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Old 04-12-03, 08:01 PM   #1
JackSpratts
 
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Join Date: May 2001
Location: New England
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Default Peer-To-Peer News - The Week In Review – December 6th, '03

Quotes of the week: “Right now, we're in a battle where those with the most social and political power benefit at the expense of the rest of us. This means large corporations having free rein over information transfer where it benefits them, while they legally restrain its transfer where they sense a loss.” - Andy Oram, editor: Peer-to-Peer: Harnessing the Power of Disruptive Technologies

"The hardest thing with my movies is getting people to see them…. [It's] not that people would want to steal them.” – Film producer Ted Hope.





Skype – The Voice Of File Sharers?

Could be. The press for Skype is generally positive but user reviews are sparse. However after seeing the AP piece and review while putting together this issue (below, along with another Skype article and an interview with company founder Niklas Zennstrom) I started wondering why I’m not using it, and immediately thought it could be the perfect thing for high bandwidth heavy users. Created by one of our very own P2P-Zone members it’s an ad free and spyware free giveaway. I haven’t given the beta a ring but they say it’s an easy set-up and an ease to operate. Interestingly, when it’s working the one big drawback is it’s biggest strength, especially for stealthy P2P’ers: it doesn’t connect to phone lines, it only calls other Skype users using decentralized peer-to-peer, and that means no having to hand out home phone numbers or other personal info bits. It also means all calls throughout the world are free.

I’m going to load it soon. Don’t know why I’ve been waiting so long. Probably because it doesn’t connect to telephones. But for WiR readers and keen peer-to-peer enthusiasts that may just make it the perfect comm tool.

Stealthy, global, decentralized, encrypted and free. Sounds perfect -

I’ll call you.

Seriously.











Enjoy,

Jack.









MP3.com Archive Is Destroyed Under New Owner C|net
Andrew Orlowski

Michael Robertson's attempts to save the million-song music archive of the company he founded, MP3.com, appear to have been unsuccessful. The MP3.com domain was bought by CNET, and Vivendi Universal had warned that the plug would be pulled.

"I had no luck in buying the content, paying for the content to be backed up or facilitating a relationship with Archive.org," Robertson told us today in email. Robertson had met with Vivendi, and as we reported, Archive.org's Brewster Kahle was only too happy to host the content.

The archive represents the work of 250,000 artists. Archive.org had ample bandwidth and storage to host the files, Kahle told us ten days ago.

Primetones, a Houston based music delivery company and Indie site Talentmatch.com had also offered to host the music.

"We're about to lose a museum filled with digital antiquities that are every bit as meaningful as their physical counterparts filling today's museums," Robertson had said.

CNET had yet to report on the destruction of the archive. We assume technical difficulties…
http://theregister.co.uk/content/6/34306.html


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Group Seeks Political Power For P2P
John Borland

A new nonprofit organization aimed at welding file-swapping and open-source computing advocates into a political force is launching online this week.

Dubbed "Click The Vote," an allusion to the successful Rock the Vote efforts focused at the MTV generation, the group hopes to make digital copyright and computing matters an issue in the 2004 election campaigns.

While not yet backing specific policies, the group's early statements include support for legalizing music sharing along with a mechanism for paying artists, and support of "open computing" as opposed to the "trusted computing" initiatives supported by Microsoft and others. These technology issues should be viewed as policy issues in a modern, digital world, the group says.

"Openness and free speech is what has made this democracy thrive," said organizer John Parres, a onetime advisor to Hollywood power broker Michael Ovitz and co-founder of the influential Pho digital music e-mail discussion group. "We're concerned that things are going in the wrong direction, that we're heading towards closed computing, encrypting speech, and those things are not conducive to a thriving democracy."

The group hopes to tap into the momentum several online organizing efforts have gained this year, including the early stages of presidential candidate Howard Dean's campaign, and the fundraising efforts of the political action committee MoveOn.

It's targeted at the technologically savvy audience of file swappers and open-source programmers--a demographic perhaps best represented by the extraordinarily active Slashdot technology news site community. That is a vocal group in online circles, but it has not yet been felt as a powerful political force.

This isn't the first attempt to turn the widespread dissatisfaction with digital copyright law--along with campaigns such as the Recording Industry Association of America's lawsuits against file swappers--into political action.

In the declining days of the original Napster, the company beseeched its users to write their legislators and sing the virtues of file trading. The campaign did raise some awareness of the issue in Washington, D.C., but that did not save the company from crippling legal rulings and bankruptcy.

More recently, Kazaa parent Sharman Networks spent $1 million last month on a print advertisement campaign, touting its own organizing Web site.

Click The Vote is starting without corporate backers and will rely largely on donations for funding, Parres said. But the group is looking to focus on exerting influence through galvanizing voters rather than through political contributions.

"I think there is a pool of energy out there that we're going to harden and focus and bring to bear on these issues," Parres said. "What needs to happen to push this thing forward is for people to start communicating in a coherent voice with their legislators."
http://news.com.com/2100-1028-5112886.html


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IP Justice Media Release

Jon Johansen Retrial Begins in Oslo Appeals Court

“DVD Jon” Publishes New iTunes Fair Use Computer Program

(Oslo) Norwegian Jon Johansen today faces the retrial of his acquittal for reverse-engineering DVD technology and creating DeCSS in 1999. DeCSS is computer software that Johansen and others wrote in an effort to build an independent DVD player for the Linux operating system. The publication of DeCSS onto the Internet spurred lawsuits against hundreds of web publishers living all over the world for its re- publication.

In January 2003, a three-judge panel in Oslo rejected charges brought by the Norwegian Economic Crime Unit (OKOKRIM) against Johansen for accessing his DVD movies using an independently created DVD player. OKOKRIM appealed the loss and Johansen’s retrial is scheduled to begin on December 2, 2003 in Oslo and end December 11, 2003. Since Johansen’s case is one of first impression, it is not unusual for the case to be retried on an appeal in Norway.

The court also rejected Hollywood’s claim that it has the right to control the way in which an individual views a DVD after purchase. “The court finds that someone who buys a DVD film that has been legally produced has legal access to the film,” the January 2003 ruling said.

The charges OKOKRIM filed against Johansen were brought under the Norwegian criminal code section 145.2, which outlaws bypassing technological restrictions to access data that one is not entitled to access. Johansen's prosecution is the first time that this law has been used to prosecute a person for accessing his own property. This data theft law has been used in the past only to prosecute those who illegally access another's bank or phone records or data that they have no lawful right to access. The penalty for violating this law is two years in prison. The Motion Picture Association filed the original complaint with OKOKRIM calling for Johansen’s prosecution in 2000, when he was 15-years old.

“If Johansen's acquittal is over-turned on appeal, it will become illegal for Norwegians to bypass DVD region code restrictions or technical restrictions that prevent fast-forwarding over advertisements, or otherwise circumvent digital controls on their own property,” said IP Justice Executive Director Robin Gross.

As a member of the European Economic Association, Norway is currently considering legislation to implement the European Union Copyright Directive (EUCD), although the Norwegian draft would permit consumer circumvention for playback.

Johansen is represented on appeal by Oslo attorney Halvor Manshaus, who earned Johansen’s acquittal in January. “I am confident with regards to the final outcome of this case - the facts have not changed, and the legal principles stand even stronger as consumers understand the restrictive nature of the CSS license scheme,” said Manshaus. “Two expert judges from the commercial and the academic arenas have been called in to assist the court, all together consisting of seven judges,” added the attorney with Oslo firm Advokatfirmaet Schjřdt AS.

In November 2003, Johansen published a new computer program called “QTFairUse” that allows consumers to make digital fair use of their Apple iTunes music collections by legally opening a music file and then saving it as an unrestricted file. QTFairUse is only foundational software since it leaves the music file in an unplayable format and needs additional software to actually play the music. But QTFairUse is published under an Open Source license enabling others to freely build upon it and incorporate the code into new applications and devices.
http://www.ipjustice.org/media_releases/120103jj.html


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RIAA Wins Round In File-Swapping Suit
John Borland

A San Francisco federal judge last week moved the venue for SBC Communications' lawsuit against the recording industry's file-swapping legal strategy, a potentially significant victory for record labels.

The decision, which was released late last Wednesday, transfers a closely watched legal battle over the Recording Industry Association of America's (RIAA) dragnet for online music traders to courts in the nation's capital, where the industry group has already had success.

"We are pleased with the California court's decision to transfer the suit filed by SBC to the District of Columbia," RIAA President Cary Sherman said in a statement. "Since the DC court has already addressed most of the challenges raised by SBC and resolved them in RIAA's favor, we believe that the decision to transfer the case throws a significant monkey wrench into SBC's case."

SBC sued the RIAA in California courts at the end of July. It contended that the record industry's subpoenas for information on subscribers to Internet service providers were unconstitutional. The RIAA has used the subpoenas it issued to most major Net service providers to identify file traders who allegedly shared copyrighted songs online and has sued more then 300 people for copyright infringement.

The telecommunications company's suit echoes a previous legal tussle between Verizon Communications and the RIAA. Like SBC, Verizon had claimed that the RIAA subpoenas were invalid, since they were not issued in the course of an ongoing lawsuit. In that suit, the Washington, D.C., federal court decided that the RIAA's subpoenas were legal under the Digital Millennium Copyright Act.

SBC says it is considering an appeal of Judge Susan Illston's ruling but noted that her decision did not affect the merits of their challenge.

"This ruling is procedural in nature and does not address the substantive issues we are raising about the recording industry’s continued misapplication of DMCA subpoena power," the company said in a statement. "SBC companies will continue to stand firm and continue our legal action in order to protect the privacy rights of our customers."

Illston also dismissed SBC's related claims against MediaSentry, a company that scans file-trading networks such as Kazaa for copyright violations and contacts ISPs on behalf of copyright owners, and Titan Media, an adult content provider that also sought identities of SBC Internet subscribers.

Illston said neither company actually had a subpoena-based legal conflict with SBC; its lawsuit against the companies was not warranted. MediaSentry had never issued a subpoena for the ISP's information, and Titan withdrew the only one it had sought, after SBC opposed it.
http://news.com.com/2100-1027-5112408.html


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'Master' and 'Slave' Electronic Labels Raise Concern in L.A.

A county official has asked computer and video equipment vendors to consider eliminating the terms "master" and "slave" from equipment because they may be considered offensive.

"Based on the cultural diversity and sensitivity of Los Angeles County, this is not an acceptable identification label," according to an e-mail sent to vendors on Nov. 18. The memo asks manufacturers, suppliers and contractors to change or remove any labels on components "that could be interpreted as discriminatory or offensive in nature."

The county's 39 departments also were told to identify equipment with offensive labels.

"We got a note back from IBM saying thank you for bringing this to our attention and we'll take a look at this," said Joe Sandoval, who wrote the memo. Sandoval is division manager of purchasing and contract services for the county's Internal Services Department (search).

The term "master" and "slave" -- when applied to electronic equipment -- describes one device controlling another.

In May, a black employee of the Probation Department filed a discrimination complaint with the county Office of Affirmative Action Compliance after noticing the words on a videotape machine.

"This individual felt that it was offensive and inappropriate ... given the experiences that this country has gone through in respect to slavery," office director Dennis A. Tafoya (search) said.

The issue was solved by putting tape over the labels and replacing "master" and "slave" with "primary" and "secondary," Tafoya said.

Although Tafoya said his office did not find discrimination in the case, he added, "I think we constantly need to be conscious of these issues."

Sandoval said the county is making a suggestion, not trying to dictate political correctness.

"Knowing that it's an industry standard, there's no way that I'm going to stop buying that equipment," he said.
http://www.foxnews.com/story/0,2933,104232,00.html


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Free Music

While legal downloads are selling well, Internet music merchants are not making money
Eugene Wee

FROM all accounts so far, the transition of downloaded music from free to fee has been a big hit.

Since Apple's iTunes Music Store was launched in April, it has sold well over 17 millions songs. Napster, formerly the music industry's worst enemy, sold more than 300,000 songs in its first week after relaunching as a paid service in October.

The numbers have even struck a chord with industry analysts, who are decidedly upbeat about the future of Internet music sales.

A Jupiter Research report released in July forecast that Internet music will grow from S$136 million, or 1 per cent of the total music market this year, to S$5.6 billion, or about 25 per cent in 2008.

But at least one man is singing a different tune.

Mr Michael Robertson, founder and former CEO of pioneer digital music site MP3.com, told The Sunday Times that companies which are following the beat of this new drum are likely to meet the same fate as the rats who followed the Pied Piper.

'Apple has announced that they cannot make money selling songs for US$0.99 (S$1.73). This means no matter how many songs they sell, they will not turn a profit,' said Mr Robertson, who is now CEO of Lindows.com, which distributes its own version of a Linux-based operating system.

Last month, Apple CEO Steve Jobs admitted during a financial analyst conference that his company makes no revenue from the iTunes Music Store, which is the current leader in digital music sales, as most of the money goes to the music companies which provide the music content.

'That is not a business success in my books. And it also is a signal that the music industry must change its pricing model,' said Mr Robertson.

His MP3.com, which was founded in 1997, was once the flag-bearer in the movement to turn the Internet into an avenue of music distribution for both signed and unsigned artists.

He sold it to music company Vivendi Universal for a whopping US$372 million (S$646 million) in 2001.

Some companies, such as Cnet Networks, seem to share Mr Robertson's pessimistic view about music's digital frontier.

The Internet media company has struck a deal to buy MP3.com from Vivendi Universal by the end of the year. But instead of continuing to distribute digital music, it will delete its entire catalogue of more than 750,000 songs and use the site's brand name to provide information about online music.

In Singapore, those who wish to buy digital music have to look to local sites such as PlanetMG ( www.planetmg.com ) and Soundbuzz ( www.soundbuzz.com ) because sites such as Napster 2.0 and iTunes do not serve customers outside the US due to music licensing restrictions.

One local industry insider told The Sunday Times that sales of digital music here have not been as hot as sales of CDs.

'Music downloads are not making money, but music companies have to try selling music online anyway,' said a content manager of a local digital music distribution website, who declined to be named.p> 'If they don't, those doing it illegally will have free reign.

'So I think at least some presence from the music labels must be felt online.'

The manager also revealed that because of this, local digital music websites have had to diversify, reaping most of their revenue from other services, such as ringtones for cell phones.

Still, others in the industry such as Ms Jami Yang, new technology manager of Asia's BMG Music, believe that there is a market of willing buyers for online digital music.

This despite the fact that this same music is often available for free, albeit illegally, from peer-to-peer (P2P) file-sharing networks such as Kazaa.

'With free file sharing or free downloads, you might spend a lot of time but end up with bad quality files or broken tracks that are not burnable, or even worse, infected with viruses,' said Ms Yang.

'With a legitimate online service, you can download high quality files in a secure environment.'

The CEO of Soundbuzz, Mr Sudhanshu Sarronwala, added that an easy-to-use service with compelling content and flexibility of use will clearly have a market, something that has been demonstrated by iTunes and Napster in the United States.

Paying for a good product is one thing. But Mr Robertson believes that this is not the case with the current breed of paid music sites.

That's because there are just too many restrictions that come with buying the product, he says.

For example, users of iTunes can only carry and listen to their paid-for music downloads using Apple's iPod player. Napster 2.0 users can't access the service using computers running on either the Linux or Macintosh operating systems.

Mr Robertson added that there are also many limitations on how users are allowed to duplicate the music they have bought, like burning them on to CDs.

On the other hand, if users get their music illegally from P2P networks, they have complete flexibility with the music they download.

'They can load it onto whatever computer they want, they can use any brand of portable player, they can make CDs anyway they wish,' said Mr Robertson.

'So you have a situation where people who pay money get less flexibility then people that do not. That's a reverse incentive. That needs to change.'
http://straitstimes.asia1.com.sg/cli...222734,00.html


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Twilight of the PC Era?

Some commentators are proclaiming the end of the computer world’s glory days. But more chip power and connectivity might produce the biggest changes yet
Steven Levy

Nicholas Carr seems an unlikely candidate for the technology world’s Public Enemy No. 1. A mild-mannered 44-year-old magazine editor and freelance writer, he’s spent five years laboring for the Harvard Business Review, not exactly a hotbed of bomb-throwers. But now he finds himself branded a wild-eyed heretic and a threat to the underpinnings of the entire economy. His offense? Penning a 12-page article about the state of information-technology (IT) investment in the corporate world. Why has it jacked up the aggregate blood pressure in Armonk, N.Y., Silicon Valley, Calif., and Redmond, Wash.? Consider the title: “IT Doesn’t Matter.” DOESN’T MATTER? Tech consultants have been burned at the stake, even banned from the golf course, for less. Ever since 1979, when Dan Bricklin and Bob Frankston invented the electronic spreadsheet—and changed the way people in the business world worked—the unshakable wisdom in the corridors of commerce has been that nothing could possibly matter more than IT.
As personal computers landed on every desk, the Internet connected everything and an army of mobile devices made every shard of data accessible at any time, there seemed no reason to question the equation that a buck spent on technology would result in a bankroll soon thereafter. And with Moore’s Law (which propounds that every 18 months computer power doubles at no extra cost) still going strong, the reigning assumption is that such alchemy will only continue.
Carr begs to differ, claiming, in essence, that the innovations of the last couple of decades have succeeded too well—at least from the point of view of those peddling software. The very ubiquity of computer power makes it unremarkable, he says, and no longer offers a strategic advantage to companies employing it. The big innovations are over, the low-hanging fruit has been picked and “the IT buildout is much closer to its end than its beginning,” he writes. More and more, technology that once seemed unique has now been commoditized, and can be bargained for and bought in bulk like office furniture and paper clips. And in a suggestion that chills the soul of an industry based on first- movers and constant upgrades, he advises companies to spend less. “Follow, don’t lead,” he cautions.
When Carr’s article appeared in May, “it was greeted with horror here [in California],” says economist W. Brian Arthur. “It was like saying that Beethoven can’t play piano.” And the outrage continues. Shane Robison, chief strategist of HP, tells of a meeting with corporate information officers on its advisory board last month. “They were wrapped around the axle by that article,” he says. Peter Godfrey, the CTO of 3M, has a typical response: “It’s utter nonsense—so far from the truth that it’s laughable.”
During Microsoft’s analyst meeting last summer, Bill Gates was only the first of a parade of executives who, before PowerPointing their plans for an innovation-studded future, felt compelled to issue a Soviet-style repudiation of Carr-think. (“Hogwash!” cried CEO Steve Ballmer.) But Gates and the rest know that it isn’t just the word processor (on an iMac!) of a lone bespectacled observer that he has to worry about. Carr’s complaint is only one sign that a dangerous idea is afoot in the land, a philosophy of “good enough” when it comes to high tech. In a number of ways, the perpetual Saturday-night blowout in the tech world suddenly looks like Sunday Morning Coming Down. Here are some dispiriting signs:
Spending nose dives. The bleak economy has battered budgets everywhere, and tech buyers are getting by with less. In the post-bubble era, “there’s a ‘we won’t get fooled — again’ ” attitude, says Gary Beach, publisher of CIO magazine. A report by a Forrester researcher says the dismal spending trend isn’t supposed to improve through 2004. And the question that really terrifies tech vendors was asked by Bill Joy, then chief scientist at Sun, at last winter’s World Economic Forum in Davos: “What if the reality is that people have already bought most of the stuff they want to own?”
Trouble in PC-land. While consumers have found some reasons to buy new PCs, the corporate world has less incentive. “There’s never been such a gap between the IT world and the consumer,” says Ray Ozzie, CEO of Groove Networks. “In the corporate world, the bosses want to lock down the desktop so you can’t install or change anything. But at home the same users can hook up cameras and music devices, and find new uses for their PCs.” Meanwhile, PC makers are increasingly hedging their bets by selling more profitable electronics devices like TVs, cameras and digital jukeboxes.
High-tech dark side . No one disputes the benefits of technology. But people have learned that all too often tech comes with a downside. The biggest problem is security and disaster recovery, which that same Forrester report listed as the No. 1 priority for IT departments. It’s an expensive, labor-intensive pursuit that does nothing for productivity, but does keep the systems going. In fact, our reliance on virus- prone computers is itself a scary proposition: what would be the consequence of an Internet blackout? Another dark-side plague is spam. The time spent deleting all the come-ons makes you question the value of e-mail itself (see Soaking in Spam).
Is that all there is? We’ve had it drilled into us that we should love the increased productivity of high tech. But technology has enabled companies to eliminate jobs or smoothly outsource them to cheap labor in distant lands. And high-tech connectivity makes us available to our employers at any time of day, at any location. “For many people, the productivity is not apparent,” says Edward Tenner, author of “Why Things Bite Back.” “Despite technology, they’re not working shorter hours for more pay. They ask, ‘What does productivity mean for me ?’ Certainly there’s been no increase in self-reported happiness.”
But while the “end of the PC era” thinking seems to have hit a nerve (and launched a healthy re-examination of where we are in relation to our digital tools) there’s another, less dour way of looking at things. Every wave of innovation —the microchip, the PC explosion, the Internet boom—has built on those that came before. And every step of the way, technology touches more people, more deeply. Given that, it’s a little ridiculous to insist that the big breakthroughs are far from over—it’s actually easier for an act of genius to change everything. For example, a widespread penetration of the Internet, along with more powerful computers with lots of space on their disk drives, set the stage for 19-year-old college freshman Shawn Fanning to shock the world with his peer-to-peer file-sharing program, Napster. In turn, the unfettered party that followed help spread broadband even more widely, sold more computers, kick-started the digital music-player trade and, oh, almost shut down the entertainment industry. Putting piracy aside, the tech world is only beginning to exploit the legal uses of P2P—which in turn will create an environment for more innovations.
That’s why the more contemplative people inside the industry view this moment as an opportunity to take stock, but certainly not a fadeout for dizzying technological change. “I’ve been hearing about the end of innovation since the 386 chip [more than 20 years ago],” says Pat Gelsinger, Intel’s chief technology officer. “But we’re not about to go backwards.” Nick Donofrio, senior VP of IBM, concurs. “Our point of view is that we’ll see six magnitudes of improvement in the next 35 years,” he says.
Even Mitch Kapor, whose Open Source Applications Foundation is built on the premise that today’s high-priced software applications will one day be cheap or free, considers it absurd to imagine the end of big innovations. “Is our software so great now that it can’t be radically improved?” he asks.
What are the emerging innovations? Some of them don’t really sound earth shattering, but they get CIOs excited: Web services that promise to speed the information flow through a company and eliminate delays in the supply chain. (We’ll leave the details to CIO magazine.)
One new technology promises to send shock waves through corporate America and eventually alter the lives of consumers: radio-frequency identification, or RFID. The ability to put very cheap sensors on products and track them from manufacture to the consumer—and eventually tag all items so people can keep track of their stuff— will cause a lot of changes. (Privacy advocates are already concerned about the ability of snoopers to look inside your shopping bags.) Wal-Mart, a company that’s grown to monster size by embracing technology, is demanding that its suppliers adopt RFID. Developments like these confound Carr’s “Follow, don’t lead” advice. As Microsoft VP Jeff Raikes says, “Who would you rather be—Wal-Mart or Sears?”
Another compelling development is search technology —the success of Google shows that a business can be built on the ability to instantly locate information. As more and more data are warehoused in cheap storage devices, software to mine them will change not only the way businesses work, but the way we learn, archive and remember.
Microsoft itself has, as you might imagine, its own master plan to keep the good times rolling. This month Bill Gates and his top tech gurus will present a new “core vision” for the company based on what he calls “seamless computing”—a holistic means of using technology that delivers “rich interfaces and new experiences” no matter where you are and what device you use. “It’s all about the power of using advanced software to bring computers into your world, rather than forcing you into theirs,” says Gates. The flagship for the seamless-computing effort is the next operating system, code-named Longhorn, due to arrive in 2006.
Carr and other proponents of the twilight era have performed a service in puncturing some of the starry-eyed and self-serving cant of industry insiders. But the smart people who buy technology know that sooner or later, something will come along that compels them to bust their budget. Chances are that at this very moment there’s some unknown geek making a breakthrough that corporations everywhere will have to understand and utilize—or else choke in the dust of discarded motherboards. And then we’ll know, beyond a doubt, how much IT matters.
http://www.msnbc.com/news/999353.asp?cp1=1


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The Music Industry, Dinosaur soon to be extinct?
Sander Sassen

The music industry as we know it is slowly fading into oblivion, although the big execs with all of the major record labels are trying hard to prevent this from happening, there’s not much they can do to stop it. Sure, the music industry is frantically lashing out at users of peer-to-peer networks and blames them for their decline in profits. Others however say that the slump in their sales are caused by the weak economy, the lack of truly new and innovative material and the fact that singles seems to have disappeared completely, forcing the customer to buy the whole album. But let’s not forget about competition from things like DVDs and video games too as people obviously have a much broader selection to choose from for roughly the same amount of money.

