Peer-To-Peer News - The Week In Review – January 17th, '04

[JackSpratts]

Quotes Of The Week


"This may be first time that the entertainment companies have backed down from a claim of copyright liability. Consumers deserve the full benefits of the digital revolution and specious copyright claims should not stand in their way." - EFF Legal Director Cindy Cohn, after successful suit against media companies on behalf of Replay TV owners.

"Having music for free is a good thing, because I don't think music should be a commodity. I've changed my opinion to and fro over the years, but I really do think there shouldn't be any copyright on art." – Aphex Twin’s Richard D. James.



New England Deep Freeze Edition



That Didn’t Take Long

Last week I mused on reports claiming that P2P usage had dropped, that the record company lawsuits were effectively killing downloading and that music sales were rising as a direct result of the RIAA’s heavy handed actions suing old ladies, little girls and everyone in between. In a word, I felt it wasn’t true. Not only did it go against my experience in peer-to-peer, but it just didn’t feel right. It was too neat. I questioned the methodology of the polls of course but since the full details won’t be released for a while I couldn’t really get into them for any meaningful analysis. But like anything else, wait around long enough and the truth eventually emerges. Well here it is a whole week later and a new poll with a larger sample, and one not tied to specific programs has come out, and the results couldn’t be more different. They’re much more inline with what we’ve been seeing for the last few months: File sharing is on the rise! Meanwhile, record sales are rebounding too. How about that?

Yes it’s true Virginia, shared files - and record sales - can happily coexist.











Enjoy,

Jack.










Report: Music Downloading Began Climbing In October
Alex Veiga

LOS ANGELES The number of people illegally downloading music shot up one month after recording companies began suing hundreds of music fans, a marketing research firm said Thursday.

The number of U.S. households downloading music from peer-to-peer networks rose 6 percent in October and 7 percent in November after a six-month decline, according to a study of computer use in 10,000 U.S. households conducted by The NPD Group.

In a separate, bimonthly survey, 12 million individuals reported getting music on the free networks in November, up from 11 million in September, NPD said.

Preceding surveys dating back to May, when 20 million people said they were downloading music from file-sharing networks, showed a steady decline in the number of file-sharers.

Russ Crupnick, vice president of The NPD Group, speculated the apparent increase in music file-sharing could merely be seasonal, as new album releases before Christmas heightened demand, or due to less media coverage of the recording industry's lawsuit campaign.

The recording industry has filed more than 380 copyright infringement lawsuits against individuals across the country since September and reached settlements for thousands of dollars with hundreds of individuals since.

Consumers might also have been tapping into the free networks to compare how they sized up to the new crop of legal digital music services, Crupnick said.

"It's important to keep in mind that file sharing is occurring less frequently than before the (recording industry) began its legal efforts to stem the tide of P2P file sharing," Crupnick said. "We're just seeing the first increase in these numbers."

Jonathan Lamy, spokesman for the Washington-based Recording Industry Association of America, which coordinates the industry's campaign against piracy, said the trade group's campaign is on the right track, regardless of what the NPD studies show.

"For us, the ultimate measurement of success has been, and continues to be, creating an environment where legal online music services can flourish," Lamy said in a statement. "All indicators point in the right direction - sales of CDs, legal downloads and awareness that file sharing copyrighted music is illegal - have all increased."

More RIAA copyright lawsuits against file-sharers are coming, Lamy added.

NPD's household data sample is representative of all U.S. households, NPD spokesman Lee Graham said. The firm's bimonthly survey is based on 5,000 respondents, age 13 or older. A margin of error for the survey was not immediately available.

Recent studies of online music piracy, which the recording industry largely blames for a four-year decline in overall music sales, haven't always shown the same upward trend in file-sharing.

A survey released earlier this month by the Pew Internet & American Life Project and comScore Media Metrix found that since May, the percentage of U.S. Internet users who download music was down by half, to 14 percent. The same report also found declines in usage of popular file-sharing programs such as Kazaa and Grokster.

But NPD's findings echo data from other file-sharing tracking firms, such as BigChampagne LLC, which says traffic on file-swapping networks like FastTrack and Gnutella has continued to rise.
http://www.heraldtribune.com/apps/pb.../APN/401150996


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Big Three international music conglomerates now targeting Canadians.

Canadian RIA Will Sue Music Swappers
Robert Thompson

Approximately 40 Canadian digital music swappers will be named in copyright lawsuits that are expected to be launched in early February, sources said yesterday.

The 40 individuals have already been chosen through their Internet protocol addresses that identify them when they are on the Internet, said sources close to the lawsuits.

The Canadian Recording Industry Association has yet to obtain court orders forcing Internet Service Providers to expose the identities of the downloaders. Legal experts said yesterday they don't expect CRIA will have any difficulty obtaining the court orders.

CRIA, which represents Canada's major recording labels, announced its intent to commence civil legal action against copyright infringers in December, but offered few details.

The organization has retained the Toronto-based law firm of Blake, Cassels & Graydon to act as litigators in the cases, according to sources.

Last September, the Recording Industry Association of America launched 261 lawsuits against users in the United States who uploaded or shared files using software like Kazaa. Currently around 400 people in the U.S. have faced civil action for downloading music.

The targets of the crackdown included a 12-year-old girl who settled her case for US$2,000 and a 71-year-old Texas grandfather.

The lawsuits are part of an attempt by the music industry to end the free downloading of MP3 music files and drive business to paid services like Puretracks.com.

In the United States, the lawsuits appear to have been successful in slowing music downloading. According to a survey in December conducted by Pew Internet & American Life Project, only 14% of those polled said they had downloaded music, down significantly from 29% six months earlier. During the period of the poll, Kazaa usage shrank by 15%, while Grokster, another file sharing service, saw its usage decline 59%.

The sharing of free music files has led to a massive decline in sales of compact discs in Canada. According to CRIA, sales of CDs in Canada have fallen by $450-million, or 23%, since 1999.

In the U.S cases, some Internet service providers refused to turn over details of their subscribers when presented with subpoena. Several Canadian ISPs, including Rogers Cable and Telus Corp., said yesterday they will cooperate and reveal subscriber information if CRIA has a court order.

Brian Robertson, president of CRIA, would not comment on the the lawsuits, saying "it is part of an ongoing process."

Cynthia Rowden, an intellectual property lawyer at Toronto-based Bereskin & Parr, said yesterday she expects the Canadian suits will follow the U.S. model, which sought settlements which were about US$1,000 per case.

"They are going to be seeking settlements that they can publicize," she said. "They won't want them to be too high or it could unduly impact public opinion."

Ms. Rowden said CRIA could determine the dollar value of the lawsuits by how many songs or albums an individual allowed to be uploaded.

Initially, CRIA wanted to announce 30 lawsuits, according to a source that requested anonymity, but Canada's five major recording labels balked and demanded about 10 more individuals be added to the list.

"The recording labels said 30 names weren't enough to make the impact they were seeking," said the source.

"They wanted numbers which shows they mean business."
http://www.canada.com/national/natio...1-833e7d8ed939


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Canadian Music Groups Appeal Copyright Ruling

May go to top court, lawyer says
Result may affect how artists paid
Tyler Hamilton

Industry groups representing retailers, electronics manufacturers and music companies launched separate court appeals this week related to a recent Copyright Board decision that imposed a levy of up to $25 on MP3 music players.

At least one legal expert says the appeals and the contentious issues they tackle may land in the Supreme Court of Canada, where a high court decision could force a rethinking of how artists and musicians are compensated for unauthorized copying of their works.

"It's not a surprise that we're seeing these appeals," said Michael Geist, technology counsel for Osler, Hoskin & Harcourt LLP. "From the get-go we had a whole range of parties indicating they were unhappy."

Each group has its own gripe.

Retailers including Wal-Mart Canada, Staples Business Depot and Future Shop Ltd., have asked a federal court of appeal to declare "unconstitutional and invalid" the section of the Copyright Act that first created the levy, which has been applied to blank recording media such as cassettes and recordable CDs for several years.

They argue the section is too vague and the levy, as a tax in disguise, violates a section of the Constitution Act that forbids any body other than the legislature from imposing a tax on its own.

In a second appeal, a group of electronics and computer manufacturers, Apple Canada Inc., Dell Computer Corp. of Canada, Hewlett-Packard (Canada) Co. and Intel Corp., are asking the court to dismiss the Copyright Board's Dec. 12 decision to extend the levy to "digital audio recorders" such as Apple iPods and other MP3 playing devices.

Both retailers and device makers argue the levy raises the prices of their products and could lead to the development of a cross-border grey market and penalizes those who don't use recordable media to reproduce copyrighted music.

Canadian Private Copying Collective, or CPCC, the music-industry group that proposed the added levy, oversees its collection and distributes the funds to artists, is upset with the Copyright Board's decision to declare "illegal" a program that lets some organizations purchase blank recording media royalty-free.

The so-called "zero-rating" program exempts schools, hospitals, software companies and other groups from the levy if they promise to not make copies of music.

In its decision last month, the Copyright Board wrote, "the question is not whether or not zero-rating is desirable, but whether or not the board, or CPCC, is legally authorized to initiate such a program." It found that the program had no legal basis.

Paul Audley, a policy adviser for the copying collective, said the board didn't properly back up the ruling and, despite requests, has declined to clarify its position.

"There is a very mixed message in the decision," Audley said. "As far as our legal advisers are concerned, the program is a legal program."

Despite the board's ruling, Audley said the CPCC continues to offer zero-rating and has assured those who are part of the program they will respect all contracts. The appeal, he added, was launched to back up those assurances by getting a court to legitimize the program.

"Participants in the program want to know that it's not illegal," he said.

Geist said the private-copying levy is one of many the music industry collects. "The idea that this particular one happens to be unconstitutional is perhaps pushing the legal envelope a little bit."

The challenge against the MP3 levy could have more success, but the biggest fallout would be if the courts agree with the Copyright Board and reject the zero-rating program. This could lead to growing opposition to the levy as large organizations once sheltered by the program realize they are no longer protected.

"That could result in pressure on Parliament to scrap the whole thing or create official exemptions," Geist said.

These latest appeals against the private-copying levy represent a second wave of legal challenges against music-industry royalty schemes.

Last month, the Supreme Court of Canada began a landmark copyright case that will determine whether Internet service providers must pay a tariff for being a conduit for rampant downloading of free music. The court is expected to rule on Tariff 22 this summer.

"The two main statutory mechanisms to address online copyright are now before the courts," Geist said. "Both cases illustrate the problems with those systems."

Meanwhile, the Canadian Recording Industry Association has vowed to file lawsuits against those who share huge volumes of music on the Internet. This comes as Ottawa works through a mandatory review of the Copyright Act.
http://www.torontostar.com/NASApp/cs...l=969048863851


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Penn State Launches Napster Music Service

STATE COLLEGE, Pennsylvania (AP) --The launch of Napster's online music service for Penn State students generated about 100,000 downloads or streaming-audio requests Monday, three days after its debut, school officials said.

