Peer-To-Peer News - The Week In Review – January 31st, '04 - P2P-Zone

JackSpratts · 29-01-04, 09:19 PM

Quotes Of The Week

"What we will demand be covered is Johansen's economic losses, and court costs and what could be called compensation." - Attorney Halvor Manshaus after winning second acquittal for client "DVD Jon" Johansen.

"If the equivalent of cold fusion has been invented in the software context, it ought to be a matter of science and engineering to see if it works." - Adam Eisgrau, P2P United, responding to attacks that content filtering is technically practical.

"Join a bunch of hackers and geeks. Spread the word. Bring people, visuals, music. If you don't make the first train, we're also on the second, and the one after that and the one after that and the one after that." – Subway “Geek Party” invite, San Francisco.

Hacker Hero Seeks Compensation After Acquittals In DVD Cracking Case

OSLO, Norway (AP) - A Norwegian man who became a hacker hero for cracking security codes on Hollywood DVDs wants police to compensate him now that he's been acquitted twice of computer piracy, his lawyer said Tuesday.

Jon Lech Johansen, 20, also known as DVD Jon, was 15 when he developed a program to watch movies on a Linux-based computer without DVD-viewing software. He posted the codes on the Internet in 1999 and became a folk hero among computer hackers.

Norway's economic crime police charged him under data break-in laws, demanding a suspended jail sentence, confiscation of equipment and fines.

However, Norwegian courts twice ruled that Johansen could not be convicted of breaking into DVDs he bought legally, nor could he be punished for providing a tool -- such as a computer program -- that others might use for illegal acts.

The Oslo District Court acquitted Johansen just more than a year ago. Police appealed to the Borgarting appeals court in Oslo, and last month lost that case as well.

Johansen's lawyer, Halvor Manshaus, said his client will seek about $21,800 from the economic crime police because the case had been such a burden over the past four years.

``What we will demand be covered is Johansen's economic losses, and court costs and what could be called compensation,'' Manshaus said on state radio network NRK. He did not immediately return calls to his office.

Johansen had been charged after police received a complaint from the Motion Picture Association of America and the DVD Copy Control Association, which licenses the film industry's Content Scrambling System, or CSS.

This month, prosecutor Inge Marie Sunde unexpectedly declined to appeal to the supreme court. Many, including Johansen, had expected a high court appeal because the case was the first of its kind in Norway.

Johansen's program, called DeCSS, is one of many that can break the CSS.
http://www.siliconvalley.com/mld/sil...al/7808655.htm

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Study: P2P and Legal Downloads Will Kill CDs
James Maguire

The combined popularity of peer-to- peer file swapping services and legal downloading sites will cause the CD format to go the way of the vinyl album, according to a study by research firm Forrester.

"Piracy and its cure -- streaming and downloads -- will drive people to connect to entertainment, not own it," states the study.

In particular, younger consumers have made music downloading part of their lifestyle, Forrester noted, reporting that 49 percent of 12- to 22-year-olds have downloaded music in the last month.

Adding momentum to this trend is the proliferation of legal download services, Forrester said. A long list of large corporations -- from Coca Cola to Apple -- are now purveyors of music downloads for a fee.

The shift from CDs to download-only music sales will take "a long, long time," Forrester analyst Josh Bernoff, the study's author, told NewsFactor, but is inevitable. "We're training a generation of young people that there's no connection between music and plastic."

Launched in the early 1980s, the compact disc caused a sea change in the music industry, turning vinyl albums into collector's items. In addition to offering superior sound quality, the CD was cheaper to manufacture, allowing the music industry to promote niche artists who otherwise might never have emerged.

The CD's higher profit margins meant record labels have been reluctant to part with this now venerable medium.

But consumer behavior is eroding support for the CD, Forrester noted, reporting that half of downloaders say they now buy fewer CDs. The popularity of unauthorized P2P services, such as Kazaa, have cost the music industry US$700 million in sales since 1999, the research firm said.

The downloading trend also is affecting the film industry. One in five young file- sharers have downloaded a film, according to Forrester, which reported that movie piracy is "three years behind music."

Record labels have attempted to come to terms with the seismic shift caused by P2P technology, launching legal downloading services. Seeing the trend, dozens of large companies -- from telecom firms like Cable & Wireless to retail mega-store Wal-Mart -- have launched or are planning download services.

The sound quality of these music downloads is not superior to that of CDs -- in some cases it is lower quality -- but the files can be shifted and transported among many digital devices, such as laptops and mobile phones.

"The download business is growing enormously," Bernoff said. "Getting it right or getting it wrong will make all the difference in the success" of this strategy for music labels and other entertainment companies.

The CD is not dead yet, "but the more energy a company puts into trying to preserve the CD business, the worse off they're going to be," he said, "and the more energy they put into trying to get the download business right, the better off they're going to be."

By 2008, music downloads will account for a third of music industry revenue overall, Yankee Group analyst Mike Goodman told NewsFactor, echoing a conclusion from the Forrester study.

The overall music market will grow, and download sales will lead this growth, he says. The shift away from the CD is not a threat to the record labels in Goodman's view.

Much of the record labels' recent revenue dips are not due to digital downloading but to the fact that labels have produced fewer CDs, he explained, focusing only on clearly profitable titles. "Any time the music industry cries poverty, you can take that with a grain of salt," he observed.

Whether legal download sites will survive in the face of unauthorized P2P services is a key question facing the industry as it gradually shifts away from the CD.

The essential task for the record labels is to "marginalize the P2P services where it's a 'youthful indiscretion,'" Bernoff said. He pointed to the recent decision by Pennsylvania State University to license the now legal Napster service to provide students with an alternative to unauthorized downloading. Many universities are considering a similar approach, he said.

The legal services eventually will overtake file-swapping services, but "it's going to be a slow process," Goodman says, not likely to occur before 2007.

But he added a caveat to his prediction: "If we see easy-to-use anonymous P2P sites out there," he said, referring to file-swapping sites in which neither the downloaders or file- sharers are traceable, "then all bets are off."
http://view.atdmt.com/TMI/iview/nwsf...0751686076306/

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Just Say 'No' to Record Labels
Associated Press

CANNES, France -- Rock veterans Peter Gabriel and Brian Eno are launching a provocative new musicians' alliance that would cut against the industry grain by letting artists sell their music online instead of only through record labels.

With the Internet transforming how people buy and listen to songs, musicians need to act now to claim digital music's future, Gabriel and Eno argued Monday as they handed out a slim red manifesto at a huge deal-making music conference known as Midem.

They call the plan the "Magnificent Union of Digitally Downloading Artists" -- or MUDDA, which has a less lofty ring to it.

"Unless artists quickly grasp the possibilities that are available to them, then the rules will get written, and they'll get written without much input from artists," said Eno, who has a long history of experimenting with technology.

By removing record labels from the equation, artists can set their own prices and set their own agendas, said the two independent musicians, who hope to launch the online alliance within a month.

Their pamphlet lists ideas for artists to explore once they're freed from the confines of the CD format. One might decide to release a minute of music every day for a month. Another could post several recorded variations of the same song and ask fans what they like best.

Gabriel, who has his own label, Real World Records, said he isn't trying to shut down the record companies -- he just wants to give artists more options.

"There are some artists who already tried to do everything on their own," he said, adding that those musicians often found out they didn't like marketing or accounting. "We believe there will be all sorts of models for this."

A representative with the venture said other musicians had expressed interest in participating in the alliance, but did not provide names.

One band that has found its niche online is the jam band Phish, which sells downloads of its concerts on a popular website.

The band's relationship with its devoted fans is often compared to that of the Grateful Dead, and the site is another chance for close contact. But it also generates plenty of money: more than $2.25 million in sales since 2002.

What's driving the movement is the success of legitimate download sites such as Apple's Internet music store, iTunes, which sells songs for $1 a pop in the United States.

Both Gabriel and Eno started their careers in the 1960s and remain immensely influential.

As a means to help unsigned artists, their effort "is certainly going to be a valuable and interesting thing to do," said Josh Bernoff, principal analyst with Forrester Research in Cambridge, Massachusetts.

"But for anyone (already) signed it's almost certainly a violation of their contract," said Bernoff, who addressed the conference over the weekend. "It's not in a record company's best interest to have large pieces of music out there that they don't have control of."

Gabriel co-founded a European company, On Demand Distribution, which runs legal download sites in 11 European countries.

The company would provide the technology for MUDDA, though Gabriel and Eno are looking for online partners.

Europe's sites haven't yet caught up to the success of the U.S. portals. Apple's iTunes, for example, is planning a European launch this year, which is expected to build interest in legal downloading in a market where many people don't realize there's even such a thing.

Because both legal and illegal sites offer tunes a la carte, many in the industry believe they'll make albums less important by putting the focus on catchy singles.

Eno and Gabriel both suggested they'd welcome a chance to make songs that stand alone.

"I'm an artist who works incredibly slowly," Gabriel said. "If some of those (songs) could be made available, you don't have to be so trapped into this old way of being confined only by the album cycle."

The former Genesis singer and world music promoter is interested in putting multiple versions of the same song online. He's also looking forward to being able to hear unfinished music from other artists.

"We tend at the moment ... to try to find a moment when a song is right. You stick the pin in the butterfly and put it in the box and you sell the box," he said. "Music is actually a living thing that evolves."
http://www.wired.com/news/digiwood/0,1412,62050,00.html

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CD Lock Loosened For Freer Copying
John Borland

Macrovision released a new generation of its antipiracy technology on Thursday that it hopes will make copy-protected music CDs more attractive to consumers and record labels.

The update attempts to simulate most of what people are doing with CDs on their computers. Content owners such as record labels would be able to set the "usage rules" on the Microsoft Windows Media files included on a Macrovision-protected CD, allowing a specified numbers of CD burns and transfers to portable devices, for example.

Macrovision hopes that its new technology, called CDS-300, will make CD copy protection more palatable to consumers who have grown used to the restrictions on music purchased from online song stores.

"Before, you had the 'second session' that was bolted to the disc," said Adam Sexton, Macrovision's vice president of marketing. "We're pleased we can now deliver the same functions and can go 'mano a mano' with the online services."

The copy-protection company's previous software blocked people from making copies of CDs by rendering the music files invisible to most computers. However, the protected CDs also held additional versions of the songs in the Microsoft Windows Media format, which could be played on PCs. This separate set of music files, called a "second session," could not be transferred off the CD or put on portable devices, however.

That restriction stood in poor contrast to songs purchased from Apple Computer's iTunes, Napster or other services, which can be burned to a CD, used on several computers, or transferred to a portable device. They also include some anticopying restrictions, however.

Loosening the restrictions on copy-protected CDs may represent a step forward for digital rights management, but the company's technology is likely to remain controversial with consumers.

Macrovision's software and rival products from companies, such as SunnComm Technologies, are intended to curb unregulated CD copying and the practice of "ripping" unprotected MP3s, which can be distributed through file-swapping services or by other digital means.

Record labels are eager to bring both activities under control. But they're also leery of a backlash from consumers, who are used to copying and ripping CDs and who might view the new CD protections as an unfair constraint. Several lawsuits have already been filed in the United States and the United Kingdom over CD copy-protection techniques.

To date, CD copy protection has not been widely distributed in the United States. Record labels there are looking for even greater protections, such as preventing burned CDs from being copied additional times, according to Sexton.

The new Macrovision technology is being tested in production plants in Europe, and it is not likely to find its way to a commercial release for at least another quarter. It will be available for record labels to use around the world.
http://news.com.com/2100-1027-5145961.html

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Hollywood Group Drops DVD-Copying Case
John Borland

A high-technology group associated with Hollywood has dropped a long-running lawsuit against a California programmer it accused of putting DVD-cracking code online, attorneys for both sides said Thursday.

The DVD Copy Control Association (DVD CCA) has asked California state courts to dismiss its case against programmer Andrew Bunner. The group sued Bunner and a long list of other Web publishers four years ago, alleging that the act of posting code called DeCSS, which can help in the process of decoding and copying DVDs, violated its trade secret rights.

The trade group's decision marks the close of the last prominent legal battle over the DeCSS code. Despite the DVD CCA's move, one federal appeals court ruling in New York found it is illegal to distribute the code in the United States.

Nevertheless, Bunner's attorneys called the unexpected decision by the DVD CCA to drop its case a victory for free speech.

"I think that they are sick of losing," said Allonn Levy, one of several attorneys who had worked on the case on Bunner's behalf. "I think they have finally reached the conclusion that it is not a fight that they can win."

Attorneys for the DVD CCA could not immediately be reached. In a statement, they said the group is "evolving" its legal strategies based on other court decisions, and that the California state trade secrets case was no longer necessary.

"The trade secrets case, together with (other) litigation, set important precedents and sent important messages," Robert Sugarman, the DVD CCA's lead attorney and a partner at Weil, Gotshal & Manges, said in the statement. "The owners of trade secrets will not stand by and allow their property to be misappropriated without action, and the rulings of the courts have shown protection of intellectual property is an important priority for the legal system."

