Peer-To-Peer News - The Week In Review - November 19th, ’05

[JackSpratts]

Volume IV, Issue No. 1






























"We deeply regret any inconvenience this may cause our customers, and are committed to making this situation right." – Sony


"At what point do you think it is a good thing to surreptitiously put Trojans on people's machines? The only thing you're guaranteeing is that they won't be customers anymore." – David Maynor


"If it's solely a Sony issue, it is easier for a company to make a decision that it will not allow particular Sony CDs. But if it becomes widespread, then it becomes difficult to decide what CDs are allowed or not allow." – Richard Starnes


"Up until now, they thought that audio CDs are safe. I think that will change, and I wouldn't be surprised if every major bank changed their policy. The fact that this software can be used to hide other stuff means that the possibilities for getting at customer data are horrendous." – Capacity manager at a major financial firm, who asked to remain anonymous


"We do not support those who infringe copyright but we seek a balanced view on the issue. More protection, technical or legal, will not help, it will reduce consumer rights." "The time has come to guarantee consumers certain basic rights in the digital world, and to tell them what they can do with their digital hardware/content." – Cornelia Kutterer/BEUC


"The decision in France could be considered a precedent. But then again, it is still very uncertain, even within France." – Cornelia Kutterer


"Who wants to buy a CD that they cannot backup or requires a proprietary player? Who wants to purchase music that is associated with a group that is going around harassing grandparents with lawsuits for the distribution of copyrighted material?" – Garon Anders


"EMI’s performance shows that file sharing is not the core reason that record sales have declined. Sales have declined because it is the end of the CD cycle and also because of the impact of competing entertainment such as DVDs." – Mark Mulligan


"There is only one time in the history of each planet when its inhabitants first wire up its parts to make one large Machine. Later that Machine may run faster, but there is only one time when it is born. You and I are alive at this moment. We should marvel." – Kevin Kelly


"This is worth the fight." – Senator Russell D. Feingold, D-Wisconsin























Sony of Troy

"Good evening, here are the latest headlines: Congress is in an uproar after all four military branches revealed that a Japanese industrial conglomerate secretly planted programs onto America’s armed forces computer networks. The White House has so far refused comment but sources close to the administration say they are drawing up sweeping penalties against the Japanese of a severity not seen since World War Two. Computer experts said industrial giant Sony Corporation used popular consumer items to surreptitiously inject so-called trojan horses into personal and business computers, which then spread quickly across networks, infecting defense systems like so many falling dominoes. The programs spied on users for nearly a year before being discovered earlier this month. In a plan seemingly taken from ancient Greece, the major media company..."



The above “news” flash, whether fantasy or ultimately fact nevertheless reflects the genuine shock over the unbelievable corporate behavior of this foreign media empire. That the greed at Sony was so overwhelming executives felt they were entitled to infect every single computer in the world with their invasive DRM scheme will surely go down as the defining black battle of a senseless war waged by conglomerates against their own customers. Regardless of any penalties imposed by slavishly pro-media company authorities, reports now indicate even the most rabidly anti-consumer officials may finally have had enough.

This isn’t merely a new “level” in the copyright cartels’ battle for dominance, or some increase in activity like a ramp-up in their sorry lawsuit campaign. This is paradigm shift in the way the corporate world treats individual customers, who in this particular instance were doing nothing but purchasing Sony product. These were not mafia pirates in league with Russian mobsters out to blanket China with bootlegged product to support Al-Qaeda, if such a thing even exists. These were consumers, some of them members of the armed forces, who wanted nothing more than to enjoy songs from a favorite artist, purchased at a retail record store and played on a computer CD deck. They were in other words people engaging in the very behavior the media companies themselves solicit in “public service” announcements repeated endlessly in movie theaters, on television and the Internet, announcements now arguably seen to be little more than manipulative come-ons designed to open home computers to surreptitious infection and control by third parties.

It’s not so much that the companies wanted to do it. Of course they did. Regular readers of this page know the dreams of media executives run dark indeed. In the late nineties executives attempted to shut down the entire internet, and today their men in Congress like Republican Orrin Hatch, the severely compromised senator from Utah, publicly support programs similar to Sony’s that go even farther. Hatch has advocated immediately “destroying computers” containing alleged unauthorized content, all the while redefining “unauthorized” to such broad extents it now encompasses nearly everything digital. But if wanting to is bad enough, doing so is so much worse, with Sony’s belated announcement yesterday to recall all affected CDs notwithstanding. The damage has been done. The CDs were played, the backdoors installed, and no one knows it better than a company that makes its living distributing copies. The effects of such reproducible catastrophes are continuous and open ended, and while a recall might be a step in the right direction it is a halting one at best, and wholly incomplete, for unless the entire Internet is purged of this bleak exercise in domination it will be as if Sony’s response was nonexistent. The program itself must be recalled and destroyed, every last copy of it, and there must be a pledge by this RIAA member that they will never again attempt such a dangerous stunt, and that they will work with - and compensate users affected by - their criminal actions. They must understand that they were wrong and why. Furthermore and most importantly, they must recognize why even craving such control is immoral. This they must do for the future of the Internet, for their immediate victims and for the future of their industry, if there’s ever going to be one.

WiR

With per-issue views now breaking the 10,000 mark, the Week In Review has become something of a popular enigma in Internet circles: written for the present but increasingly favored by a future fascinated with its past. Great storms of hits blow through the oldest pages for reasons never entirely clear, but intriguing to ponder nevertheless. Three years ago when I started this compendium I had hoped it would become the place where people would turn for news at the end of the week, a group of well-chosen articles bearing on peer-to-peer and individual rights in the digital age. And for many dedicated readers that is what it is and will essentially remain. It seems though that others have discovered new uses for the linear magazine, if new is even the right word. In addition to its immediacy it appears a growing appreciation of the WiR may be for its sheer staying power, because it now attracts archivists and researchers in ever greater numbers, as well as the historically curious among us. Indeed, instead of page views falling off as the stories recede into distance, the hits actually increase in frequency, making yesterday’s news today’s essential reading. So much so I now include stories for this future audience, dropping in time capsule-like curiosities I hope they find interesting, and stories of import so ephemeral the Week in Review may well be the only place left to read them in the years to come.

Like many things we create, such uses are often agreeable if not always foreseeable. And so it is with this long green page.

On this sparkling November day my thanks go to the readers of the Week in Review, and as always, to the writers, who have contributed so much to this undertaking.

Happy 3rd Birthday WiR.






Yours,

Jack Spratts

November 17th, 2005
Danbury, Connecticut



























November 19th, ’05





Ending Not With a Bang But a Whimper, Sony Recalls CDs
Tom Zeller Jr.

The global music giant Sony BMG yesterday announced plans to recall millions of CD's by at least 20 artists - from the crooners Celine Dion and Neil Diamond to the country-rock act Van Zant - because they contain copy restriction software that poses risks to the computers of consumers.

The move, more commonly associated with collapsing baby strollers, exploding batteries, or cars with faulty brakes, is expected to cost the company tens of millions of dollars. Sony BMG said that all CD's containing the software would be removed from retail outlets and that exchanges would be offered to consumers who had bought any of them.

A toll-free number and e-mail message inquiry system will also be set up on the Sony BMG Web site, sonybmg.com.

"We deeply regret any inconvenience this may cause our customers," the company said in a letter that it said it would post on its Web site, "and are committed to making this situation right." Neither representatives of Sony BMG nor the British company First 4 Internet, which developed the copy protection software, would comment further.

Sony BMG estimated last week that about five million discs - some 49 different titles - had been shipped with the problematic software, and about two million had been sold.

Market research from 2004 has shown that about 30 percent of consumers report obtaining music through the copying and sharing of tracks among friends from legitimately purchased CD's. But the fallout from the aggressive copy protection effort has raised serious questions about how far companies should be permitted to go in seeking to prevent digital piracy.

The recall and exchange program, which was first reported by USA Today, comes two weeks after news began to spread on the Internet that certain Sony BMG CD's contained software designed to limit users to making only three copies. The software also, however, altered the deepest levels of a computer's systems and created vulnerabilities that Internet virus writers could exploit.

Since then, computer researchers have identified other problems with the software, as well as with the software patch and uninstaller programs that the company issued to address the vulnerabilities.

Several security and antivirus companies, including Computer Associates, F-Secure and Symantec, quickly classified the software on the CD's, as malicious because, among other things, it tried to hide itself and communicated remotely with Sony servers once installed. The problems were known to affect only users of the Windows operating system.

On Saturday, a Microsoft engineering team indicated that it would be updating the company's security tools to detect and remove parts of the Sony BMG copy-protection software to help protect customers.

Researchers at Princeton University disclosed yesterday that early versions of the "uninstall" process published by Sony BMG on its Web site, which was designed to help users remove the copy protection software from their machines, created a vulnerability that could expose users of the Internet Explorer Web browser to malicious code embedded on Web sites.

Security analysts at Internet Security Systems, based in Atlanta, also issued an alert yesterday indicating that the copy-protection software itself, which was installed on certain CD's beginning last spring, could be used by virus writers to gain administrator privileges on multi-user computers.

David Maynor, a researcher with the X-force division of Internet Security Systems, which analyzes potential network vulnerabilities, said the copy-protection feature was particularly pernicious because it was nearly impossible for typical computer users to remove on their own.

"At what point do you think it is a good thing to surreptitiously put Trojans on people's machines?" Mr. Maynor said. "The only thing you're guaranteeing is that they won't be customers anymore."

Some early estimates indicate that the problem could affect half a million or more computers around the globe.

Data collected in September by the market research firm NPD Group indicated that roughly 36 percent of consumers report that they listen to music CD's on a computer. If that percentage held true for people who bought the Sony BMG CD's, that would amount to about 720,000 computers - although only those running Windows would be affected. (Consumers who listen to CD's on stereo systems and other noncomputer players, as well as users of Apple computers, would not be at risk.)

Dan Kaminsky, a prominent independent computer security researcher, conducted a more precise analysis of the number of PC's affected by scanning the Internet traffic generated by the Sony BMG copy-protection software, which, once installed, quietly tries to connect to one of two Sony servers if an Internet connection is present.

Mr. Kaminsky estimated that about 568,000 unique Domain Name System - or D.N.S. - servers, which help direct Internet traffic, had been contacted by at least one computer seeking to reach those Sony servers. Given that many D.N.S. servers field queries from more than one computer, the number of actual machines affected is almost certainly higher, Mr. Kaminsky said.