A first in higher education, the service is designed to curb students' use of illegal music sharing and piracy. Peer-to-peer file sharing sites have generated lawsuits against users filed on behalf of recording artists.

As spring semester classes got under way Monday at Penn State, more than 2,600 students had registered for the Napster 2.0 service, which comes free with their tuition. All 17,000 on-campus resident students are eligible to use it.

School officials said the new system, which offers about 500,000 songs to choose from, appeared to work flawlessly for the vast majority of users.

By Monday, more than 8,000 visits were logged on the Napster Web site devoted for use by Penn State students. For a fee, students also can burn music onto compact discs.

The school plans to offer the service to all of its 83,000 students this fall. Faculty, staff and alumni will qualify for reduced-price Napster memberships.
http://edition.cnn.com/2004/EDUCATIO...te.napster.ap/


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Oscar Copy Found on Ebay
Patrick Day

The Academy of Motion Picture Arts and Sciences, scrambling to crack down on movie "screeners" that have popped up on the Internet in recent days, had a new incident to investigate Wednesday: how an academy screener copy of "House of Sand and Fog" came up for sale on EBay Inc.

Security features on the tape identified it as belonging to academy member Ivan Kruglak, president of Valencia-based Coherent Communications, a wireless audio-video and data communications company. Kruglak, who received a 1998 technical achievement award from the academy for a wireless video assist system for motion picture cameras, expressed complete surprise at the incident.

"The first I heard of this was when I got a phone call from the academy," Kruglak said in a phone interview. He said he had no idea how a copy of his tape ended up for sale on the Internet.

"I firmly believe someone at the duplicating house made themselves a copy before the studio sent it to me," he said.

The academy already is looking into how a screener of "Something's Gotta Give" belonging to 69-year-old actor Carmine Caridi was used as the source of a downloadable pirated copy on the Internet. Caridi met Wednesday with an attorney; neither would comment on the matter. Another screener, for "The Last Samurai," also has made an appearance online. The film's distributor, Warner Bros., said it intended to enforce its copyright "to the fullest extent of the law."

Meanwhile, Miramax said late Wednesday that it was looking into how an academy screener of its "Cold Mountain" became available for download.

Those incidents involved downloadable copies. In the case of "Sand and Fog," the tape itself was offered for sale. DreamWorks SKG, the studio behind the movie, said the tape was removed from EBay after the studio contacted the auction site.

The rash of unauthorized copying comes amid a broad effort in Hollywood to crack down on movie piracy. A ban enacted in the fall by the Motion Picture Assn. of America initially prohibited the release of the popular screeners, though an exemption later was made for Academy Awards voters. Then, on Dec. 5, the entire ban was thrown out by a federal judge.

Seeking to deter unauthorized use of the free movies — which have long been a favorite Hollywood entitlement — the academy this year is requiring its 6,000-plus members to sign waivers agreeing not to allow the tapes out of their possession. In addition to any criminal penalties, those found to have violated the agreement face expulsion from the academy.

Academy President Frank Pierson said his organization would not apply sanctions "without due process."

"We will give these members an opportunity to explain how their screeners got into the hands of pirates," he said.

As of now, the academy has no intention of setting up a permanent system to handle cases of screener piracy. Academy spokesman John Pavlik characterized the investigations as informal.
http://www.latimes.com/technology/la...nes-technology


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Another Oscar Screener Movie Found Online
AP

A second movie sent to Oscar voters has turned up on the Internet.

The Academy of Motion Picture Arts and Sciences announced the discovery of an unauthorized Internet copy of the Tom Cruise film "The Last Samurai" on Tuesday, a day after announcing a probe into an unauthorized copy of "Something's Gotta Give," starring Diane Keaton and Jack Nicholson.

Both Internet postings were setbacks for the anti-piracy campaign by the film industry, which has estimated that unauthorizied movie copying costs it $3.5 billion a year.

The Motion Picture Association of America, which represents studios, last year banned the distribution of so-called "screener" DVDs and videotapes over concerns about bootlegging, but it partly lifted the ban after complaints from filmmakers, producers and independent production companies.

The studios changed the policy in October to allow the shipment of encoded videocassettes to Academy Award voters only. Two months later, a federal judge granted a temporary injunction blocking the screener ban after independent production companies sued, arguing the policy put them at a disadvantage for awards.

The academy said that Warner Bros. had not identified a source of the Internet copy of "The Last Samurai." The movie, an East-West culture clash set in 19th century Japan, was in the top ten at the box office last week and has earned more than $97 million since it hit theaters last month.

Actor Carmine Caridi was identified by the Los Angeles Times as the intended recipient of the "Something's Gotta Give" copy that surfaced on the Internet last week. He declined comment to the newspaper.

Malcolm Cassell, Caridi's agent, said the 69-year-old "NYPD Blue" actor had hired an attorney and was "mightily embarrassed," though "vague and not forthcoming" when asked how a copy of the movie sent to him may have surfaced online.

The 5,803 Academy members eligible to vote this year were required to sign forms promising to protect their screener tapes. About 80 percent of them returned the forms, which include a stipulation that a violation is grounds for expulsion from the academy.

Academy members include actors, producers, directors and writers as well as public relations specialists, sound technicians and other industry executives, artists and craftspeople.

The Oscar nominations will be announced Jan. 27 and awards presented Feb. 29.
http://www.salon.com/tech/wire/2004/...ner/index.html


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Big Three international music conglomerates now targeting Brits.

UK Music Industry Considers Suing Net Song Swappers
Bernhard Warner

The British music industry will sue Internet song swappers unless they stop putting their music collection online for others to download, a top UK music official said on Tuesday.

"We want to increase consumer awareness of the legal implications of file-sharing. We want to introduce new legitimate (online download) services. If these are not working, then there has to be a degree of enforcement," said Andrew Yeates, director general of industry association The British Phonographic Industry (BPI).

The comments, made on the sidelines of an industry event Tuesday night, is the clearest statement yet that the European music industry is prepared to follow in the controversial footsteps of the United States.

In September, U.S. trade group The Recording Industry Association of America (RIAA), launched a legal crusade to stamp out Internet piracy by suing individuals who distribute songs on file-sharing networks.

Yeates said the legal crackdown would be "proportional," suggesting the BPI would, as the RIAA has in America, go after those who distribute the most songs and leave the occasional file-sharer alone.

He also hinted legal enforcement would not start until after new industry-backed music download services, such as Apple Computer's and Roxio's Napster make their European debut, as anticipated, later this year.

If the industry-backed services prove a hit with consumers and piracy levels tail off, he said, legal steps may not be necessary.

The music industry blames file-sharing services such as Kazaa and Grokster for creating a massive black market of free songs on the Internet that is crippling CD sales.

Over the past few months, European music industry officials have been making increasingly stronger suggestions that they would consider suing online file-sharers if piracy levels continue to climb.

Recent industry statistics reveal that file-sharing is on the decline in the United States but increasing in Europe since the RIAA embarked on its legal campaign four months ago.

Yeates said the BPI was stepping up talks with European Internet service providers (ISPs) to streamline a process for identifying the major culprits, a necessary development if a legal campaign is to be effective.

The ISP industry regularly investigates complaints from copyright holders about file-sharing abuses, but as of yet they remain unwilling to hand over the identities of their customers without a court order.

Under a new UK copyright law, file-sharing has been criminalised. But few expect it will result in jail time for downloaders.

"The BPI is not going to bring a criminal case," Struan Robertson, a solicitor for UK law firm Masons, told Reuters. "That would require prosecutors getting involved. And they have a lot more to do than to go after kids in their bedrooms."
http://www.reuters.com/newsArticle.j...toryID=4121224


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Bajan Journal

Piracy Beast No Easy Slay
Ryan Broome

WHILE I laud the Prime Minister’s recent efforts to strengthen existing piracy laws, enforcement of these laws by the Royal Barbados Police Force will be one if its greatest challenges.

To say that the dedicated members of the Force have their work cut out for them is indeed, an understatement. After going over the Prime Minister’s remarks on stepped up efforts to deal with piracy from the start of this new year, it was interesting to note that the most compelling changes pertained to penalties.

In his financial statement, the Prime Minister said Government was proposing to double the existing maximum penalty under the Copyright Act 1998-4, “such that upon conviction on indictment the new maximum penalty will be a fine of $500 000 and/or a period of imprisonment of ten years”.

Noting that enforcement of the applicable laws would therefore have to be crucial, the Prime Minister also stated that as of January 1, this year, Government would establish a dedicated Anti-Piracy Unit within the Police Force “with the attendant resources and training for enhanced surveillance and detection of all intellectual property related offences”.

He also said the measures would be matched by a similar effort on the part of the rights holders within the Civil Law courts and the soon to be established Copyright Tribunal.

Strong words indeed, but will they achieve the desired result to “wipe out piracy of intellectual property rights”, as the Prime Minister suggested? If the existing evidence is anything to go by, seeing will be believing.

As it stands right now, any number of vendors peddle popular music on City streets, mainly selling “burned” CDs featuring music from international artistes. In fact, it is rare, though not impossible, to see persons attempting to sell local artistes’ music on the streets of Bridgetown.

Every now and again, police officers swoop down on these vendors to remove them and their products from City sidewalks, but few casual onlookers might recognise that the majority of these vendors are not charged with piracy or intellectual property related offences under the Copyright Act.

In most cases, and I believe police statistics would back me up, these vendors are charged with selling or vending without a licence.

Such a charge is no different to what would be utilised when somebody decides to go and set up a fruit stall in the City without first getting the appropriate licence or permission.

In other words, police officers traditionally seem to have had some challenges enforcing piracy and intellectual property laws.

In fact, evidence would suggest that police officers tend to be able to bring charges in cases where local music and artistes are involved moreso than where international artistes and their music are concerned.

The widely held belief on the street is that the police cannot do anything if the burned music for sale is from international artistes.

In any case, matters brought before the law courts involving local music piracy have been few and far between, with one or two exceptions coming when MADD Entertainment was able to initiate prosecution in two separate cases over the space of the past decade.

On the surface, the lack of such cases being brought begs the question, whether the average police officer has fully understood the elements necessary to bring a charge under the Act.

In any case, Commis-sioner of Police Darwin Dottin recently indicated that specific training of officers in this area should soon commence, as the Force seeks to get its Anti-Piracy unit up and running.

Whether this will eventually lead to pirated CD vendors actually being charged under the Copyright Act and fully removed from City streets in the future remains to be seen. What is clear, is that this is still somewhat virgin territory for local police officers.

Perhaps further complicating an already complicated situation, advances in technology are making copying of copyrighted material mere child’s play.

Some local “pirate” video stores are a prime example, since some of them have already started to utilise ‘master’ DVD copies of major movies to produce their stock of tapes for rental.

Indeed it is a huge step away from the old system where master video tapes had to be relied upon, resulting in significant loss of video and sound quality.