Although the unceremonious close to the case will have little impact on the online availability of the controversial DVD software, Bunner's fight has been a closely watched test of how much freedom individuals have to distribute software online that runs against corporate or other powerful interests--or even violates a law.

Bunner's attorneys had sought broad First Amendment free-speech protections for posting software code online, while the DVD CCA had argued that speech rights did not cover trade secrets.

An appeals court ruled in favor of Bunner, affording software the highest protection available. But that verdict concerned Silicon Valley companies, which worried that it would provide a shield in cases such as disgruntled employees posting a company's private source code online for competitors to read.

"The appeals court ruled that you couldn't have a preliminary injunction (blocking online posting of code) in a trade secrets case that involved software," said Jonathan Band, an intellectual-property attorney with Morrison & Foerster. "That was a very odd decision...and was extremely problematic for (the) software industry."

However, a state Supreme Court ruling overturned that lower-court ruling late last year, saying software should have some First Amendment protections but that trade secret rights might take precedence.

Hollywood's four-year fight

The DVD CCA decision follows a series of setbacks for Hollywood in attempting to control the spread of DeCSS code and other DVD-copying tools.

Written by Norwegian teenager Jon Johansen, the code was initially aimed at letting Linux-based computers play DVDs. However, the code became widely distributed as a means for breaking through, or decrypting, the Content Scrambling System, an anticopying technology the DVD CCA created that most DVDs use.

Norwegian courts ruled last month for a second time that Johansen did not break that country's laws in releasing the DeCSS code online.

Hollywood studios have fought a long-running battle against distributors of the code in the United States, however. Soon after the DeCSS software emerged, studios sued a number of Web publishers in federal court, arguing that Johansen's software violated provisions of the Digital Millennium Copyright Act.

Just one of those defendants, 2600 publisher Eric Corley, ultimately fought the lawsuits. He lost, after a federal judge ruled that he could not post the DeCSS code, or even link to it online.

At the same time, the DVD CCA took Bunner and other publishers to court in California, saying their publication of the DeCSS code violated the technology group's rights to keep the CSS code a trade secret. Most of those defendants also declined to fight the lawsuit.

The ruling in the Corley case ultimately made the California case redundant, since the code was already illegal to distribute, attorneys said. If it had pursued its case further, the DVD CCA would have also risked prompting a ruling against it, since the California Supreme Court had expressed skepticism in its last ruling that there were any trade secrets to protect.

In its statement Thursday, the DVD CCA said it will pursue other avenues in protecting its code, including possibly filing patent infringement suits. It also said several outstanding Hollywood cases against commercial publishers that offer DVD-copying software will help protect its rights.
http://news.com.com/2100-1025_3-5145809.html

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File-Sharing Sites Kazaa And Grokster To Offer Free Downloads Of Shatner/Nimoy Priceline.com TV Ad
Press Release

Haven't seen the new priceline.com TV ad with William Shatner and Leonard Nimoy? Don't worry - help has arrived.

Priceline.com and Altnet, Inc. announced today that the new priceline.com TV spot is being made available for free downloading on the Altnet Network, which includes peer-to-peer affiliates Kazaa and Grokster. The spot is available today on Kazaa and will be added to Grokster next week. This is the first time Priceline.com has utilized peer-to-peer file-sharing networks to get its commercial message into the hands of consumers.

"The entertainment value of the spot is so high that we believe Shatner and Nimoy fans will want it, even if it is an advertisement," said Brian Harniman, priceline.com's Vice President, Online Marketing.
http://home.businesswire.com/portal/...&newsLang =en

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Penn State File-Sharing Trial Grows In Popularity
Elizabeth Thomas

The file-sharing program at Penn State University has met with tremendous success in its first two weeks.

The agreement between Penn State and Napster, originally signed in October, offers students membership in the file- sharing program as a part of their tuition.

In the first few hours, over 2,000 students signed up for Napster 2.0, and the numbers continued to rise steadily. By the end of the week, approximately 8,000 students had registered, equaling nearly half of the on-campus population.

Thus far, the program is only available to the 17,000 students who reside on the State College, Pa., campus. By next fall, officials hope to extend Napster 2.0 to the off- campus students who compose the remainder of Penn State's population of 83,000.

"The success and reaction to the Napster program has everyone at the university ecstatic," Penn State spokesman Tysen Kendig said.

"We were confident that it would be a successful addition to the student experience and set a trend in higher education over time, so in that sense, we were not surprised."

The program offers three ways to access music. The first two -- using streaming audio and downloading songs onto a hard drive -- are free.

Students who wish to download songs that they can then transfer off of a computer system and onto a CD or MP3 player must pay a small fee for each downloaded track.

"The songs can be paid for with a credit card or Napster gift cards," said Sam Haldeman, special assistant to the associate vice provost of Information Technologies.

"By the end of the semester, students will be able to bursar their music purchases."

Of the 100,000 songs that students downloaded or streamed within the first few hours of the launch, "it is safe to say that the majority of those would have been illegally obtained had we not made this decision," Haldeman said.

Despite some initial student concerns before the Jan. 12 program start, Kendig said he had "not heard of any negative reaction, and didn't expect to hear of any once we launched the service and students actually got to hear all that it has to offer."

"It's certainly been a top hit this semester, and we expect it to stay that way for a long time."

While the administration at Penn currently has no plans of offering a legal downloading service, it is "exploring options similar to Penn State's Napster service," said Dave Millar, University Information Security officer.

Millar said that people who continue to download music illegally are increasingly subject to lawsuits from the Recording Industry Association of America.

"Most importantly, people need to know that if they share copyrighted files without permission, they are personally liable and may face significant fines," Millar added.

"With all the commercial options available for legal file sharing, from iPod to Wal-Mart and everything in between, people are wise to only download files legally."
http://www.dailypennsylvanian.com/vn.../4014b7b87ddef

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Pressure to use only Napster.

Penn State Puts Firewall In Dorms

Residents of Atherton, McKean, McElwain and Packer Halls were the first students to get this security.
Kristen M. Neufeld

Residents of Atherton Hall became some of the first Penn State students to experience the university's new firewall when it was activated in their building at 8 a.m. yesterday.

Intended to protect Penn State's network from malicious codes like worms, viruses and Trojan horses, the firewall will also block peer-to-peer file-sharing programs like Kazaa and prevent students from running servers out of residence hall computers, said Joel Weidner, associate director of information systems for Housing and Food Services.

However, the decision to block Kazaa and similar programs "was intentional," he said, because it will help fulfill Penn State President Graham Spanier's initiative to curb the illegal trading of copyrighted materials.

The firewall will not affect Penn State's Napster program, Weidner added.

Furthermore, according to the university's recently revised policy AD-20 on network security, students are no longer allowed to run servers in residence halls, he said.

"The firewall is intended to stop that from happening," he said.

Firewalls were also activated yesterday in McElwain, McKean and Packer Halls, he said.

The Office of Housing warned students of the firewall's activation via e-mail Wednesday afternoon, said Atherton resident Michael Young (senior-computer science).

Many students, particularly those studying computer- related fields, say the firewall will be an inconvenience to them.

In the past, Young, a Linux user, said he used a server called a Secure Shell Host to upload files to his Web space. This allowed him to work on large files for classes in a computer lab and then access them from his personal computer, and vice versa.

"Now I won't be able to do that" because of the firewall, he said.

Weidner said there are alternatives for running servers and sharing files. The U:/ drive, 100 megabytes of network space on which students can store data, is one possibility, but Young said it takes more time and effort.

"It is so cumbersome and inefficient," he said. "It's another hassle, another level of hindrance."

Other Secure Shell Host users say they will face the same problems.

"I see a big problem with getting my work done," Linux Users Group President William Enck (senior-computer engineering) said. "I'm going to have to walk all the way across campus to get files on my computer. Then if I need to work on them in the computer lab, I'll have to walk all the way back."

Many students in computer-related majors work in labs in the new Information Sciences and Technology Building, which will be especially inconvenient for residents of Atherton Hall who need to make that kind of round trip to work on projects, he added.

"I see more problems it's going to create than it will solve," he said.

Even more frustrating is the fact that firewalls can be programmed selectively to block potentially hazardous activities, like spam e-mail messages and viruses, while allowing safe ones, Young said.

"Instead of just stopping known issues, they are blocking every port," he said. "It's like using a sledgehammer instead of a flyswatter."

Weidner said the university could have decided to selectively block ports, but chose to block them all because of policy.

The new firewall will have a lot of implications, Linux Users Group member Tom Keiser (junior-computer science and electrical engineering) said.

"We will lose a lot of productivity and flexibility in how we use our computing resources," he said. "Then what's the point of having a residence hall server at all?"

Some students are already looking for ways to circumvent the firewall, such as using AOL Instant Messenger to transfer files, he said.

"There is already a backlash against it," he said.
http://www.collegian.psu.edu/archive...04dnews-12.asp

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Napster's Fanning Has Snocap-ped Vision
John Borland and Stefanie Olsen

Far from his anarchic Napster days, file-swapping pioneer Shawn Fanning and several of his old colleagues are quietly working on a new venture called Snocap that is aimed at turning peer-to-peer networks into dollars for record companies.

Based in San Francisco and backed by angel investor Ron Conway--who also initially funded Napster--Snocap has for months been quietly writing code and building the bridges to the music world that Napster lacked, according to sources familiar with the company.

Fanning's role as the creator of the music industry's archenemy does not seem to be holding him back. Snocap's plan, which involves identifying music files being traded through file-swapping networks and then attaching a price tag to them, is resonating well with music industry executives.

"It's a pretty well thought-out idea, but the success of it hinges on everybody in the ecosystem getting involved," said one record label executive familiar with Snocap. "The key to its success is the peer-to-peer companies agreeing to participate. If they do participate, it could be phenomenal."

Requests for comment from Fanning and other Snocap employees were not returned.

Fanning's return to the peer-to-peer world is one of the most ambitious of several ongoing attempts to bring about a detente between file-swapping networks and record labels, which have been at war almost since the day Napster launched in 1999.

Today's unrivalled file-swapping leader, Sharman Networks' Kazaa, is closely affiliated with Altnet, a division of Brilliant Digital Entertainment that seeds file-swapping search results with authorized files such as games or music. Altnet has been trying unsuccessfully for more than a year to strike distribution deals with major record labels and movie studios. Sharman is now suing the entertainment companies on antitrust grounds, alleging that they are colluding against peer-to-peer companies.

Altnet and Sharman have also helped create a forum called the Distributed Computing Industry Association, which is trying to bring entertainment companies and file-trading companies to a negotiating table in order to work out their differences. That effort is still in the early stages, however.

After the flood
A filing with the California Secretary of State states that Snocap was incorporated in Delaware on Oct. 28, 2002, with Conway as president, listed as the sole officer. The filing also notes that the company changed its name to Snocap from Open Copyright Database on June 25, 2003.

The company, at least in its early stages, looks much like Fanning's old one.

According to sources familiar with the company, Ali Aydar, who worked with Fanning on pre-Napster projects and ultimately became a key engineer at the file-swapping company, is chief operating officer. Jordan Mendelson, who helped develop Napster's search technology in its early days, is also a co-founder. Mendelson registered the Snocap.com domain name.

Mendelson has chronicled a few moments in the company's development on his Web log, including a recent flood caused by an errant sprinkler that temporarily forced the start-up out of its San Francisco offices. A visit to Snocap's office in San Francisco's trendy "SoMa," or South of Market, district bears out the flood's damage. A Snocap banner and a few scribbles on a white board now overlook empty desks and exposed wallboards.

Nevertheless, the company is growing, with a total of nine employees as of early January, according to Mendelson's blog. A few job listings also are posted on the company's Web site.

The technology itself, according to sources familiar with the company, takes a page from Napster's last days as a file-swapping company. In late 2001, courts forced the company to block copyrighted songs before they were traded through the network. Napster, with partner Relatable, worked to develop a way to identify and filter material.

Ultimately, the company decided to shut the service down rather than try to develop the technology under the court's order. The Napster name is now being used by the Roxio-owned digital music download service, a rival to Apple Computer's iTunes store. The new Napster service does not have any of the file-swapping capabilities of the original, however.

Snocap has been working on ways to identify songs, as they are traded through a file-swapping network, including using a technique called "audio fingerprinting," which monitors the sonic characteristics of music files.

That fingerprinting tool could be integrated into the file-swapping software itself in several different ways, sources said. When a file is being downloaded, the software could check its "fingerprint" and then compare it against a database Snocap operates, for example.

Once an identification is made, the download could be blocked, unless the computer user pays a fee, as if they were downloading a song from iTunes or another digital song store. Alternately, some mechanism could be established, under which the file-swapping network operator would pay for the downloads that are tracked by Snocap's system and would later be reimbursed by subscription fees or advertising revenue.

Fanning has been explaining his ideas to record label executives, who are interested but not entirely sold, sources said. His background with Napster may be helping him win meetings with the labels, rather than hurting him, they suggested.

"Shawn is a smart, articulate guy. That goes a long way," said one source familiar with Fanning's discussions with record labels. "He walks in a world that they desperately want access to."

