Peer-To-Peer News - The Week In Review - February 21st, '04

[JackSpratts]

Quotes Of The Week

"We have seen attempt after attempt by government agencies to implement sometimes ominous regulations to allow the federal government to invade the privacy of American citizens." - Rep. Steve Chabot.

"These types of scare tactics are not permissible and amount to extortion." – Bart Lombardo, attorney for file sharer.

"Controlling distribution on the Internet is now central to success in the music business. There are strategic changes that the industry must make in order to survive." - Eric Briggs





Um, Can I Borrow Everything?

A new survey claims that the overwhelming majority of online files is concentrated in the hands of surprisingly few filesharers. Less than ten percent of computer users who have music files on their harddrives control “nearly three quarters” of all content. These so called power users are getting a lot of attention lately since in theory it’s a lot cheaper stopping a few with lawsuits than it is going after everybody. That’s what they say anyway, in practice the lawsuits seem to be waste of time. It’s been nearly a year since the RIAA started them and filesharing is as big as ever. As a matter of fact some studies show it’s gotten bigger. Nevertheless a pundit could spend his life explaining why the RIAA does what it does and still not get to the bottom of what motivates their self-defeating activities. So let’s forget for a moment the whys and how comes and let’s look at some figures.

From The Article:

"The study estimated that only 8 percent of downloaders have more than 1,000 music files on their computers. But those large users account for about 56 percent of an estimated 11.1 billion downloaded files, according to the group's research. And the average number of music files held by those heavy users is 2,300 songs.

Another 18 percent of music files are held by another 8 percent of the downloaders with 501 to 1,000 music files. That means that nearly three-quarters of all music files can be found on 10 percent of computers that have more than 500 music files, according to NPD.

Overall, about 40 million households had at least one music file downloaded to the computer."

It may be small percentage wise, but relative or not, 10% is huge in real numbers. If approximately 40 million households have at least one file, and a household is defined as three people, that's 120 million file sharers in the US alone, a number more inline with my own estimates of 100 million, and many more than the usual 60 million users we hear quoted by most people in the media.

10 % of 120 million is 12 million people.

That the NPD uses their own survey to justify the RIAA's lawsuit campaign makes less and less sense - not more – when user bases get this large -

"The RIAA's focus on those sharing the most files makes sense, because this group provides the most egregious example of one of the music industry's most pressing business issues -- copyright infringement."

It may seem like it makes sense and it sure sounds good to corporate boards, but if in fact suing 1000 people a year out of twelve million users is not having the desired effect, or having the opposite effect which it arguably is, it’s time to rethink the policy if only from a business point of view.

Then There’s This

As harddrive capacities skyrocket and prices continue to plunge, soon everyone, not just the 12 million users now ahead of the wave will have the space and the ability to create – and fill - their own celestial jukeboxes. Don’t expect them to fill 10,000 slot 40 gig iPods at 99 cents a song. It won’t happen (all the same I’d love to see the receipt!) Soon capacities will hit a Terabyte and when they do we’ll need $250,000 bucks just to load them with (DRM restricted) tunes and that’s clearly out of the question, not when hooking up two drives together will transfer the contents in minutes for free. If anything can slow the percentage usage of P2P for transfers it will be this “new” sneaker net, especially when transferring that much content over even a fast P2P network could take 6 months!

At this point in their history the artists, the RIAA and increasingly the actors and the MPAA should rethink policies of chasing away users off P2P networks. Not when speeds, price and capacities are making it attractive for traders to use other methods. In person cloning of multi-terabyte harddrives will make P2P look like a picnic. The answers will not be found in courtrooms and, note to Don Henley, Washington isn’t hiding them someplace either.

I’m increasingly of a mind that direct, person-to-person swapping will be the coming huge wave, at least until bandwidth catches up to capacity, and the way things are going bandwidth will trail capacity for a long time to come. It’s been estimated that before the end of the 00’s the average personal computer will have enough room to store every single song ever recorded, plus every book and a few thousand movies. Within weeks of that happening the trades will be done and everyone will have everything everyone else has, and that means everything. Fundamentally changing – again – the equation between consumer and distributor. There will be no turning back.











Enjoy,

Jack.











So Not Intimidated

Dorm downloaders aren't fazed by recent lawsuits, they've just sharpened their skills.
Patrick Day

On a recent weekday afternoon, a 19-year-old college freshman named Shawn sat in his dorm room at the University of Southern California and broke the law: He illegally downloaded a copyrighted song off the Internet.

Shawn knows all about the record company lawsuits against those who download without permission — including more than 500 filed last month — and ongoing investigations by the Recording Industry Assn. of America into downloading activities. And he doesn't care.

"The lawsuits are a joke," Shawn says. "That doesn't stop me and my friends. It gives us something to joke about. When I'm downloading a song, I'll say, [sarcastically] 'Here I go breaking the law again. Hope I don't get sued.' "

Across town at UCLA, Jessica, a third-year sociology major, has developed a firm rule to avoid getting in trouble: "Don't share files; don't get caught."

That doesn't mean, however, that Jessica has stopped downloading music. Her desktop computer in her dorm is full of songs by Britney Spears and Radiohead, all taken illegally from file-sharing services like Kazaa and Morpheus.

She noticed that the lawsuits focused on Internet users who made their song file libraries available to others and who traded more than 1,000 songs. By making her files inaccessible to other downloaders and by keeping their number well under 1,000, she feels confident she won't get sued.

"I have friends who say I should just buy the CDs," she says. "But I don't have the money."

Shawn and Jessica (their last names, like other students quoted in this story, aren't given to protect their privacy) are just the kind of people who scare the entertainment industry to death. Alarmed at the drop-off in album sales in recent years and at the increasing ease of movie downloading, the music and film industries have been working feverishly to change attitudes about their products, whether it's with lawsuits or advertisements or working with colleges to cut down on downloading.

Is it working? The RIAA says yes, noting that 56% of college students polled last month were supportive of the downloading crackdowns. In an e-mail, Jonathan Lamy, a spokesman for the RIAA, said: "Students are learning both that 'sharing' music on peer-to-peer networks without permission of the copyright holder is illegal and that there are terrific legal alternatives for getting their music online.…. This transition won't occur overnight, but we're making real progress."

But recent visits to dorm rooms on the campuses of UCLA and USC revealed a student body more interested in avoiding the authorities than obeying them. Most of the students interviewed continue to download music, movies and TV shows using their universities' high-speed Internet connections unmindful of possible legal action. In their view, it's easy and available, so why not?

"The way I see it, it's only illegal if you get caught," says Shawn, who proudly notes that he shares every song file on his computer.

Students interviewed knew the name of at least one person whom they could turn to for downloading missed TV shows and a student at UCLA showed clips of everything from "Fight Club" to "Finding Nemo," all available from a menu on his computer screen.

Record labels began filing lawsuits last year, beginning with four college students in April, then 261 lawsuits in September and the latest round of 532 suits coming in January.

But instead of acting as a deterrent, the lawsuits have made many college students more savvy of what type of online behavior will get them noticed and what they feel they can get away with. And when one file-sharing service, such as Kazaa, makes headlines, students migrate to a different service, such as Soulseek or LimeWire, to avoid the authorities, USC and UCLA dorm residents say.
http://www.latimes.com/features/life...=la-home-style


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Music Industry Wants Info On Canadian File Swappers
CTV.ca News Staff

The Canadian Recording Industry Association has kicked off what promises to be a lengthy battle against online music sharing, and the first hurdle may be the most difficult to clear.

The CRIA has asked a number of Internet service providers to hand over contact information for customers it suspects of "egregious" uploading of music files. But at least one of those companies, Calgary-based Shaw Communications, says it intends to oppose the CRIA, citing new federal privacy laws that protect its customers.

"We're absolutely compelled under the privacy act not to provide that information," Shaw Communications president Peter Bissonnette told The Globe and Mail.

Arguments in the case begin Monday at a federal court in Toronto.

Working on behalf of major record labels, the CRIA is reportedly hunting for 29 Canadian customers from at least five different ISPs, including Shaw, Telus Corp., Rogers Cable, Bell Canada's Sympatico service and Quebec's Videotron.

So far, Shaw is the only ISP to openly oppose the CRIA's request. The company provides high-speed Internet service to about 900,000 Canadians.

Record labels contend that online file sharing violates copyright law and has hurt sales of albums and singles. Supporters of it say it stimulates demand for music and say the industry is to blame for falling sales.

The CRIA's search follows the lead of the Recording Industry Association of America, which has sued some 400 individuals in the United States. On both sides of the border, the recording industry is targeting computer users who upload musical files, not those who download songs.

In December, a California court ruled that the recording industry could not force ISPs to identify customers unless it launched a formal lawsuit and obtained a subpoena.

Such a ruling might be considered by a Canadian judge, but would not be a binding precedent.

There are also doubts about whether lawsuits against file sharers will be successful here, since Canadian laws on reproducing music for personal use differ from those in the United States.

For example, it has been legal in Canada since 1998 to make a single copy of a recording for personal use, such as copying a CD onto your hard drive or MP3 player. But the practice is illegal in the U.S.

But under the Copyright Act, it remains illegal to give or sell a CD copy to a friend, since it's not for personal use. In the same vein, distributing copies to friends online is prohibited.

Each of the ISPs involved in the case have reacted differently to the CRIA's request.

While Shaw is adamantly opposed, Telus says it plans to ask for an adjournment while Rogers remains undecided on a course of action.

Videotron is in a unique position because its parent company, Quebecor, also sells music, Videotron says it is concerned about copyright protection and considers file sharing to be "theft."

"In terms of protecting the identity of our subscribers, we're doing everything we can, but if there's a court order we certainly won't fight it," executive vice-president Luc Lavoie told The Globe and Mail. "We're actually delighted that the CRIA is doing what it's doing."
http://www.ctv.ca/servlet/ArticleNew...4/?hub=SciTech


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Big setback for DVD copying

Judge Rules Software for Copying DVD's Is Illegal
John Borland

After eight months of deliberation, a San Francisco federal judge has ruled that software company 321 Studios' popular DVD-copying products are illegal.

In a ruling released Friday, Judge Susan Illston granted Hollywood studios' request for an injunction against 321 Studios, saying the small software company has seven days to stop distributing its DVD-copying products.

The case was widely viewed as a test of how far commercial software could go in helping consumers make backup copies of their own legally purchased digital entertainment products, such as DVDs or video games. Illston wrote that federal law made it illegal to sell products that--like 321 Studios' software--break through DVDs' antipiracy technology, even if consumers do have a legal right to make personal copies of their movies.

"It is the technology itself at issue, not the uses to which the copyrighted material may be put," Illston wrote. "Legal downstream use of the copyrighted material by customers is not a defense to the software manufacturer's violation of the provisions (of copyright law)."

The ruling, which had been pending since arguments last May in Illston's court, goes a long way toward shoring up Hollywood's weakening digital copy protections for its profitable DVD business--even while potentially eliminating one key driver of sales in the DVD burner market.

In previous interviews, 321 Studios has said it has sold about 1 million copies of its DVD-copying software, many of them through mainstream computer stores such as CompUSA. Under the ruling's terms, the company will have to remove from its software the ability to "rip" copies of copy-protected DVDs or take the products off the market altogether.