The problem with the music industry is that it sees the sharing of MP3s as the root of the problem. They often use the point of the increased volume of MP3's being traded as evidence of customer demand, a demand that was supposed to be filled by these people legitimately buying records. But really, all that that point proves is that people are always looking for the best deal; because if it’s free and easy to get a hold of they’d rather go with MP3s instead, rather than pay a price premium for an album of which they only like two songs. I think a far better way to judge demand and how people like to listen to their music is by looking at the sales of playback devices, just look at any electronics store nowadays and you’ll see what I’m referring to.

Remember the last time you saw a stereo department in one of these stores? They have just about disappeared to be replaced with a big screen TV and a whole range of different home theatre setups. Furthermore, many stores now carry a broader selection of TVs and multi-channel speaker systems than they ever carried CD players or stereo sets. And when was the last time you heard somebody ask about a high-end CD player with 20bit DACs and 256x oversampling, these things are now taken for granted and people have moved on to DVD players that are perfectly capable of playing back their old CDs. DVD-audio and Super-Audio is claimed to revitalize the sales of these devices, but I doubt that, as the content featured on these DVDs/CDs in not innovative enough to justify a significant investment in the playback device. And to be honest, it is only a matter of time before generic DVD players also enable playback of these formats, we've seen the same thing happen with MP3 and SVCD playback.

Even car-audio is changing, while a CD player was a luxury upgrade over a tape-deck a few years ago, today TV sets and DVD players are becoming standard options on more vehicles every day. Thus I think it's pretty obvious that people have moved on to a more visual experience, whenever they’re in their homes or on the road. Most of the equipment being sold for listening to music is for mobile use and otherwise the home theatre has pretty much replaced the stereo-set. So the trend seems to be that people listen to music on the go, for that purpose they’re not going to carry around a bag full of CD’s if a 256MB MP3 device will carry the same amount of music in a much smaller size. So I think it is pretty obvious that with this increased mobile use of music, portable music formats have become very popular. With copy protection schemes popping up left and right things will only start to look worse in terms of sales as people are not able to use them in any other than their original form, thus severely limiting people in the choice how and where to listen to their music. This is also why protection schemes will fail in the end, partly because they’ll be circumvented but mostly because people will move on to better things if they can’t transfer their music to their format of choice.

The only workable solution I see, and I already mentioned that in a previous column about this subject, is some form of subscription service that allows for paid music downloads in a variety of different formats. It also has to be affordable; you can’t charge the same amount of money for a song you download off the internet as you would charge for the single. And if you want to tap into the budgets that are left over after people spent most of their money on DVDs and video games, it has to be relatively inexpensive. The other requirement is that there has to be a very broad range of titles available, not just the golden oldies, but also the latest top-100 songs. This is simply to give the consumer a choice; download the music off of some peer-to-peer network and possibly get a file of lesser quality, or pay a small fee and get it straight from the source. If the selection is broad enough and the prices are affordable, or rather, cheap, people will at some point prefer official downloads over shady peer-to-peer networks, just because it is less hassle and the quality is better. I think it is time for the music industry to drop their current business model and move on to greener pastures which this approach would offer, they’re fighting a losing battle here and if they want to stay afloat they’d better adapt to what the consumer wants or be doomed to fade into oblivion. The very same music downloads that they're vigorously fighting today could very well be what prevents them from going out of business tomorrow.
http://www.hardwareanalysis.com/content/article/1568/


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Telco Market To Pick Up
Tom Pullar-Strecker

Australian telco analyst Paul Budde predicts growth in the New Zealand telecommunications services market will accelerate to 6.7 per cent in 2004 after the market grew a modest 2.5 per cent this year.

He says the total value of the New Zealand telco market will top $6 billion next year, helped by a 10 per cent rise in data revenues to $900 million.

The mobile market will be worth $1.5 billion in 2004, he says, with Vodafone "further increasing its market share at the expense of Telecom". The economics of broadband in New Zealand is affected by the fact 90 per cent of content is hosted offshore, he says.

About 40 per cent of data is accounted for by peer-to-peer traffic – mostly MP3 music files, software and pornography.

The value of broadband is still not clear to a lot of consumers, he says.

Telecom knows what heavy residential users of the Net want, he says. "The challenge is providing what they want for the amount they are prepared to pay for it."
http://www.stuff.co.nz/stuff/0,2106,2743530a28,00.html


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He’s Still Having Fun
Bill Gates, for one, thinks that the digital era is far from fading. In fact, he thinks it’s only now getting interesting
Steven Levy

LEVY: What’s Microsoft’s next big push?

GATES: There’s a lot of breakthroughs we see coming in software to solve some of the boundary problems we think exist today: the boundary between you and your machine... in terms of how you use speech, do you use ink, does the machine remember how you like to do things, the boundary between the different devices. There’s never been a software company spending $6.9 billion a year tackling these problems. And so either [the critics] are right and those breakthroughs won’t take place and I’ll have to tell shareholders I’m sorry. Or they will in large part take place, in which case it’s a big win for people using this stuff and a great thing that Microsoft is willing to take the risk to drive it forward.

Your next big product is the new Windows operating system code-named Longhorn. Why are you saying that it’s a bigger step than anything in the last 10 years?

Well, the system today is in some ways quite fragmented. The way that you deal with your files is different than the way you deal with your e-mail, which is different than the way you deal with your address book, and you have to be pretty smart to understand how you navigate each of those, how you move them around between different machines or devices. And so [we’re] getting rid of a lot of the specialized systems that have grown up on the PC that make it just a lot harder to work with. And then we’re saying, hey, the photos will be there, so the way that you navigate photos and the way you navigate music will all be very rich and very common. That is the new storage system code-named Win FS, Windows File System. And that is probably the most ambitious, the most shocking advance that we’ve got in the system. You can find your stuff, search your stuff, share your stuff, and once people have gotten used to that they won’t want to go back to the fragmented, fairly simple world that they have right now. We [also] have a lot of things about real-time collaboration, peer to peer, the graphics richness of the system, the fundamentals of knowing when you install a piece of software it won’t mess anything else up. But I’d say Win FS is probably the biggest advance.

Microsoft recently announced a bigger dividend. You personally, as a big shareholder, get a big chunk of that, and now a change in tax law means your taxes on that will be lower. I’m curious how you feel about the government’s giving you that break.

I don’t consider myself an expert on tax policy. I certainly wasn’t lobbying for taxes to be changed up or down. I pay a lot of taxes every year. I pay enough that the numbers don’t fit on the normal IRS computer system, but I’m glad to do it.
http://www.msnbc.com/news/999480.asp


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Interest Renewed In Internet Micropayments
AP

An idea that seemingly evaporated along with dot-com mania is back: that the Internet would realize its full grass-roots potential if Web surfers could pay small amounts for tidbits of online content.

Several companies are again betting they can mine gold from ferrying around such "micropayments." Even credit card giant Visa USA is exploring the prospect.

Boosters believe people could sell countless new creations on the Internet -- from essays to advice -- if only mechanisms existed to facilitate small payments. For authors of popular content, all those pennies would add up.

The problem, as things currently stand: transaction costs make most credit card sales under $1 all but pointless.

By giving independent content providers an efficient way to collect money, micropayments could widen the Web's pool of things to see, hear and do, keeping the Internet from being dominated by media giants and other brand-name companies.

"We like to characterize ourselves as e-commerce for the rest of us," says Kurt Huang, co-founder of BitPass Inc., which carries small payments to 100 Web sites and plans to emerge from "beta" test mode in December. "What we're trying to do is enable diversity."

Micropayment handlers know they're treading over the skeletons of 1990s companies -- the likes of Flooz, Beenz, CyberCash and DigiCash -- that tried and failed to create virtual currencies. Back then, some hoped Internet currencies would evolve to eventually be spent as anonymously as pocket change.

Today's micropayment advocates say earlier attempts failed not just because they were cumbersome and lacked sufficient government and financial industry support. People preferred what was familiar, namely credit cards.

As well, bountiful advertising money and venture capital inflated the Web with so much free content in the late 1990s that there wasn't much point in charging 25 cents to view a comic strip.

With free stuff now fading, much more online material is available only by subscription.

"Times have definitely changed," said Ron Rivest, a prominent Massachusetts Institute of Technology encryption researcher who co-founded micropayment provider Peppercoin Inc. in 2001. "I think the market is ready."

There also are far more broadband Internet connections today, meaning more people might be interested in buying bandwidth-intensive digital content a la carte. Witness the quick popularity of new online music services like Apple's iTunes, which charges 99 cents per song.

Those sites aren't using any special micropayment formula -- users often buy more than one song and establish prepaid accounts with a credit card.

But if competition pushes prices lower, and more individual artists want to sell tracks at their own Web sites, micropayment providers say they would be ideal helpers because they can track royalties and handle customer service.

"We're finding that music is just the tip of the iceberg," said Steve Elefant, president of Yaga Inc., which handles micropayments and larger transactions, including the $2.50 payments that Tribune Co. and Time.com charge for articles in their archives.

Eyeing such possibilities, Visa recently began exploring whether it ought to facilitate micropayments, too.

"While this segment is still small, we want to keep our eye on it," spokeswoman Randa Ghnaim said.

Micropayment carriers are using different technologies to collect, transfer and authenticate payments.

PaymentOne Corp., for example, lets consumers make several small purchases online and pay for them on their local phone bills. Some cell phones in Asia have software that turns the handsets into virtual wallets for vending machines and other small but cashless purchases.

BitPass and Peppercoin invite Web surfers to set up an account with as little as $3, which is charged to a credit card or PayPal, the popular Internet money-exchange service. A user's online micropayments are deducted from that larger amount, without the hassle of entering credit card information each time.

Here's the advantage for content providers: If you wanted to sell a poem for 20 cents, you wouldn't accept Visa or MasterCard, because the fees involved would drain most, if not all, of your 20 cents. Similarly, PayPal takes 2.9 percent of a sale plus 30 cents, so selling your 20-cent poem would be a dream deferred.

But with a micropayment carrier, you could expect to give up 15 percent. Your 20-cent poem would bring in a healthy 17 cents. And micropayment providers can make life easier by paying you $17 for every 100 poems, instead of 17 cents after each sale.

The trick for micropayment companies is to convince Web surfers that there's so much good online content available for nickels and dimes that it's worthwhile to bother stocking a prepaid account with a few bucks.

But some critics believe that will never happen en masse because of fundamental economic psychology: Few people are willing to spend time deciding whether to buy things individually, like newspaper articles, for pennies. That is why subscription models that bundle a huge amount of content are attractive.

Such doubts have kept PayPal from breaking into micropayments.

PayPal would figure to be a micropayment gorilla if it altered its fee structure for cheap items. With 35 million users, PayPal is the dominant peer-to-peer means of sending money online, especially at the auction site run by its parent company, eBay Inc.

"The problem with micropayments, is, they're micro," said Todd Pearson, PayPal's managing director for merchant services. "Nobody's going to make a lot of money off these things."

A different kind of skepticism rules at RedPaper.com, which should be a micropayment carrier's dream. Sort of like an eBay for the written word, RedPaper launched in July and has 26,000 members who buy and sell prose, poetry and essays that each cost less than $1.

Members have to put at least $3 in an RedPaper account that gets docked or credited when they buy or sell material on the site. RedPaper takes 5.25 percent from sellers.

RedPaper set up its micropayment engine all by itself. Founder Mike Gaynor said it took only about a week's labor by one programmer.

"Micropayment technology in and of itself is about as interesting as new and improved dish soap," Gaynor said. "Anyone who has content worth purchasing is not going to give a chunk of their revenue to somebody like BitPass if they could build the technology themselves."
http://www.chron.com/cs/CDA/ssistory...siness/2260839


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Music Industry: Stop Shirking

Don't say theft when you mean rational avoidance of moral hazard.
Umair Haque

Every major label is drooling over the money-making prospects of having its own iTunes or Musicmatch. But they are all, in the immortal words of Johnny Cash, "born to lose, and destined to fail." Why? The music industry's problem is fundamental: the implicit contract between music companies and listeners is no longer viable.

The music industry fails to understand that a primary reason that consumers illegally share music files is that they want insurance against the music industry itself. File sharing is as much about risk sharing as it is about the theft of value. Technology makes file swapping possible - but the music industry's business model, which is at odds with the implicit contract it signs with listeners, is what makes it probable.

The contract between record labels and music listeners follows basic economics: The labels assume market risk in exchange for value. They take on the risk of talent search, artist development, and distribution costs, in exchange for profits.

Alternatively, we can say that labels are agents hired by music listeners, or principals, to perform a function they do not have the time to do: find interesting and entertaining musical artists. In every such transaction, there are always additional costs incurred. Economists call these costs agency costs.

The problem with such a simple contract is that it creates massive information asymmetries. There is no monitoring mechanism, so listeners cannot tell what the labels are doing; conversely, labels cannot really tell what listeners' preferences are. Even worse, listeners cannot influence labels unless they can coordinate amongst themselves.

Furthermore, the labels' biggest buyers - the big music and electronics retailers - have forced them to standardize prices. In most markets, prices convey meaningful information about value and risk. This point is intuitive: think of the price of blue-chip stock, for example. But because every CD costs roughly the same, prices do not serve their usual function of providing an informational feedback loop between labels and listeners.

So what if, under such a contract, the interests of the record labels (the agent) diverge from the interests of the listeners (the principal)? What if, for business reasons, the labels are more interested in their own economies of scale and brand identity than providing listeners with music they value?

In an extreme case, the labels might begin to impose costs beyond the actual search and production costs for which listeners are actually interesting in paying just to feed the bottom line. That is exactly what the recording industry did well before file sharing existed. The result? Alienated and disgruntled customers.

With the rise of peer-to-peer services, consumers found it more efficient to take on their own search costs and avoid the inefficient middleman, the record company. Many people were more happy to spend time searching for new music on the Net and compiling their own collections - a service previously performed by recording companies - than they were simply buying the goods the industry selected and promoted by the record labels.

Economists have a name for this problem: moral hazard. Moral hazard happens when the actions of agents can be hidden from principals, creating "agency costs" because agents are able to shirk and not deliver on their end of the bargain. In this case, the moral hazard is the shirking behavior of the record industry. It chooses artists and music collections not based on listeners' preferences, but based on production, marketing, and distribution efficiencies - adding massive agency costs and no longer offering the search value it is supposed to provide. The problem is compounded because music is an experience good - its value is not directly knowable to buyers until they have begun to consume it.

The way to change the incentives implicit in this contract is straightforward: Just add insurance. Insuring a contract can help offset moral hazard because principals have to compensate agents if they do not deliver on their end of the bargain - so it is in their best interest not to shirk in the first place. In this case, insurance means that consumers do not have to pay the costs charged by the music industry for selecting acts or music cuts that no one wants to hear. This creates an incentive for the recording industry to choose or compile the things that listeners really value.

But doing so creates a double moral hazard. Listeners might take advantage of the insurance, and renege on buying music altogether, as is often the case with users of Kazaa, Grokster, and Morpheus. If the industry offered consumers the ability to simply return any music they did not like, consumers might return all of their music - even the music they did like - after having copied or consumed it. It would be as though restaurants offered money back guarantees you could exercise after having eaten your entire meal and you claimed you were dissatisfied.

But this has been exactly the impact of the Net. By opportunistically grabbing free music, listeners operate under their own moral hazard, because now the record companies' lack of information about how people are using their music online means that listeners can shirk on their end of the bargain. So the Net offers a major opportunity to renege on buying music goods that are produced under moral hazard, and completely eliminate the risk listeners ordinarily would take by, say, buying CDs they cannot sample ahead of time. That's why the real problem is that the Net offers listeners insurance against the music industry itself. File sharing is not simply theft. Rather, file sharing is risk sharing.

In fact, we could go even further - saying that file sharing is a way for principals to modify the bad behavior of agents who are operating under extreme moral hazard by withholding the ultimate economic reward: cold, hard cash.

Is there a way out of this mess? Can the record industry offer it's own insurance, so listeners do not have to file share? Can it do so without creating a double moral hazard? Yes - by shifting to a more sophisticated contract.

One way is to offer listeners a contingent contract with a payment scheme dependent on the provider meeting a certain set of conditions. You sell a contingent contract every time you order from Domino's: if it's not there in 30 minutes, your pizza is free. The music industry might offer rebates or free music when quality indicators, such as when sales of a label's top artist's latest album is less than expected.

Another way is to offer what are termed "multilateral contracts", which in this case might mean that labels would offer downloads from a given artist at a discount - but only if enough people offer to buy the good. Schemes like this make private information and expectations public, allowing people to pool and share their risk.

Such contracts let consumers hedge the risk they take entering into contracts under conditions of extreme moral hazard. Right now, consumers only have one viable way to eliminate the moral hazard - by parceling it out, and sharing it with other listeners, via file sharing.

However the industry decides to help listeners hedge risk, it is important to note that the mechanism used should make strategic sense, rather than just rely on price competition, which is what might happen under iTunes, Rhapsody, Napster 2.0, or Musicmatch schemes. Such a system might, for example, reimburse listeners for a certain amount of music that they find unsatisfactory with cash, free music, or music vouchers. Alternatively, it might let listeners exchange a fixed number of tracks for tracks from a list of similar music, providing consumers limited insurance within a genre. The additional value created by such features takes the competitive focus away from price competition, because such features can be traded for dollars - and listener loyalty.

Umair Haque is a London-based entrepreneur. He has worked for the World Bank and was previously chief science editor for the Friday Times, one of South Asia's largest independent newspapers.
http://www.herring.com/ForumPage_111903-04.aspx


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Broadband Availability Pushes Piracy Into Hyperdrive
Johor Bahru,

Malaysia - A handwritten sign at the entrance to a tiny shop in southern Malaysia's busiest city sums up the music industry's colossal problems in Asia.

"1 CD for 7 ringgit," it beams in bright blue ink. This sum is equivalent to US$1.80.

As two policemen direct traffic just yards away, the shop's teenage manager brags of even better bargains, running a hand along makeshift shelves lined with hundreds of compilations -- from pop princess Britney Spears to Taiwanese idol Jay Chou.

It is just one of a dozen shops brazenly selling knockoff pop music CDs and DVD bootlegs of Hollywood films in a single neighborhood in Johor Bahru, only a few minutes' drive from Singapore -- and one of thousands scattered across Asia.

But as Washington presses Asia to curb the sophisticated piracy syndicates equipped with CD-burning technologies and stacks of blank discs that supply the shops, a bigger battle is brewing online against Web pirates in the fast-growing region.

The rollout of high-speed broadband Internet in India, China and Indonesia, three of the world's most populated countries, could expand the number of people downloading free music off the Web by millions a month.

To fight back, labels are releasing more hits to fee-based online music services in Asia, accelerating growth in an embryonic industry now dominated by just two companies -- Soundbuzz.Com and Sony Corp's Planet MG.

"The digital music medium is coming of age in Asia," said Sudhanshu Sarronwala, 38-year-old chief of Singapore-based Soundbuzz and former managing director of MTV Networks Asia.

Four-year-old Soundbuzz has licensing agreements with 65 record labels in the region and operates in 12 Asian markets in eight languages -- from Chinese and Korean and Japanese to the Bahasa languages of Indonesia and Malaysia.

Its clients include Web portals run by Microsoft Corp's MSN and Yahoo Inc. "We build the storefront look and feel for the client," said Sarronwala.

Asia was once prized by record labels including Time Warner Inc's Warner Music Group, EMI Group Plc, Universal Music and Bertelsmann unit BMG for its potential for growth as US and European markets mature.

Instead, recorded music sales in Asia are sliding faster than in the US and Europe, the International Federation of the Phonographic Industry (IFPI) says.

Asian music sales slid 13 percent in the first half of the year to US$2.59 billion, a fifth of the world's total, outpacing a fall of 10.9 percent globally. South Korea's fall of 23.1 percent was the worst, followed by Taiwan's 21 percent and Japan's 13.5 percent -- Asia's three biggest music markets.

In Taiwan, which accounts for 80 percent of Mandarin language music sales worldwide, around half of all music sold in the past two years was pirated, while nine of every 10 recordings in China are fakes.

Analysts say growth in legal music download sites in Asia's vast, upwardly mobile markets, in tandem with broadband Internet, could help stabilise the world music industry.

But whether paying sites take off depends on how quickly so-called peer-to-peer networks such as Grokster and KaZaa -- where surfers can download an entire 10-track album in 15 minutes -- are shut, said Simon Dyson, senior analyst at Informa Media.

"If they don't get that control, and broadband increases, then you can see music sales going right down," said Dyson.

Much depends, he says, on whether record labels win their appeal of a potentially precedent-setting April decision by a US federal judge who ruled Grokster and other file-swapping networks were not liable for what their downloaders are doing.

"The opinion is that they will probably win that. If they do win that, then obviously they can start encroaching on file sharing networks," he said.

Music copyright lawsuits are also flaring around Asia. Taiwan's music industry has taken legal action against two Taiwanese sites -- www.kuro.com.tw, which has about 500,000 subscribers, and www.ezpeer.com with 300,000 members.

South Korean free music site www.soribada.com, which counts 6 million members and gets about 1.5 million hits a day, is also being sued. A court told Soribada to shut its server in February but it switched to new servers and is open.

"Record companies all over the world are struggling with this," said Terence Phung, managing director of Sony Music Entertainment Singapore Pte Ltd. "It is hurting all of us. There is no solution available to stop this. It is a huge problem."

Although copyright infringement is a crime in Singapore, a 2001 government survey showed 500,000 of its four million people used the Web to download music. Internet service providers are sending letters to downloaders of pirated music on behalf of the recording industry but they do not initiate legal action.

"We encourage our customers to feed back to us on these allegations by the copyright owners. We will then advise the copyright owners accordingly," said Mervin Wang, a spokesman at Pacific Internet Ltd, a Singapore Web service provider.

Sarronwala says the opening of Apple Computer's iTunes Music Store this year was a turning point, spurring labels into releasing quality music online. Though he doubts piracy will vanish he reckons legal online music can thrive alongside it.

As sales fall across the industry, Soundbuzz went profitable on a quarterly basis this year after growing revenues for the past four years, said Sarronwala.

Swee Wong, senior vice president at BMG International based in Sydney, said the appetite for legal music downloads in South Korea and Taiwan was growing.

"They are ahead of the game," he said. "But it's not happening as fast as I would like.

"China remains the wild west," he adds. But even if just 10 percent of China's sales are legitimate, that is still a huge market, he said. "The potential market in one city could be as big as or bigger than Hong Kong or Singapore."
http://www.taipeitimes.com/News/biz/.../30/2003077860


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Chatterbox.

Canada & Finland Agree


To all startrek enterprise fans

Don't know but the new music that accomp st enterprise this year suck bad!

any thought?

- miss_silver
__________________



Sucks real bad.

