Peer-To-Peer News - The Week In Review - July 31st, '04

[JackSpratts]

Quotes Of The Week

"[We are] stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod." – Apple Computer


"They have been saying that Blockbuster would disappear since it started in the mid-1980's, but these new technologies are always additive." - Scott Hettrick


"Disney recently provoked an uproar when it prevented its subsidiary Miramax from distributing Michael Moore's film Fahrenheit 9/ 11. As a senior Disney executive told The New York Times: 'It's not in the interest of any major corporation to be dragged into a highly charged partisan political battle.' Follow the logic, and you can see what lies ahead: If the only media companies are major corporations, controversial and dissenting views may not be aired at all.

"Naturally, corporations say they would never suppress speech. But it's not their intentions that matter; it's their capabilities. Consolidation gives them more power to tilt the news and cut important ideas out of the public debate. And it's precisely that power that the rules should prevent." – Ted Turner









Judge Blocks Sales Of Unlicensed DVD Chips
John Borland

A California judge has ordered a multimedia chipmaker to stop selling versions of its products that were used in DVD-copying devices.

The Motion Picture Association of America said Monday that it had found chips from ESS Technology, based in Fremont, Calif., inside a device that allowed DVDs to be copied. Los Angeles County Superior Court Judge Maureen Duffy-Lewis issued an order Friday that blocked the manufacturer from selling its chips to any other device maker producing similar products.

"By selling chips to unlicensed manufacturers, ESS was effectively enabling wholesale piracy," Dan Robbins, the MPAA's chief technology counsel, said in a statement.

The case is part of Hollywood's ongoing battle to keep DVD-copying technology off the market and the Internet, despite widespread availability of underground software that will break through the discs' copy protection.

Earlier in the year, the MPAA successfully stopped the sale of 321 Studios' DVD X Copy, which had sold nearly 1 million copies online and in retail outlets like CompUSA. Previously, it had sued to stop the distribution of DeCSS, code that can be used to work around DVD encryption.

Any hardware manufacturer that makes DVD players needs to have permission from a Hollywood technology group called the DVD Copy Control Association in order to be able to decrypt the information stored on DVDs. ESS' customer, unnamed by the MPAA, did not have that right, the group said.
http://news.com.com/2100-1025-5284190.html


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Reverse engineered encryptions

RealNetworks Says Files Can Play on iPod
Allison Linn

SEATTLE - RealNetworks Inc. says it has created technology that allows songs purchased through its online music services to be played on Apple Computer Inc.'s popular iPod
player, just a few months after complaining that Apple was rebuffing attempts to form an alliance.

In an interview Friday, RealNetworks chief executive Rob Glaser said he did not know how Apple would react to the new technology. Apple, based in Cupertino, Calif., did not return numerous phone calls from The Associated Press seeking comment.

Glaser said the new system, called Harmony Technology, will let people securely transfer music bought using RealNetworks' music download services to an iPod or virtually any other portable music player.

Previously, music purchased through RealNetworks' music download services could most easily be played on devices that supported its copyright protection technology. By the same token, the easiest way to get digital music onto the iPod player was through Apple's iTunes Music Store, which uses its own system. The same held true for devices that supported Microsoft's Windows Media Player anti-piracy technology.

Microsoft said it could not immediately comment on the system.

Glaser said the new the system works by essentially translating the various anti-piracy technologies, to make the players' systems compatible with RealNetworks' system. RealNetworks said it was not concerned that the system would be illegal.

"We are making it so that consumers can buy music once and play it anywhere," Glaser said.

A test version of Harmony will be available Tuesday on Real's Web site.

In April, Apple chairman Steve Jobs rebuffed Glaser's request for a meeting to discuss an alliance between the companies, prompting complaints from RealNetworks representatives about why Apple didn't want to make its popular system more open.

There is already a way to make songs from RealNetworks' online music services play on the iPod, but it is cumbersome. To do so, a user would have to burn the songs from a computer to a CD, download them back onto the computer in a different format and then put them on the player.

Phil Leigh, an analyst with Inside Digital Media in Tampa, Fla., said he was surprised to hear that Real had developed the technology, since Apple has been careful about guarding its popular - and proprietary - system.

He said the new system could be a potential boon for RealNetworks, because customers would be able to buy whatever player they want without worrying about whether it would work with Real's service. But he said it would only be a success if it was easy and reliable.

"The question is, 'How well does it work?'" he said.
http://www.siliconvalley.com/mld/sil...al/9242507.htm


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Study: Song Downloads To Hit A High Note

Music downloads could be on an upswing this year.
Dinesh C. Sharma

Sales of digital tunes in 2004 in the United States will reach $270 million, more than double the takings from the previous year, according to a report released by JupiterResearch on Monday.

That revenue will rise to $1.7 billion, or 12 percent of total consumer spending on music, by 2009, the research firm projected.

While healthy sales of digital downloads have brought cheer to the U.S. music industry, which has seen four years of sliding sales for compact discs, the growth in the niche is not enough to make up for the shortfall, JupiterResearch said.

In the short term, downloading will continue to be used by consumers as a way to check out music before buying a CD, the report's authors said. In the longer term, they predict, revenue from digital subscription services will outgrow revenue from digital downloads.

"The so-called celestial jukebox is in sight," David Card, a senior analyst at JupiterResearch, said in a statement. "But for now, it will appeal to music aficionados. The U.S. music industry must manage digital music as one of a series of incremental revenue streams, one that is in the same scale as licensing (like ring tones, games and advertising)."

Shipments of MP3 players in the United States will more than double this year to more than 5 million and will continue to rise at that rate for the next several years, JupiterResearch said. Hard drive-based, low-end devices will drive the growth, as 77 percent of buyers of portable music players surveyed by the research firm said they would want no more than 1,000 songs on a player at any given time.

The digital music market is dominated by Apple Computer's iPod player, which is linked to an online music store, iTunes. On Monday, RealNetworks released software, named Harmony, that enables people to play music from its downloads store on iPods. The move gets around Apple's refusal in the past to provide licenses to companies looking to make their software compatible with Apple's device.
http://news.com.com/2100-1027-5284030.html


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EDonkey Carts Load Of Criticism
Jefferson Graham

Sam Yagan's critics call him a pirate, an illegal operator and an encourager of child pornography because of his free online file-swapping service.

Yagan begs to differ. He's the president of New York- based MetaMachine, owner of eDonkey, where the latest music and movies are available at no charge. And all he wants is the entertainment industry to stop fighting him and instead use his giant audience — an average 2.2 million — to sell media with him. But on his terms.

"The peer-to-peer community is massive," he says. "Show me another technology on this scale that's been litigated or legislated out of business. You can't make us go away."

Yet some in Congress hope to do just that. The Senate Judiciary Committee held hearings Thursday to discuss a bill aimed at making peer-to-peer companies directly liable for copyright infringement. The bill is a response to a recent court win by P2P companies Grokster and Morpheus that said they weren't liable for copyright infringement — but their users were. Record labels and Hollywood studios are appealing the decision.

Bolstering the bill are its many high-profile co-sponsors, including Sen. Majority Leader Bill Frist, R-Tenn., Sen. Minority Leader Tom Daschle, D-S.D., and Hillary Rodham Clinton, D-N.Y.

Opponents include technology companies Intel, Google, Yahoo and Cnet Networks. They say the bill is written so broadly it could make them liable for inducing consumers to engage in copyright infringement — not just the P2P networks.

If the bill passes, "We'd have to figure out whether we need to close down (or) move abroad and keep doing what we're doing," Yagan says.

Unlike competitors, eDonkey is incorporated in New York and pays taxes here. That should account for something, Yagan says. (Kazaa is incorporated on the small island of Vanuatu; Grokster is headquartered in Nevis,West Indies; and Earthstation 5 is run from the Jenin refugee camp in Palestine.)

Kazaa is being sued by the Recording Industry Association of America and its international counterparts. The RIAA this week settled its lawsuit against Israel's iMesh, one of the longest-running P2P firms, since 1999, for $4.1 million, and the company promises to take down unauthorized files by year's end.

Yagan calls it a "good sign" that the labels made a deal with a P2P company, but says, "I'm curious to know if there will be any files shared and downloaded for free. How will iMesh keep their user base if they do this?"

He has offered to sell licensed music and movies on eDonkey. But Hollywood and the record labels aren't interested because he would put licensed content next to free stuff. Yagan says his audience would disappear overnight if he did it any other way. However, RIAA President Cary Sherman says, "Financially supporting a network where 99% of the traffic is illegal does not make sense."

Yagan hears the word "illegal" often, but he doesn't agree with the assessment. "The software provided by P2P companies is not illegal," he says. He notes that copyright law says works cannot be infringed. "I produce software," Yagan says. "The software does not infringe. Are there people who use the technology to infringe? I'm sure there are."

Indeed, eDonkey is a haven of copyrighted material. Do a search for any current movie —Spider-Man 2, Anchorman, Fahrenheit 9/11 — and multiple copies pop up. Same for songs: all the latest from hitmakers Usher, Alicia Keys and Janet Jackson.

Internet measurement firm BigChampagne says 1 billion songs were available for free on P2P services in June, the same month Apple announced it had sold 100 million songs to users since April 2003.

A different start

Yagan majored in economics at Harvard University and co-founded study guide company Sparknotes, now owned by Barnes & Noble. An old friend of software designer Jed McCaleb, he signed on with eDonkey when McCaleb was looking for a way to make the service profitable.

The labels say P2P firms make millions of dollars from advertisers and spyware program vendors. Yagan says the money he reaps from advertising is a modest amount that pays for its five-person staff and 14th Street office in New York.

Unlike Kazaa, Grokster and other P2P firms, eDonkey users can choose whether to opt in for the ad programs. Most users agree to take them, Yagan says.

EDonkey has been downloaded by more than 50 million people and is even more popular in Europe, he says.

"Kazaa is on the decline," adds Andrew Parker, chief technology officer of London- based Internet measurement firm CacheLogic. "EDonkey is faster to use, has more content, doesn't have as much ad and spyware and is available in more languages, which is why it's so popular worldwide."

EDonkey's speed shows in its technology. It downloads bits of files simultaneously, and then seamlessly puts them into one file after they reach your computer. The name eDonkey is meant to spotlight its specialty in big files. The donkey is carrying a big load for you.

The donkey has nothing to do with politics. But ironically, while senators debate P2P's merits, their parties are supporting it in advertising. Both the Democratic and Republican national committees are advertising on eDonkey for President Bush's and Sen. John Kerry's presidential campaigns.
http://www.usatoday.com/tech/news/20...-edonkey_x.htm


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Judge: RIAA Can Unmask File Swappers
Declan McCullagh

A federal judge has handed a preliminary victory to the recording industry by granting its request to unmask anonymous file swappers accused of copyright infringement.

U.S. District Judge Denny Chin ruled Monday that Cablevision, which provides broadband Internet access in Connecticut, New Jersey and New York, can be required to divulge the identities of its subscribers sued over copyright violations.

This ruling is the latest decision to clarify what legal methods copyright holders may use when hunting down people who are trading files on peer-to-peer networks. Courts have spent the last few years grappling with how to reconcile Americans' right to be anonymous with the entertainment industry's own right to sue people who violate copyright law.

Chin, in Manhattan, said that the implicit guarantee of anonymity in the Bill of Rights is an insufficient shield in this case: "Such a person's identity is not protected from disclosure by the First Amendment."

Lawyers following the case said it is significant because Chin's ruling is the most detailed so far in any of the many "John Doe" lawsuits brought by the Recording Industry Association of America. Chin said that while file swapping "qualifies as speech" to some degree, the RIAA's member companies had overcome the hurdle posed by the First Amendment and could compel "disclosure of the Doe defendants' identities."

Paul Levy, an attorney at the nonprofit group Public Citizen, said that "the nice thing about the ruling is that (the judge) recognizes the First Amendment interests at stake here and he applies a balancing test." Levy, who filed a friend-of-the-court brief opposing the RIAA, said that Chin's analysis ensures that companies filing a copyright infringement lawsuit must prove they have a real case and aren't merely on a fishing expedition for someone's name.

Stanley Pierre-Louis, a senior vice president for legal affairs at the RIAA, said in an e-mail statement: "Judge Chin's ruling makes it abundantly clear that those who engage in copyright infringement over the Internet, whether on peer-to-peer networks or otherwise, should not expect to remain anonymous."

Investigators working with the RIAA had traced the Internet addresses of 40 suspected peer-to-peer pirates to Cablevision's network. RIAA lawyers sent a subpoena to Cablevision, which turned over the names of the "John Doe" defendants in February.

Chin said he was willing to consider the First Amendment aspects anyway--even after the names were divulged--because the RIAA could have been "ordered to return the information and prohibited from using it" if the outcome of Monday's ruling had been different.

Aden Fine, an attorney at the American Civil Liberties Union, said: "It's not a victory or a defeat. The important part of the opinion is that it emphasizes that accusations saying an individual is engaged in illegal speech don't mean the First Amendment provides no protections." The ACLU and the Electronic Frontier Foundation had also filed amicus briefs against the RIAA.

The RIAA turned to "John Doe" lawsuits after a federal appeals court ruled late last year that the association could no longer rely on the Digital Millennium Copyright Act's turbocharged subpoenas to unmask suspected pirates.

The DMCA contains provisions for unmasking file swappers without a judge's approval, but a federal appeals court in Washington, D.C., barred those methods from being used. While that decision is not technically binding on other areas of the country, it is influential. RIAA litigators appear to have decided that filing "John Doe" lawsuits with unnamed defendants is a less risky legal strategy.
http://zdnet.com.com/2100-1104-5285605.html


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French ISPs To Block File Sharing
Dinah Greek

The war against file sharers spreads across Europe. French ISPs have clubbed together to block P2P users from downloading music files.

Free, Noos, Club-Internet, Wanadoo and Tiscali France have all signed a government-backed charter to crack down on music swappers.

The charter, which has also been signed by record labels, will use a series of measures to stamp out music swapping.

The first step will be to send warnings to subscribers identified by music groups as having downloaded music illegally.

ISPs said they will remove copyrighted tracks posted by subscribers and pass on subscriber details to music labels when asked.

If all else fails, the ISPs said they would suspend internet accounts, but only on the decision of a judge, according to French news agency AFP.
http://www.vnunet.com/news/1156997


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My Beef With Big Media

How government protects big media--and shuts out upstarts like me.
Ted Turner

In the late 1960s, when Turner Communications was a business of billboards and radio stations and I was spending much of my energy ocean racing, a UHF-TV station came up for sale in Atlanta. It was losing $50,000 a month and its programs were viewed by fewer than 5 percent of the market.