Peer-to-peer companies, however, may also be a difficult sell. Executives from several major file-swapping companies said Fanning has yet to contact them; some said other companies with similar ideas based on audio fingerprinting were looking for support.

"We had a very similar idea run past us," said LimeWire Chief Technology Officer Greg Bildson. "We basically ended up not following up on it. It is interesting, but we're not interested in building filtering and any centralization into our client."
http://news.com.com/2100-1025-5146858.html

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Music Labels See Recovery In Downloads, Lawsuits
Reuters

A music industry trade organization said Thursday that new online download services are winning over customers and warned that a globe-spanning legal crackdown on file sharers is imminent.

On Thursday, the International Federation of the Phonographic Industry (IFPI) released a progress report on its year-old campaign to develop and promote online music stores and spread its message that online song swapping is illegal.

In a rare upbeat statement, the IFPI said its initiative is building a vibrant, albeit small, market for selling music downloads that appears to be stealing momentum from peer- to-peer networks such as Kazaa and WinMX, where all varieties of music are available for free.

"We believe that the music industry's Internet strategy is now turning the corner, and that in 2004 there will be, for the first time, a substantial migration of consumers from unauthorized free services to legitimate alternatives," said Jay Berman, IFPI's chief executive.

"The start of 2004 brings a new sense of optimism along with evidence of real change," Berman said in a statement.

The IFPI, which represents a host of independent and major music labels including EMI, Warner Music, Bertelsmann's BMG, Sony Music and Universal Music, also said it would get tough with prolific song swappers this year.

"It is likely that there will be lawsuits against major Internet distributors internationally in 2004, similar to those filed in the U.S.," the IFPI said in its report.

European music industry executives have been warning for weeks they will follow in the controversial footsteps of the United States, where a legal clampdown on file sharers has resulted in hundreds of lawsuits. On Wednesday, the Recording Industry Association of America launched its largest wave yet of file-swapping lawsuits against individuals.

The crackdown could intensify in Canada and Asia too, industry officials said.

The industry blames file-sharing networks for contributing mightily to a three-year decline in music sales. Citing a variety of independent and industry-backed studies, it says the lawsuits do serve as an effective deterrent to file sharing.

The IFPI said its own probe of file-sharing networks revealed the availability of unauthorized music files on the services dropped from 1 billion in April 2003 to 800 million this month.

Industry reports offer contradicting evidence that the file-sharing phenomenon is tailing off, however.

It is believed music executives will invest more money in the development of online music stores before they round up the lawyers. In Europe alone, some 50 new industry- backed download stores are expected to launch this year, bringing the continental total to over 80.

Berman said he expects that the most popular online music store, Apple Computer's iTunes, along with offerings from Roxio and RealNetworks

Industry officials told Reuters recently that in 2003 American music fans purchased 30 million downloads, while Europeans bought 3 million from industry-sanctioned sites.
http://news.com.com/2100-1027-5145267.html

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Governments Vote Against Microsoft
David Becker

Microsoft has had its share of bad courtroom experiences, but lately the software giant has been taking some of its hardest knocks in city council and legislative chambers.

While government customers account for less than 10 percent of Microsoft's revenue, according to analyst estimates, they've caused a disproportionate share of headaches for the company over the past year. Ambitious projects to migrate government computers to Linux and other competing software, official decrees favoring open-source products and hard- nosed licensing negotiations have put government customers well ahead of private business when it comes to testing Microsoft's mettle.

Some of Microsoft's most publicized business defeats recently have come from government plans to migrate official computers to open-source software. The German city of Munich became one of the most high-profile Microsoft defectors last year, voting to move 14,000 city-owned PCs to open-source software. The Texas city of Austin embarked on a similar Linux project late last year. A number of British government agencies are looking at open-source, as are official agencies in Korea, China and Germany. And the Commonwealth of Massachusetts last year adopted an IT purchasing policy that favors open-source software, but it later modified the policy to emphasize "best value" products.

While some of announcements seem little more than negotiating tactics, the sheer volume of deals point to a greater willingness among governments to move out of Microsoft's fold. And it isn't just Linux on servers that's garnering interest: The open-source operating system finally seems to be making headway on the desktop.

"These kind of deals are symptomatic that Linux is really gaining credibility on the desktop," said Stephen O'Grady, an analyst for research firm Red Monk. "What we're seeing from government...is that certain constituencies are ready for that migration."

Follow my leader?
The fear for Microsoft is that business customers--the company's bread and butter--might soon follow suit. "Governments just get it faster in some areas, and I think open source is one of them," added Sam Hiser, the marketing guru for open-source software group OpenOffice.org. "Enterprises are very clubby; they need a sense of confidence that individually, they're not the odd one out. Governments will act more quickly--especially if there's a case for cost-cutting and doing the right thing with taxpayers' dollars."

Maggie Wilderotter, senior vice president of business strategy for Microsoft, argued the situation is one of perception more than reality. Governments aren't making radical IT moves with any more frequency than businesses, she said. They're just getting more attention when they do.

"I really believe it's more about publicity than government moving faster than anyone else," Wilderotter said. "In a lot of cases, government involvement is just more high- profile. These are more transparent contracts because of the bidding requirements. If a business decides on a new software package, it's not a press-release thing."

"There are also a lot of wins Microsoft has made with governments in the last year," she added, "but we don't spend a lot of time hyping those in the press."

Stuart Cohen, chief executive of Open Source Development Labs, said government motives for moving to open-source software vary. It is different around the world," he said. "I think in the U.S., they are very focused on the total cost of ownership and flexibility. I think in Europe, they seem more focused on the open-source concept of where Linux comes from. In Japan, I think they are focused more on the import-export ratios, and they would like to see more exporting of software versus importing of software. And I think in China they are interested in using what they build, and they are building Linux-based applications today."

Cost is often the first factor to motivate governments into considering open-source software. "These guys are really strapped for cash;
many of them are in a state of near financial crisis," said Mike Cherry, an analyst for research firm Directions on Microsoft. "They are really looking at any way to save money. If they have a Linux advocate in the IT organization who says, 'I can save you money,' that's going to get some attention."

The overall cost of buying and running Windows as opposed to Linux and open-source software has become one of the most contentious areas of the debate between open-source software advocates and proprietary software backers. Microsoft claims that while open-source products are cheap or free to acquire, increased administration and support costs make them more expensive in the long run. Several third-party studies, including an influential report by research firm IDC, have supported Microsoft's claims. But others argue that cost advantages from switching to Linux continue to accrue well after the initial installation.
http://news.com.com/2100-7344-5145332.html

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UK Music Industry Wins Web CD Pricing Dispute
Bernhard Warner

The British music industry has settled a legal dispute with CDWow.com over the sale of discounted compact discs after the online retailer agreed to raise its prices in the UK and Ireland, the parties said on Wednesday.

In reaching an agreement, trade body The British Phonographic Industry (BPI) and Hong Kong-based CDWow.com avoided a February 2 court hearing to determine if the online retailer could continue to import products from outside the European Union and sell them on to Irish and British customers.

The profitable three-year-old firm has been able to undercut high street retailers by as much as three pounds by obtaining the music from record companies and wholesalers in cheaper markets around the world.

The BPI said the practice violated EU trade law, once again landing a virtual retailer in a legal quagmire over how to apply local laws to its global customer base.

Under the terms of the agreement, reached late on Tuesday night, CDWow.com said it agreed to ship products to customers in the UK and Ireland that are sourced from within the European Economic Area, in accordance with European trade laws, the parties said.

As a result, CDWow.com will raise CD prices by two pounds ($3.67) or three euros ($3.75) as of Sunday night for all deliveries to the UK and Ireland, respectively, said Philip Robinson, co-founder of CDWow.com.

"We will be expressing it as a surcharge," said Robinson. "A pop-up window will appear when the shipping information is submitted that says this charge is due to the BPI."

Prices for most CDs will rise to between 8.99 pounds and 10.99 pounds on CDWow.com. Pricing for DVDs and video games will not be affected, Robinson said.

Earlier this month, the BPI said it was investigating a number of Web retailers, including Amazon.com, to determine if the products they sold were properly sourced.

The probe is being conducted amid a prolonged slump in CD sales as the popularity of file sharing services such as Kazaa and eDonkey continues to build a black market for free music on the Internet.

The industry is in a tight spot, though, because it often acknowledges that Internet retailers have become an important source of revenue to counteract weak store sales.

"We are growing the market," said Robinson. "There was a strong appetite for product at 8.99 pounds. We met the consumer's value point, which is why the business grew so wildly."

Record companies have begun cutting the price of CDs in many countries over the past year. In the UK, album sales were up 7.6 percent as price discounts took hold.

Robinson said a similar complaint from the BPI's German counterparts has recently been lodged, setting the stage for a pricing change there.
http://www.reuters.com/newsArticle.j...toryID=4177141

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Silicon.com

Should The UK Music Industry Take The Legal High Ground?

In business you have to make unpopular decisions, that's a given, but nobody has actively courted negative press with the same kind of vigour that the record industry has displayed in hastily dragging its name through the mud.

In the US, the Recording Industry Association of America has made more enemies than it has records in the past 18 months and, worryingly, its UK equivalent, the British Phonographic Industry, seems to think that this is an approach it would be wise to follow.

Andrew Yeates, director general of the BPI, has warned that legal action may be the only option left for a beleaguered record industry.

But is this really worthwhile?

For starters, there is the age-old argument that the record industry is barking up the wrong tree.

Many believe file-sharing and music downloads have little to do with a dent in record sales that is more likely to be attributable to a drop in the standards of music being produced.

This is born out by the fact that independent labels, typically those producing more innovative sounds, have not seen any decline, while major labels, dependent upon tiresome cover versions, rehashed identikit pop acts and the nauseating Pop Idol format, have been found out and subsequently witnessed a drop in revenues.

The truth is that the record labels were too slow to embrace technology, leaving a chasm that was filled by the likes of Napster.

Originally the labels turned on Napster and Kazaa but successes, after the closure of Napster, were few and far between.

Now behind the times and in a strop, the labels are picking on 'the smallest bloke in the pub' by turning on individual consumers unlucky enough to be singled out from the millions using download services.

Such action will be costly, time consuming and will ultimately offer very little reward.

Some might call it spiteful; others might call it misguided.
http://www.silicon.com/networks/webwatch/ 0,39024667,39117791,00.htm

Web Wrongly Blamed For Child-Sex Offence Explosion

Children's charity NCH has today blamed the internet for a 1500 per cent increase in child-porn related offences.

Its figures reveal that 549 child-porn offenders were charged or cautioned in 2001, compared with only 35 in 1988.

And that's all the evidence the charity felt it needed to start whipping up a storm of anti-internet propaganda, which was doubtless music to the ears of the lazy hacks on the Daily Mail and other even-handed rags that are always willing to blame 'newfangled' technology for all society's ills.

There are also claims flying around that 3G mobile phones are likely to make matters even worse. There's no evidence to support that claim, but it makes for good copy.

Examining the figures further, however, it's worth pointing out that until 1988, the law on possessing child pornography was very different - hence the apparently arbitrary year chosen to compare to the present. Until this time, being in possession of child pornography was not illegal, and subsequent enforcement of new laws may not have been as rigorous as it is now. We are not comparing like with like.

Then consider the fact that these figures could actually be construed as good news. The fact that 549 child-porn offenders were charged or cautioned compared to 38 is a victory of sorts for law enforcement. The internet hasn't created paedophiles; these higher contemporary figures merely portray the number of offenders who previously may have been escaping detection. You can bet there were not only 38 offenders in 1988 and 549 in 2001 - these are merely percentages of a far more concerning figure.

To say the numbers of those caught have increased solely because of the internet also detracts from efforts by the UK police force to stamp out child pornography. More people are being caught because the police are working far harder and far more efficiently to catch them.

While the research from the NCH deals specifically with child-porn related offences, there is an implication that the rise of child porn on the internet has led to a rise in instances of what it calls "hands-on" abuse.

We can only hope NCH isn't claiming for one minute that the internet has actually created more paedophiles - but that would appear to be the suggestion.

While it is clear that the internet has provided a channel for procuring and sharing pornographic images, it is unlikely that it has had any impact on the actual numbers or proclivities of child-sex offenders.

The ignorance inherent in suggesting people have been encouraged to take up child abuse because of the ubiquity of the internet is alarming.

These offenders have always existed. The internet is merely a technological means to an end that like anything is open to abuse. The fact of the matter is that yes, the internet has become a stalking ground for sex offenders who will use chat rooms to 'groom' unsuspecting victims, but the internet is not to blame. It's merely a technology and, if anything, it's the users who are to blame.

Since the 1950s, generations of parents have been sitting children in front of the television set. As a 'third parent', it was there to act as babysitter, educator and entertainer. A child could be left in front of the TV and the parents could go about their business.

Too much of the same thinking now governs how people treat the internet within the home.

The fact of the matter is that lazy parenting is just as responsible for the exposure of children to sex offenders online. The internet doesn't have to be dangerous. Too many parents are unaware of who their children are talking to and what they are doing online. Too many will allow children to have an internet-enabled PC in their bedroom, when common sense says to put it in a communal room, and too few parents are installing monitoring and filtering software on the family PC or locking it with a password of which they are guardian.