Although antivirus companies have indicated since late last week that virus writers were trying to take advantage of the vulnerabilities, it is not known if any of these viruses have actually found their way onto PC's embedded with the Sony BMG copy protection software.

Mr. Kaminsky and other security and digital rights advocates say that does not matter. "There may be millions of hosts that are now vulnerable to something that they weren't vulnerable to before," Mr. Kaminsky said.

For some critics, the recall will not be enough.

"This is only one of the many things Sony must do to be accountable for the damage it's inflicted on its customers," said Jason Schultz, a lawyer with the Electronic Frontier Foundation, a digital rights group in California.

On Monday, the foundation issued an open letter to Sony BMG executives demanding, among other things, refunds for customers who bought the CD's and did not wish to make an exchange, and compensation for time spent removing the software and any potential damage to computers.

The group, which has been involved in lawsuits over the protection of digital rights, gave the company, which is jointly owned by the Sony Corporation and Bertelsmann, a deadline of Friday morning to respond with some indication that it was "in the process of implementing these measures."

Mr. Schultz said: "People paid Sony for music, not an invasion of their computers. Sony must right the wrong it has committed. Recalling the CD's is a beginning step in the process, but there is a whole lot more mess to clean up."
http://www.nytimes.com/2005/11/16/te...gy/16sony.html


Conservative estimate of Sony Infection:

U.S. -



W.Europe –




Sony Numbers Add Up to Trouble
Quinn Norton

More than half a million networks, including military and government sites, were likely infected by copy-restriction software distributed by Sony on a handful of its CDs, according to a statistical analysis of domain servers conducted by a well-respected security researcher and confirmed by independent experts Tuesday.

Sony BMG has been on the run for almost two weeks with the public relations debacle of its XCP copy-restriction software, which has installed an exploit-vulnerable rootkit with at least 20 popular music titles on PCs all over the world.

While the company has committed to withdrawing the CDs from production, and is said to be pulling them from the shelves, the biggest problem remaining for the company, and perhaps the internet as well, is how many Sony-compromised machines are still out there.

That's a number only Sony knows for sure -- and isn't releasing. One person, however, is getting closer to a global figure: Dan Kaminsky, an independent internet security researcher based in Seattle.

Using statistical sampling methods and a secret feature of XCP that notifies Sony when its CDs are placed in a computer, Kaminsky was able to trace evidence of infections in a sample that points to the probable existence of at least one compromised machine in roughly 568,200 networks worldwide. This does not reflect a tally of actual infections, however, and the real number could be much higher.

Each installation of Sony's rootkit not only hides itself and rewrites systems drivers, it also communicates back to Sony and the creators of the software, British company First 4 Internet and Phoenix-based SunnComm Technologies, who handled the Mac side for Sony.

Sony did not respond to phone calls seeking comment. First 4 Internet declined to comment for this story.

Kaminsky discovered that each of these requests leaves a trace that he could follow and track through the internet's domain name system, or DNS. While this couldn't directly give him the number of computers compromised by Sony, it provided him the number and location (both on the net and in the physical world) of networks that contained compromised computers. That is a number guaranteed to be smaller than the total of machines running XCP.

His research technique is called DNS cache snooping, a method of nondestructively examining patterns of DNS use. Luis Grangeia invented the technique, and Kaminsky became famous in the security community for refining it.

Kaminsky asked more than 3 million DNS servers across the net whether they knew the addresses associated with the Sony rootkit -- connected.sonymusic.com, updates.xcp-aurora.com and license.suncom2.com. He uses a "non-recursive DNS query" that allows him to peek into a server's cache and find out if anyone else has asked that particular machine for those addresses recently.

If the DNS server said yes, it had a cached copy of the address, which means that at least one of its client computers had used it to look up Sony's digital-rights-management site. If the DNS server said no, then Kaminsky knew for sure that no Sony-compromised machines existed behind it.

The results have surprised Kaminsky himself: 568,200 DNS servers knew about the Sony addresses. With no other reason for people to visit them, that points to one or more computers behind those DNS servers that are Sony-compromised. That's one in six DNS servers, across a statistical sampling of a third of the 9 million DNS servers Kaminsky estimates are on the net.

The damage spans 165 countries, with the top five countries being Spain, the Netherlands, Great Britain, the United States and Japan, which, with more than 217,000 DNS servers reporting knowledge of Sony-related addresses, takes the top spot. Could the traffic be from human visitors? Kaminsky doesn't think so. "Having First 4 Internet at the scale of 700,000 or 800,000 name servers knowing about it -- it's just not that popular a site."

Kaminsky doesn't speculate on how many machines may actually be compromised. "My approach is entirely statistical -- the only people who know are the people who put together the software themselves. The problem is they don't have to tell us the truth."

Adam Stubblefield, an assistant research professor of computer science at Johns Hopkins University, has inspected Kaminsky's methodology, and noted security researcher Ed Felten of Princeton University is currently reproducing his work. Stubblefield expresses confidence.

"Dan has done a very careful job of collecting the data, and thought through all the possibilities for false positives, and filtering out all the data points," Stubblefield said. "He's produced a lower bound on the number of (positive DNS servers)."

Should the average person write software that took control of a computer at the system level without a user's knowledge and distributed that software across the world, there are plenty of laws that would put him behind bars. But what happens when Sony does this, ostensibly to protect its intellectual property?

Jennifer Granick, executive director of Stanford Law School's Center for Internet and Society and Wired News legal columnist, sees this as a question of how well-written Sony's end-user license agreement is, a topic of much conversation in the media lately.

But either way, she noted over IM, "If the EULA did not advise the user that s/he was installing software on the machine that would collect information and/or open the machine to vulnerabilities, then the software arguably violates 18 USC 1030(a)(5)(A)." That's a criminal charge. But Granick doesn't see criminal prosecution of Sony any time soon.

"The (Department of Justice) is not going to charge Sony.... They have never charged a big corporation with a computer crime."

In order to invoke 18 USC 1030, you have to show $5,000 in damages or damage to a computer system used by or for a government entity in furtherance of the administration of justice, national defense or national security. That's another interesting point of Kaminsky's work, because it shows networks that are part of national security and civil infrastructure faithfully reporting their existence back to Sony, along with as-yet-unknown information about the compromised computers.

Granick see this playing out in civil litigation. Cases are already pending in California, New York and Italy.

But with Sony backpedaling on the XCP CDs and Microsoft offering a patch for compromised machines, what more needs to be done? Kaminsky says withdrawing the CDs or offering signatures to anti-spyware programs is simply not enough.

"The problem is Sony has done a significant amount of damage, and it's not enough to stop doing damage," he said. "(This is) something that needs to be remedied. Microsoft's approach only helps those who are very well-patched. Sony needs to figure out ways to get rid of it."
http://www.wired.com/news/privacy/0,1848,69573,00.html





Give Me Back My Digital Rights!
Wired News Report

Sony BMG Music Entertainment has been targeted in a class-action lawsuit in California by consumers claiming their computers have been harmed by anti-piracy software on some the record company's CDs.

The claim states that Sony BMG's failed to disclose the true nature of the digital rights management system it uses on its CDs and thousands of computer users have unknowingly infected their computers, according to court documents.

The suit, filed Nov. 1 in Los Angeles Superior Court, asks the court to stop Sony BMG from selling additional CDs protected by the anti- piracy software and seeks monetary damages for California consumers who purchased them.

The suit claims that around June 2005, Sony BMG began to issue some CDs that install digital rights management software that continuously monitor for rights problems, depleting a computer's available resources. The suit says the technology cannot be removed without damage to the system and that Sony BMG does not advise consumers of the existence or true nature of the program.
http://www.wired.com/news/business/0,1367,69541,00.html





Consumers Fight Copy Protection
J. David Goodman

PARIS All Stéphane Perquin wanted to do was watch David Lynch's "Mulholland Drive" at his mother's house in the Burgundy region of France. Since he knew that there was no DVD player in the house, he got out his dual-deck video recorder to transfer the film from the DVD he had bought to a tape so he could watch it on the VCR, as he had done in the past.

Only this time, the movie would not copy. Confused, he checked the packaging and discovered a small "CP" printed in on the back. His disc could not be copied under any circumstances because Universal Pictures had equipped it with copy-protection technology.

Call it collateral damage in the ongoing war against copyright infringement. Technologies that were designed to combat file sharing and copyright infringement have also limited the average consumer's ability to make personal copies of legally purchased media.

Four years after the passage of the European Union's Copyright Directive, member nations are still grappling with how to provide protection for digital rights management and other content-protection technologies while allowing consumers to enjoy a practice many have come to regard as normal and legal.

The directive unambiguously gives legal protection to technologies that prevent copyright infringement. Yet it also provides for certain exemptions, including an exception for consumers to make so-called private copies.

But even in countries whose laws explicitly allow some private copying, copy-protection technology ends up preventing the consumer from benefiting in practice. In fact, the Copyright Directive makes circumvention of these technologies a crime.

It was the "private copy" exception that led a French consumer group, UFC-Que Choisir, to help Perquin bring a case in 2003 against Universal Pictures and Studio Canal for preventing him from making a copy of "Mulholland Drive." And it was with this exception in mind that in April 2005, an appeals court in Paris reversed a lower court and decided in favor of Perquin.

"The Court of Appeals of Paris has decided that technical means preventing private copies conflicts with French copyright law," said Sandra Woehling, a lawyer for UFC-Que Choisir.

The case is not over. Universal, defending its right to protect its intellectual property, has appealed to France's highest court, which is due to rule by the end of the year.

Consumer groups and some legal experts say the case underlines a legal ambiguity in European copyright law.

"The decision in France could be considered a precedent," said Cornelia Kutterer, European regional counsel for the BEUC in Brussels, an umbrella organization for European consumer groups. "But then again, it is still very uncertain, even within France."

The BEUC this past week urged the European Commission to propose more EU laws supporting consumers' rights.

Adding to the ambiguity across Europe is a similar case involving copy-protected CDs that was decided in Belgium in September in the industry's favor. The case pitted the Belgian consumer group Test'Achats against four record labels and the International Federation of the Phonographic Industry, a recording industry trade group.

"The court in Belgium has ruled very clearly that it is legal to use this technology and that there is no conflict with private copying," said Olivier Reginer, IFPI regional counsel.