I acquired it.

When I moved to buy a second station in Charlotte--this one worse than the first--my accountant quit in protest, and the company's board vetoed the deal. So I mortgaged my house and bought it myself. The Atlanta purchase turned into the Superstation; the Charlotte purchase--when I sold it 10 years later--gave me the capital to launch CNN.

Both purchases played a role in revolutionizing television. Both required a streak of independence and a taste for risk. And neither could happen today. In the current climate of consolidation, independent broadcasters simply don't survive for long. That's why we haven't seen a new generation of people like me or even Rupert Murdoch--independent television upstarts who challenge the big boys and force the whole industry to compete and change.

It's not that there aren't entrepreneurs eager to make their names and fortunes in broadcasting if given the chance. If nothing else, the 1990s dot-com boom showed that the spirit of entrepreneurship is alive and well in America, with plenty of investors willing to put real money into new media ventures. The difference is that Washington has changed the rules of the game. When I was getting into the television business, lawmakers and the Federal Communications Commission (FCC) took seriously the commission's mandate to promote diversity, localism, and competition in the media marketplace. They wanted to make sure that the big, established networks--CBS, ABC, NBC--wouldn't forever dominate what the American public could watch on TV. They wanted independent producers to thrive. They wanted more people to be able to own TV stations. They believed in the value of competition.

So when the FCC received a glut of applications for new television stations after World War II, the agency set aside dozens of channels on the new UHF spectrum so independents could get a foothold in television. That helped me get my start 35 years ago. Congress also passed a law in 1962 requiring that TVs be equipped to receive both UHF and VHF channels. That's how I was able to compete as a UHF station, although it was never easy. (I used to tell potential advertisers that our UHF viewers were smarter than the rest, because you had to be a genius just to figure out how to tune us in.) And in 1972, the FCC ruled that cable TV operators could import distant signals. That's how we were able to beam our Atlanta station to homes throughout the South. Five years later, with the help of an RCA satellite, we were sending our signal across the nation, and the Superstation was born.

That was then.

Today, media companies are more concentrated than at any time over the past 40 years, thanks to a continual loosening of ownership rules by Washington. The media giants now own not only broadcast networks and local stations; they also own the cable companies that pipe in the signals of their competitors and the studios that produce most of the programming. To get a flavor of how consolidated the industry has become, consider this: In 1990, the major broadcast networks--ABC, CBS, NBC, and Fox--fully or partially owned just 12.5 percent of the new series they aired. By 2000, it was 56.3 percent. Just two years later, it had surged to 77.5 percent.

In this environment, most independent media firms either get gobbled up by one of the big companies or driven out of business altogether. Yet instead of balancing the rules to give independent broadcasters a fair chance in the market, Washington continues to tilt the playing field to favor the biggest players. Last summer, the FCC passed another round of sweeping pro-consolidation rules that, among other things, further raised the cap on the number of TV stations a company can own.

In the media, as in any industry, big corporations play a vital role, but so do small, emerging ones. When you lose small businesses, you lose big ideas. People who own their own businesses are their own bosses. They are independent thinkers. They know they can't compete by imitating the big guys--they have to innovate, so they're less obsessed with earnings than they are with ideas. They are quicker to seize on new technologies and new product ideas. They steal market share from the big companies, spurring them to adopt new approaches. This process promotes competition, which leads to higher product and service quality, more jobs, and greater wealth. It's called capitalism.

But without the proper rules, healthy capitalist markets turn into sluggish oligopolies, and that is what's happening in media today. Large corporations are more profit-focused and risk-averse. They often kill local programming because it's expensive, and they push national programming because it's cheap--even if their decisions run counter to local interests and community values. Their managers are more averse to innovation because they're afraid of being fired for an idea that fails. They prefer to sit on the sidelines, waiting to buy the businesses of the risk-takers who succeed.

Unless we have a climate that will allow more independent media companies to survive, a dangerously high percentage of what we see--and what we don't see--will be shaped by the profit motives and political interests of large, publicly traded conglomerates. The economy will suffer, and so will the quality of our public life. Let me be clear: As a business proposition, consolidation makes sense. The moguls behind the mergers are acting in their corporate interests and playing by the rules. We just shouldn't have those rules. They make sense for a corporation. But for a society, it's like over-fishing the oceans. When the independent businesses are gone, where will the new ideas come from? We have to do more than keep media giants from growing larger; they're already too big. We need a new set of rules that will break these huge companies to pieces.
http://www.washingtonmonthly.com/fea...07.turner.html


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Skype Unveils Deals With Companies For Expansion Of Peer-To-Peer Phone Program
Matt Moore

STOCKHOLM, Sweden (AP) -- The creators of Skype, the peer-to-peer program that lets computer users make free calls to each other anywhere in the world, are going one step farther in their bid to compete with traditional telecom companies, releasing a new version that lets users dial regular phones from a computer.

Skype Technologies SA, a privately held Luxembourg-based company, said Friday that it had struck deals with providers COLT, iBasis, Level 3 and Teleglobe to launch SkypeOut, a soon-to-be-launched prepaid service.

Skype co-founder Niklas Zennstrom said SkypeOut would be released later this year, but didn't say when or how much it would cost users.

The basic Skype program, offered as a free download over the Internet, lets people use their computers as telephones to call others equipped with Skype software. It incorporates a technology known as Voice over Internet Protocol.

A similar version, Skype Plus, is planned for later this year, and will let people collect voice mail and receive calls from regular telephones. SkypeOut goes a step farther by letting Skype computers call regular phones.

"We will now move quickly and offer SkypeOut calls to landline and mobile phone numbers around the world," said Zennstrom, who also co- created the song-swapping program Kazaa.
http://www.mlive.com/newsflash/busin...lash-financial


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Plantronics Enters Partnership With Skype
Chandler Harris

SANTA CRUZ — Seeking to become the preferred headset maker in what could be the next communication technology phenomenon, Plantronics recently formed a partnership with Skype, an Internet telephone company that allows users to make phone calls anywhere in the world, free.

The agreement puts Plantronics as the preferred headset manufacturer for Skype and in the future a range of Plantronics headsets will be made available with a free trial of Skype’s premium services.

It took months for Plantronics executives to land a deal with the Luxembourg-based company, but in London Plantronics sealed the deal for exclusive licensing, marketing and distribution of headsets for Skype.

"When you combine voice and data you get a really powerful system," said Matt Miller, director of product marketing for Plantronics. "You can go into Starbucks and work on your laptop with wireless Internet, and you can use your PC to talk to anybody in the world at a coffee shop."

Skype was created by Niklas Zennstrom and Janus Friis, whose previous brainchild was Kazaa, the peer-to-peer file sharing network that has spurred lawsuits from the entertainment industry. Kazaa’s founders have since sold Kazaa and moved their peer-to-peer concept into the telecommunications field, where anyone with a computer and high speed connection can talk through a computer to any other Skype user in the world, without paying anything.

Since its inception in August 2003, Skype has been downloaded more than 12 million times by users from more than 170 countries. Skypes popularity has been growing faster than other popular programs such as Hotmail, Kazaa and instant messaging, said Kelly Larabe, Skype representative.

"Niklas talks about it all the time, that there’s been evolutions in phone technology, but there hasn’t been a major disruption until now," Larabe said.

Skype works much like Internet instant messaging. Users download the free software, select a user name, then create an address book of other Skype users. Whenever a person from the address book is online, Skype will notify other Skype users who are online.

Skype technology uses voice over Internet protocol, or VoIP, which records a voice, puts it into a digital packet, then sends it out over the Internet to be reassembled by another computer.

However, unlike traditional telephones that can call at any time, Skype calls can only be made only when two users are online at the same time. And for now, calls can only be made through computers without using traditional phone lines. But that is expected to change this summer when Skype plans to offer "Skype Out" where Skype users can call anyone on a regular phone line and pay for the minutes used. The charge for minutes used will be less than a traditional long distance telephone, Larabe said.

Plantronics is expecting the Skype phenomenon to continue to grow in popularity and that more handheld phones will be replaced by Plantronics headphones that plug into a computer.

Plantronics found through its own research that 58 percent of recent Plantronics communication headset users purchased a headset to have phone conversations across the Internet.

"With faster processors and much better software, Skype is making a very viable alternative to home phones, and you’re saving a lot of money," Miller said.
http://www.santacruzsentinel.com/arc...ries/02biz.htm


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RIAA: You Need To Get A Life!
John Ginn

The iPod people must make their stand against the recording industry

The following is a message to the Recording Industry Association of America, more commonly known as the RIAA: If I can't put it on my iPod, you've got nothing I want.

Wow, is that a simple concept, or what? That's right RIAA, if I can't put it on my iPod, it ain't happening, my friend. The CD is as dead as Marley's Ghost, get over it. The digital age is here; come on in, the water's fine.

It's been awhile since I've written about the RIAA. A year and a couple of months at least. In late April of 2003, I wrote about the launching of Apple's iTunes Music Store, in which I predicted the emergence of a whole new distribution model for the music industry. For years, the model had been in place to a certain degree: a large portion of music distribution had been turned into digital files being traded on peer to peer networks online. What was missing was the exchange of money in the transaction, a way for artists to get paid for the work they produce, and a way for them to protect, to the extent that it is possible, their ownership of their work.

Apple's iTunes store seemed to be the answer to many of these issues. The digital files it sold had digital rights protections included for artists, but they were also loosely structured enough that most "fair use" consumer issues would also be protected. It also gave consumers more control in that, with rare exceptions, they were allowed to download and pay for only the tracks that they wanted. No more having to buy a whole CD just to listen to one cut from the disc.

By just about any measure, the ITMS has truly been a revolutionary success. Its introduction spawned many imitators, but ITMS remains the market leader. Albums have debuted on ITMS, as well as exclusive bonus tracks. By April of 2004, in its first year, the store had moved 75 million songs; and with the recent addition of markets in Great Britain, France and Germany, the tally is closing in on 100 million songs.

But (you knew there was a but coming; there's always a "but" lurking around the corner in any discussion of the RIAA) the picture is not as rosy as I had hoped it would be. In my 2003 article, I foolishly declared that the RIAA's war against consumer trends was over. To a point I think that is still correct; it is hard to remember now what a sea change ITMS was. The RIAA had been fighting such a model to the bitter end.

But my idea that the RIAA was done fighting? Well, as Fonzie famously said in that Happy Days episode, "I was ... I was ... I was wrrrrrrrrrrrrr ..."

If anything, in the months following the opening of ITMS, the RIAA stepped up the battle even more, taking file traders to court, suing little kids in an appalling attempt to terrorize other little kids. Bullies, cowards!

Continuing their weird and unsupportable assertion that each and every downloaded file was a lost sale, they claimed that the kids (many of the kids having no money to spend) were costing them billions in lost profits. This despite plenty of counter evidence, some from the artists themselves, that file sharing actually increased sales by allowing fans to discover music they might otherwise have never heard.

The RIAA can crunch numbers all they want from now until Britney Spears records a tribute album to Paul Robeson, but they will never be able to produce a "lost revenue" number that actually makes sense. It's a waste of time, a downloaded file is not a lost sale, and can't be tallied as such. There are way too many variables left out of the equation: downloaded files that led to the listener to search out the CD and purchase it being the most obvious one, followed by downloaded files that the listener thought were so bad that they cleared it from their hard drive with all due speed. There are, no doubt, that portion of downloaders who have no intention ever of buying any music. Still, the "lost sale" scenario-building has so many logical fallacies built-in that it is literally pointless; and yet it seems to be the RIAA's overwhelming obsession. Surely it would be better to address the things that can be known?

Tops on that list is the one fact that consumers have consistently told the RIAA: CDs cost too much. They cost way too much. The price of CDs is the number one cause of any supposed "lost sales," and yet it is the one area that the RIAA refuses to address, preferring to obsess over non-numbers rather than genuine real-world numbers.

So what's all this have to do with your iPod, you ask? Thanks for asking and getting me back on track. Senate Bill S.2560 is what it's about, "A bill to amend chapter 5 of title 17, United States Code, relating to inducement of copyright infringement, and for other purposes; to the Committee on the Judiciary." Recently, Senator Orrin Hatch took the floor to introduce proposed changes that would make certain technology, software and hardware manufacturers liable for prosecution for the behavior of some of the people using their technology.

The theory here is that these companies are "inducing" children to break the law, thus causing irreparable harm to children. This is not satire on my part, this is the language Hatch uses again and again. He compares the technology companies to "Fagins" and the children as hapless little Oliver Twists, forced to do the bidding of the techies. "Honest, Guv'nah! ‘Twas he who made me do it. I'm just a poor ‘armless little urchin, I am."

You can read Hatch beating the metaphor yourself at http://thomas.loc.gov. Search S.2560 and follow a couple of links, and you'll find it. I'd print the actual link, but it's way too long. Suffice it to say that you always know someone's on their last desperate argument when they roll out the old weepy "Who will think of the children?" routine.

This is not to say that the bill can't do harm. In spite of Hatch's and the other bill sponsors' assertions to the contrary, the description of what exactly constitutes "inducement" does seem rather broad to my non- attorney eyes. It is easy to see where, given this law, the RIAA could use it as a weapon in court to sue pretty much whomever they wanted. Is Apple, with its iPod, inducing children to steal music? Let's take it to court to find out! Many articles have speculated that Apple could be forced to stop making the iPod.

As I said at the start, RIAA, and you really need to hear this, because this is not just me talking, if I can't put it on my iPod, then you've got nothing I want. If you are that worried about "the children (sob)" then quit suing children in court. This fantasy you have that you will maintain total control of music is delusional and harmful and not even in your best interest; nurture and build the market you have while there is still time!

And as to all the little Oliver Twists out there, I don't want to induce you to anything — stealing music is bad — however, given no other choice, by legislation that continues relentlessly to constrict your options, you need to fight like hell, fight ferociously like spitting-mad cornered wolverines, against corporate bodies like the RIAA who see you as nothing but soulless obeying consumerbots, and would have you defined as such in the law of the land.

Fight them, fight them!

http://www.gazettetimes.com/articles...ewind/ginn.txt


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Who's a Pirate? Russia Points Back at the U.S.
C. J. Chivers

ZHEVSK, Russia, July 24 - The bazaar in this industrial city shows why Western companies regard Russia as a land of piracy.

Bootlegged copies of new American movies - "King Arthur,'' "Troy'' and "Spider-Man 2'' - sell for $3. Photoshop CS, a $600 program in Western stores, fetches $2.75.