Rather than standing back and blaming 'the internet', broadcasters, charities, MPs, parents, newspapers and schools would be of far more use collaborating on schemes to better educate the public about the dangers lurking online, rather than hiding behind headline-grabbing scaremongering.
http://www.silicon.com/hardware/storage/ 0,39024649,39117724,00.htm

Corporate America Divided Over File-Sharing

Today sneak previews of Pepsi's latest advertising campaign have been leaked onto the internet, ahead of its debut during Sunday's Superbowl.

The campaign promotes a joint venture between Apple and Pepsi which will see Pepsi drinkers win the opportunity to download free music from iTunes. But the messages it sends out may confuse many, as it makes heroes of convicted file-sharers.

Apple and Pepsi are giving away 100 million free songs - which equates to around one winner in every three Pepsis bought during the promotion - but the message is very much "we're still going to get out music for free off the internet".

The issues here are manifold. First there is the fact that this provides the hugely popular iTunes service with a massive competitive advantage. Of course there is a high likelihood that many winners won't be converted into regular users of iTunes but there is also a chance that it will sign-up many new converts through the promotion.

Then there is the small matter of Coca Cola's recent foray into online music services. Coke comes to the market with financial clout, advertising dollars and know-how as well as huge youth appeal.

So it must be doubly pleasing for Pepsi to be giving Apple such assistance in keeping the old enemy at bay.

And then there is the issue of file-sharing and the messages which Pepsi's campaign sends out. The advert features a group of teenagers who have all been charged and convicted by the Recording Industry Association of America accompanied, we assume, with no little irony by a Green Day cover version of I fought the law (and the law won).

We say irony, because the law and those who uphold it - such as the RIAA - are largely seen as the villains of the piece, while these teenagers are doubtless even now benefiting from Pepsi's mega-bucks. Who said crime doesn't pay?
http://www.silicon.com/networks/webwatch/ 0,39024667,39118092,00.htm

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Macworld

iTunes Superbowl Ad To Show Sued File-Swappers

Pepsi's forthcoming iTunes music promotional SuperBowl ad looks set to cause some controversy, as it features twenty teenagers sued by the Recording Industry Association of America (RIAA).

The RIAA took the teenagers to the courts and accused them of stealing music. Pepsi's ad identifies the miscreants as "a few of the kids sued for downloading music free off the Internet."

One of these – 14-year old Annie Leith – then appears (to a Green Day version of "I Fought the Law") holding a Pepsi and says: "We are still going to download music for free off the Internet." The announcer then introduces the giant Pepsi iTunes Giveaway, in which Pepsi is offering 100 million free tracks from the iTunes Music Store.

RIAA chairman Mitch Bainwol told USA Today: "This ad shows how everything has changed. Legal downloading is great because fans are supporting the future of creative work in America."

The music industry has little choice but to get behind digital music distribution, if claims by Forrester Research are true.

The analyst claims music downloads will make CDs obsolete in the next five years. Analyst Josh Bernoff said: "The industry is going through a complete change in the way people consume music."

He also warned that by the end of 2004 "half the businesses that started out" in the sector will fail, comparing the digital music explosion to the dot-com boom: "I haven't seen this level of irrational exuberance since the height of the bubble," he said.
http://www.macworld.co.uk/news/main_...fm?NewsID=7757

Apple 'Will Drive Consumer Music-Making'
Karen Haslam

Apple's recent audio related announcements are "very welcome" and are likely to encourage "increased growth at the consumer end of the market", according to Emagic UK distributor Sound Technology's managing director, David Marshall.

Last week's Logic announcements, and Apple's update to SoundTrack, joined the company's recently announced GarageBand application, repeating the segmented approach to market-capture that it revealed with its digital video products: Final Cut Pro, Final Cut Express, and iMovie.

Marshall told Macworld of his appreciation of Apple's audio strategy: "GarageBand is very welcome. With this new consumer-focused application Apple is making everyone aware that they can make their own music and is therefore opening up new markets for us. This news will help to grow the market for audio."

He added: "The audio market has been growing year on year for at least the last seven years at the professional end. Now we will see increased growth from the consumer end."

Apple acquired Emagic 18 months ago. At the time there was some concern over Apple's announcement that it would no longer support the Windows operating system in future product releases.

According to Marshall, these fears were unfounded: "Before Apple bought Emagic most of the market used Macs so we weren’t too concerned about the fact that Apple would not continue to develop for the PC. We didn't experience any loss of business even though we were now selling only a Mac product."

The effect of discontinuing development on platforms other than the Mac OS has had a positive effect for Apple, according to Marshall. He explained: "Many of the our customers who were Windows users have now switched to Mac."

Education breakthrough

And it isn’t just that the Mac platform is growing in popularity in the professional audio market. "We have seen an increase in interest in the Mac from our education customers," said Marshall.

"When Apple bought Emagic, 85 per cent of our education business was Windows based; we have since seen a huge increase in Apple's education market share." Marshall thinks this increase is partly due to universities switching to Macs and schools "following their example".

Marshall's findings reflect the analysis of analyst firm Gartner who announced recently that Apple's UK education market share is now 8.5 per cent – up from 6.4 per cent a year ago.

"Audio is definitely helping Apple to win back the education market," said Marshall.
http://www.macworld.co.uk/news/main_...fm?NewsID=7747

Will Apple’s Music Plan Pay Off?

Apple is enjoying great success with the iTunes Music Store and the iPod, but is this enough to turn around the company’s fortunes? Three Business Week reports look into this question.

The first report looks at Apple's victory with regard to online music downloads.

Speaking to Business Week, Apple CEO Steve Jobs predicts that any new players entering the market now will have to work hard in order to be successful.

He says: "Whoever enters this market now is going to enter a market that's not in its infancy. And they'll enter a market against a competitor that has a 70 per cent market share – and surprisingly, that competitor's name will not be Microsoft. It will be Apple. Now, I understand that there's no guarantee we'll stay on top, but that's the situation."

And Jobs has no fear of Microsoft in this new market, despite the fact that the Seattle-based software giant has many partners in hardware and on the services side using Microsoft technologies. He told Business Week: "The people using their technologies have yet to be successful."

Jobs puts down the success of the iTunes Music Store to four factors: "Apple is the most creative technology company out there. Almost all recording artists use Macs and they have iPods. And there's a trust in the music community that Apple will do something right – that it won't cut corners – and that it cares about the creative process and about the music.

"Also, our solution encompasses operating-system software, server software, application software, and hardware. Apple is the only company in the world that has all of that under one roof. We can invent a complete a solution that works – and take responsibility for it."

The second Business Week report notes: "The iTunes Music Store managed to clock 30 million downloads in 2003 without the assistance of any marketing by a PC partner. Adding HP to the mix could push the total to over 100 million in 2004 and well above that in the future."

The report considers that even though Apple says it doesn't make money from selling digital downloads: "At those types of volumes, Apple will make money."

iPod gamble

The reports also examine the success of the iPod, suggesting that this also bodes well for the company. The digital music player was a big seller this Christmas – so popular in fact that many shops ran out.

Apple could have had even fewer iPods available. The company made 750,000 units for Christmas, despite predicting that it would only sell in the region of 500,000. Jobs told Business Week: "It was a big gamble on our part. We thought we could be way too high."

But Apple sold every one. "The thing that I love is that the best product is winning for a change," said Jobs.

Regarding the success of the iPod Jobs said: "It's very exciting to be able to apply Apple's innovation, engineering excellence, and marketing skill in a market where we don't have that 5 per cent market-share ceiling to see what we can do. And it feels good."

And this level of market share includes Windows users: "We sell more iPods to owners of Windows PCs than we do for the Mac, and it has been that way for a long while," Jobs told Business Week.

Business Week's third report goes on to suggest: "If Apple can maintain its success with the iPod, and follow up with other non-Mac products (the iPod works with the Mac as well as with Wintel PCs). Indeed, the iPod just might cast the Mac in an entirely new light."

The report notes that the iPod actually brought in more revenue ($256 million) than Apple's consumer flagship iMac line ($251 million), and suggests: "Why not focus on using the Mac to boost the bottom rather than the top line?"

Profits over market share

Apple had a positive reception to its first-quarter results, but shares fell 5.6 per cent the day after the earnings report. According to the Business Week report this was for two reasons: "The stock had run up in anticipation of solid numbers. And the Street had been hoping for bigger sales numbers on Power Mac G5 desktops."

According to the report, analysts are warning that the iPod sales growth could dim soon, so it is increasingly important that Apple keeps churning out Mac-related profits. "After all", notes Business Week, "that product still brings in nearly 70 per cent of sales, and that's not likely to change in the short term".

Merrill Lynch analyst Steve Milunovich adds: "If they're going to make Wall Street happy, it's going to be about PCs."

But in the Business Week interview Jobs suggests that analysts should start measuring the Mac by the profits it produces, rather than by its market share: "We've got 25 million customers that want the best computers in the world. If our market share grows, we're thrilled. But we've held our own, while our rivals were losing hundreds of millions of dollars a year. We're in pretty good shape."

Business Week suggests that Apple may experience stronger Mac sales as a result of the "return to strength in the ad and media biz" predicted for 2004.

The report also notes that Apple is developing a strong niche in the scientific computing market. Although this may only result in tens of thousands of machines per quarter, "this can make the difference between a good quarter and a ho-hum quarter for the Power Mac line," according to Needham & Co analyst Charles Wolf.

Apple is looking at other ways of increasing its profits. The Business Week report notes that by selling Mac OS X updates, the newly updated iLife suite, iChat software, and .Mac accounts to Mac users: "Jobs is clearly in the process of building a recurring revenue stream of hundreds of dollars per customer. Granted, not all Apple buyers will bite, but if even 10 per cent of the faithful buy in each year, that could mean hundreds of millions in new revenues."

And, according to the report, there is evidence that Apple is winning back the education market.

However, according to Gartner's preliminary market-share data, Apple held just 1.8 per cent of the worldwide PC market in the fourth quarter of 2003. And, Business Week suggests: "Some think Apple's share will fall further, if it can't keep pace with surging overall PC demand."
http://www.macworld.co.uk/news/main_...fm?NewsID=7759

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Smart File Sharing Between Macs and PCs
Wei-Meng Lee

I know many MacDevCenter readers use more than one platform in their daily lives. You may use a Windows PC in your workplace then use a Mac for all your other creative tasks at home. In any case, it is inevitable that sometimes you need to transfer files from one platform to the other. While there are many ways to do this (via USB flash drive, FireWire, Ethernet, shared folder, etc.), most of them still require you to either mess with lengthy cables, or need you to know how to mount a file share in Mac OS X. But there's an easier way through the use of an inexpensive application called "PC-Mac-Net FileShare."

Obtaining and Installing PC-Mac-Net FileShare

You can obtain the free Lite edition of PC-Mac-NET FileShare from Lava Software. The Lite edition allows you to transfer files of sizes smaller than 10MB and supports up to a maximum of three users in a workgroup. The Standard and Pro editions of PC-Mac-Net FileShare cost $24.95 and $39.95 (per user), respectively. The Standard edition does not have the restrictions of the Lite edition, and the Pro edition supports file encryption, which is especially useful over a wireless network. The licensing cost is for each computer, which means that if you have a Mac and a PC, you need two licenses. But at this moment, Lava software is selling it two-for-one, which makes it affordable.

PC-Mac-Net FileShare allows you to share files over TCP/IP. You can either use it in your local network (such as in the office or at home), or over the Internet. When used over the Internet, be sure to check that your firewall opens up port 3300, the default port used by PC-Mac-Net FileShare.

I downloaded the Lite edition and installed one copy on my PC and one on my Mac (note that you have to run the software on both machines in order for file sharing to work). The user interface for both platforms looks identical.

One note for Windows XP users: most people on Windows XP use the built-in firewall to protect against unauthorized entry, so you need to change those settings in order for PC-Mac-Net FileShare to work (even to use it on the local network). To configure your built-in firewall for PC-Mac-Net FileShare to work, right-click on My Network Places and select Properties. Right-click on your network connection and select Properties. Click on the Advanced tab (see Figure 1).
http://www.oreillynet.com/pub/a/mac/.../pc_share.html

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Looting The Music Industry
Corey Deitz

As part of the Radio industry, music has always been a central element in my work. I’ve done this long enough to have witnessed the transition of DJs from playing vinyl 45s-to tape cartridges-to CDs-to-.mp3 files on hard drives. It’s been a fascinating metamorphosis.

Until just a few years ago, there were only two distribution systems for recorded music: Radio and record companies. With one, consumers received it for free and with the other, they paid for it. Since Radio stations paid licensing fees for the right to distribute copyrighted music, it was free for listeners. Hell, listeners could even record it if they wanted but, everyone knew you could never quite get a perfect copy of a song without some Disc-Jockey talking over the beginning or the end of it. (A characteristic of Radio noted and applauded by the Music industry.) Alas, that was the trade-off for getting it free.