The company said it would immediately ask for an emergency stay that would let it keep the software on the shelves but would appeal Illston's ruling, regardless of what happened.

"We can't just lay down for this," 321 Studios President Robert Moore said. "It is too important for the consumer; it is far too important to the evolution of our culture...We think the final battle will be fought at the Supreme Court or at the congressional level."

Hollywood executives praised the ruling.

"Companies have a responsibility to develop products that operate within the letter of the law and that do not expose their customers to illegal activities," MPAA Chief Executive Officer Jack Valenti said in a statement. "Today's ruling sends a clear message that it is essential for corporations to protect copyrighted works while facilitating the enjoyment of entertainment offerings through new digital technologies."

Long battle over DVDs
Illston's ruling is the latest in a long string of rulings that have largely gone against critics of Hollywood's protection efforts, even as the technology to copy DVDs has spread more widely online and off.

Most Hollywood DVDs are protected with a technology called Content Scrambling System, or CSS, which encrypts the content on the discs so that they can only be read by devices with authorized "keys" to unlock the data. A studio-affiliated trade group licenses those keys to DVD player manufacturers.

However, in 1999, a Norwegian teenager named Jon Johansen released a software program called DeCSS, which allowed computers to decrypt DVDs, even without a licensed "key." Once the video was decrypted, it could easily be copied, and so DeCSS quickly found its way into DVD-copying tools.

Hollywood studios sued to keep DeCSS offline, and a New York federal judge ultimately agreed that posting the software online violated parts of the U.S. Digital Millennium Copyright Act, which bars distribution of tools that break through digital copy protection mechanisms.

Not long afterward, 321 Studios began selling its own software, however. Despite the New York ruling, the company argued that its software was legal and necessary in helping consumers make the personal copies federal law allows.

The company actually initiated the legal battle in early 2002, suing studios in hopes of winning a ruling that'd say its software was legal. The studios later countersued.

In her ruling Friday, Illston was unconvinced by any of 321's arguments.

Hollywood critics have long said CSS simply controls access to DVDs and that it's not a direct copy protection mechanism. And 321 has argued that since consumers who buy a DVD have the right to access their own movie, it would not be illegal to help them access it by using 321's software.

Illston disagreed, saying CSS was plainly a way to protect copyright holders' rights, as envisioned in copyright law.

She said blocking people from making perfect digital copies of their DVDs did not unconstitutionally hamper free speech or fair-use rights. People were free to make copies of movies in other, nondigital ways that would give them access to the same content, even if not in the same, pristine form, she said.

And, she said, the fact that DVD decryption keys were widely available online in programs like DeCSS did not make Hollywood's attempts to block copying useless.

"This is equivalent to a claim that, since it is easy to find skeleton keys on the black market, a dead bolt is not an effective lock to a door," she wrote.

Earlier this month, 321 Studios released new software that makes backup copies of computer games. That product will not be affected by this ruling, the company said.
http://news.com.com/2100-1025_3-5162...?tag=nefd_lede


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Untrue Names
Annalee Newitz

LOUIS ALTHUSSER, a brilliant French philosopher famous for writing eloquently about the nature of disobedience for many years before suddenly and inexplicably shooting his wife, is the author of a little essay that reminds me very much of a hacker who named himself Fyodor. The essay, one of Althusser's masterpieces, is called "Ideology and Ideological State Apparatuses." Fyodor's masterpiece is a software program called nmap.

I had the pleasure of watching Fyodor conduct an informal presentation about nmap at the San Francisco OpenBSD User Group (SFOBUG). With his generous intelligence and humble plainspokenness, Fyodor is a geek's geek. Since he published an article about it in Phrack six years ago, nmap has grown from a small-scale program to a powerful precision tool called a port scanner that's used for investigating whether a computer is running any programs that might make it vulnerable to attack or exploitation.

The difficulty with nmap is that it's a great tool to use if you want to break into a computer network. The difference between a "good" nmap user and a "bad" nmap user is that the good one wants to fix the vulnerabilities she or he finds and the bad one wants to exploit them. Several members of SFOBUG reported that nmap's naughty reputation has gotten them into numerous scrapes – some of them said their ISP accounts had been shut down by administrators who found nmap in their directories and accused them of possessing "dangerous hacker tools."

In 2000 an engineer named Scott Moulton was brought up on criminal charges in Georgia for using nmap to scan a network he'd been contracted to maintain. A judge ruled that port scanning was legal under state computer crime laws, but Moulton still faces criminal charges from another company he scanned.

The ambiguity nmap confers on its users reminded me of Althusser's essay and the concept of "interpellation" he elaborates in it. Interpellation refers to the way people come to know themselves through a curious process of misrecognition. Althusser's argument rests on the notion that people learn who they are from the way institutions and other people define them. A person who considers himself a quick-witted computer programmer, interpellated by propaganda from the federal government or ISP administrators, might suddenly misrecognize himself as a criminal. In a famous passage about this, Althusser describes a person walking along the street suddenly hailed by a police officer who screams, "TRESPASSER!" The person cannot help turning around as if his own name is being called; by responding to the hail, he seems to say, "Yes, I am a trespasser." In that moment of misrecognition, he is given a new name, a new identity. The police officer has made him see himself, if only briefly, as a trespasser.

The word interpellation comes from the Latinate "inter" (between) and "appello" (to name). In a literal sense, the philosopher is describing how humans' names for themselves arise out of interactions between people: parents name their children, police officers name trespassers, and judges name nmap users bad or good. Regardless of your intentions or desires, you cannot always control the names you are given. And those names define you in ways you never intended; indeed, they can even confine you, as Moulton discovered when he was brought up on criminal charges for using nmap.

Names carry political freight. That's why it's crucial for nmap users – and others like them – to fight back when ISPs refuse to offer them service because they misrecognize a tool that most people use to defend computers against intrusions or to learn about the vulnerabilities in their networks. When the authorities call us trespassers, we should refuse to acknowledge that name. We are not criminals.

Talking to Fyodor in another context, with Althusser still on my mind, I asked him, "Do you want to tell me your real name?" Fyodor is the hacker handle he picked out for himself as a teenager. It isn't as if the name his parents gave him is a huge secret, although I don't know it. I was simply curious about whether he wanted to tell me, which isn't the same thing as finding it out.

"No," he said with a smile.
http://www.sfbg.com/38/11/x_techsploitation.html


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Pay, Don't Sue, Song-Swappers, Trade Group Urges
Andy Sullivan

Internet users could collect paychecks rather than lawsuits when they share music through "peer-to-peer" networks like Kazaa, under a proposal outlined by an industry trade group on Thursday.

Rather than losing millions of dollars in potential sales to online song swappers, the recording industry should give them a cut of the revenues when they distribute songs in a protected format, the Distributed Computing Industry Association said.

The scenario follows two others put forth by the trade group in an effort to forge peace between peer-to-peer networks and the major record labels that have hounded them and their users in court.

DCIA chief executive Marty Lafferty said record labels could see sales grow by 10 percent over the next four years if they embraced the new technology, much as movie studios increased their market when they embraced the videocassette recorder in the 1980s.

"Each time there's a technology breakthrough in entertainment distribution, once it's harnessed and embraced and an industry finds a way to capitalize on it, the industry does enjoy accelerated growth," he said.

Under the plan, record labels would encode their songs with copy-protection technology so users would have to pay a small fee, between 80 cents and 40 cents, to listen to them.

Prolific song-swappers would be encouraged to convert their collections of unprotected material into the protected format, and then paid a portion of the fees collected each time somebody purchases a song after copying it from them.

Eventually, user-friendly software would allow amateur musicians without recording contracts to make their music available as well, DCIA said.

But implementing the plan could be difficult as it would require the cooperation of Internet providers, record labels and peer-to-peer networks.

Most peer-to-peer networks back a model in which musicians and record labels could be reimbursed through surcharges on blank CDs, CD burners, and fees from Internet providers and peer-to-peer networks themselves.

Though any proposal to pay artists for peer-to-peer activity is welcome, DCIA's suggestions "need to be taken with a large portion of the salt shaker," said Adam Eisgrau, executive director of P2P United, a competing trade group.

An earlier DCIA proposal would have positioned member company Brilliant Digital Entertainment Inc.'s copy-protection technology as a standard, Eisgrau noted.

A spokesman for the Recording Industry Association of America said he had not had time to look over the proposal and declined comment.

Major record labels include Vivendi Universal, Bertelsmann AG's BMG, EMI Group Plc, Sony Corp.'s Sony Music and Time Warner Inc.'s Warner Music.
http://www.reuters.com/newsArticle.j...toryID=4296386


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Friday the 13th Unlucky for Microsoft, Windows Users
Jay Lyman

"This is definitely impacting the bottom line for Microsoft," iDefense director of malicious code Ken Dunham told TechNewsWorld. "They are losing steam in the sales area and losing ground in servers because of security issues. It may not be the courts that dissolve the monopoly of Microsoft, but it may be the attackers."

What started out for Microsoft (Nasdaq: MSFT) as a bad day with the reported theft and Internet posting of source code for some of its Windows operating systems turned worse as the technology giant once again saw the security of its software tested with the emergence of a dangerous Internet Explorer exploit.

Security experts said the attacks via Microsoft's Web browser -- although not connected to the source code spillage -- are particularly dangerous to Internet users because it would take only casual visiting of a Web site to become infected.

The alarming rate of emerging vulnerabilities, exploits and wriggling worms this year is compounded by the source code leak, which is likely to lead to even more security issues, according to experts who predicted the situation might spell the start of a switch from Microsoft products to other alternatives.

"This is definitely impacting the bottom line for Microsoft," iDefense director of malicious code Ken Dunham told TechNewsWorld. "They are losing steam in the sales area and losing ground in servers because of security issues. It may not be the courts that dissolve the monopoly of Microsoft, but it may be the attackers."

Malicious Leg Up

Security experts agreed that the Windows NT and Windows 2000 source-code leak -- which is being investigated by the software giant and law enforcement officials -- has broad implications for the number and severity of future attacks against Windows machines.

"Six hundred forty megabytes' worth of lines of code should be enough to find some vulnerabilities in there," Gartner research vice president Richard Stiennon told TechNewsWorld. "There will be new exploits, there will be patches, and there will be worms."

Dunham called the capability to come up with new vulnerabilities and exploits based on the exposed source code "incredible."

"The attackers are saying this morning that it does give them a leg up," Dunham said of the source-code leak. "They can look at source code they've never seen before and do things they have never done before."

He added that the source-code leak also might give an advantage to Microsoft's competitors, which now have access to their rival's code. The source code is being widely distributed and downloaded via the Web, FTP sites and peer-to-peer (P2P) networks.

Attacks Not Prevented

The theft and distribution of Windows source code comes at a time when several Internet viruses, virus variants, exploits and attacks are pounding at the Windows operating system and particularly the Internet Explorer browser.

Dunham -- who reported at least 5,000 infected computers as a result of a new, as-yet-unpatched or so-called zero-day exploit -- said the serious vulnerability in Explorer 6 could facilitate silent infection if a user merely visits a hostile Web site. Dunham recommended using alternative browsers, such as Mozilla, Netscape or Opera.