Markets like this, found throughout Russia, have been a longstanding subject of diplomatic complaint. Washington contends Russian intellectual-property pirates cost the United States more than $1 billion a year.

Now Russia is striking back. A Russian industry and product designer are asserting that the United States has been abetting intellectual-property pirates to suit its own needs, by directing copies of Russian merchandise around the world.

The complaint is not about software or music. It makes no mention of movies or video games. It is about the Kalashnikov assault rifle, the most prolific firearm ever made.

"We see a great number of products which are named after Kalashnikov, my name,'' said Mikhail T. Kalashnikov, the weapon's original designer. "They are buying Kalashnikovs from other countries,'' he added.

Since the collapses of the Taliban in Afghanistan and Saddam Hussein's army in Iraq, the United States has been purchasing or arranging the transfer of thousands of knockoffs of Kalashnikovs commonly referred to as AK-47's, to outfit new military and security forces in Kabul and Baghdad.

These rifles have not been made in Russia, where the arms industry holds patents for the weapon in several nations. Instead they have originated in weapons plants controlled by Eastern European states, each of which was a partner of Moscow's in Soviet days.

So begins an argument at once curious, impassioned and bizarre, involving the legacy of cold war influence jockeying, secretive arms deals, recent efforts to defeat modern Islamic insurgencies, and international business and patent law.

The automatic Kalashnikov, made in a factory here, is in many ways Moscow's Ford. It is a quintessential national product: extraordinarily successful, widespread, a name closely connected to the identity of a state.

It was designed by Mr. Kalashnikov, a former Russian tank sergeant, in classified Soviet weapons trials shortly after World War II, and was promptly embraced by Soviet soldiers for its simplicity and reliability under almost any condition. It is regarded as a weapon that rarely, if ever, fails.

Russian arms officials say that no other nation has a valid license to make the AK-47 and its many derivatives and clones, and that to defeat insurgents and terrorists, Washington has been encouraging violations of intellectual property rights. Russia is suffering losses in income, jobs and damage to the Kalashnikov name, the officials say, and would like the United States to shop for the weapons directly from here.

"We would like to inform everybody in the world that many countries, including the United States, have unfortunately violated recognized norms," said Igor Sevastyanov, who leads a division of Rosoboronexport, Russia's state-controlled arms export company. American officials confirm that non-Russian Kalashnikov rifles have been provided with American assistance to Afghanistan and Iraq. Sometimes the weapons have been transferred via purchases on international arms markets, they say, other times via the solicitation of donations from friendly states as a gesture of cooperation with the Bush administration's war and reconstruction efforts.

The officials also say that they are aware of the Russian complaints, which raise questions of provenance that remain unresolved.

"We have taken the position that there are important issues with respect to the production, intellectual property rights and conditions of export of these weapons, and it is important that we strengthen controls in all of these areas," a State Department official said. Officials from Rosoboronexport and Izhmash, the Russian company holding patents on the rifle, say American-coordinated transfers include Kalashnikov clones made in Romanian, Bulgarian and Hungarian plants that have continued to be sold despite Russian complaints.

Another transfer, arranged by the American-led Coalition Provisional Authority in Iraq last year, involved the purchase of Kalashnikovs from Jordan. The weapons were believed to be excess stock from the Jordanian army, and to have been manufactured years ago by the former East Germany, another State Department official said.

The transfers have been diplomatically delicate; the Jordanian deal drew complaints from across the political spectrum.

American business representatives have said that American-made rifles should be bought to preserve American jobs. Others questioned the wisdom of shipping more automatic rifles to countries already awash in such guns.

Congressman have asked why American forces did not save money by reissuing to friendly forces the thousands of Kalashnikov rifles confiscated in both wars.

(Last spring, journalists from The New York Times watched United States marines collect tens of thousands of mint-condition Kalashnikovs in a cache in a hospital in Tikrit. The weapons were still in their original packing crates.)

In spite of complaints, the transfers continued, American officials say, in part because the automatic Kalashnikov is inexpensive and requires less training to master than modern American rifles. Several officials noted that many young Iraqi and Afghan men already know how to use it.

Izhmash and Rosoboronexport agree with this position; their officials are even proud that the Pentagon prefers the Kalashnikov for its new allies.

But they say Washington's deals have come at the expense of Izhmash and Izhevsk, where mass production of the rifles began in 1949, and where orders and the work force have shrunk since the Soviet Union broke up in 1991.

More than 12,000 people worked on the gun lines then; roughly 7,000 work there today, and at fewer shifts, said Andrei Vishnyakov, an Izhmash official.

The officials noted that the low price of Kalashnikov knockoffs can make it impossible to sell the genuine item, a phenomenon resembling the underselling of software and DVD's, albeit on a different scale.

For example, the Jordanian rifles sold for about $60 each - less than one-fourth of the price of a new Kalashnikov from the Izhmash plant, according to Rosoboronexport data.

"They are selling these rifles at dump prices," said Alexander G. Likhachev, a former Izhmash director who is now an official with the state arms agency.

He added that Russia wants that business. "We are prepared to manufacture the genuine weapons, in big quantities, because we know there is a demand," he said.

The legal standing of Rosoboronexport's complaint is uncertain. American officials, analysts and trade representatives said issues surrounding each transfer would require intensive legal research to resolve.

The task would be daunting. In the 1950's, in a mix of collaborative revolutionary spirit and jockeying against the West, the Soviet Union began exporting the rifles and the technology to manufacture them to states in its sphere of influence. Ultimately, Moscow entered licensing agreements with 18 states, according to Rosoboronexport.

"We transferred and gave them all the technical documentation, all the know-how about the design," Mr. Kalashnikov, now 84, said in an interview at his dacha in the Russian woods. "Representatives of these countries came here. They studied our production line."

Moreover, once the rifle's utility became well known, another 11 countries began making derivatives and clones without Moscow's approval, the state agency said.

Russia says that all former licenses have expired. But to make this case, the old licenses would have to be studied, as would Izhmash's more recently acquired patents as well as intellectual property laws in each Kalashnikov-manufacturing state.

A third American official said several former Soviet-bloc countries that formerly made Kalashnikovs with Moscow's approval contend they retain rights to the weapon today. "There is a dispute among all the parties involved," the official said.

Still, whatever the legal merits, analysts agree: the complaint's symbolic power is great.

"I'm not a big fan of guns, but that said, if the creators of this intellectual property have rights to enforce, I really do hope they can get them enforced in every country," Eric Schwartz, a vice president of the International Intellectual Property Alliance, said in a telephone interview. "And I hope that the United States government would comply and set a good example."

The alliance represents American companies with products protected by copyright laws.

The complaint also faces the unrelenting realities of the market. After decades in production in plants in Asia, Africa, the Middle East and Europe, the automatic Kalashnikov has spread far beyond Izhevsk's reach.

Analysts estimate that 70 million to 105 million of the weapons have been made.

It has been used not only by more than 55 state armies, but also by the Viet Cong, militias in Beirut, Palestinian insurgents in Gaza City, guerrillas in Iraq and child soldiers in Asian and African states. A Kalashnikov is on the seal of Hezbollah and the flag of Mozambique. It features prominently in the symbolism of jihad.

Even the United States long ago entered in the Kalashnikov business, in the 1980's, when it surreptitiously bought Chinese and Egyptian Kalashnikovs for Islamic guerrillas battling the Red Army in Afghanistan.

American purchases of Kalashnikovs have continued intermittently since then. A few years ago, according to officials at the State Department and the Pentagon, Washington purchased Kalashnikovs for a Nigerian peacekeeping force in Sierra Leone.

With so many of the weapons in circulation, one analyst said Russia's complaint could prove to be an almost impossible fight.

Rosoboronexport's position is like "the Chinese saying they have a royalty right on every firearm, because that's where it all started with the invention of gunpowder 700 years ago," said Dr. Aaron Karp, a professor at Old Dominion University in Virginia who specializes in weapon proliferation issues.

Mr. Kalashnikov, who said the Russian versions of his rifle are superior, and who expressed deep fondness to Russian workers who have long made them, recognized the difficulties in the state agency's complaint.

He remembered that years ago President Boris N. Yeltsin vowed to defend the weapon from market infringement, to no avail. "President Yeltsin said he would do everything," Mr. Kalashnikov said. "But it's not so easy."
http://www.nytimes.com/2004/07/26/in...26russ.html?hp


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Year of the Blog? Web Diarists Are Now Official Members of Convention Press Corps
Jennifer 8. Lee

Jeralyn Merritt had expected the news to come by e-mail rather than by snail mail, otherwise known as the United States Postal Service.

But she had to rip, rather than click, to open the message informing her that she had received press credentials to cover the Democratic National Convention in Boston for her Internet Web log, or blog, at TalkLeft.com, where she offers a running commentary on political and criminal justice issues.

"A big smile broke out on my face and I just went 'Yeah!' " said Ms. Merritt, 54, who works as a criminal defense lawyer in Denver. "It was someone who was judging me on the work that I was doing for free over the last two years and found me worthy."

Even as many networks are reducing their coverage of the increasingly predictable political conventions, the political blogs, which have become a fruitful alternative for individual voices, have been ablaze over the prospect of officially covering conventions for the first time. Ms. Merritt is one of about three dozen bloggers who have been given press credentials for the Democratic convention in Boston, which begins Monday. Another, Ana Marie Cox from the Washington gossip site Wonkette.com, will be working as a correspondent for MTV.

Organizers of the Republican convention have said they plan to issue credentials to 10 to 20 bloggers.

"Whomever they decide to let through the gate is now the press," said Jay Rosen, a journalism professor at New York University who will attend the convention for his blog, PressThink.com, which appraises media coverage. "What the credential means to me is that someone just expanded the idea of the press a little bit."

If the 1952 Republican convention was the first television convention, and the 1924 conventions were the first radio ones, the 2004 election will be remembered because of them, the bloggers insist.
http://www.nytimes.com/2004/07/26/po...gn/26blog.html


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New 'Bourne' Helps Keep Pace Brisk at Box Office
Sharon Waxman

The summer box office continued to steam along at a rapid pace this weekend, with "The Bourne Supremacy" taking in an unexpected $53.2 million and the Michael Moore documentary "Fahrenheit: 9/11" passing the $100 million mark in its fifth week in release.

Despite numerous big-budget disappointments, the summer box office has totaled $2.8 billion so far, running ahead of last summer's pace by $200 million. "The Bourne Supremacy," a $75 million sequel to the 2002 thriller "The Bourne Identity" starring Matt Damon, capitalized on strong word of mouth and enthusiasm for the original. Universal, which produced the film, released a new DVD version of the original in time for the sequel's release.

Universal executives said they did not expect such a strong opening, which rivaled that of far more expensive summer fare. "Unbelievable," said Nikki Rocco, the head of distribution for Universal. "I knew it would be successful, we all felt the buzz, but still."

Universal's other major summer films, the $140 million "Van Helsing" and the $100 million "Chronicles of Riddick," have both been disappointments at the box office.

Meanwhile the anti-Bush documentary "Fahrenheit: 9/11" hit a new landmark this weekend when it surpassed $100 million at the box office, reaching $103.3 million. It was already by far the highest-grossing feature documentary in history, but the new benchmark put the film, which cost $6 million to make, among the summer's top-earning movies.

"This means to me that the film has reached beyond the hard-core, politically involved people, way into the mainstream," Michael Moore, who made the film, said in an interview. "For a film to make over $100 million, you can't exist in a niche."

Bob Weinstein, who distributed the movie independently with his brother, Harvey, said Mr. Moore's documentary "has beaten 10 movies with budgets of $100 million, which goes back to the oldest ideas — good movies, movies with ideas — that's what audiences go to see."

"They do not go to see the budget of a movie," he added.

Among the weekend's disappointments was the performance of Warner Brothers' action movie "Catwoman," which opened this weekend to just $17.1 million at the box office. The movie cost $90 million to make, and a profit appears unlikely.
http://www.nytimes.com/2004/07/26/movies/26BOXO.html


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Commentary: No Matter What You Call It, the Inducing Infringement of Copyright Act Spells Trouble
Fred Wilhelms

Though it’s not aimed solely, or even primarily, at streaming media, the "Inducing Infringement of Copyright Act" should give anyone involved with moving content across the Web cause for concern.

The name has been changed from "Inducement Devolves into Unlawful Child Exploitation Act" to "Inducing Infringement of Copyright Act," but the bill is still commonly known as INDUCE, and that’s what I will call it here. The original name of the bill reflects the political ruse commonly used to fight peer-to- peer networks: that they were a hotbed of child pornography. Unfortunately for Orrin Hatch, the original sponsor, there was a severe shortage of proof of this connection, and much stronger evidence that the great majority of child pornography is traded one-to-one on the Internet via email and IM rather than by P2P.

Under either name, this piece of legislation scares the hell out of me.

What the bill boils down to is giving copyright holders a virtual veto power over any technological development that could possibly be used to distribute copyrighted material. It gives them this power by establishing contributory liability under copyright law for anyone who creates, develops, implements, or distributes technology (hardware or software) that is capable of disseminating copyrighted material without compensation to the copyright holders.

Because of the broad language regarding what constitutes inducement in the current bill, this liability would extend to anyone who even advocates the use of this technology. A couple months ago, Senator Patrick Leahy, one of the bill’s co-sponsors, entered a statement in the Congressional Record lauding Phish (Vermont residents and Leahy constituents), in which he commented favorably on their policy of encouraging fans to record and trade copies of their live performances. This could be found to violate INDUCE.

Because Rock and Rap Confidential, a newsletter of cultural and political commentary, runs a regular column entitled "Home Downloading Tips" (which are actually brief reviews of new CD releases), they could also be found liable for inducing copyright infringement under the act if it is passed with the current language. And the newsletter doesn’t have the advantage of Congressional immunity available to Leahy (though that might not apply, as Article I, Section 6 of the Constitution excludes felonies from immunity).

All the promoters of the bill (including, to no one’s surprise, the MPAA and the RIAA) say the bill will only be used to go after the "bad actors" engaged in promoting out-and-out piracy, but the reach is actually far greater. INDUCE is an overt and direct attempt to overturn the Supreme Court decision in Sony v. Universal Studios, the "Betamax case." That case established that if a device has substantial non- infringing uses, its developers, manufacturers, and distributors could not be found guilty of contributory copyright infringement if the device was also used to make unlawful copies of copyrighted works. For 20 years, the Betamax case has provided a safe harbor for hardware and software creators, protecting them from pre-emptive litigation from the "Big Content" entities intended to drive them out of business by forcing them to incur immense legal fees to defend themselves from these attacks.

