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Old 17-06-04, 09:58 PM   #1
JackSpratts
 
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Join Date: May 2001
Location: New England
Posts: 10,013
Default Peer-To-Peer News - The Week In Review – June 19th, '04

Quotes Of The Week

"File-sharing appears to boost music CD buying." - John P. Mello Jr.

"I wish we could get justice; I don't know where it is." - Robert Moore, President and founder 321 Studios

"A decision like this says that you must prove that someone did something wrong--just owning a product doesn't mean you did something wrong." - Jason Schultz

"If China was as good as Italy, we'd all have a party and I would pay for it." – Microsoft’s Steve Ballmer, on Italy’s stiff prison sentences for sharing music and software.

"With a price point of $1 per song or more, and with the [Digital Rights Management] wrappers on the current music downloads, it actually seems that buying a CD is a better deal." - Greg Bildson






Smear Guardian

I've watched a developing situation over the last six months with increasing alarm. I’m beginning to realize IP blocking programs could be the best thing to happen to the RIAA since the lawsuit was invented. The programs have gotten normally well meaning people so convinced of their legitimacy many file sharers wrongly think most of the planet is working for the copyright police. Hundreds of thousands of peers (and millions of files) may as well be offline when no one using these systems will connect to them. Major areas of Canada are inexplicably blacklisted by one system for instance where nothing should be - filesharing is legal there! It's P2P-Macarthyism. No evidence is given - just a darkbot working in a Star Chamber, secretly whispering into the ears of users.

If I was advising the RIAA I'd tell them to buy and control operations like Peer Guardian and make everyone’s IP suspect, instantly removing millions of otherwise legitimate files from the networks; eliminating peers without the controversy or expense of lawsuits. Why not? It looks like that’s what’s happening. It wouldn't surprise me if they were doing it already. When the wholesale blocking of so many IP’s occurs the software is either seriously warped or the people running the systems are. The case can now be made that these programs are hurting – not helping the P2P networks, more than the lawsuits even, and not just the big webs like Fasttrack but independents like Soulseek as well. With so many IP’s under suspicion it’s time the creators of peer jamming updates issued real and convincing, independently verifiable evidence why countless IP’s are now being blocked. Either that or let’s just stop cutting innocent people off before we play right into the hands of the RIAA, giving it a victory it doesn’t deserve.













Enjoy,

Jack.











Survey Finds File-Sharing Networks Boost CD Buys
John P. Mello Jr.

"[The survey] shows that most people have used P2P networks in a way that many of us have: to find music that is actually worth buying," Jarad Carleton, an IT industry analyst with Frost & Sullivan in Palo Alto, California, told TechNewsWorld. "Putting a top-40 hit on a CD with 11 other piece-of-crap tracks is the reason the record industry is suffering."

File-sharing appears to boost music CD buying, according to survey results released by Warez.com, a maker of file-sharing software.

The online survey, which reportedly has been taken by some 150,000 people, shows that the purchasing of music increases slightly for some consumers after they discover peer-to-peer file- sharing networks. Light buyers of music appear to buy more discs after they discover online file- sharing, the survey indicates.

The survey showed 47.12 percent of the respondents indicated that they bought fewer than 10 CDs a year before they became file-traders, but that number dropped to 41.4 percent after they discovered P2P.

Moderate music listeners showed a negligible uptick when comparing their pre- and post-P2P behavior, and heavy musicos showed a decline.

The survey showed 26.01 percent of its respondents bought 10 to 20 CDs annually before P2P exposure and 26.61 percent afterwards. But the numbers for those surveyed who buy more than 20 CDs a year dropped from 16.21 percent to 15.27 percent after P2P contact.

Finding Music Worth Buying

An alarming number -- at least from the entertainment industry's point of view -- is the number of listeners who don't buy any CDs at all. That figure jumped from 10.67 percent before P2P exposure to 16.72 percent afterwards. A spokesperson for the Recording Industry Association of America declined to comment to TechNewsWorld on the survey results.

On the other hand, one analyst didn't find that 6 percent increase in no-buys disturbing.

"It shows that most people have used P2P networks in a way that many of us have: to find music that is actually worth buying," Jarad Carleton, an IT industry analyst with Frost & Sullivan in Palo Alto, California, told TechNewsWorld. "Putting a top-40 hit on a CD with 11 other piece-of-crap tracks is the reason the record industry is suffering."

"What this survey shows is the propensity of file-sharing users to consume digital media," added Brian O'Neil, a spokesperson for StreamCast, the Los Angeles-based maker of Morpheus , an online file-sharing program.

"It also shows the willingness of users to pay for content," he told TechNewsWorld.

Commercial vs. Peer-to-Peer

Asked how they would behave if online pay-per-tune services sold tracks at 25 cents a song, only 15.76 percent of the respondents said they'd desert P2P and buy exclusively from a commercial site.

That compares to 29.37 percent who said they'd obtain music from both sources and 38.32 percent who vowed to continue to use P2P exclusively for their listening needs.

Another 16.55 percent of the respondents said they'd only buy from a music site if it sold tracks for a nickel or less. While a nickel a tune might seem like an outlandish price point anywhere outside of Russia -- where AllofMP3.com does sell music for roughly five cents per song -- questions have been raised about the current pricing of online music.

Prices for Electronic Music

"We did do an interesting survey of our own about the prices that users were willing to pay for electronic music," observed Greg Bildson, COO of LimeWire, a New York City-based maker of P2P software.

He told TechNewsWorld that the LimeWire survey showed that if prices were lowered, participation rates and volume purchases would increase so much that the music industry would actually make twice as much revenue as they do now.

"If they were able to couple that with leveraging free P2P networks for distribution, then they could make good money," he added.

"With a price point of $1 per song or more, and with the [Digital Rights Management] wrappers on the current music downloads, it actually seems that buying a CD is a better deal," he said. "At least a CD is a perfect digital master without all the roadblocks to listening to the music however you like."
http://www.ecommercetimes.com/story/34544.html


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DirecTV Can't Sue For Gear Possession
Richard Shim

An appeals court affirmed a ruling against satellite company DirecTV that it cannot sue individuals for merely owning gear that could be used to hijack satellite signals.

The 11th Circuit Court of Appeals said Tuesday that DirecTV can't sue individuals like defendant Mike Treworgy for owning equipment that enables them to intercept television programming. The court was supporting a ruling by the U.S. District Court Middle District of Florida's Fort Myers Division that said DirecTV could not sue individuals for owning gear.

"A decision like this says that you must prove that someone did something wrong--just owning a product doesn't mean you did something wrong," said Jason Schultz, an attorney with the Electronic Frontier Foundation. The civil liberties organization filed an amicus brief in support of Treworgy, who is represented by attorney Albert Zakarian.

"We believe this ruling will have no practical effect on existing cases," said Robert Mercer, a DirecTV spokesman.

The company intends to prove that Treworgy did use the gear illegally, Mercer added.

The case will now go back to the Florida trial court, where DirecTV will have to provide evidence that Treworgy intercepted the company's signals. DirecTV's service allows subscribers to receive and decode television shows. DirecTV's service starts at $36.99 per month.

DirecTV had targeted its suits against vendors selling gear. More recently, it turned those efforts toward consumers. It filed more than 24,000 lawsuits, alleging that they stole programming.
http://news.com.com/2100-1040-5235019.html


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Company may fold

Three Makers Of Video Games Sue, Alleging Piracy
AP

Three makers of video games sued a Missouri company marketing software that enables consumers to make backup copies of computer games.

The federal lawsuit, filed Tuesday in New York, alleges that Games X Copy software by 321 Studios Inc. of suburban St. Louis violates copyright laws by illegally cracking copy- protection systems used by game makers.

The lawsuit marks a new legal front against 321 Studios, already at legal odds with Hollywood over the company's DVD-copying software.

Federal judges in New York and California have barred 321 from marketing the questioned DVD- cloning software -- a victory for movie studios, which contended that such products violate the 1998 Digital Millennium Copyright Act. That law bars circumvention of anti-piracy measures used to protect DVDs and other technology.

Since those rulings, 321 has shipped retooled versions of its DVD-copying products, removing the software component required to descramble movies.

Tuesday's lawsuit -- filed by Atari Inc., Electronic Arts Inc. and Vivendi Universal Games Inc. -- also accuses 321 of violating the copyright law by circumventing technological protections used by entertainment software publishers to prevent piracy.

Doug Lowenstein, president of the Entertainment Software Association trade group, said the lawsuit seeks unspecified damages.

``There's not a dollar figure inserted there,'' said Lowenstein, whose group represents U.S. publishers of computer and video games. ``I wouldn't get into speculating on dollar losses here. What's at stake here is a rather important legal principle -- that products with no purpose other than to circumvent copyright protection are illegal under the DMCA.''

Calling Games X Copy piracy-easing software ``masquerading as a consumer-friendly tool,'' Lowenstein said that ``obviously from the moment the device came out, we had concerns.''

The lawsuit seeks a court order blocking 321's further production and sales of Games X Copy, which fetches $60 and lets users make what 321's Web site calls ``a PERFECT backup copy of virtually any PC game.''

``No more threat of losing a game due to theft, scratches, skipping, freezing or other media imperfections,'' 321's Web site says. ``Your copy works just like the original; your entire collection can be archived and your investment protected.''

Robert Moore, 321's founder and president, called the latest lawsuit confounding, saying provisions in federal copyright law allow consumers to make backup copies of their software. Games X Copy, he said, ``is clearly designed for that purpose.''

``This is par for the course,'' said Moore, who last month told a congressional panel the court rulings in Hollywood's favor have put his company ``on the brink of annihilation.''

By Tuesday, Moore said, 321's work force -- once numbering about 400 -- was less than two dozen.

Those suing the company ``clearly want to drive a nail through our heart and make us dead,'' Moore said. ``I wish we could get justice; I don't know where it is.''

Lowenstein said game-copying software may facilitate theft of intellectual property, given that creating and marketing a top video game typically costs companies $5 million to $10 million.

``Video game copyright owners stand to lose an enormous amount from the piracy enabled by products like Games X Copy,'' he said.

Members of Lowenstein's association account for more than 90 percent of the $7 billion in entertainment software sales nationwide last year, with billions more in export sales of American-made entertainment software.
http://www.siliconvalley.com/mld/sil...al/8929386.htm


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Attorneys General Told By Lobbyists To Monitor File Sharing
Alex Veiga

Lobbyists for record companies and Hollywood movie studios laid out a case against online file-sharing Thursday before a group of attorneys general, suggesting the state prosecutors should examine whether such companies are breaking state laws.

Addressing the National Association of Attorneys General, the entertainment industry representatives warned that consumers in their states needed to be protected from the impact of online file-sharing over so-called peer-to-peer networks.

"P2P networks pose tremendous piracy problems ... but they also pose very substantial threats to consumers," said Fritz Attaway, executive vice president and general counsel for the Washington-based Motion Picture Association of America.

Copyright infringement laws are enforced at the federal level, and state courts have no jurisdiction. But on Thursday, Attaway and his counterpart at the Recording Industry Association of America, both repeatedly stressed consumer protection issues that might prove fertile ground for the state prosecutors to examine.

One example, whether the distributors of file-sharing software like Kazaa, Grokster and Morpheus do enough to warn users that they could be liable for sharing copyright content.

"The vast bulk of material distributed on P2P networks are pirated movies, music and pornography," Attaway said. "And consumers who do so, knowingly or unknowingly, expose themselves."

Last year, the RIAA began suing individuals caught distributing music files over the file-sharing networks.

Attaway also suggested the state prosecutors might have a case for protecting businesses like movie theaters and video stores from P2P software companies under state unfair competition statues. P2P software providers divert customers, affect jobs, he added.

Adam Eisgrau, executive director of P2P United, a trade group representing StreamCast Networks and Grokster and three other file-sharing software companies, said there was no need for states to get involved.

"There is no dearth of federal security of those issues," Eisgrau said. "There is a dearth ... of rationale for involving you folks and the powers you command. Now is not the time to do that."

Despite dealing a mortal blow in the courtroom against pioneer file-swapping service Napster in 2001, movie studios and recording companies have lacked a similarly decisive legal victory against current file-sharing software distributors.

California Attorney General Bill Lockyer, who earlier this year had drafted a letter suggesting P2P software companies could be targets of warnings or legal scrutiny by state attorneys general, said Thursday the group had not decided to adopt any policy on file-sharing.
http://www.usatoday.com/tech/news/te...e-states_x.htm


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Swap Blockers Graduate To High Schools
John Borland

Technology aimed at identifying and blocking copyrighted songs as they're being traded on file- swapping networks is beginning to move into high schools.

Filtering technology from Audible Magic has been installed at several high schools around the country, most recently at private Bellarmine College Preparatory in San Jose, Calif., and a technical high school in Cape Cod, Mass., the company said. The song-blocking tools have largely been used by universities and Internet service providers.

As at the larger institutions, the high-school administrators say they are looking for tools that help them control unauthorized and potentially illegal use of their networks by students or staff.

"We have about 450 computers and 1,400 students, and sometimes, guys will bring laptops in and do some things that we may not want them to do," said Chris Cary, Bellarmine's technology coordinator. "We found there was significant (file-swapping) traffic at lunchtime and after school hours."

Although the use of Audible Magic's tools at Bellarmine remains limited, a broader move into secondary schools could mark a jump toward the mainstream by peer-to-peer, or P2P, network filtering. It could also spark more controversy. High schools' use of Web filtering technologies have led to prominent lawsuits.

Audible Magic's software has already been the source of considerable debate, both over whether it can accurately stop copyrighted song trading on P2P networks such as Kazaa or eDonkey, and regarding privacy.

Last year, top Recording Industry Association of America executives ushered Audible Magic's CEO, Vance Ikezoye, around Washington, D.C., visiting the offices of congressional representatives to demonstrate the technological feasibility of filtering on P2P services.

The tour drew bitter criticism from file-swapping companies and trade association P2P United. Companies providing the P2P software had not been shown the technology and questioned whether it could work in the field as advertised, the trade group said.

In some previous tests, privacy concerns have also been raised by critics. An early test of the song-filtering software at the University of Wyoming stopped ahead of schedule, after some students complained that the tool examines every bit of data going in and out of a network in its hunt for copyrighted songs. The company subsequently modified a version of the software to avoid retaining information on specific user accounts.

The move into secondary schools remains preliminary, however. Cary and his counterpart at the Cape Cod Regional Technical High School each said the ability to block individual songs, instead of all file-swapping traffic, was responsible for their decision to buy Audible Magic's technology.

However, neither has turned on that individual song-filtering mode, electing instead for the broader ability to block file-swapping traffic altogether.

"It's nice to know we do have the feature, if we decided to block only music that was illegal to trade," Cary said. "Then (people on the network) could still use P2P for legitimate things, if they wanted to."

Ikezoye said different customers would always use the tools in different ways.

"Bellarmine is a good example of a school using it first to analyze P2P traffic, and then to implement an appropriate solution," Ikezoye said.
http://news.com.com/2100-1027-5233272.html


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Suspected 'Half-Life' Code Thieves Arrested
David Becker

Game developer Valve Software announced on Thursday that law enforcement authorities have arrested several suspects for allegedly stealing source code for the highly anticipated game "Half-Life 2."

Valve CEO Gabe Newell said in a statement that arrests were made in several countries. He credited customers with helping identify the suspects.

"Within a few days of the announcement of the break-in, the online gaming community had tracked down those involved," Newell said. "It was extraordinary to watch how quickly and how cleverly gamers were able to unravel what are traditionally unsolvable problems for law enforcement related to this kind of cybercrime."

Valve did not offer any information on the identity, nationality
or legal status of the suspects and referred all questions to the FBI's regional Cyber Crime Task Force in Seattle. An FBI representative did not immediately respond to a request for comment from CNET News.com. The agency told GameSpot, a News.com sister site, only that it had made some arrests in the case.

Newell confirmed in October that hackers had broken into Valve's network and downloaded the entire source code tree for "Half-Life 2," which was later redistributed via online forums.

The game is a sequel to the popular shooter "Half-Life" and was originally due out late last year. The theft posed numerous security risks for the online game and forced struggling publisher Vivendi Universal to delay the release, now set for an unspecified date this summer.

The timing of the arrest announcement lends credence to reports in German technology publication Heise Online and other venues that the "Half Life 2" theft may be tied to Agobot, the destructive Trojan horse. According to Heise, a German man recently arrested in connection with Agobot boasted in online forums of hacking into Valve.
http://news.com.com/2100-7355-5230761.html


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Blank CD Levy Could 'Pay Artists'
Kate Mackenzie

A MUSIC industry analyst is calling for industry groups to lobby the Federal Government to reform laws on CD copying and to introduce a levy on blank CDs.

Phil Tripp, who publishes the Australasian Music Industry Directory, said consumers should be allowed to make copies of CDs in some circumstances, and artists should be recompensed through a blank CD levy distributed by organisations such as the Australian Performing Right Association and Screenrights.

Under Australian law, copying personal CDs is illegal, even for personal use such as playing in car stereos.

Mr Tripp said a blank CD levy scheme in Canada collected about $30 million in 2002 and $40 million in 2003, and distributed 66 per cent to songwriters and 19 per cent to performers.

Germany has a similar scheme, which is also considered successful.

APRA and the Australian Music Publishers Association have previously called for government support of a CD levy.

Mr Tripp said such a scheme would not rob artists of their rightful earnings, because organisations such as APRA were experienced at redistributing music revenues.

"It would actually benefit consumers who buy music - the ones who support the music industry by paying for CDs - and benefit artists and songwriters, who are at the bottom of the music food chain," he said.
http://australianit.news.com.au/arti...nbv%5e,00.html


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ISP Fear Of Being Sued 'Fanciful'
Simon Hayes

THE Australian recording industry sent 120 take-down notices to ISPs, universities and businesses last year requesting they remove potentially pirated music files.

Music Industry Piracy Investigations general manager Michael Speck told a Senate Committee on the US-Australia free trade agreement that the industry had been sending lawyers' letters to ISPs for seven years, and "rarely have a problem with any of them".

He estimated as much as 20 per cent of ISP customer activity was driven by pirated music files.