- tg

http://www.p2p-zone.com/underground/...threadid=18046

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What they’re saying:

IT Business Tips -

Building IT Alliances

To derive maximum benefit and lasting competitive advantages from collaboration, content managers must seamlessly make information and service exchanges between companies. This not only leads to investing in relationships, between the client and your business but creates added value and service -raising imposing competitive barriers and creating a win-win opportunity. The business process that takes place within these communities and extends beyond company boundaries is referred to as collaborative business alliances. Collaborative business enables enterprises to make the most of up-to-date content and related services for their clients and therefore leveraging the Internet to the fullest. Alliances are also an often faster and less capital-intensive way to gain access to products, customers, and business capabilities than building them or researching this information from scratch. P2P (peer to peer content sharing) is only one example of how to apply this alliance development concept. When a client or end-user accesses your site for content, they would see the linking of other related articles and content from other sites as an added service of your site, if made available. This client will, after making great use of your service, refer you site and articles to his network of associates. Thus raising the profile and viability of your site and making it more attractive to your sponsors.“By using the Internet to bundle products with related information and services, creative companies can improve their effectiveness and efficiency of their clients’ businesses. By doing so, they will be able to forge strong, long-lasting client relationships that will de-emphasize product price and exchange- based transactions.” Harvard Business Review, Beyond the Exchange, November-December 2000 Collaborative alliances not only enrich business- to-business relationships by boosting site stickiness, facilitating transactions, optimising communication channels, disseminating information, but effectively connect information and services to the end user through effective market dynamics. Here are several reasons why you should consider building alliances into your business and Internet site:

· Alliances extend your range of content and services.
· Alliances elicit and collaborate with information and services which would not be accessible and remain untapped.
· Alliances create opportunities for people to network, communicate, mentor, and capture, formalize, and diffuse tacit knowledge.
· Alliances build boundaryless communities for information dissemination and increase a company’s overall competitive advantage.

Indeed, the question isn’t whether building alliances will add value to a company and their site but rather what kind of content, products and services are suitable and what steps does the company need to take to acquire these. Clearly defining roles and relationships is essential for successful collaborative alliances. Once these are defined - the Internet, and in particular the ProActive platform, can utilise a variety of protocols to support this relationship such as events calendars, I-Framing and linking, surveys and polls, emails, send this article to a friend, just to mention a few. In the next few years, collaborative alliances will support more complex relationships to ensure that its customers and trading partners can all work together in a profitable relationship network, securely sharing structured and unstructured information. And the underlying key to all of this is to drive everything from a customer perspective. Start from the very top of the business. Check your ego at the door; act like you work for your customers and partners, not vice versa. Dare to share vital business information with partners and customers. Work through inevitable security issues and occasional missteps. While you're learning, however, be smart about the risks you do take. Remember, it's still about people. At the core of successful relationships, networked or otherwise, are real people of flesh, blood and emotions whose main question is: "What's in it for me?" Better have an answer ready. In the collaborative future, customers will reap rewards by receiving the products, services and interaction experiences that they want at an affordable cost. Partners -- true value-added intermediaries -- will earn the loyalty of both customers and suppliers. And the enterprise will gain the sustainable competitive edge it needs to win in the Customer Age.
http://www.inbusiness.com.au/articles.php3?rc=87


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RIAA Actions Spawn New Product Designed to Help Parents and Others Avoid Lawsuits

ShareControl Application Helps Users Comply With RIAA and MusicUnited Guidelines
Press Release

Starting today, Music-Amnesty.com is providing parents, grandparents, schools and businesses with a simple way to check for the top 10 Music File Sharing programs known as "Peer-to-Peer" or "P2P" products. The software ships under the name "ShareControl" and is available for under $20.00.

In addition to looking for and reporting the presence of the most popular P2P products, ShareControl checks for the presence of music files known as "MP3" files and allows the user to delete them as well. "I think most people want to comply with the RIAA ruling but just don't know enough about their computers. This application focuses on P2P software, sharing attributes and MP3 files -- the same things the RIAA is also concerned about when they file lawsuits," says Mark Andrews, co-founder of Music-Amnesty.com. "The key advantage we give users is the ability to police themselves. Users decide if they want to delete these programs, turn sharing on or off, delete or keep music files -- we don't impose our values. People are capable of deleting, installing or adjusting settings -- our software just validates or verifies their choices. If a parent deletes or turns off sharing for a program and then someone else in the household installs a different program or changes these settings, there is now a quick and easy way to check for this."

Highlighted Links

MusicAmnesty Website

"Our research shows that when parents delete one Peer-to-Peer product, their sons or daughters often download another product and start downloading music again. Parents need to know if these products are on their computers and what their potential liability is," says Mr. Andrews. With over 750 subpoenas per day, there is good reason to worry -- each song illegally download or uploaded can result in a fine of $750 to $1,250. "Most people don't realize that there are over sixty different file sharing programs available on the internet today. Even parents who know about Kazaa or Morpheus may not know about DICE, iMesh, Grokster or BearShare," says Roy Feague, co-founder of Music- Amnesty.com. "Any one of these programs can create significant financial liability. ShareControl can identify all of the most popular programs, so parents can make informed decisions and have peace of mind knowing that they are fully compliant with the law."

ShareControl™ is available for download for $19.95 from Music-Amnesty.com. For more information, including a full list of all the software supported by Music-Amnesty.com, visit their web site at www.music-amnesty.com.
http://www.marketwire.com/mw/release...lease_id=60599


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Koala Acquires P2P Software

Koala International Wireless, Inc. (OTCBB:KIWI), a developer and integrator of web-based, wireless network applications and wireless device technology, announced today it has acquired 100 percent of a proprietary peer-to-peer software developed by Dylan Morris Software ("DMS") of Los Angeles California on a performance and milestone payment formula totaling 1,000,000 common shares of KIWI stock. Dylan Morris will commence formal employment as Senior Vice President, Software and Process Design with KIWI focusing primarily on completion of a proprietary peer-to-peer Internet, Wireless and Cellular based transport method for voice and data referred to in KIWI's business Plan as KIWI Internet Protocol -- Peer-to-Peer Communications ("KIP-PPC").
http://www.boardwatch.com/document.asp?doc_id=44334


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Interview

Skype's VoIP Ambitions
Declan McCullagh

Niklas Zennstrom may be Sweden's most famous serial entrepreneur. The 37-year-old Stockholm resident co-authored the legendary software used in the Kazaa file-sharing network. After he and his partners sold the rights to Kazaa last year, Zennstrom turned his attention to Joltid, which sells a caching technology to help network providers deal with the growing amount of peer-to-peer traffic.

Now Zennstrom and Kazaa co-creator Janus Friis have launched their most ambitious effort so far: Skype, a start-up that hopes to convince people to use voice over Internet Protocol (VoIP) technology instead of the traditional phone system.

CNET News.com recently spoke to Zennstrom, Skype's chief executive, in Stockholm about VoIP, privacy, security, and the lessons he's learned from his other start-ups.

Q: What's different about Skype? Lots of instant-messaging clients already offer voice communications.
A: We don't see them as competitors. We see our competitors as being Deutsche Telecom, British Telecom, AT&T and Verizon. We think there's going to be a migration from circuit-switched telephony services to Internet telephony.

This is a second kind of driver for broadband. P2P file sharing has been driving broadband adoption. I've been meeting a lot of Internet operators in Europe and they say users aren't getting broadband to check their e-mail. Broadband penetration in Europe is around 10 percent to 12 percent. The U.K. is only around 4 percent. It has a long way to go to reach dial-up. One way to do that is to make it more useful.

Are you hoping to sign distribution deals with Internet providers?
Absolutely. We're speaking to a few broadband operators right now. They're quite interested in offering Skype to their users.

Will Skype continue to be free?
Now it's free--it's free in the beta phase. When we launch it'll continue to be free. We think it's very, very important that people can use it for free and for the momentum to grow. We want people to spread it around. We have to be very good in up-selling users to premium services like voice mail and conference calling. That's what people are asking for.

One of the great things about P2P for this product is that we don't have any incremental cost for a new user. There's no marketing because we don't run marketing campaigns. It's being spread virally by users. We don't have any operational costs because they make calls peer-to-peer. It doesn't cost us any more.

You permit mirror sites?
Yes. We're encouraging people to spread this to each other. Then we have an established base of users. If we can encourage a few percent of people to get premium services, that's an advantage to us.

What we're saying is that telephony is just an application. You can use this software application that does all the call setup and routing, which traditionally has been done by big company switches. Telephony is software. It's not big software in a centralized system. It's software that people run on their laptops at home.

What we're saying is that telephony is just an application.
How do you keep track of who's logged in and able to receive voice calls?
We have a distributed database on the P2P network that keeps track of your IP address, firewall condition, and so on. We've taken (Kazaa's) FastTrack concept of supernodes and taken it one step further.

Are there any privacy implications to this public database approach?
There would be a privacy consideration if you and I are talking to each other and it's being proxied through John. That's why calls are being end-to-end encrypted.

I can check my e-mail from anywhere in the world and senders don't know where I am. I can answer my cell phone from any GSM country and callers don't know where I am. But when I connect to Skype to receive phone calls, my IP address becomes public, which tends to reveal details about my physical location.
The way for me to find your IP address would be when I set up a phone call to you, I see your IP address if it's a direct connection. If you're using a proxy server, I won't.

Let's say I'm trying to track someone--in a divorce case, I want to prove that a spouse is in Stockholm when he or she is supposed to be in New York City. If I monitor the public Skype database over time, I can roughly follow their movements secretly.
It's not an "anonymized" system. For some people it could be labeled as a privacy issue. That has never been any design goal.

Your advice for divorcees?
I would recommend that you set up all your Internet connections through a proxy server.

How many downloads have you had?
We've had 1.6 million downloads. That's not 1.6 million people. I think there are around 900,000 registered users.

People are downloading multiple versions?
This is the same ratio that you see at Download.com (Download.com is owned by CNET Networks, publisher of News.com). There are usually about twice as many downloads as users. People are either downloading multiple versions or initiating the download again. Compare that to Free World Dialup. It's growing considerably faster than that.

When will you have a gateway to the telephone network?
We're working on it...It's something that's going to be much later on.

When?
The interesting thing is that in the feedback we get from users this is not the highest priority. They're more interested in conference calling and voice mail. People are much more comfortable with using the Internet for communications. People are being much more mature with the Internet. They say, "This is my primary way to communicate. The people that I'm calling I'm encouraging them to get on Skype." People are quite happy with that.

If you had to set a date?
Next year.

How much have you received in seed funding?
We haven't disclosed how much we raised. But it's the normal seed funding. We haven't raised tens of millions.

Are you funding any of this yourself?
No. Just hard labor and things like that. We had the Draper family--Bill Draper--as investors from the beginning.

You said Skype is different from IM voice clients. How about P2P voice clients, such as PGPfone, which is encrypted, free, open source, and has been available for years?
When we're talking about peer to peer it's much more today. It's a self-organizing network that can adapt itself to different firewall configurations and network address translation boxes. You cannot set up a direct connection in most cases.

The problem is that there are a lot of different configurations. Some routers allow outgoing connections but not incoming. Some others allow UDP (User Datagram Protocol) connections. Others allow TCP (Transmission Control Protocol). Most existing Internet telephony applications don't work that well in consumer environments.

How does Skype get around that?
We're setting up hot standby connections. We set up four, maybe five standby paths. When both parties are behind NATs (Network Address Translation), they can't actually set up a connection between each other. It's being synchronized. It works sometimes.

Sometimes?
It only works sometimes. It depends on the routers.

What lessons have you learned from your experience with Kazaa and FastTrack?
It's quite amazing that when you do something that catches on over the Internet you get people all over the world to use it.
Several lessons. One thing is that the whole viral effect--when you do something that works virally you can get a lot of people using it. It's quite amazing that when you do something that catches on over the Internet you get people all over the world to use it.

You should not try to do things that are artificially viral like an "Invite a friend to use this service" feature. Those don't really work. We've had that feature on Skype but it doesn't really bring in the users. The product has to be fundamentally viral in itself.

How many supernodes share the Skype database?
It grows. There are a few hundred clients per supernode.

How do you become one?
You have to qualify to be a supernode. You have to have enough memory, bandwidth, and a good uptime. Then you're connected to supernodes. If they feel that they're getting too much load they tell the other clients around them, "Can you help me out?" It's a distributed process which is not centrally run.


What happens if someone sets up a malicious supernode with false "phone number" data?
First of all, the data is populated by the users themselves. What we do in Skype is have all users' identities protected in a public key infrastructure. In order to avoid malicious supernodes or people saying, "I am Nicholas," they have to do a challenge response saying that the keys are correct. What you want to avoid is identity theft.

What happens if someone creates and distributes, say, Skype Lite, which recognizes user IDs "minted" by someone else?
That's so much fun. On Slashdot, people are saying, "I'm not going to touch this," saying they don't want the advertisements (on Skype) and will wait for Skype Lite. But there are no advertisements. OK, say someone makes a hacked version. You and I wouldn't be able to set up calls with each other. We'd both need the hacked version.

Are you afraid of intruders targeting your server that signs user ID keys?
The signing server is like Fort Knox.

Where's it located?
I won't tell you. That's kind of a sensitive part of (the company). It's very, very secure.

Will we ever see a Skype telephone?
We have a phone that plugs into the USB port that's working now.

How about an 802.11 Wi-Fi phone running Skype?

That's a natural step to take later on.

On cell phones too?
The cellular phone is a relatively closed platform. I have a Nokia phone with Java but it doesn't give you access to the IP stack. (For competitive reasons) they're going to make sure that the telephone is very, very closed--though 802.11 phones are eventually going to be affordable in the next year or so.

Where do you hope to make money from Skype users?
This is software. Our business model is to sell value-added services. It doesn't matter what client you're going to use--whether it's a Windows client or a PDA client or an embedded client.

Any plans for Macintosh or 'nix versions?
That's one of the things we have on our wish list. We don't have any release date planned.

Are you targeting business users as well as individuals?
We're starting with individuals. We're doing this bottom up. It's grassroots for businesses too. It's being used by business clients already but not through the IT departments.

News.com ran an article a few months ago talking about how the FBI wants to force VoIP providers to make their networks subject to wiretaps. If it gets adopted, what would this proposal mean for you?
The landscape is changing. In the old world you had issues like lawful interception of telephone calls. In Sweden the police can get a court order and wiretap a telephone call if the crime would lead to six years in jail or something like that.

And if the Swedish police came to you?
We cannot do anything because we don't have access to the data stream. The old way of thinking was easy. You'd go to the local telephone company and they'd get a wiretap. That's not a problem because the telephone service owns the infrastructure, provides the service, and operates in one country. The Internet is a bit different. What you would have to do is to go to the Internet service provider.

Assume the police can get a court order and conduct the tap. But the Skype conversation is encrypted and they only can hear gibberish.
I'm just trying to say in general what the issues are. I don't have a solution. In general it's not as clear cut as it was in old POTS (plain old telephone service) days. My point is that it's not as easy as it was before.

Have you been contacted by any law enforcement or national security agency?
No. What if we got contacted by the Chinese government, or the U.S. government, or North Korea, or the Swedish? If you're operating something that's only available in one country it's an easy clear-cut case. But if it's available worldwide, that's different.

Even Phil Zimmermann, inventor of PGP (Pretty Good Privacy), has said he's concerned about terrorists using his software to plot crimes. He concluded, though, that the benefits outweigh the negatives. How about you?
The Internet is great. There's a lot of bad things happening on it but it's still great. If you were a sophisticated criminal and you really wanted to hide away, then you should probably not use something that is a commercially closed source system such as Skype. I don't think this is an issue.

If the FBI or Europol came to you and said, "We order you to include a secret backdoor for unencrypted wiretapping in the next version of Skype," what would you do?
I don't have the answer to that. Obviously we would work with authorities in whatever jurisdiction we would be subject to. Sure, we would sit down and talk to them. But we would not just say here's the backdoor and just bluntly do it.

Currently Skype is not subject to telecommunications regulation, therefore we do not have any legal obligation to provide any means for interception. This is software that's not any different from e-mail or chat.
http://news.com.com/2008-7352-5112783.html


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Beware Skype's Hype
Brian Livingston

Wouldn't it be great if vendors always got their standards together before shipping products? Sometimes this happens; sometimes it doesn't. When it does, as with USB 1.0 and 2.0, adoption is rapid. You can hardly buy a PC or laptop these days without finding a couple of USB ports.

When it doesn't, it can create a slow-motion train wreck that we can watch but can't prevent.

Take the case of rewritable DVDs. With their multigigabyte capacities, they can be a handy storage alternative. But contention over DVD-RW, DVD+RW, DVD-RAM and more has delayed mass adoption by individual users and enterprises alike.

Today, the technology that most suffers from this problem—and is already careening off the tracks— is voice over IP. VOIP promises to revolutionize the way we make phone calls. Ultimately, no one will use wired, land-line phones. New mobile phones will use VOIP over corporate or home Wi-Fi connections when in range and seamlessly switch to slower cellular- type networks everywhere else. (VOIP is such a terrible acronym that henceforth I'll call it "Internet calling.")

Internet calling has been possible for years, but only the latest technologies deliver good quality. Compatibility fell into place through the efforts of the Internet Engineering Task Force and its adoption in June 2002 of a detailed standard, Session Initiation Protocol, which allows the integration of Internet calling with Web services, digital video, instant messaging and e-mail. As a result, everything from Microsoft's Windows XP to its Live Communications Server 2003 to IBM's Lotus Instant Messenger supports SIP.

This harmonious bubble was burst 13 weeks ago by a new, free, peer-to-peer Internet calling program. Skype, a made-up name that rhymes with hype, is the creation of the same two young Scandinavian entrepreneurs, Niklas Zennström and Janus Friis, who in 2001 released Kazaa, another P2P program that's now a much bigger music-and-file-sharing network than Napster ever was.

People who download the software—perhaps onto your company's network—can make free Internet calls to any other Skype user in the world. Although corporate firewalls often block this kind of traffic, Skype's makers built in clever technical workarounds that they say allow their packets to pass right through.

But Skype isn't compatible with SIP. You could wake up one day to a nightmare in which some of your offices have adopted SIP while others have downloaded Skype. Users couldn't rely on the incompatible services to call one another.

Worse, having unmanaged voice packets zipping through your firewall poses the risk that a malicious hacker could some day find a buffer overrun or other flaw that can exploit Skype software.

Steve Johnson, president of Ingate Systems, which makes SIP-capable firewalls and network appliances, says SIP should be respected. "We believe that having industry standards is the way to go with new technologies," Johnson said. "Skype has many limitations. You can make a point-to- point call between two people who've downloaded the software, but you can't make conference calls and other things that are important for business."

In response, Skype's co-founders told me in a joint e-mail, "We believe in interoperability, we are looking into it, and we are open to discussion with other companies."

Skype's home page states, "Works through all firewalls," but this isn't true. Skype cannot connect through proxies, authenticating firewalls or firewalls that manage outgoing UDP packets.

I advise you, however, not to use this weakness to try to simply block the independent-minded Skype pioneers in your company. Make SIP- compliant Internet calling widely available to your employees instead. SIP calls with good manageability should be just as attractive to users as Skype. And going with SIP-based software might encourage Skype's founders to bring their software into SIP compliance. That would keep your users speaking to one another.
http://www.eweek.com/article2/0,4149,1401510,00.asp


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AP Finds Skype To Have Some Shortcomings
Michael Tarm

TALLINN, Estonia -- It's the moneysaving potential that's likely to draw your attention to Skype, the Internet phone software whose creators are bent on displacing the POTS, or plain old telephone system.

Certainly, there is no disputing the cost savings. The software is free, created by the same anti-establishment programmers who wrote the music file-sharing application Kazaa. Free versus whatever you're now paying for more traditional phone service is, on the surface, an unbeatable deal.

The question, though, is whether that makes up for some of the frustrations I experienced using Skype, which, granted, is still in beta, or test phase. On balance, it does.

On a good day, with a faultless broadband line, Skype's sound quality is awe-inspiring, especially considering that the communication is wholly decentralized. It is near and sometimes even surpasses the quality of run-of-the-mill landline or mobile phones.

Skype's also a breeze to set up.

Armed with an online PC - one running Windows 2000 or XP - a microphone and headset, you can be calling (or "skyping," in the lingo of aficionados) just five minutes after downloading the program from www.skype.com.

Skype can also be used with Windows 95 and Windows 98, though compatibility's not a sure thing. There are no Mac or Linux versions.

Users enter a password and some contact details for Skype's user-friendly online phone book - indexed by country of origin, user name and 12 other categories. With its search tool, it's a cinch to locate and call friends, relatives and associates.

You can only talk to people who also are using Skype, but if you reach them on a good line, Skype works like a dream. Knowing you're paying next to nothing - even if you chat for half the day to friends halfway around the world - makes this doubly thrilling.

Other times, it's considerably less fun.

Slower Internet connections or ones that keep slipping offline cause the sound to deteriorate or conk out completely. An inferior link can produce delays of several seconds - giving users a sense that they're speaking with someone on the moon.

So unless you can use Skype on faster lines, don't bother at all. Even with better connections, quality can occasionally be erratic - with the volume fading in and out or with the sound taking on a tin-can quality.

Skype is also subject to that variable so often at the root of life's failings - other human beings.

Headphone sets not plugged in or turned up properly by technically challenged users can foil attempts to talk to your party - even when Skype signals you've reached them successfully.

You're also dependent on the person you wish to call being at his or her computer. If they're not, you may be reduced to calling them on that Plain Old Phone and asking them to log on - which rather defeats the purpose of having Skype in the first place.

Of course, since you can only call other Skype users, anyone determined to use it to order a pizza is sure to go hungry.

Similar to peer-to-peer Kazaa, Skype exchanges data packets directly from one personal computer to another - not via a central server. It purportedly directs that data through the quickest networks so quality isn't degraded. Skype works through most firewalls, software used by many firms to monitor traffic in and out of its computers. And privacy is assured by encryption.

I saw no signs of spyware. Skype, in a nod to the scads of it found with Kazaa, proclaims it to be free of both spy- and adware.

To be sure, several other services have used the Internet to carry phone calls cheaply or even for free.

One, Free World Dialup, promises to connect its 75,000 users not only to other members but also to users of certain other Internet-based services. Free World Dialup requires special hardware or a software "SIP phone" that turns conversations into data packets and vice versa.

Skype, meanwhile, has a dramatically expanding universe, with 3.3 million people having downloaded it just three months after its launch. At that pace, it could eventually break into the same league as Kazaa, which - to the horror of the recording industry - has a whopping 300 million users.

According to Skype's online directory, virtually every country on earth now has a budding Skype community - from Afghanistan to Peru, from Swaziland to China.

It's easy to see how cash-poor students studying far from home and some phone-reliant firms with branches abroad could embrace this program even with its shortcomings.

Others, quite rightly, may approach Skype with a bit more skepticism.

But if executives at traditional phone companies aren't losing sleep over Skype, they might soon. Skype's creators have vowed to iron out kinks and add new capabilities, including enabling calls to mobile and landline phones from Skype.

Skype may yet live up to its revolutionary billing.
http://seattlepi.nwsource.com/busine...Test%20 Skype


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FBI Seeks Wiretap Capabilities for Phone Calls Made Over the Internet

The agency and the Justice Department ask the FCC to ensure that law enforcement can eavesdrop on online communication.
Jube Shiver Jr.

Concerned that terrorists and criminals can easily communicate without being caught, the FBI wants to tap into online phone calls.

As federal regulators Monday debated how — or whether — to regulate the fast-growing technology of Internet phone service, the FBI and the Justice Department sought to ensure that law enforcement has the same ability to eavesdrop as it does on virtually every other form of communication.

Exempting Internet telephony from the wiretap provisions of federal law would "jeopardize the ability of federal, state and local governments to protect public safety and national security against domestic and foreign threats," Patrick W. Kelley, the FBI's deputy general counsel, and the Justice Department's John G. Malcolm, deputy assistant attorney general, wrote in a filing with the Federal Communications Commission.

Reached by phone Monday, Kelley declined to elaborate on his written remarks.

FCC officials characterized the FBI's concerns as "serious." They said the FCC, which already had begun a proceeding to address the potential economic harm that Internet telephony poses to traditional telephone service, was examining the wiretapping concerns of the Justice Department and the FBI.

It's not that law enforcement can't tap Internet calls. It's just difficult.

The unregulated technology of so-called voice-over-Internet protocol chops calls into digital packets and sends them over the Internet like e-mail. The packets are reassembled at their destination as speech.

Because Internet telephony largely circumvents traditional phone lines, it promises to save users billions of dollars in fees that carriers traditionally charge to route calls over the public phone network.