The other distribution source was the Record companies, themselves, who gladly sold the music directly to consumers - for a price. The status quo of this arrangement sat well with all for most of last century.

Then, all-of-a-sudden, beginning in the late 1990s, things began to change and anyone with a computer and a dial-up connection could circumvent BOTH distribution systems.

This change has thrown the Music Industry into an hysterical tailspin in search of copy- protection schemes, experimental Internet streaming partnerships, and a way to hold on to a fleeting reality.

Something occured to me the other day about the peer-to-peer music sharing phenomenon. I think it can be better understood by making an analogy in using the recent looting that occurred in Iraq. Saddam Hussein put the screws to his people for years, repressing them and taking advantage of them. But, when the opportunity presented itself, hundreds - if not thousands - thought nothing of looting his grand palaces, government buildings and any insitution associated with the former authority in Iraq.

Think of the music-buying public as the Iraqi people and the Music industry as the former Hussein Regime. For years, the Music “dictators” have been able to charge inflated prices for CDs because they owned the distribution system (creating and marketing the CDs). But, with the advent and convergence of .mp3 technology, the ability to burn CDs and the Internet, the distribution system was suddenly yanked away from the music moguls.

And what did people do? They traded .mp3 files by the millions. In effect, they LOOTED the formerly oppressive Music industry.

Though most of us didn’t condone the looting in Iraq, we certainly understood it. It’s the same with sharing music: ask most people if they feel badly about grabbing .mp3 music files and they’ll say, “Yeah, I know it’s stealing....technically” but, they UNDERSTAND it. They accept it and rationalize it as proper payback for the inflated profits the Music industry extorted from them for years.

There’s no doubt musicians and artists should be compensated for their work. In the old days, the only way to make a recording that could reach the public was through a record company. Not so, today. Artists can deal with their fans directly because of the Internet and all the associated technologies that allow them to get their music to the listeners.

The Music industry, like the former Iraqi Information Minister, is in denial. “Downloading? No. Not at all. No one is downloading files and we are selling CDs as never before.”

Yet, as they clamour to try and put the Genie back in the bottle, peer-to-peer file sharing is toppling the Music industry's statues, day-by-day.
http://radio.about.com/library/weekly/aa050103a.htm

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Music Royalties Rise, Even as CD Sales Fall
David Bernstein

Despite the travails of the music industry, with CD sales still slumping and record executives still suing suspected Internet pirates, one part of the business is thriving. Royalties paid to songwriters and music publishers from radio and television broadcasts of their songs, and from live performances, are at record highs.

"When it comes to the downloading issue, which is killing record labels and music publishers, we're only indirectly affected by it," said Bill Velez, the head of Sesac, one of the leading performing rights organizations in the United States. "We're able to weather economic storms better than other segments of the entertainment industry."

In 2003, America's three recognized performing rights organizations - Sesac, B.M.I. and Ascap - reported record revenues, which, in turn, have generated bigger royalties distributions to songwriters and music publishers.

Ascap - the American Society of Composers, Authors and Publishers, a nonprofit association - is the oldest and by most measures the largest of the performing rights organizations in the United States. Its preliminary data indicate that Ascap took in $668 million in 2003, 5.2 percent more than in the previous year. The association plans to release its official year-end results at its annual meeting in February.

B.M.I. - Broadcast Music Inc., also a nonprofit and the longtime chief competitor to Ascap - reported that revenue in its last fiscal year, which ended in October, increased 9.7 percent, to nearly $630 million, from $574 million in fiscal 2002.

Sesac - once known as the Society of European Stage Authors and Composers, now based in Nashville - is the smallest of the three and the only for-profit organization of the group. Mr. Velez declined to disclose revenue, but said Sesac had gains in 2003 of about 30 percent, which he said continued the pace of the last decade.

Performing rights organizations track and collect royalty fees for public performances of copyrighted music and distribute the money to the copyright owners. Their role is to ensure that songwriters, composers and music publishers are paid for the use of their creations on broadcast radio and on network, cable and satellite television as well as in public places.

Senior executives of the three organizations credited their revenue growth mainly to royalties collected from two relatively robust media: radio and cable television. They also said there were more public performance outlets now than ever: live concerts, restaurants, nightclubs, taverns, amusement parks, shopping malls, health clubs, cruise ships, even telephone on-hold music.

The organizations have expanded their coverage in recent years to more businesses, some of which had once been considered inconsequential or not worth the expense of pursuing for license fees.

"If you had told me 20 years ago that we would get around to licensing funeral homes, I would never have believed it," Mr. Velez said.

One of the most rapidly expanding new sources of performance royalties, the executives say, is cellphone ring tones, digitized melodies that play on mobile phones. Last year, 9.9 million people purchased cellphone ring tones in the United States, paying a total of nearly $57 million, according to IDC, a technology research firm.

Downloadable ring tones, typically costing $1 to $2, are the most popular Internet content offered for download, said Dana Thorat, an analyst at IDC, who projected that sales of tones would exceed $1 billion by 2007. Even if performance royalties add up to only a small percentage of that total, the revenue to songwriters and publishers could be tens of millions of dollars.

New technologies, including "audio fingerprinting" and music identification software, have helped the organizations track music use around the world more easily and efficiently, trimming operating costs.

Each performing rights organization has a roster of affiliated songwriters and publishers from all genres; they license only the copyrighted works of their artists.

Ascap represents more than 170,000 songwriters, lyricists and music publishers and has a catalog of about eight million musical works. B.M.I. has close to double that number of creative artists and publishers, with 300,000 affiliates, although its song repertoire of 4.5 million compositions is only about half as large. Sesac represents 4,000 songwriters and 3,000 publishers, but counts some widely known artists on its roster, including Bob Dylan and Neil Diamond.

As royalties from album sales decrease, Frances W. Preston, the president of B.M.I., said, songwriters have become more dependent on performing rights organizations to maintain a steady income.

"The bottom hasn't dropped out of the performing rights business," Ms. Preston said. "They look to us for their royalties because the record company royalties, in some cases, are almost nonexistent."

Approximately 50 percent to 75 percent of songwriters' compensation now comes from performance royalties, according to B.M.I.

The increase in such royalties has been the music industry's "one saving grace," in the view of Carey Ramos, a lawyer for the National Music Publishers' Association, which represents music publishers and songwriters. Mr. Ramos said increased performance royalties had helped songwriters offset some lost income from mechanical royalties, as fees from record sales are known. But, he added, "I'm quite sure it doesn't make up for the mechanical losses, by any stretch of the imagination."

From 1996 to 1999 - the year the file sharing service Napster began - annual collections of mechanical royalties grew 18.5 percent, Mr. Ramos said, while performance royalties increased 19.8 percent. From 2000 to 2002, he said, mechanical royalties fell 22 percent, while performance royalties kept growing, by 13.6 percent.

"The continued rise in public performance royalties reflects a growing demand for music," he said. "That tends to confirm that the dramatic decline in mechanicals is attributed to Internet piracy, not because there is less demand for music."

Although the Internet has proved a challenge to the business practices of record labels and music creators, the performing rights organizations recognized almost immediately its potential as a major source of royalty revenues. Ascap, B.M.I. and Sesac have licensed several thousand Internet sites and online music subscription services that use streaming audio technologies.

"After tracking radio and television and cable for all of these years, suddenly you're tracking something much bigger than all of that put together," Ms. Preston said of the Internet.

"Where I think a lot of other people in the business were spending time with lawyers trying to find ways to sue everybody,'' she said, "it was pretty clear to us that the public had accepted all of this new technology. There was no way to kill it even if you wanted to. So, you might as well get out there and embrace it and find out how you can license it and how you can collect from it."

Still, the expansive and unruly Internet has not been an easy outlet to license, nor has it become the pot of gold that the performing rights organizations had expected.

"Because of piracy, the Internet has not been able to grow as other broadcast venues of entertainment have grown," John LoFrumento, chief executive of Ascap, said. Ascap, for example, took in just $10 million in royalties last year from about 2,000 Internet licensees, a pittance compared with the group's overall revenue. Mr. LoFrumento said Internet collections had doubled annually in the last few years, however, and he predicted that the Web, in time, would be a significant revenue source.

Radio and television, meanwhile, are likely to continue providing the bulk of performance royalties.

"It's a growth industry," Mr. Velez of Sesac said. "Unless there's a total catastrophe in terms of a recession, and radio stations and TV stations go out of business in leaps and bounds and can't pay their license fees, unless something like that happens we're going to have a good year every year."
http://www.nytimes.com/2004/01/26/bu...ne r=USERLAND

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I’m Depressed
Frank Field

So, a couple of years into tracking this set of issues, and it feels like I’m just spinning my wheels. My accomplishments in this domain mostly have to do with the students that I’ve had the chance to teach about this, but that’s a really long term strategy – and, at the rate things are going, there might not be enough time to hope that strategy will come to fruition.

The notion that Congress is priming to overturn the principles in Feist is just horrifying. After all the critisim of the European legislation in this area, I can only believe that this is willful ignorance of the threat. The opportunities for abuse are going to be legion, and it’s clear that, in the current climate, those abuses will be undertaken and exploited as fully as the market and the technology will allow.

It’s actually a little perverse. Creating a database and locking it up behind a pay-wall certainly allows the creator to extract rents from his/her labors. But, putting it out on the WWW for free generates traffic only for as long as the database is well- maintained and the content updated regularly. With copyright extended to databases, it could easily be the case that publishing a database online will award the creator with a monopoly that might allow his/her to extract rents, but no longer requires the database owner to maintain the database itself. The barrier to entry that copyright awards will limit competition. I would argue that competition is, in this domain, the engine for creativity – and the monopoly that copyright awards in fact undermines the creativity that copyright is supposed to engender.

In fact, I’m beginning to wonder if the real innovation that needs to be protected is the ability to innovate new ways of making money/conducting business. This is the kind of meta-innovation that emerges out of technological advance, and increasingly it appears that our construction of copyright is limiting that creativity in favor of other kinds of creativity. And, I fear that protecting the latter at the expense of the former will just ensure the decline of the marriage of technological advance and market innovation that has produced so much progress and wealth to date.

Oh, well. It’s late, I’m tired and it’s been a long week. I’m out of touch with what my online friends have to say. I need a little optimism and I hope that, as I catch up on things this weekend, there will be some of that to find. But, for the moment, I understand why Larry has such a hard time expecting that people will see the light. He’s worked a lot harder, and with a lot more apparent success, yet we’re still having weeks like these. Maybe it’s time for a change in tactics………..
http://msl1.mit.edu/furdlog/index.php?p=1218&more=1&c=1

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Coleman Criticizes RIAA's Renewed Efforts To Crackdown On P2P Users Through The Courts

Senator Norm Coleman (R-MN) today criticized renewed efforts by the RIAA Wednesday to continue to use the courts to sue individuals that the industry group believes are illegally sharing files on the Internet.

"I don't believe lawsuits are the answer to the RIAA's problems," Senator Coleman said. "While the industry has every right to protect its intellectual property, lawsuits should not be the primary means by which they do so.

The recording industry sued 532 computer users Wednesday — the largest number sued at one time since the RIAA first launched its legal battle against illegal file sharing last summer. The defendants were identified only by their numeric Internet protocol addresses, since a federal appeals court last month ruled that the recording industry can't use the subpoenas to force Internet providers to identify music downloaders without filing a lawsuit. RIAA spokesmen said they will identify the defendants, who if convicted face civil penalties or costly settlements, through the legal process.

"The decision by the RIAA to rely primarily on the fear of the courts and litigation to pummel P2P users is unfortunate and misdirected," Senator Coleman said. "Although the John Doe lawsuits now utilized by the RIAA may afford the consumer some additional protection than the previous litigation governed by the Digital Millennium Copyright Act (DMCA), I still believe litigation alone is not the answer."

Coleman called upon industry officials to seek a more proactive, long-term solution, instead of using the fear of lawsuits to deter illegal file sharers.

"I urge them to participate in a dialogue with the broader digital community to find solutions that will not only address the economics of the entertainment industry, but the powerful potential of technology to open new doors of economic opportunity and growth," Coleman said.

As chairman of the Permanent Subcommittee on Investigations, Coleman has held numerous hearings to address the problems facing the music and motion picture industries, which have found that technological innovations, rather than more legislation, can combat illegal downloading. Within several weeks Coleman will convene a roundtable of industry and technology leaders to address the crisis facing the industry and find a proactive solution.
http://mi2n.com/press.php3?press_nb=61889

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France Joins U.S., Britain Against Song Swappers
Bernhard Warner

CANNES, France (Reuters) - Add the French to the war on Internet song swappers.

Facing their first annual sales decline in recent memory, officials from the world's fourth largest music market told Reuters Sunday they would fight back with lawsuits.

Monday, French music industry trade body SNEP will report that recorded music sales fell 14.6 percent in revenues in 2003 to just under 2.1 billion euros, said Herve Rony, SNEP general manager.

The culprit, according to Rony, is the growth in file-sharing services such as Kazaa and possibly CD-copying by home users.