Arguing that provisions for a formal system of take-down notices would not increase litigation over online music piracy, Mr Speck said most internet access providers wanted to obey the law.

"Unless the ISPs or those associated with them become total anarchists, nothing is likely to change," he said.

"The prosecution rate is not going to change because most of the corporations want to obey the law."

Despite the informal system and 18 months of negotiations, the recording industry and ISPs are yet to sign a protocol to allow formal take-down notices.

Labelling as "fanciful" ISP concerns about being sued by customers for wrongly removing content, Mr Speck said the internet industry was protected by the Copyright Act and by internet service providers' terms and conditions.

He said ISPs were easily able to identify offenders.

"The internet industry routinely tells the sound recording industry or its investigators that they are unable to identify customers who infringe," he said.

"These are the very same customers they can identify for breaching the download limits, the very same customers they can identify in the cyber-crime protocol for police."

ISPs already participated in an informal take-down notice system, Mr Speck said, and most complied with letters from music industry lawyers asking that allegedly infringing content be removed.

"Invariably Australian ISPs take that material down within 24 hours," he said.

"Yet they come to this committee and revisit the entire issue."

The recording industry has been backed by the Interactive Entertainment Association, which told the committee it welcomed an "expeditious process" for dealing with ISPs, as well as tougher controls on circumvention technology.

The IEA represents games software developers.

"We understand from our counterparts overseas that ISPs overseas are able to accommodate this and do not see it as an imposition," IEA chief executive Beverly Jenkin said.

"We believe the Australian ISPs have that technology available to them."

The Internet Industry Association told the committee earlier that mass mailings of take-down notices in the US had violated customer privacy.

Chief executive Peter Coroneos said the IIA was "happy to continue work on a code of practice".

Australia had to protect "our different legal environment and our different privacy environment", he said.
http://australianit.news.com.au/arti...-15319,00.html


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China Gives Cyber Dissident Suspended Sentence
Juliana Liu

A prominent Internet dissident has been given a suspended sentence for subversion in a rare display of leniency by a Chinese court.

The People's Intermediate Court in Xiaogan city in the central province of Hubei sentenced Du Daobin to three years in prison on charges of "subverting state power", the official Xinhua news agency said on Friday.

But the sentence was suspended for four years, Xinhua said. The former civil servant does not have to serve time unless he breaks the law again in the next four years.

He was given a light sentence after he pleaded guilty, Xinhua said without elaborating.

The court was told Du published 26 articles on the Internet from May 2002 to October 2003, "overtly instigating and subverting the state power by way of slander", Xinhua said.

Du's friends told Reuters he had been released but he could not be reached.

A court official declined comment.

Du was detained by police in Wuhan last October for posting online essays in support of fellow dissident, Liu Di, who was released from police custody last November.

Liu, a university student who wrote satirical essays poking fun at the government, spent more a year in detention but was never charged with a crime. She was known as the "stainless steel mouse" and became a high-profile symbol for free speech in China.

Several dozen Chinese academics, reporters and scholars sent a letter to Premier Wen Jiabao last November protesting against Du's arrest, saying it was a violation of free speech rights guaranteed by the constitution.

China lumps political dissent, including any mention of the 1989 Tiananmen Square democracy protests or the banned spiritual movement Falun Gong, along with pornography as illegal content.

China has been cracking down on Internet content with limited success as the ranks of Web surfers surged.

The government has even set up a special Web site for Internet users to report "illegal" online content including pornography and political dissent, in another bid to control the free-wheeling sector.

The site, net.china.cn, said it aimed to "protect the public interest" by fostering a better environment for China's youth. Internet users had already reported the presence of four Web sites offering "free movies and other services", it said.

"If those sites don't take action on their own, we will further expose their actions," it said in a posting.

The Internet has become a life line for millions of Chinese who want information beyond official sources, as well as a cash cow for aggressive private firms, many of which are listed in New York and Hong Kong.

Cai Mingzhao, deputy director of the cabinet spokesman's office, was quoted by Xinhua as saying China would have nearly 100 million Web users by the end of 2004.
http://uk.news.yahoo.com/040611/80/evpka.html


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Site of the Rat

China's Telltale Web Site Patrols "Illegal" Content

China has set up a special Web site for Internet users to report "illegal" online content including pornography and political dissent, in another bid to control the free-wheeling sector.

The site, net.china.cn, said it aimed to "protect the public interest" by fostering a better environment for China's youth. Internet users had already reported four Web sites, it said.

"If those sites don't take action on their own, we will further expose their actions," it said in a posting. It did not elaborate on the content of the four sites.

China lumps political dissent, including any mention of the Tiananmen democracy protests or the Falun Gong spiritual movement, along with pornography as illegal content.

It has been cracking down on such Internet fare for several years with limited success as the ranks of Chinese Web surfers surge to the tens of millions.

The Internet has become an essential tool for millions of Chinese who want to access information beyond official sources, as well as a cash cow for aggressive private firms, many of which are listed in New York and Hong Kong.

Cai Mingzhao, vice director of the State Council's information office, was quoted as saying by the Xinhua news agency that China would have nearly 100 million Web users by the end of 2004.
http://uk.news.yahoo.com/040611/80/evp9s.html


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Tech Execs Lobby For Better Schools, Anti-Piracy Measures
AP

Chief executives of leading technology companies urged Congress on Wednesday to promote math and science in U.S. schools, avoid interfering with industry efforts to hire more workers overseas and crack down on foreign software piracy.

The executives included Microsoft's Steve Ballmer, Bruce Chizen of Adobe Systems Inc., John Thompson of Symantec Inc. and George Samenuk of McAfee Security. The head of Solidworks Corp., John McEleney, described buying a black market copy of his company's $4,000 engineering design software for $4 during a recent swing through Asia.

The executives said they support plans to let the U.S. Patent and Trademark Office keep more of the fees it earns for reviewing inventions so it can hire more examiners and issue patents more quickly. The process can stretch over years.

``Our innovations are getting kind of bollixed up,'' Ballmer said.

But the business leaders tempered their latest lobbying with recognition that election-year politics will largely overshadow policy debates important for them.

``We can't expect a lot of viable legislation,'' said Bill Conner, chief executive at Entrust Inc., which makes software to protect Internet traffic.

Executives urged Congress not to interfere with their efforts to hire more technology employees overseas, a politically sensitive subject. Greg Bentley of Bentley Systems Inc., which makes engineering software, said such hiring moves were ``a natural aspect of globalization.''

``We have an awful lot to lose through protectionism,'' he said.

They complained about math and science classes in U.S. schools, saying India and China are graduating far more students with skills needed as software engineers.

But during a 90-minute public meeting on Capitol Hill with senators, the executives did not offer detailed plans for overhauling America's schools. The forum was organized by the Business Software Alliance, a Washington-based trade association.

``Why can't we get in the educational system the same increase in productivity that we've gotten in the rest of the economy,'' asked Art Coviello, head of RSA Security Inc.

Conner said schools should offer better opportunities in math and science for women and minorities. He said students who excel in these areas still face stereotypes they are nerds.

``We need to turn up the volume, make it OK and cool to be in math and science,'' Conner said.

Chizen, whose company's Photoshop graphics software is among the most widely pirated programs on the Internet, urged lawmakers not to change a 1998 copyright law that bans the sale of products that can break the digital locks on software or entertainment discs. Such products can be used to make personal backup copies of DVD movies or software.

Executives agreed that although piracy is common in the United States, it is far worse overseas. Ballmer said Italy has a relatively high rate of software piracy, but not anywhere close to the worrisome rates in China.

``If China was as good as Italy, we'd all have a party and I would pay for it,'' Ballmer said.
http://www.siliconvalley.com/mld/sil...al/8939187.htm


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Net Portal Vows To Improve Management
China Daily

A Shanghai website plans to reinforce its management after being chastized in court for copyright infringement.

The case once again highlighted growing legal problems related to online content.

On Monday, Shanghai No 1 Intermediate People's Court ordered www.51tuangou.com to apologize on its front page and pay compensation to the writer of a book whose contents it spread illegally.

In a statement Wednesday, the company said it would reinforce its management to avoid similar violations.

The website, established in September 2002, sells decoration materials, furniture and other products.

Last November, author Liao Tian accidentally found a book he wrote published on the website's electronic magazine without his permission.

The book warns house buyers about scams from decoration companies.

Liao said the book is based on his own experience decorating his house. He published it in March 2001.

Liao found the book was uploaded by a registered user of the website.

Annoyed at such an apparent violation against the country's Copyright Law, Liao asked the website to "make an immediate deletion of the book contents from the web and make a public apology on the Web."

In addition, Liao asked for the identity of whoever uploaded the book.

After receiving no answer, Liao sued the website for 140,000 yuan (US$16,930).

"We played a passive role from the very beginning. Although we did not infringe upon the writer's copyright, it was still negligence in our work that resulted in the violation," said Zhang Guohua, general manger of the company.

Zhang said the company sent a warning to the user who uploaded the book, who never logged on again.

"We encouraged original articles from netizens and our members, yet it was really difficult to distinguish copied articles from original ones," he added.

Zhang explained that as a formal website with governmental approval, it had long paid attention to copyright problems.

"We tried to observe the law, and we also have a lawyer," he said.

Zhang complained that such violations are rampant on the Internet and many original articles on his website are illegally used elsewhere.

Screening articles is complicated, considering it is the duty of a website to provide a communication platform, said Hu Jianxing, the company's attorney.

In China, the first case emerged in 1999 in Beijing when six contemporary writers sued a website which put their novels online without their permission.

Earlier this year, a scandal surrounding leaked graduate English exams triggered a heated debate on supervision of Internet. On January 10, only around 20 minutes after the English test started, some examination questions appeared online.
http://www.chinadaily.com.cn/english...ent_335934.htm


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Vietnam Releases Cyber-Dissident Two Years Before End Of Jail Term

HANOI (AFP) - Vietnam has released a "cyber-dissident" more than two years before the end of his four-year jail term for posting essays critical of the communist regime on the Internet.

"While serving his term in Nam Ha prison, Le Chi Quang expressed remorse and admitted his crimes and those of people who lured him into his activities against the Vietnamese state," a statement from the foreign ministry said. Quang wrote a letter asking for clemency and promised not to break the law again. His request was accepted, the statement added, citing "humanitarian" reasons. He was effectively released on Saturday. Le Chi Quang, a 34-year-old computer instructor, was convicted of "offences against the state and the Socialist Republic of Vietnam" on November 8, 2002 and given a four-year term. He had been arrested on February 21 the same year in a cyber cafe and was accused of breaking the law after posting articles criticising land and sea border agreements forged between Vietnam and China in 1999 and 2000. In a letter to Jiang Zemin ahead of a visit to Vietnam by the then Chinese president, Quang accused the Vietnamese authorities of making territorial concessions to China. As well as criticising the border agreements, Quang had also come out in favour of more democracy and incurred the wrath of the authorities for posting articles praising well-known dissidents Nguyen Thanh Giang and Vu Cao. His arrest was part of an ongoing crackdown against intellectuals and dissidents who use the web to circulate news or opinion banned from the tightly-controlled state press. International human rights groups have accused the communist regime of using national security as a pretext to silence criticism. Several other cyber-dissidents have been arrested these last two years. Last month, the government ordered a crackdown on "bad and poisonous information" being circulated over the Internet just months after tough new rules regulating the use of the web came into force. The government office issued a formal notice ordering ministries and agencies to "tighten state management to prevent the exploitation and the circulation of bad and poisonous information on the Internet". Only around 3.2 percent of Vietnam's 80 million people surf the web, mainly through cyber-cafes.
http://uk.news.yahoo.com/040614/323/evuv9.html


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The Son of Patriot Act Also Rises
Kim Zetter

While activists and politicians work to repeal or change parts of the Patriot Act that they say violate constitutional rights, Patriot Act II legislation -- which caused a stir when it came to light last year -- is rearing its head again in a new bill making its way through Congress.

The bill would strengthen laws that let the FBI demand that businesses hand over confidential records about patrons by assigning stiff penalties (up to five years in prison) to anyone who discloses that the FBI made the demand. The bill would also let the FBI compel businesses to cooperate with record requests, and it would expand the government's secret surveillance powers over noncitizens in the United States.

"There is no reason for this legislation," said lawyer Chip Pitts, head of the Bill of Rights Defense Committee of Dallas and a former constitutional law professor. "Given the expanse of powers and secrecy already granted in the Patriot Act, and given the unclear security benefits and possible security detriments of that legislation, why do we need a further amendment of the law to grant more powers to the government?"

The bill, known as the Anti-Terrorism Intelligence Tools Improvement Act of 2003, or HR 3179, was introduced last September by Rep. James Sensenbrenner (R-Wisconsin) and was co- sponsored by Rep. Porter Goss (R-Florida), chairman of the House Intelligence Committee and a possible contender to replace departing CIA chief George Tenet.

It contains four sections that first appeared in a proposed piece of legislation dubbed Patriot Act II. That proposed law was discovered last year by the Center for Public Integrity just weeks before the invasion of Iraq. Patriot Act II, or "Son of Patriot" as critics called it, was written by the Justice Department to expand Patriot Act powers, but the department was forced to shelve the proposal after news of it created an uproar.

But critics, like conservative former Rep. Bob Barr (R-Georgia), say that rather than abandoning the legislation altogether, the department has been extracting provisions and having sympathetic lawmakers slip them one by one into new bills to pass the legislation piecemeal. At least five other bills pending in Congress also contain provisions from Patriot Act II, but HR 3179 is the one that's in imminent danger of being passed under the radar.

Last year, a Patriot Act II provision was slipped into the Intelligence Authorization Act of 2004 at the last minute and passed quickly before legislators opposed to it had time to fully examine it. The Intelligence Authorization Act, an annual bill that allocates funds for intelligence agencies, is a must-pass bill that generally gets drafted and passed quickly in secrecy.

The new bill, HR 3179, was set to pass through Congress without a hearing last year, but the House Judiciary Committee, chaired by Sensenbrenner, changed its mind and held a hearing May 18. The bill is waiting for markup in that committee, but critics fear that Rep. Goss and the House Intelligence Committee will slip the bill into this year's Intelligence Authorization Act during a closed-door hearing on June 16, and pass it quickly before lawmakers can revise or further debate it.

Proponents of HR 3179 say critics are overreacting to the bill. They say the bill will simply "plug a few gaps" in the Patriot Act by establishing penalties for noncompliance that were never specified in the Patriot Act.

But opponents say the bill grants the government more power to investigate people without probable cause and to do so under a cloak of secrecy. As a result, individuals being investigated will have no chance to protest unconstitutional searches and seizures.

Under the Patriot Act and Patriot Act II provisions passed in the Intelligence Authorization Act last year, the FBI doesn't need a court order or probable cause to obtain the transaction records for patrons of libraries, Internet service providers, telephone companies, casinos, travel agents, jewelers, car dealers or other businesses.

The FBI can simply draft a "national security letter" stating records are needed for a national security investigation, without being specific about the data being sought or the people being investigated. A nondisclosure provision prevents the letter recipient from telling anyone about it, including patrons whose records may be investigated.

Under HR 3179, anyone who knowingly violates the secrecy clause could be imprisoned for up to a year, and anyone who violates it with "the intent to obstruct an investigation or judicial proceeding" could be imprisoned up to five years. The bill also lets authorities force individuals and companies to comply with security letters under contempt-of-court threats.

Jeff Lungren, spokesman for the House Judiciary Committee where the bill currently resides, said HR 3179 simply gives teeth to the Patriot Act.

"Right now you can't disclose if you receive a national security letter," he said. "But if you do disclose it, there is no penalty for that. There's (also) no stick to deal with a person that refuses to comply with a national security letter."

But Jim Dempsey, director of the Center for Democracy and Technology, said the bill tips the balance of power further into government hands while hampering the ability of people "to push back" and provide balance to government powers.

Currently, if government investigators request data that is too broad or intrusive, a company has some wiggle room to protect patrons' Fourth Amendment rights by resisting and negotiating a more targeted search, Dempsey said. But letting the FBI force cooperation while at the same time demanding secrecy and threatening imprisonment would make it unlikely that unreasonable secretive searches would ever be prevented or challenged.

"It's a way to increase the government's leverage," Dempsey said, noting that no company employee would want to go to jail for 30 days, let alone five years, to defend the privacy of the company's patrons.

Dempsey said he believes the original Patriot Act didn't specify penalties for disclosure because lawmakers were ambivalent about the act's powers and didn't want to eliminate opportunities for checks and balances.

Steve Lilienthal, director of the Center for Privacy and Technology Policy at the conservative Free Congress Foundation, said the gag rule is "a license for abuse."

"You have the right to talk to an attorney, but the attorney cannot talk to anyone else," he said. "You're prevented from going to the Department of Justice to communicate, or to the relevant congressional community to tell them when an abuse has taken place. It's almost un-American."

In addition to penalties for disclosure, HR 3179 expands surveillance of noncitizens by amending the Foreign Intelligence Surveillance Act of 1978, or FISA. Currently FISA investigations involve individuals or groups acting on behalf of a foreign government or terrorist organization. But HR 3179 would let the government conduct secret domestic surveillance against noncitizens believed to be engaged in international terrorism, but who have no known affiliation with a foreign government or terrorist group.

Pitts, the attorney with the Bill of Rights Defense Committee, said the amendment could be used to justify surveillance of noncitizens for criminal activity, for work with organizations like Amnesty International or for donating money to an environmental organization that stages protests.

"Because there is no accepted definition of international terrorism, and because they're eliminating the need for someone to be acting on behalf of a foreign government, you're relying on subjective and perhaps arbitrary or politically motivated definitions" to determine who could be secretly investigated, he said.

Barr, a member of the American Conservative Union who has been practicing law since leaving Congress last year, testified against the bill during the May hearing and said that Congress should not be passing new laws to strengthen the Patriot Act while there are concerns about how the legislation has been used to date. The FBI has admitted using the Patriot Act for nonterrorism investigations, such as cases involving corruption in a Las Vegas strip club, drug trafficking and other criminal activity.

Barr said the surveillance powers of the Patriot Act play "fast and loose" with the Constitution and that the secrecy penalties in HR 3179 would make its assault on the Fourth Amendment even worse.