But calls are hard for law enforcement to intercept because, unlike a traditional phone network, Internet telephony is diffuse and travels along the Internet backbone. All a person needs to make an online call is an Internet connection, some software and a computer or dedicated Internet telephone that is sold by companies such as Cisco Systems Inc.

The FBI and Justice Department want the FCC to classify Internet-based telephony as a traditional telecommunications service, which would subject it to federal laws requiring carriers or software companies "to develop intercept solutions for lawful electronic surveillance."

Internet calling accounts for only about 1% of overall telecommunications revenue, but it is growing rapidly, and even traditional phone companies use the technology to route some calls.

Since Congress passed the Communications Assistance for Law Enforcement Act of 1994, federal law enforcement officials have battled the telecommunications industry over efforts to extend federal wiretapping laws to new technologies. The act established a process that allowed the FCC to order standards to facilitate wiretapping.

In the past, the government has required phone companies to install electronic monitoring capability in their networks to allow the government to eavesdrop on private data communications for law enforcement and national security reasons.

The FCC recently required wireless companies to install technology to both eavesdrop on and track the location of cellphone users.

Civil liberty experts draw the line at the current effort, saying it potentially gives law enforcement too much control over how computer networks are built. They fear it also could lead to efforts to outlaw powerful data encryption if Internet telephony users begin encrypting calls.

"This represents a great threat to privacy and free speech," said Lee Tien, a staff attorney at the Electronic Frontier Foundation in San Francisco.

He said the FBI effort could stifle innovation and make communications less secure for all Americans because, in many cases, there's no phone company to act as an intermediary between law enforcement and customers.

"The government has always banked on the fact that when it comes to electronic communications, there's always a middleman" like the phone company, added Tien. "But Internet telephony has the potential to make that middleman go away and make conversations a lot more secure from government eavesdropping."

The FBI's concern emerged as the FCC began a series of highly anticipated meetings on the future of Internet telephony. Chairman Michael K. Powell told industry officials and policymakers Monday that the government should try to avoid regulation because it might hamper growth.

"Regulatory medicine can be poison to an otherwise healthy technology," Powell told the standing-room-only audience at the meeting. "No regulator, federal or state, should tread in the area without compelling justification to do so."

Fellow Republican FCC Commissioners Kathleen Q. Abernathy and Kevin J. Martin also called for regulatory restraint at the meeting. Abernathy said the technology required only "a light regulatory touch."

Democrats Jonathan S. Adelstein and Michael J. Copps, however, expressed concern about the technology's effect on public safety and the maintaining of universally affordable phone service. Traditional phone companies are required to provide universal service, subsidized by all customers.

Experts say the technology could transform the $300-billion telecommunications industry within the next decade. Equipment revenue at companies providing Internet- based telephone service totaled $3.3 billion last year and is expected to rise to $15.1 billion by 2007, said Thomas Valovic, a program director at technology researcher IDC, a unit of Boston-based International Data Group.
http://www.latimes.com/technology/la...nes-technology
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Anonymous File Sharing Network Not So Anonymous After All?
Posted Eric Bangeman

Two Japanese computer users suspected of trading movies and games were recently arrested according to Japanese police. What makes this case especially interesting is that they were accessing a supposedly- anonymous file-sharing network via a program called "Winny," which purports to hide the user's identity from the rest of the network. The network based on Winny has around 250,000 regular users and is popular because of the anonymity it supposedly offers. Along with the two men arrested, the home of the developer of Winny was raided by police.

Winny is reportedly based on probably the best-known anonymous file-sharing application Freenet. This network provides anonymous untraceable sharing by dividing up files and distributing them across different computers. The network is also cryptographically secured. However, Freenet's creator, Ian Clarke, has questioned any close connection. "From what I have seen of Winny (which isn't much) it is more likely that they have borrowed a few ideas from Freenet," Clarke writes in an online posting. "But it is unclear whether Winny uses a Freenet-style routing algorithm, or implements any of Freenet's crypto."

Since the advent of legal action against file traders, anonymous and other closed networks have become more popular for trading music, movies, and programs. The arrests in Japan mark the first time someone has been nabbed for using one of these networks. As more legal pressure is brought to bear on the practice of file sharing, dedicated traders will look harder for means of obscuring their identity. However, as the arrests in Japan demonstrate, true anonymity on the Internet is difficult - if not impossible - to find.
http://arstechnica.com/news/posts/1070383658.html


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Kazaa's Premiere
Nicole Manktelow

An Australian surf movie and a Bollywood blockbuster have premiered as the first full-length feature films to be available - legitimately - via the peer-to-peer file-sharing application Kazaa.

Surf movie maestro Jack McCoy's Tahitian odyssey, To' Day of Days, (To' is pronounced 'toe') can be downloaded for $US4.90 ($6.80). It joins the Hindi language film Supari, a thriller by director Padam Kumar, which costs $US2.99.

The two films will provide Kazaa's owner, Sydney-based Sharman Networks, with important examples to woo other filmmakers and prove itself as a bona-fide distribution network.

Kazaa claims 60 million users and the mantle of being the world's most downloaded software, but its file-sharing abilities are most loved for allowing users to swap files, including pirated content, freely.

This leaves the company with the formidable challenge of gaining the trust of the broader entertainment industry that, while warming to digital content, has shown little tolerance for file- sharing systems.

While Sharman Networks claims no control over the content its users share among themselves, it does have access to a copy-protection technology from partner Altnet.

"We work with Altnet to create a market for licensed content, promotion and distribution ... it's everything we want to be in the future," says Sharman Networks' marketing director, Michael Liubinskas.

The company recently launched a $US1 million advertising campaign targeting the entertainment industry in the US, Britain and Australia, and in particular attempting to change perceptions of Kazaa users. One advertisement placed in US print media included the line, "They are not pirates. They are your customers."

Not yet convinced, the Recording Industry Association of America has so far declined to test the protection technology.

Using the system, protected movies may be swapped and shared between users as freely as any file on a peer-to-peer network; however each user will be asked to pay a licence fee (billed to a credit card) when they run the downloaded file.

This payment mechanism was an important consideration for filmmaker McCoy before he released To' Day of Days.

"That was absolutely one of my major issues. I was wondering, once it is out there, is it going to be out there forever?"

McCoy has produced, directed and photographed 23 films, many considered surfing classics. The Avalon-based filmmaker is now finishing his latest epic Blue Horizon, which has been sponsored by the clothing giant Billabong.

"We are developing plans to release the new movie online. Billabong is thrilled," McCoy says.

McCoy has been selling To' Day of Days on video and DVD from his website for about a year.

"The e-commerce experience for me has been with fans overseas who have not been able to get my films and have to get in touch," McCoy says. With Kazaa, he believes his film is already reaching a new audience, especially with a free four-minute extract from the full movie.

At 400MB, the full-length version is targeted at those on broadband connections. Big files are no problem according to Kazaa's Liubinskas. "We have had success in selling 800MB games," he says.

The film Supari, released online thanks to a distribution agreement between filmmaker Aum Creates and Altnet, has so far achieved 200 sales via Kazaa, says Liubinskas. "People are paying for it," he says.

As well as the film, there are production footage and trailers, the soundtrack and music video clips from the feature, which can be bought for US90 cents ($1.25).

"Both films are really big steps for us," says Liubinskas, who adds the company is hunting for more licensed content.

"We have someone sourcing Asian films and someone sourcing French films now. We're already in discussions with the BBC ... they have a charter to distribute all the content they create but they can't have 25 channels."
http://www.smh.com.au/articles/2003/...351783049.html


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Getting Real About the DVR Threat
Diane Mermigas

Television broadcasters, who increasingly find themselves adrift in a multichannel media world, have only themselves to blame and may have only a few years to salvage or leverage their grass-roots franchises.

That is the pragmatic warning from SG Cowen analyst James Marsh in a new report, "Will the Current Ad-Supported TV Model Be Zapped by DVRs?"

Unlike the growing number of Wall Street research analysts who have similarly accepted and focused on how rapidly growing digital video recording technology will compromise broadcast revenues and profits, Mr. Marsh has put his money where his mouth is.

Because he expects a balance sheet threat to materialize by 2005, Mr. Marsh has downgraded four broadcast-related companies and lowered financial performance estimates for the seven media concerns he tracks.

Mr. Marsh made the uncommon move of lowering the ratings on four major broadcast groups- Hearst-Argyle, Gannett, Tribune and Univision-to "market perform" from "market outperform." He also lowered his long-term estimates for growth in earnings before interest, taxes, depreciation and amortization for those four media companies and three others in his coverage group-including New York Times Co., E.W. Scripps and Emmis Communications-despite what will likely be a profitable cyclical quadrennial year in 2004.

The rollout of DVR-type technology, hastened by its integration in cable set-top boxes as a weapon in cable's battle with satellite for subscribers, will reach critical mass with 11 percent penetration of U.S. television households by 2005 and 15 percent by 2006, Mr. Marsh said. By that time sponsorships and product placement, or even long-awaited deregulation, will offset the rapid loss of spot television advertising revenues.

"The broadcasters who do not own the bulk of the programming they air [namely affiliate groups] will be most at risk during this transition period," he said.

As a result, five-year earnings growth for TV station groups could fall from as much as 10 percent to as low as 4 percent, Mr. Marsh said.

"As penetration levels rise, we see commercial ad skipping among DVR subscribers to blunt top-line growth as ratings for commercials diverge from program ratings," he said. "While we don't think DVR technology will destroy ad-supported television entirely, it will be increasingly difficult for broadcasters to rein in highly fixed cost structures before their cash flow and revenues growth rates slow."

But the scariest part about all of this is the lack of response from broadcasters, which do not share Wall Street's emerging sense of urgency about how DVR-type technology is being adapted more quickly and undercutting their ad-supported economics more quickly than previously expected.

In fact, Mr. Marsh had intended to devote an entire section in his Nov. 11 report to broadcasters' responses and solutions, only to find there wasn't much when they were asked.

"It's reminiscent of re-arranging the deck chairs on the Titanic," Mr. Marsh said. "It scares me a bit because some of the businesses are in a very awkward position. Especially the affiliate groups. After all, the only programming they own is their local news, and they are hard-pressed to do product placements.

"No one seems to be taking it very seriously, but I think behind the scenes they have to be very nervous."

Mr. Marsh's forecast and assumptions leave little room for argument: Once DVR technology reaches mass-market proportions, five-year TV ad revenue growth will drop to 3.8 percent from 6.5 percent.

During the same period, total ad-supported TV ratings will remain flat despite share shifts to cable from broadcast. Advertising CPMs (costs per thousand impressions) grow only 3 percent annually, just ahead of inflation. All the while, the average revenue growth of various ad-supported TV platforms remains relatively low even before factoring in the impact of DVR ad skipping. Mr. Marsh forecasts average annual revenue growth of 4 percent for the Big 4 networks, 5.6 percent for national spot, 5.3 percent for local spot, 9.2 percent for cable networks, 9.4 percent for local cable and 6.2 percent for syndication.

With DVR users skipping an estimated 60 percent of commercials-what Mr. Marsh contends is a "conservative estimate"-the collective impact represents a threat to revenue and cash flow growth that cannot be offset, even by the most rigorous cost containment or deregulation.

"The tactics once employed by broadcasters to assure their profitability will lose their effectiveness," he said. Suddenly, the popular programs the broadcast networks paid a premium to maintain on their schedules as prime-time lead-ins, lead-outs and anchors of nightly schedules are no longer effective. Viewers recording their favorite shows, such as "Friends," while failing to sample new series such as "Single Guy" destroys the entire broadcast network economic system, Mr. Marsh said.

As if Mr. Marsh's straightforward assessment weren't scary enough, it comes amid a prime-time television season fraught with still more unexpected downside.
http://www.tvweek.com/deals/112403dicolumn.html


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Sharing and Stealing
Jessica Litman

Wayne State University Law School

Abstract:
The purpose of copyright is to encourage the creation and mass dissemination of a wide variety of works. Until recently, most means of mass dissemination required a significant capital investment. The lion's share of the economic proceeds of copyrights were therefore channeled to publishers and distributors, and the law was designed to facilitate that. Digital distribution invites us to reconsider all of the assumptions underlying that model. We are still in the early history of the networked digital environment, but already we've seen experiments with both direct and consumer-to-consumer distribution of works of authorship. One remarkable example of the difference consumer-to-consumer dissemination can make is seen in the astonishing information space that has grown up on the world wide web. The Internet has transformed information and the way we interact with it by creating an easily accessible, dynamic, shared information space. Its success derives from the fact that information sharing on the Web is almost frictionless; individuals are free to post information they learned from others without having to secure their permissions. This paper proposes that we look for some of the answers to the vexing problem of unauthorized exchange of music files on the Internet in the wisdom intellectual property law has accumulated about the protection and distribution of factual information. In particular, it analyzes the digital information resource that has developed on the Internet, and suggests that what we should be trying to achieve is an online musical smorgasbord of comparable breadth and variety. It proposes that we adopt a legal architecture that encourages but does not compel copyright owners to make their works available for widespread sharing over digital networks, and that we incorporate into that architecture a payment mechanism, based on a blanket or collective license, designed to compensate creators and to bypass unnecessary intermediaries.
http://papers.ssrn.com/sol3/delivery...tractid=472141

http://papers.ssrn.com/sol3/delivery...er - 127KB PDF

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Holiday Greetings: RIAA Files More Lawsuits
Roy Mark

The Recording Industry Association of America (RIAA) sent early holiday greetings to alleged peer-to-peer (P2P) music pirates Wednesday, filing 41 more lawsuits claiming "egregious" copyright infringement. In addition, the principle trade group of the music industry said it notified another 90 people that it intends to file suits against them.

The RIAA defines egregious as distributing 1,000 or more "copyrighted music files for millions of strangers on the Internet to copy for free."

Since September, when the RIAA launched its legal campaign against individual file-swappers, the music industry has filed 382 legal actions. Almost 300 more P2P users have been notified of possible infringement violations.

The RIAA says it has secured 220 settlements with file-sharers, resulting from a combination of lawsuits filed, notification letters sent to those targeted for legal action, and individuals who had contacted the RIAA after learning that their identifying information was subpoenaed from their Internet service provider (ISP).

According to the RIAA, the lawsuits help to foster an environment that provides a level playing field for the growing number of legitimate online music services to thrive.

"The legal actions taken by the record companies have been effective in educating the American public that illegal file sharing of copyrighted material has significant consequences," said RIAA President Cary Sherman. "Consumers are increasingly attracted to the host of compelling legal online music alternatives."

Additionally, the RIAA said, more than a thousand people have filed "Clean Slate" affidavits, an RIAA amnesty program for P2P network users who voluntarily identify themselves and pledge to stop illegally sharing music on the Internet. The program has been attacked as misleading and in California, a lawsuit has been filed claiming the program is a deceptive trade practice.

Research from Peter D. Hart Research Associates released by the RIAA indicates the anti-piracy campaign is having an effect on illegal file-swapping. Hart's survey results from a November poll, among 802 Americans age 10 and over, show that 64 percent of those polled understand it's illegal to "make music from the computer available for others to download for free over the Internet."

That's up from 37 percent in November of last year, and for certain subgroups, the new awareness numbers are even higher, for example, 69 percent versus 16 percent among "regular Internet users."

The Hart data also claims that by a 52-20 margin, those surveyed feel there are now good legal alternatives to illegal downloading.
http://dc.internet.com/news/article.php/3116101


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Salute The Flag
Wendy M. Grossman

THE FEDERAL Communications Commission published new rules this week allowing over-the-air broadcasters to insert a “broadcast flag” into high-definition digital transmissions that would allow personal copying but block redistribution – at least, in the original high- definition format. All devices (such as VCRs and DVD players) that are capable of receiving digital TV broadcast signals that are sold after July 2005 will be required to have a tuner card that recognizes the flag. Getchyer unprotected TV equipment now, folks!

Seriously, the claim that is being used to justify this decision is that if broadcasters can’t protect their content from piracy they’ll move it off free-to-air networks and onto secured subscription channels such as HBO. Or, in the words of FCC chairman Michael Powell, introducing the new rules, “The widespread redistribution of broadcast TV content on the Internet would unnecessarily drive high-value programming to more secure delivery platforms.”

Now, let’s think about this. To whom is this a threat? Not the program makers: they’re saying they’ll simply move their distribution elsewhere. Not the cable/satellite channels who presumably are the fantasy recipients of this “high-value programming”. Be the first channel on your block to carry the new season of Friends! It’s meant to be a threat to ordinary TV viewers, who might have to pay more to see Survivor. The only network TV series that I can imagine on HBO is The West Wing.

These subtle differences are, by the way, generally lost on international viewers of American TV shows, even commentators for major newspapers outside the US and Canada. I remember reading an article in one of the British broadsheets that was based on the notion that people actually chose between watching Sex and the City and Friends (and condemning Americans for being so stupid as to choose the latter), with no understanding of the different contexts and business models in which they appear.

So really, the threat is to network broadcasters whose market share has been ebbing for two decades. Those folks have a lot of clout, of course, and to be fair I think it is important that we continue to have freely accessible broadcasting.

The immediate impact of the new rules seems likely to be minimal, at least in terms of existing equipment. It is already possible to download whole episodes of new TV shows less than 24 hours after their broadcast and sometimes even before, if someone intercepts the satellite feed. This is not going to stop instantly: the broadcast flag won’t, for the moment, stop you from recording the show and watching it yourself. The FCC proposes to make rules later that will define the boundaries of a “personal digital network environment”, a zone within which copying and redistribution will be permitted. We, of course, might like that PDNE to include all our own personal devices plus all our friends and families; the MPAA will doubtless want it to be confined to a single copy tied to a single device. But that’s some way down the path.

Where the rules will have more impact is on equipment that could be made now and that people want to buy now, but that the MPAA wants to block. SonicBlue was driven out of seeling the Replay device that would allow anyone with a copy of a TV show to hit a “Send” button to dispatch a copy across an ethernet connection to a friend of relative with the same device. I know someone who transfers copies of American game shows from the US to the UK this way (expatriates get nostalgic for the strangest things). Wouldn’t you prefer your high-def TiVo to have a built-in DVD burner? However, although it’s probably fair to say, as Paul Boutin does on Slate, that the broadcast flag is not the end of the world and the FCC in its rule calls the broadcast flag a “speed bump” rather than a total blockade, it’s important to remember that the most likely scenario is that it’s a first step. The MPAA is not being as stupid as the RIAA in that it’s not suing children for sharing files, but it still wants more digital control rather than less. The next point of attack will be what is now being called the “analog hole”. That is, the bypass that will continue to allow people to make analog copies (certainly no worse in quality than today’s, and possibly much better) of broadcasts and digitize and share those. A working group has already been set up to consider this problem, as has the EFF, “Cruelty to Analog”. Satellite and cable systems, which are more secure, also have an analog hole, so anyone wanting to defend the fair-use rights we still have is going to be facing a much bigger array of interests.

The really unfortunate thing about all this is that all discussion of the future of broadcasting has been diverted into the copyright wars. Where is the will to demand a quid pro quo? Let the broadcasters have their flag if – and only if – they continue to provide services of public importance. Like hard and international news, which erodes year by year in favor of celebrity gossip. Somewhere along the line “high-quality” has been hijacked to refer only to the quality of the picture, not its content.
http://www.theinquirer.net/default.aspx?article=12919


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Will the Broadcast Flag Break Your TiVo?
The FCC ruling explained.
Paul Boutin

Television fans accustomed to recording shows and watching them later are still trying to make sense of the Federal Communications Commission's Nov. 4 ruling, which says digital TV sets built after July 2005 will need to include an anti-piracy system called a broadcast flag, meant to keep high-definition digital broadcasts from instantly becoming Internet bootlegs. Broadcast-flag technology works like this: Digital TV signals that are broadcast over the air, rather than transmitted via cable or satellite, will include an invisible data tag—the broadcast flag—along with the picture and sound. By FCC fiat, any digital TV tuner built after July 1, 2005, must refuse to allow broadcast-flagged programs to be recorded in such a way that they can be redistributed in their high-definition format. You'll be able to record Letterman tonight and watch him tomorrow but you won't be able to e-mail a copy to your friends.

People have been taping and sharing TV shows for years, so why should the FCC care now? Chairman Michael Powell hopes to clear America's airwaves by pushing TV broadcasters from analog to digital, which uses scarce bandwidth much more efficiently. But Hollywood moguls who make the shows broadcasters want to carry have been reluctant to let them be sent through the air in HDTV format. It's a reasonable fear: A digital TV broadcast can be easily grabbed and saved to disk as a perfect copy of the original, which alarms the studios that produce the shows. Unless the broadcasters have a way to protect content, they won't be able to license or purchase shows, and if they don't have access to the shows, they won't be able to compete with cable and the satellite-TV folks.

But never mind the industry gossip. How will the broadcast flag affect your viewing? It'll be an annoyance for some, but it's not the end of the world some tech reporters predicted. Instead, it's more like the Big Four networks' last stand against their competitors.

Here are the FAQs:

Will the broadcast flag break my TiVo?

No. The FCC's ruling specifically requires that current consumer gear not be disabled by the broadcast flag. If you use TiVo or ReplayTV now, and you can figure out how to wire an analog line from a future digital TV tuner to your current personal video recorder (the required adapters will be selling like hotcakes), you'll still be able to record and play shows as usual. The trade-off is that your recordings won't be in the new high-definition format—they'll be converted to the same analog-signal-quality your TiVo now records.

What about the new high-definition digital recorders? Will they allow me to time-shift shows, skip commercials, or pause live broadcasts?

Yes. One of the biggest myths about the broadcast flag is that TV networks are pushing the flag to end time-shifting and to force viewers to watch the commercials. In reality, the flag's purpose is to stop file-sharing, not time- shifting. ABC, CBS, Fox, and NBC, want to protect their audience-share by offering programming that's as good as what's on HBO without having it go straight to KaZaA.

Will I be able to trade high-definition episodes of Everybody Loves Raymond with other people?

No. That's exactly what the broadcast flag aims to stop, which is why the major networks will wait until the restriction is in place before making the switch to digital broadcasting. But you'll still be able to make and trade lower-resolution recordings if you keep the gear you use today. That's the surprising loophole in the broadcast-flag scheme: Copyright holders seem willing to put up with bootlegs on the Net, as long as they aren't bit-for-bit high-definition copies. The flag isn't so much a roadblock as a speed bump.

Is it true the new video recorders won't be compatible with my existing DVD player?

Yes. The copy-protection scheme for broadcast-flag shows will require a different data format that isn't backwards-compatible with the current standard. A show recorded on a 2006 digital video recorder won't play on older DVD players. Hopefully new DVD players will be rejigged to accommodate the broadcast flag so you can record a show in your living room and play it in your bedroom, but it's not yet clear how (or whether) that will work.

Isn't that kind of annoying?

Absolutely. It's a good example of the problem with anti-piracy mechanisms: They often disrupt perfectly legal viewing habits as a side effect. For example, the Macrovision copy protection on all new VHS players, mandated by the Digital Millennium Copyright Act of 1999, sometimes scrambles rental tapes that, in theory, it should play normally.

I get my television via cable or satellite. Does the broadcast flag apply to me?

No. Cable and satellite are regulated separately from traditional through- the-air broadcasts, so your set-top box won't be watching for the flag. Cable-satellite copy-protection mechanisms are negotiated individually between the maker of your television's tuner, such as Sony, and the content providers, such as Time Warner.

But if you're a cable-viewer seeking an excuse to fume at the Feds, take heart. The FCC has mandated that all televisions of more than 13 inches must include a digital tuner by 2007. You'll have to pay an extra couple of hundred bucks for one in your next set, even though you'll never use it.

Is there any TV gear I should stock up on before it's illegal?

Yes. Buy a high-definition TV tuner-card for your PC before July 2005. After that you may only be able to get a crippled one, and these new cards will capture, record, and play digital broadcasts in lower resolutions. The reason for the ruling: If TV broadcasters start sending movies such as Finding Nemo over the air in high definition, it will be too easy for any techie to set up a PC that automatically uploads perfect copies to the Net.

