisbane music conference heard yesterday.

One of the executives behind Kazaa file-sharing software, Kevin Burmeister, told QMusic's Big Sound conference that peer-to-peer software was an unstoppable force and major record labels and file-sharing companies would be forced to co-exist.

Peer-to-peer software allows Internet users to swap song files, videos and software.

Mr Burmeister, the CEO of AltNet and Brilliant Digital Entertainment, said the major record labels would have to change the way they sold music in order to compete with peer-to-peer networks and, in the long run, both businesses were likely to remain healthy.

"Peer-to-peer networks will survive," he said.

"I think it will be a rocky road over a long period of time but I think users will still want free access to this content."

Mr Burmeister, whose home was raided as part of the music industry's ongoing lawsuit against Kazaa, said peer-to-peer networks would also evolve and would develop ways to reimburse artists for using their work.

He said consumers would end up paying for music indirectly, through the technology used to download songs.

"Ultimately we'll pay the artist back," he said.

But Music Industry Piracy Investigations manager Michael Speck said the music industry was "always going to be (based on) a model where people have to pay for a product".

He said the Internet would evolve into a place where "copyright can be adhered to" and artists and music labels could control the use of their products.

Mr Speck said music labels would sell more of their songs online but Australia's three major legitimate online music businesses were "struggling to make a go of Australia as a marketplace".

MIPI this year launched a court case against Kazaa owners Sharman Networks, Brilliant Digital Entertainment and LEF Interactive over alleged copyright breaches.

The case will be heard in the Australian Federal Court on November 29.
http://news.com.au/common/story_page...5E3102,00.html


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File Sharing Helping Or Hurting Sales?
Michael Ingram

The effect of file sharing debate continues with new independent research by the Canadian Recording Industry Association (CRIA).

The research carried out by POLLARA Inc. shows the damaging effect that file sharing has on the sale of CDs.

52 percent of music consumers in Canada who do not download had purchased music in the past month. This contrasts with active file sharers, of whom only 35 percent had purchased music in the month prior to the survey.

30 percent of respondents, who reported purchasing less music over the past 12 months, said they purchased less because of file sharing and the availability of CD burning hardware. The responses were not prompted.

Brian Robertson, president of the CRIA, is quick to dismiss other research, commenting, “This negates arguments to the contrary that peer-to-peer activity is just sampling and those people go out and buy the music later from a legitimate source."

The research was less sophisticated than research in the USA by the universities of Harvard and California. The joint research by the universities, which used complex mathematical models of sales, the economy and file sharing activity, found that the effect of file sharing is “statistically indistinguishable from zero.”

In comparison, the latest research by POLLARA was based on a phone poll of music consumers and file sharers over twelve years old. A total sample of 1,200 was used. Full details of the research have not been made available for independent analysis.
http://www.slyck.com/news.php?story=522


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File Sharing And The Law
Ren Bucholz

Are the Feds seriously coming for your iPod? Get the facts on the Inducing Infringements of Copyright Act, which would make illegal any technology that might allow someone to share copyrighted material without permission. Ren Bucholz of the Electronic Frontier Foundation has the details on what's under consideration, and what the consequences could be iPods, TiVos and more.

Electronic Frontier Foundation

USA TODAY coverage: Inducing Infringements of Copyrights Act

Comment from USATODAY.com Host: Welcome, everyone, to our chat with the Electronic Frontier Foundation's Ren Bucholz. Ren's on board to day to discuss the Inducing Infringements of Copyright Act, which has drawn a lot of attention from everyone from music fans to the American Library Association. Hello Ren; please tell us what this bill's about and why so many folk are up in arms.

Comment from Ren Bucholz: Welcome, everyone, to our chat with the Electronic Frontier Foundation's Ren Bucholz. Ren's on board to day to discuss the Inducing Infringements of Copyright Act, which has drawn a lot of attention from everyone from music fans to the American Library Association. Hello Ren; please tell us what this bill's about and why so many folk are up in arms.