"If the government is able to conduct its powers in secret, then we never know the extent to which its power is being used or being abused," he said. "If the government wants to conduct more of its business in secret and without probable cause, then (we should) just amend or repeal the Fourth Amendment, not allow the government to eat away at it in small steps and pretend it's still there."

Barr said the law should allow recipients of national security letters the right to challenge them, just as they can challenge grand jury subpoenas.

The American Civil Liberties Union recently discovered just how daunting the secrecy provisions can be when it was forced to file a lawsuit in secret that challenged the constitutionality of national security letters under the First Amendment. The organization was able to reveal the existence of the lawsuit only after negotiating with the government about what it could say about the suit.

The lawsuit was filed after the ACLU filed a Freedom of Information Act request for information about how often and in what cases authorities have used national security letters to date, and the organization received six pages of blacked-out documents.

Pitts said that although HR 3179 is not yet on the radar screen of most congress members, activists are working to thwart what he calls a "stealth measure."

"The last time (a Patriot Act II provision) slipped through and got signed was on the day of Saddam Hussein's capture," Pitts said. "There was not a single activist who knew it was coming down the pike. At least this time we know about it in advance."

In total, six bills pending in Congress contain provisions taken from Patriot Act II. In addition to HR 3179, three other House bills (and two Senate companion bills) were introduced late last year:
http://www.wired.com/news/privacy/0,1848,63800,00.html


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Libraries Oppose Internet Filters, Turn Down Federal Funds
AP

Libraries that receive federal funds have until month's end to install Internet filters on their computers, but many in New Hampshire are giving up the money without much regret.

The federal government offers libraries nearly $3 billion a year to help pay for Internet access and computer setups. In return, the computer systems must include filters designed to protect both children and adults from pornographic and other inappropriate Web sites.

The New Hampshire Library Association encouraged forgoing federal funds in a statement posted on its Web site. It said filters block valuable information like research on breast cancer, sexually transmitted diseases and even Super Bowl XXX, and give a false sense of security.

Local librarians have additional complaints. Many say the federal grants were often too small and the application too cumbersome to bother with.

The library in Laconia is giving up about $1,700 a year by choosing not to filter its Internet access.

Bob Selig, chairman of the library's trustees, said the library would spend more money than it would get in grants to maintain the filter and comply with requests from library users to disconnect the filter.

Instead, the library filters only the two Internet stations in the children's rooms, not the six elsewhere in the library.

The Franklin library once got $1,700 toward its phone bill. But library director Rob Sargent found the year-long application process took too much of his work week to make it worth it.

''As a professional librarian I am not in a position to judge the information another person may want to see,'' he said. ''Here ... (we) allow customers to exercise their own intellectual freedom.''

Sargent explains to patrons that the access is not filtered and requires children younger than 18 to have a parent or guardian's permission to use the Internet. The library also has privacy screens on its computers so other patrons can't see what someone is looking at unless they are very close to the computer.

Sargent said he has not found anyone using the computer to view potentially offensive sites. But nor does he police their viewing.

''We assume people are using good judgment and exercising their own personal responsibility,'' he said.

Andrea Thorpe, president of the state library association and director of the Newport library, complained that filters keep harmless and useless information from the screen. She said an innocent Web search for John Stark or Smuttynose Island would be hampered by a filter because Stark can be associated with stark naked and Smuttynose is too close to smut.

She and other librarians have heard of school nurses being unable to get information online about sexually transmitted diseases because body parts are mentioned. Also, the law says libraries must filter out images, not necessarily words, and filtering technology cannot yet assess pictures.

But Denise Jensen, director of the Berlin Public Library, said she can't afford to fight the filtering because her library could not provide Internet access if not for the help it gets in federal money. Last year, the grant totaled $201. This year, Jensen is expecting $890 because she discovered she had been using the wrong calculations in her application.

She said the library did have trouble with younger students looking at inappropriate sites before the filter was installed. The librarians monitored the usage by circulating in the room and barred kids who'd misbehaved from using the Web again.

''We put the filters on so we could get the federal funds,'' Jensen said.
http://www.boston.com/dailynews/165/...et_filt:.shtml


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Court Bans Internet Cut-Price Book Sale
DPA

A court Tuesday banned a journalist from selling his review copies of books online, saying the discounts breached German price- fixing arrangements that forbid price competition.

A bookseller had sued for a court order after the Berlin journalist posted 48 books on the Ebay auction site in a space of six weeks. The journalist said at trial he had been sent the books free by various publishers and he was only earning a little on the side.

But court said that as a "power seller", he was on a par with a professional bookseller, and bound by the book-price rules.

Confirming the ban on appeal, the state superior court in Frankfurt said Tuesday the ban did not apply to used books, or the occasional sale of an unwanted gift book.

Decades-old price-fixing arrangements for books have collapsed in recent years in the United States and Britain, but remain in force in Germany after obtaining European Union dispensation.

There has been little public discussion of the rules. The book trade argues that economically marginal small publishing houses and bookshops would collapse without protection, and authors fear that competition would make it harder to publish small-print-run books.
http://www.expatica.com/source/site_...&story_id=8538


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SBC Restrictions on DSL Are Illegal, Judge Rules

The firm is ordered to cease its practice of refusing to provide the service to people who switch phone carriers.
James S. Granelli

SBC Communications Inc. is violating California law by refusing to make its high-speed Internet service — SBC-Yahoo DSL — available to customers who switch their local voice service to rival carriers, according to a decision Wednesday.

The ruling by a Public Utilities Commission administrative law judge states that SBC's refusal "is not just or reasonable" and that California's dominant local phone company must cease the practice.

The decision becomes effective in 30 days unless any party files an appeal to the PUC, or a commissioner requests a review.

Competitors have complained that SBC has unfairly maintained its control over local phone service partly by tying that to its DSL, or digital subscriber line, service.

SBC executives, who have not yet seen the decision, insisted Wednesday that the company didn't have to provide its DSL service to customers who wanted to move their local phone service to a rival.

"Based on what we know is in the record, we have no obligation to provide a retail resale DSL product," spokesman John Britton said.

He said DSL was offered by an SBC subsidiary only in an arrangement in which it shares the copper lines to homes with SBC.

The decision by Judge Anne E. Simon came in a case involving tiny Telscape Communications Inc. in Monrovia, which serves the Latino community primarily in Southern California.

Telscape complained to the PUC two years ago that SBC would not process orders for switching local customer service when the customer also subscribed to SBC-Yahoo. The rejected orders amounted to about 10% of Telscape's total orders, Simon wrote.

SBC's practice was so prevalent that giant competitors AT&T Corp. and MCI Inc. had instructed their salespeople to ask potential customers if they had SBC- Yahoo DSL and turn down their business if they did, Simon wrote.

AT&T and MCI now offer their own DSL service, mainly through Covad Communications Group Inc. in San Jose, in SBC territory. The territory covers about 78% of the state geographically and about 94% of all phone lines.
http://www.latimes.com/business/la-f...,6394839.story


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Bell Tolling For DSL?
Ben Charny

The suspension this week of rules regarding local phone competition could play havoc with fast- growing broadband services, experts said, bolstering the position of the Bells at the expense of smaller players and of consumers.

Legal rulings took effect Tuesday that for now remove key conditions that had previously regulated the terms and prices local phone monopolies can demand from rivals seeking to rent parts of their networks.

Many predict the regulatory vacuum will drive some competitors out of the local phone business, a trend that could potentially lead to price increases down the road. And the impact on broadband could be even more sudden and severe.

More stories on this topic

Legal rulings took effect Tuesday that for now remove key conditions that had previously regulated the terms and prices local phone monopolies can demand from rivals seeking to rent parts of their networks. Such rules have generally been considered crucial for ensuring an even playing field among companies seeking to offer phone and broadband service over local telephone wires and switches owned by the Bells.

Many predict the regulatory vacuum will drive some competitors out of the local phone business, a trend that could potentially lead to price hikes down the road. According to reports, AT&T and MCI already plan to wind down local phone service in some markets.

Experts said the impact on broadband could be even more sudden and severe.
http://news.com.com/2100-1037-5234647.html


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U.S. Broadband Access Leaped 42 Percent In 2003
Jim Hu

Broadband Internet access in the United States surged 42 percent last year as demand for speedier connections remained strong, according to a report from the Federal Communications Commission.

At the end of 2003, the FCC reported a total of 28.3 million broadband lines in the United States. The study, released Tuesday, also showed that growth for the second half of 2003 reached 20 percent, up from an 18 percent increase during the first half of the year.

As the market grows, the battle between cable modems and digital subscriber line (DSL) services is getting more cut-throat.

Asymmetric digital subscriber lines (ADSL), the most common type of DSL used to connect households, grew 47 percent to 9.5 million lines. This is good news for the Baby Bell phone companies, which are the main purveyors of the technology. DSL has been available longer than cable, but the Bells are playing catch-up because they were slow to enter the market.

The Bells have succeeded in closing the gap by offering steep discounts and slashing prices. Cable companies have refused to cut prices, opting instead to boost download speeds.

Cable modems did not grow as quickly as DSL, but the technology continued to lead in the market. Cable modem access jumped 45 percent to 16.4 million lines, a sizeable lead over DSL.
http://news.com.com/2100-1034-5229545.html


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Pop-Up Toolbar Spreads Via IE Flaws
Robert Lemos

An adware purveyor has apparently used two previously unknown security flaws in Microsoft's Internet Explorer browser to install a toolbar on victims' computers that triggers pop-up ads, researchers said this week.

One flaw lets an attacker run a program on a victim's machine, while the other enables malicious code to "cross zones," or run with privileges higher than normal. Together, the two issues allow for the creation of a Web site that, when visited by victims, can upload and install programs to the victim's computer, according to two analyses of the security holes.

The possibility that a group or company has apparently used the vulnerabilities as a way to sneak unwanted advertising software, or adware, onto a user's computer could be grounds for criminal charges, said Stephen Toulouse, security program manager for Microsoft.

"We consider that any use of an exploit to run a program is a criminal use," he said. "We are going to work aggressively with law enforcement to prosecute individuals or companies that do so."

Microsoft learned of the issue when a security researcher posted an analysis of the problem to the Full Disclosure security mailing list Monday. The software giant has already contacted the FBI and is in the "early stages" of building the case, Toulouse said. The company is considering creating a patch quickly and releasing it as soon as possible, rather than waiting for its usual monthly update.

The flaws are apparently being used to install the I-Lookup search bar, an adware toolbar that is added to IE's other toolbars. The adware changes the Internet Explorer home page, connects to one of six advertising sites and frequently displays pop-ups--mainly pornographic ads, according to an adware advisory on antivirus company Symantec's Web site.

On Tuesday, security information group Secunia released an advisory about the problem, rating the two flaws "extremely critical."

"Secunia has confirmed the vulnerabilities in a fully patched system with Internet Explorer 6.0," the group wrote. "It has been reported that the preliminary SP2 (a major security update being developed by Microsoft) prevents exploitation by denying access."

The flaws could let any attacker with a Web site send an e-mail message or an instant message with a link that, when clicked on by an Internet Explorer user, would cause a program to run on that victim's computer.

The original analysis, written by a Netherland student researcher, Jelmer Kuperus, who found that the type of programming needed to take advantage of at least one of the flaws required sophisticated knowledge of the Windows operating system.

"While sophisticated, it's so easy to use, anyone with basic computer science can set up such a page, now that the code is out there in the open," Kuperus wrote in an e-mail interview with CNET News.com. "It's just a matter of changing two or three (Internet addresses) and uploading another" executable file.

Kuperus, who used an e-mail account based in the Netherlands, wrote in a Monday e-mail that he had been tipped off to the adware Trojan horse by an unnamed individual.

"Being rather skeptical, I carelessly clicked on the link only to witness how it automatically installed adware on my PC!" he wrote.

The Internet address from which the adware Trojan horse was downloaded resolves to I-Lookup.com, a search engine registered in Costa Rica that antivirus firms Symantec and PestPatrol have linked to aggressive advertising software. Two of the top three searches on the site relate to removing such programs, according to I- Lookup.com's own statistics.

A domain name search shows i-Lookup.com's parent company to be Aztec Marketing, but Pest Patrol links the site with iClicks Internet. E-mails sent to both companies for comment were not immediately answered.

Kuperus believes that i-Lookup.com's parent company may not be directly responsible for the adware-installing Trojan horse program, but that it could be rewarding the creator through an affiliate program.

"It does pass along a referrer code when downloading," he said. "Whomever created this probably is getting money for every install, so if the folks at (i-Lookup.com) would be willing, they would be able to track down the perpetrators."

Microsoft's Toulouse said Internet Explorer users could harden the software against such attacks by following instructions on the company's site. Other browsers available on Windows, such as Opera and Mozilla, do not contain the flaws.
http://news.com.com/2100-1002-5229707.html


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RIAA Moves In on Digital Radio

Digital radio broadcasts that bring CD-quality sound to the airwaves could lead to unfettered song copying if protections are not put in place, a recording-industry trade group warned on Friday.

Without copy protections, music fans could cherry-pick songs off the air and redistribute them over the Internet, further deepening the copyright woes of record labels, the Recording Industry Association of America said.

U.S. regulators at the Federal Communications Commission should ensure that the broadcast format limits such copying so radio stations don't turn the airwaves into a giant file-sharing network, RIAA officials said.

"A little bit of prudence right now goes a long way," RIAA CEO Mitch Bainwol said in a conference call.

Digital radio promises to bring CD-quality sound to FM stations and FM-quality sound to the AM band, along with "metadata" like artist and song information. Broadcasters also can use the standard to broadcast several signals at once.

Roughly 300 stations now broadcast digital signals or are in the process of setting them up, according to the FCC.

RIAA officials said digital-radio players could soon allow listeners to record certain songs automatically when they are broadcast, allowing them to build a free library of music they otherwise might pay for and distribute it to millions of others over the Internet.

Players already on the market in Europe, such as Pure Digital's "The Bug," allow users to pause and rewind broadcasts and record them digitally.

Under restrictions proposed by the RIAA, listeners would be able to record digital broadcasts for later playback, but would not be able to divide that broadcast up into individual songs.

Listeners would also not be able to program their players to record certain songs, or redistribute those recordings over the Internet.

The RIAA plans to submit its proposal to the FCC next Wednesday.

XM Satellite Radio Holdings and Sirius Satellite Radio, which broadcast digital signals by satellite, do not pose the same risk because those companies would be hurt by song copying and thus have an incentive to limit it, RIAA officials said.

A spokesman for iBiquity Digital, a privately held company whose broadcast technology was selected as the standard for the medium, was not immediately available for comment.

The RIAA represents the world's largest record labels, such as Warner Music, Bertelsmann AG's BMG, EMI Group, Sony's Sony Music and Vivendi Universal's Universal Music Group.
http://www.wired.com/news/digiwood/0,1412,63819,00.html


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Piracy Battle Begins Over Digital Radio
John Borland

Consumer groups, electronics companies and record labels squared off Wednesday in the first full public airing of proposals for antipiracy protections for digital radio networks.

Digital radio, which transforms traditional over-the-air broadcasts into the same kind of bits and bytes used in Internet transmissions, promises to boost the audio quality of FM signals to that of a CD. But it also holds out the promise of transforming radio listening in the same way that TiVo hard drive-based recorders have changed TV--by providing powerful recording and playback options.

The new medium has attracted the attention of the Federal Communications Commission, which recently began a proceeding that could end up laying out content protection rules and other regulations for it.

On Wednesday, the Recording Industry Association of America asked the FCC for new antipiracy protections that would prevent listeners from archiving songs without paying for them--and from trading recorded songs online. The RIAA and musicians' trade groups are worried that consumers might one day forgo buying albums or songs from iTunes-like services in favor of recording CD-quality songs off digital radio services.

"We know this (technology) will be attractive to consumers," RIAA Chief Executive Officer Mitch Bainwol said. "For us, it's the challenge that peer-to-peer introduces but made more complex by the fact that there are no viruses, there is no spyware or other file-sharing (problems)."

The debate is shaping up to resemble the earlier discussion around digital television technology, which similarly had movie studios worried that their products would be recorded and traded online. Both debates have pitted powerful forces against each other in Washington, D.C., and have given content companies a key role in helping shape the future of a nascent technological medium.

In digital radio, the RIAA would like to see music transmissions encrypted so that only authorized receivers that follow content protection rules could play the songs. It would also like to see a "flag" inserted in a song's data stream to prevent any recordings made from being transmitted online.

Those ideas have drawn deep opposition from consumer groups and electronics companies, which say the FCC has no congressional mandate to impose content protection on radio broadcasts of any kind.

"Interfering with radio broadcasters' shift to digital broadcasting would choke off advancement and modernization," Gary Shapiro, president of the Consumer Electronics Association, said in a statement released Wednesday. "Not only is that un-American, it's totally without merit."

Consumer groups echoed Shapiro's opposition to the RIAA's proposals.

"No one at the Recording Industry Association of America or the FCC has demonstrated any need whatsoever for content protection on a service that doesn't exist in the U.S.," said Gigi Sohn, co- founder of Public Knowledge, a copyright campaign group that is working with Consumers Union and the Consumer Federation of America on the issue. "The recording industry is trying to fool the FCC into regulating home taping of radio, which is protected by law."

The first round of comments on the digital radio issues had a deadline of Wednesday for submission to the FCC. Another round of comments is due on July 16.
http://zdnet.com.com/2100-1104-5236755.html


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Digital Radio Sounds Too Good For The RIAA

The American music industry this week warned the Federal Communications Commission that digital radio, with its high quality broadcasts and accompanying data services, presents a new risk of internet piracy to rival P2P networks, making music freely available on demand.

Since 2002, when the FCC selected in-band, on-channel, or IBOC, as the technology enabling AM and FM radio broadcast stations to go digital, Digital Audio Broadcasting, or DAB, has grown in popularity. Apart from transmitting near-CD quality audio signals, IBOC provides data services like station, song and artist identification, stock and news information.

IBOC also lets a radio station split its digital channel so that it can broadcast multiple streams of digital audio programming and allows broadcasters to use their current radio spectrum to transmit AM and FM analog signals simultaneously with new digital signals.