Won't that happen anyway?

Probably.

Where can I read the details of the broadcast-flag ruling online?

The FCC's full report and order are available in both Word and PDF format but might be hard to grok. If it's too geeky, the Center for Democracy and Technology has posted a broadcast-flag primer that translates government-speak into English.
http://slate.msn.com/id/2091723/


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Paper

Stopping Digital Copyright Infringement Without Stopping Innovation
Mark A. Lemley

Suing actual infringers is passé in copyright law. In the digital environment, the real stakes so far have been in suing those who facilitate infringement by others. Copyright owners tend not to sue those who trade software, video, or music files over the Internet. Indeed, such suits are so rare that the RIAA’s recent announcement that it would sue some actual infringers sent shock waves through the legal community. Instead, copyright owners sue direct facilitators like Napster,[4] makers of software that can be used to share files,[5] those who provide tools to crack encryption that protects copyrighted works,[6] search engines that help people find infringing material,[7] and quasi-ISPs like eBay or Yahoo Auction.[8] All of these suits rely on theories of secondary liability, focusing on those who provide services or write software that can be used in an act of infringement.[9]

In addition, there is a new theory of what might be called “tertiary” liability that seeks to reach those who help the helpers. Cases in this vein include lawsuits filed against those who help others crack encryption, for example by providing links to software that can be used to crack encryption,[10] the copyright lawsuit against backbone providers for providing the wires on which copyrighted material flows,[11] the claims filed against the venture capital firm of Hummer Winblad for its role in funding Napster,[12] and (with an unusual twist) the malpractice suit against the law firm of Cooley Godward for advising mp3.com that it could assert defenses to copyright infringement.[13] The anticircumvention provisions of the Digital Millennium Copyright Act (DMCA) provide for one particular type of tertiary liability (for providing tools that circumvent encryption protecting a copyrighted work and that can be used to infringe the work’s copyright),[14] and there have even been suggestions that there should be a new tort of contributory violation of the DMCA’s anticircumvention provisions, which should perhaps be termed quaternary liability for copyright infringement.[15]

Further, a number of doctrines that were designed to protect these secondary and tertiary “facilitators” – the “safe harbor” for online service providers,[16] the restrictive standard for contributory copyright infringement for equipment providers announced by the Supreme Court in the Sony Betamax case,[17] and the requirement that vicarious infringement be limited to cases of direct financial benefit[18] – are under attack. The ALScan and Perfect 10 cases undo much of the benefit of section 512’s protection for Internet service providers.[19] Napster rewrites the rule of Sony in a way that significantly limits its application.[20] And both Napster and Fonovisa have all but eliminated the requirement of direct financial benefit in vicarious infringement.[21] It’s also worth noting that the doctrine of the corporate veil, which protects investors from liability in most areas of law, appears not to function in copyright.[22] And proposed legislation would go even further in regulating the behavior of those who do not themselves infringe, injecting Congressional oversight into how software and consumer electronics are built[23] and permitting content owners to unleash destructive hacks of computer networks without fear of liability.[24]
http://intel.si.umich.edu/tprc/paper...novation. htm


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Covert P2P Network Fails To Hide Users

Two users of a Japanese file-sharing network that promised anonymity have been arrested.
Staff, John Borland

A Japanese peer-to-peer (P2P) file-sharing network which claimed to keep user identities untraceable has failed to work -- two users in Japan have been arrested.

The developer of the P2P software has also had his home searched by police, according to a report in the Mainichi Daily.

There are around a quarter of a million users of the supposedly anonymous file-trading network, called Winny, which rides on the more well-known Freenet network.

Such networks differ from other file trading software, such as Kazaa, in that they claim to be able to hide the Internet Protocol (IP) addresses of users. It is not known how the police managed to track down the two users, or why criminal action is being taken against them. In other countries, P2P users have been hit with civil lawsuits instead.

The creator of Freenet, Ian Clarke, has cast doubt on whether Winny uses Freenet's full identity-cloaking features or its cryptography, according to a report in New Scientist.

Freenet is an open-source project and is the most prominent of a growing number of projects aimed at giving people the ability to communicate online without being tapped, traced or monitored.

The software marks an attempt to create a network that exists as a parallel Internet, where content of any kind can be uploaded and downloaded without any way to track who created a given "site".

Unlike other peer systems, Freenet has a built-in method of pushing content between different computers, so that a given file can migrate around the network between different people's hard drives until it is stored near regions where it is most often used.

The arrested are two men, aged 41 and 19, said the Mainichi Daily report. Among other charges, the older man is accused of sharing the Hollywood movie "A Beautiful Mind" while the teenager is being held for making the game Super Mario Advance available online.

Several companies, including game maker Nintendo, are pressing charges against the pair. This is the first known case of legal action being taken on users on anonymous file-sharing networks.

In Korea and Taiwan, lawsuits have been filed against users of P2P networks. A copyright body in Taiwan is suing three users of file sharing networks, while in Korea recording companies are threatening to do the same.

In both countries, creators of file sharing software have been brought to court, but defendants are arguing that they are not responsible for what people choose to share. Both cases involve homegrown P2P networks sharing local-language music.

In Taiwan, the International Federation of the Phonographic Industry (IFPI) has sued three P2P users who are said to have shared files on the locally-popular Kuro and Ezpeer networks.

Unlike internationally popular networks such as Kazaa, both Taiwanese services are fee-based.

The Recording Industry Association of Korea (RIAK) is said to be mulling suing end users of free-use P2P software Soribada.

Soribada's 4.5 million users have lost the recording industry millions in revenue, claimed the RIAK. The makers of the software have been slapped with a $16,300 (Ł9428) fine, despite claiming that they are not responsible for the actions of its users.

In the US, the Recording Industry Association of America (RIAA) has targeted hundreds of P2P users for legal action.

There is some evidence that the controversial RIAA lawsuits against ordinary computer users are making a dent in the file-swapping world. According to Web analysis firm Nielsen/NetRatings, weekly usage of the Kazaa software in the United States plummeted from a high of 7 million people in early June to just 3.2 million people in late October.
http://news.zdnet.co.uk/internet/0,3...9118255,00.htm


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AOL Site Blocked For Bypassing Proxy
Mahmood Saberi

The AOL site has been blocked for the last four days as it was advertising a proxy 'tunnelling' service for $20, an informed source told Gulf News yesterday.

Call centres have received calls from people complaining that they cannot access the site. "They will also not be able to access their email on AOL," he said.

In simple terms what the tunnelling service helps you to do is bypass the Etisalat proxy service, which refuses access to URLs if they are on a list of banned sites. The proxy also blocks you if a content check of the site you are accessing turns up objectionable material.

If you try to access such sites, you get a cryptic message on the screen saying, 'Blocked Site, Access denied'.

Etisalat subscribers are advised not to utilise the service for "any other criminal or unlawful purpose such as, but not limited to vice, gambling or obscenity or for carrying out any activity which is contrary to the social, cultural, political, economical or religious values of the UAE."

However, systems connected to dedicated lines were found to have access to the site. Asked what happens if the proxy server blocks a site by mistake, the staffer said an e-mail should be sent to watch@emirates.net.ae and if there is a mistake, it will be unblocked.

Gulf News found another email address on the website on which complaints can be sent: custserv@emirates.net.ae. Sources said hackers could get around the proxy connecting to an international server.
http://www.gulf-news.com/Articles/ne...ticleID=103693


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Amnesty Accuses Vietnam Of Silencing Online Dissent

Amnesty International accused the Vietnamese government of using national security as a pretext to silence cyber-dissidents and stifle freedom of expression on the Internet.

In a new report, the human rights group said the crackdown was the result of the communist regime's concern over use of the Internet by political dissidents to circulate opinion. "In Vietnam, pushing the 'send' button can result in dire consequences including years in prison and family and friends put under 24-hour surveillance," Amnesty said Wednesday. The 34-page report by the London-based organization coincided with Wednesday's one-day annual human rights talks in Hanoi between the European Union and Vietnam. Since 2001 at least 10 people critical of government policies have been arrested for exchanging e-mails with overseas Vietnamese, posting articles critical of the government on the Internet and expressing dissenting opinions. Six of these cyber-dissidents have been sentenced to long prison sentences after unfair trials, Amnesty said. Others are awaiting trial. "These arrests attest to a sense of paranoia among the leadership of the government who feel under threat and fear a 'peaceful evolution' which could threaten the current supremacy of the Communist Party of Vietnam," it said. Vietnamese foreign ministry spokesman Le Dung, however, dismissed the "biased and erroneous" report, saying only people who violated the law were punished. Hanoi maintains tight control and surveillance over the Internet, to which around 2.5 million people out of a population of 80 million have access, mainly through Internet cafes. Websites critical of the authoritarian, one-party system are firewalled, while Internet cafe owners have also been instructed to prevent their customers from accessing "subversive and poisonous" material. Amnesty called for the immediate and unconditional release of all "prisoners of conscience detained solely for peaceful expression of their opinions". The organization highlighted the case of two nephews and a niece of imprisoned Catholic priest Father Thadeus Nguyen Van Ly, a lifelong critic of Vietnam's religious rights record. Nguyen Vu Viet, Nguyen Truc Cuong and their sister Nguyen Thi Hoa were jailed in September for three to five years for emailing information about their uncle and the religious situation in the country to US-based activists. Amnesty says their appeal trial is due to take place on Thursday. In December last year, Nguyen Khac Toan, a 48-year-old former soldier and businessman, was also jailed for 12 years on espionage charges for passing information to overseas Vietnamese groups about protests by farmers in Hanoi. And in June this year 35-year-old businessman Pham Hong Son was handed a 13-year sentence after he posted an article about democracy on the Internet. It was reduced to five years on appeal following an international outcry. Amnesty also pointed to the paradox between the government's desire to harness the Internet for socio-economic growth and its censorship activities. "The Vietnamese government appears unwilling to recognize that the Internet can only be a tool for development and prosperity if the right to freedom of expression and information is respected fully in both law and practice."
http://uk.news.yahoo.com/031126/323/eeyk6.html


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Chinese Man Tried For Online Subversion In Shanghai

An unemployed man was tried for "incitement to subvert the state" after he published an article on the Internet accusing China's ruling communist party of corruption, a human rights group said.

His message also called on the party to "protect the rights and interests of the weaker classes as well as those of retired workers and people expelled from their homes." Sang Jiancheng's trial began Wednesay at 9:00 am (0100 GMT) and ended two hours later with no verdict announced, the Hong Kong-based Information Centre for Human Rights and Democracy said. The Shanghai Intermediate People's Court charged Sang, 61, with subversion for posting incendiary material on the Internet. He was arrested in November last year. The charge is commonly used by Chinese authorities to punish anyone who is seen as opposing the government. Court officials were not immediately available for comment. The subversion trial was the first of its kind in Shanghai since Lin Hai was tried on the same charges in 1999 for expressing his political views, the rights group said. China has heightened its crackdown on cyber-dissidents this year, with four people accused of state subversion condemned to between eight and 10 years in prison in May. Other Internet dissidents are likely to be convicted before the end of the month, in southwestern Sichuan and northern Shaanxi provinces, as well as Beijing, according to the rights group.
http://uk.news.yahoo.com/031126/323/eez5k.html

Leading Chinese Internet Dissident Jailed For Four Years

Prominent Internet activist Jiang Lijun was jailed for four years after being convicted of subverting state power by planning to set up a pro-democracy party, his lawyer said.

"The verdict was handed down at 2 pm (1100 GMT) this afternoon. Jiang is very calm," Jiang's lawyer Mo Shaoping told AFP on Friday. "He pleaded innocent and we need to talk more to decide whether we will appeal." Jiang's wife, Yan Lina, who was in the Beijing No. 2 Intermediate People's Court for the six-minute sentencing hearing, called the verdict "incorrect and unfair". Jiang was detained in November last year, suspected of being a ringleader of online pro-democracy activism. According to Mo, he was convicted for advocating democracy on the Internet and for intending to organise a political party known as the China Freedom Democracy Party. Reflecting his prominent status, he has been kept in Beijing's Qincheng Prison which has previously held China's last emperor Pu Yi and several senior-level Communist Party officials. Jiang is reportedly a close confederate of other Internet activists, including Liu Di, a Beijing student who was also arrested a year ago after posting democracy essays online. The case of Liu, a 22-year-old psychology student known by her online alias of "Stainless Steel Mouse," has proved a hard nut to crack for China's law enforcers. Prosecutors bounced it back to police earlier this month, telling them to come up with better evidence. China's government -- happy about the Internet's economic potential but concerned about its political implications -- seems to have launched a clamp-down on online dissent in recent months.
http://uk.news.yahoo.com/031128/323/ef58e.html


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Army Quietly Opens JetBlue Probe
Ryan Singel

The Pentagon, which has remained tight-lipped for the past two months about its part in the JetBlue passenger data scandal, told an oversight committee last week that the Army Inspector General's office is looking into whether the Army violated the Privacy Act when it hired a contractor to use airline passenger records to study base security.

The announcement comes just weeks after Governmental Affairs Committee chairwoman Susan Collins (R- Maine) and ranking member Joe Lieberman (D-Connecticut) wrote Defense Secretary Donald Rumsfeld asking whether the Pentagon had complied with federal data protection rules and whether an investigation had been launched.


The Army has not responded to the senators' questions, though they expect to be notified in writing of the new investigation later this week.

The Army's investigation is likely the third federal inquiry into possible violations of law stemming from JetBlue's handing over almost 5 million passenger records -- in violation of its own privacy policy -- to a defense contractor. That contractor, Torch Concepts, then augmented that data with Social Security numbers and other personal data which it bought, with JetBlue's permission, from data giant Acxiom.

However, civil liberties advocates, such as the director of the ACLU's technology and liberty program, Barry Steinhardt, were not trumpeting the quiet announcement.

"If the Army was really serious about public oversight, they would respond to our Freedom of Information request," Steinhardt said. "We'd like to think people want to know what the actual purpose was of getting JetBlue's logs."
http://www.wired.com/news/privacy/0,1848,61374,00.html


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Rules to Address Holes in Software

Major tech companies work to formalize guidelines for steps to take when security flaws are detected.
Joseph Menn

As the cost of securing data against malicious attacks continues to escalate, big technology companies and security researchers are stepping up efforts to control the spread of information about software holes that make computers vulnerable to hackers.

Yet they fear they are not moving fast enough to avert a wave of lawsuits and legislative action that could impose strict rules on corporate software buyers, criminalize the work of some security researchers or hold companies like Microsoft Corp. liable for attacks on their customers.

"It's not a matter of if but when there will be new regulation," said Vincent Weafer, senior director of incident response at Symantec Corp. in Cupertino, Calif., which makes anti-virus and other security software.

Overall data security, which wasn't very good to begin with, has been getting worse as software is designed to do more things and connect more people. Hackers and other researchers have been finding flaws with increasing frequency, and saboteurs are exploiting those flaws by designing viruses, worms and other programs at ever faster rates.

That's why most security researchers agree not to publicize the holes they find until target software makers come up with patches and distribute them to customers.

Now some of the biggest names in technology are trying to formalize the process by crafting guidelines to govern when security holes are disclosed and the corresponding patches are released. Working under the auspices of the Organization for Internet Security, Microsoft, Symantec, Oracle Corp. and other companies are hammering out rules they hope will pressure bug finders not to publicize their findings until it is deemed safe for them to do so.

"We think it will improve the situation," said Scott Culp, senior security strategist for Microsoft.

The guidelines, which don't have the force of law, lay out nearly a hundred steps for what a person should — and shouldn't — do after finding a hole. They also govern the appropriate responses for the company that wrote the faulty software.

At first, the plan says, a hacker should notify the software maker and refrain from publicizing the vulnerability. The software company, in return, is supposed to keep the hacker informed as it conducts tests and develops a patch, a process that should take about a month.

Then another month is supposed to elapse before the hacker may broadcast details about the problem he or she found.

If no software patch can be developed, according to the Organization for Internet Security, those details should never be released.

So far, the guidelines have won over few hackers who work for small companies or on their own.

"It's retarded," said Dave Aitel, a respected hacker and veteran of the National Security Agency.

Aitel and others complain that companies will falsely claim they can't construct a patch, leaving hackers no opportunity to publicize the flaws they find.

"The only people who will benefit … are the vendors, the criminals and" malicious hackers, Eric Raymond, a leading technical author, wrote to the Internet security group.

If a patch does come out, experts fear, talented virus writers will study it and work backward to find the underlying problem. Then they'll write a malicious program to exploit it, as they did with the Blaster worm this summer.

Meanwhile, many systems administrators will be reluctant to install the patch for the month before they know the underlying problem, since many patches turn out to have bugs themselves.

"The net result is that attackers will have a head start," said Byrne Ghavalas, a researcher with Network Security Consulting Services in Reading, England.

Still, big tech companies feel they have to do something. They fear Congress will pass laws holding them responsible when hackers breach the software they create, an approach being advocated by the National Academy of Sciences. Rep. Adam Putnam (R-Fla.), chairman of a House subcommittee on information technology, recently warned that the next time a major Internet virus strikes, Congress will be under extreme pressure to do something dramatic.

In the meantime, lawsuits and threats of legal action are piling up. A Los Angeles woman is seeking class-action status for her 2-month-old suit against Microsoft, arguing that it ran afoul of a new California law requiring companies to let customers know when hackers gain access to personal information.

More commonly, software companies are threatening to sue hackers who expose holes in their products. Hewlett-Packard Co., SunnComm Technologies Inc. and GameSpy Industries Inc. all have issued threats under the Digital Millennium Copyright Act, a 5-year-old law that prohibits distribution of some software code based on reverse-engineering. HP and SunnComm withdrew their threats after an outcry from security experts; GameSpy succeeded this month in forcing an Italian researcher to delete references to GameSpy bugs from his Web site.

"This is a battlefield," said Jennifer Granick, a cyber law specialist at Stanford University's Center for Internet and Society.

In response, some hackers are trying to pool their resources by creating a trade group.

Thor Larholm, a 23-year-old researcher at security consulting firm PivX Solutions of Newport Beach, said his as-yet-unnamed group would have as many as 800 members when it is announced around the end of the year. Their top priority is to fight the guidelines from the Organization for Internet Security, and they might lobby Congress on related issues as well.

Larholm said that if the OIS rules were enshrined in law, they would threaten the livelihoods of some hackers who make a legitimate living finding security holes and then helping to fix them.

"If you are required to tell the company the vulnerability, how can you possibly negotiate" a price for your efforts, said President Bob Weiss of Password Crackers Inc., a North Potomac, Md., firm that helps companies recover information hidden on their machines.

With fewer business opportunities, some hackers may migrate to the black market, where they can earn $5,000 selling programs that take advantage of an unpublicized hole to spammers, organized crime figures and other unsavory customers, said Mark Loveless, a BindView Corp. security researcher and former malicious hacker.

But he said the larger worry was that new laws, proposed legislation and the OIS guidelines were combining to undermine the security of computer networks.

"It all points to the direction of less information," he said.
http://www.latimes.com/business/la-f...1,838200.story


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Baseball Throws Web a Curve
Mark McClusky

Among the major professional sports leagues in the United States, Major League Baseball has consistently been the most innovative in covering its games and promoting its league online. In the past three years, MLB and its interactive division, MLB Advanced Media, has introduced dozens of online products, from radio shows to live video feeds of most major league games.

But during this off-season, MLB is on a quest to assert what it considers are its exclusive rights to transmit real- time information about its games online. And some of its partners aren't buying it.

The battle is being waged over what are commonly called gamecasts: real-time descriptions of baseball games, including who's batting, what pitches are thrown, the game situation and the outcome of each pitch. These online presentations of games are a standard feature of many sports websites, from MLB's own site, to ESPN.com, SI.com, Yahoo and CBS Sportsline.

"If someone is communicating information about a game in real time, on a pitch-by-pitch basis, that's an exhibition of that game," said Bob Bowman, the CEO of MLB Advanced Media. "There's no difference, in our eyes, between exhibiting a game using text and graphics and doing it on radio or television."

Using that argument, MLB says that it is entitled to a license fee, or that some other accommodation needs to be reached regarding gamecasts. What it is sure of is that anyone doing a gamecast needs to secure the rights to do so from MLB.

However, some of the other sites and companies involved in producing these sorts of gamecasts disagree. ESPN subsidiary SportsTicker has recently agreed to use statistics provided by MLB in their updates, but ESPN emphasizes that the agreement covers just SportsTicker and has nothing to do with its gamecasts.

"Our recent agreement is a small piece and a reflection of a positive, wide-ranging relationship with MLB, not a statement of either side's legal rights," said ESPN in a statement. "To characterize it as anything more is an overstatement."

The legal issues around sports-score updates are cloudy. In 1996, the National Basketball Association sued STATS Inc., a provider of real-time statistical information, and Motorola, the pager manufacturer, to prevent them from offering real-time information on NBA games while they were in progress. This information included the time remaining in the game, the score and who was in possession of the ball.

The case was first heard in district court in New York, where the court held that STATS and Motorola were using the NBA's proprietary data -- the real-time data of the games -- to make a profit in violation of New York state law.

But the Court of Appeals for the Second Circuit later overturned that ruling, stating that since the underlying facts of the game, such as the score, aren't copyrightable and since STATS and Motorola had spent their own time and money collecting that data, the service could continue.
http://www.wired.com/news/games/0,2101,61119,00.html


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Blind Eye To Piracy
Chris Jenkins

NEARLY one fifth of Australians had knowingly bought pirated computer and video games and would do so again if the price was right, a new study has found.

The findings come from the Cost of Counterfeiting Study conducted by the Allen Consulting Group on behalf of the Business Software Association of Australia (BSAA), the Interactive Entertainment Association of Australia (IEAA) and the Australian Toy Association (ATA).

The study contained research done by ACNielsen on consumer attitudes to piracy. It found that 18 per cent of Australians would knowingly buy pirated goods if they were cheaper than the genuine article. More (40 per cent) would buy pirated goods if they were 75 per cent cheaper than the original, while half would take pirated goods that were free.

The study found that 17 per cent of households interviewed had knowingly purchased pirated software of games.

A broader study by Allen Consulting found the Australian toy, software and interactive games industries lost $667 million in sales to counterfeiting during 2002. The study estimated the Australian software industry lost $446 million in sales in 2002, with $142.5 million in supplier profit lost, along with $11.9 million in profit for software retailers.

BSAA chairman Jim Macnamara said Australia's software piracy rates were higher than comparable markets such as the US, New Zealand and the UK.

"While Australia's copyright enforcement has been improved, it is still inadequate to significantly reduce the rate of software piracy and more stringent enforcement is needed to protect businesses and consumers," he said.

Losses from game software piracy would mount along with the growth of the games industry, IEAA president Michael Ephraim said.

The study found that $100 million in games sales was lost to counterfeiting in 2002, along with $21.8 million in profits to suppliers and $4.3 million in profit to retailers.

"The biggest problem area, in terms of counterfeit game production, is the backyard operator that sells games at markets or distributes them to friends and family," Mr Ephraim said.

The toy industry claimed $132 million in sales was lost to counterfeiting.
http://australianit.news.com.au/comm...E15306,00.html


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Music Industry Rejoices Over File-Sharing Victory
Bill Heaney

A decision in the legal case against a 22-year-old man surnamed Chung who shared music files over the Internet without the permission of record labels was hailed by the music industry yesterday as a landmark in the fight against online piracy.

"This case proves that peer-to-peer file-sharing infringes copyright," International Federation of the Phonographic Industry (IFPI) Taiwan branch secretary-general Robin Lee told the Taipei Times in an interview yesterday.

The music industry has claimed since 2000 that peer-to-peer Web sites break the law as they allow subscribers to download music via the Internet without paying royalty fees to the rights holder.

After successfully closing only one Web site -- Napster -- the industry changed tack earlier this year and started going after site users.

"We will use this case to let everybody know that users of peer-to-peer Web sites are breaking the law, and we will bring more cases to court if peer-to-peer doesn't stop," Lee said.

In Taiwan, the IFPI -- which represents 12 local and international record companies -- launched three cases against individuals, and two against the peer-to-peer Web sites Ezpeer.com.tw and kuro.com.tw .