"It's flat scary to think that by just surfing the Internet your computer could be infected with a virus," he said. "This [attacker] has specific plans to hijack computers and control them, maybe to steal data, maybe to use in attacks."

Dunham, who said the danger from exploit code was tempered because it is not widespread, nevertheless warned that companies using Explorer 6 are likely vulnerable even with the most up- to-date and comprehensive security patching.

"Corporations that use IE -- even if they are fully patched because they are sensitive to security -- are wide open to attack," he said.

Death of Monoculture

Stiennon, who referred to the increasing attractiveness of alternate Web browsers on the Windows platform, said that although distaste for Microsoft wanes with the fading of issues, the company is likely to lose market share over time because of security concerns.

"During actual patch activity, the disgust level gets pretty high," Stiennon said. "Companies start looking at other platforms, and you hear words like 'diversity.' But the half-life of that sentiment seems to be about three weeks, then they're moving onto the next ones."

He added that at some point, however, it will be easier to measure the cost of dealing with patching and the pain of an all-Windows or "monoculture" approach, which will drive companies to switch. He also said the other shoe to drop will be the reaction of consumers, who have helped Microsoft gain its dominant position.

"When consumers abandon ship and buy Macintosh or anything else, it will be the beginning of a tidal shift in computing," Stiennon said.
http://www.technewsworld.com/perl/story/32854.html


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FCC: 'Pure' VoIP Not A Phone Service
Declan McCullagh and Ben Charny

Handing a partial victory to Internet phone providers, federal regulators said Thursday that voice communications flowing entirely over the Internet are not subject to traditional government regulations.

The Federal Communications Commission, in a split decision, approved a request from voice over Internet Protocol (VoIP) provider Pulver.com to be immune from the hefty stack of government rules, taxes and requirements that applied to 20th-century telephone networks.

"This is in no way different than e-mail and other peer-to-peer applications blossoming on the Internet," FCC Chairman Michael Powell said. "Such services have never been held to be telecom services." Commissioner Michael Copps opposed the decision, and Jonathan Adelstein said he partially dissented.

In a significant limitation, the decision does not address whether traditional phone regulations might apply to VoIP services that interconnect with the traditional telephone system. As a result, the FCC's vote for now only applies to developers of VoIP applications similar to Pulver.com's Free World Dialup (FWD)--software that allows voice conversations to take place between computers, but not between computers and ordinary telephones.

Other applications covered by the decision include Skype and instant-messaging programs from Microsoft, Yahoo and America Online. But the ruling appears to leave in limbo VoIP services from Vonage Holdings, cable giants and others that allow calls to be placed from a computer over a broadband connection to any phone number in the world, and vice versa.

In a second, unanimous vote Thursday, the FCC said it would begin a public comment period to decide what to do about other VoIP services. Commissioners cautioned that they might take a different approach to variants that more closely resemble traditional phone service.

"Where these applications become more complicated, or more traditional, or they touch public-switched networks, they present even more complications," Powell said.

The FCC also Thursday began a rulemaking proceeding to address the problems that VoIP creates for police wiretaps and other law enforcement activities sanctioned by the Communications Assistance for Law Enforcement act.

Industry views
The outcome of the pending comment period is likely to dictate the future of state-by-state efforts to regulate VoIP providers, highlighted by a federal court decision issued last year that found that VoIP provider Vonage was not a telephone service and was thus not subject to phone rules crafted by the Minnesota Public Utilities Commission.

Still, VoIP providers said the FCC's action was a boon to their industry.

"This is a watershed event for the future of IP communications in the U.S.," Pulver.com's CEO Jeff Pulver said after the vote. "I think this is a day to celebrate if you're involved in the IP communications industry in the U.S. This should have a ripple effect around the world."

Pulver said that "state regulators should be put on notice that...they should wait for the FCC to take action before they act, and they should follow the leadership of the chairman along the way."

"It's all very good news," said Brooke Schulz, spokeswoman for Vonage, one of the most recognized VoIP providers in the United States.

The Computer and Communications Industry Association, whose members include Nokia, Time Warner and Yahoo, said it applauded the FCC's "decision not to regulate voice communications made with personal computers running peer-to-peer software." The Telecommunications Industry Association, representing hardware makers and related firms, said the vote "brings a sense of confidence that neither the federal nor state governments are going to be in the business of regulating the dynamic Internet application space."

By ruling on these issues, the FCC puts even more pressure on states like Minnesota and California to stop drafting their own separate Net telephony rules, said Vonage's Schulz. VoIP service providers fear that if unchecked, states will create a patchwork of different rules that will slow the technology's spread.

"It sends a very loud message to the states," she said.

Schulz added that the FCC's vote has an immediate impact on Vonage: Some 4 percent of its calls never use traditional phone networks, and will remain unregulated.

The view from the states
Brad Ramsey, the general counsel of the National Association of Regulatory Utility Commissioners, said he was "concerned" that a majority of FCC commissioners seem to believe that VoIP services, like the Internet, are off limits to state rules.

But for now, the FCC has left room for state utility regulators to serve a "consumer protection" role for the growing number of VoIP subscribers, he said. "None of the state commissions are interested in applying a heavy-handed treatment to VoIP providers."

California is the most influential of 25 states that are drafting Internet phone rules. These states are worried that as more conversation flows onto the Internet, there will be less funding for state public services raised from taxes on traditional telephone companies.

California's Public Utilities Commission began its own "investigation" into VoIP regulations on Wednesday. A spokesman for the commission said Thursday's FCC ruling agrees with the state's "go-slow approach" to regulating Internet telephony.

"The (FCC's) message to state regulators was clear: We should not rush to regulate this new technology under the old rules," said Susan Kennedy, a commissioner of the California commission whose antiregulatory opinion is in the minority on the board.

"It is my hope that the FCC will make further determinations on pre-emption."

A representative from the Minnesota PUC declined to comment on the decision.

Eavesdropping establishment
In fact, the decision leaves unresolved numerous policy issues relating to VoIP and has not quelled simmering dissent within the FCC.

Probably the most bitter controversy at Thursday's FCC meeting centered on concerns at the Justice Department and FBI that federal law enforcement agencies may find it too difficult to wiretap VoIP calls.

Although Thursday's decision was limited, it drew heated opposition from commissioner Copps, who objected that the ruling left unanswered how VoIP would comply with wiretap laws, among other things.

Copps said that the FCC's vote in favor of Pulver.com creates unreasonable "challenges for law enforcement and has implications for universal service and public safety." After meeting with the FBI and the Justice Department, Copps said he concluded it is "highly unwise to proceed, and I cannot and will not support this proceeding."

In correspondence made public earlier this week, the Justice Department said it is "currently drafting a request" that would ask the FCC to rule that a weighty set of wiretapping regulations applies to VoIP providers. Until the bureau backed down earlier this month, the FBI had tried to block the FCC from considering the Pulver.com request until its wiretap concerns were resolved.

Powell noted that the FBI is currently able to conduct VoIP wiretaps even without the FCC doing anything and said "we have worked exhaustively, on almost a daily basis with law enforcement authorities" before Thursday's meeting.
http://news.com.com/2100-7352-5158105.html


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Subpoenas On The Way For Nine Vanderbilt File Sharers

The RIAA sent subpoena notices to ITS officials for nine campus IP addresses targeted for illegal distribution.
Kristin Smith

Nine Vanderbilt students could be among the latest individuals sued by the

Recording Industry Association of America for illegally distributing music over the Internet — and none of them know about it yet.

The RIAA has sent nine individual subpoena notices to Information Technology Services this semester, the latest one arriving Wednesday. These notices essentially make ITS aware that Vanderbilt will be subpoenaed at a point in the future to provide the names matching the nine Vanderbilt IP (Internet protocol) addresses detected by the RIAA for distributing high volumes of media files over the Internet.

“They give me a computer’s IP address and we are obligated to identify the individual,” said Terry Cavender, network security officer for university central. “We haven’t located the names yet since we haven’t been subpoenaed. This is new ground Vanderbilt is covering.”

Vice Chancellor for Public Affairs Michael Schoenfeld stressed that lawsuits have not been filed.

“When we receive a subpoena, our attorneys will review it,” he said. “No suits have been filed. A subpoena is the step before the lawsuit, which is one of the number of things the RIAA is doing.”

Both Cavender and Schoenfeld said they do not know how long the time period is between receiving subpoena notices and receiving actual subpoenas.

“It’s basically an agreement between service providers and the RIAA to provide a notice first,” Cavender said.

By stipulations set down in the Digital Millennium Copyright Act of 1998, the RIAA can file suits through the “John Doe” process, meaning they can begin the suit process before a name is known.

The recent subpoena notices are a step beyond the more common copyright infringement notices which ITS receives a few of each week.

“People like the RIAA, Paramount and Disney employ people to find people who are distributing their product,” Cavender said. “When we receive a copyright infringement notice, I’m obligated to remove the machine from the network and wait for the student to contact me.”

Cavender said that students should remember that even if they have stopped downloading music from an Internet peer-to-peer network, they can still be distributing music.

“The nature of peer to peer is that anyone can get files from you,” he said.

He suggests deleting peer-to-peer software like Kazaa and Gnutella to avoid lawsuits and potential viruses.

In a recent study, security firm TruSecure found that 45 percent of files downloaded from Kazaa, the most popular file-sharing program, contain malicious code like viruses and Trojan horses.

The RIAA began suing individuals in 2003, and illegal downloading of music has dropped by 50 percent since the crackdown, according to Information Week.

When the RIAA serves subpoenas to Vanderbilt, the students involved will be notified.
http://www.vanderbilthustler.com/vne.../402c56db14a66


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Privacy Is In The House
Ryan Singel

For the third year in a row, a bipartisan congressional coalition is pushing a bill that would require all government agencies to study the privacy impact of new rules before they put them into effect.

The Defense of Privacy Act (PDF), which was approved by a House subcommittee on Tuesday, would complement the E-Government Act of 2001, which requires agencies to submit privacy impact assessments whenever they buy new technology.

Rep. Steve Chabot (R-Ohio) introduced the bill. It is backed by three Republicans and a handful of Democrats, including Rick Boucher (D-Virginia), who many consider to be the Internet's best friend in Congress.

Former Republican Rep. Bob Barr, who now works with the ACLU, introduced a similar bill, known as the Federal Agency Protection of Privacy Act, in 2002. Barr's bill and a similar one introduced in 2003 passed the House of Representatives, but were never taken up by the Senate.

Privacy groups, ranging from the Free Congress Foundation to the Center for Democracy & Technology to the ACLU, hope the third bill will be the charm.

The original impetus for the privacy impact requirement stemmed from congressional efforts to kill controversial Treasury Department regulations that would have required banks to closely monitor their customers and report suspicious behavior to the federal law enforcement agencies.

Although those rules were withdrawn after public and congressional outcry, portions of those rules were later included in the Patriot Act.

At Tuesday's meeting of the House Judiciary's Subcommittee on Commercial and Administrative Law, Chabot argued that "privacy is not a partisan issue" and that civil liberties need not be sacrificed for counter-terrorism programs.