In April, recognising that the rules and requirements of the system needed to be updated, the FCC launched a consultation on the way forward for DAB. On Wednesday, it heard from the RIAA as well as broadcasters and consumer groups.

The RIAA, the Recording Industry Association of America, warned the FCC that unprotected digital radio would create free libraries of thousands of CD-like quality songs; allow users to “cherry-pick” the music wanted through an automated search function; and allow them to redistribute songs over the internet.

“The potential upside of digital radio for fans, artist and labels, broadcasters and others in the music chain is tantalising,” said Mitch Bainwol, Chairman and CEO of the RIAA. “For the potential to be fully reached, we need the help of the FCC to approve some common-sense safeguards. Given the enormous damage wrought by peer- to-peer piracy, a little advance prudence here would go a long way.”

The RIAA’s brief argues that unprotected high-definition radio could become a popular substitute for the unauthorised peer-to-peer networks, as consumers could acquire all the music they want from free over-the-air broadcasts without having to download any software, expose their computers to viruses and spyware or themselves to a copyright infringement lawsuit.

The solution, says the RIAA, is either to encrypt the copyrighted music being broadcast or to use an audio protection flag that, as with digital television broadcasts, tells the recording device being used to encrypt the recording to prevent further distribution of it.

But the RIAA stresses that there is no intent to prevent consumers from enjoying DAB as they would traditional analogue radio - by manually pressing a button to start and stop recording a song. Instead, says the RIAA, it is merely trying to prohibit “cherry-picking” and the unfettered redistribution of the music.

For its part, consumer group the Consumer Electronics Association warned the FCC that restraints on DAB could stifle innovation, chill technological progress, and deny US consumers the non-commercial recording rights upon which they have come to rely.

"This [consultation] is the latest example of the content community - in this case the Recording Industry Association of America - seeking to limit consumers' recording rights and rollback the landmark 'Betamax' decision, which maintains that manufacturers have the right to sell a product if it is capable of any commercially significant non-infringing uses," said CEA President and CEO Gary Shapiro.

"Interfering with radio broadcasters' shift to digital broadcasting would choke off advancement and modernisation. Not only is that un-American, it's totally without merit," he added.

A further set of comments is due to be submitted to the FCC by 16th July.
http://www.out-law.com/php/page.php?...4136&area=news


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Online Pirates Use Submarine Tactics
Jefferson Graham

In the face of potential arrests and litigation, Internet movie swappers are getting foxier in outwitting Hollywood.

They have begun bypassing popular peer-to-peer (P2P) networks like Kazaa and eDonkey, where their activities can be tracked, to share unauthorized copies of hit films. That is making it harder for the film industry to find them.

The number of hit movies available for unauthorized swapping on peer-to-peer networks has dropped considerably. Number of copies available for download during May:


May 2003

1.
Bulletproof Monk
104,765

2.
Anger Management
69,227

3.
The Core
64,444

4.
Phone Booth
53,360

5.
Final Destination 2
48,445

May 2004

1.
The Passion of the Christ
37,609

2.
Hellboy
33,650

3.
Van Helsing
30,666

4.
Lord of the Rings: Return of the King
28,593

5.
Kill Bill, Volume 2
26,587

Source: BayTSP



Internet detective agency BayTSP says the availability of hit films on P2P services is down as much as two-thirds from a year ago.

Mark Ishikawa, CEO of BayTSP, which hunts for online pirates on behalf of six of the seven major studios, says many P2P users "are starting to understand that they can be caught and in trouble."

With the publicity generated by the 3,000-plus copyright infringement lawsuits filed by the recording industry and BayTSP's 1 million monthly cease-and-desist notices to online traders, "People are getting smarter," Ishikawa says.

And more careful.

"Students are sharing among themselves with private networks," says Phil Leigh, an analyst with research firm Inside Digital Media.

They connect their PCs in small or large groupings.

Internet cops like Ishikawa track down swappers when they "upload" films or other media to share with others. Uploading is copyright infringement with fines reaching as much as $150,000 per title.

Now, many users disable the "share" function in programs like Kazaa while nabbing a film or song, thus protecting their identity.

"Because of the lawsuits, people are wary about putting their files out there, unless they're in trusted groups," says Jorge Gonzalez, co-founder of Zeropaid, a Web site devoted to file sharing.

They still trade, but more quietly.

"We haven't seen any indications that downloading is anything but an ever-growing problem," says 20th Century Fox Senior Vice President Ron Wheeler.

The Motion Picture Association of America says it loses $3.5 billion a year from piracy. The industry has yet to sue anyone for sharing films online.

The MPAA is lobbying Congress to pass a law that would make it illegal to videotape a movie from a theater. Most films offered for trade come from video copies.

About 14 states have passed such legislation. Three people were recently arrested in Los Angeles for videotaping The Day After Tomorrow, The Passion of the Christ and The Alamo.

Bootleg copies of films also are sold frequently as DVDs on street corners. Internet piracy is "slightly greater" than bootlegs now and in two years "will be even greater," says MPAA anti-piracy chief John Malcolm.
http://www.usatoday.com/tech/news/20...4-piracy_x.htm


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Harry Potter Tops Box Office With $34.9M
AP

''Harry Potter and the Prisoner of Azkaban'' continues to charm audiences, taking in $34.9 million to remain the No. 1 movie for a second straight weekend.

Three new flicks, ''The Chronicles of Riddick,'' ''Garfield: The Movie'' and ''The Stepford Wives,'' all opened in the top five with healthy $20 million-plus debuts.

The top 20 movies at North American theaters Friday through Sunday, followed by distribution studio, gross, number of theater locations, average receipts per location, total gross and number of weeks in release, as compiled Monday by Exhibitor Relations Co. Inc. and Nielsen EDI Inc.:

1. ``Harry Potter and the Prisoner of Azkaban,'' Warner Bros., $34,910,393, 3,855 locations, $9,056 average, $157,975,042, two weeks.

2. ``The Chronicles of Riddick,'' Universal, $24,289,165, 2,757 locations, $8,810 average, $24,289,165, one week.

3. ``Shrek 2,'' DreamWorks, $23,316,920, 3,843 locations, $6,067 average, $353,333,317, four weeks.

4. ``Garfield: The Movie,'' Fox, $21,727,611, 3,094 locations, $7,022 average, $21,727,611, one week.

5. ``The Stepford Wives,'' Paramount, $21,406,781, 3,057 locations, $7,003 average, $21,406,781, one week.

6. ``The Day After Tomorrow,'' Fox, $14,538,226, 3,210 locations, $4,529 average, $153,144,814, three weeks.

7. ``Raising Helen,'' Disney, $3,705,336, 2,103 locations, $1,762 average, $31,284,112, three weeks.

8. ``Troy,'' Warner Bros., $3,417,016, 2,003 locations, $1,706 average, $125,604,418, five weeks.

9. ``Saved!,'' United Artists, $2,535,013, 589 locations, $4,304 average, $3,717,375, three weeks.

10. ``Mean Girls,'' Paramount, $1,486,032, 944 locations, $1,574 average, $81,303,696, seven weeks.

11. ``Van Helsing,'' Universal, $1,194,255, 1,034 locations, $1,155 average, $116,989,795, six weeks.

12. ``Soul Plane,'' MGM, $933,068, 783 locations, $1,192 average, $13,009,074, three weeks.

13. ``Super Size Me,'' Roadside, $820,686, 230 locations, $3,568 average, $7,533,912, six weeks.

14. ``Man On Fire,'' Fox, $452,980, 402 locations, $1,127 average, $76,293,464, eight weeks.

15. ``Kill Bill -- Vol. 2,'' Miramax, $221,512, 201 locations, $1,102 average, $65,075,745, nine weeks.

16. ``NASCAR: The Imax Experience,'' Warner Bros., $213,014, 45 locations, $4,734 average, $13,043,892, 14 weeks.

17. ``A Day Without a Mexican,'' Televisa Cine, $199,403, 73 locations, $2,732 average, $2,832,595, four weeks.

18. ``Coffee and Cigarettes,'' MGM, $156,703, 46 locations, $3,407 average, $1,362,068, five weeks.

19. ``The Ladykillers,'' Disney, $146,368, 231 locations, $634 average, $39,349,265, 12 weeks.

20. ``Control Room,'' Magnolia, $141,070, 41 locations, $3,441 average, $290,174, four weeks.


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INTERVIEW:
MediaServices CIO Vadim Mamotin on Russia's AllofMP3.com
Kirk L. Kroeker

"We think that in the foreseeable future, the prices of online music stores will drop because of the constant pressure from the direction of peer-to-peer networks and their growing popularity and availability," MediaServices CIO Vadim Mamotin told TechNewsWorld.

File-sharing applications are among the most popular uses of the Internet today. According to the market research firm Big Champagne, an average of 9.5 million Internet users are simultaneously logged on to use file-sharing applications at any given time of the day to share music, videos, applications and other digital media -- a fact that does not please the Recording Industry Association of America .

In fact, the RIAA has taken several steps over the past year to stem the flow of what it considers to be wholesale music piracy. Last month, for example, the RIAA filed nearly 500 more lawsuits against alleged music file-sharers. This action brings the total number of individuals it has sued to roughly 3,000. The RIAA suits against file-sharers began in September 2003, and, despite many reports to the contrary, the RIAA says it is having a positive effect on the amount of illegal file-swapping.

In contrast to the unchecked flow of pirate MP3s on file-sharing networks, there are plenty of legit services that offer, at a cost, a wide range of digital music. But while iTunes, Rhapsody, MusicMatch, Napster, Sony Connect and several lesser-known digital music sites are charging roughly US$10.00 per album and roughly US$1.00 per song, another player has emerged on the international scene and is making big waves: MediaServices' AllofMP3.com.

AllofMP3.com, based in Russia, has been controversial from the get-go, charging for legit music not by the song or by the album, but by the megabyte. The company caters to every kind of musical taste with a huge library of legitimate music. While many have questioned the legality of the service, AllofMP3.com assures its users that the service is above-board legitimate. The cost per song through the service works out to be about 5 cents, with the cost per album works out to be 65 to 75 cents, depending on the album size and the format requested by users.

Many consumers who are accustomed to paying $1.00 per song and a minimum of $10.00 per album typically raise an eyebrow suspiciously at the prospect of such a low-cost service, which offers nearly all its music in AAC, MP3, OGG and several other formats. How can this service be legal? How are artists compensated? How does the RIAA even allow the site to function? And why are users not migrating in droves from the higher-cost services like iTunes and Napster? With these questions in mind, TechNewsWorld turned to MediaServices CIO Vadim Mamotin for an exclusive interview.

TechNewsWorld: First off, can you tell us what motivated you to create AllofMP3.com?

Vadim Mamotin: People love music. As digital audio and mobile technologies improve, interest in digital music will only increase. Several years ago we somehow foresaw this situation and thought we could create an Internet store to provide people -- both experienced and inexperienced computer users and audiophiles -- with a quality service and a wide assortment of music. We obtained all necessary licenses and started our hard work. What will become of it in the long run, our users will decide.

TNW: Have you been approached by the RIAA or other media organizations to stop selling music so inexpensively?

Mamotin: The RIAA didn't address us directly. As far as we know, several legal owners' organizations contacted ROMS -- the equivalent of the RIAA here in Russia -- wishing to obtain more specific information on our service and its legality. No suit was brought against us.

TNW: What do you think of the RIAA's current process of suing music users to prevent them from sharing music online through Kazaa, Morpheus, LimeWire and the other P2P music networks?

Mamotin: From our point of view, peer-to-peer networks are the natural reaction to the high cost of MP3 (and other audio) files at music stores of official distributors. We think the RIAA and other remedial organizations are acting badly in trying to sue music users. Lawsuits against users is only a temporary, insufficienly considered solution that will be found ineffective in the future. We think the only way to force users to pay for the music is to provide users with rich services for less cost.

TNW: Is your service legal from an international perspective, or just in Russia?

Mamotin: Because we have ROMS licenses, it would be more appropriate to address this question to ROMS.

TNW: How do you respond to questions about artist royalties, when you charge so little per song and per album?

Mamotin: We pay all royalties according to our license, which we have obtained from ROMS. These royalties allow us to keep our prices at their current level.

TNW: Can you talk a little about the technology behind what your service offers, in terms of the multiple formats? No other service offers as many different formats as AllofMP3.com.

Mamotin: A variety of available encoders and file formats allows our users to obtain what they want. We attempt to satisfy all our users, so we consider all essential requests to be important. Generally, we work in two slightly different directions: We want to satisfy those who are not that experienced in audio technologies and also the advanced, competent audiophiles.

Of course, most of our users download regular MP3s encoded with default parameters, but there are also those who choose other encoders and want to control all encoding parameters. All of these users are more than welcome.

TNW: In terms of the current most popular service in the world -- iTunes -- do you identify Apple as your primary competitor?

Mamotin: We do not compete with foreign services. We work basically for the Russian users.

TNW: Are you planning any marketing efforts in the U.S. or other countries to promote your service?

Mamotin: We didn't plan such efforts and do not plan them in the future. We intended our service initially to be for Russian users. But, of course, those who come to our site from abroad are welcome and are provided with our full service.

TNW: When did the service officially debut?

Mamotin: In August, 2001. In its present form, it debuted in November 2003.

TNW: When did you launch an English-language version?

Mamotin: The English version has been developed simultaneously with the Russian one. This is because certain problems with Russian language-encoding standards existed when we launched, so we addressed this by offering two language versions simultaneously. There are also many our nationals living outside Russia who prefer to browse our English part of the site.

TNW: What percentage of your customers are from outside Russia?

Mamotin: It is insignificant. Our service has been created for Russia and based on Russian legislation.

TNW: What do you think will happen in the future of online music distribution?

Mamotin: The consumer always prefers services with a variety of abilities and features. The more technological features are provided by the service, the greater popularity it has. We think that in the foreseeable future, the prices of online music stores will drop because of the constant pressure from the direction of peer-to-peer networks and their growing popularity and availability.

TNW: Are you planning any partnerships with any hardware vendors, like iRiver, Creative Labs or Rio?

Mamotin: We carry on negotiations with different manufacturers of MP3 and audio equipment. At present we are cooperating with Samsung .

TNW: What other digital formats are you planning to offer in the future?

Mamotin: Recently, we have implemented the support of WMA 9 Lossless, Monkey's Audio, OptimFROG and FLAC. Our users are able also to download uncompressed source CD-DA data as wave files. Technology never stands still. New audio-encoding techniques and formats will be developed. If these technologies will become popular, we'll include their support at AllofMP3.com.

As to our other plans. We will continue to develop our AllofMP3 Explorer. This program is a fully autonomous part of our service that makes the work with our services much easier and more convenient.

TNW: Many users in the United States are leery of using their credit cards on International sites, because outside the U.S., there is no direct way to appeal against credit card theft or identity theft. How are you working to assure users that their information is safe?

Mamotin: First of all, the security of any transaction depends to a large extent on the payment- processing company. If it is banking company and it has international certificates from Visa, MasterCard, Diners Club and so forth, the probability of user's information leakage is insignificant. We use such a company -- CyberPlat -- for our financial transactions with international clients.

In fact, we do not directly access the information from user credit cards. We get only notifications about successful transactions. We know that many people are leery of buying anything on Russian sites or are leery of using their credit cards on the Internet at all. It would be ineffective to try convincing these kinds of users of our honesty.

The only way we see it is to advance our good reputation, provide users with as good support as we can and answer all questions of our current users.
http://www.technewsworld.com/story/34512.html
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Well-Timed Traveling Music at the Ready on Your Wrist
Roy Furchgott



With the earphones plugged in, the new BMW watch screams "look at me" almost as loudly as a phoenix-yellow metallic M3 Coupe.

BMW has put its brand on the LAKS Memory Music MP3 watch, which incorporates a 256-megabyte memory chip into a water-resistant timepiece with a Japanese movement. It is available for $275 from www.bmw-online.com, at dealerships or by calling (888) 269-6654. A version without the BMW brand is available from www.laks.com in Austria for roughly $240.

The auto company says the watch will hold up to 60 songs or 256 megabytes of other data, like word-processing documents or a PowerPoint presentation.

The watch, which connects by U.S.B. to Windows, Linux or Mac systems, includes a built-in microphone and has preset equalizer settings for pop, rock, classical music and jazz.

The MP3 player has a lithium battery that takes about an hour and half to charge; the company says it will last up to five hours.

The written directions are somewhat faulty - to change equalizer modes, an MP3 file should be playing, not paused as the directions say - but fortunately, operating the watch is fairly intuitive.
http://www.nytimes.com/2004/06/17/te...ts/17watc.html


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Voiceglo, CampusDirt.com to Offer Low-Cost Phone Service to Students
Press Release

Voiceglo, a global, full- service Voice over Internet Protocol (VoIP) communications company, today announced a strategic partnership with education finance leader financialaid.com and its free college search Web site CampusDirt.com. Under the agreement, CampusDirt.com will become a distribution channel for Voiceglo's innovative GloPhone, a PC-based phone that enables people to use the Internet to make and receive low cost -- even free -- phone calls.

Within three minutes of logging onto its web site, Voiceglo assigns customers a U.S. or Canadian phone number that can be used through any Internet-enabled computer anywhere in the world for local, long-distance and international calling. Through its proprietary patent-pending GloPhone product, Voiceglo provides a way for subscribers to call each other for free (i.e. peer-to-peer calling) through their broadband or dial-up Internet connection.
http://biz.yahoo.com/prnews/040616/flw010_1.html


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File-Sharing Giant Focuses On U.S.
Chris Marlowe

One of the top names in file-sharing is aiming to spread its popularity to the United States.

The latest version of eDonkey2000 was released recently, and the company says it's on track to deliver movies, video games and other content efficiently and legally within the next five years.

"We want to be productive, constructive partners with the entertainment industry," eDonkey CEO Sam Yagan says. "All we need is a group of people willing to think creatively."

Despite the demonization of peer-to-peer technology because of its association with piracy, some content owners are beginning to share Yagan's belief. He says the crucial breakthrough was showing them that digital-rights management technology can protect anything being shared on peer-to-peer networks with whatever usage rules the owner wishes.