The decision against Chung is the first result in the court cases. Last week, the prosecutors office of the Panchiao District Court decided to defer prosecution in the case against Ezpeer subscriber Chung after he admitted that he infringed the copyright law and agreed to publish an apology in the local press. The apology appeared last Friday.

Chung also signed agreements that he would not use peer-to-peer Web sites again, or share music files without the prior permission of rights holders. Under the deferred prosecution framework, Chung could be dragged back in front of the courts if he breaks the agreement and starts sharing files again.

One legal expert said the decision was important, but not final.

"This represents some kind of victory for the music industry," said Liu Yen-ling, a copyright lawyer with Winkler Partners in Taipei. "It shows that prosecutors at least think Chung is guilty, but it is not a complete victory."

The news comes as Taiwan's music industry struggles to survive. Taiwan's legitimate market in recorded music has dropped dramatically in value from NT$12 billion in 1997 to NT$4.9 billion last year, according to IFPI figures.

Meanwhile, peer-to-peer sites are raking in the cash. Kuro charges its 500,000 users NT$99 per month, netting the company NT$600 million per year. Ezpeer charges NT$100 per month with 300,000 members, which means NT$360 million per year.

Officials from Ezpeer and Kuro were not available for comment yesterday afternoon, but both have repeatedly claimed that their services are legal as they do not store songs on their servers, or charge subscribers to download music.

Consumers in Taiwan can buy music over the Internet without fear of prosecution. Earlier this month, iBIZ Entertainment Technology Corp launched a music download site in Taiwan in cooperation with 14 record labels, charging between NT$10 and NT$30 for each song.

Chunghwa Telecom Co's Hinet Internet service and computer giant Acer Inc have also negotiated deals for music sites, and five other companies are in discussions, IFPI's Lee said.

"If you go the legal way, the record industry will support you," he said yesterday.
http://www.taipeitimes.com/News/biz/.../27/2003077458


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File-Sharing Site Calls Suit Futile
Bill Heaney

The nation's most popular file-sharing, or peer-to-peer, Web site yesterday tried to play down a criminal indictment launched against it by the Taipei District Public Prosecutors' Office, citing failed attempts to close similar sites in the US.

"Peer-to-peer sites have been prosecuted before and have been found not guilty," Philip Wang (???), spokesman for Kuro.com.tw (???), told the Taipei Times yesterday.

"Given this trend, even the US federal court is taking the position that the technology itself is no different from a Xerox machine. It is the user's behavior that infringes copyright," he said.

Wang's comment goes to the heart of the peer-to-peer dilemma. While the technology itself may be neutral like a knife -- a useful tool for cutting vegetables that can also be used to kill -- site owners are allowing millions of people to copy movies, music and software without paying for it, which is crippling the entertainment industry, officials say.

On Thursday, the prosecutor's office filed charges against Kuro's management team and one subscriber under the amended Copyright Law (????). Wang said that his company had not been served legal papers as of yesterday evening.

Music industry representative body the International Federation of the Phonographic Industry (IFPI) was celebrating the move yesterday.

"Our position is that this is great," IFPI Taiwan branch secretary-general Robin Lee (???) said yesterday.

"This proves that peer-to-peer is illegal and infringes copyright. It also shows that Taiwan's copyright laws conform to global standards," he said.

"It also means that Kuro and Ezpeer should close down their businesses," Lee added.

But cases against peer-to-peer sites have been notoriously difficult to prosecute. Napster, the world's first peer-to-peer site, was declared illegal and closed in 2001, but in April this year, the Los Angeles District Court dismissed cases against Web sites Grokster and Morpheus, ruling that their peer-to-peer technology could be used to share files like movie trailers and non-copyright music legally, as well as to download music files without the record labels' permission. It could not be proven that the site owners had direct knowledge of its users' infringement, the ruling said.

This ruling is currently under appeal, but it forced the music industry to change tactics and go after individuals. Since September, the Recording Industry Association of America has sent out 400 warning letters, received affidavits from over 1,000 former file-users and more than 200 settlements, Agence France Presse reported Wednesday. The same day, the association launched 41 new lawsuits and sent out 90 new warning letters to file-sharers.

Taiwan is following suit and has filed charges against five individuals, the most recent one on Thursday with Kuro against Chen Jia-hui (???), who allegedly had stored 970 illegally copied song titles on her computer's hard disk.

"We want to take this chance to give peer-to-peer users a warning that they need to reconsider what they're doing and give up their membership of peer-to-peer sites," Lee said.

International IPR experts welcomed the news of the prosecutions yesterday.

"The Internet is the new frontier," Jeffrey Harris, co-chair of the American Chamber of Commerce in Taipei's Intellectual Property Committee.

"The law in Taiwan is quite clear. Offering to sell unlicensed products over the Internet is against the law," he said.

But Harris' counterpart at the European Chamber of Commerce Taipei expressed concerns that there might be better ways to tackle IPR violations.

"If you look at these cases, there's a lot more sensationalism to them than actual results," John Eastwood said.
http://www.taipeitimes.com/News/fron.../06/2003078502



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Canadian Distributor May Sue Song Pirates

Most don't know they're doing anything wrong
Kathryn Greenaway

When you download your favourite song from the Internet for free, it's the same as stealing a CD from a music store.

That's the message music retail and distribution giant Groupe Archambault Inc. wants to get across to song pirates anyway it can -- even if it means suing them.

According to statistics supplied by Groupe Archambault, three million people download music from the Internet in Canada every week, most of the time for free.

A survey taken last year revealed that only nine per cent of the people who download for free know they're breaking the law.

"It's ridiculous that only nine per cent of pirates realize that piracy is illegal," Archambault CEO Natalie Lariviere said this week.

"We need to do something about this and we need to do it now."

Groupe Archambault may file lawsuits against pirates, following the lead of the Recording Industry Association of America which began filing lawsuits against pirates in the United States last Spring.

Lariviere called for other leaders in the music retail business to follow suit. "This is the first I've heard of this from Archambault, but I assume they will present their proposal to RMAC (Retail Merchants Association of Canada) when we meet next week," HMV president Humphrey Kadaner said this week.

"As an active member of RMAC, HMV will, of course, give due consideration should such a proposal be put forth."

Lariviere said it would be impossible to stop every one of the millions of pirates with lawsuits but "we think that a series of lawsuits without warning will make many people think twice. . . . Theft is theft.

"And the perpetrators should be aware of the possible consequences of their deeds."

Freeloading on the Internet has eroded CD sales, which fell 12.7 per cent in Canada over the past year.

Archambault is raising awareness through anti-piracy messages, which began appearing on TV and in newspapers this week.

Groupe Archambault also plans to launch a music download site in time for the holidays.

It would function along the same lines as the recently launched puretracks.com, a portal where consumers pay a fee to download songs.

"We have to be able to give (consumers) an alternative (to piracy) and offer them a well-stocked catalogue," Lariviere said. "Otherwise they will quickly revert to their old ways."
http://www.canada.com/regina/news/st...8-F71CF5758BE5


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Music at Your Fingertips, and a Battle Among Sellers
Bob Tedeschi

COMING to a music download store in 2004: Yo-Yo Ma's Shostakovich Quartet No. 15 and Bob Dylan's second show at Amsterdam.

So go the predictions of some music industry executives, who say that as music labels and retailers compete more aggressively online, they will offer more obscure titles and recordings of live performances that could find a paying audience through downloads but make no financial sense to distribute on CD's.

This is but one of a handful of trends likely to emerge next year in the paid digital download arena, industry executives said. With hundreds of millions of investment and marketing dollars flowing into the sector, it could be the most active online commerce category. And with the activity comes a risk that it could resemble the Internet bubble of 1999, though on a smaller scale.

The first area of resemblance, analysts and executives predict, will be in the sheer number of online music stores that sell downloads, which will continue to build through the early part of next year, only to contract beneath the weight of excessive marketing spending and slim profit margins.

There will be fewer paid download sites running a year from now than there are today, said Josh Bernoff, an analyst at Forrester Research, a technology consulting firm.

The reason, Mr. Bernoff said, is that music tracks that are downloaded digitally generate tiny profits. Apple pays roughly 70 cents to the labels for each song it sells for 99 cents, Mr. Bernoff said, and, based on Apple's projections of sales of 100 million songs by April - the first 12 months of its iTunes service - "you're talking about $30 million in gross margin, not counting all the advertising or the costs of running the store."

"That's brutal, and this is the company with the dominant market share."

Peter Lowe, Apple's director for marketing of applications and services, agreed that it was hard to make money selling music downloads. But, he said, iTunes is close to break-even. Still, he acknowledged that one reason Apple was in the business was to drive sales of its iPod music player and to help the company position itself as a cutting-edge brand.

Those attributes may not apply to other entrants in the field. Nonetheless, other companies are certain to join the competition for music fans looking to start downloading songs, or to switch from peer-to-peer services like Kazaa and Morpheus, as the music industry fights piracy.

In addition to Apple's iTunes, RealNetworks' Rhapsody, Napster of Roxio, MusicMatch, BuyMusic.com, BestBuy and others, online music stores from several other companies are expected to start in the coming weeks and months. JupiterMedia, a technology research firm, predicts digital music downloads will be a $1.1 billion marketplace next year and $3.2 billion in 2008. According to Nielsen SoundScan, the biggest paid download sites sold $3.2 million worth of individual tracks in October alone, more than double the number sold in July.

While some sites will stick to the business of selling downloadable songs, others will gravitate toward multiservice offerings along the lines of iTunes and Rhapsody (www.listen.com), where radio stations sit a click away from the store, or MusicMatch, where users listening to the site's jukebox can click on an icon for the current song and buy the track.

Sean Ryan, vice president for music services at RealNetworks, expects the services next year to include some form of subscription download service. Such an offering, he said, would combine the flexibility of the so-called streaming services - where users listen to unlimited numbers of songs on demand, but cannot download them - and the portability of downloaded tracks.

"The idea is that consumers can download as many songs as they want," Mr. Ryan said, "and move them from one device to others, but at the end of 30 days, if you don't pay the subscription fee, the songs go away.

While the technology exists to offer such a service, Mr. Ryan said there were a number of issues to work out, including how much to charge. "But I think we'll see such a service by the end of next year."

"And that's where this gets interesting," he added. "You've got a portable music player that can fit 10,000 songs on it? Come on. No one will spend $1 a track filling it.''

But portable players, he said, "become totally useful'' when it is possible to rent an unlimited number of tracks for a flat fee. Mr. Ryan and other executives said consumers would also enjoy a greater range of tracks next year, as the download sites expand beyond pop music, and as artists migrate toward a growing revenue opportunity. Classical and jazz tracks will begin to proliferate, and Mr. Ryan said, live, archived performances from popular musicians will see new life online.
http://www.nytimes.com/2003/12/01/te...rint&position=


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China's First Lawsuit Involving Virtual Game Assets Awaits Judgment

Shanghai. (Interfax-China) - An online gamer has filed a lawsuits against online game operator Beijing Arctic Ice Science and Technology (BAIST) concerning lost virtual assets, a BAIST official surnamed Qiu told Interfax in an interview. This is China's first lawsuit involving virtual assets from an online game.

The gamer, surnamed Li, is a veteran player of 'Redmoon,' an online game operated by BAIST. Li claims to have spent thousands of hours and more than RMB 10,000 (USD 1,208) in the past two years playing the game, and has so far obtained over 30 attractive game items. This February, Li reported to BAIST that another player had stolen all of the armor and weapons in his inventory of items. However, BAIST refused to disclose the personal information of the player Li accused of theft.

Subsequently, BAIST allegedly seized another of Li's accounts and deleted all the items in that account on June 10. Moreover, ten days later, items in a third account owned by Li were also deleted. Li claims that this third account held items he had bought from other players for a combined RMB 840 (USD 101.47).

After the two parties failed to reach an agreement through negotiations, Li filed the lawsuit with the Beijing Chaoyang District People's Court. The court hearing has already concluded, with the judgment to be announced soon.

"The major argument in this case is the value of virtual game items," said Qiu. "Game items are something you obtained in the game. Their value only exists in the games, not in real life."

"We understand the feelings of the player. However, we need to protect the rights of the majority. It is difficult for us to distinguish if a complaint is reasonable or not because of technical issues and the immense number of complaints we receive everyday."

Qiu went on to explain that the loss of virtual game items and IDs happen for various reasons. Some players report the loss of items purposely, when they have actually lost nothing. Some players sell the same virtual item to several different people at once. In addition, Trojan programs, illegal game patches, and hacker programs can also cause problems.

"All we can do now is wait for the court's judgment," Qiu added. "No matter what the result turns out to be, this case will have a significant impact on China's online gaming industry."
http://www.interfax.com/com?item=Chi...d=5671688&req=
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Old 06-12-03, 01:04 AM   #3
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Quote:
'Master' and 'Slave' Electronic Labels Raise Concern in L.A.

A county official has asked computer and video equipment vendors to consider eliminating the terms "master" and "slave" from equipment because they may be considered offensive.

"Based on the cultural diversity and sensitivity of Los Angeles County, this is not an acceptable identification label," according to an e-mail sent to vendors on Nov. 18. The memo asks manufacturers, suppliers and contractors to change or remove any labels on components "that could be interpreted as discriminatory or offensive in nature."

The county's 39 departments also were told to identify equipment with offensive labels.

"We got a note back from IBM saying thank you for bringing this to our attention and we'll take a look at this," said Joe Sandoval, who wrote the memo. Sandoval is division manager of purchasing and contract services for the county's Internal Services Department (search).

The term "master" and "slave" -- when applied to electronic equipment -- describes one device controlling another.

In May, a black employee of the Probation Department filed a discrimination complaint with the county Office of Affirmative Action Compliance after noticing the words on a videotape machine.

"This individual felt that it was offensive and inappropriate ... given the experiences that this country has gone through in respect to slavery," office director Dennis A. Tafoya (search) said.

The issue was solved by putting tape over the labels and replacing "master" and "slave" with "primary" and "secondary," Tafoya said.

Although Tafoya said his office did not find discrimination in the case, he added, "I think we constantly need to be conscious of these issues."

Sandoval said the county is making a suggestion, not trying to dictate political correctness.

"Knowing that it's an industry standard, there's no way that I'm going to stop buying that equipment," he said.
http://www.foxnews.com/story/0,2933,104232,00.html
ffs..!
this is stupid....
master and slave in relation to devices is
got nothing to do with the slavery trade..
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Old 06-12-03, 12:16 PM   #4
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DVD 'Hacker' Pleads Not Guilty in Piracy Appeal
Inger Sethov

OSLO (Reuters) - A Norwegian who defeated Hollywood on piracy charges pleaded not guilty on Tuesday in a landmark appeal hearing that the movie industry is anxious to win to protect its lucrative DVD business.

Prosecutors, on behalf of major U.S. film studios, will try to prove that 20-year-old Jon Johansen broke Norwegian law when he developed and distributed a computer program that enables consumers to make personal copies of their DVDs.

The industry hopes to send a message to hackers that it will fight on any turf those who crack into their copy-protection systems in a global crackdown on piracy.

The plaintiffs, the Motion Picture Association of America -- representing Hollywood studios like Walt Disney Co., Universal Studios and Warner Bros -- estimate that piracy costs the U.S. motion picture industry $3 billion annually in lost sales.

The case in the Oslo Appeals Court is set to end on December 12 with a verdict expected in early 2004.

Johansen was dubbed "DVD-Jon" by the Internet community after he devised a computer program -- DeCSS -- in the late 1990s that enabled consumers to circumvent copy- protection technology embedded in ordinary DVDs.

Johansen was cleared of piracy charges in an Oslo court in January after a six-day trial, billed as a fight between a cyber David and corporate Goliaths.

The court ruled that Johansen could do whatever he wanted to DVDs he had legally purchased. The court also said prosecutors had failed to give evidence that Johansen's program had been used by others to copy and distribute pirated copies.

The prosecution this time intends to establish that Johansen broke the law when he cracked the copy-protection code on DVDs.

State prosecutor Inger Marie Sunde, who lodged the appeal objecting to the court's application of the law and the presentation of evidence, said: "The core of this case is the use of DeCSS in connection with legally purchased films...not on pirated copies."

Johansen, who developed the program when he was 15, has become a hero for hackers worldwide who say making software like DeCSS is an act of intellectual freedom.

Media and software executives argue rampant digital piracy threatens their livelihoods and creates a need for stronger technological stop-gaps like digital rights management software to stop unauthorized copies of compact discs and DVDs.

The introduction of such technologies has triggered a showdown between copyright holders and consumer rights advocates who say such technologies rob individuals of the ability to make legitimate back-up copies of what they buy.

"If Johansen's acquittal is overturned on appeal, it will become illegal for Norwegians to bypass DVD region code restrictions or technical restrictions that prevent fast-forwarding over advertisements or otherwise circumvent digital controls on their own property," said executive director Robin Gross of consumer advocacy group IP Justice in a statement.

There is no specific legislation in Norway to protect digital content. A European Union copyright directive gives individual countries the right to choose if they want to recognize legal protections for new digital rights management technologies.
http://www.reuters.co.uk/newsArticle...toryID=3923240


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ACLU Takes On UNC Student's Music Case
Eric Ferreri

CHAPEL HILL -- A UNC student's entanglement with a music industry watchdog group has attracted the notice of the American Civil Liberties Union.

The ACLU is now representing the UNC student, whose identity is undisclosed but is being sought by the Recording Industry Association of America.

The RIAA issued a subpoena in October charging that the student has made nine copyrighted songs available for download on the Internet, using a UNC computer
connection to do so.

Last week, the ACLU filed a motion in federal district court in Greensboro on the student's behalf to quash the RIAA's subpoena, which seeks the student's personal information.

Attorneys from the ACLU's national office in Washington, D.C., and the local chapter in North Carolina are teaming up to tackle the case, said Aden Fine, the national office's staff attorney.

The ACLU's interest stems from what it perceives as a violation of the unnamed student's constitutional rights to privacy and anonymous use of the Internet. By requesting the student's name and contact information before proving any legal wrongdoing, the RIAA is violating the student's rights, Fine said.

"We don't support copyright infringement in any manner," he said. "Our motion is about due process rights. The Constitution and the First Amendment protects the right to engage in anonymous speech and that includes anonymous speech on the Internet."

Though it hasn't yet been determined whether the law has been violated, the student's access to the university's computer system has been blocked.

That means the student can't log in to the university's computer system from a personal computer. He or she may still use the Internet or e-mail from public computer terminals on campus.

Suspending the student's computer access is standard procedure, said David Parker, a UNC attorney. Generally, a student notified of a potential violation like this can regain access to the university computer system by filling out what is known as a "counter notice" form, which is essentially a response to the charge.

The student has not done so in this case and thus is still unable to tap into the university computer system from his personal computer, Parker said.

"It was kind of an odd situation," he said, speaking generically and not confirming the gender of the student. "Given that the individual didn't want his identity revealed, he didn't fill out a counter notice."

The ACLU's motion attacks parts of the federal Digital Millennium Copyright Act, a statute created in 1998 designed to address an increasingly complex digital world.

The civil-liberties group argues that the act doesn't offer enough legal shelter to people who wish to remain anonymous, saying it so lacks those protections that it is "an invitation to mistake and misuse."

In the case of the UNC student, it would be unfair to make a public identification until some wrongdoing was proven, Fine argued.

"All there is, is an allegation," he said. "Alleged copyright infringement still deserves First Amendment protection."

For now, UNC is in a bit of a holding pattern. If ordered to, the university will provide personal information on the person, Parker said.

"We just have to see how it plays out," he said. "We'll do whatever the court says we have to do. The university is, in this situation, essentially an Internet service provider. When potential violators of copyright or other laws are brought to our attention, we deal with it."

As of October, the recording industry had filed 80 more federal lawsuits around the country against computer users it said were illegally sharing music files across the Internet.

The group previously filed lawsuits against 261 others. It had reached settlements with 156 people.

File sharing is a particularly popular pastime on college campuses because students have access to high-powered university computers and, generally, have an interest in music.
http://www.herald-sun.com/orange/10-419897.html


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Microsoft Decries Overseas Longhorn Rustling
Reuters

Malaysia's brazen software pirates are hawking the next version of Microsoft Windows operating system years before it is supposed to be on sale.

Underscoring the scale of U.S. companies' copyright problems in Asia, CDs containing software that Microsoft has code-named Longhorn are on sale for 6 ringgit ($1.58) in southern Malaysia. Microsoft's current version of Windows, XP, sells for more than $100 in the United States.

The software is an early version of Longhorn demonstrated and distributed at a conference for Microsoft programmers in Los Angeles in October, Microsoft Corporate Attorney Jonathan Selvasegaram told Reuters.

"It's not a ready product," he said from Malaysia. "Even if it works for a while, I think it's very risky" to install on a home computer, he said.

Chairman Bill Gates has said that Longhorn, which is not expected to be released for several years yet, would rank as Microsoft's largest software launch this decade.

The software is on sale in the largest shopping complex in Johor Bahru, the Malaysian city bordering Singapore, alongside thousands of pirated programs, music CDs and DVDs. Discs in plastic covers hang from racks in more than a dozen specialized stores in the Holiday Plaza center, even though it has its own police station.

Such piracy is rampant in Asia, although the United States praised Malaysia for seizing thousands of illegal discs since May. U.S. trade losses due to piracy in Malaysia fell to $242 million last year from $316 million in 2001.

Selvasegaram said pirates would shut their shops whenever Malaysian authorities launched a clampdown, only to reopen within days or even hours. He said software companies were working with the authorities on the problem, but the police were more concerned about controlling pornography.

Longhorn promises new methods of storing files, tighter links to the Internet, greater security and fewer reboots, Microsoft has said.
http://news.com.com/2100-1016-5112229.html


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Diebold Drops Legal Case Against Speech Advocates

In a major victory for free speech enthusiasts on the Internet, Diebold Inc. has agreed not to sue voting rights advocates who publish leaked documents about the alleged security breaches of electronic voting.

A Diebold attorney promised in a conference call Monday with U.S. District Judge Jeremy Fogel that it would not sue dozens of students, computer scientists and ISP operators who received cease-and-desist letters from August to October.

Diebold also promised not to file lawsuits against two Swarthmore College students and a San Francisco-based Internet service provider for copyright infringement, according to a motion that company attorneys filed Nov. 24 in San Jose's federal court.

Diebold did not disclose specifics on why it had dropped its legal case, but the decision is a major reversal of the company's previous strategy. North Canton, Ohio-based Diebold, which controls more than 50,000 touch-screen voting machines nationwide, had threatened legal action against dozens of individuals who refused to remove links to its stolen data.

``This is a huge victory that shows we have weapons on our side to protect free speech from overbearing copyright laws so that the Internet remains a forum for public discussion,'' said Electronic Frontier Foundation staff attorney Wendy Seltzer, who represents the students and the San Francisco-based Internet service provider, Online Policy Group. ``We're trying to hammer home that you can't go around making idle threats that aren't backed up by the law.''

Diebold spokesman David Bear emphasized Monday that while the company had dropped its case, it will continue to monitor the online proliferation of the leaked documents, and may file lawsuits against others who publish the data.

``We certainly reserve our right to protect our proprietary information in future cases,'' Bear said.

Diebold's battle began in March, when a hacker broke into the company's servers using an employee's ID number, and copied a 1.8-gigabyte file of company announcements, software bulletins and internal e-mails dating to January 1999.

The vast majority of the file included banal employee e-mails, software manuals and old voter record files. But several items raise security concerns about electronic voting that voting rights advocates have been trying to publicize for more than a year.

In one series of e-mails, a senior engineer dismissed concern from a lower-level programmer who questioned why Diebold lacked certification for the operating system in touch-screen voting machines. The Federal Election Commission requires such software to be certified by independent researchers.

In another e-mail, an executive scolded programmers for leaving software files on an Internet site without password protection.

In August, the hacker e-mailed data to voting activists, who published the information on their Web logs. Wired News published an online story. The documents have been widely circulated.

Seltzer said free speech advocates should hail Diebold's promise not to sue, but she warned that numerous individuals have already removed the offending material from Web sites.