"I introduced the bill because a reasonable expectation of privacy is too often a regulatory afterthought, and we have seen attempt after attempt by government agencies to implement sometimes ominous regulations to allow the federal government to invade the privacy of American citizens," said Chabot.

James Dempsey, executive director of the Center for Democracy & Technology, testified before the committee, calling the bill a good first step that would force government agencies to think of privacy when drafting rules, rather than scrambling later to address privacy.

"One of the best ways to protect privacy is to raise privacy concerns early in the development so those concerns can be addressed and mitigated in advance," Dempsey said. "We call this privacy by design, building in the privacy protections from the ground up, before a system is implemented and before it is too late."

Gregory Nojeim, the associate director of the ACLU's Washington office, called the bill a "very sensible and modest piece of legislation."

"The bill doesn't tell agencies they can't issue regulations that violate people's privacy rights," Nojeim said. "It simply tells them they must consider alternative, privacy-sensitive regulations. They don't have to adopt those, however."

The hearing, which included testimony from former Virginia Gov. James Gilmore and University of Michigan law professor Sally Katzen, also doubled as an oversight hearing on the activities of Nuala O'Connor Kelly, the chief privacy officer for the Department of Homeland Security.

Although several agencies -- including the Postal Service, the State Department and the Internal Revenue Service -- have chief privacy officers, O'Connor Kelly is the only one whose position is mandated by law, which committee members agreed gives the position more clout.

Both the committee and the other witnesses praised O'Connor Kelly's work over the last nine months, calling her work proof that other agencies and the Office of Management and Budget also should have privacy officers.

Over the past year, O'Connor Kelly has been involved in the development of the second generation of the airline passenger-screening system (known as CAPPS II), the ongoing negotiations with the European Commission over the transfer of passenger data to border-control agencies, and the new foreign visitor biometric database system (known as US-Visit).

Despite continuing reservations about US-Visit, privacy advocates have praised O'Connor Kelly's work on the program's privacy impact assessment (PDF). They point to the report's description of the program's database structure and the discussion of possible security risks that could expose personal data as evidence of O'Connor Kelly's thoroughness.

In her testimony, professor Katzen, who helped guide the Clinton administration's privacy policies, guardedly praised O'Connor Kelly's work in revising CAPPS II's privacy act notices, though she said changes still needed to be made.

"O'Connor Kelly's success demonstrates that the government needs 24 more O'Connor Kellys, along with a chief privacy czar in the Office of Management and Budget," Katzen said.

She added that the Patriot Act shows that the Justice Department in particular needs a strong privacy officer, an idea that at least one committee member said he would be looking into.

The Bush administration has yet to take a public position on the bill, which now heads to the full House Judiciary Committee for final markup and approval, before it can be sent to the House floor for a vote.
http://www.wired.com/news/privacy/0,1848,62243,00.html


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iPod Journal

The World at Ears' Length
Warren St. John

Idea for a sci-fi horror flick: New York is invaded by zombielike robots. They ghost along the sidewalks, oblivious of pedestrians, and have frequent near misses with taxis and cyclists, causing chaos. They carry a secret weapon — no bigger than a deck of cards — that can render humans invisible. The only sign they are not quite human themselves: two white wires that run from their ears into their clothes, just below the neckline, as distinctive as the bolts in the Frankenstein monster's neck.

No need to make the movie, of course. They're already here: the iPod people. Apple sold around 750,000 iPods during the holiday season, up from 250,000 in the same period in 2002, and a disproportionate number were bought by New Yorkers, said Vipul Patel, an analyst at Jupiter Research, a technology research firm. Having had time to figure out how to use the gadgets and their new imitators, and to load them up with a gazillion tunes, the wave of new iPod owners are strutting around Manhattan in a seemingly endless parade of one-person dance parties.

Much has been made of the reasons for the device's popularity — you can D.J. the soundtrack to your life, for example, or iPods hold a record store's worth of music. But not a few New Yorkers also notice that, corked off from reality by their ear buds, iPod users are gumming up the works of the city. They stand in line at Starbucks and at banks, unaware that the person at the counter is yelling "Next!" No matter how loudly you shuffle your feet on the sidewalk behind them — making the scrunchy sole-on- cement sound that New Yorkers instinctively understand as "Move!" — they won't step aside. And as the less fortunate among us know, forget asking these people if they can spare some change. They can't hear you!

"They're in a daze," said Rosie Garcia, the manager of the Hot & Crusty bakery in Grand Central Terminal, who said she deals with customers in earphones "all the time."

"It's: `Can I help you? Can I help you? Can I help you!' " she said. "You have to wave at them to get their attention."

Since the Walkman arrived in the United States in 1980, New Yorkers have been using gadgets to tune each other out, and cellphones have certainly done their share to complicate social relations. But the rise in sales of iPods and other portable digital players like the Rio Cali amounts to a significant escalation in New Yorkers' continuing campaign to ignore, snub and look through one another.

The immense storage capacity of iPod and its imitators offers at least the opportunity for total, uninterrupted isolation from one's surroundings for long — extremely long — periods of time. It is now possible to commute, to stroll, to shop, even to go to a Knicks game, without having to listen to another human being, or even the same song. There is no rewinding or CD-changing to permit the outside world to leak inside the cocoon. With a jukebox in your pocket, a suitable tune is always at the ready, no matter your mood. And if you have little white ear buds rammed in your ears, there is always an excuse not to acknowledge fellow humans. "I'm busy right now," iPod users seem to say. "I'll get back to you in 10,000 songs."

"It's `I'm listening to my music — don't bother me,' " said Douglas Ladendorf, 40, a Webmaster who got his iPod in December and uses it to listen to Sting and Seal on his daily commute in Manhattan. "Someone stops you, and they ask for money or any number of guilt-trip-type things — everyone is trying to avoid those situations. Having an iPod makes people pass over you. It's too much effort to get your attention."

Michael Gitlitz, an iPod-wearing art dealer walking down Fifth Avenue on Wednesday, put it another way: "It's the next best thing to being transported from place to place in a pneumatic tube."

Much of America — the part that lives behind the wheel of a car and views life through the glare of the windshield — has long since adapted to life in a bubble. But city dwellers are supposed to be different; their constant interaction with other human beings, urbanites like to think, makes them more socially advanced creatures than the detached inhabitants of car culture. But could the iPod and similar high-capacity players be turning the vibrant sidewalks of New York into the pedestrian equivalent of the soulless freeway?

Yes, it could, says Michael Bull, a lecturer in media and culture at the University of Sussex in England and the world's leading — perhaps only — expert on the social impact of personal stereo devices. Mr. Bull has studied both the Walkman and the iPod, and says the iPod is changing urban life.

"The potential for continual play means you never have to tune in to the environment you're in," he said. "You're perpetually tuned out."

Mr. Bull said that wearing an iPod all the time amounts to "blanking out" other people.

"We have certain rules of civility and recognition — to recognize their use of space," he said. "In some ways the use of these devices denies that prerogative. If you're in an environment where many people are blanking you out, that makes the environment more inhospitable."

Asking actual iPod users about this subject is no easy matter, since it means invading the cocoon they have spent $300 or more to construct. To get their attention on Wednesday at rush hour in Midtown, I made a sign saying, "I'm an NY Times reporter — CAN I INTERVIEW YOU ABOUT YOUR iPOD?" which I held in front of anyone wearing those telltale white wires to see if I could make mental radio contact.

Peterpaul Scott, 33, was walking home from work at Tommy Hilfiger when he saw the sign and removed an ear bud, acknowledging for a moment that I existed.

Mr. Scott said he has 1,400 songs on his iPod — hip-hop, house classic, soul, rock 'n' roll — and he said he listens to it three to four hours a day.

"I like that it drowns out New York," he said. "The only time I feel weird is on an elevator. When you get on an elevator, you've got to tune back into the world."

The only strangers with whom Mr. Scott actively engages while he is in his special place are other iPod users, he said.

"It's a society within itself," he said. "You've got your biker community, your hip-hop community. And now you've got your iPod community. It's all about those wires."

Griffin Creech, a 27-year-old actor, stopped for the sign and removed his earphones. He has a thousand songs on his iPod, which he got in November, and said listening to the device in Manhattan makes him feel as though he is in his own music video. He dismissed Mr. Bull's concern over the iPod's social impact as "something some professor would say."

"It's hard to ignore New York City," he said, before replacing his earphones and going back under.

The fear that personal stereos could lead to antisocial behavior is an old one. The late Akio Morita, a founder of Sony and the company's chief executive at the Walkman's introduction, was said to have been so afraid of the device's capacity for creating solipsistic drones that he insisted early on that the Walkman have two headphone jacks and a microphone so listeners could communicate with each other. There is little evidence that the Walkman wrecked modern society, so some technologists say there is little reason to fear the iPod.

"I don't see it as a private cocoon," said Mark Poster, a professor of film and media studies at the University of California, Irvine, who has studied the social impact of cellphones. "I see it as connecting with a musician and therefore making a connection that's not related to physical space. We need to understand it, instead of saying, `It's not how we used to be, so it's bad.' "

The people at Apple, which makes the iPod, concede that a few antisocial types might use the iPod to turn off the world, but call such people a small minority. The notion that the hot-selling contraptions could lead to social ills almost seemed to hurt one company executive's feelings.

"It's a little wacky to look at it that way, when the iPod has brought so much happiness into people's lives," said the executive, Greg Joswiak, the vice president for hardware product marketing.

Of course someone trying desperately to get the attention of a zoned-out digital-player user — someone being blanked out — might see it differently. Ms. Garcia, the Hot & Crusty manager, said that when a long line of customers are frozen in place by someone lost in his own mental music video, it can be highly irritating. But she expressed a measure of awe at the immersive powers of those white wires.

"These people are very distracted by whatever it is they listen to," she said.
http://www.nytimes.com/2004/02/15/fashion/15IPOD.html


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CBS Pulls Advertisement on Medicare Prepared by Administration
Robert Pear

CBS said on Friday that it had stopped running a television advertisement for the new Medicare prescription drug law while Congress investigates its accuracy.

The 30-second advertisement, prepared by the Bush administration, assures Medicare beneficiaries that the program is not changing in any way except to provide "more benefits." Democratic members of Congress and some liberal advocacy groups say the advertisement amounts to a taxpayer-subsidized political commercial for the administration.

Dana McClintock, a spokesman for CBS in New York, said: "The ad has been pulled. It violated our longstanding policy on advocacy advertising. We pulled it as soon as we became aware of the investigation."

The government is spending $9.5 million to run the advertisement on national network and cable programs in the next six weeks.

The General Accounting Office, an investigative arm of Congress, is examining the advertisements at the request of several Democrats. The lawmakers say the commercials are inaccurate and constitute an illegal use of federal money to promote the re-election of President Bush.

The CBS policy says the network "does not sell time for the advocacy of viewpoints on controversial issues of public importance." A commercial is considered unacceptable if it explicitly takes a position on such an issue, or if it presents arguments parallel to those made by one side, "so as to constitute implicit advocacy."

CBS's decision angered Republicans in Washington.

"This is a political decision," said John P. Feehery, a spokesman for Speaker J. Dennis Hastert of Illinois.