Some software companies already are distributing their products with eDonkey, having attached digital-rights management that permits users to try it free for 30 days and then pay to unlock it permanently.

Yagan says he also is close to an arrangement with a well-known university film school "to help their independent students find an audience for their movies" by putting them on the eDonkey network, whose headquarters are in New York City. And Bishop Allen is just one of the independent recording artists who have built audiences by putting their songs on the network, Yagan adds.

"Looking five years down the road, P2P will be used for video-on-demand, rentals-on-demand - all sorts of business models," he says.

More than 1.5 million people are sharing files using his company's software at any given time, he says. "We're the largest in Europe and Asia. And our network is used more than any other for large video files."
http://www.rockymountainnews.com/drm...964798,00.html


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OD2 To Fight iTunes In The UK
Jay Lyman

"Users can stream any song any time, and download or burn to CD the titles that they want to keep," said OD2 chief executive officer Charles Grimsdale in a statement. "The pay-as-you-go system allows the users to spend as little or as much as they wish each month without the burden of a fixed-rate subscription."

Great Britain's On Demand Distribution (OD2) might be the biggest online music downloader in the region right now, but the company is preparing for battle with the likes of Apple's iTunes and the reborn Napster, unveiling this week its own digital jukebox that will provide pay-as- you-go music for about a dollar per track.

OD2 said its SonicSelector PC plug-in would use Windows Media Player 9 to browse an online store, stream and download songs, burn CDs or transfer songs to portable devices other than the iPod from Apple, which is expected to announce its own UK play this week.

Roxio's Napster also has made moves to enter the European market, partnering with UK indie labels and extending its service overseas. At the same time, other local companies such as Wippit, an OD2 rival, have partnered with larger players, such as Sony, all making the UK and European music market an increasingly competitive one.

New Country Complexity

Gartner research director Mike McGuire told TechNewsWorld that the foreign online music market represents a much greater challenge in terms of copyright deals and contracts with different recording industries in the various nations.

"The copyright issues in other countries are going to be really, really hard to deal with," he said.

Yankee Group senior analyst Mike Goodman said that while music service providers might already have established relationships and license deals with record labels, they are starting from scratch in the still-immature overseas market.

"The complexity is the same -- you're having to clear a new market and clear more of the same," Goodman told TechNewsWorld.

Local Launch

OD2 said its SonicSelector jukebox -- with about 350,000 tracks from 12,000 artists -- represents the most affordable, large-scale legal download service in Europe.

"Users can stream any song any time, and download or burn to CD the titles that they want to keep," said OD2 chief executive officer Charles Grimsdale in a statement. "The pay-as-you-go system allows the users to spend as little or as much as they wish each month without the burden of a fixed-rate subscription."

The OD2 jukebox, a free plug-in that provides songs through streaming, will reward customers who purchase music by lowering the unit price the more tracks a user buys. SonicSelector also features a "recommendation engine," which monitors user searches and matches them against listening habits of the entire database of music fans, generating recommendations for other titles.

Heard Round the World

Services such as iTunes and Napster have been duking it out in the U.S. market with no fewer than seven other major competitors, according to Goodman, who said the overseas market is much younger and not nearly as competitive yet.

Goodman said that while OD2 might have an advantage of local brand and established customer relationships, all of the services are looking to expand and compete globally.

"Ultimately, if you're going to have a music service, you're not going to be a U.S. or North American- only music service," Goodman said.

Power of Prosecution

Goodman said legal copyright enforcement efforts, such as those demonstrated by the Recording Industry Association of America (RIAA) in the U.S. -- resulting in hundreds of lawsuits against file- traders -- has not been paralleled by equally aggressive tactics in Europe.

However, that is changing as the recording industry and governments of the region begin launching lawsuits and levying penalties against peer-to-peer (P2P) use.

"Until recently, [the music industry crackdown against illegal file-trading] hasn't been particularly forceful [overseas]," Goodman said. "It has become more forceful. They have certainly made some efforts."
http://www.technewsworld.com/story/34480.html


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Big Music Stores Squelch Download Plan
John Borland

A group of big music stores has mothballed a plan to join forces on the Internet to fight online services such as Apple Computer's iTunes, a move that highlights painful choices brought on by a digital shakeout.

Echo, a joint effort launched with a splash of publicity in early 2003, was supposed to give the big brick- and-mortar retailers such as Best Buy and Virgin Megastores an online foothold that would help them beat back file-swapping services and digital stores.

But mounting development costs, a glut of rivals offering bargain-rate services, and smaller-than-hoped-for sales across the online-music spectrum, even at Apple's successful store, have led the big retailers to pull funding for the project, its founders say.

"The reality is that compared to all the retailers' bottom lines, even Apple's music sales are insignificant," said Alex Bernstein, a co-founder and investor in the Echo project. "Our board repeatedly told us that."

The decision to halt Echo's work, at least for now, spotlights the deeply mixed feelings that many of the big offline music sellers continue to show toward digital music. Once so fearful of being replaced by Internet upstarts that an immediate joint effort seemed necessary, they are now taking a more measured approach in which their natural competitive instincts are returning to the fore.

Analysts say that the digital market--while likely to grow over time, perhaps even to rival sales at physical stores--is still very immature, giving the retailers time to experiment and react more slowly.

"Right now, we're not forecasting the death of the CD anytime soon," said Michael Gartenberg, an analyst at Jupiter Research. "I don't see (the retailers) as being overly concerned at this point that they're missing out."

According to the Recording Industry Association of America, or RIAA, $11.2 billion worth of CDs were shipped to retailers in 2003. By contrast, estimates for sales of music downloads optimistically top out at $245 million for this year, or just 2 percent of CD sales and only a little more than double 2003's sales figures for cassette tapes.

Put another way, a little more than seven average days of CD buying would equal the revenue of one year of digital downloads at today's peak rates. While those figures will certainly change over time, they are sobering to giant corporations.

A fading Echo
Echo was conceived in 2001, largely by Bernstein, then an independent consultant, and Dan Hart, who was chief executive officer of Echo Networks, a struggling boom-era Internet radio service. Together, the pair drew up plans for turning the old Echo into a vehicle for offline retailers' technological future.

Drawing on the pull of Bernstein's father--who had once headed the Musicland group of stores, as well as the National Association of Music Retailers trade group--the pair wangled an early-2002 meeting with executives from nine of the biggest offline retailers to pitch their idea. It took much of the rest of the year, but the seeds planted at that meeting ultimately took root.

In January 2003, six of those companies--Best Buy, Hastings Entertainment, Tower Records, Trans World Entertainment, Virgin Entertainment and Wherehouse Music--announced their plans with considerable press fanfare, promising to use Echo-built technology to create a suite of digital music services backed by the giant retailers' brand names. A seventh member, Borders Group, joined shortly afterward.

It was Apple and its iTunes music store that genuinely shook up the market a few months later, however. From that point, Echo's future slowly clouded.

A host of Apple competitors quickly sprang up, ranging from Musicmatch and MusicNow to giants including Sony and Microsoft. Hart confidently told journalists that the Echo offering, when completed, would be more attractive, since the retail stores digital services could tie in closely to their real- world activities.

Indeed, by late 2003, Echo's team of mostly contract programmers said that the ambitious service was starting to take shape. Created in Macromedia's Flash, along with an assortment of open-source and proprietary technologies, it could offer an iTunes-like store or a monthly unlimited-listening streaming service like RealNetworks' Rhapsody.

But the service would also be able to tap into the retailers' back-end databases, offering potential additional features such as the digital version of an album, or making exclusive bonus tracks immediately available online to anybody who bought a CD in the stores.

The big retailers were having second thoughts, however. Small competitors, desperate to make money in a low-margin business, were offering the big music stores their services at bargain-basement prices.

Moreover, the industry's online-sales figures weren't looking good, Bernstein and Hart said. The first few weeks of Apple's store, in which millions of songs were sold to the relatively tiny audience of Macintosh computer users, had created a heady optimism among the retailers. When Apple moved into the Windows market, sales increased, but not nearly to the extent that the retailers had hoped.

The lesson they drew was that the market was growing, but it was small and would show little profit potential, at least for the near future. As the early months of 2004 came, they pulled back on funds, and the project was put slowly on hold.

Bernstein says the technology has gotten to the point where it is 100 days away from being able to launch, were the project to be refunded, and the contractors rehired.

Hart, who still serves as Echo's CEO, said that the company's board of directors--largely representatives of the retailers--will reconvene in three weeks and that "big news" could come out of the meeting. But for now, the project is stopped in place, he said. Others say a resurrection is highly unlikely, at least today.

"It ultimately boiled down to the idea that the numbers didn't justify a large investment at this stage in the market," said Bernstein, a former executive at the company. "It didn't make sense for retailers to stick together when playing with something that was so small. So they started to revert back to retailers' competitive sense, where the important thing was, 'How do you get something a little better than somebody up the street?'"

Retail mix and match
Their joint venture on hold, the big offline retailers' digital future is less clear. A few are charging ahead, while others, like Borders, aren't yet sold on the need for immediate action. What's emerging is a diversity of plans, rather than the need for a common platform.

Virgin in particular sees a vibrant online presence as an important part of its future strategy, although it has outsourced the guts of its online service to
MusicNet, the same company that powers America Online's subscription service. As in the Echo vision, Virgin plans to have close connections between the online and offline stores, and Virgin-branded digital music software that will compete with Apple's iPod.

"Virgin digital exists to bring together a lot of digital media assets that no one has," Zack Zalon, president of Virgin Digital, said in an interview after the company unveiled its plans in March. "We want to give you a seamless experience between what's on the Web and what's in your pocket."

Best Buy is less concerned about branding, serving instead as a distribution point for RealNetworks Rhapsody, Napster and the MusicNow services.

"We want to work with the leading services that serve our customers' needs," Best Buy Vice President Scott Young said. "It didn't make sense to us in the near term to focus on (one thing) and say that's the answer."

Waiting in the wings is at least one other retailer that hasn't yet tipped its hand: Amazon.com. As the largest online goods retailer, the company has long worried brick-and-mortar competitors--although Borders has teamed up with the Net giant for online sales.

"We're in watch-and-see mode," said Anne Roman, a spokeswoman for Borders. "We're going to see what develops, and make decisions about if and when to get into digital downloading in stores when we see fit."
http://news.com.com/2100-1027-5231175.html


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Senate To Debate Net Phone Regulations
Declan McCullagh

The U.S. Senate on Wednesday is scheduled to begin hearings on Internet telephone services, in what could be the first step toward banning state governments from regulating the fast-growing technology.

Under discussion during the hearing will be a proposal introduced in April that would flatly ban state regulators from monkeying around with voice-over-Internet Protocol (VoIP) services. The bill, called the VoIP Regulatory Freedom Act, says regulatory authority is "reserved solely to the federal government."

VoIP calls are placed over the Internet or a corporate IP network. They are generally less expensive because they avoid traditional telephone networks, which are heavily regulated and taxed.

The proposal is aimed at heading off state officials, who are eyeing VoIP companies as potentially lucrative taxing opportunities. Last August, Minnesota required Vonage to apply for a telephone operator's license. Then in February, a California commission voted to assert jurisdiction over any Internet phone call that connects with traditional phone networks. New York took similar steps last month.

"The bill protects consumers by ensuring that this new service won't be taxed at the state level," Sen. John Sununu, R-N.H., said on the Senate floor when introducing the federal bill in April. "Everyone knows the more you tax something, the less you get. If you want to discourage investment, innovation and capital from moving into important new services like this, then raise the taxes and discourage that investment."

The following witnesses are scheduled to testify before the Senate Commerce Committee: Laura Parsky, deputy assistant attorney general at the Department of Justice; James Dempsey from the Center for Democracy and Technology; Jeff Pulver of Pulver.com; Tom Rutledge, chief operating officer of Cablevision Systems; and David Jones, director of emergency services for Spartanburg County, N.C.

The Justice Department and FBI are keenly interested in wiretapping VoIP calls. The Sununu bill says that VoIP companies that provide links to the existing telephone network--a category that would include Vonage, for instance--must provide some "access to necessary information to law enforcement agencies."

But the access requirement, a key concern of the FBI, would not apply to instant-messaging applications or peer-to-peer services like Skype. In March, the FBI submitted a proposal to the Federal Communications Commission urging regulators to grant police sweeping surveillance powers over Internet voice communications, a more expansive plan than the Sununu bill would authorize.
http://zdnet.com.com/2100-1103-5233510.html


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ILN News Letter


AOL Settles Copyright Lawsuit Over Net Postings

Science-fiction and TV writer Harlan Ellison and AOL have settled a copyright infringement lawsuit involving examples of his works posted on the Internet without his permission. In the suit, Ellison contended that AOL had failed to remove his stories quickly enough after they were posted on Internet message boards.
http://online.wsj.com/article/0,,SB1...434545,00.html

Courtt Upholds Restoration Of Copyright To Public Domain Works

The District Court for D.C. has dismissed a suit challenging the constitutionality of Section 514 of the Uruguay Round Agreements Act, which restores copyright protection to foreign copyright holders whose works remain protected in their origin country, but entered the public domain in the United States. The section, which implements Article 18 of the Berne Convention, was challenged by a music sheet company that publishes public domain works and by a family-owned business that preserves films dating back to the 1900s. The case was first brought in 2001 but stayed pending the outcome of the Eldred case. Case name is Luck's Music Library v. Ashcroft.
Decision at http://www.dcd.uscourts.gov/01-2220.pdf

Russian Federation Council Rejects Copyright Term Extension

The Russian Federation Council has rejected a bill that would have increased the term of copyright protection from 50 to 70 years. Science and Culture Committee Chairman Viktor Shudegov said that increasing the norm would lead to numerous legal battles to restore the rights of authors whose rights expired before the law came into effect.
http://www.rferl.org/newsline/2004/05/270504.asp

Court Factors Software Downloads Into Jurisdiction Analysis

BNA's Electronic Commerce & Law Report reports that a federal court in Deleware has cited the making available of free trial software for download over the Internet as one factor in support of asserting specific jurisdiction over an out-of state software company. The court noted that at least one entity within the forum attempted to download the software. Case name is Padcom Inc. v. NetMotion Wireless Inc. Article at <http://pubs.bna.com/ip/BNA/eip.nsf/is/a0a8w0q7a9>


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INDUCE Act
Susan

Here's something to worry about: The INDUCE Act of 2004 (pdf).

The logic is that P2P applications inevitably lead to exploitation of children. With me so far? So the act is called the "Inducement Devolves into Unlawful Child Exploitation Act." I'm not even sure that's how "devolves" should be used. But the crimes here go far beyond the title.

The Act (to be proposed tomorrow by songwriter Sen. Hatch and others) amends the copyright law to say that anyone who "induces" copyright infringement is himself/itself an infringer.
"Induce" means intentionally aids, abets, counsels, or procures. So you can't even hire a lawyer if you're doing something risky.

This is amazing. Now we're waaaaaay beyond contributory and vicarious theories of liability, which are court-created and pretty darn broad on their own. See Napster 9th Circuit, Aimster 7th Circuit. It's not even clear what the limit to this is -- "aids" could mean that even something that would have been fair use under the Sony Betamax decision is now an illegal inducement.

And no one can talk to you if they think there's the slightest risk of copyright infringement liability.

We're back to the CBPTDA -- another hugely broad way of making sure that no unauthorized machines ever enter into our lives. If there was ever a moment to organize (see prior post) this might be it.

"Copyright. It's Not Just the Law. It's All Law."

[thanks to Fred von Lohmann for pointing to this]
http://scrawford.blogware.com/blog/_.../16/89416.html

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A Profile In File-Sharing
Thomas Mennecke

On February 1st, 2004, Warez P2P initiated a four month study. The study contained 20 questions, mostly regarding the demographics and behavior of the file-sharing community. While many of the results were already common knowledge, some portions offered an interesting insight of the P2P world.

In recent months, subscription based music services have stalled to some extent. Even iTunes failed to reach its goal of 100 million downloads for its 1 year anniversary. Supporting this, a recent survey by MacWorld UK found that the British are unwilling to pay 99 pence per download. That equates into an astounding $1.80 (today’s exchange rate.)

This is just about where the Warez P2P survey becomes interesting. In the survey, the question was asked "Suppose that pay-per-download services like iTunes and Napster were to provide a library as comprehensive as most P2P network at 25 cents per download. What would you do?" Interestingly, 16% said they would use iTunes instead of P2P, 39% would still use P2P exclusively. Perhaps more interesting, 29% said they would use both. 5% said they would use iTunes if it was priced at 5 cents or less.

Another point of interest from the survey is the amount of CDs individuals’ purchase. Two questions were asked regarding their CD buying habits before and after the advent of P2P. Before the advent of file-sharing, 47% bought less than 10 CDs per year. After the advent of file-sharing, this number only fell to 41.5% per year. However, those buying 10 to 20 CDs per year actually increased, albeit fractional, from 26.07% to 26.58%. Those buying 20 or more was stable, at 16.14% to 15.33%, respectively.

While this study cannot be conclusively verified as a scientifically sound profile into the hearts and minds of the file-sharing community, it offers an alternative viewpoint from the mystical statistics provided by the copyright industry.
http://www.slyck.com/news.php?story=505


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Seagate Makes Move With New Disk Line
Martin Courtney

Latest products aimed at enterprise Sans and data centres

Hard disk maker Seagate Technology has released a range of new drives to meet business demands for faster access to more data storage space on servers, desktops, notebook PCs and handheld devices.

Analysts estimate that the global market for disk drives is set to grow from 261 million units shipped in 2003 to 380 million units in 2006.

Seagate's NL35 series is a fibre channel component providing 500GB of data storage capacity.

It is designed specifically for use in enterprise storage area networks (Sans) and data centres where high capacity and performance, virtual storage management, and disk/tape-based backup/recovery applications are key.

"Data centres face a growing set of challenges, including satisfying bulk storage requirements, simplifying data management, meeting service levels of high I/O transaction processing applications, managing within existing space constraints and minimising data centre cost per square foot," said Dave Reinsel, programme director of storage research at analyst IDC, in a statement.