The recording industry estimates that there are as many as 175 million copy-protected CDs on the market worldwide. Eighty percent of DVDs in France contain copy-protection technology, according to UFC-Que Choisir. There were about 6 billion CDs sold worldwide between 2002, when copy protection was introduced, to 2004.

Sony BMG has a different problem on its hands. The record label was targeted in a class-action lawsuit in California this week by consumers claiming their computers have been harmed by anti-piracy software on some Sony BMG CDs. The software, which installs on personal computers when the CDs are played, was also being exploited by a virus, wire services reported.

A study in 2004 by the Berkman Center for Information and Society at Harvard University found that since the implementation of the Copyright Directive in Europe, the trend has been toward a more restrictive interpretation of "private use" by national legislatures.

Of the 15 member states at the time, the report said, only Italy had incorporated the Copyright Directive's voluntary "private use" exception into law. The law grants consumers the right to make one copy of protected content for personal use as long as this does not interfere with the content itself.

British copyright law, by contrast, is among the most restrictive and provides for exceptions only in the case of "time-shifting," or recording a broadcast to watch it later, the study said.

Several smaller EU states have been more tolerant of "private use" copying. Malta, Lithuania, Slovenia and Luxembourg have all incorporated the private-copy exception into their laws.

"Courts in Germany, Belgium and France have taken restrictive approaches," Urs Gasser, one of the authors of the Berkman study, said via e-mail, "but this issue is still very much in flux," as the French case demonstrates.

In the Universal case, the Paris appeals court said that if a DVD was not copyable, there must be a clear and visible warning. The small "CP" symbol does not meet that description, the court said in reversing the lower court. The appeals court also decided that "one of the essential characteristics" of a DVD is that it can be copied.

Hoping to capitalize on the decision, a group of lawyers in Paris filed suit in May against five major film companies, including Universal Pictures, over their copy-protection technology.

A possible solution that does not rely on the national courts has been proposed in France as part of a bill implementing the Copyright Directive to be voted on in December. The French government would create an independent body whose purpose would be to arbitrate matters relating to private copying and technological copy protection.

"I think that we will have conflict in the future, even when the law is implemented in France," said Olivier Banchereau, a French copyright lawyer. "We are seeing a conflict between two types of legitimate interests: between the interests of the rights holder and the interests of the consumer."
http://www.iht.com/bin/print_ipub.ph...s/ptcopy12.php





Sony 'Rootkit' Prompts Office Clampdown On CD Use
Graeme Wearden

Sony's decision to include rootkit-like copy restrictions on some of its music CDs is prompting some companies to review whether they allow their staff to use personal CDs at work.

Last week, Trojan horses emerged that avoid detection by using the digital rights management, or DRM, software used by Sony BMG Music Entertainment on some of its audio CDs. This software uses the same techniques used by rootkit malicious software to hide itself from the operating system, which makes it particularly difficult to detect.

Andrew Yeomans, vice president of global information security at Dresdner Kleinwort Wasserstein, said that he is already assessing whether the Europe-based investment bank needs to tighten up its controls.

"I'm reviewing the autorun settings for music CDs, but not planning to ban their use," Yeomans said. "We certainly don't want arbitrary software to be installed."

Yeomans added that the bank cannot prevent all its employees from running executable programs from a CD or download. That's because some people have to be given administrator rights to use certain applications, which would allow them to override such restrictions.

Richard Starnes, president of the Information Systems Security Association, said that other companies should consider whether they need a policy on CD use.

"This is certainly something that would trigger a review of policies. I would advise companies to review the situation," Starnes said.

"If it's solely a Sony issue, it is easier for a company to make a decision that it will not allow particular Sony CDs. But if it becomes widespread, then it becomes difficult to decide what CDs are allowed or not allow," added Starnes, who was speaking before Sony announced it had stopped producing CDs containing the rootkit-like software, called XCP.

Other companies have confirmed that they are also watching the situation closely.

"Something that can get in and hide itself would have the security people screaming their heads off," said the capacity manager at one major financial firm, who asked to remain anonymous.

"Up until now, they thought that audio CDs are safe. I think that will change, and I wouldn't be surprised if every major bank changed their policy. The fact that this software can be used to hide other stuff means that the possibilities for getting at customer data are horrendous," he added.

Opposition to Sony's behavior has been fierce, with threats of boycotts and even legal action.
http://news.com.com/Sony+rootkit+pro...3-5951177.html





Sony Recalls Copy-Protected CDs, But Security Fallout Worsens
AP

The fallout from a hidden copy-protection program that Sony BMG Music Entertainment put on some CDs is only getting worse. Sony's suggested method for removing the program widened the security hole the original software created, researchers say.

Sony has moved to recall the discs in question. But music fans who have listened to them on their computers or tried to remove the dangerous software they deposited could still be vulnerable.

``This is a surprisingly bad design from a security standpoint,'' said Ed Felten, a Princeton University computer science professor who explored the removal program with a graduate student, J. Alex Halderman. ``It endangers users in several ways.''

The ``XCP'' copy-protection program was included on at least 20 CDs, including releases by Van Zant, The Bad Plus, Neil Diamond and Celine Dion. Sony BMG said 4.7 million were shipped, with 2.1 million sold.

When the discs were put into a PC -- a necessary step for transferring music to iPods and other portable music players -- the CD automatically installed a program that restricted how many times the discs' tracks could be copied, and made it extremely inconvenient to transfer songs into the format used by iPods.

That antipiracy software -- which works only on Windows PCs -- came with a cloaking feature that allowed it to hide files on users' computers. Security researchers classified the program as ``spyware,'' saying it secretly transmits details about what music the PC is playing. Manual attempts to remove the software can disable the PC's CD drive.

The program also gave virus writers an easy tool for hiding their malicious software. Last week, ``Trojan horse'' programs emerged that took advantage of the cloaking feature to enter computers undetected, antivirus companies said. Trojans are typically used to steal personal information, launch attacks on other computers and send spam.

Stung by the controversy, Sony BMG and the company that developed the antipiracy software, First 4 Internet Ltd. of Oxfordshire, United Kingdom, released a program that uninstalls XCP.

But the uninstaller created a new set of problems.

To get the uninstall program, users were asked to request it by filling out online forms. Once submitted, the forms themselves download and install a program designed to ready the PC for the fix. Essentially, it makes the PC open to downloading and installing code from the Internet.

According to security experts, the program fails to make the computer confirm that such code should come only from Sony or First 4 Internet.

``The consequences of the flaw are severe,'' Felten and Halderman wrote in a blog posting Tuesday after being tipped by a Finnish researcher, Matti Nikki. ``It allows any Web page you visit to download, install, and run any code it likes on your computer. Any Web page can seize control of your computer; then it can do anything it likes. That's about as serious as a security flaw can get.''

On Tuesday evening, Sony BMG was preparing to release a safe new method for removing XCP. It was unclear when it might be available.

Other programs that knock out the original software are likely to emerge. Microsoft Corp. says the next version of its tool for removing malicious software, which is automatically sent to PCs via Windows Update each month, will yank the cloaking feature in XCP.

A Sony BMG statement Tuesday said the company would pull unsold CDs with the software from store shelves and let consumers exchange already purchased ones. On Friday the company had said it would halt production of CDs with the technology and ``re-examine all aspects of our content protection initiative.''

``We share the concerns of consumers regarding discs with XCP content-protected software,'' Tuesday's statement said.

First 4 Internet was not making any comment, according to Lynette Riley, the office manager who answered the company's phone Tuesday evening in England.
http://www.siliconvalley.com/mld/sil...y/13173768.htm





Firestorm Rages Over Lockdown On Digital Music
Jefferson Graham

New York University sophomores Inga Chernyak and Diana Rosenthal took part in a demonstration near campus the other day.

It had nothing to do with the Iraq war, a political election or any of the other hot-button issues students normally want to protest. Instead, the pair and about 20 other NYU students were out to rally consumers against what Chernyak calls a dark force that has invaded her tech life: digital rights management.

DRM, as it is known in the entertainment industry, uses computer software to make it tougher to freely copy entertainment purchases. It is what prevents users of RealNetworks' Rhapsody, Microsoft's MSN Music and Yahoo Music from transferring legally purchased digital music directly to the world's most-popular digital player, Apple's iPod. DRM software is in the background of all pre-recorded DVDs: It's the reason consumers can't copy Hollywood DVDs to their hard drives.

DRM is the root of the firestorm that has engulfed Sony BMG Music Entertainment over the past few weeks. Sunday, the company acknowledged that more than 20 Sony BMG music CD titles using a controversial form of copy protection are vulnerable to a computer virus.

Sony — which plans to have all major 2006 releases copy-protected — said it would temporarily stop the manufacture of the affected CDs but won't pull them off the market. Titles include releases by Neil Diamond, Celine Dion and rockers Van Zant. The company also provided a patch that guards against the virus. The problem doesn't affect discs played in non-computer CD or DVD players.

"This is a good first step, but Sony has a ways to go to make things right for the consumer," says Mark Russinovich, the Austin computer-security expert and blogger who first brought the issue to the world's attention.

Even before Sony's DRM flap caught fire, tech enthusiasts, consumer-advocacy groups, bloggers and some musicians had been howling that copy- protection restrictions have become too severe.

"We were horrified when we first heard about the new copy-protection policy," Switchfoot bassist Tim Foreman recently wrote on a fan site hosted by Sony Music.

Keeping a lid on copies

Entertainment companies say they need copy-protection tools to keep music and videos from being traded for free on the Internet. They also want to restrict the number of times songs can be copied to CDs and passed among friends.

But copy-protection software isn't uniform, or what techies call "interoperable." Dave Berlind, executive editor of computer-oriented website ZDNet, calls DRM "digital restriction management."

Perhaps the biggest consumer headache: copy-protected CDs are designed to prevent the easy transfer of songs to Apple's iPod.

"Consumers don't like copy-protected CDs at all," says Terry Currier, owner of the Music Millennium record store in Portland, Ore. "They return them to us, saying they don't work, and we're the ones who are stuck with them, since the labels won't take back opened product."

Artists aren't happy, either. The Foo Fighters, Dave Matthews Band and Switchfoot have posted notes on websites decrying restrictions and offering tips for how to skirt the system.

Jamie Kitman, manager for British group OK Go, says he was distressed this year when executives from the band's label, EMI, told him about its copy- protection plans.

"Copy protection has been proven ineffective, annoying and, ultimately, it puts the industry and artists associated with it in a bad light," he says. "The fans don't realize the artists have no say in this."