Mr. McClintock said the decision had been made by Martin D. Franks, an executive vice president of CBS.

Mr. Feehery asserted that Mr. Franks was "a partisan Democrat" who had contributed money to Democratic candidates. CBS executives rejected the criticism as a smear tactic, and they insisted that their policy had been applied in an evenhanded way.

"People on both sides express displeasure when you have a clear and consistent policy down the middle," Mr. McClintock said.

Last month CBS rejected a request from a liberal group, MoveOn.org, that wanted to run a Super Bowl advertisement criticizing President Bush's fiscal policies.
http://www.nytimes.com/2004/02/14/politics/14MEDI.html


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DVD-Copying Maker Says Reach Too Far
Jim Suhr

ST. LOUIS - A maker of DVD-copying software accused the United States and its movie industry Wednesday of unfairly influencing copyright and privacy matters overseas, perhaps accounting for the product being pulled off shelves in Australia.

Though Australia is a sliver of 321 Studios Inc.'s global market, a distributor's yanking DVD X Copy from Australian store shelves under threats of lawsuits by a movie industry lobbying group reflects Hollywood's troubling reach, 321 chief executive Rob Semaan said.

The company since has replaced the original software with a version unable to unlock copyright-protecting encryption, though such tools readily can be bought from 321 or other Web sites.

"It's the United States kind of forcing its copyright laws on any Western country that wants to do business with the United States," Semaan said of the Australian flap.

Messages left Wednesday with the Motion Picture Association of America and the Australian headquarters of 321 distributor Conexus were not returned.

Based in the St. Louis suburb of Chesterfield, 321 is being sued in California by seven Hollywood movie studios arguing that DVD X Copy facilitates copyright infringement and piracy. Paramount Pictures and 20th Century Fox filed a similar lawsuit in November in New York; 321 wants that case transferred to California, given the other cases there.

The company also is being sued on similar grounds in the United Kingdom.

At issue is software that lets users make backups by defeating the copy protections encoded onto movie discs. The company has said the process protects against piracy because it injects electronic barriers into copies, to keep them from being duplicated further, and inserts digital watermarks and identifying information that can trace the source of any file that's transmitted over the Internet.
http://www.washingtonpost.com/wp-dyn...2004Feb18.html


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Feds Step Up Push To Wiretap VoIP Calls
Declan McCullagh

The Bush administration plans to ask the Federal Communications Commission to order Net telephony providers to comply with a law that would permit police to wiretap conversations carried over the Internet.

In a series of letters made public Tuesday, the Justice Department said it is "currently drafting a request" that would invoke the 1994 Communications Assistance for Law Enforcement Act (CALEA). That law requires telecommunications carriers to rewire their networks to government specifications to provide police with guaranteed access for wiretaps.

It is debatable whether CALEA's decade-old definition of "telecommunications carrier," crafted long before the Internet era, applies to Voice over
Internet Protocol (VoIP) providers. If the FCC rules that CALEA's definitions are not a close enough fit for the fast-growing and somewhat amorphous VoIP sector, then the Bush administration could ask Congress to rewrite the law.

Until earlier this month, the FBI had tried to block the FCC from considering VoIP's regulatory structure until the wiretap issue was resolved. But last week, the two agencies said they had reached an agreement allowing a vote on VoIP regulations to take place on Thursday.

"While it would obviously be our preference that the FCC decide these issues prior to considering other broadband proceedings, we recognize that this is not practical, and have no desire to prevent the FCC from doing its work," Deputy Assistant Attorney General John Malcolm wrote in a letter to the FCC. "We expect that the FCC will commence rule-making proceedings on CALEA-related matters in response to our petition in the near future."

Malcolm added that based on the Justice Department's conversations with FCC attorneys, he expects them to recommend that the commission "tentatively concludes that CALEA applies to broadband Internet access services, including VoIP, whether provided over DSL or cable modem."

Civil liberties groups such as the Electronic Privacy Information Center and the American Civil Liberties Union contend that CALEA's definition of telecommunications carrier clearly does not apply to most VoIP providers.

In general, VoIP providers have pledged to work with police, and some, including Level 3 Communications, do not oppose the regulations the FBI is seeking. Others, such as a coalition of 12 smaller VoIP providers that includes BullDog Teleworks and PingTone Communications, have told the FCC that "there are various industry initiatives under way, and the commission should allow those initiatives time to succeed before pre-emptively regulating."

Vonage already is able to comply with police wiretap requests, company spokeswoman Brooke Schulz said Wednesday. "We have a way to capture the data, to give them everything they need," Schulz said. "But we don't really have a way to get it from our system to their system. We've had meetings with various law enforcement agencies to figure out the best way to do that."

CALEA defines telecommunications carriers as companies that are "engaged in the transmission or switching of wire or electronic communications as a common carrier"--which probably does not apply to VoIP providers. A second definition, which covers services that are "a replacement for a substantial portion" of the local telephone network, comes closer. So far, the FCC has interpreted CALEA's wiretap-ready requirements to cover only traditional analog and wireless telephone service.
http://news.com.com/2100-7352-5157282.html


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Singapore Journal

NUS and NTU fine students for illegal music downloads
Crystal Chan

AT LEAST 25 students here have been fined by their university in the past six months for illegally sharing copyrighted music files on campus networks.

They downloaded the music via the Internet from other users who offer the music for free in the form of digital files through certain websites.

Such sharing of copyrighted material is illegal under Singapore law.

However, it was the universities, not the copyright owners, which acted against the students.

The National University of Singapore (NUS) fined 20 students $200 each. Nanyang Technological University (NTU) fined at least five students, but wouldn't say how much the fines were. No other action was taken against the students.

In the United States, many university students face legal action by copyright owners who began to file lawsuits last year.

Copyright owners complained to NTU and NUS after they tracked down the computers involved in the illegal swops.

An NUS spokesman said: 'From our logs, we are able to trace the student who logged on to the PC. The student will be interviewed. If found guilty, he or she will be fined.'

The number caught so far is a tiny fraction of NTU and NUS students, who number more than 64,000 in all.

Copyright owners have not complained about Singapore Management University, which has about 2,200 students.

All three universities have rules that bar anyone using campus resources to break the law here, which covers downloading, copying and sharing copyrighted materials without copyright owners' permission.

Lawyer Wong Siew Hong, who specialises in copyright issues, said: 'Under Singapore copyright law, the students can be sued for copyright infringement as they have made unauthorised copies of copyrighted materials.'

The law provides for offenders who sell, make or possess illegal copies to be fined up to $100,000 and jailed for up to five years.

The Recording Industry Association of Singapore (Rias), which protects the copyright of performers here, works with Internet service providers, the police, polytechnics and universities to nail culprits.

Rias chief executive Edward Neubronner warned last August: 'Those who think the Internet offers anonymity so they can get away with copyright infringement should think again.'

And now, the students know they can't be anonymous in cyberspace.

A 22-year-old engineering student at NTU, who spoke on condition he wasn't named, said: 'Now I know my identity can be tracked, I'll remove the Kazaa program from my computer and stop sharing files over the network.'

The universities do not, on their own, investigate possible illegal file-swopping unless there has been a complaint.

However, the action in this case has stopped others swopping files.

NTU engineering student Valerie Wu, 19, said: 'I won't take the risk of being fined or faced with lawsuits.'
http://straitstimes.asia1.com.sg/sin...235748,00.html


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U.S. Copyright Office Sets Webcaster Royalty Rates
Sue Zeidler

The U.S. Copyright Office has published long-awaited royalty rates for Web music broadcasts, ending a year-long process marked by legal and financial wrangling, the group named to handle the royalties said on Tuesday.

Regulations published on Feb. 6 essentially rubber-stamped a resolution reached last April between online music broadcasters and the Recording Industry Association of America, the industry trade group for big record labels like Time Warner Inc.'s (nyse: TWX - news - people) Warner Music and Vivendi Universal's (nyse: TWX - news - people) <EAUG.PA> Universal Music.

In addition to setting rates for the 2003-2004 license period, the Copyright Office also named SoundExchange -- a former RIAA arm spun off as a separate non-profit group in September 2003 -- as the sole designated agent to collect and distribute royalties from Webcasters and new online subscription services.

The recording industry and Webcasters finally agreed on a proposed 0.0762 cents per performance or 1.17 cents per aggregate hour tuned in for free, advertising-supported services. Webcasters had opposed other rates suggested by the RIAA, saying they would put them out of business.

The new regulations made official last week govern rates and terms for online music subscription services with non-interactive streaming components, Internet radio stations and traditional broadcasters that simulcast signals online.

The negotiated rates were submitted to the Copyright Office for adoption on April 14, but a legal objection by one company, finally dropped last month, led to a delay.

Under the new regulations, all covered services are required to submit a lump sum payment to SoundExchange covering the period from Jan. 1, 2003 through Feb. 29, 2004 on or before April 14, 2004, SoundExchange said on Tuesday.

Starting from March, services are required to make royalty payments within 45 days after the end of each month.

Additionally, commercial Webcasters, broadcast simulcasters and new subscription services must choose their preferred rate structure by March 8, 2004.

John Simson, executive director for SoundExchange, told Reuters that the group expects to shortly sign on to a worldwide agreement that would let Webcasters stream into foreign territories without fear of liability.
http://www.forbes.com/home_asia/news...tr1254818.html


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EMI Admits Problems With Copy Control Software
Sam Varghese

EMI Music Australia has admitted that there are problems with the copy control software which it has been using since November 2002 on music discs which it sells here, in order to try and prevent copying of the discs.

In an email sent to Canberra-based system administrator Michael Ellerman, the company wrote: "We have been advised from our parent company that an updated version of the Copy Control software will be available in April 2004 and believe that this version addresses most, if not all, of the incompatibility issues that have been raised in relation to earlier versions."

Ellerman said he was surprised to hear from them as he had made a complaint around one year ago. "It is so long back that I can't recall when exactly I sent them an email except that it was before I took a holiday in March," he said. "And, frankly, I never expected to hear back from them, certainly not after such a long time."

Ellerman's complaint was about the Massive Attack disc 100th Window; as he is a AIX and Linux admin, he uses Linux on his desktop and could not get the disc to play. He also tried it on a couple of standalone CD players at home with similar results. "It only played on a PC which runs Windows," he said.

In its reply to him, EMI said: "... we also appreciate that you have been very patient in awaiting for a response from EMI. As such, we are looking to source a replacement copy of "100th Floor Window" (sic) from a different EMI manufacturing territory which should resolve the compatibility issues that you have experienced. If you would like a replacement copy please complete the details below and reply to this email."

Ellerman laughed wryly at the reply. "Although I appreciate their sentiment, I know none of my customers would accept waiting almost a full year for a response to their complaint," was his reaction.

It may be recalled that last year one Australian consumer, Tom Dullemond of Queensland, lodged a complaint with the consumer watchdog about the low quality sound which the discs generate. The last we heard of it, the ACCC had not given him a response.

In June 2003, a resident of NSW complained to the Federal MP for his area, Workplace Relations Minister Tony Abbott, about the problems he faced in getting some of these discs to work.