Add to that the fact that anyone with basic knowledge of the Internet and peer to peer (p2p) file swapping with an ADSL or wireless modem can download any number of recently released movies from membership sites such as KaZaa.

Indeed, even with the best of training, the officers who comprise the new Unit will have to remain up-to-date with the rapid technological changes if they are to be truly successful.

Anything less, and the doubled penalties and other new measures under the Act will all be for nought.
http://www.barbadosadvocate.com/NewV...m?Record=16185


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Music's Download Breakdown

Industry struggling for customers as formats evolve
Alex Veiga

Richard Warner and his family have spent thousands of dollars over the years on music, buying more than 500 CDs and 700 vinyl albums.

Now Warner is surrendering $4,000 to settle a copyright infringement lawsuit -- the price of his 17-year- old daughter's habit of downloading music for free.

The 49-year-old California wine merchant was ensnared in a September wave of recording industry lawsuits aimed at chilling illegal downloading. But while he's angry at the music labels for suing the loyal customer he considers himself to be, Warner has signed up for an industry-backed online music service.

"I encouraged my daughter to enjoy music, and I did not want to make this a negative in our life," Warner said. "We're not going to stop enjoying music."

After four straight years of declining CD sales, the recording industry is hanging hopes for a recovery on music fans like Warner going digital -- and being willing to pay for it.

More than 19.2 million digital tracks were sold online in the last six months, according to Nielsen Soundscan, helping to narrow the music industry's losses last year.

Overall North American music sales were down 0.8 percent last year over 2002, while album sales, which include cassettes and other formats, were down 3.6 percent, says Nielsen Soundscan.

Edgar Bronfman Jr., the former Universal Music chief who last month led a group of investors in the purchase of Warner Music from Time Warner Inc., said he believes digital music sales will eventually help the industry recover -- although continued pain will precede the healing.

"I think that the industry is going to see continued difficulty for a couple of years," Bronfman told The Associated Press.

Bronfman said the music industry has only begun to tap the potential for digital distribution and that it's going to take time for the different business models to develop and grow.

"We're already seeing just the very nascent, very beginnings of that here in the United States, and I think that trend will continue," Bronfman said.

Companies from Wal-Mart Stores Inc. to a revamped Napster have dived into online music sales. After last year's success by Apple Computer Inc.'s iTunes Music Store and iPod digital player, it's no surprise.

"We've made some incredible headway," said Ted Cohen, senior vice president of digital development and distribution for EMI Music. "Wal-Mart going into this business says a lot."

The handful of industry-licensed digital music services launched in 2001 didn't draw much interest from music fans because they had too many restrictions and not enough flexibility.

Enter Apple chief executive Steve Jobs, who convinced reluctant record companies to abandon restrictions on selling individual digital tracks a la carte for as little as 99 cents each.

By the end of 2003, after cautiously following the progress of iTunes, record companies were busy making much of their catalogs available for digital sale.

After seeing many traditional music stores close, music companies now are trying to adapt to an online market where singles are king and the traditional CD format losing relevance.

"Technology ... has leapt so far ahead of us that we kind of wound up with our heads in the sand and left in the dust, so we're playing catch-up here," said Neil Portnow, Recording Academy president and former West Coast head of Zomba Music Publishing and Jive Records.

Helping drive consumer demand for digital music will be a proliferation of digital music players, cell phones and other wireless devices that can support "digital rights management" technology, which safeguards files from being pirated.

"We think 2004 is going to be the year of subscription content on portable devices," said Scott Kauffman, head of digital music retailer MusicNow Inc. "The notion of figuring out which 12 songs to put on a disc that doesn't fit in your pocket when you already have 12,000 that fit in your pocket ... that's just over."

Already, signs point to a budding price war in digital music. By selling individual songs for 88 cents, Wal-Mart undercut the 99-cent price set by iTunes and followed by Napster 2.0, among others.

Industry watchers expect song prices to drop further, though for now, profit margins are squeezed by the average 25-cent credit card transaction fee per song.

Still, lower-priced song downloads may still not be able to compete with the no-cost and restriction-free music available over peer-to-peer networks.

A survey released last week by the Pew Internet & American Life Project and comScore Media Metrix found that since May, the percentage of U.S. Internet users who download music was down by half, to 14 percent. And while that figure does not include Internet users younger than 18 -- a ripe demographic for free downloading -- the same report also found marked declines in usage of such well-known file-sharing programs as Kazaa and Grokster.

But other indicators suggest the free-for-all is hardly waning. BigChampagne LLC, which also tracks file-sharing, reports that usage of such swapping networks as FastTrack and Gnutella continues to rise.

Meanwhile, the music industry's legal campaign against online piracy has run into some static. Last month, a federal appeals court ruled that it can't force Internet providers to identify music downloaders, making it more difficult to track down and sue individuals it suspects of piracy.

Juan Torres, a 22-year-old security guard in Los Angeles, says he still downloads from the Internet, avoiding sharing his music so he won't become an easy target for a lawsuit.

"If I had a choice in paying for it and downloading for free," he said, "I'd rather download it for free."
http://www.dailynews.com/Stories/0,1...83144,00.html#


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Update: Surge In iPod Sales Drives Strong Q1 For Apple

PC shipments also climbed in the quarter.
Stacy Cowley

The holiday season treated Apple Computer Inc. well this year. The company posted revenue Wednesday of $2 billion for its first quarter of fiscal 2004, its highest quarterly revenue in four years.

IPod sales more than tripled from the prior year's quarter as Apple sold 733,000 digital music players, generating $256 million in revenue. Apple's PC shipments also climbed during the quarter, to 829,000 units, bringing in revenue of $1.3 billion.

The Cupertino, California-based company turned a profit for the period of $63 million, or $0.17 per share, topping the $0.14 per share consensus estimate of analysts polled by Thomson First Call. Apple's first fiscal quarter ended Dec. 27.

Apple Chief Executive Officer Steve Jobs hailed the quarter as an outstanding one for his company. Apple began its new fiscal year with "strong momentum," especially around Mac OS X, which is now used by nearly 40 percent of Apple's customers, he said.

Research firm Merrill Lynch & Co. Inc. said in a report issued before Apple's financial release that it is pleased with Apple's current strategy and product lineup.

"We think Apple has gotten its act together in focusing on core markets, building a mature management team, and most important innovating again," Merrill Lynch wrote. "People will pay more for Porsches, but they have to perform."

The introduction of iTunes for Windows during the quarter contributed to the strength of iTunes and iPod revenue, Executive Vice President and Chief Financial Officer Fred Anderson said in a conference call following the results announcement. ITunes users bought and downloaded 17 million songs from the service during the quarter.

Overall revenue rose 25 percent from the year-earlier quarter in the Americas, and also jumped in other parts of the world, Anderson said. It grew 48 percent in Europe, 13 percent in Japan and 55 percent in the Asia-Pacific region excluding Japan.

About two-thirds of iPod sales are made in the U.S., according to Apple.
http://www.infoworld.com/article/04/...appleq1_1.html


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Filesharing Up At Stanford U.
Stephanie Condon

The number of college students estimated to be sharing files over the Internet has decreased by more than half since last spring, but the number of complaints of students illegally downloading music at Stanford has actually increased this year.

Although the decrease of file sharing shown in a report released Sunday by the Pew Internet and American Life Project correlates with the first wave of lawsuits filed by members of the Recording Industry Association of America against individuals illegally downloading music, the cause of the decline is uncertain.

As part of their efforts to curb the illegal distribution of entertainment on file sharing networks such as Kazaa, the recording industry and motion picture industry have been working closely with universities and have formed the Joint Committee of the Higher Education and Entertainment Communities. According to the RIAA, the committee was formed to offer information to university officials about the problem that illegal downloading poses and to help them adapt their computer usage policies so they address the issue.

Illegal downloading “is not exclusive to campuses, but one reason campuses are focused on is that they have some of the biggest bandwidth and state of the art computer systems, so just the availability of the tools makes it possible there,” said MPAA representative Rich Taylor. “But in terms of how many students are involved, it’s difficult to estimate. Our goal is to provide them with a legitimate alternative.”

It is unclear whether or not the decrease in music downloading found among college students by the Pew project applies to Stanford students.

“We don’t have any way to track that, but what comes to our office are complaints from the recording industry,” said David Hoffman, Stanford manager of information security services. “Judging by the number of complaints that have come in, those are up from last year. It could just be that the recording industry is being more aggressive about the complaints.”

Hoffman explained that the best way to track illegal downloading is from year to year because of the peaks in downloading during certain seasons.

Rich Holeton, Stanford’s head of Residential Computing, said that associating the results of the Pew report with the RIAA’s lawsuits is an oversimplification of the matter and cited the recording industry’s initial reports of a decline in downloading which failed to consider the decline in downloading that naturally occurs over the summer.
http://daily.stanford.edu/tempo?page...=0001_article#


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Want more DRM?

Sony Packs More Into Mini-Discs
Alfred Hermida

Sony has packed a lot more into its mini-disc digital music players.

The Japanese electronics giant has developed a new format which can store up to 45 hours of music on a single disc, as well as pictures and text.

The new Hi-MD players and discs will be available from April, Sony said at the Consumer Electronics Show in Las Vegas.

The mini-disc walkman has been facing tough competition from portable MP3 players, like Apple's iPod, which holds up to 10,000 songs on a hard drive.

"With Hi-MD players, we're giving music lovers more choices," said Todd Schrader, Vice President of Marketing for Sony Electronics' portable music range. "Nothing's been left out."

The new format can pack a gigabyte of data onto a disc, amounting to 45 hours of music compressed at 48Kbps.

This compares to 13 hours of music on a standard 80-minute mini-disc encoded at the same rate.

The new machines will be able to play both new and old discs and have built-in copyright protection.

Sony has learnt from the example of digital music players that use hard drives or memory cards to store music.

The new Hi-MD recorders will be able to act as external hard drives, letting people store photos, presentations or documents on a disc.

These can be transferred to a PC via a USB cable, which will also power the player.

The entry-level model of the new players will cost around $200, while Hi-MD discs are expected to cost about $7 each.

"We've created the best overall portable music solution that addresses digital music fans' needs for high capacity storage and long battery life in a small and extremely durable device," said Mr Schrader.

Sony will be looking at the new high density format to breathe fresh life into its mini-discs.

The new format comes as rival portable music players grow in popularity.

Products like Apple's iPod have been a runaway success and have eaten into Sony's market share.

Sony estimates that global sales of mini-disc players and recorders from all manufacturers have totalled about 80 million since the devices went on sale in 1992.

The company expects to sell more than seven million mini-disc players worldwide in the financial year ending in March.
http://news.bbc.co.uk/go/pr/fr/-/1/h...gy/3378627.stm


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How Much Broadband Usage is Too Much?
Posted by Cliff

from the it-doesn't-help-when-they-won't-tell-you dept.