With DRM, ownership rules state how many copies can be made of a CD, often in long documents that consumers sign off on but rarely read. Copy- protected CDs even dictate how consumers can listen to their music. With the Sony BMG discs, for instance, anyone who uses competing media players, such as iTunes or Musicmatch, is out of luck.

To play one of the Sony CD titles on a PC, you must first accept Sony BMG's licensing agreement and a software download, which includes the Sony music player and the hidden files that have become prey to hackers. You can't take the stuff off your computer without Sony's permission.

"My feeling about DRM was that it was infringing upon my rights as a consumer," says Chernyak, whose group, Free Culture at NYU, is organizing another protest for later this month. "But now, with what Sony has done, I feel it's also infringing upon my personal property. They're putting something on my computer I'm not aware of."

Why pay?

The music industry hasn't been the same since then-college freshman Shawn Fanning developed a tool for finding online music in his dorm room in 1999. Fanning's original Napster — coupled with the growth of CD burners — showed the world how easy it was to get free music from the Internet, simply by clicking a mouse and saving song files to a hard drive.

The music industry is still fighting to regain its footing, despite lawsuits against song swappers, a Supreme Court victory against file-sharing companies and several shutdowns of once-leading firms. More people than ever are using file-sharing programs. Music sales, meanwhile, sank 10% from 2000 to 2004, according to the Recording Industry Association of America.

Apple's hugely successful iPod and iTunes Music Store have helped wean song swappers away from file-sharing services by selling authorized downloads for 99 cents apiece. Apple has sold more than 500 million songs since opening the iTunes store in 2003 — an impressive number but a fraction of the songs being traded on the Internet.

Apple uses its own DRM method for digital music, which it calls FairPlay. It's led to much consumer confusion, due to a basic stance of Apple's business policy. Apple won't license FairPlay to other companies, so rivals in digital music are forced to use other DRM tools — most notably Microsoft's Windows Media.

And just like VHS and Beta, Apple and Windows, and other incompatible formats, songs in Windows Media won't transfer easily to the iPod, and FairPlay tunes won't play on non-iPod devices.

Apple declined comment.

"Consumers should say, 'Apple, we won't buy your music until you make your DRM interoperable,' " says Apple competitor Rob Glaser, CEO of RealNetworks.

The security companies that make copy-protection software acknowledge that their systems won't be complete until the songs can be easily transferred to the iPod. "Everyone benefits," says Adam Gervin, senior director of marketing for Macrovision, which supplies DRM tools for many record labels, including EMI. "We want that to happen."

Richard Cottrell, head of EMI's content-protection division, says the label aims to have all of its new releases copy-protected next year worldwide — and he believes the songs will be playable on iPods.

He says he's been working with Macrovision, testing a tweak in the system that will get the songs onto the iPod. He says the system "is almost ready."

Sony and EMI say they turned to copy-protected CDs in response to declining sales. Rival labels Warner Music and Universal have yet to introduce copy-restricted CDs.

EMI has sold more than 175 copy-protected CD titles, mostly outside the USA, and Cottrell says the amount of complaints has been minuscule.

Sony BMG in the crossfire

No entity has taken bigger hits in the DRM debate than Sony BMG Music. When Russinovich first blogged about the issue, he showed that some of Sony's copy-protected discs had hidden files, called "rootkits," that potentially could be used for viruses. Sony initially responded by posting a downloadable patch on its website, which makes the file visible on a hard drive.

A note on the front of the Foo Fighters' In Your Honor CD says the disc is copy-protected. The Foo Fighters aren't happy about it.

But the patch doesn't answer all of the problems, says Russinovich. "Sony's music player still contacts Sony's site with a CD identifier, tracking your listening habits without proper disclosure, and that's potentially an invasion of privacy," he says.

The files can be removed, but you must first submit personal information to Sony and await an e-mail reply with a link to delete them.

Sony uses DRM tools from two companies, SunnComm and First 4 Internet. The CD titles that use First 4's XCP software are the ones that have gotten Sony into hot water. To tell which kind of copy protection is on a CD, check the fine print on the back cover (a First 4 Internet CD will read ?cp.sonybmg.com/xcp).

EMI's Cottrell says there are no hidden files in EMI's copy-protected CDs. And he sticks up for DRM tools, saying the copy-protection software makes the experience better for consumers by offering additional features.

Photos, lyrics and video can be accessed in the embedded player that comes with the CDs, he notes. "Without software, we can't make that happen."

Future versions of the discs, he says, also will contain a song-sharing feature. Friends will be able to e-mail a link to where the song can be downloaded from a website and listened to a few times before it times out. "Such a tool isn't available legitimately today," he notes.

Still, analyst Phil Leigh at Inside Digital Media, warns that by putting consumers through so much "hassle," they could just stop buying CDs and return to file-sharing networks. Songs traded in unauthorized fashion online are not copy-protected.

ZDNet's Berlind isn't sold, either.

"DRM is a Catch-22 for consumers," he says. "We want to be law-abiding citizens, and we certainly respect companies' desires to protect their content, but the whole thing has become a rotten mess. You go out and buy music, and guess what, it doesn't play everywhere it should, and you have to jump through hoops to make it play. That's just wrong."
http://www.usatoday.com/tech/news/co...l-rights_x.htm





Copyrighting Wrongs
Wired News Report

People who attempt to copy music or movies without permission could face jail time under legislation proposed by the Justice Department.

The bill, outlined by U.S. Attorney General Alberto Gonzales at an anti-piracy summit, would widen intellectual-property protections to cover those who try but fail to make illicit copies of music, movies, software or other copyrighted material.

It would also enable investigators to seize assets purchased with profits from the sale of illicit copies, as well as property such as blank CDs that might be used for future copying.

Those found guilty of a copyright violation could be forced to pay restitution to the owner of the material in question, and repeat offenders would face stiffer sentences.

A recording-industry trade group praised the bill, but a public-interest group, Public Knowledge, said the Justice Department should consider measures that would protect consumers' fair-use rights as well.

Congress in recent years has strengthened copyright laws to help media companies battling the widespread copying of their works, and law enforcers have increasingly targeted groups that release movies on the internet hours after they appear in theaters.
http://www.wired.com/news/business/0,1367,69555,00.html





Music Industry Launches New Internet Piracy Crackdown
Patrick Lannin

The music industry's top lobby group on Tuesday launched a new wave of legal action against the illegal sharing of music over the Internet, which it says hits sales and steals money from music artists.

The International Federation for the Phonographic Industry (IFPI) said it was launching 2,100 legal cases and extending the action to five new countries in Europe, Asia and, for the first time, South America.

It said file-sharers in Sweden, Switzerland, Argentina, Hong Kong and Singapore faced prosecution for the first time.

"It's the thinking of dinosaurs for anyone to believe that they can steal music after all the education and campaigns that we have had," IFPI head John Kennedy told Reuters.

He told a news conference that Sweden had been chosen for the launch of the new cases as it had a reputation as being a "haven for piracy." Sweden only recently made it illegal to download copyright-protected files.

"This is a shame for a country which has produced so much good music," he said, referring to ABBA, Ace of Base and The Cardigans.

Some Uneasy

IFPI said 900 million unauthorized music files were on the Internet, which was hitting sales of music compact discs.

The group's action is aimed at people who put music out on the Internet, uploading, via peer-to-peer software, which allows others to download the files.

The number of legal actions in the form of civil complaints or criminal prosecution against uploaders was now more than 3,800 in 16 nations outside the United States, it said.

The industry has a two-pronged approach to the issue, promoting digital music services such as iTunes from Apple <AAPL.O> and Napster while prosecuting illegal file sharers.

Sales of digital music tripled in the first half of 2005, representing 6 percent of the market, or about $790 million.

IFPI said actions so far had led to mostly young men between the ages of 20 and 30 paying fines of $3,000 or more.

Brussels-based pan-European consumer group BEUC expressed unease that people's rights were being lost sight of in discussions about cracking down on piracy.

"We do not support those who infringe copyright but we seek a balanced view on the issue. More protection, technical or legal, will not help, it will reduce consumer rights," BEUC senior legal adviser Cornelia Kutterer told Reuters.

"The time has come to guarantee consumers certain basic rights in the digital world, and to tell them what they can do with their digital hardware/content," BEUC said on its digital rights Web Site, www.consumersdigitalrights.com.
http://today.reuters.com/news/newsAr...&srch=internet





Piracy Clampdown Hits 'Digital Shoplifters'

Britain’s music industry has launched its biggest ever assault on illegal file sharers, declaring yesterday that a further 65 prolific music uploaders will face action in UK courts.

The digital clampdown is roughly twice as many cases as there have been in each of the three previous claims from the British Phonographic Industry, the UK’s trade body for the music industry.

Already around 70 British internet users have agreed to pay settlements of up to £6,500 to avoid court action, with the new claims taking the total number of UK cases over 150.

There will be “no let-up” in the fight against internet uploaders and the music industry will do whatever it takes under UK law to bring “digital shoplifters” to account, the BPI said.

They claim momentum against illegal net use is gathering pace, given the announcement of 2,100 new cases across 16 countries, taking the total number of court cases against filesharers to almost 20,000 worldwide.

But it’s not just individuals in the UK and elsewhere that are being stung for their online music activities.

The filesharing networks Kazaa and Grokster were recently defeated in the courts, moments before WinMx and eDonkey’s decision not to issue new versions of software to their customers.

The peer-to-peer site iMesh recently followed suit, declaring it would ‘go legit’ by entering into distribution agreements with copyright holders.

“The bad news for Britain’s digital shoplifters is that the law is not on your side,” said Roz Groome, BPI General Counsel.

“In twelve months more than 70 British filesharers have discovered the real cost of free music and ended up thousands of pounds out of pocket to avoid a [more] costly court case.”

Chairman, Peter Jamieson, agrees; “After the Kazza and Grokster rulings, no company can now be under the illusion that building a business on facilitating copyright infringement is any way legal.

“The net is closing in on illegal p2p.”

Not so, according to research released yesterday, which shows most music fans continue to file-share over the Internet unconcerned by potential legal action.

In fact, two-thirds of people using p2p software to access music said they were unperturbed by legal action from record labels, according to research consultant XTN Data.

Although the study focused on US uploaders, similar trends emerged in the survey that are known to fuel UK piracy, such as the ‘less for more’ offering of legitimate music download sites.