Last year, there were occasions when the discs irked music buffs, served to turn people off EMI products for life, prevented radio stations from giving artists play-time, raised questions about whether they are fish or fowl, resulted in EMI pulling its copy-control forum off the web, and at least in one case had exactly the opposite effect it was intended to have.

Philips, one of the creators of the CD specs, has expressed concern over the side effects of the technology.
http://www.smh.com.au/articles/2004/...548143941.html


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China Launches Web Site On Copyrights, Patents

SHANGHAI, China (AP) - Chinese inventors have a new, electronic option for registering and advertising patents.

Under foreign pressure to stamp out rampant piracy of patents and other intellectual property, the government launched the site in collaboration with state
television.

The site -- http://www.cipmun.net/ -- is in Chinese only. Launched Tuesday, it is crammed with information on patents, news and a patent search service.

Sponsors include the State Intellectual Property Office, China Central Television and local television stations.

Among the patented products listed on the site Wednesday:

--A bicycle with solid tires (no more hunting down a sidewalk repair stall for a bicycle pump).

--A voice-controlled cellular phone advertised as ``convenient for the elderly and disabled.''

--A biodegradable plastic said to be ``kind to the environment.''

The Intellectual Property Office said an online patent application office will debut March 12.
http://www.siliconvalley.com/mld/sil...al/7927945.htm


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EFA Slams IP Clauses In US-Aust Trade Deal
Online Staff

Australians are likely to face legal action from multinational media companies according to from the intellectual property clauses of the recently announced US-Australia free trade agreement, Electronic Frontiers Australia (EFA) said today.

In a statement, the group, a non-profit national organisation representing internet users concerned with online rights and freedoms, said it was dismayed over the IP clauses which represented a massive step backwards for Australian IP law.

"The US has one of the worst systems of intellectual property laws in the world," EFA board member Dale Clapperton said. "Their Digital Millennium Copyright Act (DMCA) has been widely condemned by civil liberties and users groups throughout the world, and now the Howard government has committed itself to implementing its worst, most insidious, provisions."

EFA said US copyright terms had been extended numerous times after pressure from lobbyists and now extended to 120 years from publication, a period which it said "had no purpose but to protect the vested interests of large corporate copyright holders."

Clapperton said the 50 years (from the death of the author) specified by Australian law were ample, as it promoted the growth and re-use of public domain material, supporting ongoing innovation and development both in the arts and business. It was also in line with Australia's commitments under the World Intellectual Property Organisation treaty.

"Nothing published in the US since 1923 has ever come into the public domain, thanks to lobbying from the music and motion picture industries to repeatedly extend the term of copyright. The public domain has ceased to grow, and unless these continual senseless extensions are stopped, it will never grow again," he said.

"There is nothing positive for Australia in these clauses. No additional usage rights are granted to Australians or Australian companies, and these provisions are a blatant sell-out to the interests of large US-based media companies."

Further, "harmonisation" of Australian patent law with the US risked the creation of "software patents" in Australia, EFA said. Such patents had been regularly abused in the US by major software companies who used them to intimidate and suppress competition and innovation. "Litigation over the alleged infringement of "software patents" has become a lucrative business model in the United States, and is a path that Australia would be ill-advised to follow," it said.

Clapperton said Australian copyright law recognised only very limited "fair dealing" rights, typically for the purposes of scholarly study or review. "In contrast, Americans enjoy wide-ranging 'fair use' rights, which Australians do not, such as the right to record TV programs for viewing at a later time, or to copy a legally purchased CD to an audio cassette. Unless very specific and limited exemptions apply, Australians who perform these acts are breaking the law.

"If the Howard government couples the draconian enforcement and prosecution provisions of the DMCA with the already unbalanced Australian copyright law, it will place every Australian at the mercy of a lawsuit for breach of copyright," Clapperton said. "It will turn the Australian Internet industry into a litigation mill, as well-funded US media groups launch waves of prosecutions against Internet users and Internet Service Providers themselves."
http://www.smh.com.au/articles/2004/...388479843.html


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Firm Develops Video Game Copying System
Jim Suhr

A company whose DVD-copying software prompted copyright and piracy-related lawsuits from Hollywood is expanding into the realm of computer games, rolling out a system that lets game buyers make backup copies.

With 321 Studios Inc.'s Games X Copy software, launched last weekend, users can burn PC games onto a hard drive, CD or DVD. The company says parents requested those options to safeguard original discs from rough-and-tumble handling by young gamers.

"You no longer need to worry about scratches and broken or lost games," said Robert Moore, founder and president of 321, based in the St. Louis suburb of Chesterfield, Mo. "The software is easy enough to use that even the kids could make the backup and take it on vacation or to a friend's house -- and parents no longer have to worry about the original being damaged or lost."

Games X Copy -- fetching $60 at www.dvdxcopy.com -- creates four "virtual drives" on a hard drive, letting the user play multi-disc games without the interruption of inserting different discs. No compression is used, making the backup a true one-to-one disc conversion.

The company hopes to sidestep the cloud that has shadowed its DVD-copying software, which has sold hundreds of thousands of copies. The movie industry claims the software facilitates copyright infringement and piracy.

"We feel we have a much stronger case with Games X Copy," said Julia-Bishop Cross, a 321 spokeswoman. "PC games are widely recognized as software, and with software there's a legal precedence set that you can make backup copies."

Analysts agreed -- though there are some restrictions, including that consumers can't sell a backup copy unless they sell the original with it, said Keith Kupferschmid, vice president of intellectual property policy and enforcement for the Software and Information Industry Association.

"We endorse and fully support the advancement of technology, and we think this is a great idea and innovation," Kupferschmid said. Still, "we want to make sure the software is being used for legitimate reasons. From our perspective, we'd be on watch on how (321 is) marketing it, how it's being used and whether it's being used to create whole new piracy," as in making copies of copies.

Schelley Olhava, an analyst with market research firm IDC, suspects that 321's game-copying offering may have little impact, given already flat growth of the PC gaming market. She questioned whether consumers would need -- or take the effort -- to buy and download the 321 software at a time when "there are people already copying" without it.

It's not immediately clear how much the PC gaming industry perhaps loses each year to pirates; by some estimates, piracy costs the software industry in general well into the billions.

The Entertainment Software Association -- formerly the Interactive Digital Software Association -- said Wednesday it had no comment on Games X Copy.

The DVD-copying program lets users make backups by defeating the copy protections encoded onto movie discs. Moore has said the process protects against piracy because it injects electronic barriers into copies, to keep them from being duplicated further, and inserts digital watermarks and identifying information that can trace the source of any file that's transmitted over the Internet.

However, 321 is being sued by seven Hollywood movie studios that argue that DVD X Copy violates the 1998 Digital Millennium Copyright Act, which bars the circumvention of anti-piracy measures.

Paramount Pictures and 20th Century Fox filed a similar lawsuit in November in New York; 321 has motioned to have that case transferred to California, given the other cases there.
http://www.washingtonpost.com/wp-dyn...2004Feb11.html


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Producer Of The Grey Album, Jay-Z/ Beatles Mash-Up, Gets Served
Joseph Patel

It was an ingenious idea, and one that played so dangerously close to the third rail of copyright law that it was sure to get shut down eventually.

Cease-and-desist orders went out last week to the producer who created The Grey Album and the few independent retail stores that were carrying the CD.

DJ/producer Danger Mouse married vocals from Jay-Z's recent The Black Album with beats made from the Beatles' classic The White Album to create The Grey Album. The "mash-up" CD is one of several bootlegs created using vocals from Jay- Z's supposedly final LP (see "Remixers Turn Jay-Z's Black Album Grey, White and Brown"). But it was the only one that dared to use music from the Beatles' guarded catalog.

A representative for EMI Records served the cease-and-desist orders to Danger Mouse and stores such as Fat Beats and hiphopsite.com. EMI Records controls the sound recordings for the Beatles on behalf of Capitol Records Inc. The publishing side of the Beatles' catalog is owned by Sony Music/ ATV Publishing, a venture between Sony Music and Michael Jackson.

Danger Mouse said he created The Grey Album strictly as a limited-edition promotional item (only 3,000 copies were pressed), but it quickly caught the ear of everyone from Damon Dash to the Neptunes to Jay-Z himself, and copies found their way to hip-hop retail outlets and auction sites like eBay.

Danger Mouse said he's complied with the order not to distribute any more copies of The Grey Album. Because of the small number pressed, he didn't expect any further legal action to take place.
http://www.mtv.com/news/articles/148...headlines=true


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Copyright Enters a Gray Area
Noah Shachtman

Wack.

That's what copyright critics and Big Music foes are calling record label EMI, for clamping down on a hotter- than-hot remix album.

When DJ Danger Mouse released The Grey Album last month, the response was thermonuclear. Music critics dubbed the record, which piled the words from rapper Jay-Z's Black Album on top of the rhythms and chords from the Beatles' legendary White Album, an instant classic. File traders turned the remix into an Internet hit. The few thousand copies printed suddenly went from novelties to must- have collectors' items.

But executives at EMI, the label that owns the rights to the Beatles' sound recordings, heard the sounds of theft in The Grey Album. Danger Mouse hadn't paid for the rights to the Fab Four's music -- the 26-year-old, originally from White Plains, New York, hadn't even asked for permission to use their songs. So late last week, EMI's lawyers sent a letter to Danger Mouse -- as well as to the select record stores and eBay retailers selling his remix -- ordering them to cease and desist.

As news of EMI's demand spilled online this week, music-industry and intellectual-property activists went ballistic. It's a sign of everything that's wrong in the American copyright system, they contend. And besides, by releasing an a capella version of The Black Album, Jay-Z and his record label, Roc-a-Fella, practically begged DJs to pair his rhymes with new beats. So why should a remixer now suffer for answering the call?

"It's a great example of our two-tiered copyright system," said Glenn Otis Brown, executive director of Creative Commons, a Web-based copyright-licensing group. "Labels are saying, 'If you do (a remix) on the underground scene, it's OK. But if it's so compelling that people trade it all over the Internet, then we're going to sue you.'"

Not so, says EMI.

"This is something we do as a matter of course," said an EMI representative, "whenever we're made aware of copyright violations."

Unlike other illicit remixers -- such as avant-garde ensemble Negativland, which got into a famous fight with a certain Irish rock band over their album U2 -- Danger Mouse won't challenge EMI's directive.

"He wants a career after this," a source close to the DJ said.

"I'm just worried ... whether Paul and Ringo will like it. If they say that they hate it, and that I messed up their music, I think I'll put my tail between my legs and go," Danger Mouse recently told The New Yorker.

But remixers like Danger Mouse shouldn't have to worry about hurting musicians' -- or labels' -- feelings, argues Nicholas Reville, co-founder of the music industry gadfly group Downhill Battle.

"All kinds of artists have always borrowed and built on each others' work," he said. "These corporations have outlawed an art form."

Once a musician has released a song commercially, Harvard Law School professor Jonathan Zittrain notes, other acts are free to perform and record their own versions of the song -- as long as they pay the songwriter a standard royalty. That's why so many bands are able to play their takes on tunes like "Take the A Train" or "Louie, Louie."