"It happened very suddenly. Apparently, there is a link to the fall in the market and the increase in access to the Internet," Rony told Reuters on the sidelines of the Midem Music conference in the French seaside city.

"It is the first year we can say France has to face the Internet crisis."

The French music industry had defied the odds for much of the past decade, growing annually while CD sales in the rest of Western Europe and the United States dip as file-sharing and physical piracy proliferate.

Last year the Recording Industry Association of America (RIAA), took the controversial step of suing the largest Internet song swappers in the United States, hoping the legal crackdown would act as a deterrent.

The RIAA's sister organizations -- the BPI in the UK and the IFPI, representing music labels around the world -- said earlier this month lawsuits would be inevitable in other territories, perhaps this year.

Rony said that while lawsuits against French file-sharers, or "uploaders," was inevitable, he could not say when. He said there was some urgency though as a number of industry-backed services were set to launch this year, including Apple Computer's.

"If we want to convince consumers to go off the illegal offers you have to take out the stick," Rony said.

French law does not offer the same levels of protection to copyright holders as British and American laws afford. For this reason, Rony said a legal crusade could be hard to stir in France.

"It will be difficult convincing parliament," he said, adding that the French Ministry of Culture had already expressed its support.

SNEP represents roughly 50 independent and major music labels including Universal Music, Warner Music, Sony Music and Bertelsmann's.
http://www.reuters.com/newsArticle.j...toryID=4202096

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Chatterbox

From News.com: Snocap has been working on ways to identify songs, as they are traded through a file-swapping network, including using a technique called "audio fingerprinting," which monitors the sonic characteristics of music files.

“yeah whats new allways trying to find new ways to monitor our online trading habbits- bastards, i want to trade like the old days with no one watching over me ....those days are gone perhaps....”

- esteeaz

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Music Labels See Recovery In Downloads, Lawsuits
Reuters

A music industry trade organization said Thursday that new online download services are winning over customers and warned that a globe-spanning legal crackdown on file sharers is imminent.

On Thursday, the International Federation of the Phonographic Industry (IFPI) released a progress report on its year-old campaign to develop and promote online music stores and spread its message that online song swapping is illegal.

In a rare upbeat statement, the IFPI said its initiative is building a vibrant, albeit small, market for selling music downloads that appears to be stealing momentum from peer- to-peer networks such as Kazaa and WinMX, where all varieties of music are available for free.

"We believe that the music industry's Internet strategy is now turning the corner, and that in 2004 there will be, for the first time, a substantial migration of consumers from unauthorized free services to legitimate alternatives," said Jay Berman, IFPI's chief executive.

"The start of 2004 brings a new sense of optimism along with evidence of real change," Berman said in a statement.

The IFPI, which represents a host of independent and major music labels including EMI, Warner Music, Bertelsmann's BMG, Sony Music and Universal Music, also said it would get tough with prolific song swappers this year.

"It is likely that there will be lawsuits against major Internet distributors internationally in 2004, similar to those filed in the U.S.," the IFPI said in its report.

European music industry executives have been warning for weeks they will follow in the controversial footsteps of the United States, where a legal clampdown on file sharers has resulted in hundreds of lawsuits. On Wednesday, the Recording Industry Association of America launched its largest wave yet of file-swapping lawsuits against individuals.

The crackdown could intensify in Canada and Asia too, industry officials said.

The industry blames file-sharing networks for contributing mightily to a three-year decline in music sales. Citing a variety of independent and industry-backed studies, it says the lawsuits do serve as an effective deterrent to file sharing.

The IFPI said its own probe of file-sharing networks revealed the availability of unauthorized music files on the services dropped from 1 billion in April 2003 to 800 million this month.

Industry reports offer contradicting evidence that the file-sharing phenomenon is tailing off, however.

It is believed music executives will invest more money in the development of online music stores before they round up the lawyers. In Europe alone, some 50 new industry- backed download stores are expected to launch this year, bringing the continental total to over 80.

Berman said he expects that the most popular online music store, Apple Computer's iTunes, along with offerings from Roxio and RealNetworks

Industry officials told Reuters recently that in 2003 American music fans purchased 30 million downloads, while Europeans bought 3 million from industry-sanctioned sites.
http://news.com.com/2100-1027-5145267.html

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To Save Copyright We Must Reform It

Prof. Lawrence Solum has written once again on copynorms, commenting on a couple of articles and providing some anecdotal evidence of his own (Lawsuits and Copynorms). Solum questions whether the RIAA's lawsuit-centered tactics are truly affecting norms. Their impact on copybehavior is disputed, but the issue of their impact on copynorms is hardly addressed. Based on the students in his law classes, Solum sums up one developing copynorm thus:

It is socially unacceptable to take the position that unlawful P2P filesharing is morally wrong.

Frankly, I think that the development of such norms is part and parcel of the RIAA's tactics. The RIAA has taken the strategically foolish position that all filesharing is wrong. To few most people outside of the ABA's IP bar, such an uncompromising approach to all filesharing is clearly incorrect. Most people believe that some sharing (particularly with friends or family) is legitimate, but other sharing is not. To the extent that the RIAA is not willing to compromise its position on filesharing, people will increasingly reject the idea that any filesharing is wrong. This is not a healthy development for those who believe that copyright is worth saving. The only way to save copyright is to reform it.
http://importance.typepad.com/the_im...e_copyrig.html

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The Tyranny of Copyright?
Robert s. Boynton

Last fall, a group of civic-minded students at Swarthmore College received a sobering lesson in the future of political protest. They had come into possession of some 15,000 e-mail messages and memos -- presumably leaked or stolen -- from Diebold Election Systems, the largest maker of electronic voting machines in the country. The memos featured Diebold employees' candid discussion of flaws in the company's software and warnings that the computer network was poorly protected from hackers. In light of the chaotic 2000 presidential election, the Swarthmore students decided that this information shouldn't be kept from the public. Like aspiring Daniel Ellsbergs with their would-be Pentagon Papers, they posted the files on the Internet, declaring the act a form of electronic whistle-blowing.

Unfortunately for the students, their actions ran afoul of the 1998 Digital Millennium Copyright Act (D.M.C.A.), one of several recent laws that regulate intellectual property and are quietly reshaping the culture. Designed to protect copyrighted material on the Web, the act makes it possible for an Internet service provider to be liable for the material posted by its users -- an extraordinary burden that providers of phone service, by contrast, do not share. Under the law, if an aggrieved party (Diebold, say) threatens to sue an Internet service provider over the content of a subscriber's Web site, the provider can avoid liability simply by removing the offending material. Since the mere threat of a lawsuit is usually enough to scare most providers into submission, the law effectively gives private parties veto power over much of the information published online -- as the Swarthmore students would soon learn.

Not long after the students posted the memos, Diebold sent letters to Swarthmore charging the students with copyright infringement and demanding that the material be removed from the students' Web page, which was hosted on the college's server. Swarthmore complied. The question of whether the students were within their rights to post the memos was essentially moot: thanks to the Digital Millennium Copyright Act, their speech could be silenced without the benefit of actual lawsuits, public hearings, judges or other niceties of due process.

After persistent challenges by the students -- and a considerable amount of negative publicity for Diebold -- in November the company agreed not to sue. To the delight of the students' supporters, the memos are now back on their Web site. But to proponents of free speech on the Internet, the story remains a chilling one.

Siva Vaidhyanathan, a media scholar at New York University, calls anecdotes like this ''copyright horror stories,'' and there have been a growing number of them over the past few years. Once a dry and seemingly mechanical area of the American legal system, intellectual property law can now be found at the center of major disputes in the arts, sciences and -- as in the Diebold case -- politics. Recent cases have involved everything from attempts to force the Girl Scouts to pay royalties for singing songs around campfires to the infringement suit brought by the estate of Margaret Mitchell against the publishers of Alice Randall's book ''The Wind Done Gone'' (which tells the story of Mitchell's ''Gone With the Wind'' from a slave's perspective) to corporations like Celera Genomics filing for patents for human genes. The most publicized development came in September, when the Recording Industry Association of America began suing music downloaders for copyright infringement, reaching out-of-court settlements for thousands of dollars with defendants as young as 12. And in November, a group of independent film producers went to court to fight a ban, imposed this year by the Motion Picture Association of America, on sending DVD's to those who vote for annual film awards.

Not long ago, the Internet's ability to provide instant, inexpensive and perfect copies of text, sound and images was heralded with the phrase ''information wants to be free.'' Yet the implications of this freedom have frightened some creators -- particularly those in the recording, publishing and movie industries -- who argue that the greater ease of copying and distribution increases the need for more stringent intellectual property laws. The movie and music industries have succeeded in lobbying lawmakers to allow them to tighten their grips on their creations by lengthening copyright terms. The law has also extended the scope of copyright protection, creating what critics have called a ''paracopyright,'' which prohibits not only duplicating protected material but in some cases even gaining access to it in the first place. In addition to the Digital Millennium Copyright Act, the most significant piece of new legislation is the 1998 Copyright Term Extension Act, which added 20 years of protection to past and present copyrighted works and was upheld by the Supreme Court a year ago. In less than a decade, the much-ballyhooed liberating potential of the Internet seems to have given way to something of an intellectual land grab, presided over by legislators and lawyers for the media industries.

In response to these developments, a protest movement is forming, made up of lawyers, scholars and activists who fear that bolstering copyright protection in the name of foiling ''piracy'' will have disastrous consequences for society -- hindering the ability to experiment and create and eroding our democratic freedoms. This group of reformers, which Lawrence Lessig, a professor at Stanford Law School, calls the ''free culture movement,'' might also be thought of as the ''Copy Left'' (to borrow a term originally used by software programmers to signal that their product bore fewer than the usual amount of copyright restrictions). Lawyers and professors at the nation's top universities and law schools, the members of the Copy Left aren't wild-eyed radicals opposed to the use of copyright, though they do object fiercely to the way copyright has been distorted by recent legislation and manipulated by companies like Diebold. Nor do they share a coherent political ideology. What they do share is a fear that the United States is becoming less free and ultimately less creative. While the American copyright system was designed to encourage innovation, it is now, they contend, being used to squelch it. They see themselves as fighting for a traditional understanding of intellectual property in the face of a radical effort to turn copyright law into a tool for hoarding ideas. ''The notion that intellectual property rights should never expire, and works never enter the public domain -- this is the truly fanatical and unconstitutional position,'' says Jonathan Zittrain, a co-founder of the Berkman Center for Internet and Society at Harvard Law School, the intellectual hub of the Copy Left.

Thinkers like Lessig and Zittrain promote a vision of a world in which copyright law gives individual creators the exclusive right to profit from their intellectual property for a brief, limited period -- thus providing an incentive to create while still allowing successive generations of creators to draw freely on earlier ideas. They stress that borrowing and collaboration are essential components of all creation and caution against being seduced by the romantic myth of ''the author'': the lone garret-dwelling poet, creating masterpieces out of thin air. ''No one writes from nothing,'' says Yochai Benkler, a professor at Yale Law School. ''We all take the world as it is and use it, remix it.''

Where does the Copy Left believe a creation ought to go once its copyright has lapsed? Into the public domain, or the ''cultural commons'' -- a shared stockpile of ideas where the majority of America's music and literature would reside, from which anyone could partake without having to pay or ask permission. James Boyle, a professor at Duke Law School, notes that the public domain is a necessity for social and cultural progress, not some sort of socialist luxury. ''Our art, our culture, our science depend on this public domain,'' he has written, ''every bit as much as they depend on intellectual property.''
http://www.nytimes.com/2004/01/25/ma...COPYRIGHT.html

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Mydoom Labelled The Worst Virus Ever
ILN

Finnish security software and services company F-Secure has declared the MyDoom virus the fastest-spreading worm ever and "the worst e-mail worm incident in virus history". F-Secure estimated that the worm was accounting for 20 percent to 30 percent of worldwide e-mail traffic Wednesday, putting it well ahead of previous pests, such as the SoBig.F worm.
http://news.com.com/2100-7349_3-5149764.html

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Software Patents 'Threaten Linux'

Open source advocate Bruce Perens tells BBC technology correspondent Clark Boyd why the real threat to Linux and the open source movement is not from the SCO lawsuits, but from software patents.
Clark Boyd : Linux seems to be going more and more mainstream. Suddenly there are advertisements by IBM on television promoting Linux. What do you make of this mainstreaming of the whole open source idea?

Bruce Perens : I like the fact that the IBM ads emphasise the openness. I saw one the other day that compared Linux to a child that had been adopted by the world. And I think that's a great theme, and it's very different than what you usually hear from IBM.

CB : Are the major companies becoming involved in Linux, helping to channel that creativity in ways that didn't exist before?

BP : Certainly the entrance of IBM, Hewlett Packard and a number of other companies, is helping. The main way is that it's helping us get more appreciation from the rest of the world. We are no longer isolated geeks making a system only we know is good. And I think there's a lot of benefit.

I think maybe some of the more naive around the world may think that Linux comes from IBM, but there are a good many people who appreciate the role of Linus Torvalds who may also appreciate the role of Guido van Rossum, the writer of the Python language.