Semprini2k asks: "I just came home from work to find a letter waiting in the old snail mail box from my Broadband ISP. It has very nice titling on it: 'Notice of Acceptable Use Policy Violations' and also has an 'Abuse Ticket Number' associated with it. Has anyone else received these from their Broadband ISPs lately? Are they being overly cautious or are they working towards throwing off any users who might possible tax their network? I am trying not to be paranoid about this, but what are other people seeing and/or doing in this situation?" The "proper" bandwidth is liable to vary by region, but it would be interesting to note usage patters of people who are getting these letters versus those who aren't.

"'Oh, no!' I think to myself, 'They think I'm a spammer!!!' But further reading sheds more light on the subject:
According to our aggregate bandwidth usage records, during December 2003 your [...ISP...] account exceeded [ISP's] bandwidth usage limitations. The activity associated with your account was more than 100 times the national median. This level of activity violates [ISP's] AUP.
"I freely admit to using a lot of bandwidth. From the day Fedora Core was released via BitTorrent I have kept an active BitTorrent session going to help others get it too. So I find this a bit of a concern.

I called their toll-free number to inquire whether I could get access to their data. No, I cannot. All I can do is try to use less bandwidth and hope I do not see any more of these letters. 2 more and my service will be terminated."
http://slashdot.org/article.pl?sid=04/01/08/1639203


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Toshiba's 0.85 inch Hard Disk Drive

CES 2004: In a feat of miniturization Toshiba has today revealed it is working on the worlds first sub 1 inch Hard Disk Drive. The new 0.85 inch HDD will have a capacity between 2 and 4 GB. This new device is clearly aimed at the portable music / multimedia players, PDA's and pocket notebook PC's. However it's not a far stretch to imagine these HDD's in use in digital cameras and 'cross over' products which also shoot digital video.

Press Release:
Toshiba's 0.85-inch HDD is set to bring multi-gigabyte capacities to small, powerful digital products



Small size and high capacity will bring HDD to mobile phones

Tokyo -- Toshiba Corporation today announced development of 0.85-inch hard disk drive (HDD), the first hard drive to deliver multi-gigabyte data storage to a sub-one-inch form factor. Toshiba expects to start sampling the new drive in summer 2004 and to start mass production in autumn 2004, at an initial monthly production capacity of two to three hundred thousand units.

Toshiba is the pioneer of high capacity, small form factor HDD. The company's current 1.8-inch HDD, the storage device of choice for some of the hottest portable gadgets on the market, has allowed manufacturers to deliver unprecedented functionality to exciting new mobile entertainment products, including palmtops, ultraportable notebook PCs, handheld GPS units, and digital audio players and jukeboxes.

With the new drive, only a quarter the size of a 1.8-inch drive, Toshiba achieves a smaller, lighter, high capacity storage medium in which low power consumption is complemented by high performance. The drive will have an initial capacity of 2 to 4 GB, and deliver enhanced data storage to smaller, lighter more efficient products. Toshiba expects the new drive to bring the functionality and versatility of HDD to a wide range of devices, including mobile phones, digital camcorders and external storage devices, and to follow the company's 1.8-inch HDD in inspiring manufacturers to develop new applications.

Work on the drive has centered on Toshiba's Ome Operations-Digital Media Network, home to the company's main development site for digital and mobile products and the manufacturing site for the device. The drive under development is planned to have a capacity of 2 to 4GB, but Toshiba anticipates achievement of even higher densities in the near future.

Toshiba, a global leader in small form factor HDD, started mass production of the world first PC-Card-type removable 1.8-inch HDD with a 2GB capacity in 2000. The company has subsequently rolled out a series of products that consistently push back the borders of capacity and performance: a 1.8-inch, 5mm height, 5GB embedded HDD in 2001; and a 5mm height 10GB embedded model and 8mm height, 20GB and 30GB embedded HDD in 2002. The latest generation of Toshiba's 1.8-inch embedded HDD offers a capacity of 40GB in an 8mm high package, and a 20GB capacity in a 5mm high package. Cumulative production reached 3 million units at the end of October, on consistently rising demand.

With the development of 0.85-inch HDD, Toshiba expects to see a further expansion of the market for small form factor HDD, and looks for continued leadership in that market.

Toshiba will feature the new drive at the International Consumer Electronics Show (CES), in Las Vegas, Nevada from January 8 to 11, at booth 12214.

Note: 0.85-inch is the diameter of the magnetic disk that records data in HDD.
http://www.dpreview.com/news/0401/04...toshibahdd.asp


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Hitachi Hard Drive At Heart Of New iPod
Michael Kanellos

Apple Computer is using a small hard drive from Hitachi in its new iPod, as the market for mini drives heats up.

The 4GB drive, which measures 1 inch across, marks Hitachi's second major contract in the music player field. Last October, Dell came out with a music player that contained a 1.8-inch Hitachi drive.

Apple did not state which company is manufacturing the drive for the new iPods, but sources close to Hitachi confirmed it is the Japanese computing giant.

The process of elimination is also fairly straightforward on this issue, because there are only three companies with product plans in this area. Cornice, a start-up that makes a 2GB minidrive that can be found in music players from Digital Networks North America (makers of the Rio line), said it wasn't involved, and Toshiba, which manufacturers 1.8-inch drives for Apple's other iPods, won't come out with a drive in the 1-inch range until late this year.

The hard drive has emerged as one of the key components in the push to bring PC technologies to the home. Personal video recorders from TiVo and others depend on hard drives to store recorded TV programs. Samsung has shown off a small video camera that relies on a 1-inch hard drive.

The iPod has also helped popularize portable music players with hard drives. More portable music players actually depend on flash memory to store music, but flash players can't achieve the same capacity, and they feature only about 256MB, versus several gigabytes, of storage space.

Until recently, in fact, the market for small hard drives, defined as drives with a diameter of 1.8 inches or less, has been sort of a sleepy place. IBM originally designed the 1-inch drive, which it called the micro drive, in the 1990s, but it sold in low numbers. Toshiba was the first major manufacturer of 1.8-inch drives, but to date, the vast majority of the drives have been incorporated into iPods.

Last year, Hitachi and Cornice both jumped into the market. Hitachi acquired the technology when it purchased IBM's hard-drive business in 2002.
http://news.com.com/2100-1041-5136124.html


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Chatterbox

From the article: “Sometimes group members will send files to other sites themselves, using a technique called File Transfer Protocol instead of e-mail.”

Aha! Since this FTP thing is obviously a tool for criminal acts, all we have to do is to use the DMCA or the Patriot Act to declare it illegal. Once this is take care of by the responsible authorities, the Internet will once again be free of criminals, and a safe place where innovation can flourish.

Bring out the stromtroopers! - Christian Engstrom
http://slashdot.org/article.pl?sid=04/01/07/2332234


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Biz Skeptical About Reported Slide in File-Sharing
Bill Holland

Are fewer Americans using music file-sharing programs? Maybe. Depends on who you talk to.

Most -- but not all -- online music industry analysts say they agree to some extent with the findings of a study released by the Pew Internet & American Life Project over the Jan. 2 weekend reporting that illegal music file sharing is down among those 18 and older.

Analysts and execs from peer-to-peer monitoring companies say, however, their data do not show the precipitous 50% dip that the Pew survey found. They also point out that the new survey excludes teens, the most active P2P users.

Pew interviewed 1,358 Internet users from Nov. 18 to Dec. 14 and found that the percentage of music-file downloaders had fallen to 14% from the 29% the project had reported last spring -- a drop from 35 million users to 18 million users.

The groups that recorded the steepest plunges were women (a 58% decrease), those with some college education (a 61% decrease) and parents with children living at home (a 58% decrease).

The study includes very recent data from ComScore Media Metrix, based on a continuously measured consumer panel, which show significant declines from November 2002 to November 2003: 15% for Kazaa, 25% for WinMX, 9% for BearShare and 59% for Grokster.

That contrasts with findings from Webspins, which compiles data on computer requests for P2P music files for such companies as Nielsen SoundScan. A Webspins analyst says that his data does not show any decline in P2P usage.

"Folks might tell Pew something, but the facts are, we've not seen a dip," Webspins consultant John Fagot says. "In fact, over the Christmas break, we found there was actually a 5% increase in requests for file sharing music files."

Most monitoring company execs say that the industry's educational and enforcement efforts, coupled with the availability of viable pay services, will eventually overcome infringing P2P outfits.

Fagot cites his son, who tells him the legit services deliver ease and guaranteed top-quality audio.

Russ Crupnick, VP at NPD Music Watch Digital Service, says his data shows that P2P usage has "dropped off significantly in the long term." In September 2002, he says, 22% of those surveyed said they had used P2P for music downloading in the past month. In September 2003, the number dropped to 11%.

Crupnick says that by November 2003, either because of the pending holiday season or less media coverage of suits from the Recording Industry Assn. of America, the download figures started creeping up again, to 12% of those surveyed. He thinks some people decided, "'I think I'll take the seat belt off."' Crupnick also agrees that some users might be telling groups one thing and doing another.

But Eric Garland, CEO of Big Champagne -- another online media measurement firm -- says that the industry enforcement program has changed attitudes, if not behavior. "Six months ago, everybody would tell interviewers they use P2P because it was hip. No longer."

As for the veracity of the Pew responses, Fagot quotes the late writer H.L. Mencken: "It is hard to believe that a man is telling the truth when you know you would lie if you were in his place."

Pew director Lee Rainie admits that some interviewees might not have 'fessed up, but he stands behind the numbers.

"You should keep in mind we were counting people, not the amount of files being transferred," he says.

All of the experts caution that big drop or no, unless the industry is vigilant, infringers will continue to look for a free ride.

John Barnett at Parks Associates warns that online piracy will continue to plague the business: "It'll be a constant battle for the industry; it's like water in a dam seeking a crack."

RIAA chairman/CEO Mitch Bainwol agrees. "We must continue on this course. It is essential to fostering an environment where legal online music services can flourish." He says the Pew revelations show that the RIAA is "on the right track."

Phil Leigh, senior analyst at Inside Digital Media, says the figures are a positive development but adds that "the drop is not enough to save the physical CD. There's no corresponding 50% increase in CD sales."

Leigh says that CD burning will continue to rob sales. Those who have CD burners on their computers, he says, are "are getting habituated to their use."
http://www.reuters.com/newsArticle.j...toryID=4106967


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The court is now in double session…

Rights Issue Dogs CD Protection
John Borland

A dispute over royalty rights on copy-protected CDs and other types of music discs is helping to stall the release of some new music technology, and could result in record labels owing tens of millions of dollars in back payments to music publishers.

At issue are "double session" CDs that include two versions of each song on a disc, formatted for playback on different kinds of devices. The most widely distributed type are copy-protected discs that prevent CD tracks from being copied to a hard drive, but that also include a digital version of the songs, often in Microsoft's Windows Media format, that can be transferred to a computer or portable digital music player.

Music publishers and songwriters, who are entitled to payments of a few cents for every copy of a song sold, contend that since these double-format discs hold two copies of songs, they should be paid for both copies. They've been negotiating with record labels for months, but already hundreds of millions of discs have been released around the world, raising the possibility of huge back payments.