EFF plans to continue with its case against Diebold, arguing under the Digital Millennium Copyright Act that Diebold must pay damages for intimidating Internet service providers. The hearing is scheduled for Feb. 9.

``The implicit threat was, 'If you don't take this material down, we might sue,''' Seltzer said. ``Without them ever needing to file a federal complaint, they got these documents taken down from a huge number of sites. It was a chill on free speech that stopped discussion of electronic voting issues without ever getting before a judge.''
http://www.siliconvalley.com/mld/sil...al/7389899.htm


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How Much Is Privacy Worth?
Ryan Singel

The Supreme Court will hear oral arguments Wednesday over whether the federal government should reimburse individuals whose sensitive data was disclosed illegally, even if no harm can be proven.

At issue before the court, according to privacy advocates, is how valuable privacy really is.

The Privacy Act of 1974 prohibits the government from disclosing private information intentionally, without the individual's consent, and provides for a $1,000 minimum fine if the individual is "adversely affected."

In the case, known as Doe v. Chao, to be argued Wednesday, the Department of Labor distributed the Social Security number of a coal miner who was appealing for black lung benefits.

Since 1969, the Labor Department has used miners' Social Security numbers as their case numbers on documents shared with coal companies, insurance companies and lawyers for all sides. Those documents also were published in court filings that later ended up in legal databases.

In 1997, seven anonymous coal miners sued, alleging the government had flagrantly violated the Privacy Act and put them at risk of identity theft.

Only one of those miners, known as Buck Doe, prevailed in the original case, winning $1,000 by arguing that he suffered emotional distress from the fear that the data leak would lead to identity theft. The government, arguing that the plaintiff needed to show real injury, appealed the decision to the 4th U.S. Circuit Court of Appeals and won.

Buck Doe argues that the leak itself causes enough distress to warrant an automatic penalty, even if the information leak never leads to financial harm.

Marcia Hoffman, staff counsel at the Electronic Privacy Information Center, which filed a friend of the court brief (PDF) supporting the anonymous miner, argues that Congress preset the penalty precisely because it is so hard to put a price on an abstract concept such as privacy or to prove damages in absence of others' misuse of that data.

"If your Social Security number is disclosed, there is a real potential harm from identity theft," Hoffman said.

Ari Schwartz, associate director of the Center for Democracy & Technology, which was one of many organizations that cosigned EPIC's brief, argues that the outcome of the case will have implications beyond the Privacy Act and could affect future privacy legislation.

"The outcome of this case will make a general statement about how we value privacy in the United States today," Schwartz said. "If someone rummages through all your stuff, nothing's taken, but they find out information about you, (yet) you can't show actual damages.

"Yet something intangible has been taken from you, and what do we do to make up for that as a society?" asked Schwartz. "It seems clear to us from the history of the Privacy Act that Congress at that time wanted people to be compensated even for intangible harm."
http://www.wired.com/news/privacy/0,1848,61439,00.html


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Microsoft Nets Pirate Reseller

MICROSOFT has successfully sued a Sydney computer retailer for loading PCs it was selling with illegal copies of Windows.

Big Ben Computer, based in the Sydney suburb of Strathfield, paid $55,000 in compensation to Microsoft after being sued in the Federal Court.

Microsoft said it was the second time Big Ben, registered in the name of Mr Ben Zhong Fan, had been sued for loading unlicensed software, having paid $10,000 in damages to Microsoft in 2001 in a copyright violation settlement.

Microsoft said investigations into the most recent breach began in May 2001. Civil proceedings began in July last year. A trial had been set down for October 2003, but Big Ben elected to settle before the trial commenced, Microsoft said.

Microsoft warned consumers against buying illegal copies of Windows, saying pirated products were not eligible for support or upgrades.
http://australianit.news.com.au/arti...-15319,00.html


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Peer-to-Peer Networks Targeted

Senators' letter asking tech companies to self-regulate garners mixed reaction.
Rita Chang,

A letter from six U.S. senators urging peer-to-peer technology vendors to take "common sense" steps to deter the downloading of copyrighted content and pornography is drawing mixed reactions.

Critics claim that the fingerprints of copyright-holders--the recording industry in particular--are all over the letter. The letter's backers don't deny the charge.

The letter, dated November 12, 2003, bears the signatures of three Democratic and three Republican senators. It asks seven peer-to-peer vendors to post warnings alerting users that downloading unauthorized copyrighted content is illegal. It also suggests the vendors use filters to block unauthorized copyrighted content and pornography, and asks them to change their software's settings so that users don't automatically share their files with others on a peer-to- peer network.

Who Wrote It?

The senators' message bears an uncanny resemblance to a September 30 news release issued by the Recording Industry Association of America, according to Wayne Rosso, president of peer- to-peer company Blubster. The RIAA's release calls on the peer-to-peer industry to "finally act like responsible corporate citizens," and requests many of the same actions.

"We have been in discussion with the RIAA," says Kevin Bishop, a spokesperson for Senator Lindsey Graham (R-South Carolina), who spearheaded the letter-writing initiative. Graham is a member of the Senate Judiciary Committee, which has held numerous hearings on piracy and copyright issues this year.

The RIAA supports the senators, says Mitch Bainwol, RIAA chair and CEO. The senators "are placing the onus squarely where it should be--on the P2P networks and their role in inducing computers users to break the law," Bainwol says.

The industry already is taking some steps urged by the senators, says Adam Eisgrau, executive director of P2P United, a trade group representing five companies that received the letter. When the group formed about three months ago, the organization immediately established a code of conduct that addresses the issues raised in the senators' letter, he says.

Still, despite their best efforts, vendors can't control what users do with their software, Eisgrau says.

"There is no magic switch for vendors to stop users from downloading copyrighted content," Eisgrau says. "The Internet can be used and misused for hundreds if not thousands of purposes that are outside the control of software developers--or for that matter, ISPs. We don't hold the Post Office responsible for blackmailers and no ink producers have been accused of extortion."

Even though peer-to-peer networks can be used for piracy, the law allows companies to manufacture and distribute technologies that have "substantial noninfringing uses," Eisgrau says. This point was highlighted nearly 20 years ago in the legal squabble between the movie industry and Betamax, which manufactured video recorders. According to Eisgrau, similarities between that case and the current controversy over peer-to-peer systems could help establish that peer-to-peer vendors are on solid legal ground, he says.

Eisgrau also notes that peer-to-peer technology is still young and has potential use in a wide array of disciplines, from scientific research to education. The U.S. Army is distributing its videogame recruiting tool on Gnutella's file-sharing network, LimeWire, as Forbes magazine recently reported, he says. Other government agencies, including NASA, the Department of Defense, and the Naval Research Library, have used peer-to- peer computing software.

Eisgrau says that he welcomes the senators' letter "as a great opportunity to correct the record." But in his view the officials are "laboring under significant misunderstandings."

Alan Davidson of the Center for Democracy and Technology agrees with Eisgrau's assessment, calling the letter a mixed bag.

Davidson welcomes the call for self-regulation, saying that demands for government oversight, if heeded, could stifle the technology's development. He also says that the proposal requiring users to opt in before they share their files could benefit peer-to-peer companies, by shifting copyright infringement liability away from them and onto users, he says.

Davidson does, however, object to one proposal in the letter: the bid for filtering. Adding a filtering mechanism would require companies to differentiate between what is and is not legal, he says.

"We're concerned about service providers' monitoring our networks," Davidson says. "We don't ask phone companies to monitor phone conversations to see if people are doing bad things."

Davidson also criticizes the senators' preoccupation with pornography on peer-to-peer networks. "Conflating child pornography with adult pornography raises question marks," Davidson says, given that great majority of adult pornography is legal.

But raising the porn issue will get attention, notes one Capitol Hill copyright lawyer who declines to be identified. "The RIAA is using P2P as its political football, linking it to child porn as a way to get things passed," the attorney says.

Any link between peer-to-peer technology and pornography remains hotly contested. Earlier this year, in testimony at a Senate Judiciary Committee hearing, the General Accounting Office provided damning testimony on how peer-to-peer networks make pornography more accessible, particularly to young users.

More recently, however, in a November 13 letter to Senator Orrin Hatch (R-Utah), who chairs that committee, the GAO stated that of the 62,000 tips received by the National Center for Missing and Exploited Children, only 1.4 percent are related to the Internet or to peer-to-peer networks. The agency notes that it does not know whether the center's reports accurately reflects the volume of child pornography on peer-to-peer networks or on the Internet.

Pornography on peer-to-peer networks is "not necessarily more dangerous" than pornography available through other online sources, the letter also noted.

Ultimately, the battleground may be in the courts. The Ninth Circuit Court of Appeals ruled in April that Grokster, a decentralized, file-sharing program, is not liable for copyright infringement, but the case is being appealed. Some observers expect the Supreme Court to review it.

Senators who joined Graham in signing the letter to peer-to-peer networks include Barbara Boxer (D-California), John Cornyn (R-Texas), Dick Durbin (D-Illinois), Diane Feinstein (D-California), and Gordon Smith (R-Oregon). The letter requests a written response from the industry by December 15, 2003. P2P United declines to share its likely response before that deadline.
http://www.pcworld.com/news/article/0,aid,113734,00.asp


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More Law Firms Turn To Extranets For File Sharing
Grant Buckler

When law firm Borden Ladner Gervais acted for ConocoPhillips Co. in a lengthy round of regulatory hearings related to the Alberta oil sands from late in 2001 through the first half of last year, the hearings generated thousands of pages of transcripts and exhibits.

But thanks to a computer extranet set up by the Calgary office of Borden Ladner Gervais, officials at ConocoPhillips, a Houston-based oil and gas firm, had access to those transcripts and exhibits within 24 hours, no matter where they were.

"That was a significant savings in having to find paper copies," says Randall Block, a Calgary-based partner with Borden Ladner Gervais.

Extranets -- private networks built on the same technology as the World Wide Web but restricted to access by limited groups of people -- have been popular in business since the late 1990s. Now they are also catching on in law firms, which have found that the large amounts of information they often need to share with clients make extranets very useful tools.

"We certainly have found that it's a good way to collaborate with our clients, particularly when you're doing a document-intensive transaction where you need to involve multiple parties in multiple time zones," says Scott Saundry, national director of technology for law firm Fraser Milner Casgrain LLP.

Mr. Saundry says his firm has used extranets in client dealings for about two years, and that is increasing. His firm is not alone. "I would guess that most of the major firms are doing something in the extranet space," says Joel Alleyne, chief information officer and chief knowledge officer for Borden Ladner Gervais in Toronto.

And extranets aren't only for big firms, he adds. Take Fast & Corcoran, a two-lawyer Vancouver firm that specializes in aboriginal law.

Partner Larry Fast says his firm puts documents on a website, with access to individual files controlled by using passwords. This makes those documents accessible to clients, most of which are First Nations bands and many of which are in remote areas of British Columbia. It also allows Mr. Fast easy access to files from his notebook computer while he is travelling.

The small firm also uses extranet technology to share information with other firms when collaborating on projects, he adds. On land-claim cases, the firm works with researchers in Toronto and elsewhere; putting documents on-line is a convenient way to handle it.

In one case, a native delegation visiting Ottawa needed to update a presentation two hours before meeting a federal minister. Fast & Corcoran did the revisions in Vancouver, posted the documents on-line and the delegates printed them at their hotel. "I don't know how else you do things like that," Mr. Fast says.

The beauty of extranets is their ability to make large amounts of information accessible to many people at once, wherever they are. Before extranets, Mr. Block explains, his firm would have received one copy of transcripts from a hearing such as the one involving ConocoPhillips and made one copy for the client. Anyone who needed to see transcripts or exhibits would have had to obtain one of the paper copies. Now any number of authorized people can use the transcripts at once, even while travelling.

The extranet saves the client the trouble of developing its own system for keeping track of the documents, which are accessible at any time, Mr. Saundry says. "They can go on the extranet . . . at 12 o'clock at night if they want."

Although extranets work well for public hearings and court cases involving large amounts of documentation, law firms are also finding other uses for them.

Early this year, Borden Ladner Gervais set up an extranet for a large financial client. Selected executives at the institution can use it to review billing information and estimates for work by the law firm, says Allan Nielsen, another Calgary partner at Borden Ladner Gervais. They can also review files on long-term litigation, and have access to articles and presentations by Borden Ladner personnel that the firm thinks might interest them.

Although the term extranet properly applies to web-like networks that make information available outside an organization, the same material can also be made available within a firm. This is usually called an intranet or portal, and gives lawyers access to additional material clients don't see.

For instance, practice groups of lawyers working in the same area at Fraser Milner Casgrain share information on-line. Mr. Alleyne says Borden Ladner is developing a firm-wide network portal that will provide access to billing information, legal information databases and other material. Extranets will give clients access through this portal to selected information.

"The extranet view into the portal will allow the client to get at certain things that they need to see," he explains.

Of course, law firms don't want to give clients unrestricted access to all the information on their computers, nor do they want the outside world to have access to sensitive information they share electronically with clients.

Extranets require user names and passwords for access. Mr. Alleyne says his firm is careful to use individual IDs and passwords rather than letting clients share IDs among multiple employees, so that if someone leaves a client company, that person doesn't continue to have access to private data.

The firm is also experimenting with the use of digital certificates -- to provide more assurance than a password that the person logging on to a network is who he or she claims to be.

Although extranets are reasonably secure, Mr. Alleyne says, Borden Ladner Gervais is still cautious about what information is made available this way.

Mr. Saundry says Fraser Milner Casgrain discusses any concerns about sensitive material with its clients before posting anything on an extranet, and would not put documents on-line if the client was not comfortable. However, he says, "it's a very secure vehicle."

Mr. Fast says he is not worried about security. "It's not an easy target and it's a boring target." The website uses the same security Fortune 500 companies use, he says.

Mr. Saundry says clients in the oil and gas industry were among the first to show interest in using extranets to exchange information with their lawyers, but now the practice has spread to all kinds of clients, though mainly for cases involving large volumes of documents. Mr. Whitt says that, although most of the interest today comes from larger companies, he expects it to trickle down in time.
http://www.theglobeandmail.com/servl...ES/TPBusiness/


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Sex haters making progress stopping representational sex.

Legislation Undergirds Obscenity Prosecution, Protects Kids?
Bill Fancher, Rusty Pugh and Jody Brown

The U.S. Senate has decided it's time to give Attorney General John Ashcroft a little nudge when it comes to the issue of obscenity.

A resolution recently passed by the Senate would encourage the AG to make prosecutions of obscenity a priority. Senate Concurrent Resolution 77, passed unanimously by the chamber the Saturday before Thanksgiving, states simply that "it is the sense of Congress that the Federal obscenity laws should be vigorously enforced throughout the United States." Pat Trueman, who works with several pro-family organizations, explains the impetus behind the resolution.

"Morality in Media encouraged Congress to pass a resolution that encourages vigorous prosecution of illegal pornography because during the Clinton Administration nothing happened," Trueman says, "and unfortunately, so far in the Bush Administration, John Ashcroft has not had a good record of prosecuting obscenity either."

Trueman says the Senate resolution will assure Ashcroft that Congress is fully supporting any effort at going after obscenity and its purveyors. "This would not only alert Attorney General Ashcroft to do a better job, but it would support him as he moves forward to prosecute more and more individuals and companies," the pro-family advocate says.

Why is that support important? According to Trueman, the lack of such support leaves the Attorney General vulnerable to media attacks accusing him of being "a right-winger way out on the extreme" -- but with the concurrent resolution, Ashcroft is able to show he has the entire Senate behind him.

Trueman says a similar House resolution is being drafted as well. Pro-family activists have been very critical of Ashcroft, claiming he needs to do more to stem the tide of obscenity.

Robert Peters, president of Morality in Media (moralityinmedia.org), says enforcement of federal obscenity statutes will dispel two common notions found in American society today: that obscene materials no longer violate contemporary community standards in the U.S., and that obscenity is something that must be tolerated if Americans are to preserve their freedoms of speech and press.

"The lie that obscenity has become as mainstream and acceptable as apple pie is a 'siren song' that producers and distributors of hard-core pornography and their defenders love to sing," Peters says on his group's website. "Every American concerned about the floodtide of hard-core pornography pouring into our communities, homes, and children's minds -- especially through the Internet -- should be heartened by the passage [of this resolution]."

Peters adds that he believes most Americans are offended by the distribution of hard-core porn and prefer to live in a decent society, rather that in one that is shaped by pornographers.

Meanwhile, a leading children's protection advocate says steps need to be taken to help protect children from a vicious form of pornography trading -- one that is not affected by Internet filters.

Penny Nance, president of the Kids First Coalition (kidsfirstcoalition.org), says parental supervision and Internet filters are a good way to help protect children from pornographic websites. But she says action needs to be taken to stop peer-to-peer (P2P) file-transfer sites, which allow anyone to download any kind of video or audio file.

Nance's group is supporting House Bill 2885, the Protecting Kids from Peer-to-Peer Pornography Act -- also known as the "P4 Bill." She says the legislation would require the Federal Trade Commission to enact safeguards that would enable parents to better protect their children from pedophiles who share sexual images of children and target children with graphic images.

Nance's organization is encouraging concerned parents to contact their congressional representatives and urge them to support the P4 Bill. Still, she says, parents are the first line of defense for their kids -- and she recommends that children not be allowed to stay alone in their room with Internet access.
http://www.crosswalk.com/news/1234347.html


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Adult film distributor wants children protected from adult film distributors.

Titan Wins A Motion To Dismiss In P2P Suit
Charles Farrar

Titan Media has won its bid to be removed from a peer-to-peer subpoena lawsuit by Pacific Bell Internet against the Recording Industry Association of America.

Federal judge Susan Illston handed down an order in the final week of November removing Titan's parent, IO Group, from the lawsuit, as well as co-defendant Media Sentry. Illston also moved the case to D.C. District Court, where PacBell and the RIAA are fighting over the same issue before a judge who recently ruled for the music industry in a similar case involving Verizon Online.

"We believe PacBell named Titan Media in this lawsuit in order to get a foothold in a Court where they hoped to get a more favorable ruling," said Titan general counsel Gill Sperlein in a formal statement. "We are pleased that the Court was able to see through Pacific Bell's smoke-and-mirror attempts to create a controversy where none existed."

Sperlein told AVN Online Titan thought above all that PacBell likely included them in the California filing to show they needed the original case to be decided in California and not Washington.

"PacBell wanted a different judge to look at the issues, because they know they're going to lose in D.C.,"" Sperlein said. "I think what made the difference is the court recognized that's what they were trying to do, and that these issues were able to be decided in the D.C. court. I think they tacked us on just so they could say they needed to be here in Northern California."

He called the Illston ruling a big win, not just for the RIAA, but for all small copyright holders like Titan, "who are being severely damaged by illegal file trading. We are a small company, we are not trying to change the world; we are just trying to protect our property and to protect children from being exposed to adult materials on file trading networks like KaZaA."

"There is no 'substantial controversy' between either [PacBell] and MediaSentry or [PacBell] and Titan of sufficient immediacy and reality to warrant the issuance of a declaratory judgment," Illston wrote in her ruling.

Titan vice president for marketing Keith Webb said in his own statement that PacBell "makes more money from adult material in a single month than we could ever hope to make in a lifetime of our business ... Let's be honest, most of [PacBell/]SBC's customers are not using DSL broadband service to download recipes or trade home movies; they are using it to illegally distribute and trade copyright-protected property, including adult materials."
http://www.avnonline.com/issues/2003...120403_1.shtml


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Group Floats Scheme To Pay For Online Music
Andy Sullivan

Internet users who copy music through "peer-to-peer" networks should pay a flat fee to compensate musicians and record labels whose songs they download, a technology trade group has proposed.

The proposal on Thursday by the Distributed Computing Industry Association is intended to nudge the popular peer-to-peer networks toward respectability and forge peace with the record labels that have hounded them and their users in court.

Under the proposal, peer-to-peer users would pay a flat monthly fee to the networks or Internet service providers, which would be divided up among the record labels and musicians whose songs were downloaded.

Music fans could eventually be charged small amounts for downloading individual songs, or pay slightly more for "channels" featuring one style of music.

DCIA chief executive Marty Lafferty said a $5 fee could generate $200 million per month for the ailing recording industry, which has seen CD sales plunge in the last several years due in part to the popularity of the peer-to-peer services.

"It's truly a band-aid to get it started," said Lafferty, who said DCIA developed the plan in consultation with record labels, Internet service providers and other interested parties despite several lawsuits pitting one group against another.

A spokesman for the Recording Industry Association of America declined to comment. The RIAA in the past has said peer-to-peer networks should stop traffic in copyrighted works if they want to gain legitimacy.

DCIA's reputation could prove a stumbling block as many peer-to-peer companies see the trade group as a front organisation for Sharman Networks, which produces the popular Kazaa peer-to-peer software, and its partner Altnet, a digital-media company. Altnet is owned by Brilliant Digital Entertainment Inc..

DCIA's first proposal, released in October, would have relied on Altnet's copy-protection technology to get users to pay for music.

One executive said the flat-fee system could work but that DCIA was simply trying to force other companies to use Altnet.

"There's always a hidden agenda with them," said Wayne Rosso, president of Optisoft SL, which makes the Blubster and Piolet peer-to-peer clients.

Lafferty said DCIA has added two more member companies, Digital Commerce, a peer-to-peer sports media company, and Claria Corp., which makes the controversial Gator advertising software. But he acknowledged that relations with the rest of the peer-to-peer industry were rocky.

"It's almost as if they view Kazaa with its much larger market share as threatening to them, much as some smaller software companies view Microsoft (Corp.)," he said.
http://www.reuters.co.uk/newsArticle...section= news


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RIAA Lawsuits Yield Mixed Results
John Borland

The recording industry this week claimed progress in a controversial legal campaign targeting individuals who use peer-to-peer networks, but its optimism appeared to clash with at least some of the evidence, which remains murky.

By some measures, usage of peer-to-peer software such as Kazaa has been cut in half since the Recording Industry Association of America (RIAA) announced in late June that it would begin suing alleged file traders. The campaign to date has yielded 382 lawsuits and 220 settlements averaging close to $3,000 apiece. But by other measures, file swapping is hitting an all-time high.

Given contradictory and inconclusive data, reading the RIAA's progress is little more than a Rorschach test, analysts said.

"(The RIAA) gets to define success," said Eric Garland, chief executive officer of Big Champagne, a research company that tracks aggregate peer-to-peer network usage trends. "It's their campaign. They decide what their goals are, and they get to grade their own paper."

RIAA officials downplayed the significance of file-swapping data in assessing the 5-month-old campaign, relying instead on a poll showing an increase in awareness of the risks involved in the practice. Nevertheless, millions of people still appear to be trading copyrighted files in spite of those risks, suggesting the message is filtering through only slowly, if at all, in many file-swapping circles, particularly outside the United States.

"The good news is that the message is getting out," RIAA President Cary Sherman said. "I am really struck by how much awareness has increased. It has far exceeded our expectations."

From its first round of 261 lawsuits in September to Wednesday's announcement of a third round of 41 new suits, the media attention has helped drive home the RIAA's message that swapping copyrighted material is in fact illegal. As newly aware parents exert more scrutiny of their children's online actions, and as legal services such as Apple Computer's iTunes and Rhapsody gain more support, that message may have a long-term impact on Net users' behavior.

At the core of the RIAA's strategy has been the attempt to persuade as many people as possible to stop trading copyrighted files online. This appears to be working in at least some groups, but the evidence is mixed at best.

The best news from the RIAA's perspective comes from Nielsen NetRatings, which has shown a steady decline in Kazaa users from a peak of 7 million per week in June, when the RIAA first announced its intention to file lawsuits, to just 3.2 million per week in November.

Some have criticized the Nielsen data, noting that it's based only on home users in the United States, and is drawn from a panel of users who know they're being watched. That means that those particular users would be most likely to give up the use of Kazaa if they learned that what they were doing was potentially illegal, those critics say.