Patent problem

CB : What do you see as the main challenges to Linux in the next year to 18 months, especially regarding the lawsuits brought by SCO which are still pending in the courts?

BP : The good news is that SCO has pretty much exhausted any chance of being successful in court. Their legal discovery documents have not yielded sufficient evidence. But, let's go on to the future beyond SCO.

The biggest challenge that will face us after that is software patenting. Software patents that are being accepted are not necessarily inventions, their definitions are overbroad. And you can never finish a patent search. The definitions are so broad, you can't ever be sure a company would or would not assert their patent on what you are doing.

You have to consider engineers today spend their entire careers combining other people's intellectual property. And every small and medium sized enterprise is at risk regarding software patenting. That is a problem in Europe, because representatives to the European Parliament are pushing very hard for software patenting that would indeed shut out all small and medium businesses from the software development business, not just open source.

We're looking at a future where only the very largest companies will be able to implement software, and it will technically be illegal for other people to do so. That's a very, very bad situation developing. We must do something so that there is reason for people to innovate, there is reason for people to invent, but that companies can execute without this constant fear that we will be sued into the ground regarding software patenting.

'Lots of friends'

CB : What about the positives for Linux coming up in next year to 18 months? I believe you've called 2004 the year of Linux on the desktop?

As Linux and open source become more important in business, we hope that those friends will be ones with political influence, who can make sure that the world remains a healthy place for open source software
Bruce Perens

BP : We have all of the Linux-based software we need for 80% of the people in the world. The other 20% may use specialised applications that are not yet available in open source. And when I say 80%, that's all free software. What we're doing in 2004 is some bug removal, and some integration, not additional features, because the features are all already there.

I think we will see some significantly-sized desktop deployments. IBM says they already have 15,000 Linux desktop deployments across the company. We'd like to see the rest of the company using the Linux desktop as well. I think we will see the same in other businesses.

The interesting thing here is that because of the sort of benevolent nature of open source, we have a lot of friends. As Linux and open source become more important in business, we hope that those friends will be ones with political influence, who can make sure that the world remains a healthy place for open source software.

CB : Looking at the increased commercialisation of Linux-based products, do you see any threat of Linux becoming, in its own way, just as monolithic as Microsoft? Or can Linux grow, and still stay true to its open source roots?

BP : We are facing a problem in that there are two dominant companies in Linux distribution - Red Hat and Novell, which just purchased SuSE. We do not intend to let it stay that way. I'm leading a project called User Linux. The project aims to make a zero-cost Linux distribution, where people, if they want service, will pay for service on a services rendered basis. And we're establishing a global support network made of small companies, more than large ones, to make that work.

And if we take the open source paradigm, which is a lot of little guys all around the world collaborating to make an organisation bigger than IBM or Microsoft, and we take that to the business sector, we may really invent something new here, taking open source into the economy to a degree it has never gone before.

Bruce Perens is the primary author of the Open Source Definition, the manifesto of the open source movement and has been a spokesperson for Linux and the open source movement for more than a decade.
http://news.bbc.co.uk/1/hi/technology/3422853.stm

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Lindows To Sell OS For Free Over P2P
James Pearce

Lindows has announced it plans to distribute its LindowsLive operating system for free via peer-to-peer networks.

LindowsLive allows people to run a Linux-based operating system from a CD, without installing it on their computer, and previously retailed for US$29.95. The product was also sold over the Internet in a form which could be burned to a CD.

"No, we haven't lost our minds," said Lindows CEO and founder Michael Robertson in a newsletter. "What we're doing is figuring out how we can take advantage of P2P to advance our own business." Robertson said Lindows.com would spend over US$100,000 in bandwidth charges to deliver software used to create installation CDs for LindowsOS.

"By allowing people to download LindowsLive from P2P networks instead from our servers, we hope to reduce those costs," said Robertson. "At the same time, we'll be exposing millions of users on file- sharing networks to LindowsOS all at a minimal cost. Hopefully, those users will purchase other products and services from Lindows.com, such as CNR (click and run), web-filtering, virus software or one of the many Click-N-Buy (CNB) games or programs."

Lindows has a running legal battle with Microsoft over the name of the company, which the litigation- happy behemoth claimed infringes a Microsoft trademark. There was also bad blood over MSFreePC.com, a Web site set up by Lindows to allow consumers due a refund from the US$1.1 billion settlement Microsoft made last year to lodge their forms online. Earlier this month a judge ruled against the Web site, forcing it to be removed.

The move by Lindows will also help the fledgling peer-to-peer industry, which is trying to legitimise the software as an effective and profitable way of distributing legal content to consumers.
http://www.zdnet.com.au/news/softwar...9115890,00.htm

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Tech Firms Fail To Squelch Database Bill
Declan McCullagh

A congressional panel on Wednesday approved a proposal to curb database copying, ignoring the objections of technology companies that launched a last- minute lobbying campaign to kill the proposal.

By a 16-7 vote, the House Judiciary committee approved an intellectual property bill that had been opposed by Amazon.com, AT&T, Comcast, Google, Yahoo and some Internet service provider associations.

The proposal, backed by big database companies such as Reed Elsevier and Thomson, would extend to databases the same kind of protection that copyrighted works such as music, literature and movies currently enjoy. Its supporters say that such protection is necessary to stop rivals from extracting information from proprietary databases like Reed Elsevier's LexisNexis service instead of going through the far more expensive process of compiling it themselves.

The loosely organized technology coalition opposed to the proposal had stepped up its lobbying efforts in the days leading up to the committee vote, joined by library and civil liberties groups.

"Proponents of the bill have yet to offer a convincing case that existing federal and state laws, including federal copyright law, federal antihacking prohibitions, and a variety of state contract and tort laws, are insufficient to provide database producers with adequate protection," the coalition said in a letter last week. "They have certainly failed to demonstrate a problem that would justify the fundamental and constitutionally suspect changes to our nation's information policy called for in the legislation."

One of the most vocal opponents of the bill has been the venerable U.S. Chamber of Commerce, which argued that database owners already have the ability to protect their property through contracts and terms-of-service agreements. In its own letter to Congress, the Chamber predicted that a financial analyst with access to Dun & Bradstreet databases could violate the law by including that information in a report prepared for a client, as could a research chemist who wishes to reproduce information on the effectiveness of new pharmaceuticals.

The Database and Collections of Information Misappropriation Act of 2003 does not include criminal penalties. Rather, it allows the database owner to sue in civil court "any person who makes available in commerce to others a quantitatively substantial part of the information in a database." There are limited exemptions for educational and research organizations and for journalists.

The bill, backed by Rep. Howard Coble, R-N.C., also is controversial because, critics say, it would sidestep a U.S. Supreme Court decision that said facts could not be copyrighted.

Wednesday's vote follows a 10-3 vote last October in a subcommittee. Now the measure likely will go to the House floor in preparation for a possible vote.
http://news.com.com/2100-1028-5145040.html

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San Francisco Journal

Last Car. Geek Party. Spread the Word.
Dean E. Murphy

The crowd gathered rather discreetly at the designated subway station, 16th and Mission, at the designated time, 5:30 on Friday afternoon, waiting for the designated train, the eastbound for Richmond.

Someone walked by with a piece of paper, an invitation: "The last car on the subway is the party car."

The subway train pulled up, and a man named Marc with a floppy blond Mohawk and a crimson sport coat let out a welcoming call from the platform. He carried an e-flat euphonium under his arm and had a habit of making noise, any noise. He was the nonleader of this nonevent: a "spontaneous, digitally organized" party on BART, as the Bay Area Rapid Transit is known.

BART's tape-recorded voice announced, "Ten-car train for Richmond," setting off a giggling dash toward car No. 10.

The party car was up and running — for dozens of Web freaks, hackers, geeks and others like them — a time and place to meet, mingle, act up, wind down, express themselves, dangle from poles, rage against the machine or do none of that, anonymously, anarchically, all in the cramped, swaying confines of a subway car hurtling underneath this stridently counterculture city, in the direction of Berkeley, where it would be abruptly unplugged.

A clown named Romance the Love Pirate brought a rubber chicken. Two men in trench coats smirked near the back. One heavyset man with pale skin and knit cap came dressed in white. He said he worked in a cubicle and did not get out much. What did he do for a living? "I sell drugs," he said.

They were joined by three skateboarders and a man wearing black leather pants and a Houston Police Department shirt. That man hung upside down from the handrails.

It was a mutinous commute, simultaneously pointed and pointless.

"This is our space," said Earl Stirling, an unemployed computer engineer, explaining the party's philosophical underpinnings. "We own public transportation."

The BART party was not original (subway parties in New York and London have been around awhile), but it had a compelling San Francisco twist: anonymous, virtual invitations to the entire world.

"Join a bunch of hackers and geeks," one of the Web invitations said. "Spread the word," another said. "Bring people, visuals, music. If you don't make the first train, we're also on the second, and the one after that and the one after that and the one after that."

As the car rumbled toward the San Francisco Bay, someone with an X-acto knife cut the Jet Blue advertisements into strips, struggling not to slice anyone's wrists with each lurch of the train. The dissected placards were mounted overhead, giving the car the vague feel of a cheap discothèque.

A man with long sideburns unraveled a tube of green cellophane, which he used to cover a row of lights with packing tape. Suddenly it was Christmastime.

A bag of something edible in the shape of mustaches was passed around. An assortment of small paper cups with Champagne drifted by. When asked, the man hanging from the ceiling volunteered a few thoughts about acts of "urban reclamation" and "space hijacking."

"People need to find more interesting ways to have fun," he said.

The man with the mustaches, who identified himself as a graduate student in computer science, seemed irritated when questioned. But his idea: The point of the party was that there was no point.

"There doesn't have to be a reason," he said. "We're reclaiming public space and showing people that they can make things happen. It is not evolved from corporations."

That was the first clue for the reporter on board, who would soon appreciate what it must feel like to be in the employ of Bechtel or Halliburton and wander into an anti- globalization demonstration. Because as much as this party car was about impulsive revelry in a place open to anyone, there was some anger, nastiness and anxiousness about this person from outside the virtual clique.

A round man named Michael with a shock of tomato-colored hair sneered and pointed his digital camera at the reporter. Later, he posted the photographs on the Internet, with commentary. "Fight the real enemy," it read above one photo of the reporter. "Damn the man," it said on another.

When the reporter approached Marc, the party's nonleader who was described by others on the car as both a chef and hacker, Marc asked to see proof of employment. He looked disdainfully when handed a New York Times business card, refusing to take it. Marc then declined to speak further.

After about half an hour, the party took a general turn for the worse when two transit police officers boarded the last car in Berkeley.

It was there, with everyone required to assemble on the platform, that Romance the clown joined the reporter on the party's island of misfits. The police were threatening her with a citation for boisterous behavior. More than a few commuters simply wanted to read a book after a long week at work, the officers explained, suggesting that she just shut up.

But Romance did not, for the longest of times. Most of the geeks scattered as she endeavored to remain in character, even when her rubber chicken slipped from her belt and an officer ordered, "Don't drop your chicken, ma'am."

Once back on the train, with the party crashed and the last car again as quiet as the first, Marc sought out the reporter. He let it be known that the reporter had been an unwelcome partygoer and the events of the evening did not belong in any newspaper, especially one interested in profits, he said.

"You are stealing our art," Marc said in what became a long lecture about corporate journalism. "You are commercializing our culture."

The spontaneous party car had become unfun for those who could not command its spontaneity. When the reporter got back to his desk that night, the phone rang. It was Hallie, the caller said. Remember? We met on the party car?

Hallie had called to pitch a story. The island of misfits was growing.

The next day on the Web, center stage for activist clowns and angry hackers alike, Romance wrote of her disappointment.

"If Shakespeare was correct in his belief that we are all players, then we are all outlaws, too," she said on tribe.net. "I refuse to be afraid. Let silliness prevail. Children are watching. We must set an example of ridiculousness and play."
http://www.nytimes.com/2004/01/29/national/29BART.html

JackSpratts · 29-01-04, 09:20 PM

Justin Frankel creator of Gnutella, WinAmp and Waste ends long affiliation.

Nullsoft Founder Resigns From AOL
Jim Hu

Justin Frankel, the controversial software engineer who created the Winamp media player, has resigned from America Online.

In an interview over instant messenger with CNET News.com on Monday, Frankel said the time was right to step down after shepherding the latest version of the player, Winamp 5, to a public launch in late December.

The announcement brings to a close a chapter in the annals of dot-com history, which began in 1999 when the then-20-year-old Nullsoft founder sold his company to AOL in a deal reportedly worth US$100 million. In the years that followed, Frankel clashed frequently with his corporate handlers, stirring up controversy with a string of products that fell outside AOL's approved regime.

"It was a pretty big love/hate relationship for me," Frankel, 25, wrote. "The love ultimately comes down to working with your friends on interesting things that you've poured a lot of time into. The hate is dealing with the process and the pitfalls of corporate America."

AOL spokeswoman Ann Burkart confirmed Frankel's resignation but declined further comment.

The resignation, quietly made public in online postings late Thursday, comes just weeks after AOL laid off hundreds of programmers in its West Coast offices, including at least two from the San Francisco- based Nullsoft division where Frankel worked.