Almost 60 per cent of fileshareres believe legit sites are too expensive, 43 per cent said the music offering doesn’t appeal, and a marginally lower proportion found sites like iTunes, Napster and HMV Digital difficult to use.

“We estimate there to be 52 million people in the US using file sharing software. In the past two years legal action in the US has seen 3,500 cases resolved,” said Greig Harper, founder of XTN Data.

The research showed that ‘for the first time ever’ illegal download of movies and TV content overtook demand for music downloads, with the most prolific users rated as the under-thirties.

“While the legal music download services have legitimised some of the demand for music content, the lack of comparable services in the movie and TV sector combined with the increase in faster connections have helped fuel demand for video content,” Harper said in a statement.

XTN added computer games are also doing particularly well in terms of download rates, with console games rapidly catching dominant PC downloads.

Among the most sought-after titles was Grand Theft Auto: San Andreas, Rome Total War and the Sims 2.

During the period of monitoring, GTA averaged 75 downloads every hour.
http://www.contractoruk.com/news/002388.html#





i2hub Network Shuts Down
Ross Goldberg

The intercollegiate file-sharing network i2hub shut down Monday after the music recording industry threatened to sue it for allowing illegal downloads.

I2hub, which enabled file swapping over a special superfast Internet connection among more than 200 universities, is one of several networks to fall under recording industry pressure this fall. Some Yale students said the shutdown will hinder their ability to acquire music at college, but experts said the industry victory is unlikely to stem music sharing in the long term.

The announcement comes a week after Grokster, another file-sharing provider, closed down following a Supreme Court decision this summer. The Recording Industry Association of America's renewed efforts to curb file sharing were encouraged by the Grokster case, BigChampagne Online Media Measurement CEO Eric Garland said.

"They seem to be emboldened by the Grokster decision from the Supreme Court," Garland said. "In some ways that has accelerated the pace of a lot of this."

An RIAA spokesperson said in an e-mail that the group is pleased with i2hub's decision to shut down. The RIAA has sued 635 individuals using i2hub at 39 campuses this year.

"We continue to be encouraged by the response of many of the illegal peer-to-peer sites to the Supreme Court's unanimous Grokster decision," the spokesperson said. "The message from the Court has been heard, and we look forward to working with services that will respect the laws protecting creators."

But Garland said the court decision -- which states that companies cannot intentionally encourage piracy but does not prohibit the technology itself -- will likely not have a serious long-term impact on file-sharing.

"I don't see a net change in any of the underlying mechanisms," he said. "People will continue to swap stuff to exchange media using the venues that they have always used."

Garland said Grokster users will still be able to use their software, although i2hub will be inaccessible. I2hub's Web site now merely displays a graphic stating, "Remember i2hub. R.I.P. 3.14.2004 - 11.14.2005."

Zachary Turnbull '07 said he was disappointed with the loss of i2hub because it allowed him to preview music before purchasing it.

"I feel a lot of people don't just use it to steal music," he said. "They use it to branch out."

i2hub also provided textbook swapping and dating networks. Though it was popular among many universities, its user counting device had shown that only a handful of Yalies accessed it at any given time, Turnbull said.

Director of Network Services Joe Paolillo said i2hub utilized the extra-fast Internet2 network in the university consortium, but that the Internet2 connection will remain intact without the file-sharing program.

The Motion Picture Association of America is planning to sponsor a student competition for a nationwide public service announcement condemning online piracy along with Students In Free Enterprise, an international nonprofit student organization devoted to creating economic opportunity.

"The MPAA is committed to educating students, parents and all consumers to aggressively tackle the threat of piracy and stem the disturbing societal trend of illegal activity online by students of all ages," MPAA Chairman and CEO Dan Glickman said in a press release.

Yale Chief Information Officer Philip Long said the University receives roughly 25 complaints against network users per month from copyright-holders. Long said he was unaware of any Yale student having been brought to court over the complaints.
http://www.yaledailynews.com/article.asp?AID=30910





Kazaa File-Sharing Boss to Face Court
Meraiah Foley

An Australian federal judge on Thursday ordered the chief executive of the company that owns file-swapping giant Kazaa to face cross-examination from recording industry lawyers about her assets pending a damages hearing in the landmark music piracy case.

In September, a federal court found Kazaa's owners and distributors, led by Sydney-based Sharman Networks Ltd., guilty of copyright infringement for failing to rein in illegal file sharing on their popular peer-to-peer network.

A hearing to set damages is expected sometime next year.

After months of legal wrangling, federal judge Michael Moore on Thursday ordered Sharman's chief executive, Nikki Hemming, to face cross-examination by record industry lawyers over her personal assets. It will be her first court appearance since the multimillion dollar trial began last November.

A date for Hemming's cross-examination was not immediately set, but is expected sometime next year.

In March, record industry lawyers sought a court order to force Kazaa's owners to disclose their assets after Hemming reportedly sold her Sydney mansion to Sharman's accountant, John Myers, for 2.1 million Australian dollars ($1.55 million), but then continued to live in the house.

The music industry alleged in March that Myer distributed about half of the sale proceeds to Hemming's live-in partner and transferred the remaining 1.1 million Australian dollars ($804,000) into a Sharman controlled trust fund in Vanuatu.

In his judgment Thursday, Moore said there were "several unusual features" about the sale.

Moore said the timing of the sale _ five days after Hemming's lawyers received documents outlining the record industry's case _ and Hemming's stake in the Vanuatu trust were aspects that needed to be reviewed.

"One can infer that the strengths and weaknesses of the respective cases would have been apparent to the parties and those advising them," he wrote. "Greater clarity about this matter may arise from the cross-examination."

Moore also ordered Hemming to file an affidavit outlining her assets by Dec. 9.

In a statement issued Thursday, Sharman Networks said it was "disappointed" with the ruling.

"We will review the judgment and consider our options," the company said.
http://www.washingtonpost.com/wp-dyn...111700163.html





A Sour Note on File Sharing

While the industry escalates its war with file sharers, EMI posts robust numbers.

The music industry inadvertently sent mixed signals on Wednesday with an international industry association filing more than 2,000 file-sharing lawsuits at the same time that EMI, one of the world’s largest music publishers, posted robust numbers with its own digital sales, growing 142 percent.

The out-of-tune juxtaposition certainly lends credibility to those who say the music industry has been crying wolf and that it has overstated the effect that illegal file-sharing has had on the industry’s bottom line.

The International Federation of the Phonographic Industry, an international recording industry organization, said on Wednesday that it had filed 2,100 new lawsuits against individuals in five countries in Europe, Asia, and South America.

The move represents a significant escalation in a war the international music industry has fought almost nonstop for five years. File sharers in Sweden, Switzerland, Argentina, Hong Kong, and Singapore face criminal penalties and fines upward of $3,000 for uploading copyrighted music on peer-to-peer networks.

The announcement of the lawsuits comes just one week after a settlement between the P2P service Grokster and the U.S. music industry (see Grokster Shuts P2P Operations). It also follows a string of legal successes for the music industry in the last few months (see RIAA Goes after P2P Firms, U.S. Indicts CD Copiers).

Just this week, the U.S. high-speed college network i2Hub closed down after legal pressure. P2P services such as Grokster, iMesh, and eDonkey are finding no feasible alternative but to shut down or launch legitimate P2P services in cooperation with the music industry (see iMesh Seeks to Clean Up, Q&A: P2P’s Sam Yagan).

“With all of this IFPI action, file sharing is still firmly established at about 17 percent of European Internet users and has been static for the last four years, so they have just stemmed the tide rather than pushed it back,” said Mark Mulligan, a research analyst with JupiterResearch.

“EMI’s performance shows that file sharing is not the core reason that record sales have declined,” he added. “Sales have declined because it is the end of the CD cycle and also because of the impact of competing entertainment such as DVDs.”

In the United States, the Recording Industry Association of America (RIAA) has been very aggressive in going after file sharers. JupiterResearch found that the percentage of adults in the U.S. 18 and over who admit to file sharing decreased to 7 percent in 2005 from 13 percent in 2003. Meanwhile, P2P measurement firm BigChampagne has reported overall increases in P2P users, with up to 9.2 million users online at any one time in October.

Legal Aggressiveness Backfires

But some industry observers believe the industry’s aggressiveness has harmed its reputation.

“The RIAA is winning the battle against file sharing, but it comes at a PR cost,” said Mr. Mulligan. “It has alienated consumers. CD piracy is much more damaging to the industry than online file sharing. Today’s happy coincidence shows that if you’ve got a good roster of artists like EMI and good music to sell, then people will buy records.”

In the meantime EMI Group posted a strong increase both in revenues and profits in the first half, with both of its divisions outperforming the market. EMI Group revenues increased to $1.58 billion, up 5.8 percent.

EMI’s digital sales grew by 142.4 percent to $76.5 million, representing 4.9 percent of total group revenues, up from 2.1 percent of the firm’s revenues in the prior year’s first half.

While the overall industry has focused public attention on illegal file sharing, the rapid growth of digital distribution almost offset EMI’s physical declines over the period, with the total global recorded market declining by an estimated 0.9 percent.

“The global recorded music industry declined only modestly in the half, continuing the improved trend driven by rapid digital growth,” said Eric Nicoli, chairman of EMI Group. “We remain confident that digital music will return the industry to growth in due course.”

Mr. Nicoli’s “due course,” may be a ways off, however, with the current numbers of digital sales. EMI’s digital revenue numbers are actually below the IFPI’s estimate that worldwide digital music sales account for 6 percent of music sales overall. This may be a fast-growing segment, but it’s still small.

Carrot and Stick for Copiers

The music industry has been sensitive to criticism that it is winning the legal battle against file sharers but losing the PR battle for young customers, some of whom have been caught in the wide net of lawsuits cast by the industry.

The IFPI has attempted to balance its legal actions with a sustained education campaign. Over 52 million instant messages have been sent directly to illegal music file sharers in 17 countries.

A campaign launched by the charity Childnet International aimed at educating parents about file sharing and downloading music has been distributed in schools around the world.

A Copyright Security Guide for companies and governments has been mailed to organizations in six countries. Free software that helps people enjoy music on their computer safely and legally was launched initially in six countries in September.

“The carrot-and-stick approach of the IFPI may not be as effective as the heavy-handed approach of the RIAA in the U.S., but long term it allows European consumers to better understand the case that the IFPI is making,” said Mr. Mulligan.
http://www.redherring.com/Article.as...n+File+Sharing





Illegal File Sharing Continues to Grow Despite Legal Action
Press Release

Recently released data from research consultancy XTN Data shows that file sharing over the internet continues to grow and that most users are unconcerned by potential legal action.