Putting the Hammer Down on Innovation

If the Betamax case had been decided the other way, the VCR would never have become a consumer device. No one (at least no one in the U.S.) would have invested time or money in streaming media or dozens of other advancements—including email, CD and DVD burners, large capacity disk drives, DSL connections, the iPod—that have myriad uses unrelated to copyright infringement because their potential "unlawful" use in infringement would have given Big Content the grounds to go after them in court. Even worse, under INDUCE, Big Content can actually go back and sue all the manufacturers and distributors of all the potentially infringing devices we already have. No one seriously thinks that anyone is going to sue Microsoft over Outlook (Microsoft is a member of the Business Software Alliance, which supports the bill), but if someone comes up with next-generation email software, they can count on getting in someone's crosshairs under INDUCE.

The Betamax case provided the legal foundation for the 9th Circuit to find recently that Grokster and Morpheus were not liable for contributory copyright infringement arising from the use of their network protocols for file sharing. Big Content can’t risk having the Supreme Court affirming that decision, so they have to change the ground rules before the case gets there.

The fundamental problem I have with P2P is that the creators don’t get paid for the distribution of their work, and I don’t really buy the arguments that this "free" dissemination encourages people to buy CDs, or that it builds a fan base, or that it promotes their live appearances. The hard numbers really don’t bear these contentions out. INDUCE, however, attacks the wrong part of the problem by attempting to stop technology in its tracks. As the VCR proved, the MPAA’s position in the Betamax case was shortsighted at best, and the current bill proves they and their allies haven’t learned anything in the intervening 20 years.

Rather than figure out how to get paid from the technology, Big Content is supporting INDUCE in order to stop the technology from coming to market. This is just stupid. INDUCE isn’t going to stop hardware and software developers outside the U.S. from working on new technology and bringing it to market. It is going to stop U.S. developers from participating in this growth, just as it will stop U.S. manufacturers, distributors, and retailers from achieving any share of the profits to be made, or employing the people who perform these functions, and no one else is going to be paid, either.

INDUCE gives Big Content a hammer to smash new technology. INDUCE gives Big Content a hammer to smash First Amendment rights to even talk favorably about new technology. If you are as unsettled by this idea as I am, I suggest you at least write someone about it.

Current co-sponsors of the bill are (alphabetically):
Sen. Lamar Alexander (TN)
Sen. Barbara Boxer (CA)
Sen. Hillary Rodham Clinton (NY)
Sen. Thomas A. Daschle (SD)
Sen. Bill Frist (TEN)
Sen. Lindsey O. Graham (SC)
Sen. Patrick J. Leahy (VT)
Sen. Paul S. Sarbanes (MD)
Sen. Debbie Stabenow (MI)

Orrin Hatch, the Chair of the Judiciary Committee, could call for more hearings, or could simply schedule the current bill for a vote. The final bill likely will be reported out of the Committee no later than September, to allow some time for House consideration before the end of the term. While I don’t expect the final version of the bill to be as sweeping in its scope as the current language, I don’t think we should expect much substantive difference, either.

Fred Wilhelms is an entertainment attorney in Nashville, representing recording artists and songwriters on royalty and benefit issues. His clients include Howard Tate, Bettye LaVette, Sam Moore, Mark Farner, and Paul Revere. He has testified before the California Senate Committee on the Entertainment Industry's royalty accounting practices.
http://www.streamingmedia.com/r/prin...ly.asp?id=8739


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Punk Rock's Warped Tour Wins Tech Sponsorsp
Scott Banerjee

Last winter, Vans Warped tour founder Kevin Lyman attended the Consumer Electronics Show to learn more about setting up backstage wireless Internet connections.

The connections he made, however, were of a different type. Technology companies, eager to tap into the Warped tour's young, tech-savvy fan base, have jumped on board as tour partners or sponsors. The 10th annual roadshow kicked off June 25 in Houston with a lineup including such bands as Bad Religion, Good Charlotte, NOFX, Thursday, New Found Glory, Simple Plan, The Vandals and Taking Back Sunday.

The tour's extensive sponsor list includes Memorex, Samsung, Cingular Wireless, Apple Computer, MusicNow, Altnet, TV Desktop, Wraptor, Fuse, AOL and Sony PlayStation2.

Deborah Hernandez, marketing communications manager for Memorex, says the company sees the Warped tour as a way to reconnect with the 18-34 market by giving them an "immediate experience with the music they're passionate about."

Digital download market leader Apple has its own iLife tent on the tour. The tent features iMacs and PowerMac G5s that allow fans to experiment with music and video creation.

Lyman also embraced relationships with companies that promote legal peer-to-peer downloading of music.

Digital content distributor Altnet has provided an infrastructure to sell live performance videos from the tour. Fans can access the videos on the Warped tour Web site or through P2P network Kazaa.

"The independent artists are looking for any way to promote themselves. A lot (of them) aren't opposed to a certain amount of downloading," Lyman says. "A lot of our kids have a greater loyalty to the Warped artists, and these P2P relationships allow fans to support the artists and buy their music through legal ways."

Lee Jaffe, president of Altnet, worked out licensing parameters with more than a dozen independent labels with acts on the tour -- including Epitaph, Vagrant and Artemis. Altnet allows users three free video downloads before it starts charging.

"We're experimenting, and selling video is the new thing," Jaffe says. "Every time we reach out to independent record labels to distribute their work, they say, 'Yes, this is what we want, we want the ability to market to (our) audience.' It's important to connect them directly to their fan base."

"This is a way of leveling the playing field for indie artists trying to get into digital distribution," says Benjamin Osgood, president/CEO of Wraptor parent Free Radical Networks. "They can proactively promote themselves rather than wait for an iTunes to get behind them."
http://abcnews.go.com/wire/SciTech/r...40725_283.html


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Music Industry Taking Cues From File Sharing

Online businesses are adding features such as peer-to-peer networks to boost song lists while protecting copyrights.
Jon Healey

Having condemned file-sharing for five years, the music industry is now trying to co-opt it.

Online music businesses are adding features once found only in file-sharing networks, such as the ability to send free songs to friends and to listen to them on a variety of portable players. And a handful of companies are developing hybrid peer-to-peer networks that encourage sharing but prevent users from violating copyright law.

One example is Mercora Inc. of Santa Clara, Calif., a fast-growing start-up that lets people listen to songs from other users' computers. Mercora's software turns each user's computer into an Internet radio station that any other Mercora user can tune in, enabling them to hear — but not download — a wide array of tracks.

Meanwhile, one of the leading peer-to-peer networks has agreed to transform itself from a hotbed for piracy into a haven for legal file-sharing. IMesh.com Inc., which struck a truce with the major record companies last week, pledged to revamp its network by the end of the year.

It remains to be seen whether any of these efforts can compete effectively with popular file-sharing networks such as Kazaa and EDonkey, which are used by millions of people around the world.

"You can't displace piracy with legal services by being as good as a pirate service, because pirate services have no restrictions," analyst Josh Bernoff of Forrester Research said. Instead, Bernoff said, legitimate outlets should compete by providing more innovative, reliable and easy-to-use services.

Unlike the songs offered by legitimate outlets, which are wrapped in electronic locks to deter piracy, the music on file-sharing networks can be shared freely and played on any device without regard to copyright law.

Some legal services are hoping to win over customers by offering the same features — to the extent they can.

MusicMatch Inc. of San Diego, which operates a downloadable music store and an online radio service, is planning a $10-a-month offering that will let subscribers play as many songs as they wish from the company's online jukebox. They will also be able to make songs available to their friends for free.

There's a catch, of course — non-subscribing friends can only play each track three times. If they want to hear a song again, they'll be invited to subscribe to the monthly service.

For Mercora, sharing songs is fundamental to the business.

Like Kazaa and EDonkey, the start-up relies on users to provide the free songs that are the lifeblood of its network. As more users sign on, more songs become available, attracting more music fans.

To keep everyone on the right side of the law, Mercora doesn't let users copy songs from each other. Instead, they merely listen to tracks from other users' collections. The tracks are chosen by Mercora's software, which tailors playlists to meet restrictions that Congress imposed on Internet radio stations. That way, the service qualifies automatically for a broadcasting license.

"Our whole premise was based on the fact that the reason people went to peer-to-peer networks was the unlimited discovery of music," said founder Srivats Sampath, who previously served as chief executive of computer security software maker McAfee.com.

The 2-month-old Mercora service is free today, but the company may decide to charge its most active users a small monthly fee to cover the royalties it pays to labels, artists and music publishers. Sampath said the company also planned to generate fees by selling advertisements and running an online marketplace for Mercora members to buy and sell music-related goods.

Bridgemar Services Ltd., which owns IMesh, could bring the music industry even closer to embracing peer-to-peer technology. But it has yet to reveal how its users will find and share songs legally, and the major record companies have not said how they will support the new service.

The most likely approach for IMesh, according to music-industry executives, is to use technology that manages what users share and download to prevent them from copying songs without permission. That sort of technology is being pitched by several companies, including Audible Magic Corp. of Los Gatos, Calif., Kokopelli Networks Inc. of Ottawa and Snocap Inc. of San Francisco, which was launched by former Napster creator Shawn Fanning.

Of course, clamping down on what users can share would rob IMesh of one of the most compelling features of today's file-sharing networks: the virtually unlimited selection of songs, including bootlegged and homemade versions of songs that were never officially released.

Nevertheless, Audible Magic Chief Executive Vance Ikezoye said he was encouraged by the labels' and IMesh's stated wish to blaze a trail to new business models.

"The industry I think has gotten some criticism for not supporting digital media and new models," he said, "and I think this is a positive direction."

In the meantime, RealNetworks Inc. is trying to chip away at another advantage of the pirate networks by making it easier to play legally downloaded songs on any device the consumer chooses, provided it uses anti-piracy technology from Real, Apple Computer Inc. or Microsoft Corp.

On Tuesday, the Seattle company is expected to unveil software that can transfer songs bought from Real's store to any MP3 player or other gadget. Other stores support only one kind of anti-piracy technology; for example, Apple's iTunes Music Store works only with Apple's iPods.

Real's "Harmony" technology will give people who buy music the same flexibility as those who download it illegally, said Richard Wolpert, Real's chief strategy officer.

Harmony will initially be available only with RealPlayer software, and the company is hoping to persuade rivals to use it with their music services as well, Wolpert said.

In the short term, analyst Michael Gartenberg of Jupiter Research said, the primary beneficiary of the new technology is Real, whose store lags far behind Apple's.

"It solves a huge problem for Real, which is the fact that there simply aren't that many devices on the market that support Real's music store," he said, adding that the success of Apple store has been driven by the popularity of the iPod.

Musicmatch and at least three other online music outlets — Roxio Inc.'s Napster, MusicNet Inc. and Circuit City Stores Inc.'s MusicNow — also plan to add more flexibility to their subscription services. Starting this year, their subscribers will be able to take hundreds of songs with them wherever they go for about the price of one CD a month.

The key is new software from Microsoft that enables subscribers to move the songs they rent to portable music players. Microsoft found a way to satisfy the major record companies, which insisted that portable players be able to disable songs if the user's subscription lapsed.
http://www.latimes.com/business/la-f...-home-business


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TiVo's Fight With Content Owners

Hollywood studios and the US National Football League have protested to the Federal Communications Commission in an effort to stop digital video recorder maker TiVo extending the reach of its technology, allowing users to watch TV shows and movies outside the home.

The objectors argue that the new technology could compromise copyrights of material broadcast digitally, which offers higher sound and video quality than at present, says the Washington Post. They fear computer buffs would capture programmes and start exchanging them online, just as millions of music files are illegally distributed through file-sharing.

The TiVo battle marks an escalating war in Washington as content owners struggle to keep control of copyright works that can be digitally stored, copied, manipulated and redistributed. Public advocacy groups and some technology firms argue that content owners are seeking to revoke long-standing consumer rights to "fair use" of artistic works.

With 1.6m users, TiVo's technology lets users copy programmes for later viewing, pause live shows, skip commercials and otherwise manipulate their viewing, though they have until been unable to send copied programmes to another device apart from "burned" DVD copies.

Now TiVo plans to make its copies more portable, starting this autumn with a system for transferring programmes from the TiVo box to a computer via a small hardware module, from where they could be sent to other devices within the home and viewed on them.
http://msnbc.msn.com/id/5482232/%20


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Film division, booming DVD sales contribute to growth

Recovery at AOL Helps Time Warner Report Strong Profit
Geraldine Fabrikant

Time Warner posted solid second-quarter earnings yesterday as America Online, long its most troubled operation, showed continued signs of recovery. But the company now faces investor concerns about growth in the cable operation, its largest and most stable unit.

In addition, the troubles at AOL may not be entirely over. The company said for the first time yesterday that it was reviewing accounting at AOL Europe before 2002 and that the review could lead to financial restatements. Time Warner said earlier this year that the Securities and Exchange Commission and the Justice Department were looking at how the company handled $400 million that AOL received from Bertelsmann for advertising.

For the second quarter, Time Warner said that total revenue rose 9.7 percent, to $10.89 billion, from $9.92 billion in the period a year earlier, fueled by strong performances in its film and cable businesses. Net income fell to $777 million, or 17 cents a share, from $1.06 billion, or 23 cents a share, in the period a year earlier.

The 2003 figure, however, was buoyed by several one-time gains. Excluding those, net income in the period would have been $536 million, or 11 cents a share.

Nevertheless, shares of Time Warner fell 26 cents yesterday, or 1.5 percent, to $16.65.

Investors worried yesterday about the drop in cable subscribers as well as less-than-robust growth of high-speed data customers at Time Warner's cable unit, which is the company's largest single contributor to cash flow.

And while the film division turned in a stellar performance, hit films are difficult to forecast. That means investors cannot necessarily anticipate comparable growth in future quarters.

The company said that over all, operating income before depreciation and amortization rose 30 percent, to $2.6 billion. However, excluding one-time items, operating income would have been up about 17 percent.

Dennis Leibowitz, who heads Act II Partners, a media hedge fund, said that while the corporate performance was strong, investors were concerned because Time Warner, along with the Comcast Corporation, was showing the pressure of competition from phone companies and the satellite business.

Operating income at the cable unit rose 9 percent, to $817 million, making it the largest cash-flow producer at Time Warner. Revenue rose 10 percent, to $2.1 billion. But the number of basic cable subscribers dropped 21,000 from the previous quarter, to 10.9 million.

While the summer holidays traditionally result in slower growth in cable subscribers, analysts noted that this was the first time that Time Warner had actually lost subscribers.

Although the company added 127,000 net residential high-speed data subscribers in the quarter, analysts had been expecting a greater increase. Mr. Leibowitz added that the high-speed data business was crucial at Time Warner because cable is a maturing business and high-speed data has been an engine for growth.