The Induce act creates a new way for copyright holders to go after companies that make products or services that could be used to commit copyright infringement. The example that we've been talking about a lot is the use of popular products like the Apple iPod. In that case, you've got a hard drive that's capable of holding 10,000 songs, and no one believes that all those came from the iTunes music store. (Apple's Rip-Mix-Burn campaign would seem to encourage what record companies would consider infringement as well.) Of course, this isn't just about music or the iPOd. It's about any company that makes a product or service that allows people to use material in a variety of ways -- your TiVo, your VCR, your weblog -- these are all technical tools that allow you to manipulate things that may or may not be copyrighted. Under the Induce act, all those companies would have to wonder whether they might be sued by a copyright holder for providing those tools.

Los Angeles, CA: Thanks for taking our questions Ren. Where is this act originally coming from? I know the music industry is screaming loss of revenue right now, but I remember when similar arguements where tossed around when the VCR and audio tapes became popular and affordable. The TV, cable, radio industries started trying to regulate that usage but failed and I think time has proven that the public having copies of entertainment won't ruin the business. How much support does this bill have and what is the possibility of these laws passing?

Ren Bucholz: To this day, Jack Valenti -- God bless him -- swears the VCR took money out of the movie studios' pockets. He said this in Congressional testimony; If the movie industry had been allowed to control the technology, they would've made more money. The lesson they've learned is that they feel they need to lobby harder, and consequently there's now a much shorter gap betwen when a technology is introduced and when a copyright holder feels the need to go to Congress for protection. The Induce act is brought to you by Utah senator Orrin Hatch and Vermont senator John Doolittle; if you follow tech and copyright issues you may remember that last year Hatch idly mused over whether they could find a way to make peer-to-peer users' computers explode if they kept it up. As for Doolittle, his campaign received the largest dollar amount of donations from the TV and entertainment industry last campaign.

Comment from Ren Bucholz: To continue -- while I wish that all the senators were as sane and schooled in history as the questioner! It seems there's a lot of support for this; it's also sponsored by Bill Frist and Tom Daschle (the Senate majority leader). And the bill has been fast-tracked, which means that it's not currently scheduled for a public hearing.

Charlottesville VA: Myself & several family members have written our VA senators. is there any way Sen Hatch can be forced to hold hearings on this bill before it goes to senate floor for a vote

Ren Bucholz: This is an interesting question. (I got the flip side to this the other day -- someone from Utah asked what to do about Hatch, who's their senator! A lot of his constituents are looking at issues other than the tech or copyright stuff.) While it may be difficult for voters in Virginia to do anything about Hatch specifically, the good news is that any member of the Senate Judiciary Committee can stall this, can keep it from being fast-tracked. So anyone in one of the states represented that can effect important change on this issue by contacting their senator. (Those states are: Vermont, Massachusetts, Delaware, Wisconsin, California, New York, Idaho, South Carolina, Alabama, Ohio, Arizona, Pennsylvania and Iowa.)

Notre Dame, IN: Do you think Universities, the managers of campus networks where copyright infringement may happen, could be held liable for that activity under this bill?

Ren Bucholz: The thing about Induce is that you knowingly have to encourage or aid or abet the infringement -- there's a knowledge requirement. Under the Induce Act there'd be a much stronger case for the recording industry "encouraging" universities to install systems to track infringements. So yes, this Act could influence university policies.

While the prospect of losing one of these lawsuits is terrifying for any company -- it could bankrupt Apple, for instance -- even the prospect of defending a suit could cost over $1M. The goal is not, for these companies, to make a product that wins an appeal in the Supreme Court; the goal is to bring forth products and services that don't even raise eyebrows. So in the case of universities, I suspect this Act would give copyright holders more ammunition to force administrators into installing technical systems designed to target copyright infringement. We have serious reservations about the efficacy of those tactics, but that's another Q&A.

Shawnee,KS: What do YOU think the likelihood is that the general public will start to see how anti-technology the RIAA/MPAA has been, and how it's hurting their consumers. Do you think we'll ever see this type of story on a nightly news program?