Aimed at desktop PCs and local area network servers, the Cheetah 15K.4 focuses on fast data access and reliability with a spin speed of 15,000rpm and quoted mean time between failure rating of 1.4 million hours, with three capacity options of 73GB, 147GB and 300GB.

It will initially be offered with fibre channel or Ultra320 SCSI interfaces, with a faster serial attached SCSI device offering 3Gbps data transfer speeds following before the end of the year.

Roaming workers should soon start to see notebook manufacturers integrating the two-disk 100GB Momentus 5400.2 into their systems, whilst the Momentus 7200.1 is Seagate's first portable drive to feature a 7,200rpm spin speed.

Seagate has also upgraded its external hard drive to provide 400GB capacity.

In separate news, small businesses that need to virtualise their storage resources, but have little money to spend on the implementation of expensive, complex San systems, may find a cost effective alternative in SANMelody Lite.

The $199 software is a souped up version of Windows file sharing that turns any network-attached computer into a hard disk server.

It can split up to 1TB of hard disk capacity into smaller segments, and handle 22,000 disk input/output operations per second to make sure that multiple users have simultaneous access to storage resources.

SANMelody Lite also features an automatic disk mirroring feature that creates backup copies of mission critical data or applications on different hard drives or partitions.
http://www.whatpc.co.uk/News/1155930


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Rock star alleges trademark, copyright infringement

Prince Countersues In Privacy Fight Over Student's Camera
Chao Xiong, Star Tribune

The rock star Prince has denied allegations that he instructed his bodyguard to assault a college student who took his photo, claiming the man invaded his privacy and violated trademark and copyright law.

In a counterclaim filed Monday, the Chanhassen musician rebuked allegations levied in an April lawsuit filed by Anthony Fitzgerald of Edina.

Fitzgerald sued Prince and his bodyguard for damages in excess of $50,000 over a Dec. 29, 2003, incident at the Minneapolis-St. Paul International Airport. Fitzgerald claims that he was assaulted and that his new digital camera was confiscated when he took a photo of Prince as the rock star was getting off a plane.

Prince's countersuit, which also seeks in excess of $50,000 in damages, is based on a weak premise that will be difficult to win, said Minneapolis media attorney Marshall Tanick.

"Generally, no one has a right of privacy in a public space, especially a celebrity," Tanick said, adding that airports are public spaces. "You can't copyright yourself. It sounds like he's [Prince] not tuned into the law."

University of Minnesota Law School Prof. Dan Burk said Prince has no grounds to claim violation of copyright or trademark laws or invasion of privacy. In this case, said Burk, who specializes in intellectual property and copyright law, the copyright belongs to Fitzgerald because he fixed Prince's image in a tangible medium. Trademarks are used to distinguish products belonging to certain brands and would only pertain to this case if Fitzgerald tried to sell the photo he took as a product endorsed by Prince, Burk said.

"I think if anybody's going to be in trouble here, it's going to be Prince and his bodyguard," Burk said. "Maybe what they're trying to do is get the other fellow to settle."

Prince's suit would have more merit if Fitzgerald used the photo for commercial gain, Tanick said. But acting on a suspicion of such use, especially when the camera was confiscated, is "extremely premature," he said.

"I think his [Prince] case would be very stifling for freedom of the press and freedom of speech," Tanick said.

Prince's lawyer, Kristen Naros said that Fitzgerald's camera was turned in to the investigative detective at the airport but that Fitzgerald has refused to claim it.

"His [Fitzgerald] claim has no legal basis and we will be fighting this in court," Naros said.

Fitzgerald's attorney could not be reached for comment.
http://www.startribune.com/stories/457/4828786.html


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Jobs Quashes iPod Movie-Player Rumour

Apple already has a smash hit with its iPod digital music player, so it might seem a no-brainer to follow up with one that plays movies in time for Christmas.

Not so fast, say analysts and even Apple's famously secretive co-founder and chief executive Steve Jobs himself, as such speculation has mounted in recent months on Internet bulletin boards and Apple enthusiast Web sites.

Brokering licensing deals with content distributors and creators, such as movie studios, is expensive and time-consuming. Also, there is yet to be any sign of great clamouring for portable video players by consumers. There are technical issues to consider, as well as the basic nature of immersing the senses that is required to watch a movie.

"There are already a whole bunch of perfectly capable devices out there that can play movies -- and they're called notebook computers," said Mike McGuire, an analyst at market research firm GartnerG2 in Silicon Valley. "It's still an open question whether there's enough demand, and I think that's central to Apple's considerations."

To be sure, there are companies, such as Creative Labs' Creative Zen Portable Media Centre and other such Windows-based devices that will be on store shelves in time for the crucial year-end shopping season. Creative sells a range of digital music players, while Apple continues to focus on music.

With the success of the iPod -- technophiles and tech newbies have bought more than 3 million of them already -- Apple deserves much of the credit for ushering in wide-scale acceptance of legal music downloading, analysts said.

Before then, piracy loomed as a crippling threat to the recording industry because of the popularity of Napster's first incarnation and other file-sharing networks.

"There's no question that the music industry was searching high and low to find a pay service in order to thwart piracy," said analyst Tim Bajarin of Creative Strategies, another Silicon Valley market research company.

But, at least for now, movie studios do not face the same urgency that the five major record labels did, ultimately signing a ground-breaking pact with Apple that paved the way for its online music store. Part of the reason is that, while high-speed Internet access in the US and Europe is broadening, it's not yet at the data rates necessary to support timely downloading of full-length feature films.

That gives the studios some breathing room.

"Hollywood doesn't make to want the same mistake as the music industry," Bajarin said. "While it's urgent to get it right, there's actually time to do it right."

McGuire of GartnerG2 notes: "The costs in time and money of negotiating rights to video content are substantial and you don't want to make that investment if you can't foresee the demand for it."

So far, Jobs doesn't himself see that demand. A shareholder asked him about plans for a video iPod at the company's annual meeting in April. He responded by paraphrasing a campaign slogan of Bill Clinton's 1992 presidential election campaign, "It's the economy, stupid."

"It's the music, stupid," Jobs said after a slight pause. Also, last week, Apple's head of hardware product marketing Greg Joswiak told Reuters that Apple has no plans yet for a video iPod.

And beyond the issues of negotiating licenses, the need for higher speed Internet connections than are now prevalent, there's the basic difference between listening to music and watching video content.

It's easy to plug a digital music player into a car stereo and listen to music while driving, using an iPod while walking to work or working out. But doing these things while watching a movie on an iPod-like, portable device is clearly not advisable.

"Music is largely a background experience and movies aren't," said Phil Leigh, an analyst at Inside Digital Media.

In addition to demand, design, licensing issues, and an adequately sized screen that consumers would expect, Apple, because of its good fortune with the iPod and iTunes, also has to worry about diluting the marketing brand of the iPod.

"Apple has good equity built up around the iPod brand," McGuire said. "They have to be careful about turning it into this digital-media Swiss Army knife that does a lot of things but none of them very well."
http://news.zdnet.co.uk/hardware/eme...9157855,00.htm


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Jobs: iTunes' Only Rival Is Piracy
Jonny Evans

During the launch of the iTunes Music Store Europe at an event in London, Apple CEO Steve Jobs dismissed other digital-music services today, saying the real competition Apple faces in the market comes from piracy.

He said: "iTunes really competes with piracy, not the other services. Piracy is the big enemy – the market has shrunk in France and Germany and seen zero growth in the UK."

Jobs stressed the hassle and lack of quality guarantees you get when you use peer-to-peer illegal file-sharing services. He also asked: "Have any of you in the audience downloaded music illegally?"

He admitted: "Well, I have a few times – you know, market research. But it's stealing," he said, repeating his observation that buying music online legally is "good karma".

State of independents

Apple has powerful allies in Europe. Major music labels are keen to protect themselves from piracy, as are the independent labels. Sadly, new iTunes users will find little content online from the indie labels because talks between these and Apple failed yesterday.

The company is attempting to offer independent labels less money per track than it offers the majors and is trying to tie independent labels here to a non-negotiable three-year deal.

This deal offers independents less money per track than they receive for selling their songs through iTunes in the US. Music-industry observers say this is also harmful to artists, and that it creates a "new evil music monopoly".

One industry insider said: "I know what margins the majors are receiving. I know that at least two are taking the pi** out of Apple, forcing that company to accept razor-thin margins. But the independents don't want to be tied down to a bad deal in order to subsidise Apple's major-label music content."

However, the British Phonographic Industry (BPI), which represents the labels in the UK, welcomed the launch of iTunes, which the industry considers an essential requirement to help it combat piracy.

BPI chairman Peter Jamieson said: "Today's launch is another important step forward in the growing UK downloads market. iTunes joins Napster and mycokemusic as the third high-profile legal digital-music service to launch in the UK this year, and with the imminent arrival of an Official UK Downloads Chart we expect 2004 to be a landmark year for digital music."

"It's great news for the UK music industry, but it's even better news for UK music fans. Music fans now have the chance to sample, share, download and burn without breaking the law and taking the risks presented by illegal peer-to-peer file sharing."

"The record industry is committed to ensuring that music is available as widely as possible in as many formats as possible," he said.
http://www.macworld.co.uk/news/index...ge=1&pagePos=6


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Napster MP3 Giveaway Stokes Competition
Robin Arnfield

Napster is throwing down the gauntlet in the battle among legitimate music-downloading services for paying subscribers. The once- maverick P2P company now is giving away MP3 players with one-year subscriptions to its service. Apple's iTunes, RealNetworks' Rhapsody and Sony Connect are vying with Napster for music fans.

Napster has issued a challenge to rival U.S. music-downloading services by giving away free MP3 digital music players to customers who subscribe to its service for a year. The promotional offer is blazoned across the music store's home page.

For an annual subscription of US$119.40, customers get a Rio Chiba Sport MP3 music player worth $129.99, which can store four hours of WMA-compatible music or two hours of MP3-based audio. For a $199.40 annual subscription, Napster also offers the Rio Nitrus player, which can hold 50 hours of WMA music or 25 hours of MP3 songs. Subscribers are also offered up to 20 percent discount on the purchase of multiple tracks.

Napster was re-launched by Los Angeles-based digital media software company Roxio as a legal paid online music service in October 2003. It started life as the first wildly popular illegal peer-to-peer music copying system. U.S. consumers have visited Napster to purchase over 10 million tracks to date, according to the company. Over 700,000 songs are available on the Web site, as a result of deals with the big five music companies and hundreds of independent labels.

"We now have over two million members, including our subscribers paying a monthly or annual fee and our Napster Light users, who buy individual tracks or albums without a subscription from our music store," Laura Goldberg, chief operating officer at Napster, told NewsFactor.

In May 2004, Napster was launched in Canada and the UK. "The free MP3 player offer will run throughout the summer in the U.S.," Goldberg told NewsFactor. It is our intention to extend the MP3 player offer to the UK and Canada, but the timing will lag a bit behind the U.S. We want to offer our customers the best value and also to bring them into annual subscriptions. The benefit of being an annual subscriber is that you can make unlimited numbers of music downloads. You can also stream as many songs as you like."

Consumer Brands

In the U.S., Napster faces fierce competition from Apple's iTunes online music store, as well as from RealNetworks ' Rhapsody service and from Sony Connect. Each of the music-downloading services is setting up cross-promotions, with consumer brands ranging from Pepsi to United Airlines. Earlier this month, Sony Connect launched a promotion offering one free music download to McDonald's customers buying a Big Mac. The promotion will last six to 10 weeks for stores in the U.S., Puerto Rico and Canada, and then reach Europe in July.

On June 8th, Napster signed a deal with Toshiba in the U.S., under which Toshiba will install Napster software for a one-month free trial in every new Toshiba Satellite-brand notebook. The deal mirrors an agreement between Apple and Hewlett-Packard, under which iTunes is carried on HP consumer machines.

Cable TV

In the UK, Napster earlier this week signed up the country's largest cable-TV operator, NTL, to bundle its music-downloading service with NTL broadband Internet subscriptions. NTL's 1 million UK broadband Internet subscribers are being offered a 30-day free trial of Napster to tempt them to sign up for the music-download service.

The NTL deal is seen as an attempt to spike Apple's launch of iTunes in the UK on June 15th, coming as it did shortly before the Apple announcement.
http://cio-today.newsfactor.com/stor...story_id=25460


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Comparing Online Music Services to P2P Networks
Jon Newton

While the Big Five do their best to kick the stuffing out of the mom- and-pop P2P file-sharers, they're nonetheless looking to downloads for some kind of salvation, having arrived in Europe with Apple's iTunes and, to a much lesser extent, Napster 2, carrying the tattered corporate music portfolios.

What's so great about the 70 million or so downloads Apple says iTunes managed in more than a year, compared to the one billion (at a conservative estimate) that happen on the peer-to-peer networks every month? The "one billion" figure, which comes from industry observer Big Champagne, helps make the point that downloads from iTunes and the other plastic online music stores supplied by the Big Five record labels don't amount to a hill of beans.

But it does raise a question about how many unique songs are available on peer-to-peer networks. So I got in touch with Big Champagne CEO Eric Garland, who had this to say:

"Let's look just at titles -- the variety of music, with no consideration of the popularity of one title over another," said Garland. "Virtually every title that has ever been popular with any audience, no matter how small, is available at one time or another on P2P networks."

He went on to say, "Now, while the volume of files (and interest) is concentrated on a few hundred thousand top titles -- many of which are for sale online, and many of which (Beatles, Madonna, Led Zep, and so forth) are not -- the available title library on a P2P absolutely dwarfs the paid offerings. In fact, the variety of titles is limited only by the imaginations of every one of the tens of millions of P2P users."

More Than a Handful of CDs

Music is more than the handful of CDs at Best Buy, and P2P networks ensure that, said Garland. He also pointed out that there are millions of titles in the history of popular music, and quite a few unpopular songs as well. "In fact, most of my friends who long ago played music very unsuccessfully in their high school and college days have since found their own obscure compositions on P2P," said Garland. "Good luck finding those gems on Apple's iTunes."

Garland suggested I demonstrate the disparity for myself by searching for any popular artist on a P2P network. "As I type this, I'm searching for 'Coldplay' and 'Sheryl Crow' (to pick a couple of iTunes user faves)," he said. "The results include at least as many 'rare' offerings -- unreleased, live, b-side, outtakes -- as legitimately-released studio tracks."

So I fired up WinMX (the new beta), and he was right -- in spades. "Just amplify this phenomenon by every artist you've ever seen on P2P networks and you start to appreciate the challenge," Garland went on. "The paid services simply can't offer 'everything' an artist records. P2P networks make a pretty good run at it."

The titles on even the best licensed services "constitute a small fraction of what's on P2P networks," Garland concluded.

Over in Europe

P2P is certainly doing it for the estimated 61 million Americans who use P2P networks for their music needs, and Big Music claims it's being driven to ruin by all those wicked file-sharing file-sharers, that its artists are on their uppers and that soon it'll have to sell the car to pay the rent.

Forget about all those copyrights, CDs, DVDs, movies, rentals, contracts, performance rights, product-service testimonies, clothing, make-up, toys, promo items, food, drinks, contra-advertising and so forth. Discount the fact that the Big Five labels continue to take money from people even when they're stone cold dead, Ray Charles being the most recent example.

You can be pretty sure sales of Charles' music and recordings went up when it was announced that he passed away, and you can be equally sure that Big Music wasn't channeling the profits to Charles' relatives.

Mom and Pop P2P

While the Big Five do their best to kick the stuffing out of the mom-and-pop P2P file-sharers, they're nonetheless looking to downloads for some kind of salvation, having arrived in Europe with Apple's iTunes and, to a much lesser extent, Napster 2, carrying the tattered corporate music portfolios. OD2, the Peter Gabriel Microsoft operation, was already there.

The Big Five earnestly state that online music stores in Britain, Germany, France and, soon, the rest of Europe will take off, leading to serious online sales. Venal they might be, but dumb they're not. And in reality, the online stores can't be much more than a way to keep music industry flags flying while they keep hammering file-sharers with lawsuits on the one hand, trying to figure a way out of the mess on the other.

Sales will ensue, but they'll never be serious, not unless Big Music does what the entire entertainment industry must also eventually do -- embrace P2P as the new marketing and distribution vehicle.

Nonetheless, thanks to a relentless multimillion-dollar PR effort and the fact that the mainstream media continues to reproduce every record label utterance as if it's from a credible source, the world is under the illusion that something big is happening in Europe. Not.

Can't Own That

Roxio's Napster II was first at the gate, but isn't a major contender. In the lead is OD2, but Apple's iTunes is coming up fast, having officially launched in the UK, France and Germany with plans for an across-Europe presence. Aided by heavy betting by mainstream music industry media supporters, Apple could indeed take the plastic Corporate Music Online Cup. Whether or not it'll mean much in the long term is another question.

"The iTunes Music Store in the UK, France and Germany all feature over 700,000 songs from all five major music companies," states a Macworld UK story. But it's the singers, not the songs, that's important. Music is alive. It can't be owned and it can't be bought or sold. It can only be shared.

Music is beyond copyrights, beyond lawsuits, beyond file-sharing, beyond the Net. Music will still be here long after the labels have driven themselves into the dirt trying to own it. Children sing as they play with each other. Big Music can't own that.
http://www.technewsworld.com/story/34530.html


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On Drawing Lines in Copyright Law
Adam Thierer

Adam Thierer, director of telecommunications studies at the Cato Institute, is the co-editor of Copy Fights: The Future of Intellectual Property in the Information Age (2002).

As Wayne Crews and I pointed out in the introduction to our book Copy Fights: The Future of Intellectual Property in the Information Age, striking a sensible balance when it comes to copyright law has always been a challenging, messy task. The inherent tension in copyright law comes from trying to accomplish two noble goals that are sometimes difficult to reconcile. On one hand, copyright is supposed to reward innovators by granting them limited terms of protection so they can commercially exploit their creation before anyone else. On the other hand, copyright law is supposed to help encourage the widespread dissemination of ideas and useful products in our economy. Questions about where to draw the line and when we should call in the IP cops to resolve disputes are what make the process so contentious. Optimally, we should avoid injecting coercion into the IP process unless absolutely necessary. Contracts, technological self-help measures, and creative business models can go a long way toward achieving a workable IP balance. But at the end of the day, if these market mechanisms aren't enough, copyright holders are going to want to call in the cops to protect their rights.