The slower growth underscored the growing aggressive competition from phone companies like Verizon, which are making inroads in the fight for broadband customers and could continue to win new customers at the expense of the cable operators, analysts said.

But even investors who worried about the cable unit were encouraged by the performance of Time Warner's film division. Revenue rose 12 percent, to $3.09 billion, and operating income rose 23 percent, to $417 million, after excluding a $43 million gain from an asset sale in 2003.

Box office releases in the quarter included "Harry Potter and the Prisoner of Azkaban" and "Troy." "Harry Potter" generated $703 million at the box office worldwide and "Troy" has made $484 million. Time Warner said that through July 5, the Warner Brothers studio had generated $714 million in revenue and New Line had $197 million in box office receipts, combining for an industry-leading 19.4 percent of the box office.

Revenue gains were driven by strong theatrical and television home video sales as the studios delivered feature films and television series to the booming DVD market. Sales of New Line's "The Lord of the Rings" and Warner's "Harry Potter" helped lift total sales.

At America Online, Time Warner raised the profit forecast for the unit after advertising sales increased for the first time in three years. They rose 23 percent while revenue increased 2 percent, to $2.2 billion. The company now expects percentage growth in operating income before depreciation and amortization this year to be in the low to mid-teens, up from its earlier forecast of low double digits.

AOL's operating income before depreciation and amortization in the second quarter rose 13 percent, to $487 million. That increase came despite a decline in the number of United States subscribers, which fell 668,000 in the quarter, to 23.4 million.

As to expansion plans, investors have been waiting to see how aggressively Time Warner would pursue an acquisition of Metro-Goldwyn-Mayer. But there was little clue yesterday as to how eager the chief executive of Time Warner, Richard D. Parsons, is to buy MGM.

During a meeting in Manhattan yesterday with analysts, Mr. Parsons said the company would be "prudent and disciplined." He added that the company was looking at every option, including a share buyback. "We have our eye on that needle as well," Mr. Parsons said.

As to the possibility of buying the cable company Adelphia, a Time Warner spokesman said, that it was too early to talk about any deal because Adelphia is still in bankruptcy.

At Time Warner's cable networks unit, cash flow rose 84 percent, to $661 million, but 23 percent excluding a one-time charge in the period a year earlier. Revenue rose 5.7 percent, to $2.3 billion.

Peter J. Mirsky, who follows Time Warner for Oppenheimer & Company, noted that advertiser spending at the Turner Networks was up only 8 percent.

"We felt that the advertising revenue growth seems light compared to Viacom's MTV Group, where revenue grew about 20 percent, for example," Mr. Mirsky said.

A company spokesman noted that the Time Warner unit includes CNN, where comparisons with last year, which included the high ratings from the war in Iraq, were difficult.

The publishing unit's cash flow, excluding a one-time charge in 2003, rose 9 percent, to $357 million. Revenue increased 4 percent, to $1.47 billion. The unit owns People, Sports Illustrated, Time and Fortune, among other magazines, and a book company.
http://www.nytimes.com/2004/07/29/bu...ia/29time.html

[JackSpratts]

Blockbuster Tries a Remake as Movie-Rental Business Transforms
Geraldine Fabrikant

In a recent weeknight, Andy Landsman, a lanky, dark-haired Manhattan high school senior, was checking out the DVD rentals at a Blockbuster store on Manhattan's Upper East Side that he and his girlfriend, Georgina Blackett, frequent.

But Mr. Landsman's regular visits may soon be coming to an end. "I've been too lazy to join Netflix, but I am about to sign up,'' he said, referring to the online video-rental service. The reason for his change of heart is his purchase of a DVD player, which has increased his appetite for watching films. The idea of not leaving the comfort of his living room to pick them up is increasingly appealing.

Although analysts have been predicting the collapse of video-rental chains for years, the departure of the teenager, Mr. Landsman, from Blockbuster's active customer base of 20 million is a particularly foreboding one.

The rise of online rental services like Netflix and the booming sales of DVD's at mass merchants have been eroding profitability at Blockbuster and other chains. And as cable operators put their marketing clout behind video-on-demand offerings, which allow customers to rent a movie by pushing a few buttons on their remotes - and not worry about late fees or schlepping DVD's back to the stores or the post office - the pressure appears more acute than ever.

"Blockbuster has a great brand, but it is fighting for its life,'' said Sandy Brasher, a research analyst at Rice Voelker.

So as the rental chain's parent, Viacom, prepares to spin off its 82 percent stake this October, Blockbuster is hurriedly remaking the company. To blunt Netflix's inroads, Blockbuster is testing its own online subscription program, but at a lower price ($19.95 a month compared with $21.95) and with the ability to pick up a film the same day from a store rather than wait until it arrives in the mail.

Meanwhile, the company has embraced video games. Two years ago, it bought GameStation, a chain of 64 video game stores in Britain, and has since added more than 100 stores and reconfigured existing Blockbuster stores to accommodate internal video game outlets. In the United States, it acquired Rhino Video Games, a chain of 40 stores in the Southwest, and began offering video games within Blockbuster stores under the name Game Rush. An in-store video game pass, for $19.95 a month, lets customers rent as many games as they want, one game at a time. The average cost of renting a single video game is $6.

And Blockbuster is expanding programs that let customers trade both videos and video games. The strategy is to "transform Blockbuster from a place you go to rent a movie to a place you go to rent, buy or trade movies and games: new or used, in store or online,'' Blockbuster's chief executive, John F. Antioco, said. "We want to become a complete source of movies and games."

Wall Street has yet to be impressed. On Thursday the company announced that, in part because if its plans to spend aggressively to expand these businesses, earnings for the year would be only about $1.04 a share, rather than the more than $1.20 a share Wall Street expected. Mr. Antioco also said Blockbuster's rental business would be down in the third quarter, in the mid-single-digit range, although some analysts were expecting a slight increase.

Tom Adams of Adams Media Research, said: "The business is not just mature and flat. It is declining pretty substantially.'' He estimated that revenue for the movie-rental industry was down 12 percent to 15 percent this year.

Indeed, Blockbuster's recent quarter reflects industry pressures. Revenue increased 2.1 percent, to $1.4 billion; net income fell to $46.8 million from $61.2 million in the comparable quarter last year, in part because revenue at stores open at least a year fell 4.4 percent. The stock closed Friday at $13.26 after hitting a 52-week low of $12.79 a day earlier.

The revamped strategy is too new to gauge its success. But Blockbuster can break even on its video game business at a lower revenue level than its competitors, because there is no additional rental expense and it can use existing staff.

To some critics, including Mr. Brasher of Rice Voelker, Netflix faces an even more challenging future than Blockbuster. "Blockbuster has the real estate,'' Mr. Brasher said. "The average Joe who lives in Plano, Texas, and has a $50 DVD player from Wal-Mart is not going to spend $22 a month ad infinitum at some subscription place.''

Netflix's chief executive, Reed Hastings, remains bullish, despite the fact that rapidly rising marketing costs affected the company's performance so much that, when the second-quarter results were disclosed earlier this month, its stock fell 40 percent, to under $20, in two days. Revenues nearly doubled to $120.3 million while net income fell 13 percent, to $2.9 million.

Mr. Hastings said the costs were part of the company's normal efforts to expand its subscriber base, which stands at 2.1 million. He said he thought that there was sufficient appetite for online services to let both Netflix and Blockbuster prosper.

That, of course, does not address the question of what will happen to some of the smaller video retailers like Hollywood Entertainment and the Movie Gallery. Hollywood Entertainment recently agreed to an $840 million buyout by Leonard Green & Partners, a private buyout firm. The Movie Gallery, while facing pressure from a weak rental market, operates in rural markets too small to attract Blockbuster.

All these competitors must deal with the encroaching threat of video on demand and its tantalizing option of impulse transactions. By year-end, it is expected to be in about 23 million of the 90 million American homes connected to cable, according to Kagan World Media, the research firm.

But the video-rental companies have some breathing room. The movie studios, not wanting to tamper with an increasingly lucrative revenue source, still release film on DVD and videotape before they release to video on demand, said Arvind Bhatia, who follows the industry for Southwest Securities. And the video-on-demand offerings are still relatively slim, compared with the rental chains and online services.

Some industry experts said they thought there was plenty of room for a variety of distribution outlets. "They have been saying that Blockbuster would disappear since it started in the mid-1980's, but these new technologies are always additive,'' said Scott Hettrick, editor in chief of DVD Exclusive, a trade magazine for the video industry.

Besides, the lure of a crowd and wide selection still resonates with people like Georgina Blackett, Mr. Landsman's girlfriend. "It's more fun to come to Blockbuster to look at all the movies,'' she said.
http://www.nytimes.com/2004/07/26/bu...l?pagewanted=2


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Hatch, Committee Should Be More Open-Minded on P2P
Jon Newton

"Why is Congress turning a deaf ear towards learning the truth and hearing all sides of the story?" StreamCast Networks CEO Mike Weiss asks. In the past, Congress, in effect, has put stakeholders together and told them to work out compromises and solutions that Congress could then consider. "That's what should be done here," Weiss declares.

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U.S. Sen. Orrin Hatch and other parties with a stake in the peer-to-peer (P2P) wars should meet with commercial P2P industry companies to talk about the so-called INDUCE Act.

This is the point of view expressed by StreamCast Networks CEO Mike Weiss, one of several industry leaders who oppose the act as overreaching. He questions why no one from the industry was invited to last Thursday's Senate Judiciary Committee hearing on the legislation.

"Why is Congress turning a deaf ear towards learning the truth and hearing all sides of the story?" Weiss asks.

In the past, Congress, in effect, has put stakeholders together and told them to work out compromises and solutions that Congress could then consider. "That's what should be done here," Weiss declares.

Indirect Liability

INDUCE (Inducement Devolves into Unlawful Child Exploitation) is Hollywood's "overreaching new form of indirect liability that will force technology companies of all kinds to 'ask permission' before innovating for fear of ruinous litigation if they don't," Electronic Frontier Foundation (EFF) lawyer Fred Von Lohmann says.

It's being spearheaded by Hatch, who also has led other initiatives on behalf of Hollywood, such as PIRATE with Sen. Pat Leahy or Hollywood-helpful acts such as Artists' Rights and Theft Prevention Act (ART) from Senators Dianne Feinstein and John Cornyn.

ART would establish new federal crimes for the unauthorized recording of movies in cinemas or other venues and for "other acts relating to copyright infringement." PIRATE amends federal copyright law so the US attorney general can "commence a civil action against any person who engages in conduct constituting copyright infringement."

Copyright Cartel

Some 42 major companies, including Google , NetCoalition, Novell (Nasdaq: NOVL) and Yahoo (Nasdaq: YHOO) , are actively opposing INDUCE, saying it would "chill innovation and drive investment in technology (and accompanying jobs) overseas."

Adam Eisgrau, executive director of P2P United, the P2P industry trade and lobby group, says INDUCE is "the fearsome and flawed product of a perfect policy storm." P2P United's members include such companies as StreamCast (Morpheus), FreePeers (BearShare), Manolito P2P (Blubster), Grokster (Grokster) and MetaMachine (eDonkey2000).

Eisgrau says that if INDUCE is passed into law, it would be because "the raw power of America's copyright cartel has grown to the point that...Congress will have granted it control over the very climate on which our entire information economy, not just the entertainment industry, depends."

But Hatch is determined to see INDUCE enacted.

"If you help us, we just might get it [INDUCE] right, but if you don't, we're going to do it [anyway]," Hatch is quoted as saying in a Washington Post story.

Misunderstanding of P2P Software

Showing that he indeed does need help on this matter, Hatch also expressed on the Judiciary Committee Web site and during a hearing that "When used as intended, this software [P2P] automatically redistributes every file downloaded. This makes uploading and redistribution automatic and invisible to the average user."

But Weiss disagreed, saying, "At no time and under no circumstances are users' hard drives, or indeed any files in their computers, automatically made available to other users."

Hatch, who has received $159,860 in contributions from the entertainment industry, is infamous for making mistakes in representing P2P technology and practices that are picked up and quoted by the mainstream media as facts.

With him on the Judiciary Committee, and amounts they have received from the entertainment industry, are: Charles Schumer, $509,635; John Edwards, $314,547; Arlen Specter, $273,800; Dianne Feinstein, $272,316; Patrick Leahy, $221,950; Edward M. Kennedy, $200,708; Mike DeWine, $111,199; Dick Durbin, $81,100; Joseph Biden, $75,774; Chuck Grassley, $73,572; Lindsey Graham, $72,523; Russ Feingold, $45,450; and Herb Kohl, $250. The amounts come from http://www.opensecrets.org.

Accuracy of Information

Weiss contended that when Hatch introduced the INDUCE legislation, he presented a multipage indictment of P2P companies, "littered with inaccurate and misleading statements about legitimate P2P software providers."

Weiss urged the lawmakers to delve further into the issue and seek out accurate information. "I particularly urge Senator Hatch to do so before repeating inaccuracies that appear to be speaking points drafted by entertainment lobbyists and transmitting these falsities publicly and on the record in front of his Senate colleagues," Weiss said.

Hatch -- accused of using unlicensed software on his official Web site -- seems to believe people who download copyrighted songs should have their computers automatically destroyed, an attitude for which he was awarded the sobriquet "The Terminator."

Among his supporters is Marybeth Peters, the U.S. Register who, among other things, wants the Betamax case, under which the movie studios tried to keep the first consumer VCRs off the market, reopened.

The U.S. Supreme Court foiled the attempt, stating: "It seems extraordinary to suggest that the Copyright Act confers upon all copyright owners collectively, much less the two [studios] in this case, the exclusive right to distribute VCR's simply because they may be used to infringe copyrights. That, however, is the logical implication of their claim."
http://www.technewsworld.com/story/35400.html


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ILN News Letter

Court Rules On ECPA Claim Against AOL For Disclosing Info

A federal court in Virginia has issued its decision in a suit launched by a Connecticut subscriber against AOL after the ISP wrongfully disclosed plaintiff's subscriber information to a Connecticut law enforcement officer in response to a warrant application that had not been signed by a judge. The court ruled that the case may proceed on the question of whether AOL can rely on its good faith as a defence against the ECPA claim. Case name is Ellis v. AOL.