Remixing and sampling are a different matter, however. There is no freedom to beat-match. And there are no set licensing fees. So while the Beatles' tunes have been recorded by thousands of bands, their song catalog has been notoriously off-limits to hip-hop and dance-music producers' manipulations. (The one exception to the rule, the Beastie Boys' Paul's Boutique, came out before the rules of sampling were clearly established.)

To Zittrain, that smacks of "copyright as a means of control, rather than a means of profit." In the American legal tradition, he notes, copyright is seen as a way to make sure innovators get paid for their work, not to keep others from being creative.

"So long as there's money to be made, it's a negotiation," he said. "There's not a lot of excitement for further downstream innovation being blocked. Nobody wants to see that."

Jay-Z's engineer, Young Guru, told MTV.com last month that the rapper released a words-only version of The Black Album so DJs could "remix the hell out of it." And they have. Kardinal Offishall and Solitair, the dance-hall reggae artists from Canada, gave the record a rude-boy twist. Atlanta-based producer Kno fused Jay-Z words with Southern sounds.

But it's Danger Mouse's pairing of classic rock and brand-new hip-hop that is the most jarring remix of the rapper nicknamed Jigga. The Boston Globe called it "the most intriguing hip-hop album in recent memory." "The ultimate remix record," gushed Rolling Stone. Copies on eBay are going for $81.

With all that hype, "Why not just sign the guy?" asks the Creative Commons' Brown. "Why not license the record, and have everybody make a bunch off of it?"
http://www.wired.com/news/digiwood/0,1412,62276,00.html


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Free legal downloads for $6 a month. DRM free. The artists get paid. We explain how...
Andrew Orlowski

Imagine a world where music and movies could be freely exchanged online, where artists are recompensed and the labels don't lose a cent, and where 12-year old girls need not fear harboring an MP3 of their favorite TV show theme tune on their PC.

All that could be yours for less than the price of a subscription to Napster: for less than $6 a month. Harvard University Professor Terry Fisher has completed the first comprehensive examination of various alternative models and the one we outline here offers such tantalizing social benefits, that even the most jaded sceptic ought to pay attention. Professor Fisher belongs to the school of forensic sceptics rather than the school of wide-eyed techno-utopians, and he's spent three years trying to make the sums add up. We think it's worth a look, and we think you ought to take a look too. (To make his task even more difficult, Fisher's license model also takes on the additional onerous task of compensating Hollywood, too).

How does it work? Let's look at the sums: what level of compensation do the labels, studios and artists need to make it worthwhile?

Fisher actually lays his philosophical armory down for us to inspect at a very early stage, and it's thus. Economies have had a lot of trouble with public goods that are 'nonrivalrous' - if you use it you're not depriving someone from access - and 'nonexcludable' - it's actually hard to make them exclusive. Examples of the latter include roads, defense, and culture. It's a real danger that if no one pays, then nothing gets done: the roads crumble, the country becomes vulnerable, and aspiring pop stars give up their dreams of one day snorting cocaine from an expensive prostitute's thighs.

But our flippant illustration of the final example is not entirely accidental. Many artists forsake fame for fame's sake - but the beauty of alternative reward models is that there's no disincentive for them to become popular, either. To cite an example, when we've discussed flat fees before, someone usually writes in with some anguish to complain how this would only reward Michael Jackson for being popular. But what's wrong with that? There was a time when he was very popular, and deservedly so.

So let's start at an accountant's year zero.

Calculating lost revenue
In the year 2000, the record labels earned $7 billion on retail sales of $13 billion. For the sake of argument, let's assume that in the first year 20 per cent of retail sales were lost to unlimited copying. That's $1.4 billion, although they'd save $210 million in manufacturing costs, and approximately $145 million in mechanical royalties. That brings the compensation to $1.045 billion for the recordings royalties and $138 million for songwriters, plus an amount for lost radio-related royalties.

For the movie industry, calculating the potential loss is extremely difficult. Firstly it's hard to estimate how much the industry earns now from DVD and VCR sales and rentals, and cable and satellite deals. And it's even harder to gauge the loss from file swapping. Even with the advent of Bitorrent, downloads are slow, and few have the patience or resources to find value in them compared to the availability on offer at plentiful late night retail outlets. Fisher reckons five per cent, rather than twenty per cent for the music business, of a $10 billion industry, or $479 million.

So combined, that's $1.677 billion to keep the RIAA and the MPAA happy.

But of course that's not all it would cost: the model requires an organization to calculate and distribute the royalties, performing the duties of ASCAP or BMI today. ASCAP reported that its 1998 administrative overhead was 16 per cent, so Fisher generously estimates 20 per cent. (It's pretty generous, as we'll see, because the digital overheads may actually be much lower). This takes - and bear with us, because it also generously throws in a 10 per cent charge for inflation between 2000 and 2004 - the net result to $2.306 billion.

So who pays?

Raising the money

If it was implemented as a regressive poll tax, with 87 million household filing IRS returns, each household would pay a mere $27 extra a year: a little over $2 a month, or 51 cents a week. That's half the price of a single iTunes Music Store song.

That's the most efficient way, with the lowest overheads.

However, any kind of income tax increase is obviously a hard sell, especially in God and Gubbment-fearing America. And there are many sound objections. Why should the poor subsidize the rich? Why, notes Fisher (who clearly must remember the culture wars of the early 1990s), should a proportion of the population which finds the entertainment products blasphemous be asked to subsidize their creators? And why should Net-free households want to subsidize the broadband users who are actually taking advantage of the system?

Fisher then exhaustively discusses four other options: taxing the playback devices and/or burners, levies on the physical media, levies on the delivery service, such as Kazaa, or on the Internet access point (your ISP). The latter is by far the largest: spending on broadband in the US in 2004 is estimated to be $16.4 billion. By contrast, blank media sales generate $2 billion in revenue. In total, these four categories gross $20.248 billion. And so to get our $2.3 billion to compensate artists, studios and labels would require an 11 per cent hike.

But what if it fell entirely on broadband users? Some might find the figure surprising: excluding all of the other penny taxes we've just mentioned, the cost will be $6 per broadband user per month. Um, is that all? Well, actually, yes it is.

So what do consumers gain from suddenly being able to exchange music? It's perhaps the most delicious question that's ever been asked - and there are so many advantages to the free exchange of culture that we may have forgotten what they are.

Fisher puts it thus:

"Consumers would pay less for more entertainment.

Artists would be fairly compensated. The set of artists who made their creations available to the world at large – and consequently the range of entertainment products available to consumers – would increase.

Musicians would be less dependent on record companies, and film makers would be less dependent on studios, for the distribution of their creations.

Both consumers and artists would enjoy greater freedom to modify and redistribute audio and video recordings. Although the prices of consumer electronic equipment and broadband access would increase somewhat, demand for them would rise, thus benefiting the suppliers of those goods and services. Finally, society at large would benefit from a sharp reduction in litigation and other transaction costs."

Is that enough? Well, there are two other benefits Professor Fisher doesn’t list. The high street music chainstore would find itself in competition with informal music distribution points - such as concert venues, clubs or coffee shops. Given the availability of cheap wireless playback hardware (phones or Bluepods) every café or laundrette could become a 'record store'.

The stores that survive would of necessity focus on their expertise and social relationships. It's hard to see what would draw customers into a Virgin chainstore, but it's easy to see an Aquarius Records (a feted specialist store in San Francisco's Mission district continuing to draw a loyal following). Social spaces could be transformed. Nor does Fisher attempt to calculate the demand for Internet infrastructure which might result, with potentially huge macroeconomic benefits.

Divvying up the pot

So what's the fairest way to divide the revenues? Professor Fisher points out that only a representative sample is required: the model need not involve Big Brother surveillance and aggregation of every song played. TV advertising buyers trust a system already: Neilsen's ratings are calculated from only a few thousand households. And in any case, it's doubtful any agency could afford the IT infrastructure required to aggregate such a vast data warehouse. However Fisher has a technical proposal which could simplify auditing enormously. He suggests that digital media carries embedded watermarks which would not restrict the playback of the song but would help auditors.

Fisher says that the "ballot stuffing" is the biggest technical hurdle.

"You can never eliminate but you can minimize the ballot stuffing problem," he tells us. "This most promising solution is an automated sampling system that counts the frequency members of the sample play a song all the way through. It's possible for artists to inflate the figure somewhat, to persuade family members to leave computers on 24x7, but that static is tolerable."

The most significant disincentive to ballot stuffing is the model itself: most people would simply want the model to work. Unlike the current situation, where there's a monetary advantage to be gained by breaking the system.

As for cross-border 'leakage' - Fisher says it is troubling from a fairness standpoint and this could limit its political appeal. "But it could work internationally especially when compared to a regime that leaks like crazy - the regime currently using illicit P2P."

The simple idea is very powerful. Fisher identifies four constituencies necessary to accept the model: consumers, artists, device manufacturers and finally the intermediaries: the studios and labels. The model has huge advantages for three of the four. And what incentives, we asked, would the labels and studios have?

After hearing his presentations, Fisher says industry is intrigued but hardly feels impelled to jump. The biggest 'carrot' is that it would see its revenues guaranteed at 2000 levels. If it believes its own rhetoric, that could be a very powerful incentive indeed.

Aside from a fringe of partisans, consumers are likely to embrace it enthuasiastically. Several months into the infancy of DRM-locked music sales, the online stores are dwarfed by the quantity of peer to peer file swapping, which is again on the rise. Consumers will likely face two futures.

In one, the music industry succeeds in locking music sales through DRM restrictions on MP3s, and equally restricted CDs. It's then at liberty to 'reinvent' itself, introducing such multi-sales opportunities we outlined here, and that Ross Anderson suggested in his TCPA FAQ: one-time plays, songs that only play on your birthday, graduated pricing models that charge a 'premium' for higher bit rates. Our favorite has already been suggested by the RIAA's Cary Sherman: a locked iPod full of all the music you'll ever need, which you can pay and unlock at your leisure. (It's deliciously illustrative of the lobby group, which has made the cynical, and not entirely false calculation that most of the people in the world have the same record collection. Or one that varies only by such sufficient degrees that it can apply the logic of the battery farm.)

The other comes at a price, but a predictable and low price, and promises to see high street and the economy rejuvenated. That isn't a hard choice for consumers to make, but it will be need to be fought against entrenched lobbyists. Our thanks to Professor Fisher for his exhaustive research in making our choices clear.
http://www.theregister.co.uk/content/6/35260.html


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Why Wireless Will End 'Piracy' And Doom DRM and TCPA - Jim Griffin
Andrew Orlowski

Don't worry about DRM and lock-down computing, says Jim Griffin.

Historically they're doomed to fail. The former director of Geffen's technology group believes that wireless networks such as 3G, 4G and WiFi will provide the tipping point at which the entertainment industries come to the table to cut a deal - before political pressure forces a deal upon them.

The deal will involve one of the flat-fee models, such as 2002's Blur/ Banff proposals [PDF, 473kb] or the model Harvard's Professor Fisher summarized here. Both of these envisage a pot of compensation money and a mechanism for divvying it up, permitting the free exchange of artistic goods. And with 'piracy' abolished, there's no need for DRM.