"From a legal standpoint, the position of the music publishers is that these discs contain two separate (copies of each song)," said Cary Ramos, an attorney representing the National Music Publishers' Association (NMPA). "The fact that they are the same recording doesn't mean that we should treat it as one."

Innovation versus piracy
The licensing dispute highlights the new power of music publishers as the recording industry seeks to shift gears from selling songs on discs meant solely for traditional stereo systems to formats optimized for use on computers and computer peripherals--a change with profound implications for artists, consumers and everyone in between.

Music publishers see the shift as an opportunity to recast decades-old contracts with record labels that have left them with a relatively small fraction of the sale price of a CD. Copy-protected discs offer a big chance to do so, since the lion's share of unauthorized files traded on file-swapping networks comes from unprotected CDs.

The labels are bent on reducing piracy by preventing consumers from making unlimited copies of tracks on future CD releases, much as they have required digital download services such as Apple Computer's iTunes Music Store to include locks on the tracks they sell.

Still, labels don't want to see their already beleaguered profit margins shaved further, and they are seeking ways to avoid doubling the amount they pay publishers for what most consumers perceive as the same product.

So far, both sides say they want to resolve the dispute through negotiation, rather than litigation. But the high-stakes dispute underscores how technology transformations still remain captive to licensing and rights issues created for a decidedly pre-digital world.

Until last year, it was the record labels that were widely viewed as the stumbling blocks to taking the music industry into the digital age. Initially loathe to license their music to online sites that talked openly of revolution in the music business, the labels even drew a federal antitrust probe seeking evidence that they were collaborating to block digital businesses.

But that probe ended late last year, showing no evidence of illegal collusion, and most labels are now eagerly licensing their music to as many online song stores as they can.

As a result, the focus on digital licensing has switched to scattered music publishers and songwriters, which typically receive between 7 and 8 cents for each physical copy of a song sold. Ordinarily wielding far less power, and commanding far fewer financial resources than the record labels, this scattered group of individuals and associations now is proving a more potent force in the digital transformation.

In some cases, individual publishers and songwriters are responsible for keeping hugely popular music out of the official digital stores.

In the case of the new two-part discs, labels are for the most part going ahead and releasing the new formats without obtaining new licenses or striking new deals with the scattered publishers. But that decision could be costly.

Copy-protection company Macrovision alone says its double-session technology has been distributed on more than 200 million individual compact discs, for a total of about 2 billion tracks, around the world. At even just a few cents a song, that potentially represents looming liabilities of tens of millions of dollars for record labels if they ultimately have to pay for the second session tracks.

Macrovision says labels seem to be more worried about the copy-protection technology's compatibility with different devices, and about consumer reaction to copy-proof discs, than about the looming royalty issues, however.

"It's not fully resolved yet," said Adam Sexton, vice president of marketing for Macrovision's music division. "But I think it is something that they're going to be able to work through."

To date, negotiation between the sides has been cordial, if tense. Publishers, which have previously sued labels such as Universal Music for distributing digital music without obtaining publishing clearance, say they want to settle the new royalty rates without resorting to lawsuits. But the tension is fraying nerves in some corners.

"We're trying so hard to make a business out of this," said David Ring, vice president of business development at Universal Music Group's eLabs division, speaking at the Music 2.0 conference last month. "But the pace of negotiations is really frustrating. While publishers want to argue about how big a slice of the pie they get versus the record companies, the pie is shrinking,"

Convenience versus livelihoods
As with so many of the licensing issues in the music business, the details of the dispute have little immediate bearing on the consumer experience.

In most of the double-session discs being released, the extra formats included on the disc are aimed at making it easier for consumers to use their music on multiple devices as digital audio technologies proliferate.

The copy-protection technology produced by Macrovision and others blocks people from ripping MP3s, a format that consumers can duplicate at will. The second session includes digital files that can be used on a computer or an MP3 player, with certain restrictions aimed at preventing tracks from being distributed endlessly on file-swapping networks such as Kazaa. While these discs remain controversial among American consumers, slowing release of the technology in the United States, the technology is far more widely accepted in Europe and Japan.

Similarly, on some Super Audio Compact Discs (SACD), a high-fidelity format sold in many record stores, ordinary CD-quality audio versions of songs are also included, so that the discs can be played in car stereos and other older players. Even hybrid DVDs are hitting markets, with such features as the entire soundtrack for a movie included along with the film itself.

This may be more convenient for consumers, but it worries publishers and songwriters. Their livelihoods have relied on people buying versions of their songs in multiple formats--once on a DVD, and again on the soundtrack album, for example. They're worried that their income will be substantially reduced if people are able to buy a disc that combines multiple formats.

Nevertheless, they say they are big supporters of the new formats, as long as the right royalty terms can be negotiated. Ramos said the process is necessarily slow, because a quirk of antitrust law forbids music publishers from negotiating as a group or trade association on this particular issue.

"They think the sound is great, and that there are wonderful features for consumers," Ramos said. "They're as anxious as anyone to work out financial issues."

The delay--and the insistence on sticking to licensing structures created when albums were released on pressed vinyl--is frustrating some digital advocates, however.

"We have a system...where (publishers) have been paid on a per-piece basis, instead of a percentage of revenue," said Jon Potter, executive director of the Digital Media Association, also speaking at the Music 2.0 conference last month. "Now some (publishers) are being opportunistic in order to make up for old wounds."
http://news.com.com/2100-1027-5139762.html


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The Next Big Thing For Wireless?

WiMax is a lot faster than Wi-Fi and has a bigger range -- but success isn't assured
Andy Reinhardt

Everywhere you turn these days, there seems to be a new way to zap data through the ether: Wi-Fi, Bluetooth, GPRS, 3G. Now comes yet another addition to this alphabet soup, a technology that can blast data seven times faster and up to a thousand times farther than popular Wireless Fidelity, or Wi-Fi, systems. Officially called IEEE 802.16 but marketed under the sexier moniker WiMax, it's bound to be a hot topic this year, thanks to aggressive backing from chip giant Intel (INTC ) and support from equipment makers such as Nokia (NOK ) and Alcatel (ALA ). The first WiMax gear should be on the market by the end of 2004.

Think of it as Wi-Fi on steroids. While Wi-Fi hotspots have a radius of about 100 feet, WiMax uses state-of-the-art microwave radio technology to span distances as great as 30 miles. That means it could be used as an alternative to copper wire and coaxial cable for connecting homes and businesses to the Internet. If it flies, WiMax could reinvigorate competition between dominant telecom and cable companies and rivals using a whole new infrastructure -- not just leasing space on existing networks. "This is the next telecom revolution," says Rudy Leser, vice-president of marketing for Tel Aviv-based Alvarion Ltd. (ALVR ), the leading maker of broadband wireless equipment.

That's just for starters. The real buzz about WiMax is that Intel Corp. is aiming to shrink the technology down to a chip so that it can be built directly into PCs and laptops. Intel did the same thing for Wi-Fi with its Centrino mobile processor line and helped accelerate the Wi-Fi boom. Analysts figure WiMax laptops could show up by 2006, letting people get on the Net wirelessly virtually anywhere. "If you like Wi-Fi, you're going to love Wi-Fi everywhere," says Sean M. Maloney, general manager of the Intel Communications Group. Pyramid Research LLC of Cambridge, Mass., figures that nearly 4 million people will be using such "broadband wireless" technology by 2008. Revenues from broadband wireless services -- mostly based on WiMax -- could top $2.1 billion annually by that time.

If all of this sounds like a marketing pitch from the 1990s bubble, it should. Telecom startups such as Winstar LLC (IDT ) and Teligent Inc. went broke trying to sell similar wireless technology to businesses and homes. But WiMax has a big cost advantage. The boom-era startups used proprietary equipment that cost as much as $1,200 for every customer site -- three times as much as early WiMax products are expected to. Thanks to standardization, prices should plunge even further in the future, to less than $200 for the gear that sits at the customer's site. Then, when WiMax migrates into laptops, the cost to buy into it will edge toward zero.

Still, success is hardly assured. The biggest question is whether even gung-ho techies need another technology to tap the Net. Wired broadband is widely available in homes and businesses in the U.S., Western Europe, and parts of Asia. The rapidly spreading Wi-Fi provides speedy Web links on the go. And wireless companies are rolling out ever-faster ways for their customers to tap the Net. On Jan. 8, for instance, U.S. giant Verizon Communications Inc. (VZ ) is expected to unveil a nationwide rollout of a competing wireless technology that provides data speeds of up to two megabits per second.

Even if incumbent telecom companies hold back, rivals are likely to see opportunity in WiMax. The No. 5 mobile operator in the U.S., Nextel Communications Inc. (NXTL ), has been snapping up broadband wireless licenses around the country and is widely expected to enter the business. Digital subscriber line (DSL) providers such as Covad Communications Group Inc. (COVD ) also could jump on WiMax to free themselves from the cost of licensing phone lines from regional Bell operating companies. And a crop of so-called wireless Internet service providers that offer local Wi-Fi services are prime candidates to graduate to WiMax.

Perhaps the biggest opportunity for WiMax lies in the developing world. Large areas of Latin America, Asia, Africa, and Eastern Europe aren't wired for telephone service, let alone cable. With WiMax, they could leapfrog directly to broadband. That's one reason players such as China Unicom Ltd. (CHU ) and Serbia's Telekom Srbija are already rolling out broadband wireless gear. These and dozens of other companies likely will switch to even cheaper WiMax when it becomes available. Pyramid Research figures that the number of broadband wireless users in the developing world will grow at a compound annual rate of 54% over the next five years, vs. 34% in developed nations. "WiMax could help close the Digital Divide," says Pyramid analyst John Yunker.

Suppliers already are scrambling to serve the market. "We are big believers in broadband wireless," says Niel Ransom, chief technology officer for Paris-based Alcatel, the world's No. 1 seller of conventional DSL gear. Alcatel hasn't announced WiMax products yet, but "there's no way we're going to sit on our hands," Ransom says. Neither is Alvarion, which is likely to be the first company to release WiMax-compatible gear late this year. All told, figures Pyramid, operators will spend $5.4 billion over the next four years on broadband wireless gear.

For consumers, WiMax holds out the promise of increased broadband competition, lower prices, and more freedom. That's a combination sure to turn a few heads.
http://www.businessweek.com/magazine...6083_mz063.htm


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US Criticizes South Korea Over Online Piracy
Martyn Williams

TOKYO - The U.S. government elevated South Korea's position on an intellectual property rights watch list on Thursday because of the Asian nation's failure to address several issues of U.S. concern over online piracy of music and movies, the Office of the U.S. Trade Representative (USTR) said in a statement.

South Korea will join 11 other nations on the USTR's priority watch list as the result of a special review of online piracy in the nation that was conducted by the USTR in late December. The review found that online music and movie piracy in the country, which is the sixth largest export market for the U.S., has caused an estimated US$572 million in losses to U.S. copyright holders in 2002, according to the statement.