Ren Bucholz: I think that the copyright holders have until now gotten away with a lot of these fights because they have targeted technologies that don't have broad user bases. The classic example is the VCR, where there were machines and video on store shelves, and people knew how cool these were; by the time the cases got to the Supreme Court people would stand up and stay they used these technologies and they weren't criminals. I think that now we live in a world where people have the "tools of copyright infringement" at their fingertips every instant of their waking life; That's a computer's purpose, after all, copying bits and bytes. And copyright holders are very uncomfortable with this. So there's a convergence going on; people are using these tools, and copyright holders are ramping up their efforts to control them, and these trends are meeting in a very public place -- the marketplace, Best Buy or what have you, rather than a private meeting room. And conmsumers are saying -- hey, I know what an iPod is, and I know what a pirate is, and I don't thing using one makes you the other. And I've seen a huge increase in the amount of coverage of this in the past few years. And I'm heartened by that.

Phoenix, AZ: I borrow copies of albums from the library and listen to them. Why shouldn't the industry shut that practice down, too?

Ren Bucholz: You can check albums, movies and so forth out of the library because libraries have an exemption to the copyright law. Likewise, you can sell and own VCRs right now because the Supreme Court clarified that aspect of copyright law years ago.

Hatch is suggesting that the Induce Act is a small change that won't affect copyright law. They even mentioned in a public statement that if the court has had the Induce Act in law when they ruled on the Betamax decision, as it's known, they would have ruled the same way. This is totally disingenuous. He's right in that it wouldn't have affected Betamax, at least the way it was argued at the time, but what he doesn't tell you is that Induce creates an entirely different cause of action -- an entirely new way for copyright owners to go after people.

For libraries, absent an exemption in the law, this creates an entirely new complication they'd have to worry about. So the short answer to your question is that it's possible the industry would like to do that, even though libraries are kind of a sacred cow in this culture. It's the same sentiment that causes publishers to attack used bookstores.

Houston, TX: What will happen should the RIAA win the suit against the many "john/jane doe" ISP people who download music? Most of these people are teenagers or young adults, too young to pay anything for downloading free music. Will their parents be held liable for damages?

Ren Bucholz: Indeed, their parents would be responsible. But the calculus here is really simple -- RIAA litigation targets can get out from under for about $10K, or they can take it to court and risk everything. The people who can afford it get out from under. To the extent that we worry about these suits, I think their biggest effect is that they've put a human face on "piracy," and that increases the pressure on the industry to find a real solution for those who wish to download, rather than just creating more litigation targets. If you look at the amount of traffic on the networks, this effort hasn't been an RIAA success by any measure. (If someone phoned you claiming to be calling from a polling organization and asked you if you download, how honestly would you answer?)

Comment from Ren Bucholz: We've run out of time though not questions - - I think it's great to see such strong public reaction to laws and bills that wouldn't have gotten on the radar just a few years ago. I hope this serves as a warning to the next legislator who decides they want to carry water for the entertainment industry at the expense of the public -- particularly if it appears that would cause as much harm as the Induce Act looks to.

Comment from USATODAY.com Host: Thanks so much to Ren Bucholz and everyone who participated today -- have a great afternoon!
http://cgi1.usatoday.com/mchat/20040707006/tscript.htm


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Wrong before

World Software Piracy Losses Could Be $29 Billion, Shouts Industry PR

The global trade in pirated software, from versions of Microsoft Windows XP to Adobe Acrobat, hit nearly $29 billion in 2003, an industry trade body said in its annual survey on Wednesday.

That value amounted to about 60 percent of all legal global desktop software sales of $51 billion, said the Business Software Alliance (BSA).

Since the Internet boom, software firms and media conglomerates have seen a rapid increase in piracy as online file- sharing networks and "warez" trading sites make it easier to exchange all manner of copyrighted material.

"Peer-to-peer file-sharing services are becoming a huge problem for us," said Jeffrey Hardee, BSA's Asia-Pacific director.

The BSA has spent large sums to prevent users of business and consumer software from installing unlicensed software duplicates from operating systems to design programs. It has also worked with police to crack down on groups that traffic in pirated software.

In April, law enforcers in Britain, Germany and the United States dismantled a series of pirated software distributors and seized $50 million in illegal software.

The uncertain science of measuring piracy

While few dispute that the piracy problem is growing worse, the BSA said its piracy tally in previous years may have been slightly inflated.

The BSA came under some criticism for its previous tallies because it couldn't clearly spell out how much of a fall-off in sales was the result of piracy and how much was due to the availability of legitimate alternative products, such as open source software commonly called "shareware."