Two thirds of people using file sharing software to access music were not concerned by legal action by record labels. Greig Harper, founder of XTN Data commented, "We estimate there to be 52 million people in the US using file sharing software. In the past two years legal action in the US has seen 3,500 cases resolved."

The survey results show that legitimate music download services are rising in popularity but 58% thought they were expensive, 41% thought they were difficult to use and 43% said they didn't offer music they were interested in. Users who were disappointed with legitimate music download services were more likely to illegally download music.

For the first time ever illegal download of movies and TV content overtook demand for music downloads. 26% of internet users said they used the internet to download DVDs with those under thirty most likely to do so. Greig Harper noted, "While the legal music download services have legitimised some of the demand for music content the lack of comparable services in the movie and TV sector combined with the increase in faster internet connections have helped fuel demand for video content."

Computer games were also popular downloads with 11% obtaining games this way. While PC games were most commonly sought, demand for console titles were close behind. Popular downloads included GTA: San Andreas, Rome Total War and The Sims 2. GTA averaged 75 downloads an hour over the period it was monitored.
http://www.prnewswire.co.uk/cgi/news/release?id=158607





AOL, WB To Offer Older TV Online via P2P

AOL and WB have announced In2TV, a new service planning to offer high-quality video of thousands of older TV shows for free via a P2P- style network.

In an aggressive new foray into bringing television content to broadband-enabled Internet users, America Online and Warner Brothers Domestic Cable Distribution have announced a free online video service which will offer thousands of episodes of older television programming via the Internet using a peer-to-peer file sharing network controlled by AOL.

The new online offering, dubbed "In2TV," will be available via AOL's Video on Demand, Video Search, and AOL Television sites in early 2006 and will initially feature full-length episodes from television series including television evergreens like The Fugitive, and Maverick, more-recent fare such as Growing Pains, Sisters, and Perfect Strangers, classic sitcoms like Alice and Welcome Back, Kotter, to genre favorites like The Adventures of Brisco County Junior, La Femme Nikita, and Babylon 5. Programming will initially be categorized into six channels, within an expanding lineup to accommodate additional shows added to the service. In2TV will also feature original interactive content to accompany the episodes, such as games, quizzed, polls, and trivia contests. In2TV will be adding episodes and programming during 2006; a list of shows to be offered by In2TV at launch appears below.

Episodes presented via In2TV will feature 15- to 30-second video advertising totalling 1 to 2 minutes within each 30 minute block, and will also feature sponsors and banner advertising in addition to in-stream video ads. Initially, the technology behind In2TV will be sponsored by General Motors.

And the technology behind In2TV is raising as many eyebrows as AOL's aggressive new entry into the online TV field. Although few details are available —and what details have been released are sketchy—In2TV will rely on a new video format called AOL Hi-Q which purports to be able to deliver DVD- quality video quickly and efficiently using a peer-to-peer style file sharing network technology AOL has developed in partnership with Kontiki. According to AOL, the "AOL Hi-Q video player provides a high resolution display with image quality designed for full-screen viewing on PC monitors or televisions capable of showing a PC interface." AOL Hi-Q supports with digital rights management (DRM) technology designed to help protect the copyrighted television content, and, reportedly, users will be able to access AOL Hi-Q content via a software plug-in, although there's no word on what platforms (other than Windows) the software will support, or whether programming can be burned to CD or DVD, or transferred to portable devices like the PSP or video-capable iPods.

In addition to installing special software, AOL Hi-Q users must also participate in a new file sharing network, a closed peer-to-peer system which AOL plans to use to distribute video content to users. According to AOL, their network does not present the privacy and security risks of other peer-to-peer systems (such as Grokster or Kazaa) because AOL will maintain full control over the network and the software. By utilizing storage and bandwidth paid for by its customers to distribute video—rather than on network infrastructure provisioned by AOL itself—AOL is simultaneously lowering its costs to provide the online video service while potentially delivering better performance to users. However, some users, particularly business users, may not appreciate their bandwidth and storage being utilized by a third party outside their control, and it remains to be seen whether AOL can shake the popular stigma currently associated with the category of peer-to-peer sharing software.

AOL is starting off its AOL Hi-Q service with a trial featuring roughly 100 Hi-Q video items (including movie and video game trailer, plus music videos) and plans to expand the trail with additional videos and, eventually, full-length television episodes on the In2TV service.

In2TV launch programming is to include:

Adventures of Brisco County Jr.
Alice
Babylon 5
Beetlejuice
Chico and the Man
Dark Justice
Eight is Enough
F Troop
The F.B.I.
Falcon Crest
Freakazoid
Freddy's Nightmares
The Fugitive
Growing Pains
Hangin' with Mr. Cooper
Head of the Class
Histeria!
Kung Fu
La Femme Nikita
Lois & Clark: The New Adventures of Superman
Maverick
The New Adventures of Batman
Perfect Strangers
Pinky and the Brain
Scarecrow and Mrs. King
Sisters
Spenser: For Hire
V
Welcome Back, Kotter
Wonder Woman

http://news.designtechnica.com/article8810.html





NBC Universal Goes Peer-To-Peer
David B. Wilkerson

NBC Universal on Thursday became the first major studio to make movie and television content available over a legitimate peer-to-peer provider of Internet downloads, announcing a deal with privately held Wurld Media, the parent of the Peer Impact service.


Under the terms of the agreement, movies such as "Ray," "The Motorcyle Diaries," and "Cinderella Man," along with television specials such as "Jerry Springer: Uncensored" will be available for on-demand rental on Peer Impact for a 24-hour viewing period.

Financial terms were not disclosed.

The announcement comes after NBC Universal's move earlier this month to make certain NBC programs available commercial-free to users of DirecTV's new digital video recorder for 99 cents per episode. That same day, Viacom's CBS Television Network revealed a similar deal with cable giant Comcast Corp. though its on-demand shows will include commercials.

For some time, the studios have been reluctant to make their content available over a P2P service due to concerns about piracy.

Now, however, as viewers demand more control over the entertainment they consume, major media companies find themselves being forced to adapt or become less relevant.

""This agreement is a significant step forward in our goal to capitalize on the myriad possibilities of new digital-media services, in a way that allows us to safeguard our content from illegal distribution," said Bob Wright, chairman of NBC Universal, in a statement.

General Electric shares were down only slightly Thursday, hitting an intraday low just 14 cents off their Wednesday close of $34.54. Vivendi Universal (FR:012777: news, chart, profile) , which holds a minority stake in NBC Universal, rose as much as 1%, trading recently at $29.71.
http://www.marketwatch.com/news/print_story.asp?print=1&guid={A2C03D14-9E8C-4B2C-A109-C0D62914BD49}&siteid=google





Report Says Ex-Chief of Public TV Violated Federal Law
Stephen Labaton

Investigators at the Corporation for Public Broadcasting concluded today that its former chairman repeatedly broke federal law and its own regulations in a campaign to combat what he saw as liberal bias.

A scathing report by the corporation's inspector general described a dysfunctional organization that violated the Public Broadcasting Act, which created the corporation and was written to insulate programming decisions from politics.

The corporation received $400 million this year from Congress to finance an array of programs on public television and radio, although its future financing has come under heavy criticism, particularly from conservative lawmakers. Its board is selected by the president and confirmed by the Senate.



The corporation's former chairman, Kenneth Y. Tomlinson, who was ousted from the board two weeks ago when it was presented in a closed session with the details of the report, has said he sought to enforce a provision of the Public Broadcasting Act meant to ensure objectivity and balance in programming.

But the report said that in the process, Mr. Tomlinson repeatedly crossed statutory boundaries that set up the corporation as a "heat shield" to protect public radio and television from political interference.

The report said he violated federal law by being heavily involved in getting more than $4 million for a program featuring the conservative editorial writers of the Wall Street Journal. It said he imposed a "political test" to recruit a new president. And it said his decision to hire Republican consultants to defeat legislation violated contracting rules.

Mr. Tomlinson, in a statement distributed with the report, rejected its conclusions. He said that any suggestion that he violated his duties or the law "is malicious and irresponsible" and that the inspector general had opted "for politics over good judgment."

"Unfortunately, the Inspector General's preconceived and unjustified findings will only help to maintain the status quo and other reformers will be discouraged from seeking change," said Mr. Tomlinson, who has repeatedly defended his decisions as part of an effort to restore balance to programming. "Regrettably, as a result, balance and objectivity will not come soon to elements of public broadcasting."

While some of the details under investigation were disclosed in a news article last May, the inspector general's report is the first official conclusion that Mr. Tomlinson violated both the law and the corporation's own rules. The report is also the first detailed and official inside look at the dynamics of the corporation as some of its career staff have struggled with conservative Republicans appointees seeking to change its direction.

The author of the report, Kenneth A. Konz, was hired by the Corporation for Public Broadcasting in the 1990's to be its inspector general after retiring from the federal government, where he had served as a deputy inspector general at the Environmental Protection Agency.

No sanctions or further action against Mr. Tomlinson will follow from the report's findings, Mr. Konz said. But some broadcasting officials fear it may be used to attack the corporation's budget, which is already in jeopardy as lawmakers look for money to help pay for rebuilding the Gulf Coast and starting an avian flu inoculation program.

The report said that Mr. Tomlinson violated federal law by promoting "The Journal Editorial Report" and said he had "admonished C.P.B. senior executive staff not to interfere with his deal to bring a balancing program" to public broadcasting. The board is prohibited from getting involved in programming decisions, but the investigators found that Mr. Tomlinson had pushed hard for the program, even as some staff officials at the corporation raised concerns over its cost.

An e-mail from around the same time shows that he threatened to withhold some money to public broadcasting "in a New York minute" if public broadcasting did not balance its lineup.

The investigators found evidence that "political tests" were a major criteria used by Mr. Tomlinson in recruiting the corporation's new president, Patricia Harrison, a former co-chairwoman of the Republican National Committee and former senior State Department official.

According to the report, she was given the job after being promoted for it by an unidentified official at the White House. Investigators found e-mail messages between Mr. Tomlinson and the White House that, while "cryptic" in nature, "gives the appearance that the former chairman was strongly motivated by political considerations in filling the president/C.E.O. position." The corporation's presidency, its senior staff job, has historically been reserved for a nonpartisan expert in public broadcasting.