Korean Student Fined For Spreading Parodies On The Internet

A South Korean court has fined a college student 1.5 million won for spreading parodies on the Internet that criticized a particular party in advance of a national election. The court ruled that the parodies went beyond criticism and thus violated that country's election law.
http://english.chosun.com/w21data/ht...407220040.html


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Beijing Blocks Overseas Websites, Shuts Local Ones In "War" Against Porn
AFP

Beijing has blocked 988 overseas websites and shut down 67 local ones as part of a nationwide campaign to weed out pornographic content on the Internet.

The websites shut down during the July 6-21 special operation included Hong Kong websites. The popular search tool Google was also inaccessible this week. So far, the Chinese capital has arrested 13 people suspected of operating the websites, the Beijing Youth Daily said. Police received 10,660 tips from the public, a majority of which were complaints about inappropriate sexual content on the Internet. Other complaints involved pornographic mobile phone short messages, the report said. The central Chinese government this month launched a "people's war" against pornography on the Internet, giving websites a deadline until September to rid themselves of indecent content or lose their license to publish decent material, such as news. Officials have so far identified 500 websites across China that carry pornographic pictures and film clips, the China Daily reported. Hundreds of websites, including the most influential ones, publish "indecent or even pornographic content" to attract users, the Xinhua news agency had reported. The crackdown on Internet porn reflects two top concerns of the Chinese leadership, about the ethical standards of the young and about the subversive potential of the Internet. With 80 million registered users in China, the government is finding it increasingly difficult to control the Internet, but that has not stopped it from trying. State media reported last month that the government had suspended the registration of new Internet cafes, following a three-month sweep in which it closed 16,000 existing ones.
http://uk.news.yahoo.com/040724/323/eyqie.html


Rights Group Accuses Yahoo, Google Of Aiding Chinese Internet Censorship
AFP

An international press freedom group has lashed out at Yahoo and Google -- the two most popular Internet search engines -- for allegedly cooperating with the Chinese government to crackdown on web access.

The Paris-based Reporters Without Borders (RSF) said it, "deplores the irresponsible policies of United States Internet firms Yahoo! and Google in bowing directly and indirectly to Chinese government demands for censorship." It called on the United States to apply the principles of its Global Internet Freedom Act on its private sector's activities in "some of the world's most repressive regimes." The Global Internet Freedom Act, passed by the US House of Representatives in July 2003, aims to combat online censorship imposed by governments around the world. RSF said it appealed to Yahoo chairman and chief executive Terry Semel last December but received no reply. The rights watchdog claimed Yahoo had been censoring its Chinese- language search-engine for several years and rival firm Google, which recently took a share in Baidu, a Chinese search-engine that filters a user's findings, seemed ready to go the same way. In their efforts to conquer the Chinese market, the two firms are "making compromises that directly threaten freedom of expression," it said in a statement. A keyword search in Yahoo's Chinese language site on "Tibet independence" Tuesday did not display any result, while "Taiwan independence" produced only mainland Chinese websites which condemn the move. The same search on Google returned no listing for "Tibet independence" but "Taiwan independence" displayed a listing which included Taiwanese sites. They were blocked however when accessed. A search of the name of one of China's most high profile dissidents, Wei Jingsheng, on Yahoo returned only mainland sites critical of him. A similar search on Google returned with a screen saying the site cannot be displayed. Neither Google nor Yahoo were immediately available for comment Tuesday. Other US high-tech firms such as Cisco Systems have also helped the Chinese government acquire sophisticated technical means to spy on the Internet, its users and the messages they send, RSF claimed. It said Cisco had sold several thousand routers to enable the regime to build an online spying system to spot supposedly subversive keywords in messages. Beijing has long censored hundreds of websites of Western media outlets, political and religious dissidents and others that are viewed as a threat to the Communist regime. RSF has also written to Lorne Craner, US assistant secretary of state for democracy and human rights and Earl Wayne, assistant secretary of state for economic and business affairs.
http://uk.news.yahoo.com/040727/323/eyw8r.html


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Millions Of Web Users Still Affected By Government Ban
Andrew Petty

Exactly a month ago, the Ministry of Information and Communication said it was blocking from viewers some 40 Web sites that could possibly contain footage of the beheading of hostage Kim Sun-il.

Now, the ministry says it has no idea how many sites are blocked and Internet viewers say millions of users are affected by the ban, due to a blanket procedure that shut off entire domains.

Despite these broad stroke efforts, the execution video still remains accessible to Internet surfers in Korea.

The ministry ordered its own ethics committee to handle the situation, in which various internet service providers were asked to close domains that could possibly contain sites with the video, an official said.

By casting this wide net, it shut off domains that offer pages to Internet users who want to maintain an online journal, also known as "blogs." Internationally popular sites like blogspot.com, blogger.com, typepad.com and several others have millions of registered authors.

The ethics committee was told by the ministry to find and block sites that contain "yeopgi," a Korean word for perverted and gruesome content. The government ordered the ban believing the footage showing Kim's murder would further anger citizens already outraged by the slaying.

Kim was kidnapped on May 31 and beheaded on June 22 by Islamic militants who demanded that Seoul scrap its plan to send an additional 3,000 troops to Iraq. He was a translator working for a supplier to the U.S. military.

Somehow, many sites which have nothing to do with Kim Sun-il have been blocked.

Bloggers wonder why the government did not take more careful measures in blocking the video so they would not suffer because of measures aimed at the voyeuristic few.

The ministry admits it did not target these or any other writers on the Internet. But it declined to say whether it made a mistake in its procedure to stop the video.

"They took the easy way out." said Charlie Reeder, who writes a blog titled "Budaechigae." He explained that it is possible to block individual Web sites but would take longer to do this procedure.

The case caught international attention with a recent article published on the issue by a leading technology magazine, Wired, causing further embarrassment to the ministry, which has not responded to bloggers' emails concerning the subject.

A month after Kim's beheading, the ministry does not know when it will remove the ban. However, the banned Web sites can still be accessed through mirror sites, or anonymous Web browsers like www.unipeeek.com.

The ministry is facing an increasing heap of criticism for its action.

Some bloggers expected better decision-making from a nation that has the highest Internet user rate in the world and proudly professes to be a leader in technology.

"By calling Korea an Internet power, the MIC is basically shooting itself in the foot with this ban. This is not going to make a good impression on the rest of the world," said Kevin Kim, who maintains a blog titled the "Big Hominid."

Many compare the measure to bans that communist China often uses to block out anti-state information.

Weeks before Kim's murder, a young American businessmen living in Iraq was also captured and beheaded. The video tape of Nicholas Berg's death was shown almost in its entirety on Korean TV networks, including MBC. Many feel that the government is being unfair by giving special treatment to a video of a Korean.

"It's different when Koreans see another Korean get killed. It's a different feeling than seeing a foreigner die," said a ministry official who did not want to be identified.
http://www.koreaherald.co.kr/SITE/da...0407230027.asp


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Music Industry Taking Cues From File Sharing

Online businesses are adding features such as peer-to-peer networks to boost song lists while protecting copyrights.
Jon Healey

Having condemned file-sharing for five years, the music industry is now trying to co-opt it.

Online music businesses are adding features once found only in file-sharing networks, such as the ability to send free songs to friends and to listen to them on a variety of portable players. And a handful of companies are developing hybrid peer-to-peer networks that encourage sharing but prevent users from violating copyright law.

One example is Mercora Inc. of Santa Clara, Calif., a fast-growing start-up that lets people listen to songs from other users' computers. Mercora's software turns each user's computer into an Internet radio station that any other Mercora user can tune in, enabling them to hear — but not download — a wide array of tracks.

Meanwhile, one of the leading peer-to-peer networks has agreed to transform itself from a hotbed for piracy into a haven for legal file-sharing. IMesh.com Inc., which struck a truce with the major record companies last week, pledged to revamp its network by the end of the year.

It remains to be seen whether any of these efforts can compete effectively with popular file-sharing networks such as Kazaa and EDonkey, which are used by millions of people around the world.

"You can't displace piracy with legal services by being as good as a pirate service, because pirate services have no restrictions," analyst Josh Bernoff of Forrester Research said. Instead, Bernoff said, legitimate outlets should compete by providing more innovative, reliable and easy-to-use services.

Unlike the songs offered by legitimate outlets, which are wrapped in electronic locks to deter piracy, the music on file-sharing networks can be shared freely and played on any device without regard to copyright law.

Some legal services are hoping to win over customers by offering the same features — to the extent they can.

MusicMatch Inc. of San Diego, which operates a downloadable music store and an online radio service, is planning a $10-a-month offering that will let subscribers play as many songs as they wish from the company's online jukebox. They will also be able to make songs available to their friends for free.

There's a catch, of course — non-subscribing friends can only play each track three times. If they want to hear a song again, they'll be invited to subscribe to the monthly service.

For Mercora, sharing songs is fundamental to the business.

Like Kazaa and EDonkey, the start-up relies on users to provide the free songs that are the lifeblood of its network. As more users sign on, more songs become available, attracting more music fans.

To keep everyone on the right side of the law, Mercora doesn't let users copy songs from each other. Instead, they merely listen to tracks from other users' collections. The tracks are chosen by Mercora's software, which tailors playlists to meet restrictions that Congress imposed on Internet radio stations. That way, the service qualifies automatically for a broadcasting license.

"Our whole premise was based on the fact that the reason people went to peer-to-peer networks was the unlimited discovery of music," said founder Srivats Sampath, who previously served as chief executive of computer security software maker McAfee.com.

The 2-month-old Mercora service is free today, but the company may decide to charge its most active users a small monthly fee to cover the royalties it pays to labels, artists and music publishers. Sampath said the company also planned to generate fees by selling advertisements and running an online marketplace for Mercora members to buy and sell music-related goods.

Bridgemar Services Ltd., which owns IMesh, could bring the music industry even closer to embracing peer-to-peer technology. But it has yet to reveal how its users will find and share songs legally, and the major record companies have not said how they will support the new service.

The most likely approach for IMesh, according to music-industry executives, is to use technology that manages what users share and download to prevent them from copying songs without permission. That sort of technology is being pitched by several companies, including Audible Magic Corp. of Los Gatos, Calif., Kokopelli Networks Inc. of Ottawa and Snocap Inc. of San Francisco, which was launched by former Napster creator Shawn Fanning.

Of course, clamping down on what users can share would rob IMesh of one of the most compelling features of today's file-sharing networks: the virtually unlimited selection of songs, including bootlegged and homemade versions of songs that were never officially released.

Nevertheless, Audible Magic Chief Executive Vance Ikezoye said he was encouraged by the labels' and IMesh's stated wish to blaze a trail to new business models.

"The industry I think has gotten some criticism for not supporting digital media and new models," he said, "and I think this is a positive direction."

In the meantime, RealNetworks Inc. is trying to chip away at another advantage of the pirate networks by making it easier to play legally downloaded songs on any device the consumer chooses, provided it uses anti-piracy technology from Real, Apple Computer Inc. or Microsoft Corp.

On Tuesday, the Seattle company is expected to unveil software that can transfer songs bought from Real's store to any MP3 player or other gadget. Other stores support only one kind of anti-piracy technology; for example, Apple's iTunes Music Store works only with Apple's iPods.

Real's "Harmony" technology will give people who buy music the same flexibility as those who download it illegally, said Richard Wolpert, Real's chief strategy officer.

Harmony will initially be available only with RealPlayer software, and the company is hoping to persuade rivals to use it with their music services as well, Wolpert said.

In the short term, analyst Michael Gartenberg of Jupiter Research said, the primary beneficiary of the new technology is Real, whose store lags far behind Apple's.

"It solves a huge problem for Real, which is the fact that there simply aren't that many devices on the market that support Real's music store," he said, adding that the success of Apple store has been driven by the popularity of the iPod.

Musicmatch and at least three other online music outlets — Roxio Inc.'s Napster, MusicNet Inc. and Circuit City Stores Inc.'s MusicNow — also plan to add more flexibility to their subscription services. Starting this year, their subscribers will be able to take hundreds of songs with them wherever they go for about the price of one CD a month.

The key is new software from Microsoft that enables subscribers to move the songs they rent to portable music players. Microsoft found a way to satisfy the major record companies, which insisted that portable players be able to disable songs if the user's subscription lapsed.
http://www.latimes.com/business/la-f...,4128712.story


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Apple Investigates RealNetworks' Software
AP

Apple Computer Inc. said the company is ``stunned'' at a move by RealNetworks Inc. to distribute software that lets customers play music from Real's song download store on Apple's iPod.

Apple said it is investigating the implications of RealNetworks' actions under the Digital Millennium Copyright Act and other laws.

The company said it was ``stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod.''

Apple said it is highly likely that Real's Harmony technology will cease to work with current and future iPods when the company updates the music player's software.
http://www.nytimes.com/aponline/tech...orks-IPod.html


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Cellphones, Say Hello to iTunes

Starting next year, users of Apple Computer's iTunes music service will be able to play songs on some Motorola cellphones, the companies said late Monday.

The agreement is the first for the cellular phone industry, which is eager to add functions to phones to bring in additional revenue.

For Apple, the deal could help it keep the lead in the online music market, which promises to get even more competitive later this year with the arrival of Microsoft.

Customers of iTunes will be able to transfer possibly a dozen to a few dozen songs from their PC or Mac to their phone over a cable or wireless connection, said Steven P. Jobs, Apple's chief executive.

The new cellphones will ship with new Apple software, called iTunes Mobile Music.

Mr. Jobs said he called Motorola's chief executive, Edward J. Zander, soon after Mr. Zander took over in January to suggest that the two companies work together on the project.

The new music phones are just one example of next-generation phones Mr. Zander said the company has planned.
http://www.nytimes.com/2004/07/27/te...y/27music.html


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Verizon's Earnings Jump Five Times Higher
AP

A 25 percent surge in wireless services sales helped boost Verizon Communications Inc.'s second-quarter profit five times higher from a year ago, the company said Tuesday. The results beat Wall Street expectations.

The nation's largest telecom company, based in New York, earned $1.8 billion, or 64 cents a share, up from $338 million, or 12 cents a share, in the year-ago quarter. Revenues for the quarter were $17.84 billion, compared with $16.83 billion a year before.

Analysts polled by Thomson First Call had been expecting earnings of 60 cents a share.

The nation's largest telecom company, based in New York, said about 50 percent of its residential customers buy ``bundles'' of service, which package Verizon's local service with either long-distance or DSL. Rival AT&T Corp. announced last week that it would stop competing for residential customers, saying a recent regulatory ruling would increase its costs of providing local service and make it impracticable to bundle services together.

During the quarter, however, Verizon restated and reduced the number of its long-distance customers by 1.5 million, following an inquiry by the Securities and Exchange Commission. Despite the reduction, the company still reported a year-over-year increase, to 16.8 million long-distance customers, from 13.8 million for the same period a year ago.