It changed its methodology and its research firm in the past year, opting this year to look at what pieces of software are on the typical computer user's machine to determine a piracy figure, rather than devise a figure based on computer shipments and past buying trends.

The BSA's new research firm, IDC, estimates the 2003 global piracy rate was 36 percent, roughly 2 percent above the BSA's revised 2002 figure. The BSA's previously reported global piracy rate in 2002 was 39 percent.

While the piracy rate may have been inflated, the monetary value of previous tallies was artificially low, because they failed to account for the number of pirated operating systems and PC games in circulation, IDC found.

In dollar terms, the losses were greatest in Western Europe, where an estimated $9.6 billion of pirated software was installed on machines, followed by Asia and North America.

Vietnam and China were singled out as the piracy capitals, accounting for 92 percent of all computer software installed. Ukraine, Indonesia and Russia again ranked in the top 10, the BSA said.

The BSA counts major tech firms including Microsoft, Apple Computer and Intel among its members.
http://edition.cnn.com/2004/TECH/biz...e.piracy.reut/


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Senator Hatch Is At It Again
From Tony Bradley

History of RIAA Legal Controversy

Senator Orrin G. Hatch a Republican representing the Recording Industry Association of America (RIAA)...I mean the state of Utah has introduced yet another bill that aims to provide the RIAA and MPAA with draconian legal power to act against technology.

I don't have the investigative experience or resources of a Michael Moore or Greg Palast or I would start doing some digging, but it seems to me that Hatch must be making more money from the RIAA and the MPAA than he does from the Utah taxpayers. He certainly seems to take alleged RIAA violations very "personally" and has battled repeatedly to implement sweeping legislation to censor certain technologies. Maybe he has a brother-in-law that is CEO of Sony or something.

I guess Senator Hatch didn't get around to reading my comments in the article Counter-Hacking: The Sequel in which I said "Senator Hatch can do us all a favor by focusing on what matters to this country and his constituents rather than what gets him the biggest donations from the RIAA and MPAA for his next presidential bid. He would also be doing himself and the country a huge favor if he would actually consult some information security and technology experts before making public statements like the one that sparked this little controversy."

The statement being referred to was Senator Hatch's comment during a June 2003 Senate Judiciary Committee hearing on copyright abuse that "If we can find some way to do this without destroying their machines, we'd be interested in hearing about that. If that's the only way, then I'm all for destroying their machines. If you have a few hundred thousand of those, I think people would realize" just how serious the government is about protecting copyright.

To begin with, lets take a little look at the history of this battle and past attempts at legislation. While whining and moaning that illegal file sharing is costing them millions of dollars, the RIAA lost a price-fixing case. Actually, the term "lost" is used loosely in this case. It is sort of like when the NFL (National Football League) "lost" the antitrust trial brought against them by the USFL (United States Football League) but were only penalized $1 in damages (no I didn't forget the word "million" or "billion"- they were literally forced to pay one dollar).

The attorneys general of 43 states and territories as well as 3.5 million consumers brought the case against the RIAA for collusion and price fixing to maintain artificially high prices for compact discs. Although an FTC estimate put the loss to consumers at over $480 million (a conservative number by my estimates), the industry was ordered to pay a paltry $143 million in damages and restitution. I personally had nearly 500 compact discs at the time of the suit and would have accounted for thousands of dollars of the overpaid money resulting from the price fixing, but as a result of the settlement I was entitled to receive all of about $12 in damages. Woo hoo! Sure glad I "won" that case.

RIAA Takes On Napster and The P2P Networks

When Napster sprung up and the concept of users forming a peer-to-peer network exploded, the RIAA was quick to blame the illegal downloading of music for a decline in sales. They failed to take into account the fact that their own price-fixing had alienated much of the customer-base or the fact that the entire economy was in a slump making music CD's a low priority for many people when compared with rent or groceries or that consumers might be tired of spending $18 for one good song and a bunch of second-rate filler from their mega-bubble gum pop album du jour. In March of 2004 Felix Oberholzer of the Harvard Business School and Koleman Strumpf of the University of North Carolina - Chapel Hill wrote The Effect of File Sharing on Record Sales which concluded "If we are correct in arguing that downloading has little effect on the production of music, then file sharing probably increases aggregate welfare. Shifts from sales to downloads are simply transfers between firms and consumers. And while we have argued that file sharing imposes little dynamic cost in terms of future production, it has considerably increased the consumption of recorded music. File sharing lowers the price and allows an apparently large pool of individuals to enjoy music. The sheer magnitude of this activity, the billions of tracks which are downloaded each year, suggests the added social welfare from file sharing is likely to be quite high."