But how we call in the cops and who the IP cops are makes a big difference. In particular, we shouldn't expect Congress or regulatory agencies to legislate on every problem that creeps up or ban or mandate specific technological solutions in an attempt to solve IP debates. But when certain parties are egregiously violating the rights of copyright holders, they are certainly justified in seeking redress in the courts. Common law resolution to copyright disputes has the advantage of avoiding a hasty, ham-handed legislative quick fix. As has been the case throughout most of copyright's history, courts can sort through rival claims to determine where the creators' concerns have merit and where the rights of consumers should instead carry the day. Two recent IP disputes illustrate how this sensible framework can still work today.

The "Broadcast Flag" Decision.
Last November, at the request of several content companies and broadcasters, the Federal Communications Commission mandated that by July 1, 2005, every consumer electronic device in America capable of receiving digital TV signals must be able to recognize a "broadcast flag" -- or string of digital code -- that will be embedded in future digital broadcast programming. In theory, the presence of this embedded code will encourage content creators and broadcasters to air more digital programming "in the clear" (i.e., over the air), on the assumption that the broadcast flag will allow them to prohibit mass redistribution through peer-to-peer (P2P) networks. In other words, the broadcast flag mandate is supposed to prevent the "Napsterization" of video programming.

But in their rush to preempt this supposed problem, a completely sensible alternative was ignored. Namely, if you're a broadcaster or a movie studio and discover that a handful of individuals are redistributing your products without permission or compensation, why not just sue them directly and avoid all this regulatory nonsense? No good answer was provided. What makes this all the more surprising is that such a model already existed in the lawsuits that the Recording Industry Association of America (RIAA) was filing against individuals accused of widespread copyright infringement. As distasteful as some find the RIAA lawsuits, they are certainly superior to the strategy the music industry was pursuing previously: trying to shut down all (P2P) file sharing networks. At least a lawsuit strategy would be capable of targeting the handful of individuals causing the most serious problems, without seeking to ban technologies or concocting grand industrial policy solutions to the problem. But instead of taking this more targeted approach and using the courts to go after the handful who might illegally distribute digital TV programming, the broadcast flag proposal opens the door to an intrusive FCC regulatory regime for the Internet and computing in the future.

The 321 Studios Case.
Another instance where this model could have been tapped is the fight over the "DVD X Copy" and "DVD Copy Plus" software products sold by 321 Studios, which allow consumers to make backup copies of DVDs. In fact, 321 Studios is currently involved in a heated lawsuit with the members of the Motion Picture Association of America (MPAA) over the legality of 321's software, which MPAA believes violates Section 1201 of the Digital Millennium Copyright Act of 1998. Section 1201 bans technologies that would circumvent or defeat the technological measures used by copyright owners to protect access to their works. This anti-circumvention mandate is quickly proving to be one of the most controversial copyright reforms passed by Congress in years and now threatens to remove software from the market that is being used for entirely legitimate and lawful purposes.

MPAA president Jack Valenti -- the same man who once said, "the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone" -- has argued that consumers have no legitimate need for software products like those sold by 321. Last November he said, "If you buy a DVD you have a copy. If you want a backup copy you buy another one." But this worldview is not consistent with the rights consumers already enjoy with regard to time-shifting or saving content on audio cassettes or VHS video tapes. Consumers should have the reasonable expectation that they will be able to make at least some copies of the content they purchase, whether that content appears in books, music, or movies. For example, I have personally used similar DVD backup software called "DVD Shrink" that I freely downloaded from an overseas website to copy and burn my favorite individual movie scenes onto a single DVD. I use this single DVD to show friends and family all my favorite DVD scenes in rapid succession without having to put the original movie in the player each time. (This is similar to what millions of American already do with music when they burn their favorite songs onto one tape or CD.)

But, following the logic of the case against 321, presumably the MPAA would like to see the "freeware" I downloaded outlawed and then throw me in jail to boot. But why? It's hard to see how I've broken the copyright bargain in this case since I went out and purchased dozens of new movies to make this compilation of my favorite movie scenes. If, however, I had made additional copies of this compilation DVD and sold them on e-Bay, or even shared the disc with the entire world via a P2P network, I would agree that I had crossed a line and broken the copyright bargain and should be held liable for my actions. And 321 Studios acknowledges this, too. On their "Protect Fair Use" website, the company states, "Fair use isn't the same as free use. Consumers shouldn't have the right to make copies for commercial use without the permission of copyright holders. They should not be able to sell illegally acquired copies of digital works, either on disk or over the Internet." That's exactly right, and the proper course of action in cases where consumers betray this trust would be for the movie studios to file suit against them for undercutting the commercial viability of their products. But if millions of average movie lovers like me are considered criminals for merely copying a few of their favorite movies or individual scenes onto a different disc, then something has gone horribly wrong with copyright law in America.

Intellectual property plays a vital role in our modern Information Age economy, but we should not adopt a "by-any-means-necessary" approach to copyright enforcement. Targeted, court-based adjudication of clear-cut copyright infringement is the better way to balance the interests of consumers and creators.
http://www.cato.org/dailys/06-17-04.html


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In a Nod to Niche Users, Sony Rethinks the MiniDisc
Iver Peterson

MINIDISCS are obsolete," my friend Dave Hoeffel says. "I only use them because I'm a geek, and because they're the best way to get the recordings I want."

Saying something is both obsolete and the best perfectly describes the deep attachment and spiky frustration that many amateur sound recorders have felt toward Sony's MiniDisc since it was introduced in 1992. Even now that Sony is introducing its new generation - the Hi-MD, aimed squarely at Apple's iPod and making a stab, at least, at placating the MiniDisc's loyal users - the combination of praise and griping shows no sign of abating.

The MiniDisc is a highly compact recording and playback system, typically smaller than a deck of cards, that can make high-quality audio recordings from a microphone or a computer download. The music is stored on inexpensive discs inside slim cartridges of just under three inches square.

Like Mr. Hoeffel, Steven P. Jobs of Apple has called the MiniDisc obsolete. Both contend that the portable audio format has moved beyond removable tapes and discs to hard drives like the iPod's, and in the future will go to solid-state flash memory.

Yet the MiniDisc continues to attract adherents like Mr. Hoeffel, 47, who runs Sound Choice, a special-event disc-jockey service in New Jersey, and edits a rock radio magazine called FMQB. Sony introduced the MiniDisc for home recording and for portable audio as a successor to its popular and much-imitated cassette Walkman; it still offers easy portability, an inexpensive, almost infinitely reusable medium, and a fairly easy track-editing and labeling system.

It can now record 80 minutes of near-CD quality sound, and two to four times that at lower fidelity. Although MiniDiscs caught on as portable audio devices in Japan and in parts of Europe, most Americans seem to have graduated directly from the cassette to the portable CD system and then to the MP3-player format dominating portable digital audio players.

Sony will not provide sales figures, but it maintains that the MiniDisc has 15 percent of the market for portable digital recorders.

And among users like Mr. Hoeffel, who used to bring high-end cassette decks or awkward and expensive Digital Audio Tape recorders to concerts and performances, the MiniDisc certainly found a niche. With its ability to produce clean sound so cheaply, the MiniDisc recorder was the coolest toy in years. They are certainly numerous enough to keep a store like www.minidisco.com, in business.

"It's definitely a niche market, but it seems to be in constant growth because there are these dedicated people who know about the format and who are into it now," said David Karon, owner of Minidisco.com, a site that sells MD players and recorders from Sony and some of its licensees, including Sharp, Panasonic and Aiwa, for as little as $100 to several thousands of dollars each for professional models.

"Some of our customers are using them like an MP3 player," Mr. Karon said, "but a big chunk of our business are these amateur recording people, and they range from people who do church choirs and concerts to broadcast journalists to people out in nature doing birds."

From the beginning, Sony and its licensees wanted the MiniDisc to be a load-and-playback system, recording from CD's through an optical input or from live audio through a microphone. The company moved closer to the portable audio mainstream five years ago with Net-MD, which allowed fast downloads through a U.S.B. cable.

I use my Sony MiniDisc recorder, bought for $100 on eBay, to record family history interviews, bird song and church choir concerts, although it takes a $300 stereo microphone to capture music. (In serious MiniDisc recording - including its use by some for surreptitious concert recording - the microphone nearly always costs more than the recorder.)

But what MiniDisc players needed to evolve into an all-purpose digital audio system was high-speed digital output, allowing their audio to be the basis for clean CD recordings. Sony's spokesmen do not explain the company's long resistance to adding such a feature. But Sony does own film studios and record labels, and copyright issues must have been among its concerns.

Without digital output, MiniDisc owners have to record through the player's earphone audio-out plug in real time - that is, recording an hourlong CD takes an hour.

I got around the absence of a digital output by playing my recorded discs back through a 10-year-old Sony MiniDisc deck that came with an optical out.

But to MiniDisc users who congregate at www.minidisc.org, the absence of a high-speed digital output directly to the PC has long been the MiniDisc's unforgivable flaw. Eric Woudenberg, a New York software engineer who runs the site, even started an online petition two years ago urging Sony to supply that last link in the MiniDisc's evolution. More than 2,100 users signed it.

Sony clearly heard the complaints, for it has developed what it hopes will be an iPod-killer, called the Hi-MD, with a raft of improvements: a one-gigabyte disc, offering about six times the current disc's capacity, and the two-way high-speed data transfer through U.S.B. that the critics have wanted. (One Hi-MD player, without a "line in" or microphone input, went on sale this month; three fuller-featured models will arrive next month.)

Rachel Branch, a Sony spokeswoman, would not quite say that the company was responding to pressure from users. But she said the company had heard them. "We knew what people wanted," she said.

So are Mr. Woudenberg and the MiniDisc purists happy? Not entirely.

For one thing, while the Hi-MD will download MP3's and reformat them into Atrac, Sony's proprietary audio compression format, it will not play or transfer MP3's, the universal language of portable and downloadable audio. (The IPod does use Apple's proprietary format but also plays MP3's.)

"If you want to sell stuff in your proprietary format, O.K., Apple's playing the same game," Mr. Woudenberg said. "But let me play my MiniDisc in MP3, for crying out loud."

And while the Hi-MD unit plays discs in the existing MiniDisc format without a problem, it will not upload them to a computer over its new U.S.B. link. So the tens of thousands of discs that MiniDisc owners have already recorded will not yet get the Hi-MD high-speed digital upload treatment.

"Maybe that's the next petition," Mr. Woudenberg said.
http://www.nytimes.com/2004/06/17/te...ts/17mini.html


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Belarus: Creator Of A Web-Site Is Fined For A Hyperlink
Mikhail Doroshevich

Creator of pesniary.com web-site Fedor Korolenko was brought to the court for the violation of the copyright law. Fedor Korolenko was obliged to pay the fine of USD 25 as there were links to music files of other sites on his website.

Complainant - Republican Unitary Enterprise of the Intellectual Property - applied to the court on the 14th of April this year.

www.pesniary.com was launched in 1998 as a non-profit project. In 2003 web site was nominated as The Best Musical Site of the Year . The site is very popular and ( according to statistics) it is visited by music fans from more than 100 countries.
http://www.e-belarus.org/news/200406161.html


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I’m Comfortable…
Jack

Using the original WASTE client created by Justin Frankel. It’s about as close to a perfectly stripped down P2P product as you could wish for but that doesn’t mean everyone else is on the page. People at sourceforge have been working on offshoots and are now up to what they call v.1.5. beta 2. There is however a serious issue: their client will not work with others, including Justin’s. Perhaps they shouldn’t call it WASTE. I’m staying put for the moment.

Info here http://sourceforge.net/project/shown...ease_id=246146

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Can We Fake Them... Emulate Them? -- The Real Video Game Battle
Jason Thompson

So the RIAA is going ballistic lately with its numerous lawsuits against mp3 downloaders and file sharers. It claims that the continued dilemma of illegal online song-swapping has taken a huge chunk out of profits year to year, even though a recent detailed study conducted by Harvard Business School says otherwise. The study has speculated that if indeed all the file sharing has caused a decline in music-related profits, then other industries, such as motion picture and video game, would also have felt the pinch as well, since many "ripped" movies and games are openly traded over the Internet as well. But in fact, box office receipts and sales for games have instead gone up. So who is to blame?

One can ponder the answer to that all day, but a definite parallel can be drawn between the mp3 file swapping perils and that of the EMU community. EMU gaming, ("EMU" being short for "emulator") has been around a long time. Do a search for "EMU" and "ROMs" and more than likely you'll be presented with page after page of results pointing you to various programs that emulate everything from classic arcade machines to the latest home and handheld gaming consoles, along with their respective ROM files which have been ripped and stuffed in handy .zip files for everyone's gaming pleasure.

Is it legal? This is where the logic becomes fuzzy, as usual. Most ROM sites come with a disclaimer that the downloader must actually own the original game to legally download the file. The disclaimer usually goes on to state that if this is not the case, then the user must delete the file within 24 hours. Ah... the catch. Delete the file. From the hard drive, right? So technically that means one could burn them to a disc, correct? Ah, the glorious loophole has reared its head.

It's no secret that the EMU gaming community does indeed download and play these files for its own pleasure. Take a look around the same searched sites and you'll undoubtedly find forums where gamers are openly discussing how they have even built their own arcade-style cabinets and fitted them with controllers to make the EMU experience even more realistic. Yet this kind of activity has come with a price, namely having a lot of the best ROM-trading sites shut down or more well-hidden. In my book, the absolute best site was the old mame.dk depository which had every classic arcade ROM known to man, and then some. Its existence came and went several times, with various legalities threatened and so forth. The demise of the site was a pretty big blow, considering the pages never had any popups, or pr0n ads (that's "porn" for those not fluent in Haxor Elite speak) that so many of the remaining sites are littered with these days.

The EMU community experienced a glorious free-wheeling heyday on the net around the same time the original Napster started coming out with guns a-blazing. I'm not sure if the success of Napster made the whole enterprise more visible, but suddenly news stories were filled with tales of all sorts of file sharing stories, and the gaming community came under the hammer for a while as much as the p2p file swapping sites. Yet perhaps since it is so often interpreted that the game industry is more fringe-like -- a silly assumption, considering the average oldest age of a gamer continues to grow lately -- ROM files and EMUs have continued to thrive in the shadows.

Of course, ROM swapping has come under the gun by the industry's own RIAA, namely the IDSA (Interactive Digital Software Association). This group has made it difficult to obtain once freely-traded ROMs, such as Donkey Kong, a number of the Street Fighter titles, and so forth. And of course companies such as Nintendo, Sony, et al are no fans of EMUs, either. It could be true that the majority of the gamers out there participating in the EMU community are playing those older games that no longer exist, but it must also be said that there are a number of EMUs for newer systems and games as well.

But yes, the hardcore elite often fancy an older title. Everything from the classic arcade machine to Commodore 64s, every Atari console known to man, Nintendo and Sega's classic games, and the kitchen sink has had an EMU designed for it. Sometimes these are successful, other times they don't work at all. Among the most successful is MAME -- Multiple Arcade Machine Emulator. This is the program that will play all the classic arcade games, as well as the beloved NEO GEO/SNK titles. For SNK-specific fans, there's always been the excellent NeoRagex. Nintendo Entertainment System fans often fancy the NESticle EMU, and for the Super NES, the ZSNES EMU has also been a favorite.

So what does this all mean, really? Is it just a geek's wonderland, a trip to the proverbial candy store? Yes and no. It perhaps does take a certain kind of gamer -- more than just the casual kid who enjoys playing Halo all day -- to get into EMU gaming, but anyone with an interest in classic games is usually out and about in the community. The residents will tell you that keeping these games alive and available is really what it's all about. After all, who's making money on old Vanguard and Gyruss machines anymore? Again, I say, who knows? The EMU world is yet another in a grey landscape that can't easily be sorted out. The fact is that the programs and ROMs are out there making many a gamer happy. And if this gamer said he didn't thrill to still be able to enjoy the likes of Twinkle Star Sprites, Mappy, Amidar, Samurai Showdown and countless others, he'd be lying. May the grey area continue to remain so.
http://www.popmatters.com/multimedia...616-emus.shtml


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DirecTV to Narrow Anti-Piracy Campaign

Satellite TV Giant Will No Longer Prosecute Users for Mere Possession
EFF Press Release

After discussions with the Electronic Frontier Foundation (EFF) and the Center for Internet and Society (CIS) Cyberlaw Clinic, satellite television giant DirecTV has agreed to modify its nationwide campaign against signal piracy in order to reduce threats and lawsuits against innocent users of smart card technology. Chief among these changes is a promise to no longer sue or threaten to sue people merely for possessing smart card devices.

“American innovators and hobbyists shouldn’t have to fear legal action merely for possessing new technologies that have many legitimate uses,” said EFF Staff Attorney Jason Schultz. “We’re also pleased that DirecTV has agreed to stop targeting general purpose devices in its campaign and will investigate all substantive claims of innocence.”

Over the past few years, DirecTV has orchestrated a nationwide legal campaign against hundreds of thousands of individuals, claiming that they were illegally intercepting its satellite TV signal. The company began its crusade by raiding smart card device distributors to obtain their customer lists, then sent over 170,000 demand letters to customers and eventually filed more than 24,000 federal lawsuits against them. Because DirecTV made little effort to distinguish legal uses of smart card technology from illegal ones, EFF and the CIS Cyberlaw Clinic received hundreds of calls and emails from panicked device purchasers.

In August 2003, EFF and CIS created the DirecTV Defense website to provide innocent users and their lawyers with the information necessary to defend themselves. The organizations also began a series of discussions with DirecTV about ways to reform its anti-piracy tactics and protect innocent consumers.

As a result, DirecTV has agreed to make several changes to its campaign. The company will no longer pursue people solely for purchasing smart card readers, writers, general-purpose programmers, and general-purpose emulators. It will maintain this policy into the forseeable future and file lawsuits only against people it suspects of actually pirating its satellite signal. DirecTV will, however, continue to investigate purchasers of devices that are often primarily designed for satellite signal interception, nicknamed “bootloaders” and “unloopers.”