Sales in the company's wireless division were 25 percent higher than they were for the year-ago quarter. Verizon said its wireless division, which it jointly owns with the United Kingdom's Vodafone Group PLC, has 40.4 million wireless customers. The division's profit margin widened and its customer churn rate, a measure of how many customers leave each month, hit a company record-low.

The company said it also installed 52 percent more DSL lines than it had in the year-ago quarter. It now has more than 2.9 million DSL lines in service.

For the first six months of the year, the company had profits of just under $3 billion, or $1.07 per share, up from $2.75 billion, or 99 cents per share, a year ago. Its revenues were $34.97 billion, up from $33.32 billion for the first six months of last year.
http://www.nytimes.com/aponline/busi...s-Verizon.html


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German Software Pirate Sent To Prison
AP

A German software dealer was convicted of fraud and sentenced to 5 1/2 years in jail Thursday for selling cheaper versions of products at inflated prices, which
the court said cost Microsoft euro4.5 million (US$5.5 million) in lost revenues.

Ralf Blasek, 38, a software dealer in the west German town of Willich, purchased cheaper educationally priced versions of software in Belgium, then mislabeled them to sell at higher prices to dealers in Bochum, according to prosecutors.

Microsoft welcomed the sentence, which it said was the longest jail sentence ever in Germany for software-related fraud.

``We ... see this as evidence that software piracy will be increasingly taken seriously as a grave crime,'' said Microsoft spokesman Hans-Juergen Croissant.

``This is a clear signal to everyone who would like to profit in grand style through software crime, and thus hugely damage the state, business and customers. ``

Microsoft spokesman Thomas Baumgaertner said he believed losses estimated by the court were on the low side when factoring in money lost to state governments in taxes and to resellers.

'We have opinions that say even euro20 million (US$25 million) would be low,'' he said.

Judge Wolfgang Mittrup of the Bochum state court said that Blasek had a ``deeply criminal personality'' and used the money from the piracy to live a luxurious life, buying around 40 pieces of property and several expensive cars.

Mittrup said he took Blasek's confession into account in setting the sentence. Blasek has no plans to appeal.

In November, police assisted by Microsoft specialists raided dozens of homes and offices across west Germany, arresting eight people, including Blasek, for suspicion of copyright offenses, including producing copied or faked CD-ROMs of popular programs on a commercial scale and passing off cheaper versions of programs as the more sophisticated editions.
http://www.siliconvalley.com/mld/sil...al/9216381.htm


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More Police Raids To Nail Copyright Violators In Brunei
Azian Othman

Bandar Seri Begawan - Copyright violators beware! The Commercial Crime Unit is ready to carry out more raids to nail culprits as copyright infringements are believed to be rampant in the country.

A senior police officer gave the warning yesterday following a raid on an Internet cafe in the Serusop Commercial Complex Wednesday to curb the unlawful use and reproduction of PC games in Internet cafes, Local Area Network (LAN) gaining centres and retail outlets in the country.

The officer said, the unit has received many inquiries especially from Malaysia pertaining to cyber games. However, they will only act and assist if the copyright owner or the authorised company lodges a formal complaint and produces evidence for any offender to be produced in court.

He said, since early this year the unit has conducted many raids pertaining to such violation.

Asked about the penalty pertaining to Wednesday's raid, the officer said the offender could be charged under the Copyright Act Section 204 and 205 carrying a penalty of an imprisonment of not more than six months, a fine of not more than $5,000 or both.

The officer said, the recent raid was the "first case and the first test". Asked whether US companies would take similar actions against those who violate the copyright act in this country, he said the US companies look at the pirated market in Brunei as small compared to other countries.

From VCD, DVD, game software to daily food items, pirated goods are sold everywhere in Brunei. Interestingly, pirated copies of the reality television show Akademi Fantasia (AF), which has hit Brunei by storm, are also allegedly sold openly at $5 per copy. It is learnt that copies are readily available in less than 24 hours after the show is aired on pay-TV channel Astro every Saturday night.

"It is unbelievable that copies of the show are available at shops Sunday morning within hours after the show is aired Saturday night starting 8.30pm," said a concerned member of the public.

It's not just VCDs or DVDs that are pirated. Not long ago, the Commercial Crime Unit had raided shops over pirated ink for printers following a formal complaint from the authorised company.

In early July this year, the authorised owner of an instant noodle brand had stated in a newspaper advertisement that they would not hesitate to take legal actions under the trademark copyright and passing of law against any person, firm or company who/which without their consent, imports, distributes or sells instant noodles bearing the instant noodle trademark or any mark or packaging which is confusingly similar thereto. -- Courtesy of Borneo Bulletin
http://www.brudirect.com/DailyInfo/N...704/nite05.htm


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TiVo Battles Hollywood Over Copyrights Of TV Programming
AP

A plan by TiVo Inc. to let its users transfer recorded TV shows to other devices is running into opposition from Hollywood studios and the National Football League, which fear their copyrighted content could get loose on the Internet.

The studios and the NFL filed papers with the Federal Communications Commission last week seeking to block the agency's approval of TiVo's proposed new service.

TiVo, based in Alviso, Calif., is the leading provider of digital video recorders, which let users easily record TV shows onto hard disks, skip commercials and pause live broadcasts. The company's plans to introduce TiVo To Go, which will allow users to shuttle recorded programs to other TiVo-compatible devices, including laptops and personal computers, have been long awaited.

TiVo officials declined to comment on the copyright objections Thursday but issued a statement: ``We are hopeful (the FCC) rules in favor of technology innovation that respects the rights of both consumers and artists.''

TiVo has said it wants to give users more flexibility in how and where they view their recorded shows -- on an airplane or a road trip, for example -- and to let them share the content with a few friends. The company says it plans to incorporate copy-restriction technologies to limit the number of devices to which the shows can be transferred, preventing unfettered Internet distribution.

The content companies don't think TiVo's proposed safeguards are adequate enough to block users from sending their recorded shows to strangers' devices across the globe, said Fritz Attaway, executive vice president and legal counsel for the Motion Picture Association of America, the Hollywood lobbying arm that filed the opposition papers.

``We don't have a problem if you want to move the content to your summer home, or your boat, but the TiVo application does not require any kind of relationship with the sender,'' Attaway said Thursday. ``It could be to a nightclub in Singapore.''

Many consumer electronics companies say such networked devices are bound to become standard in the ever-more-digital world, but they acknowledge that they must first appease Hollywood and other content providers' concerns over copyrights.

Content companies have been fighting hard on Capitol Hill for rules that would restrict what they consider illegal distribution of copyrighted works. The industry's successful lobbying led to the FCC rule forcing electronics companies to certify that their recording gadgets have technologies to prevent mass distribution.

That's why TiVo is now seeking the FCC's approval.

A dozen other companies, including Sony Corp., RealNetworks Inc. and Microsoft Corp., have similar product applications pending. Attaway said Hollywood so far does not object to those proposals because they appear to mostly limit the movement of copyrighted works to a user's own home network.
http://www.siliconvalley.com/mld/sil...al/9219078.htm


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Share Music Online With P2P Radio

Mercora.com Allows Users To Stream Music To Anyone
Rick Ellis

If you're a rabid music fan, you've probably harbored a secret desire to run your radio station. All that stands in the way is the $40 million or $50 million it requires to buy a traditional radio station. Or the tens of thousands of dollars it costs to stream music online to a large audience. One new site may have the solution, albeit not the perfect answer. Mercora.com, a derivation of a Latin word meaning "to trade," is a self-described "peer-to-peer radio" program, and it allows users to easily stream music to anyone who also has the software. One reason to use the software is that the company has paid the license for the non-interactive webcasting of digital audio. Which in layman's terms means that you can broadcast music to as many people as you wish, without cost and without fear of annoying the copyright police.

The Merora software is easy to download and set-up, although there are a couple of annoying wrinkles. If you allow the software to search your hard drive for files, it will automatically lump your music into categories, which may or may not be relevant. It's also not easy to point outsiders directly to your "station," in the same way that Live365.com allows you to do. Overall, Mercora is an interesting experiment. But it's ultimate success may depend on how many people decide to give it a try.
http://www.thebakersfieldchannel.com...12/detail.html


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Are P2P Networks Leaking Military Secrets?
John Borland

A new Web log is posting what it purports are pictures, documents and letters from U.S. soldiers and military bases in Iraq and elsewhere--all of which the site's operator claims to have downloaded from peer-to-peer networks such as Gnutella.

The "See What You Share" site has been online for a week and has published photos ranging from a crashed military jet to a screenshot of a spreadsheet file that appears to include names, addresses and telephone numbers of marines.

The site's operator, a 30-year-old named Rick Wallace, wrote in a blog posting that he is trying to help the military understand how serious a security risk unmonitored peer-to-peer file sharing can be. CNET News.com could not independently verify the authenticity of the documents posted on the site.

"I want everyone to know that we can be our own worst enemies when we don't understand the full power of our technology," Wallace wrote in a posting explaining the site. "I want every military and government agency to see firsthand what is being shared with anyone who has a computer. Since a picture is worth a thousand words, I can save myself some talking."

Among the items appearing on the site were documents from a transportation unit at Fort Eustis in Virginia. A Fort Eustis spokesperson contacted could not immediately comment.

The issue of unmonitored file sharing has been a problem since the release of Gnutella, which allowed people to share the entire contents of their hard drives, rather than just MP3 files, as had been the case with Napster.

Network watchers quickly noted that some people appeared to be sharing much more than they realized, including personal information and Web "cookie" files that sometimes included passwords for credit cards and e-commerce accounts.

Critics of file-sharing companies, including the Recording Industry Association of America, have often pointed to this accidental sharing of personal information as a rationale for tighter regulation of the networks.

Wallace told CNET News.com that he first downloaded a zipped file of classified documents a few months ago on Gnutella, with stamped security clearances ranging from "For Official Use Only" to "Secret/NO FORN." (NOFORN typically stands for "not for release to foreign nationals" in military parlance.) The documents contained real-time information about operations in Iraq, "stuff that could kill people," he said.

In an interview from Germany, where he lives with his wife, a U.S. Army officer, Wallace said he had contacted local military intelligence about the issue. They forwarded the information to a higher level, but there was little further response until he contacted the office of Sen. Conrad Burns, who represents Wallace's home state of Montana, Wallace said.

Burns' office confirmed that the conversation had taken place.

"We did send a letter to the secretary of the Army," Burns spokesman J.P. Donovan said. "We are monitoring this as it goes along."

Shortly after Wallace got in contact with Burns' office, the file of classified documents disappeared from Gnutella. But many other potentially sensitive files remain on the sharing network, ranging from confidential military documents to internal information on public safety authorities procedures, Wallace said.

"If you're a terrorist, imagine the damage you could do with that," Wallace said. "I don't really care if people share their love letters online. The only things I care about are when people share information that could hurt people."

Wallace said he now calls agencies once before posting information on his blog but sees the site as a way to spotlight a problem that could cost lives in the future. He said he blacks out information that could be classified before posting a file.
http://zdnet.com.com/2100-1105-5285918.html


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Now Playing, a Digital Brigadoon
Chris Thompson


Susan Spann for The New York Times

SANTA CRUZ, Calif. - LIKE most cities in Silicon Valley's outer stratosphere, Santa Cruz has a district dedicated to an odd marriage of high and low tech, where lumber mills and cement factories squat beside gleaming software business parks. But the geeks and hipsters who parked their bikes on this slab of broken land and sneaked past the "no trespassing" sign were not here on business. They were going to the movies.

Few theaters consist of dead weeds and a mound of gray slag squeezed between a laboratory and an alloy manufacturing firm. But these movie buffs have brought their own theater with them. For three years, cult-movie buffs have been organizing "guerrilla drive-ins" in a number of cities, rigging together a nest of digital projectors, DVD players, and radio transmitters or stereo speakers, spreading the word online, and assembling on parking lots or fields to watch obscure films beneath the stars.

They project the image onto warehouses or bridge pillars, tune their car stereos to a designated FM frequency, and sit back and enjoy the show. The only thing they do not do is ask for permission.

As dusk crept over the hills on a Friday night, a 1964 Ford pickup careened to the curb, and out jumped Wes Modes, the impresario behind the Santa Cruz guerrilla drive-in collective. Dressed in black and distinguished by a shock of frizzy red hair, Mr. Modes, 37, reached into the truck bed and began hauling out milk crates bristling with surge protectors and extension cords, a DVD player wired to an amplifier, and two 50-pound golf-cart batteries.

The police had broken up two showings in the last few weeks, so he kept his eyes peeled for patrol cars. As about 100 slackers, electrical engineers and graduate students unfurled blankets and waited for the opening credits to Richard Linklater's 2001 movie "Waking Life," Mr. Modes checked his equipment. "I don't know how good the batteries are going to be," he fretted. "So I think I want to run backup." With a few sidelong glances, he strung out 300 feet of extension cord, crept down to the adjacent lab, and plugged into a socket he found in the driveway.

VCR's and specialty video stores may have exported art films to every corner of the country, but to Mr. Modes and his friends, they also left people stranded in their living rooms, starved for the community and fun of rep houses and B-movie drive-ins. In the mid-90's, cultural pranksters like David Krzysik, who runs the annual Brainwash Movie Festival in Oakland, Calif., experimented with replicating the ambience of old drive-ins, organizing movie showings in empty lots and open-air art spaces. But 16-millimeter projectors were too bulky and expensive for any but the most dedicated movie lover.

Now, high-quality DVD players, digital projectors and iPods have put the technology of drive-in movies into the hands of anyone with $1,500 to spare, giving rise to outdoor movie nights in locations from warehouse packing districts to suburban cul-de-sacs. Instructions on converting iPods into radio transmitters are available at Web sites like engadget.com, many DVD players cost less than $100 and any blank wall will work as a screen.

In cities like Tampa, Fla., and West Chester, Pa., as well as Santa Cruz, people are pirating a piece of that old Hollywood magic and challenging conventions on the role of public space in the process. "The one I used last week was unbelievable," Mr. Krzysik said of the latest liquid-crystal-display projector he set up in Oakland. "And it's cheap, too. I think it cost $1,200, whereas in the old days it would have cost $30,000."

Even $1,000 was too steep for John Young, a technophile in West Chester who became infatuated with guerrilla drive-ins after reading about them in a hobbyist magazine. So Mr. Young decided to build his own projector and found step-by-step instructions after just a few minutes of Web research.

"There's a community out there for some serious home theater geeks," he said. "They're using parts from old rear-projection video systems, from sports bar televisions from back in the day." Within a few weeks, Mr. Young had assembled his Commando Projector, a mass of circuit board and liquid crystal encased in an old heating duct mounted on the handlebars of his motorcycle.