The report said Mr. Tomlinson defended his decision to hire a candidate with strong political ties because of the need to build relationships with Congress for future funding requests.

Ms. Harrison disputed suggestions that she was motivated by politics.

"Only actions will dispel critics who believe I have a political agenda, which I do not have," Ms. Harrison said in an interview today. "I want to define my tenure in as open a way as I can." She said that excellence, creativity and quality are as important in programming as objectivity and balance.

The report said politics might have been involved in other personnel decisions. In one case, a candidate to become the senior vice president for corporate and public affairs was asked by a board member about her political contributions in the last election. Another official was given a particular job title at the corporation at the request of the White House, the report said

The report said Mr. Tomlinson's decision to hire two Republican consultants to help the corporation in its lobbying efforts against public broadcasting legislation last year was "not handled in accordance with C.P.B.'s contracting procedures." The inspector general criticized another contract with a researcher to monitor the "Now" program, when its host was Bill Moyers, because it was signed by Mr. Tomlinson without informing the board and without board authorization.

The report said that a White House official, Mary C. Andrews, worked on a plan by the corporation to create a new office of ombudsmen to promote balance in programming. Ms. Andrews had been hired by the Corporation for Public Broadcasting at the time but was still on the White House payroll.

It said her efforts "appeared to be advisory in nature and she did not provide the ombudsmen with guidelines on how to operate or interfere with their functioning."

But it also found that the decision to sign contracts with two ombudsmen "does not appear to comply with established C.P.B. procurement processes."

Following a board meeting this morning at which the corporation adopted a series of resolutions to impose tighter financial controls, Mr. Tomlinson's successor as chairman, Cheryl Halpern, met with senior lawmakers in hopes of blunting any political fallout.

But the report poses its own problems for Ms. Halpern, a Republican fund-raiser, and the rest of the board, which for many months supported Mr. Tomlinson's broader efforts at objectivity.

"Our review found an organizational environment that allowed the former chairman and other C.P.B. executives to operate without appropriate checks and balances," the report said. It ascribed the problems, in part to the "culture of C.P.B."

Ms. Halpern headed the board's audit committee under Mr. Tomlinson, and she raised concerns among executives at National Public Radio for criticizing its coverage of the Middle East. She was also Mr. Tomlinson's choice to succeed her, in part, he has said, because of her continued commitment to end any programming bias.

The report questioned a severance package for the corporation's former president, Kathleen A. Cox, who was forced to resign abruptly last April after a series of disagreements with Mr. Tomlinson. According to the report, the package was more than three times her annual compensation, and Mr. Tomlinson structured its payouts over a period of years so that the lump sum would not be disclosed on publicly available tax records.

In a statement attached to the report, Ms. Cox named other board members aside from Mr. Tomlinson who she said were involved in some of the decisions criticized by the inspector general. Ms. Cox said she was forced to resign after Mr. Tomlinson told her that she was "not political enough" for the job

The report came in response to requests by two senior Democratic lawmakers, Representative David R. Obey of Wisconsin and John Dingell of Michigan. Their request followed an article in The New York Times last May that described the contract to monitor the "Now" Show, the plan to hire Ms. Harrison, the role played by Mr. Tomlinson in promoting "The Journal Editorial Report," and Ms. Andrews role in the creation of the office of ombudsman.

Mr. Tomlinson remains the head of the Broadcasting Board of Governors, which supervises all American government-broadcasting programs overseas. The inspector general of the State Department is examining accusations there of misuse of federal money and the use of phantom or unqualified employees by Mr. Tomlinson.

In a recent letter, Senator Chris Dodd, Democrat of Connecticut, asked President Bush to consider ordering Mr. Tomlinson to step down from the board of governors until that investigation was completed.
http://www.nytimes.com/2005/11/15/bu...rtner=homepage





Computers Crash Into TV Sets

With their audiences fragmenting and advertisers decamping to the internet, the US TV giants had no option
David Kiley and Tom Lowry

A string of groundbreaking deals struck on Monday has been heralded as the beginning of a media revolution. NBC and CBS abandoned age-old policies and chose to make top shows available via video-on-demand services. Yahoo! announced that it will enable television fans who are away from home to programme their TiVo digital-video recording devices remotely. "The computer has crashed into the TV set," declares Brian Roberts, chief executive of Comcast, the country's largest cable operator, which will let customers order up CBS prime-time shows just hours after they are on air.

But amid all the hue and cry about the growing consumer disdain for the daily TV schedule and enthusiasm for DVRs and iPods, one thing was missing: the business model. How will the producers of entertainment replace the profits they made from selling advertising aimed at a mass audience?

So why the rush by media giants into the on-demand world? They're worried that audiences are fragmenting and that advertisers won't keep paying for general audiences, who are turning away from their messages. The internet and hand-held devices provide access to all kinds of entertainment for a small fee. Internet ad revenue amounts to only a fraction of the $17.8bn (£10.4bn) that network television ads generate, but the online take is growing by 40 per cent a year. Network dollars are up only 2.6 per cent, and that's the result of price increases that will be difficult to sustain.

"We have great content. What we need are new revenue streams," says Leslie Moonves, chief executive of CBS.

Even scarier for the networks is the growing competition from free content on the internet. File-sharing websites like eDonkey, which don't charge anything, already account for half the volume of data - TV shows, movies and music - sent via the web in a given day. Some three million people are using eDonkey at any given time.

"There is no doubt that the merger of the living room TV set and the world wide web is coming soon," says Rishad Tobaccowala, chief innovation officer at ad agency Publicis Groupe.

So even though they don't yet have a clear profit plan - and they risk cannibalising some of their traditional TV fans by dangling 99 cent downloads - the networks are ploughing ahead. Certainly, they have watched giants in other old-economy industries stumble as they try to hang on to time-honoured revenue streams while new rivals make inroads and consumer preferences shift.

The networks, along with their counterparts in radio, movies and professional sports, need only consider old-line companies such as Eastman Kodak, which was crippled by the digital photography revolution. Newspapers and magazines face stagnant or declining readerships and restless advertisers. So far, publishers haven't figured out the formula for generating online revenue that's anything close to what they're making from their struggling paper- and-ink editions.

Martin Franks, an executive vice- president at CBS, who helped forge the Comcast deal, acknowledges that offering prime-time shows such as CSI at 99 cents a time is very much an experiment, not a clear path to profits. But the network knows it must adapt to changing attitudes.

"We will look at how people respond, and we may adjust those prices," says Franks, who is optimistic about the foray. He offers the hypothetical case of a highly successful 8pm show that snares 20 per cent of the total viewing audience. "That means that 80 per cent of the households aren't watching" that programme, he notes. "There is just so much audience available" to whom an enterprising network can try to sell on-demand versions of the same show.

That's why the networks are dipping their most profitable toes into unknown waters, making some of their top-rated shows available in new ways. A deal ABC struck last month to have episodes of its hit Desperate Housewives available for download on Apple's video iPods for $1.99 shows how the networks are cautiously experimenting. The series about the wacky women of Wisteria Lane generates $11.3m in ad revenue per episode, according to Forrester Research. That translates into an estimated 45 cents per viewer, per episode. By contrast, ABC is expected to earn $1.20 per download of an episode after Apple has taken its cut. Even if 20 per cent of the show's audience shifts its viewing from traditional TV to iPod and ad revenue falls accordingly, ABC would still net $1.8m more per episode than if Desperate Housewives weren't available on demand.

But a hit like Desperate Housewives is the exception, not the rule. The networks have only a small number of highly rated shows, and it's unlikely that the duds would appeal to iPod users. It's all too obvious that many advertisers are turning away from less popular television fare. The networks have responded at times by twisting arms. To hawk their wares on Desperate Housewives, advertisers must comply with ABC's demand that they buy time on low-rated shows, too, as part of a deal.

Advertisers are increas- ingly sceptical of the iffy science of broadcast-TV ratings, which aim to measure slices of the viewing audience, such as the most sought-after demographic of 18- to 49-year-olds. Video delivered on demand - whether via the internet or cable - allows for much more precise counting, not to mention the opportunity to gather detailed information from viewers asked to register online.

As a result, "the traditional prime-time TV placement of 30-second ads is dying a fast death", says Fred Suckow, marketing director at Nissan North America. The car maker still spent $721m on TV ads in the US last year. But Suckow says he is more excited about the four-minute promotional films on the 350Z sports car and Titan pick-up truck he has been running on DirectTV's programme menu, which consumers have to click on to watch. In one of the recent announcements, NBC said it would provide the DirectTV satellite network with programming.

As networks try to figure out a way to make on-demand profitable, they can look to their advertisers for examples. Big marketers are already exploring what consumers will tolerate - and even like - in an online ad. General Motors is expanding a programme that puts short promotional films on the on-demand menus of cable systems. This idea tested well in Philadelphia, where people identified as close to buying a car showed strong interest in watching the long- form ads. TiVo, for its part, places icons on 30-second ads that drive consumers to longer promotions if they are interested.

The urgency of the networks' move online may wane in the short term before picking up again. Most baby boomers still aren't downloading free video from the internet, and blue-chip companies are shelling out big bucks for old-fashioned advertising on TV shows. But consumers under 30 are turning off, and audiences are splintering.

For that reason, Google is the company, more than any other, that frightens the media establishment. The company's ad revenues were $6bn last year and are expected to be $10bn this year. What disturbs programmers and distributors is that the company hasn't even scratched the surface of what its search technology might be able to do.

Soon it won't be just the viewers deserting prime-time TV. Big-name celebrities may flee, too. The radio personality Howard Stern is quitting Infinity Broadcasting for Sirius Satellite Radio on 1 January, but he's also taking his audience to an on-demand format, charging $9.95 per month for 35 hours of shows.

That service, in demand, is expected to have about $750m in revenues this year, which includes some early Stern subscriptions. If he succeeds, others may follow. Top talents such as Aaron Sorkin, Mark Burnett and Larry David could cut out the middle man and develop programmes that go straight to broadband. They'd avoid all the annoying memos from network executives - and get to collect the ad dollars themselves.
http://cache.directorym.com/creative...=168&source=33





TV Networks Say Digital Recorders Raise Viewership
Michele Gershberg

Far from being the TV doomsday machines that some have predicted, digital video recorders that allow viewers to skip advertising and watch shows at their leisure will actually boost television audiences, the major networks said on Wednesday.

That was the principal finding in a report issued by the six major networks -- CBS, ABC, NBC, Fox, the WB and UPN -- that sought to allay concerns in the media industry that DVRs will undermine the commercial value of broadcast television.