Two issues came in for particular criticism by the USTR. They are the failure of the South Korean government to submit legislation strengthening rights governing audio recordings and its failure to grant the Korea Media Rating Board the authority to stop movie piracy.

Multi-megabit per second broadband is virtually ubiquitous in South Korea and P2P (peer-to-peer) file-sharing services have been popular for several years. Initially, the locally developed Soribada service provided the most popular P2P trading site and recently, after growing legal pressure on Soribada's operators caused the site to be shut down temporarily, users have begun switching to other P2P networks.

South Korea is hardly alone in being criticized. An annual review published in May this year listed 50 nations as causing special concern for the USTR. Eleven of those were named to the special watch list to which South Korea has been added. They are: Argentina, the Bahamas, Brazil, the European Union, India, Indonesia, Lebanon, the Philippines, Poland, Russia and Taiwan.

Countries that fail to make progress in negotiations with the U.S. may find themselves facing sanctions. The USTR cited Ukraine as currently subject to US$75 million in sanctions as a result of insufficient progress on intellectual property issues. At least two countries, China and Paraguay, were previously on the priority watch list but were removed after satisfying U.S. demands.
http://www.idg.com.sg/idgwww.nsf/uni...7?OpenDocument


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Porn Producer's Complaint: Kazaa Won't Block Downloads
Andy Sullivan

WASHINGTON — An adult-video company has complained to Congress that the owners of the Kazaa Internet file-trading service have not blocked users of the network from downloading its films, even though they have the technology to do so.

Pornography producer Titan Media said Kazaa's owner, Sharman Networks, can closely monitor activity on the network through "spyware" installed on users' computers and could use that capability to block its users from downloading copyrighted files.

But Titan said in a letter to Congress that Sharman has not cooperated with a request to stop unauthorized copying of Titan's adult videos over its network.

Titan's letter, released late Monday, is the latest blow to Sharman as it battles charges that it facilitates widespread copyright abuse and the spread of child pornography over its Kazaa network. Millions use Kazaa to copy music, movies and other computer files from each others' hard drives, without paying royalties for copyrighted material.

Like other movie studios and record companies, Titan has sought to stop unauthorized copying of its products by Kazaa and other "peer to peer" networks.

Sharman has long maintained that it cannot control what users share over Kazaa, though it told a Senate committee last fall it would try to improve its content filters to help users avoid offensive material.

Titan said it had asked Sharman to block 1,400 of its movies last month but had received no response.

"Sharman Networks does not want to interrupt the flow of adult materials through its network because its existence is a primary factor in the growth and profitability of (the) company," Titan vice president Keith Ruoff wrote the Senate Judiciary Committee.

Pornography accounts for more than 40% of the material on Kazaa, he said.

A Kazaa spokesman declined comment as he had not seen the letter.

Pioneer peer-to-peer service Napster tried to develop a method to block copyrighted files after it was shut down in 2001, but ultimately abandoned the effort. Napster now operates as a for-pay service supported by the recording industry.
http://www.usatoday.com/tech/news/te...zaa-porn_x.htm


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Forget The Spin, Taping Is Not Killing Music
Peter Martin

For many of us, this Christmas marked the return of the homemade gift. By that I mean the lovingly crafted personalised compact disc, a sort-of high-tech car tape filled with what the giver imagines are your favourite (perhaps illegally downloaded) songs.

A Record Industry Association survey suggests that an astonishing 40 per cent of us have received homemade CDs as gifts, typically four each during the past year.

The industry wants us to feel bad about this. It says we are guilty of theft (or at least of receiving stolen goods). When three university students were sentenced last month for their role in creating a music download site the industry claimed they should have been treated as common criminals. "Clearly, if you steal this much music from the store you go to jail," a spokesman said.

But creating CDs is different from stealing CDs from a store, and the industry's figures bear this out.

The recording industry survey was carried out by Quantum Market Research using a sample of about 1000 people. It suggests that 31 million homemade CDs are given away as gifts each year (about four for each of the eight million Australians it says receive them). If, as seems reasonable, 31 million homemade CDs are kept rather than given away, the total number created each year would top 62 million.

When something is stolen there is normally something missing. A dent of 62 million in CD sales in stores each year should be easy to spot. Except for this problem. CD sales in Australian stores have hardly ever been that high. They peaked at 63 million in 2001.

If, as the industry suggests, each of the CDs made on a home computer was indeed created at the expense of one sold in a store the entire industry would have been wiped out.

In fact while 2001 was the industry's best year on record, 2002 was its second-best year, with sales only a few per cent lower.

So don't feel too guilty. The homemade CD appears to have brought us the best of both worlds - doubling the number of new CDs in circulation, without much harming sales in stores.

(The record companies will not like me saying this. They will make the point that the dollar value of CD sales is the lowest it has been since 1998, but that is because prices are lower, thanks in part to Allan Fels. The number of CDs sold is higher than it was back then, thanks in part to Norah Jones, Delta Goodrem and now Guy Sebastian.)

If the healthy state of CD sales in the face of massive do-it-yourself competition surprises you, you are in good company. Midway through last year the Chicago University economist Stan Liebowitz was warning of annihilation. The recording industry loved him for it. He said large-scale unauthorised copying could soon make it obsolete.

Liebowitz has since had a change of heart. In a new study entitled Will MP3 Downloads Annihilate the Record Industry? he concedes that the evidence for annihilation has failed to materialise. He says that "given the enormity of the whole MP3 download enterprise [as in Australia, roughly one song is downloaded for each song sold through stores] it should be easy to recognise its impact on album sales if the impact is large".

He concludes that the impact has not been large and says his best guess is that the worst of it is over, given that most homes that would want CD burners now have them.

CD sales in the US have fallen 20 per cent, but from an extraordinary high. Liebowitz says that during the history of the vinyl LP, sales rarely exceeded two per US citizen a year. Prerecorded cassettes did better - sales peaked at about 2.5 a citizen. Sales of CDs peaked a few years back at more than five per citizen a year. Even now US citizens buy more than four CD albums each a year, roughly twice as many as they ever did in the days of the vinyl LP.

The reason is that home taping, cassettes and CDs have made music more portable. In the days of the vinyl LP you were limited to listening in one room (usually the lounge room) and you certainly could not listen in your car. The advent of the cassette tape increased the amount of minutes available each day to listen to recorded music.

As a result the demand for recorded music went up, whether in the form of LPs which could be taped onto cassettes or in the form of prerecorded cassettes. The 1980s industry sticker "Home taping is killing music" couldn't have been less accurate.

The recording industry and its brethren have been crying wolf for years. At various times we have been told that the pianola was going to kill sales of sheet music, that radio was going to kill sales of records, that photocopying would kill sales of books, that the VCR would stop people going to movies, and that cheaper imported records would stop people buying Australian music.

Along the way we have been told that the use of the latest technology was immoral - everything from the photocopier to the cassette recorder to the VCR.

Liebowitz says we are in the middle of a "wonderful natural experiment" which will determine fairly quickly whether the latest high-tech copying machine causes the sort of damage the other machines didn't. He adds that from an economist's point of view it would be no real disaster if it did. The present recording industry would be replaced by something better able to make money in the changed environment.

But all the indications are that the recording industry we know will be around for quite some time yet - side by side with homemade CDs. In Australia CD sales through stores rebounded 5 per cent in the first half of 2003. The figures for the second half may well show Guy Sebastian has pushed the industry towards a near-record Christmas.

Peter Martin, a former Treasury official, is the economics correspondent for SBS Television.
http://www.smh.com.au/articles/2003/...546532286.html


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From October, ‘03

Global Downloading, Local Lawsuits

Hauling U.S. file-sharers to court won't stop the flow of free tunes from overseas.
By Jack Ewing in Frankfurt and Heather Green in New York

It took a couple of nanoseconds for news of the U.S. music industry's legal assault on file-swappers to reverberate across the Atlantic -- and the reaction was shrill even by online standards. "World War III will be fought over the telephone lines," declared one young German on a Web forum devoted to "the war for digital freedom." Another young man warned darkly that he would learn to fly a plane and "behave like a terrorist," though he decided that first he would "go chug down a beer."

The Internet discourse, overblown and juvenile as it may be, demonstrates that illegal file-sharing isn't just a U.S. problem. Even if the Recording Industry Association of America makes good on its threat to sue thousands of people who are distributing pirated material in the U.S., it will hardly be able to choke off the supply of free tunes. "You can't stop this digital revolution," warns Kim Schmitz, a self-styled Internet entrepreneur and former hacker from Germany.

The RIAA'S strategy sounds reasonable. The theory is that 90% of the illegal content comes from a core of dedicated users of programs such as Kazaa, the file-sharing software made by Australia-based Sharman Networks. These people offer thousands of songs to anyone who wants to download them. If the RIAA can scare those hard-core sharers with its lawsuits, the thinking goes, users might turn to legal Web sites that charge real money for digital music. To some extent, it has been successful: Kazaa traffic, for instance, has plunged nearly 40% since June, according to researcher Nielsen/NetRatings, although many experts believe that drop-off will be temporary.

The Web, though, really is worldwide. Even if the record companies shut down Americans who provide free songs, downloaders can simply turn to overseas sources for their music. That's no problem, since users of programs such as Kazaa, Grokster, or BearShare have no way of telling whether the Motörhead or Britney Spears songs they're taking come from Frankfurt, Germany, or Frankfort, Kentucky. "A downloader is just a downloader," says Carl, a 21-year-old student in Australia. "You don't know if he or she is from a certain country."

Youth culture is as global as the Internet. That's especially true in Europe, where young people listen to many of the same bands as Americans, and a healthy 10% of homes have the high-speed Internet connections essential for illegal sharing. While file-swapping is not as epidemic in Europe as in the U.S. -- home to 60% of global file-sharers -- it's widespread and growing fast. About 6.4 million Germans over age 10 downloaded music last year, up 31% from the prior year. Last year, sales of recorded music in Germany fell 9%, according to the International Federation of the Phonographic Industry, a London-based trade group.

Sales have also begun to taper off in France, which until recently had defied the global decline in music sales. And while language and differences in taste have held back file-sharing in countries such as Japan and Korea, it's increasing quickly as the number of high-speed Net connections surges.

Going after file-sharers in court could be more complicated outside the U.S. American law makes it relatively easy for the recording industry to subpoena customer records from Internet service providers. But copyright protections differ from country to country, and stronger privacy laws -- especially in Europe -- might make it more difficult to identify illegal sharers. "When you get outside the U.S., you get into a legal minefield," says Rebecca Jennings, an analyst at Forrester Research Inc. in London.