DirecTV also agreed to change its pre-lawsuit demand letters to explain in detail how innocent recipients can get DirecTV to drop their cases. The company also promised that it will investigate every substantive claim of innocence it receives. If purchasers provide sufficient evidence demonstrating that they did not use their devices for signal theft, DirecTV will dismiss their cases. EFF and CIS will monitor reports of this process to confirm that innocent device purchasers are having their cases dismissed.

“While EFF still disagrees with DirecTV over other aspects of its campaign, we’re pleased that we could find mutual ground on these issues,” said CIS Executive Director Jennifer Granick, who represented EFF in the negotiations. "We hope to continue working with DirecTV to resolve the remaining disputes so that everyone can enjoy the benefits of smart card technology."

Smart card readers and their various derivatives have many legitimate uses, including computer security and scientific research.
http://www.eff.org/news/archives/2004_06.php#001615


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Hollywood Moves To Stem Net Film Piracy
Glynn Wilson

Hollywood's major studios are taking the battle to stop Internet movie piracy to a whole new level beginning this week with a high-priced series of public service announcements in some of the nation's most influential newspapers and magazines.

"Parental Guidance Suggested: Illegal downloading inappropriate for all ages," the ads blare in the New York Times, Washington Post, Los Angeles Times and other papers and magazines, including 100 college newspapers.

The question is, will the ad campaign make a difference and save filmmakers millions in lost revenue from illegal downloads by mostly young, Internet-savvy users?

"We wouldn't be spending several million dollars on this campaign if we didn't think it would make a difference," said Jack Valenti, president of the Motion Picture Association of America (MPAA), the Hollywood lobby group behind the ads. "How successful it will be, I can't tell you, but it's a pretty damn good ad. We're optimistic. One million jobs in the movie industry are in peril if we don't check this piracy."

One of the main thrusts of the campaign is to reach parents, students and local groups and explain why movie piracy is illegal, how it affects jobs and the economy and the consequences of engaging in illegal trafficking.

"We hope this ramped-up information/educational campaign will cause those who are taking films without permission to stop their illegal activity," Valenti said.

He said the other thrust of the campaign is to educate parents to the dangers of letting their children use file- sharing programs that could open the door on home computers to viruses and spyware programs, where third parties might be able to access all kinds of personal records, including bank account information and even medical records.

"If we don't react promptly to an ascending curve of illegal uploading and downloading soon to be reinforced with dazzling speeds rising from file-trafficking networks, we will live with an intense regret," Valenti said. "We have to do more to convince that minority of people who are engaged in this unlawful and infringing activity of the wrongness of their conduct. We have to stem the tide of film theft online before it is too late, before it puts to peril the creative energy of the industry and the jobs of the nearly one million Americans who work within the movie industry."

The campaign also includes the development of self-enforced codes of conduct for student computer use on campuses, where students complain of clogged networks because of the use of peer-to-peer networks. Working with Junior Achievement, more than 1 million students in grades 5-9 are learning about copyrights and the protection of creative property, the MPAA statement said.

The motion picture industry also is working with a broad range of information technology and consumer electronics companies to develop new technological solutions to illegal movie downloading and to expand legitimate alternatives to piracy that would permit consumers to rent and buy movies via the Internet with such services as Movielink and CinemaNow.

The MPAA is in the process of significantly increasing its monitoring of illegal film-swapping levels online and is following closely and assessing the effectiveness of initiatives taken by the Recording Industry Assn. of America (RIAA) against music piracy.

"We will keep all of our options open, including legal action," Valenti said.

The campaign builds on the MPAA's extensive efforts to raise public awareness about illegal file swapping, using technology as well as legal and legislative channels to build public awareness and create legal alternatives to protect copyrighted works.

To connect with consumers, the MPAA has been running two sets of trailers on every movie screen in the country as part of the "Movies, They're Worth It" campaign. It also has broadcast PSAs on broadcast and cable TV networks.

The MPAA estimates losses because of analogue and hard-goods piracy at $3.5 billion (1.9 billion pounds) annually, not including illegal downloading. According to outside research, 400,000-600,000 films are being illegally downloaded each day.

If piracy is left unchecked, illegal file trafficking could grow in the near term and include "spellbindingly fast download speeds. According to studies, 39% of adult Internet users -- 24% of all adult Americans -- have high- speed access at home, an increase of 60% since March 2003. This trend is expected to continue.

Also, for the first time, more than half (52%) of the college-educated under-35 audience has access to a high- speed broadband connection at home, making it easier to trade copyrighted movie and music files.

"Stealing movies over the Internet can lead to serious consequences," the Department of Justice Task Force on Intellectual Property said in a statement. "Online piracy involves the theft of billions of dollars, impacts the livelihood of tens of thousands of Americans and is a criminal offence. (We) applaud the MPAA's campaign and others like it that educate parents and children about the consequences of illegally downloading copyrighted movies and remind them that their behaviour is more than illegal -- it's wrong."
http://www.reuters.co.uk/newsPackage...2&section=news


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The Verdict: No Starz

The cable network's new online downloading service is just good enough to drive you to piracy.
Paul Boutin

To stop online piracy—or at least keep it to a bearable minimum—the companies whose copyrights are being violated need to offer consumers something better than what people can get for free. That's a tough challenge, but the better music services, such as iTunes and Rhapsody, have figured it out. By contrast, online movies are still a bust. You might think there's no market for people who want to watch movies on a computer, but that's only if you don't fly a lot. Lots of well-paid people spend a lot of time sitting on airplanes holding a laptop that doubles as a personal movie player. Why carry on a pack of DVDs when your disk drive will hold dozens of full-length movies? Yet while iTunes sells several million songs every week, Movielink and CinemaNow can convince consumers to pay for only about 135,000 flicks a month. That's for both services combined.

But John Sie, the chief executive of the Starz TV network, gave the New York Times three reasons this week that Starz's new movie-downloading service might be worth watching. He claimed the downloads would play at full-screen size, rather than the postcard-size videos offered by other services. Second, Starz would offer hit movies like Finding Nemo and Pirates of the Caribbean, not also-rans. Finally, the service would be affordable, $12.95 a month for up to 100 screenings. (You can watch 100 movies once, one movie 100 times, or any combo in between. The movie files expire at the end of their scheduled runs on Starz—usually a few weeks.) RealNetworks CEO Rob Glaser, whose company partnered with Starz on the project, told the Times that business travelers would be its obvious early adopters.

But on all three points offered by Sie, Starz comes in a distant second to piracy. If Hollywood wants to wean computer users from BitTorrent, the movie studios will have to offer something better than this.
Just getting started was a challenge: The Starz site repeatedly told me I couldn't sign up for the service because I didn't have a 600 kilobit or greater network connection, even though various bandwidth-testing tools confirmed that my DSL line clocked more than double that. Then I spent an hour wrestling with the Real player, which Starz uses to browse, download, and play its movies. The player kept trying to upgrade itself unsuccessfully, rebooting my PC several times before I figured out how to trick it into running. The constant marketing come-ons from Real were annoying, especially when mixed with error messages. Installing a BitTorrent client and the DivX video player used for most pirated movies was undoubtedly easier and quicker. BitTorrent also works on Mac and Linux computers that Starz doesn't support, despite the existence of Real players for both.

Once I'd managed to successfully reach the Starz menu, things started to look promising. There are previews for each movie, and to my pleasant surprise I found I could download the average 500-megabyte movie in just under an hour, which is faster (and more predictable) than the one to six hours it takes to get a two-hour movie from BitTorrent.

After that, it was all downhill. First, the full-screen claim turned out to be bogus. My downloaded Starz copy of Nemo is only about 640 by 480 pixels, a size that hasn't been "full screen" for over a decade. On my 15-inch flat panel, the movie covered just over half the screen. Resizing the movie to full-screen mode blurred the pixel-for-pixel craftsmanship of the original. That's barely tolerable for laptop viewing while traveling and certainly not good enough to make you wire your PC to the TV to watch a movie in the living room (where Starz alone can't compete with the quality—or quantity—of shows on cable, anyway). Bootleg movies on BitTorrent are often of higher visual quality than Starz movies, thanks to DivX's compression format, which looks a lot better than Real's at the same file size. And bootleggers often scan movies at higher resolution than Starz offers—a 750 megabyte DivX of Nemo looks a lot better than a 500 megabyte Real file.

By the time I finished perusing the entire Starz catalogue for this week, I realized I wasn't getting all that much for $12.95. The 100-plus title list beats watching an edited airline flick or paying hotel-movie rates for even fewer choices. But for less time and effort, BitTorrent users willing to flout copyright laws can get newly released movies for free. Nemo was bootlegged its first week out last year, and many appear online before they hit the theaters. Add it up, and Starz offers fewer movies than BitTorrent, at lower quality, for a higher price.

It's frustrating, because the movie industry could do better than the pirates if it really wanted to. A ripped DivX version of a movie is nowhere near DVD quality. If the studios sold downloadable movies that the average viewer couldn't tell from a DVD (the way MP3s offer "good enough" sound even though it's not CD-quality), who'd want a grainy bootleg? The studios could compete on selection, too. Instead of letting Starz's 100-movie inventory look generous, the studios need to create an online store with a catalogue comparable to Blockbuster or Netflix.

Sure, it's impossible to beat the pirates on price, but the movie moguls could learn from the mistakes, and the recent successes, of the music guys. For all its strengths, BitTorrent is just a file-sharing protocol. You still have to hunt down URLs for movies on the Net yourself. Once you do, they can take all day to load, and sometimes the download doesn't finish. If it does, you sometimes find you've spent hours downloading a grainy video with bad sound. An iTunes for movies—a well-designed, super user-friendly video store with fast, reliable downloads (there's no reason it couldn't use BitTorrent on the back end, linked to fast corporate servers)—would lure consumers into paying. Not by making piracy feel criminal, but by making it feel inconvenient.
http://slate.msn.com/id/2102504/


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A Smooth Go-Between Brings Taped Movies to Disc
J. D. Biersdorfer

he four-figure price tags on early DVD recorders for home use kept many video enthusiasts away. But now that prices are well below $400 and still falling, the VCR's days are surely numbered, as are those of the aging videotapes they once recorded on.

To help convert the old home movies and favorite TV shows on those tapes to long-lived shiny discs with your new DVD recorder, Sima Products has introduced the GoDVD digital video duplicator, a small silver box that simplifies the transfer process.

The GoDVD! box links a VCR or camcorder to a DVD recorder. To help improve the quality of the taped image as it records to the disc, the GoDVD unit stabilizes the video signal as it passes through; four enhancement modes help sharpen the picture and improve the color.

The device works with VHS, S-VHS, VHS-C and 8-millimeter tape formats and can make a backup copy of a pre-recorded DVD disc. GoDVD! sells for $130 in electronics stores and can be found at www.simacorp.com.

Travelers will be pleased to know that GoDVD! can also convert between the NTSC video format used in North America and the PAL system used widely in Europe, Asia and Australia.
http://www.nytimes.com/2004/06/17/te...ts/17conv.html


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The DCIA Tries To Cozy Up To The MPAA
Drake Zamanov

On June 17, the Cato Institute sponsored an event that focused on P2P and copyright law. The Distributed Computing Industry Association (DCIA) took part in this event and, once again, demonstrated that their sole desire is to turn the FastTrack network into a pay service.

DCIA CEO Marty Lafferty tried to cozy up to the MPAA during this event by encouraging the MPAA to work with FastTrack to distribute their content. “Mr. Valenti, end the major studio boycott of peer-to-peer. Urge your members to work with us to counter copyright infringement and commercially develop file sharing to its full potential.”, said Lafferty. Lafferty then went on to say, “We do not agree with those who claim that 'swapping movies and music 'without compensating rights holders 'doesn't really hurt anybody’.

It seems that the DCIA is now parroting the same propaganda the RIAA has been spewing concerning file sharing hurting rights holders. It’s clear that they are against the free exchange of information and want to capitalize on their large, but shrinking user base before its too late.

Lafferty went on to say, “DCIA Members Digital Containers, Clickshare, and SVC are adding even more advanced digital rights management and new commerce engines to further distance P2P from the old-architecture centralized download sites favored by the music industry. Our Members Relatable, Predixis, and Shared Media Licensing (SML), are working to address unprotected files entered by consumers into P2P distribution.”

He then went on to propose the following steps:

- Entertainment content inventory (using Relatable software to create
and monitor a fingerprint and file-metatag database).

- Rights holder registry (comprising all interests for each piece of
content, where multiple parties are entitled to remuneration).

- Content verification (matching acoustic IDs with rights holder data to enable revenue allocation -- and the option to have high-quality files supplant inferior ones).

- Rules application (addressing allowable content usage, SML-based user
incentives, and benefit considerations).

- Digital rights management (adding encryption and licensing-features
for open format copies of identified content).

- And payment services (facilitating a range of user-fee collection and
content-provider payment options, from per-unit to actuarial).

Sharman Networks has played a large role in shaping P2P. The RIAA has taken them to court on more than one occasion and tried to make file sharing illegal. They might have succeeded if Sharman Networks didn’t oppose them. Sharman has several anonymous investors and as a result, they have the financial resources needed to fight the RIAA. Many file sharers have supported Sharman throughout their battles with the RIAA, but have always questioned Sharman’s true motives.

It should now be crystal clear that Sharman Networks (the largest group involved in the DCIA) doesn’t give a damn about file sharers. If they did, they wouldn’t be working on incorporating advanced DRM and trying to form alliances with the RIAA and MPAA. If they were to strike a deal with the MPAA, you can be sure that Sharman Networks would do everything in their power to hunt down anyone who is sharing “unprotected” files on their network.

According to Slyck’s statistics, on January 11, 2003 there were 4,194,808 file sharers on the FastTrack network at the same time. On January 20, 2004, that number fell to 3,770,372. On January 30, 2004 if slipped to 3,407,587. The latest statistics show that their average online user base is now 2,479,381.

The FastTrack network has quickly deteriorated and instead of improving their technology, Sharman Networks has spent their time trying to come up with schemes that would make them rich. There’s no reason why file sharers should support a P2P network that wants to add advanced DRM to their network and charge its users. Sharman Networks will always be remembered for their successful battles against the RIAA, but unfortunately they will also be remembered for turning their backs on file sharers.
http://www.slyck.com/news.php?story=512


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Pioneer Who Kept the Web Free Honored With a Technology Prize
Victoria Shannon

HELSINKI, Finland, June 13 - If Tim Berners-Lee had decided to patent his idea in 1989, the Internet would be a different place.

Instead, the World Wide Web became free to anyone who could make use of it. Many of the entrepreneurs and scientists who did use it became rich, among them Jeffrey P. Bezos ( Amazon.com), Jerry Yang ( Yahoo), Pierre Omidyar ( eBay) and Marc Andreessen (Netscape).

But not Mr. Berners-Lee, a British scientist working at a Geneva research laboratory at the time. That is why some people think it is fitting - or about time - that on Tuesday, Mr. Berners-Lee will finally be recognized, with the award of the world's largest technology prize, the Millennium Technology Prize from the Finnish Technology Award Foundation. The prize, valued at 1 million euros ($1.2 million) is supported by the Finnish government and private contributors.

The Internet has many fathers: Vinton Cerf and Robert Kahn, who came up with a system to let different computer networks interconnect and communicate; Ray Tomlinson, the creator of e-mail and the "@" symbol; Ted Nelson, who coined the term hypertext; and scores of others.

But only one person conceived of the World Wide Web (originally, Mr. Berners-Lee called it a "mesh" before changing it to a "web"). Before him, there were no "browsers," nothing known as "hypertext markup language," no "www" in any Internet address, no "U.R.L.'s," or uniform resource locators.

Because he and his colleague, Robert Cailliau, a Belgian, insisted on a license-free technology, today a Gateway computer with a Linux operating system and a browser made by Netscape can see the same Web page as any other personal computer, system software or Internet browser.

If his employer at the time, CERN, the European Particle Physics Laboratory in Geneva, had sought royalties, Mr. Berners-Lee said he thought the world would have 16 different "Webs" on the Internet today.

"Goodness knows, there were plenty of hypertext systems before that didn't interoperate," he said in an interview on Sunday as three days of award ceremonies began here.

"There would have been a CERN Web, a Microsoft one, there would have been a Digital one, Apple's HyperCard would have started reaching out Internet roots," he said. "And all of these things would have been incompatible."

Software patenting today, Mr. Berners-Lee said, has run amok. In April, Microsoft was awarded a United States patent for the use of short, long or double-clicks on the same button of a hand-held computer to start applications, according to a report earlier this month on eWeek.com. At the same time, Microsoft said last week that it was appealing a $521 million judgment - the second-biggest patent-infringement award - won by a Chicago company called Eolas Technologies over plug-in applications in Internet browsers.

In 2000, the BT Group tried to pursue royalties on "hyperlinking," and in 2002 Amazon.com patented a way to shop online with one click of a mouse button.

"The problem now is someone can write something out of their own creativity, and a lawyer can look over their shoulder later and say, 'Actually, I'm sorry, but lines 35 to 42 we own, even though you wrote it,' '' said Mr. Berners-Lee, who is director of the World Wide Web Consortium based at the Massachusetts Institute of Technology.

"What's at stake here is the whole spirit in which software has been developed to date," he said. "If you can imagine a computer doing it, then you can write a computer program to do it. That spirit has been behind so many wonderful developments. And when you connect that to the spirit of the Internet, the spirit of openness and sharing, it's terribly stifling to creativity. It's stifling to the academic side of doing research and thinking up new ideas, it's stifling to the new industry and the new enterprises that come out of that."

In Europe, proposed changes in patent law are still out of reach after more than a year of heated debate, and the original advocate of the law is reportedly now ready to withdraw it. In the United States, that the federal Patent and Trademark Office issued a preliminary finding in March that would invalidate the Eolas patent claim, Mr. Berners- Lee said, "is a very important step."

"Now we have to look at the general system. In the States, the situation will need a huge change."

http://www.nytimes.com/2004/06/14/technology/14web.html















Until next week,

- js.














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