The NPD Group, another independent research firm, measures how many households acquire any digital music on their PCs during a given month. That figure dropped sharply from about 18 million in May to about 13 million in August and has held fairly steady since, said Russ Crupnick, NPD Group vice president. About 60 percent of that figure comes from file swapping, while the majority of the rest represents people creating their own MP3s from CDs, he said.

Only 1 percent to 2 percent of digital music on PCs was coming from authorized services like iTunes by the end of October, he added, but that number is expected to grow over time.

"Right now all the numbers are overwhelmingly reflecting what's going on in the peer-to-peer space," Crupnick said.

But there's also evidence that file swapping is growing overall, according to Big Champagne. The number of people on Kazaa's FastTrack network fell somewhat over the summer, but grew to an all-time high of 5.6 million simultaneous users in October, Garland said.

The RIAA's Sherman says there's no real way to know what's happening on the networks, and points to the growth in use of "legitimate" services like iTunes as a positive sign.

"We've said that we would not be measuring this by numbers of files traded or number of users online," Sherman said. "The ultimate success here is whether the legitimate online services are gaining traction. So far that has been a glowing success."

While none of the RIAA's suits has yet come to trial, the initial stages of the campaign has prompted a series of lawsuits that could have effects well beyond the issue of music downloading.

To learn the identities of the nearly 400 people sued so far, the RIAA took advantage of a unique provision of digital copyright law that allows a copyright holder to use court- backed subpoenas to identify anonymous Internet service provider (ISP) subscribers.

These subpoenas are virtually unique in American law, since they do not have to be approved by a judge before being issued, and are used before any actual court case has been filed.

Verizon Communications was the first ISP to challenge this strategy, but a Washington, D.C., court decided that the RIAA's plans were legal under current law. Now SBC Communications and the American Civil Liberties Union (ACLU) are separately challenging the RIAA subpoenas in Washington, D.C., and North Carolina courts.

ACLU attorney Aiden Fine said his group took on its most recent case, in which it is representing a University of North Carolina student, for reasons well beyond music downloading.

"This is not about copyright infringement," Fine said. "This is about ensuring that the constitutional right to due process is met, and that the First Amendment rights of individuals using Internet are protected. Those are core issues for our organization."

Ordinary consumer backlash has manifested in several ways. Various online calls for boycotts of RIAA-member labels have had little discernable effect on sales--indeed, for the past two months, year-to-year sales figures for CDs have been rising for the first time in several years, driven largely by releases from big-name artists such as Britney Spears and the Beatles.

A guerrilla stickering campaign from activist group Downhill Battle, however, has seen labels reading "Warning: Buying this CD supports lawsuits against families and children" show up in retail record stores.

Other copyright holder groups are sitting back and watching, studying both the backlash and the potential effects on the file-swapping networks.

Some media reports have indicated that the Motion Picture Association of America (MPAA), which has watched online movie trading climb sharply in 2003, has already decided to pursue a similar course of lawsuits. MPAA spokesman Rich Taylor said that's premature, however.

"We have no current plans to take actions against individuals," Taylor said. "But we're not ruling out any actions we can take to combat piracy."

The RIAA's Sherman said that his organization would continue pursuing individuals over the long term. The dollar amounts of settlements would likely go up as the campaign progressed, and the number of files needed to trigger a lawsuit would likely go down, he said.

"We think we're on the right path," Sherman said. "That doesn't mean that we've achieved what needs to get done."
http://news.com.com/2100-1027-5113188.html


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

California Law Will Ban Recording Devices From Cinemas
Gary Gentile

Sneaking a camcorder into a movie theater will soon be a crime in California under a new law designed to protect both copyrights and the livelihoods of thousands of movie industry workers.

"This industry is the economic engine that moves this city," Police Chief William Bratton said at a City Hall press conference Thursday.

The new law, which takes effect Jan. 1, allows moviegoers to make a citizen's arrest if they see someone in a theater with a recording device. Signs will also be posted at all Los Angeles County theaters notifying patrons of the new law.

The effort is aimed mainly at camcorders, which account for 92 percent of all illegal copies of films that appear for sale over the Internet and are sold on street corners, according to the Motion Picture Association of America. The MPAA is seeking to enact similar laws in other states and is backing an effort to make the illegal taping of a film a federal felony.

The law, which was signed by former Gov. Gray Davis, was written to also include future technologies and could be enforced against people recording all or parts of a film with a tape recorder, handheld computer or even a cell phone.

City and county law enforcement officers say they will respond to calls from theaters to assist in making the citizen's arrest if resources permit. People convicted under the law could be subject to a maximum one year in jail and a fine of $2,500.

"These thieves are stealing from Los Angeles and are stealing from American creativity," city attorney Rocky Delgadillo said Thursday.

Clutching a palm-sized camcorder in one hand, Delgadillo paraphrased the movie character "Dirty Harry," portrayed by actor Clint Eastwood. "If you carry one of these into a movie theater, you have to ask yourself, 'Do I feel lucky?'"
http://www.sacbee.com/24hour/nation/...-7538222c.html


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

TunA Lets Users Fish for Music
Kari L. Dean

Forget the fad of accosting random strangers to jack your headphones into their iPods. That's so two weeks ago. The future of on-the-go peer-to-peer music sharing is already starting to groove in Ireland.

Media Lab Europe, research partner to MIT Media Lab, is testing tunA, a software application that employs Wi- Fi to locate nearby users, peek at their music playlist and wirelessly jack into their audio stream. Pronounced like the fish and signifying music "tunes" and "ad hoc" file sharing, tunA is being designed for wireless PDAs, cell phones and even its own hardware device.

"TunA alleviates the alienation of using a Walkman, and it makes it more of a social experience. You can listen to your music and still open yourself up to people around you," said research fellow Arianna Bassoli, who masterminded the project late last year after researching the way young people in Dublin interact -- or don't -- in public spaces.

Since February, Bassoli has dedicated herself to answering the question: Can anyone become a mobile radio station? Joined in July by computer engineer Julian Moore, another member of Media Lab Europe's Human Connectedness group, a working prototype implies the answer is yes. Their next step is to determine whether tunA can become a social experience.

"The main issue behind it was a way to connect people subtly, without being intrusive," said Bassoli. "And music is the way teenagers want to open themselves to people around them."

When alone, a tunA-enabled device functions like a regular MP3 player. But around others like it, the interface displays other in-range users, identified by the avatar of their choice. Avatars appear or disappear automatically as users go in and out of range.

Clicking on others' avatars lets you see whatever personal information or messages they want to share with the world. It also displays their playlist and the song they are listening to at that moment so you can decide if you want to tune in.

There's also instant-message capability, the possibility to change skins and a virtual stalking feature: You can bookmark not only songs, but also people.

"So even though the people around you might change, you can bookmark those you like, so next time you see them, (tunA) would notify you they're around," explained Bassoli. "Also, if there's a song that you don't you know, you can bookmark it so the next time someone nearby has it, you can ask them about it."

Bassoli's next step is observing tunA users' interactions at a small art college in Dublin.

"I am interested in the overlap between the virtual and real world," she said. "I think that since you know the people you are connecting with are nearby, it would get you curious about who they are (based on their music tastes).

"It's not like sharing music with someone far away on the Internet; you might actually want to meet these people."

Despite research sponsorship by Ericsson, however, Bassoli said tunA's path to commercialization is not necessarily immediate. Media Lab's contact at Ericsson was not available by press time to comment on the probability or timing of tunA appearing in one of its mobile phones. More importantly, however, Bassoli isn't sure how tunA would best work with mobile phones.

"What's nice about Wi-Fi is the peer-to-peer connection; it's completely decentralized," she said. "With wireless technology used now for mobile phones, it is more difficult because it is more centralized."

As for potential DMCA-violation concerns, Bassoli isn't worried at the moment. TunA isn't designed to provide downloading capability, and rogue software available to hijack music streams isn't much more sophisticated than a camcorder in a movie theater.

Technology pundit Andrew Orlowski, on the other hand, is more concerned that tunA does not have downloading capabilities.

"I'm not sure that a device that would allow streaming but wouldn't allow you to copy would be very popular," he said.

"I agree with the Cupertino strangler, I mean Steve Jobs. (He) said that there is a certain satisfaction that comes with completing the transaction."
http://www.wired.com/news/digiwood/0,1412,61427,00.html


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

Time For A Data Transmission Summit
Andy Oram

In a widely circulated weblog, software designer Dave Winer has called on major Democratic presidential candidates to issue statements about current intellectual property battles. Winer is backed up by another weblog by noted law professor Lawrence Lessig. Their goal, which I and most other people in high-tech support, is to to "keep the Internet free of interference from the entertainment industry," as reflected in the DMCA and its harsh application, the anti-KaZaa lawsuits by the RIAA, the recent broadcast flag required by the FCC on digital reception and playback equipment, and so forth.

I would go further and say it's time for a broad-based but officially sanctioned summit on information transmission involving Congress, relevant agencies such as the FCC, technology leaders, and content providers. These would not be the stacked hearings and closed-door negotiations that usually drive policy in these areas, but a frank examination of what technological change is doing to our data. It would not be restricted to the field known as intellectual property. (The term is not really appropriate, of course, and technological change is making that more and more obvious as time goes on.)

Don't think that current IP battles are just large entertainment firms defending turf. We will all eventually be towed in by the deep currents that the content providers are struggling with now.

The plummeting cost and increasing ease of transmitting material changes everything about information. But policy got off on a bad footing back around 1995 in the first serious government examination of the issues, the notorious document "Intellectual Property and the National Information Infrastructure: The Report of the Working Group on Intellectual Property Rights," by Bruce Lehman and the Information Infrastructure Task Force. This report founded the original sin of digital policy, defining the movement of bits within a computer as a "copy" of a work and therefore as a copyright-infringing act.

Lehman's report essentially declared that the government's approach to protecting copyright holders' interests would be business as usual. The Clinton administration hereby set itself inexorably against the technological tide and committed itself to a philosophy totally out of touch with reality, a course that led to the dismal results we see today. And yet the doctrine of the infringing computer copy has spread throughout the world and is being urged by copyright holders on governments everywhere.

Similar defenses of business as usual have distorted policy in just about every other area of "intellectual property," including trademarks, patents, and trade secrets. While the World Intellectual Property Organization and its adherents claim to balance technological change with the interests of current big business, decisions always slant toward the latter.

But we must not lose all discernment in our fight against abuses by large intellectual property interests, because they are touching on to something that affects us all. The ease of storing and transmitting information that essentially takes on an eternal existence is a social issue that we all must face. One current manifestation of the problem is the recent decision by many health clubs to ban cell phones because some contain cameras that can catch members in compromising positions.

The spread of cameras, sensors, and wireless networks will lead to more such dilemmas that will make us wish we could sit down with the intellectual property interests and discuss what we all have in common. Too many people fall back on the oft-discredited but easy phrase "information wants to be free," which is no more appropriate to the situation than the "get over it" response to violations of privacy.

We can't stop the spread of information, but we can try to establish norms and ground rules for its use. We have to celebrate what we can achieve with the potent combinations of new technologies, but try to remain masters of them. And that is why it's high time for a summit.

Right now, we're in a battle where those with the most social and political power benefit at the expense of the rest of us. This means large corporations having free rein over information transfer where it benefits them, while they legally restrain its transfer where they sense a loss. A summit will necessarily have to raise questions of power, which are the questions powerful interests are most loath to address. We must push all the harder to make the issues explicit.
http://blogs.law.harvard.edu/2003/11/17#a651


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

The Object of This Game: Sink the Music Pirates

Its makers say the computer game can teach kids about copyright laws.
Jon Healey

Hey, kids! Want to join the FBI and chase music pirates?

That would be the Funny Bureau of Investigations, and the chase would take place in the make-believe world of a computer game based loosely on Robert Louis Stevenson's "Treasure Island." But the underlying message is serious: Don't bootleg music.

The game is being developed by Music Games International, a privately held company in Cambridge, Mass., that is run by three emigres from the former Soviet Union, Igor Tkachenko, Roman Yakub and Alexander "Sasha" Gimpelson. "The Music Pirates Game," due out in the spring, will be the fourth interactive music title from the company.

Tkachenko, a concert pianist and composer, said MGI had set out to create a game about the yo-ho-ho kind of pirates. But when the trio started researching the topic of piracy, they were overwhelmed with information about music copyrights.

"It was a natural extension," he said.

Their goal is to persuade the Recording Industry Assn. of America to distribute the game free to schools and students across the country.

"We believe it's a great benefit to the RIAA," Gimpelson said.

RIAA spokeswoman Amy Weiss said the group had not been approached by MGI, "but we welcome anyone's participation in the battle against piracy."

The RIAA has launched a few educational campaigns against illegal downloading. It is best known, however, for suing online file-sharing companies and the people who use them. Although the trade group has won several key court battles and collected several hundred thousand dollars from individual infringers, file-sharing networks continue to attract tens of millions of people around the globe, and CD sales continue to slide.

Unlike the RIAA, which has focused its educational efforts on college students, Tkachenko prefers to target young students who don't expect music to be free.

And the best way to deliver an anti-piracy message isn't to scare kids, he said, but to ridicule bootleggers.

So in MGI's game, only the bootleggers' ringleader is portrayed as evil. The rest of the pirates are "kids who love music, and they don't know better," he said.

P.J. McNealy, who tracks the video game industry for American Technology Research in San Francisco, said video games could be effective educational tools, "but we've seen more applications for multiplication and spelling than explaining copyright law." MGI's project is "a noble effort," he said, but it won't put a dent in piracy unless it's integrated into a larger campaign.

Gimpelson is hopeful nonetheless. In the face of rampant illegal downloading, he said, the choice for the music industry is clear.

"Either you can teach them now or sue them later," he said. "I don't think there's any other option."
http://www.latimes.com/technology/la...nes-technology


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

Pirated Movies Flourish Despite Security Measures

The more studios try to stifle bootlegging, the more technology works to undermine them.
Lorenza Muńoz and Jon Healey

Hollywood's all-out war against movie piracy is turning into a big-budget bomb, with illegal copies of virtually every new release — and even some films that have yet to debut in theaters — turning up on the Internet.

Sophisticated computer users currently can download pirated versions of titles ranging from "Bad Santa" to "Master and Commander: The Far Side of the World." While some of the versions are crude copies made by camcorders aimed at theater screens, a surprising number are nearly pristine transfers.

The abundance of bootlegs arrives just as the movie studios have launched their most aggressive campaign yet to protect their business from the rampant downloading that has plagued the record industry. As part of this antipiracy initiative, the studios have done everything from banning the distribution of free DVDs to awards voters to stationing security guards equipped with night-vision goggles inside Hollywood premieres to spot camcorder users.

The steps may have made some thievery more difficult, but overall, piracy appears to be up from previous years, when an avalanche of year-end awards DVDs and videos, or "screeners" as they are called, flooded the entertainment and media communities. In fact, the new security measures seem only to have emboldened some pirates.

The Motion Picture Assn. of America says that last year it found at least 163,000 Web sites offering pirated movies. The number is likely to go up to 200,000 sites by the end of the year, said Tom Temple, the association's director of worldwide Internet enforcement.

A major source of movies online is an underground network of groups that specialize in bootlegging films, piracy experts say. These "ripping crews" — which recruit members around the world to obtain, edit, transfer and store films — compete with each other to be the first to obtain a movie, the experts say. They frequently are assisted by people connected to the movie industry, whose numbers include cinema employees, workers at post-production houses and friends of Academy members.

Pirates usually copy a movie first by sneaking a digital camcorder into a movie theater, sometimes the very auditorium in which antipiracy public service announcements have just played before the feature attraction. These copies yield something less than DVD-quality results. After this version appears online, crews will continue to compete to deliver a true DVD- quality version before it is officially released to video stores.

Piracy-monitoring firms say the advancing technology of digital camcorders is yielding dramatic improvements in the earliest versions of pirated movies. Although these efforts vary, the best ones come close to the picture and sound quality of DVDs.

Mark Ishikawa, the chief executive of BayTSP, a Los Gatos firm that helps studios combat online piracy, said, "We have seen some copies of 'Finding Nemo' that look like they were DVDs, yet after forensics we determined they were camcorders." Said another antipiracy expert who asked not to be identified: "The quality of non-DVD screeners has increased so much in the past year, the DVD screener ban is too little, too late."

The crews store films on powerful computers connected to the Internet but not accessible to the public. But their movies quickly trickle down to places open to the Internet savvy, such as Internet chat rooms and news groups. They take pains to hide their identities and locations, and so far have remained outside the reach of federal enforcers and studio lawyers. The Justice Department has struck only a glancing blow against this type of piracy, prosecuting members of several so- called "warez" groups, loose confederations of online partners who concentrate on copying computer software and games.

Nevertheless, government agencies are paying attention. The FBI began investigating the unauthorized release to the New York Post of Mel Gibson's "The Passion of Christ" two weeks ago; by the time that probe began, federal authorities already had launched a broader investigation into the unauthorized copying of numerous other first-run films, according to sources.

Adding to the magnitude of the problem is the fact that some of these bootleg copies are pirated from inside the entertainment industry itself.

Piracy from such an array of sources means that there now are more Internet movie offerings than at the world's largest megaplex. Quentin Tarantino's "Kill Bill Vol. 1" is available in two versions, an American/European edition (with portions in black and white) and one in Japanese (all in color). Other titles available include "The Rundown," "Timeline," "21 Grams," "The Missing," "The Cat in the Hat," "Thirteen" and "Pieces of April."

The box-office hit "Elf" was available four days before its Nov. 7 release in theaters, taken from a digital camcorder recording made in a theater, with the sound most likely recorded from a cinema seat audio jack used by hearing- impaired moviegoers. Films not yet in theaters, including "Girl With a Pearl Earring" and "Monsieur Ibrahim," were taken from DVD screeners sent out in advance of the films' release.

As part of the campaign against movie piracy, the MPAA on Sept. 30 banned the seven major studios and their specialty film divisions from sending out free movies to anyone but the 5,800 Academy Awards voters. Oscar voters, furthermore, can only receive specially marked videocassettes and not DVDs, which provide better masters for bootlegs. The move infuriated the makers of lower-budget movies and less conventional fare, who feared the true motive for the ban was to bring Oscar attention back to big studio releases.

Movies from independent companies that are not part of the MPAA are turning up in a number of Internet sites. DVD copies of all of the movies being pushed for awards consideration by Lions Gate Films, for example, are available illegally online. Lions Gate began sending out screeners to an array of awards voters two weeks ago. The studio declined comment Wednesday.

The motion picture association's Temple said the main point of the ban was to delay the arrival of high-quality copies of movies online as long as possible. It's too early to tell the impact of the new rules, he said, because the studios have just started sending out screeners. But a few copies of DVD and VHS screeners have started to pop up online; for example, a VHS copy of United Artists' "Pieces of April" hit the Net on Thanksgiving.

The piracy expert who asked not to be named said the MPAA's action "has of course caused a shortage of real, true DVD screeners of movies" online. "But it doesn't matter because there are copies out there that are good enough…. Some of them even exceed the quality of VHS screeners."

Several other experts agreed that the new rules have had absolutely no effect on the availability of movies online.

"There's no difference," said Kevin Moylan, senior vice president of the antipiracy firm Vidius Inc. of Beverly Hills. "The thing to remember is that all it takes is one copy. So even an authorized screener, one of them is going to perpetrate a leak."

The MPAA ban is now at the center of a lawsuit in New York, where on Wednesday a federal judge heard a full day of testimony on a challenge by a group of independent filmmakers to the screener edict. MPAA President Jack Valenti testified that the prohibitions were necessary to combat the illegal copying and sale of videotapes and DVDs.

But two independent film producers who are among the plaintiffs in the case testified that the distribution of screeners is essential to their strategy of marketing independent films based on good reviews, word of mouth, mentions on critics' Top 10 lists and, eventually, awards nominations.

"The hardest thing with my movies is getting people to see them…. [It's] not that people would want to steal them," said producer Ted Hope, who has prize aspirations for two films this year, "American Splendor" and "21 Grams."

He and fellow indie producer Jeff Levy-Hinte, who has similar hopes for his film "Thirteen," told the judge that the major studios would have a big advantage if lower-budget films like theirs cannot send thousands of copies to opinion-makers and voters who may never see the works in theaters.

The organization's vice president supervising its anti- piracy efforts, former FBI agent Kenneth Jacobson, later told the judge that the film studios were trying to avoid what happened in the music industry, in which illegal Internet downloading is widely seen as cutting sharply into sales.

Authorities around the world already have seized "35 million [illegally copied movies] so far this year," Jacobson testified, adding that film piracy has become so rampant in countries such as China, Russia and Pakistan that the legal markets there have all but evaporated.

Miramax's Harvey Weinstein, who has used promotion campaigns to gain multiple Oscars for films such as "Shakespeare in Love," submitted a declaration stating that "a successful awards season can make the difference between a movie grossing $5 million at the box office and a movie grossing $20 million."

U.S. District Judge Michael B. Mukasey said he will rule Friday whether to grant a temporary restraining order barring the MPAA from carrying out the ban.

The MPAA and California law enforcement officials plan to announce today how they will enforce a new state law barring the illegal recording of motion pictures in movie theaters. Similar federal legislation has been proposed.
http://www.latimes.com/technology/la...nes-technology













Until next week,

- js.










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Old 07-12-03, 11:49 AM   #5
SA_Dave
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What a bumper issue!

Quote:
Originally posted by multi
ffs..!
this is stupid....
master and slave in relation to devices is
got nothing to do with the slavery trade..
Didn't you know that Maxtor and Seagate fund sweat-shops in Africa?

Quote:
'With free file sharing or free downloads, you might spend a lot of time but end up with bad quality files or broken tracks that are not burnable, or even worse, infected with viruses,' said Ms Yang.

'With a legitimate online service, you can download high quality files in a secure environment.'
Don't you hate those MP3 trojans? And those non-burnable WMA tracks which infest Napster?

Quote:
"If you go the legal way, the record industry will support you," he said yesterday.
How sweet! Maybe when they're finished they'll "give you the reach-around." (to quote jcmd)

Quote:
But this has been exactly the impact of the Net. By opportunistically grabbing free music, listeners operate under their own moral hazard, because now the record companies' lack of information about how people are using their music online means that listeners can shirk on their end of the bargain. So the Net offers a major opportunity to renege on buying music goods that are produced under moral hazard, and completely eliminate the risk listeners ordinarily would take by, say, buying CDs they cannot sample ahead of time. That's why the real problem is that the Net offers listeners insurance against the music industry itself. File sharing is not simply theft. Rather, file sharing is risk sharing.
Very interesting. There's no better resource for discovering music than the web and p2p.

Quote:
Since September, the Recording Industry Association of America has sent out 400 warning letters, received affidavits from over 1,000 former file-users and more than 200 settlements, Agence France Presse reported Wednesday.
I'd like to meet these people who've given up on using files. I want telepathic powers too?!

Quote:
Longhorn promises new methods of storing files, tighter links to the Internet, greater security and fewer reboots, Microsoft has said.
If this is the "pinnacle of innovation" you can count me out, thanks!

Quote:
"There is no magic switch for vendors to stop users from downloading copyrighted content," Eisgrau says. "The Internet can be used and misused for hundreds if not thousands of purposes that are outside the control of software developers--or for that matter, ISPs. We don't hold the Post Office responsible for blackmailers and no ink producers have been accused of extortion."
Good point! Law enforcement and security agencies want to eavesdrop on encrypted communications, yet the USPO wasn't fined for not scannning parcels for biological agents.

Quote:
It's almost as if they view Kazaa with its much larger market share as threatening to them, much as some smaller software companies view Microsoft (Corp.)," he said.
I'm sick of Sharman's self-important ramblings. They're still amusing, however naive they may be.
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Old 07-12-03, 07:47 PM   #6
multi
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OOPS !

sorry my comment was ment to go at the end..lol

i am speechless that they need to change that..

from..
the machine "Formerly Known As" Master Controller
liberate your slave devices today!
what are they going to call them though...?
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Old 08-12-03, 09:20 AM   #7
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Quote:
Originally posted by multi
OOPS !
not your fault multi, lol. as dave noticed i added enough material for the final edition to exceed nu's bit limit and make a 3rd post necessary.

- js.
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