Abroad, the record industry also worries about strong-arming customers, because the tangle of licensing issues means such buyers have fewer legal ways of getting music online than in the U.S. So until the industry can figure out how to deal with these tough problems internationally, it can block the front door for U.S. sharers, but plenty of tunes will come in through the worldwide window the Internet has created.
http://www.businessweek.com/magazine...2078_mz054.htm


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Data Management/Storage

RDS

Peer-to-Peer File Replication

RDS enables mission critical scheduled replication and synchronization of file systems over networks regardless of content, volume or production environment.

RDS is for enterprises running both UNIX and Windows operating systems in production environments, performing a one-to-one and cascaded file replication.

RDS scales to handle very large files and huge replication trees - without maximum size limit or performance degradation as content volume grows. The synchronization time does not depend on the total volume of data to be replicated, but only on the volume of changes.

Replication processes run unattended. The scheduling framework provides automated recovery that is resilient to any failure including reboot, power outage and loss of network connectivity. Failure recovery resumes at the exact point of failure once connectivity is restored.

RDS is flexible and feature rich, allowing the user to configure replications according to business needs. Replications can be tuned to include or exclude specific files and folders, to perform pre and post replication tasks, and to be sensitive to network bandwidth or server CPU. RDS is built to accommodate high-speed LAN networks as well as slow WAN networks or busy networks where replication bandwidth use needs to be controlled.

Either GUI, command line or API interface can be used to define, monitor, and control file replication processes from anywhere on the network. Centralized reporting and logging options provide replication related data at corporate IT level. Runs as an unattended service or daemon with control from anywhere on the network. Detailed centralized reporting and logging functions.

RDS provides secured replication. Being TCP/IP based and not relying on windows networking, it is firewall friendly. Data transfer is encrypted and authenticated.
http://products.enterpriseitplanet.c...073216813.html


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Journalists Protest Web Site Clampdown
Declan McCullagh

A journalist's organization is protesting the U.S. military's decision to restrict what information is available on a Defense Department Web site. Last month, the Pentagon said that "information of questionable value to the general public" will no longer be posted on the Office of Inspector General's Web site.

Tammy Lytle, the president of the National Press Club, responded in a letter this week arguing that because sensitive information can be classified, "there is no need for individual agencies to add their own restrictions, especially when they are so broadly worded as to likely become susceptible to abuse." Last month's move follows a January 2003 directive from Defense Secretary Donald Rumsfeld warning that too much unclassified but worrisome material was popping up on military Web sites.
http://news.com.com/2110-1028-5138034.html


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EFF Secures Protection for ReplayTV Clients

Hollywood Promises Not to Sue Consumer Plaintiffs
Press Release

San Francisco - A federal court today ruled to end a case brought by five ReplayTV digital video recorder (DVR) owners after 28 entertainment companies promised not to sue them for copyright infringement for using the "commercial advance" or "send show" features of their DVRs.

"Skipping commercials is not illegal and neither is sending television shows from your home to your office, as one of our clients does," said EFF Staff Attorney Gwen Hinze. "We're pleased that we were able to protect our clients against unjustifiable copyright claims for exercising their fair use rights."

"This may be first time that the entertainment companies have backed down from a claim of copyright liability," added Cindy Cohn, EFF's Legal Director. "Consumers deserve the full benefits of the digital revolution and specious copyright claims should not stand in their way."

EFF brought the case on behalf of the five plaintiffs in June of 2002 after the entertainment companies sued the creators of ReplayTV arguing that the device infringes their copyrights because it allows consumers to skip commercials and send recorded programs from one device to another. Responding to the lawsuit and to claims by a top industry executive that people who skip commercials are "thieves," EFF asked the court for a declaratory ruling that using the DVR to skip commercials and send shows between devices is fair use.

EFF had asked the court to give affirmative relief to all owners of ReplayTV DVRs with the "commercial advance" and "send show" features. The court declined to do so on the grounds that the entertainment companies promised not to sue here and had indicated no intention to sue any of the other owners. The court did, however, leave open the possibility of relief in the event that the entertainment companies change their position and seek to sue owners of ReplayTV DVRs.

Assisting EFF in this litigation were Ira P. Rothken of San Rafael and Richard R. Wiebe of San Francisco.
http://www.eff.org/IP/Video/Newmark_...nd_case_pr.php


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France's Digital Economy Bill Annoys Net Users
Peter Sayer, PARIS

Net users and internet service providers in France are mounting a last-ditch protest against a piece of legislation entitled A Bill to Promote Confidence in the Digital Economy, which entered its final reading in the French national assembly Thursday.

Among other things, it will oblige service providers to filter net traffic for illegal content, with criminal sanctions for companies that fail to block pedophile images, material excusing crimes against humanity and incitement to racial hatred.

Iinternet access providers are unwilling to take on responsibility for policing French net users. Such a measure would be the first taken by a democratic state, the Association of French Internet Access and Service Providers (AFA) wrote in an open letter to French deputies. Other countries that had considered net censorship, such as Canada and Australia, had rejected it, they said. The letter, signed by the chairmen of 10 of France's largest internet access providers, added that filtering technology is just as likely to block legal content as illegal content, and asked the deputies to reject this part of the bill.

Service providers are not the only ones against the proposed legislation: users are also up in arms.

The bill's proposal to oblige access providers to filter internet content entering the country is like a "digital Maginot Line", according to an association of broadband internet users, Odebi (pronounced like the French words for broadband). The Maginot Line was a supposedly impregnable fortification along France's border with Germany, designed to prevent an invasion. The Germans outflanked it by invading through Belgium, as its common border with France was not fortified. The bill's proposals to block certain types of information can just as easily be sidestepped, and will prove devastating, costly and ineffective, Odebi said in an open letter to deputies.

The wide-ranging bill is the translation into French law of the European Union directive on electronic commerce. Other parts of it make access providers responsible for preventing their customers from illegally downloading or sharing intellectual property, such as music, to which they don't own the rights.

If record companies feel they are losing money to online music trading, they have only themselves to blame, according to the AFA. For its part, the association says its members support legal music downloading, as the presence of legal online music stores on their portals shows, and that it should not fall to them to police a law that only the record industry wants.

Odebi, for its part, threatened to call a complete boycott of all music products, online and traditional, if the law is passed.
http://www.computerworld.co.nz/news....E?OpenDocument


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Cuba Tightens Control Over Internet

HAVANA (AP) - Cuba tightened its controls over the Internet on Friday, prohibiting access over the low-cost government phone service most ordinary citizens have at home.

The move could affect hundreds, perhaps thousands, of Cubans who illegally access the Internet from their homes, using computers and Internet accounts they have borrowed or purchased on the black market.

Cuba's communist government already heavily controls access to the Internet. Cubans must have government permission to use the Web legally and most don't, although many can access international e-mail and a more limited government-controlled intranet at government jobs and schools.

Now Cubans will need additional approval to access via the nation's regular phone service. Since few Cubans are authorized to use the Internet from home -- only some doctors and key government officials -- the new law amounts to a crackdown on illegal users.

The law states that the move is necessary to ``regulate dial-up access to Internet navigation service, adopting measures that help protect against the taking of passwords, malicious acts, and the fraudulent and unauthorized use of this service.''

As for foreign firms and individuals, most are authorized to use the Internet in Cuba, usually via a more expensive telephone service charged in American dollars and already off limits to most Cubans.

E-net, the Internet service of the Cuban telephone company Etecsa, told customers in a letter Friday the new law would take effect late Saturday. It affects all other Internet service providers in Cuba as well.

E-net is the largest of a handful of Internet providers in Cuba -- all of them heavily monitored and controlled by the government.

E-net customers who do not have the dollar phone service can keep accessing the Internet with the ordinary phone service with special cards sold at Etecsa offices, the letter says.
http://www.siliconvalley.com/mld/sil...al/7674007.htm


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Fiber To The Home

As every Internet surfer knows, broadband is good, broader band is better
Steven M. Cherry

The broadest broadband, of course, is optical fiber, the only medium capable of moving data at multigigabit-per-second speeds. It's fiber that will ferry us into a future of thousands of television channels, videoconference telephony, movies on demand, distance learning, telemedicine, and a digital record of every sight and sound around us.

We've known this for two decades. Yet only rarely is an existing residential connection being refurbished with fiber. That will soon change—in fact, the pace of fiber installation is expected to pick up dramatically in the next few years.

This past summer the three largest U.S. telecommunications providers, Verizon, SBC, and BellSouth, agreed on a common set of standards for residential fiber-optic networks. That congruity is expected to lower costs and unleash a tidal wave of spending—Verizon alone reportedly has plans to embark on a 10- to 15-year US $20 billion to $40 billion upgrade of its fiber-to-the-premises networks.
http://www.spectrum.ieee.org/WEBONLY...0104comm3.html


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Tired of Slow Speeds, Some Cities Build Their Own Net, Cable Firms

Public networks are a boon to some consumers but raise legal and policy questions and the ire of private competitors.
Jube Shiver Jr.

NEWNAN, Ga. — For years, Harry Belcastro bought Internet and cable TV access from Earthlink Inc., Comcast Corp. and other telecommunications companies.

Then, when Belcastro and his family moved to this Atlanta suburb two years ago, he signed up with an unusual service provider: the city of Newnan, population 16,000.

For $25 a month, Newnan residents can hook up to a high-speed Internet connection. For $30 more, they can subscribe to a 74-channel cable TV package. They also can buy $30-a-month local phone service with caller ID, voicemail and 13 other add-ons most carriers charge extra for.

The big selling point for Belcastro, though, was a super-fast commercial-grade Internet connection for his home-based businesses.

"We couldn't afford this anywhere else," said Belcastro, noting that the bundle of services offered through Newnan's $40-million network would set him back more than $1,000 a month if he bought it all from the private sector.

He pays less than half that.

Frustrated by a slow or spotty rollout of high-tech communications services, 357 municipalities have dug up streets to build their own networks and compete against companies that they in some cases also regulate.

The number of cities with their own services has grown 54% in the last two years, according to a report by the Progress and Freedom Foundation, a Washington think tank. The trend is fueling welcome investment in networking equipment two years after the epic collapse of the $400-billion-a-year telecommunications industry drove thousands of independent Internet service providers and telecom companies out of business.
http://www.latimes.com/technology/la...nes-technology


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Senator Wants VoIP To Be Regulation Free
Ben Charny

U.S. Sen. John Sununu said he's preparing legislation to keep broadband telephone service providers from being "smothered by state and federal regulators."

The New Hampshire Republican described the proposed law at the Consumer Electronics Show as a "clear, pre-emptive remedy" that directs state utility regulators to take a hands-off regulatory stance on what's called voice over Internet Protocol (VoIP).

The legislation also seeks to make the Federal Communications Commission the main authority over VoIP service providers, the senator said.

As more conversations begin to flow through unregulated VoIP links instead of the heavily taxed public switched telephone network, state governments stand to lose billions of dollars. Because Net telelphony is not regulated, companies offering the service aren't subject to the vast thicket of taxes and regulations governing E911 and guaranteeing wiretapping access for police.