At a time when 12-year old girls are being arrested for harboring an MP3 file of their favorite TV show's theme tune, and the RIAA dons paramilitary outfits to terrorize street vendors, this seems to be an unfashionably optimistic view. But as Griffin explained in a lengthy interview with us, flat fee pricing will eventually prevail, forcing the industry to the table. Why? Because the pigopolists will realize that they'll make more money out of a flat fee model than by trying to force the world - particularly developing countries - to buy expensive content under lock and key.

He shuns the word 'tax'; partly because he believes that such a model won't penalize anyone who doesn't participate, and also because Griffin wants to minimize the role of Government, relegating it to the role it plays in business of Antitrust watchdog.

But Griffin's optimism is founded on the belief that where the marginal cost is zero consumers have historically opted for bundles rather than onerous one at a time pricing.

"Can you think of a single model where we haven't had a pool of money then split it up?" he asks. "Since the 1920s we've had public address systems, radio, TV, and cable - and all of those are monetized with a pool. You simply can't find an example to the contrary."

By promising to play nice, and building DRM and TCPA technologies, the computer industry is simply making come-hither noises that the rights holders want to hear.

"When I was 14, I told girls I loved them to sleep with them too. It was a fiction. Steve Jobs just leaves a little money on the table," he says. "These theoretical notions of control run headlong into the real historical experience."

High bandwidth wireless networks will tip the balance, thinks Griffin, because not only do they allow people to build new peer-to-peer networks to distribute content and exasperate the RIAA - an unstoppable trend, he believes - but because they offer the rights holders the chance to make more money.

So much for the executive summary. Now for the detail, with Jim in bold.

- What's your starting point for the flat fee model?

We have to start with the a priori notion that we must democratize access to art and knowledge. That's a baseline notion of a civilized society. We have libraries that will get you any movie, and any song, and any book; and price or money should not stop you hearing those songs. Museums go even further, with the idea that great art should be able to travel, to come to you, and feel free.

For anyone who doesn't start with that notion, you have to ask who they're working for.

- But don't we have the problem of a new fee, which may cost most people less, but which will still be regarded as a new fee?

Society is afraid of new taxes and rightfully so. I really object to even the partial notion that art or any other human creativity should be priced by a government commission; when we do, we slide so quickly into a place that is a huge mistake. But we don't have to go there.

You just have to look how we dealt with similar circumstances in history. Now go back to the 1920s, which was a time of much greater change than now. The move from acoustic to electric was much more savage than electric becoming digital.

Before then, artists were accustomed to controlling their output completely, with their feet. Then artists lost control. After loudspeakers came broadcasting, and the audience could see or hear you across the ocean, even without your permission. That had no real precedent.

So ASCAP and BMI came along with a model that embraced performance, and this continues to grow, while sound revenue continues to fall. It's a model that has survived the times and grown, while the sound recording model has really only existed for a blip in history. Now we're re-living what happened in the 1920s: it's just a matter of gradations stronger, but it's not revolutionary.

Locks and keys are probably the one thing people find more antithetical than having the Government involved. But we do need people to make money.

- You're so certain that DRM will not succeed, but the temptations for the industry are so great - one-time party CDs - that surely it's too tempting for them not to try?

Theoretically what you're saying makes some seductive logic. But it's obvious that not only should it not happen, it's not going to happen.

The flow of information once digitized, this anarchy of art and knowledge and creativity, can't be controlled. We've designed our societies around the anarchy. For example, we've been emphatic about the notion that we can't control speech. We may send out the secret police and have all manner of efforts of control; but basically we don't believe in it.

So we're left with two paths here. Will we try and end the anarchy of art, or will we try and monetize it? Art and knowledge and creativity are fascinating to us because they make our lives better when they're not controlled. And we've monetized it successfully throughout history.

- For example?
http://www.theregister.co.uk/content/6/35498.html


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Today We're Selling Digital Rights Management, Tomorrow We're Making Water Run Uphill
Mitch Wagner

It's rather appropriate that the logo for Disney is a mouse, because The Walt Disney Company this week announced its intention to throw money down a rathole. Disney became the latest company to license Digital Rights Management (DRM) technology. DRM doesn't work and consumers don't want it, so of course it's very appealing to big business, who are also in a big rush to sell other, equally practical products, such as anchovy flavored ice cream and bicycles with square wheels.

We learned that DRM doesn't work in the late 80s, only back then it was applied to software and we called it "copy protection." Software companies tried to control how many copies of individual applications their customers could make. Even if copy protection had worked right, it would have prevented customers from making backup copies of applicatons, or moving applications between systems. But it didn't work &emdash; copy protection was buggy and caused even legitimate, licensed installations of software to fail. Given a choice between copy-protected and non-copy-protected products, consumers went for the non-copy-protected products. Eventually, the vendors gave up.

Now, the media companies are going to have to learn the same hard lessons. Customers just don't want unreliable, DRM-infested products. And, what's worse for the media companies, their attempts to enforce draconian copyright laws are creating a backlash among consumers &emdash; the harder media companies push to get people to believe filesharing is wrong, the more consumers seem to believe that filesharing is their right.

Media companies face a tough climate. Their existing business model is disappearing. The existing business model depended on reproduction and distribution of products being somewhat expensive. It cost a significant amount of money to print up a book or CD and get it to stores, or to ship movies nationwide and play them in a theater.

Now, that's changing. Reproduction and distributions costs are nearly free for music, the same thing is happening for movies and I expect it will happen for books. Media companies are reacting by trying to use laws and police to change public opinion, and DRM to shackle technology. They're trying to get water to run uphill.

As Cory Doctorow, a writer, blogger, and digital rights activist, is fond of saying, "No Windows user rolled out of bed this morning and said, 'I wish there was a way that I could get Microsoft to deliver me tools that allow me to do LESS with the music I buy.'"

If people are unwilling to buy something, technology and law won't make them buy it.

So what's the alternative? I don't know. Right now, digital media are available for free over pirate services over the Internet. How do you get people to be willing to pay for it? The technology and content already exist, what's waiting to materialize is the business model to harness digital media.

Media companies are going to have to compete with the pirates, they're going to have to figure out what service they can provide that's so good that people will pay for it rather than pirate stuff for free. I don't know for sure what the answer is, but I know where to start looking: look to the producers and editors. These are the people who scout out the best talent out of all the wannabe writers, musicians, actors and directors, find the best content these guys are producing, polish it up until it's reached its peak, and package it for the consumer. That's what the media companies have been selling all along, really, and they need to figure out a way to adapt that service to new, electronic distribution channels.

My company is a media company too, of course. We went through something like this in the mid-90s, when the web started booming. Newspapers and magazines at first resisted coming out with Internet editions, fearing they'd compete with their own print editions. And they were right to be afraid, because that's exactly what happened -- but the smart journalists realized the transition was inevitable, and adapted to the new condition. Smart journalists realized that the essential service we sell is timeliness, our articles lose value faster than bananas. Some of our articles have a shelf-life of months, some have a shelf-life of weeks or days, but most of them are pretty useless a day or two after they are published. That's how we beat out piracy &emdash; it's easier and faster to get the news and information from us than it is from anybody foolish enough to pirate our information.
http://www.securitypipeline.com/show...cleID=17603511


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Killing The Music
Don Henley

When I started in the music business, music was important and vital to our culture. Artists connected with their fans. Record labels signed cutting-edge artists, and FM radio offered an incredible variety of music. Music touched fans in a unique and personal way. Our culture was enriched and the music business was healthy and strong.

That's all changed.

Today the music business is in crisis. Sales have decreased between 20 and 30 percent over the past three years. Record labels are suing children for using unauthorized peer-to-peer (P2P) file-sharing systems. Only a few artists ever hear their music on the radio, yet radio networks are battling Congress over ownership restrictions. Independent music stores are closing at an unprecedented pace. And the artists seem to be at odds with just about everyone -- even the fans.

Contrary to conventional wisdom, the root problem is not the artists, the fans or even new Internet technology. The problem is the music industry itself. It's systemic. The industry, which was once composed of hundreds of big and small record labels, is now controlled by just a handful of unregulated, multinational corporations determined to continue their mad rush toward further consolidation and merger. Sony and BMG announced their agreement to merge in November, and EMI and Time Warner may not be far behind. The industry may soon be dominated by only three multinational corporations.

The executives who run these corporations believe that music is solely a commodity. Unlike their predecessors, they fail to recognize that music is as much a vital art form and social barometer as it is a way to make a profit. At one time artists actually developed meaningful, even if strained, relationships with their record labels. This was possible because labels were relatively small and accessible, and they had an incentive to join with the artists in marketing their music. Today such a relationship is practically impossible for most artists.

Labels no longer take risks by signing unique and important new artists, nor do they become partners with artists in the creation and promotion of the music. After the music is created, the artist's connection with it is minimized and in some instances is nonexistent. In their world, music is generic. A major record label president confirmed this recently when he referred to artists as "content providers." Would a major label sign Johnny Cash today? I doubt it.

Radio stations used to be local and diverse. Deejays programmed their own shows and developed close relationships with artists. Today radio stations are centrally programmed by their corporate owners, and airplay is essentially bought rather than earned. The floodgates have opened for corporations to buy an almost unlimited number of radio stations, as well as concert venues and agencies. The delicate balance between artists and radio networks has been dramatically altered; networks can now, and often do, exert unprecedented pressure on artists. Whatever connection the artists had with their music on the airwaves is almost totally gone.

Music stores used to be magical places offering wide variety. Today the three largest music retailers are Best Buy, Wal-Mart and Target. In those stores shelf space is limited, making it harder for new artists to emerge. Even established artists are troubled by stores using music as a loss leader. Smaller, more personalized record stores are closing all over the country -- some because of rampant P2P piracy but many others because of competition from department stores that traditionally have no connection whatsoever with artists.

Piracy is perhaps the most emotionally gut-wrenching problem facing artists. Artists like the idea of a new and better business model for the industry, but they cannot accept a business model that uses their music without authority or compensation. Suing kids is not what artists want, but many of them feel betrayed by fans who claim to love artists but still want their music free.

The music industry must also take a large amount of blame for this piracy. Not only did the industry not address the issue sooner, it provided the P2P users with a convenient scapegoat. Many kids rationalize their P2P habit by pointing out that only record labels are hurt -- that the labels don't pay the artists anyway. This is clearly wrong, because artists are at the bottom of the food chain. They are the ones hit hardest when sales take a nosedive and when the labels cut back on promotion, on signing new artists and on keeping artists with potential. Artists are clearly affected, yet because many perceive the music business as being dominated by rich multinational corporations, the pain felt by the artist has no public face.

Artists are finally realizing their predicament is no different from that of any other group with common economic and political interests. They can no longer just hope for change; they must fight for it. Washington is where artists must go to plead their case and find answers.

So whether they are fighting against media and radio consolidation, fighting for fair recording contracts and corporate responsibility, or demanding that labels treat artists as partners and not as employees, the core message is the same: The artist must be allowed to join with the labels and must be treated in a fair and respectful manner. If the labels are not willing to voluntarily implement these changes, then the artists have no choice but to seek legislative and judicial solutions. Simply put, artists must regain control, as much as possible, over their music.
http://www.washingtonpost.com/wp-dyn...2004Feb16.html
http://www.theunionleader.com/articl...?article=33325