Nevertheless, the music industry not only insisted on ignoring the tremendous marketing value of P2P file sharing and blaming P2P networks for a decline in sales but, as if their "plight" is somehow linked to national security or anti-terrorism, they even went so far as to lobby for exemptions from hacking and computer security laws to be secretly bundled with the PATRIOT Act to allow them to hack systems suspected of P2P file sharing or even initiate denial-of-service attacks against P2P network providers.

When word of that lobbying effort leaked the public backlash forced such measures to be withdrawn, but it didn't stop the lobbying efforts of the RIAA and MPAA from looking for other "creative" ways to deter file sharing. In June of 2003 Representatives Howard Berman (D-CA) and Howard Coble (R-NC) proposed a bill that would exempt copyright holders from anti-hacking laws and shield them from litigation that might result from damage incurred during such hacking and allow them to execute hacking attacks against computer systems as long as they have a "reasonable basis" to believe that piracy is taking place.

Jessica Litman, a Wayne State University professor and specialist in copyright law stated in a CNet.com article "I think it's wildly overreaching...copyright owners are in essence asking Congress to say that peer-to-peer file trading is such a scourge, is so bad, that stopping it is more important than enforcing any other laws that federal or state governments may have passed on computer security, privacy, fraud and so forth."

This was followed with the Hatch statement quoted earlier regarding the legality of allowing copyright holders to damage computer systems and by the RIAA beginning a rampage of using provisions of the DMCA (Digital Millenium Copyright Act) to compel internet service providers (ISP's) to identify the users associated with IP addresses known to traffic illegal music files and the filing of hundreds of lawsuits against individuals. These lawsuits have been hailed as a success by the RIAA while bringing outrage from many for targeting children like the case of Brianna Lahara, a 12-year old honor student living in a New York Housing Authority apartment who settled for $2,000 last September (the fine was paid for her by a P2P industry group). Shortly after this during a Senate Judiciary committee hearing Senator Dick Durbin (D-IL) asked the RIAA President Cary Sherman “Are you headed to junior high schools to round up the usual suspects?”

Not wanting to be left out of all the fun, the RIAA's motion picture cousin the MPAA (Motion Picture Association of America) was also exerting their lobbying muscle to push legislation. They are credited with authoring the template that has been used in many states to create what have been dubbed Super-DMCA laws. These state-level laws seek to augment and expand upon the federal DMCA law, but the wording of some parts of the legislation is very broad and seemingly makes many computer network and security technologies illegal (see Are You Breaking The Law?).

Inducement Devolves into Unlawful Child Exploitation Act

I am sure I am missing other proposed bills and attempts at lobbying and legislation in my timeline, but you get the idea. Fast forward now to June of 2004 and we have Senator Orrin Hatch proposing a new bill- the INDUCE (Inducement Devolves into Unlawful Child Exploitation) Act. Basically, past efforts at shutting down P2P networks have been difficult in the face of the precedent-setting 1984 Supreme Court decision in the case of Sony vs. Universal Studios. That decision in essence stated that VCR's were legal because although they had a potential for copyright-infringing uses, their primary use is not copyright-infringing. The bottom line is that the makers of VCR's are not liable for the illegal actions of some VCR users. Similarly, P2P networks are not responsible for the illegal actions of some users who may traffic illegal files on the network.

The INDUCE Act seeks to change that by making it punishable to "intentionally induce any violation" of copyright law. Any person or entity found to aid, abet, induce, counsel or procure a violation of copyright law could be faced with very stiff civil penalties and / or lengthy jail sentences. If passed, this act would effectively override the Supreme Court precedent. I am not sure how you prove that the inducement is "intentional".