Advertisers and investors have watched the entry of DVRs into the mass market with a keen eye for several years. Some predicted the features that let viewers skip ads and watch programs at their leisure would spell the death of ad-supported broadcast TV and its prime-time programing schedule.

But in their research on the use of DVRs, the television networks said the technology offered an opportunity to attract viewers who might otherwise miss shows when they first air.

"For most of the top television programs, the audience will be greater for these programs as DVR penetration increases," David Poltrack, head of ratings research for CBS, told reporters. "The DVR is going to increase viewership to major network television programs."

Nearly 8 percent of U.S. homes use a DVR, with that number expected to grow to 39 percent by 2010. Acknowledging that trend, Nielsen in January will begin to issue national television ratings that include DVR playbacks within a day of original airing and up to seven days later.

On average, homes with a DVR watched 5.7 hours of television daily compared with 5.1 hours for homes without the device, the networks said. DVR households still watch about 90 percent of their television at original broadcast time, while the remaining 10 percent that is recorded favor the most popular broadcast programs during a given season.

While 90 percent of viewers surveyed said they skipped all or most commercials when they watched a show played back on DVR, the networks' research showed 58 percent paid attention to the commercials in a fast-forward mode and 53 percent have gone back to watch an ad that interested them, the networks said.

Advertisers have already shifted a portion of their spending to new media outlets, trying to reach consumers who devote more time to the Internet or other forms of entertainment. Many view television as part of a bigger mix of commercial vehicles, but say it has lost its dominant role.

"No single aspect of additional media choices that are occurring today is that concerning," said Ellis Verdi, president of the DeVito/Verdi Advertising agency. "The pie has been split up many different ways."

Television networks are also exploring new revenue models without advertising, including a deal between ABC and Apple Computer Inc. to sell downloads of its most popular shows on the portable iPod media player. NBC and CBS will offer video-on- demand playbacks of their shows for a fee as well.

"I think the entire DVR thing is transitional," Poltrack said. "We're probably going to see a much more complicated world where video on demand surpasses DVRs."

CBS is part of Viacom Inc., ABC is owned by Walt Disney Co., NBC is a division of General Electric and Fox is controlled by News Corp..
http://news.yahoo.com/s/nm/20051116/...NlYwN5bmNhdA--





Documentary Makers Rally For Fair Use
Gregg Kilday

Five organizations involved in documentary films will next Friday release a manifesto of sorts titled "A Documentary Filmmakers' Statement of Best Practices in Fair Use," which will set out guidelines under which filmmakers can make use of copyrighted material without being subject to often exorbitant licensing fees.

Growing out of a study conducted last year by American University professors Pat Aufderheide and Peter Jaszi, the statement should provoke discussion that will be of far more than just academic interest.

The report comes from the University Film and Video Assn., the Society for Cinema and Media Studies, Arts Engine, the PBS series "P.O.V." and public television's Independent Film Television Service.

Fair-use practices -- which have been upheld by the courts as a way of balancing the extension of copyright protections -- are a matter of established practice in the print media. One publication can quote from another, within reasonable limits, without violating copyright. But in the visual media, the practice of licensing rights has evolved into a complicated morass. Filmmakers, when they want to include a clip from a news broadcast or another film, are often asked to license not just the clip itself but also various underlying rights -- say, for example, the music rights to a tune that happens to be playing in the background when a film crew is shooting in a real-life study.

In their initial study, Aufderheide and Jaszi found that for many filmmakers, licensing rights has become not just an expensive proposition but also an inhibiting one. Citing dozens of examples, they contend, for instance, that the budget of Jonathan Caouette's homemade 2004 documentary "Tarnation" ballooned from $218 to $400,000, "using most of the eventual budget to clear rights."

Since rights are often licensed for fixed periods, further problems pop up when they must be renewed. Henry Hampton's "Eyes on the Prize," a study of the civil rights movement, is now out of circulation because it originally purchased five-year licenses and renewing them was prohibitive.

More ominously, the researchers found that problems with right clearances are even leading some filmmakers to self-censorship. Jeffrey Tuchman ("The Man From Hope") said that he had shelved a project on politics and the media because rights issues had become "so extortionate."

The authors concluded, however, that the whole issue of fair use is widely misunderstood in the film arena, and that distributors and networks often reflexively ask for clearances as a condition for releasing or airing a film even though under fair use, the clearances aren't actually necessary.

They did not call for any new legislation -- and even cautioned against challenging established fair use doctrine in court. Instead, they argued that fair use is more available to filmmakers than is generally recognized and so there needs to be an industrywide discussion about fair use practices.

Over the past year, Aufderheide and Jasci have continued to meet with filmmakers around the country to develop the statement.

"This is designed specifically to be nonconfrontational," Aufderheide says of the statement. "We want to reduce the level of ambiguity and signal the availability of this right. It's about the reinforcement of the legitimacy of existing law."

After all, the filmmakers whose input helped define the statement are, or aspire to be, copyright-holders themselves. It's in their interest to strike a balance that allows them fair use of existing materials when creating their own original works, while also protecting their work from anyone who might want to make unfair use of them in the future.
http://news.yahoo.com/s/nm/20051111/...documentary_dc





Extension of Patriot Act Faces Threat of Filibuster
Eric Lichtblau

A tentative deal to extend the government's antiterrorism powers under the law known as the USA Patriot Act appeared in some jeopardy Thursday, as Senate Democrats threatened to mount a filibuster in an effort to block the legislation.

"This is worth the fight," Senator Russell D. Feingold, a Wisconsin Democrat who serves on the Judiciary Committee, said in an interview.

"I've cleared my schedule right up to Thanksgiving," Mr. Feingold said, adding that he was making plans to read aloud from the Bill of Rights as part of a filibuster if necessary.

The political maneuvering came even before negotiators for the House and Senate had agreed on a final deal to extend the government's counterterrorism powers under the act.

With a tentative deal in place on Wednesday, Congressional negotiators had been expected to reach a final, printed agreement by early Thursday for the full House and Senate to consider. But despite minute-by-minute updates about a possible conclusion, the day passed on with no final agreement, causing no shortage of nervousness among Bush administration officials and Republican supporters of the tentative deal.

By Thursday evening, officials said negotiators had reached what amounted to an impasse for the day, as those from the Senate pushed for further civil rights safeguards that were seen as unacceptable to House leaders. Talks are expected to pick up again on Friday, officials said.

The tentative deal reached by negotiators would make permanent 14 of the 16 provisions of the law that are set to expire at the end of the year. The remaining two provisions - related to government demands for records from businesses and libraries and its use of roving wiretaps - would have to be reconsidered in seven years, as would a separate provision on taking aim at people suspected of being "lone wolf" terrorists.

But in the eleventh-hour negotiations to complete the deal, Congressional leaders discussed changing some crucial elements of the agreement in response to concerns from lawmakers, officials said. One proposal would have lowered the "sunset" on the three investigative provisions from seven years to something closer to the four years approved by the Senate in its version of the bill earlier this year.

In a letter Thursday, a bipartisan group of six senators said the tentative deal had caused them "deep concern" because it did not go far enough in "making reasonable changes to the original law to protect innocent people from unnecessary and intrusive government surveillance."

Reflecting the political breadth of concerns about the law, the letter was signed by three Republicans - Senators Larry E. Craig, John E. Sununu and Lisa Murkowksi - and three Democrats - Senators Richard J. Durbin and Ken Salazar and Mr. Feingold.

The group called for tighter restrictions on the government's ability to demand records and its use of so-called "sneak and peak" warrants to conduct secret searches without immediately informing the target, among other measures.

"We have worked too long and too hard to allow this conference report to eliminate the modest protections for civil liberties that were agreed to unanimously in the Senate," Ms. Murkowski, of Alaska, said in a separate statement.

"There is still time for the conference committee to step back and agree to the Senate's bipartisan approach. If the conference committee doesn't do that, we will fight to stop this bill from becoming law."

Republican leaders said they remained confident that a deal would be worked out that would accommodate the newly raised concerns from members of both parties. But the late maneuvering could thwart the leaders' hopes to have a deal in place before Congress breaks for Thanksgiving next week.

The Bush administration, which saw the negotiators' tentative agreement as a strong endorsement of its demand for tough antiterror tools, has made the reauthorization of the act one of its top legislative priorities, and officials have been pushing for a quick resolution to avoid hitting a deadline at the end of December, when several major surveillance and investigative powers in the law would expire.
http://www.nytimes.com/2005/11/18/na...18patriot.html





Internet Still Young, Faster Access To Spur Growth
Duncan Martell

The Internet has given rise to profitable companies such as Yahoo Inc., Google Inc., eBay Inc. and others, but the industry is still in the early days and will be further fueled as even faster Internet access proliferates through the United States and other countries, executives said on Wednesday.

"We are seeing the beginning of things," said Reed Hastings, chief executive of online DVD rental company Netflix at the TechNet Innovation Summit in San Jose, of video on the web. "Web 2.0 is broadband. Web 3.0 is 10 gigabits a second."

Now that more homes are connected at speeds of 2 to 3 gigabits per second, that has allowed for viewing of movie trailers and the like, and has opened up new markets for companies such as eBay, Salesforce.com and other Internet companies.

"Now we're seeing services and applications," said Jerry Yang, co-founder of Internet media firm Yahoo. "This has been one of the promises the Internet has offered for a long time -- the consumer can really be the programmer."

As broadband rolls out, companies such as Yahoo and online customer relationship management software maker Salesforce.com and others are building ever more complex services that run over the Internet and are used through a simple Web browser.

"Everything is really driven as a service over the Internet," said Mark Benioff, chief executives of Salesforce.com during a panel discussion on what is next for the Web. "Instead of that traditional concept of you having a data center in your house or your business, you will use these services."

For eBay, the leading online auctioneer, the Internet has obviously allowed it to connect buyers and sellers efficiently, cheaply and quickly, said Bill Cobb, president of eBay North America.

"It's all about freedom," Cobb said. What the Internet does now is it allows convergence between a seller and a buyer. All these inefficiencies in the supply chain can be eliminated."

In addition to building communities of buyers and sellers on the Internet, eBay has expanding its services. Recently it bought Skype, which lets its users talk over the Internet, allowing for another form of communication via the Internet.

"If you go to the heart of it it's about communications," Cobb said.
http://today.reuters.com/news/newsAr...&srch=internet