Also at issue is the future of a special $2.25 billion-a-year tax--typically reflected in higher monthly phone bills--that provides schools and libraries with discounts on everything from Internet access to phone lines for fax machines and domain name registrations.

Some states want broadband phone providers to follow the same state rules and regulations as do traditional phone providers. But FCC Chairman Michael Powell indicated here at CES that he favors either new regulations for VoIP providers or a hands-off approach for now to enable the young industry to mature.

"Unfortunately, if left unattended, I'm afraid the benefits of VoIP will be smothered by state and federal regulators," Sununu said during a CES panel this week. "A clear pre-emptive remedy is needed now. Congress must establish pre-eminence of federal authority in this area and provide major direction for any action by the FCC."

State regulators in California, New York and Minnesota, which have all indicated they want to regulate VoIP service providers, could not be reached Saturday for comment.
http://news.com.com/2100-7352-5138916.html


FCC Chairman Said That He Doesn't Support Regulating VoIP
Ben Charny

Federal Communications Commission Chairman Michael Powell said that he doesn't yet support regulating broadband telephone service providers, but thinks instead that a national "forum" to guide the young industry is more appropriate.

His comments, made Friday at the Consumer Electronics Show here, come just weeks before the FCC is expected to make several important decisions about whether broadband phone providers, whose subscribers use their Internet connections to make calls, will have to pay the same taxes and obey the same century-old rules that traditional phone companies must follow.

The FCC is also expected to soon rule on several petitions seeking similar clarifications that were filed by telephone giant and soon-to-be broadband phone provider AT&T, plus upstart broadband phone providers Vonage and free Internet telephone service Free World Dialup.

Based on his comments Friday, Powell has apparently sided with broadband phone providers who say that their technology is anything but a telephone service and that they are still too young to survive the financial burden that fees create.

Using VoIP (voice over Internet Protocol), calls are broken into bits of data using the Internet Protocol (IP), the world's most popular method for electronic devices to communicate. With IP, thousands of data packets are sent over the Internet at the same time using any open pathway they can find. Traditional phones use their own private networks and circuit switches, which waste network capacity by creating a constant connection.

Instead of regulations, which Powell called the "most acute threat" to the industry, he'd prefer to "wipe the slate clean" and craft either new regulations, a process that could take years, or drop the effort altogether. In the meantime, Powell would support the FCC playing the role of national "forum" that the telephone industry--both traditional and new--can turn to for direction. However, the FCC chairman didn't provide additional details,.

"We'd better realize that if you create a hostile environment, there is nothing that stops them from dropping that server in Italy," Powell told an overflow crowd at a CES session. "The minute they don't like it, they're gone. That's not what we want."

"The FCC has to demonstrate leadership; we're the best positioned to bring this all together," he added. In the case of broadband telephony, "that doesn't mean regulating it, but provide a forum to guide it."

Powell also took a backhanded swipe at states such as Minnesota and California, where public utility regulators have asked broadband phone providers to follow state telephone rules and regulations. Powell said regulators in these two states decided broadband phone companies were telephone concerns because of a "duck test," as in: Broadband phone services look and feel like a phone, so they should be subject to telephone regulations.

"It's the scariest thing I heard about VoIP," he said. "It's a scary impulse from the public policy perspective."

A representative from the Minnesota Public Utilities Commission had no immediate comment. California utility regulators were not available for comment.
http://news.com.com/2100-1034-5138451.html


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Congressional Leaders Promise Action On Tech
David Becker

Federal lawmakers are ready to help the technology industry solve its problems--at least some of the issues.

That was the consensus from eight U.S. senators and representatives gathered Friday for a panel at the Consumer Electronics Show. Congressional leaders vowed concerted action on some hot-button tech issues, but warned attendees not to expect too much.

Some of the most vigorous debate focused on trade policy, with speakers describing a balancing act between encouraging free international trade and preventing an exodous of U.S. jobs to overseas locations.

Rep. Tom Davis, R-Va., said misguided concerns about jobs are setting the agenda now. "What we're seeing is a continuing assault on free trade," he said, adding that some lawmakers "want to punish companies that do business offshore."

"We've been in defense all year," Davis said. "The AFL-CIO is out there--they're taking book on this."

But Rep. Steve Buyer, R-Ind., warned that fellow free-trade Republicans shouldn't make the mistake of thinking the jobs issue isn't real. "There's some realities out there that hurt Americans," he said. "There's a beginning of the erosion of the middle class in this country."

Debate was more unified on intellectual property issues, with lawmakers saying that while Congress will continue to support strong copyright protection, media industries need to come up with their own solutions to file-swapping and other issues.

Sen. John Sununu, R-N.H., joined others in criticizing the Recording Industry Association of America (RIAA) for suing alleged music swappers, calling the RIAA's legal tactics heavy-handed and against the intent of U.S. copyright laws, including the controversial Digital Millennium Copyright Act (DMCA).

"The fundamental problem with the approach of the RIAA took is that it was based on legislation that created special property rights," Sununu said. "Suddenly, you had a private entity that's able to issue subpoenas, which is unprecedented."

"That's not what the DMCA was intended to do," he said. "We can't be writing legislation that gives holders of certain types of intellectual property special rights...We can't carve out special legislation to give special powers to certain types of content."

Rep. Joe Barton, R-Texas, said it's up to content creators to come up with business models that accommodate modern technology and attitudes. "I don't agree you're going to get teenagers and young people to believe they're doing something immoral" in file swapping, he said. "The industry has to decide on a different model."

Lawmakers also spoke in support of moratoriums on taxing the Internet, with Sen. George Allen, R-Va., saying lawmakers need to be vigilant against efforts by state and local authorities to grab a chunk of broadband service fees.

Sununu said those same force are hungry to take a bite out of the emerging market for Internet-based telephone service. "I think the most important policy issue we'll be dealing with over the next few months is voice over IP," he said. Sununu said Congress' job is "to try to protect it from taxation, to define it as an information service, so the technology can grow."
http://news.com.com/2100-1028-5138908.html


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RFID Tags Get A Push In Germany
Alorie Gilbert

German retailer Metro Group has asked its top suppliers to begin attaching special microchips to shipments, giving a boost to an emerging computer-based logistics system that is expected to help retailers reduce their inventory-tracking costs.

Metro, which operates 2,300 stores in Europe and Asia, plans to install the system at 250 supermarket and wholesale stores in Germany this year, the company said Monday. The microchips will be attached to shipments of everything from shampoo to cream cheese. The project, one of the largest of its kind in Europe, involves a technology known as radio frequency identification (RFID), which experts predict could one day replace bar code technology.

U.S. retailer Wal-Mart Stores has launched a similar initiative and is asking its top suppliers--including The Gillette Co., Kraft Foods, Procter & Gamble and Tyson Foods--to put RFID "tags" on shipments headed for its U.S. warehouses and stores next year, starting with its Texas stores.

Metro expects its top 100 suppliers to start outfitting containers and cases of merchandise with RFID "tags" in November. RFID tags, which contain special microchips and antennae, are designed to automatically relay precise information about merchandise and its location to computers via radio frequency signals.

Concerns over privacy and costs have kept some retailers, including Wal-Mart, focused on using RFID in warehouses and back rooms, with the tags being removed before they reach consumers' shopping baskets. But in a project separate from the one it announced Monday, Metro is using an RFID technology in two of its Galeria Kaufhof department stores to monitor stock--a brand of women's apparel from German clothier Gerry Weber International--on store shelves. Items of clothing in those stores have RFID tags attached to them to help store managers locate goods and keep shelves stocked, Mierdorf said. The company plans to expand the project, which is the foundation of a self-checkout system, to more department stores and more labels this year, he said.

U.K. retailers Marks & Spencer and Tesco are also testing so-called item-level RFID systems.
http://news.com.com/2100-1008-5139627.html


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Microsoft Retail Project Taps Into RFID
Matt Hines

Microsoft said Monday that it established a new project aimed at providing next-generation technology to retailers, including emerging wireless applications such as radio frequency identification.

The announcement, made as part of the ongoing National Retail Federation (NRF) convention in New York, targets development of applications for nearly every aspect of the retail universe, from shopping to inventory management. Dubbed as the Smarter Retailing Initiative, the effort promises to deliver tools that allow retailers to interact with customers, improve operations management and incorporate emerging wireless technology. Microsoft said that software built under the effort would be based on its .Net Web services framework and would have an interface to existing products.
News.context

What's new:
Microsoft will create tools that allow retailers to interact with customers, improve operations management and incorporate emerging wireless technology. The software will be based on the company's .Net Web services framework and would have an interface to existing products.

Bottom line:

Retailers are expected to use radio frequency identification, or RFID, for everything from tracking inventory to communicating information on special deals to consumers via wireless devices. Microsoft's plans should boost these efforts.
http://news.com.com/2100-7345-5139176.html


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Parents Spy On Teens By Phone
Patrick O'Neil

PARENTS will be able to track their teenagers 24 hours a day using secret bounce-back SMS messages.

Parents using the "text track" technology get a return SMS instantly revealing their child's location. Teens will have no idea when their parents have done a check-up. Child tracking will be within the budget of average parents. In the UK, setting it up costs less than $100.

But privacy experts warn pedophiles and stalkers could hack the system and engage in clandestine tracking. Users need only a standard mobile phone. Each check will cost parents about 55 cents.

Previous tracking systems used GPS satellites costing up to $1000, and parents refused to pay.

Suppliers expect a boom in the use of text track because of its affordability. Truant children and secret teenage lovers are being put on notice. Parents can set up a zone around their wayward child's school or banned boyfriend's house. If the teenager leaves or enters the zone, an alarm is triggered and an SMS alert is instantly sent to parents. Parents can also set up regular location checks at set times and view their child's movements at the end of a day, week, or month.

Tracked teens must give permission before the private operator can follow their every move, but once given it is open-slather surveillance for parents. Unlike GPS tracking, the system can track mobile phones indoors. Phones will also have a one-touch alarm button for emergencies.

Australian software company Internav will introduce the Findafone service in March after the success of a similar service in Britain. But Australia's federal privacy commissioner Malcolm Crompton said yesterday the British service initially was not encrypting information safely, leaving children open to abuse. "A pedophile can begin to track people, or the estranged parent from an abusive household," he said.

He said that gung-ho operators were too quick to release controversial products. "If you have technology as sensitive as this, you don't need to rush into the market," he said.

Adolescent psychologist Dr Michael Carr-Gregg said text track was an electronic leash. "It doesn't say a lot about trust and respect. In a good family that is functioning well, there is no need for electronic surveillance," he said. "Enterprising kids worth their salt will get around this with ease."

Internav director Graham Thomas said he expected the service to be a hit among teenagers. "I've got a 13-year-old daughter. She is going to be able to SMS her friend and find out if she is in Queen St or sitting on the beach."

Text track will not be able to locate a phone that is switched off. Parents will also be able to check their child's location via the internet and home phone.

The technology can also be used by employers to track workers.

http://www.heraldsun.news.com.au/pri...360772,00.html