In a more recent CNet.com article about the INDUCE Act Jessica Litman said that "under the Induce Act, products like ReplayTV, peer-to-peer networks and even the humble VCR could be outlawed because they can potentially be used to infringe copyrights. Web sites such as Tucows that host peer-to-peer clients like the Morpheus software are also at risk for "inducing" infringement."

All of this legal wrangling also ignores the fact that the RIAA is already being compensated for illegal song sharing. After complaining to Congress that CD recording technology would allow users to copy music CD's a royalty was introduced that pays a surcharge to the industry for each recording device and blank media sold. They actually make money when you copy the music.

In the case of Sony, one of the Big 5 companies that make up the RIAA, they are in a particular catch 22. Within Sony there are divisions that produce and distribute both motion pictures and music. They participate in the RIAA and MPAA and rally to fight the illegal downloading and sharing of works that they own the copyright to. However, Sony also has divisions which manufacture CD and DVD recording equipment and blank CD and DVD media. They make equipment like the Network Walkman which is sold for the sheer intent and purpose of playing MP3 files transferred from the Internet or a computer network. They market such products on their ability to "rip" (copy or convert from one format to another) songs faster than competing products. They are providing the very weapons they are trying to fight against.

The Link Between MP3's, P2P and Child Pornography

Losing the public relations battle, the RIAA shamefully resorted to making the battle against P2P networks about child pornography rather than their own profit margins. According to a CNet.com article RIAA President Carey Sherman "cautioned the U.S. Senate that Kazaa could be a tool for adults to lure children into having sex." Carey is credited with saying a pedophile could send "an instant message to the unwitting young person who downloads an Olsen twins or Pokemon file from the pedophile's share folder on Kazaa."

Taking this cue, Hatch has chosen to incorporate the battle against child pornography in his bill to expand the scope and power of the RIAA and MPAA ability to fight P2P file sharing networks. Politically, linking the two issues makes it more difficult for elected officials to vote against the bill. No senator or representative wants to be on record as the person who voted against fighting child pornography.

In the end though, maybe this concept isn't all bad. I mean, rather than waging a war to squash the INDUCE bill maybe we need to expand it to include other "inducers". We can add in clauses to allow people or entities to go after gun manufacturers (inducing homicide), alcohol producers (inducing homicide through DUI), oil companies (inducing poverty and damage to the environment), fast food restaurants (inducing obesity), cigarette companies (inducing both suicide and homicide) and more. Of course, I realize that some have actually already tried suing some of these companies on these or similar grounds, but why not give them a clear cut law to use?

The Carlyle Group might be a good target too. They induce war by virtue of making the weapons and instruments to wage war. The recent conflict has resulted in the death of just under 1,000 American soldiers and 10,000 Iraqi civilians. I would say that the Carlyle Group is just as guilty of those deaths as Kazaa is for the illegal downloading of Britney Spears latest hit.

If you are as appalled by the implications of this proposed bill as I am (especially by linking the obviously biased effort to fight the RIAA's battles with the issue of child pornography) take the time to write or call your Senator or Representative and let them know.

If you live in the state of Utah make sure you take a close look at Hatch's positions on the various issues as well as his actual voting record and really think about whether you want this person representing your state again when his term expires in 2006.

UPDATE: Senator Hatch and his compatriot Senator Leahy must have been inundated with criticism about trying to link their RIAA fight to child pornography. They dropped the acronym for INDUCE (Inducement Devolves into Unlawful Child Exploitation Act) and changed the name of the bill to simply IICA (Inducing Infringement of Copyrights Act). Regardless of the bill's name the wording is still too broad and overreaching even if you agree with the intended goal of holding P2P networks liable for the illegal actions of their users.

Another side note is that this seems to be yet another area where there is already legislation on the books that makes the action of inducing copyright infringement illegal (Patent Law Statute 35 U.S.C. s. 271(b)), but whether to provide a more targeted tool for the RIAA and MPAA to use against P2P networks or simply to get their names on the front page and appear productive these distinguished gentleman have chosen to create a separate bill proposing a new law stating essentially the same thing.
http://netsecurity.about.com/od/secu...a/aa062904.htm

















Until next week,

- js.














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