For a year, Mr. Young has cruised the roads of Pennsylvania, scouting sites and tipping off his friends when he finds a winner. His Web site, www .tikaro.com/gdi, is emblazoned with an image of Che Guevara wearing 3-D glasses. "There's no novelty in watching a movie by yourself anymore," Mr. Young wrote in a recent e-mail. "It's way more fun to watch 'The Bad News Bears Go to Japan' on the back of the old Y.M.C.A. building than it is to watch reruns of 'Jerry Maguire' on cable by yourself."

Unlike Mr. Young, most guerrilla drive-in ringmasters seem to have come up with the idea by themselves and for their own reasons. In Florida, a pirate-radio enthusiast, Kelly Benjamin, staged a series of drive-in screenings to raise money for a quixotic 2003 Tampa City Council race. A Los Angeles filmmaker, Lawrence Bridges, has used guerrilla drive-ins to get around traditional distribution networks.

Mr. Bridges, an advertising executive who heads the digital design company Red Car, spent 12 years and $300,000 making a movie about ancient Greek demigods condemned to live in Los Angeles and act as characters from "The Importance of Being Earnest." By the time he finished his project, he decided that the best showcase for this elegy to his hometown would be in the open air, with the cityscape as a living backdrop. So his staff spent a year sneaking onto parking lots and projecting his film against a wall on Saturday nights.

Red Car employees are currently showing his film at various locations in Dallas and plan to take the movie to an empty lot somewhere in Brooklyn. "We don't say, 'Can we use the space?' " said Mr. Bridges's executive assistant, Destiny London, in a telephone interview. "But we've never had any problem."

Mr. Modes and his Santa Cruz friends started showing movies in the backyard of the house they shared (their "collective" is largely a grander reference to their former living arrangements) before taking their act on the road, as it were. But Mr. Modes aspires to more than a good time on a Friday night: he wants to change the way people use public space, and return the commons to an idealized past untainted by money.

"Part of why we're doing this is to reclaim public space and give people a way to use the nighttime that's not mediated by commerce," he said. "In our town, the parks close at sundown, you have to buy something at coffee shops. We wanted to give people a way to interact with each other outdoors without having to spend any money."

Of course, he is also organizing guerrilla drive-ins for the thrill of being naughty. Not only are Mr. Modes and his friends trespassing when they set up their events, they are not exactly clearing their project with the companies that own the rights to the films they show, either.

Michael Bergman, a Los Angeles-based entertainment lawyer, said the fact that Mr. Modes does not charge admission does not diminish his basic violation of copyright law. "The copyright proprietor for the film has the exclusive right to publicly perform the work," he said in a telephone interview. "Projecting a rented DVD onto the side of a building, where anybody who wants to can come and watch it, is certainly a violation of the copyright act."

But whether Hollywood would bother to crack down on a few enterprising movie fans is another question. Breena Camden, a spokeswoman for Fox Searchlight Pictures, which owns the rights to the Linklater film that Mr. Modes showed here in mid-July, refused to comment, if only because her company has never encountered this situation before. "This is the first I've heard of it," Ms. Camden admitted.

So for now, Mr. Modes and his friends seem safe. Even the police do not really care; the Santa Cruz deputy police chief, Patty Sapone, said her officers had shut down the previous movie because Mr. Modes was using public property; as far as trespassing at the new site, it is not a matter for the police unless the property owner complains.

As the ocean breeze took the edge off the summer heat, Becca Anderson, 24, sat on a blanket and waited for the show to start. Ms. Anderson moved in May from Wisconsin to San Mateo, south of San Francisco, looking for work and a taste of the Bay Area's counterculture, she said, but found herself surrounded by computer geeks who talked endlessly about gaming.

The San Francisco club scene was too fast for her, she said, so she and her friends logged onto www .squidlist.com, the local Web clearinghouse for subversive culture, and found out about Mr. Modes's labor of love. "They show some awesome movies," Ms. Anderson said. "You don't often see a drive-in with 'Waking Life.' Or 'Dr. Strangelove.' "

Just before the main feature, Mr. Modes showed a few experimental short films as appetizers. The clear crowd favorite was "Round and Round," a 1939 General Motors educational cartoon about the laws of economics. After all, buying and selling was exactly what these people have come here to avoid.
http://www.nytimes.com/2004/07/29/te...ts/29driv.html


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Laws Regarding Copying Music Need Fine Tuning
Dave Toplikar

My teenage daughter was singing as she walked into the kitchen.

"Hey, Julie, that reminds me, can you make me a new CD?" I asked.

I told her I wanted a mix that would help me get revved up for my early morning workouts.

She seemed a little puzzled at my request.

"I can't download anything," she said.

That's when I realized that I'd been away from the peer-to-peer file sharing over the Internet for a while.

Thanks to a crackdown by the music and motion picture industries, the fear of lawsuits and prosecution have put an end to a lot of the free-wheeling music piracy that was going on two years ago when Napster was in full swing.

Suddenly, I wondered if I had just asked my daughter to break the law by copying some songs on a CD for me.

Drawing the line

"Surely, you can copy songs from a CD, a cassette tape or an album that you already own, for personal use, can't you?"

I didn't want to break the law, so I presented the question to some experts.

I had read that U.S. Sen. Orrin Hatch, chairman of the Senate Judiciary Committee, was trying to put a stop to illegal file sharing through his proposed Inducing Infringement of Copyrights Act, otherwise known as the "Induce Act."

The legislation would go after companies that, through software and other products, induce our children to engage in illegal music swapping and downloading over the Internet.

"It is illegal and immoral to induce or encourage children to commit crimes," Hatch, a Utah Republican, has said.

Opponents of the Induce Act worry that it would go after such products as the iPod, Apple's popular MP3 player that can hold
10,000 songs or more. They're also afraid it would stifle the creation of technology.

Critics say that, in its current form, the Induce Act would undermine the Supreme Court's Sony Betamax decision.

In that decision, the court ruled that if a device, such as the old Betamax video recorder, is used for a legal purpose, then it is legal to make and sell it, even if some people figure out how to use it illegally.

I called Hatch's office and reached Margarita Tapia, a media contact.

Tapia told me she was hesitant to answer my question about whether making a copy of music I owned on a CD would be illegal.

Tapia was helpful, but explained that she didn't want to be in the position of giving me legal advice.

Finding the line

Because of her hesitancy, I sensed that the issue was cloudy among those who have been involved in the thick of the debate.

"Even those who work in this area are really perplexed," said Mike Kautsch, a Kansas University law professor who studies media-related law.

Kautsch said the old rule of thumb was that making a backup copy of your music CD for the purpose of what used to be called "time shifting" or "space shifting" is considered fair use.

But if you start buying your music or software or movies online and downloading it to your computer, you're subject to the fine print in the "click agreement" that you approve before you download it.

Because of the different licensing agreements these days that are put into such click agreements (which few people read), it's difficult to say what is and isn't allowable, he said.

"The range of restrictions is beyond what most people imagine when they click that button and agree to it," he said.

Policing the 'Net

I checked into how the music and motion picture industry is policing illegal file sharing under the Digital Millennium Copyright Act of 1998.

Enforcers for the motion picture or recording industries most often file lawsuits against groups of "John Does." The enforcers then try to find out their identities by issuing subpoenas to the defendants' Internet service providers.

The defendants are then given the option of settling out of court. If they decline, they're subject to being sued again, only this time by name.

Stephen Figgins, assistant systems administrator for Sunflower Broadband, a local Internet service provider owned by the World Company, which also owns the Journal-World, said that sharing copyrighted material over the Internet was a violation of Sunflower's terms of service.

However, Sunflower only responds to offenses reported to it by copyright enforcers for the motion picture industry or the music industry or if the activity of a customer threatens the integrity or performance of the company's network.

Legal quagmire

Kautsch said that Hatch's Induce Act is something of a response to the recent MGM Studios v. Grokster case. A district court ruled that Grokster and Morpheus, two file-sharing programs, were not liable for copyright infringement made by those using their P2P (peer-to-peer) services because there was no centralized index that they could use to control abuses. The case is now under appeal before the U.S. Ninth Circuit Court of Appeals.

Part of the Grokster suit claims that software designers have a duty to build their software in such a way that it can't be used illegally, Kautsch said.

Defendants in the Grokster case, like the opponents of the Induce Act, say building in such designs will tend to have a chilling effect on new technology in the United States.

The decision the court makes "is just enormous," Kautsch said. "This could just, either way, change the course of technological history."

Meanwhile, consumers like me aren't too sure what to do.

"It's just an incredible war between the consumers and the copyright owners," he said.

But there is a starting point you can take to be legally safe, Kautsch said, laughing.

"You start out with the assumption that everything that you want to do is probably wrong."

Many people try to do their own research, but they can't get any clear definition of the law, other than the hard line of the copyright enforcers of the motion picture or music industry, Kautsch said.

"It is just a nightmare."

He suggested going to the U.S. Copyright Office Web site to see if what you want to do is legal.

I couldn't find anything specific about copying a CD. But I did find a frequently asked question on whether it's possible to copyright your photograph of an Elvis sighting. It is.

Stop the music

As I was heading out to go for a run, a song that Julie had been humming popped into my head.

I started humming it.

Then I began wondering how far copyright would ever go.

After all, I don't think we actually owned a copy of the music. She had heard the song on the radio and had "copied" it into her own memory.

Then I had heard her singing it, and I had unknowingly "copied" it into my own head -- sort of a biological file sharing.

Feeling a bit guilty about enjoying someone else's intellectual property, I was trying to think of something else.

But I just couldn't get the tune out of my head.
http://www.ljworld.com/section/toplikar/storypr/176934


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Private Picture for All
Pamela LiCalzi O'Connell

Most people who use file-sharing networks are looking for music. Rich Vogel uses them to find photos, many of which were never meant to be shared with the world.

One day while searching for new MP3 audio files, Mr. Vogel, a 31-year-old musician in Grand Rapids, Mich., browsed through a user's shared folder on the Soulseek network. He was surprised to find some photographs. "It was like landing in the middle of someone's life," he said.

He began searching other peer-to-peer, or P2P services, using the phrase "my pictures," and found that thousands of photo folders had been made available to the public, most of them, he suspects, inadvertently. He selects the more interesting examples and exhibits them at his site as found photos (www.10eastern.com/foundphotos.html). More than 300 have been posted there so far. The photos - of parties and their aftermaths, wounds, kisses, infants - reflect Mr. Vogel's sensibility but also offer a window into the lives of the P2P generation.

Several people whose photos were used have protested, prompting Mr. Vogel to remove their images. What surprised him, though, is how few have complained, given the ease of monitoring what others download from your shared folder, he said.

"I've struggled with the larger moral issues, but what keeps me motivated is how great these photos are - how much life and spontaneity is in them," Mr. Vogel said. "I reject the idea that I'm a snoop."

While some might argue that these photos are searched for rather than found, Jason Bitner, editor of Found Magazine (www.foundmagazine.com), is enthusiastic about the site.

"There's a sprawling universe of images that grows each time someone puts their digital photos into a shared folder,'' he said by e-mail. "And it's usually the photos that are accidentally shared that are the most interesting.''
http://www.nytimes.com/2004/07/29/te...ts/29diar.html

















Until next week,

- js.














~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Current Week In Review.




Recent WiRs -

July 24th, July 17th, July 10th, July 3rd, June 26th, June 19th, June 12th

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


"The First Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public." - Hugo Black

[SA_Dave]

P2P radio sounds like a good idea in theory. I just wonder if it's wise to trust this company to have the best interests of the "peers" at heart.

Ted Turner's article was interesting. Just be grateful you don't live in an African country, where uber-monopolies are a way of life...

Guerilla drive-ins could be fun!

[JackSpratts]

Originally Posted by SA_Dave

P2P radio sounds like a good idea in theory. I just wonder if it's wise to trust this company to have the best interests of the "peers" at heart.

agreed. there are other "less establishment" p2p broadcasting tools available, also covered here from time to time. i'm interested tho (if a little dubious) in their claim that carp fees are paid.

Originally Posted by SA_Dave

Guerilla drive-ins could be fun!

when i was younger we used an old 16mm projector to do much the same. a nieghbor was in the film business and had collected dozens of features and newsreels. we'd borrow a few and throw picture parties this time of year on the sides of friends' barns and garages.

even tho we screened ancient fare seeing the images outdoors and out of context was pretty cool, with the darkness providing cover for less parentally acceptable summer activities between the young sexes.

- js.

[theknife]

Private Picture for All
Pamela LiCalzi O'Connell

Most people who use file-sharing networks are looking for music. Rich Vogel uses them to find photos, many of which were never meant to be shared with the world.

One day while searching for new MP3 audio files, Mr. Vogel, a 31-year-old musician in Grand Rapids, Mich., browsed through a user's shared folder on the Soulseek network. He was surprised to find some photographs. "It was like landing in the middle of someone's life," he said.

He began searching other peer-to-peer, or P2P services, using the phrase "my pictures," and found that thousands of photo folders had been made available to the public, most of them, he suspects, inadvertently. He selects the more interesting examples and exhibits them at his site as found photos (www.10eastern.com/foundphotos.html). More than 300 have been posted there so far. The photos - of parties and their aftermaths, wounds, kisses, infants - reflect Mr. Vogel's sensibility but also offer a window into the lives of the P2P generation.

this guy's site is cool - well worth checking out

i've noticed on Soulseek it's common to find people who are sharing their whole c drive (inadvertently, i suppose, but who knows?). for some reason, it's fascinating to exploring the "My Pictures" folders of total strangers...brings out my closet voyeur

[JackSpratts]

Originally Posted by theknife

i've noticed on Soulseek it's common to find people who are sharing their whole c drive (inadvertently, i suppose, but who knows?).

that's so true. for instance i stumbled across this person's shares yesterday. he was d/l'ing from me and i took a look at his folders. the attached txt file is only a partial list of his folders and sub folders (i needed a time out after clicking a bazillion +s and just went ahead w/the scrn capture).

i PM'd the user but received no response. what saved him in his case was his very narrow selection of approved file endings he allowed shared. a lot of what was viewable was not downloadable - but enough of it was that he had left himself very exposed.

- js.

[theknife]

i pm'd someone on Soulseek who had all their files hanging out....the guy came right back at me and got all huffy,"so? it's read-only - you can't download anything"....so i proceeded to describe the girl in the one photo i downloaded, in her bathrobe, eating pizza. the guy typed "oh shit" and immediately vanished offline