Nullsoft operated in relative autonomy as a cutting-edge development arm for AOL. The team created the media player in AOL's flagship service as well as a streaming media technology called Ultravox that is now being used in AOL's broadband radio product. But the corporate culture of AOL never completely gelled with Frankel's more subversive side.

Frankel's most notable run-in with AOL occurred in 2000, when he posted a peer-to-peer file-sharing service called Gnutella. The software sparked an immediate response from AOL executives who were in the midst of acquiring Time Warner, which ran a major record company. Gnutella was eventually pulled, but not before thousands of copies were downloaded by other software engineers, spawning a new breed of file-swapping services that rose up after courts shut down Napster.

Time Warner has since agreed to sell Warner Music Group, citing sagging revenue and lacklustre growth.

In May 2003, Frankel was forced to pull a software program called Waste, which let users set up private networks equipped with peer-to-peer file sharing and instant messaging. Soon after Waste was pulled, Frankel threatened to quit AOL but later reconsidered to help complete the new version of Winamp.

"I really had been putting it off long enough; it was just that time," Frankel wrote Monday. "Launching Winamp 5 was a big goal of mine for the last nine months, and having it out in the wild made it that much easier to move on."
http://www.zdnet.com.au/news/busines...9115830,00.htm

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Music 'Dot Com' Boom Imminent
Johnny Evans

Legal download sites developing

The renaissance of legal digital music distribution services is opening up new opportunities for entrepreneurs in a phase of activity

which bares a striking similarity to the early years of the dot com boom.

In one move, former Napster CEO Shawn Fanning has made the classic transition from poacher to gamekeeper, announcing Snocap. Formed with several of the early developers and investors of Napster 1.0, Snocap is building code that will be able to identify tracks traded on peer-to-peer networks and to attach a price tag to those tracks. Users will then have to pay to download those tracks

CNet reports that "several record industry executives believe the idea sounds promising", warning that Fanning will also need to secure support form the peer-to-peer (P2P) networks themselves. In another move that shows the extent of creative energy being thrown at the new emerging business, Wired News yesterday discussed RipDigital, a company that will convert US music fans' CD collections into high-quality MP3s for a fee.

To use the service — which the company reportedly plans extending into other markets — consumers choose their preferred digital music format and choose whether to have their encoded tunes ripped to DVD or an external hard drive supplied by the company. They then ship their CD collections to the company for ripping.

US copyright law means the company cannot archive the tunes, but must rip them each time from the original legally-acquired discs. The company charges $129 (about £60) for 100 CDs. With the online music market anticipated to reach values in excess of $3bn (about £1.6bn) by 2008, entrepreneurs have recognized the value that may exists in creating services for the emerging breed of music fan.
http://www.pcadvisor.co.uk/index.cfm...view&news=3786

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BPI Ramps Up Copyright Battle
Dinah Greek

The British Phonographic Industry (BPI) is making a two-pronged attack on what it says are violations of copyright and trade laws.

The industry group is ramping up its efforts against online retailers selling CDs sourced from the Far East and Asia and users of peer-to- peer (P2P) sites.

Web surfers can save up to 50 per cent when shopping for music with popular online retailers such as CDWow.

But in what is likely to be just the first of a number of legal battles, the BPI has forced CDWow to change how it sources its CDs.

Some online retailers make savings by importing products from the Far East and Asia where prices are lower because overseas record companies take a smaller percentage of sales income.

This is known as parallel importing, which the BPI claims is in breach of European trading laws.

The BPI brought a case against CDWow, but it was settled out of court in late January. CDWow will now only sell CDs that have first been placed on the European market to UK and Irish customers.

The net effect will be an average price rise for CDWow customers of between £2 and £3, the company claimed.

The BPI is also turning its eye on Amazon.com and e-tailer Play.com for similar alleged infringements of European law.

At the same time the BPI has warned that it may launch legal action against people who swap music files on P2P sites.

This reflects growing frustration within the music industry, which has been trying to stop internet users sharing copyrighted music files.

The move follows in the footsteps of the Recording Industry Association of America, which began court action against a number of alleged P2P users in September last year.

The legal framework to allow the BPI to sue users is already in place thanks to the recently revised Copyright Directive, but that the organisation still preferred to educate P2P users.

And BPI director general Andrew Yeates, warned that the BPI could bring injunctions against ISPs as a means of trying to obtain the names and addresses of suspected file sharers. ISPs have said they would fight such a move.

"It would be the next step for the BPI. We are not in the business to sue for the hell of it, but we have an active dialogue with ISPs and work with them," said Yeates.
http://vnunet.com/News/1152317

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Music’s Cold Online Revenge
Mike Butcher

When it comes to the relationship between the Net and that rather older medium, music, there’s life in the old dog yet.

For instance, It would appear Madonna telling us to "F*** Off" in those bogus tracks her label distributed on P2P networks like Kazaa wasn’t such a brilliant idea afterall.

A US federal court has cleared the way for Kazaa owner Sharman Networks to sue the entertainment industry for copyright infringement, saying it misused Kazaa to invade users' privacy and send corrupt files and threatening messages. Ooer.

Ok, so admittedly the users were probably downloading several billions dollars of music at the time, thus depriving J-Lo of the ability to finance her eyebrow plucking habit (or not?), but who’s counting?

Sharman ( their latest hit, for course, being Skype, according to the IHT is to pursue the case, though handily it’s HQ is on the island nation of Vanuatu in the South Pacific - tricky to serve a writ on at the best of times. And last Friday a judge rejected the entertainment industry's request to dismiss the lawsuit.

The Recording Industry Association of America said "Yah, boo, you’re just a bunch of Vanuatan jokers." Ok, so what they really said was "the court does not appear to want these claims to proceed at this point. If they ever proceed, Sharman will have a very difficult time providing evidence to support their allegations." Got that?

So the RIAA and others used KaZaA to try to enforce their copyrighted material while violating Sharman's copyright. It’s such a shame Pop Will Eat Itself aren’t still around.

Meanwhile in Cannes - at the Midem conference - Rock veterans Peter Gabriel and Brian Eno are launching a new musicians' alliance which will let artists sell their music online instead of only through record labels.

The "Magnificent Union of Digitally Downloading Artists" - or MUDDA is the venture’s name, which launches formally in a month.

This is no idle threat. Gabriel co-founded a European company, On Demand Distribution, which runs legal download sites in 11 - count’em - European countries.

But for all we know, Kazaa and the rest are probably being slowly made obsolete by Nokia, which has launched the Nokia 7700 Media Device in Cannes.

It is Nokia's first dedicated media phone, and is the the first mobile phone that can receive digital TV transmissions and FM radio along with images and text on the LCD handset display screen, displaying pictures of the artist, the name of the song or its current chart listing.

In Europe, digital radio networks are happily sending data down the line to sets, trumping in-car CD players and the like.

Phew. Anyone for 78s?
http://www.thestandard.com/movablety...ves/000077.php

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Students Still Plug Into File Sharing
Amy Rolph

Despite reductions in filesharing nationwide and hundreds of lawsuits filed by the Recording Industry Association of America, UW students have found a way to share music, videos and software over Residence Hall computer networks.

A message taking a strong stance against illegal filesharing over the University computing networks was sent via e-mail to all UW students, faculty and staff last October. Regardless of this message, in which Vice Provost Steven Olswang asked students to comply with copyright laws, it appears that music, movies, games and pornography have continued to be exchanged on campus servers.

"I've downloaded $150-worth of games for free," said a sophomore in McCarty Hall who did not wish to be named.

The most prevalent means of peer-to-peer file sharing on campus is done through a program called Direct Connect, a shared system linking dormitory computers together.

The direct connect server hosts a shared folder called DawgFarm, that can be accessed from any computer on the server. Students can search DawgFarm and download music, videos or games from the collections stored in the direct connect folders of other users, provided that the owner is logged on. Movies and music are often available on DawgFarm weeks before their official release.

According to DawgFarm users, there is a student responsible for maintaining the shared folder. However, none of the students interviewed knew the identity of this person.

Olswang told The Daily that as a distributor of Internet services, the University is obligated to look into any claims of illegal use on any campus computer.

According to Olswang, students in dorms are not the only computer users who are guilty of peer-to-peer filesharing; staff and public computers have also been subject to investigation. In many cases, guilty parties have been discovered.

"Our policy is to adhere to the law," said Olswang. "We have had to disconnect access on numerous occasions."

Catherine Innes, director of policy and strategic initiatives, said 500 alleged cases of illegal filesharing have been reported in the past two years.

According to Olswang, the typical reprimand consists of computer access being shut off while the matter is investigated. If suspicions are substantiated, illegally obtained files are removed and the guilty party is subjected to "re-education" about legal file sharing before computer access is restored.

Olswang said he knows of two cases in which an individual has continued to download illegally after the "re-education" process. In such cases, he said, computer access may be terminated completely. If there were a third offense, expulsion would be considered.

"We hope that this never happens," said Olswang. "The issue of filesharing is a national problem, not a campus problem."

According to a study published this month by the Pew Internet and American Life Project, the number of people downloading music files illegally has been cut in half since last September when the Recording Industry Association of America began prosecuting those suspected of violating copyright laws.

However, there are those who disregard any threat of prosecution.

"I don't do it enough to get caught. I download once a month, maybe," said a McCarty Hall resident who also asked to remain anonymous.
http://thedaily.washington.edu/news....e=8149&-search

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The Sound of The Industry

How Bad a Year?

Music biz recovery means suing and firing more people
Douglas Wolk

Exactly how bad a year did the music industry have in 2003? It depends who's asking. According to Nielsen Soundscan, American labels sold 687 million units (including 19.2 million paid downloads) last year—a drop of less than 1 percent from 2002. A widely cited survey from the Pew Internet & American Life Project suggests that file sharing has plummeted since the Recording Industry Association of America started threatening traders with lawsuits. The percentage of Internet users who download music, it claims, fell from 29 percent to 14 percent between May and December.

Of course, it may be more correct to say that half as many Internet users are willing to tell a pollster that they download music—these days, the first rule of File Club is you do not talk about File Club. And a study by the NPD Group (which monitors actual computer usage), released a couple of weeks after Pew's, indicates that peer-to-peer file sharing went up 14 percent between September and November, after dropping for six months.

The U.S. Court of Appeals ruled December 19 that the RIAA can't use the Digital Millennium Copyright Act to subpoena Internet service providers for their customers' identities without a lawsuit. Even Senator John Sununu, Republican of New Hampshire, declared at the Consumer Electronics Show in Las Vegas that that's "not what the DMCA was intended to do. . . . We can't be writing legislation that gives holders of certain types of intellectual property special rights." In response, the RIAA has gone back to getting information the old-fashioned way: by filing suits, on January 21 against 532 allegedly file-sharing "John Does," now identified only by IP address. Presumably, some of them won't turn out to be 12-year-old girls, 83-year-old nuns, or senators trading bootleg remixes of Howard Dean's post-Iowa yelp.

More PR disasters, after all, could impede the RIAA's attempts to look like an actual arm of the law. The organization was recently granted permission to put the FBI's logo on CD packages, to remind consumers once again that it considers them all potential criminals. LA Weekly reported a few weeks ago that the RIAA's anti-piracy unit (now headed by former ATF director Bradley Buckles) has been hiring ex-cops to wear "raid" vests stenciled "RIAA," confront street vendors selling bootleg CDs, and fill out incident reports saying that they "voluntarily" forfeited their wares. (The unit's Western regional coordinator, John Langley, told the Weekly why they photograph the people they bust: "A large percentage [of the vendors] are of a Hispanic nature. Today he's Jose Rodriguez, tomorrow he's Raul something or other, and tomorrow after that he's something else. These people change their identity all the time.")

The RIAA is also trumpeting its $200,000 settlement of infringement claims against Nashville's United Record Pressing, one of the few vinyl plants still operating in America. (If you bought an indie-label seven-inch single in the '90s, it was very likely pressed there.) It seems that they were hired to press some records that turned out to include unlicensed content ("more than 170 unauthorized sound recordings"). Everything that customers send to United is now "audio tested," and no samples of any kind are permitted. Fair use? The public domain? Out of the question.

Individual record labels are facing turbulence too. Warner Music Group, soon to be taken over by Edgar Bronfman (whose investment group is buying it from Time Warner), is bracing for massive layoffs, rumored to be up to half of its staff. Antonio "L.A." Reid got the boot as president of Arista the same week that the label had the top three songs in the country with "Hey Ya!," "The Way You Move," and "Milkshake." And the Beastie Boys' defunct Grand Royal label failed to sell its assets in a bankruptcy auction last week—nobody offered more than $65,000.

Even so, Pepsi's giving away 100 million song downloads (five times the total number sold last year) on Apple's iTunes in February and March. Coca- Cola has riposted by launching its own music site, in the U.K. rather than the U.S., and selling songs in Windows Media rather than iTunes' AAC format —the website doesn't even work on Macs yet. It's also saddled with the worst name ever: mycokemusic.com. (Mirror and razor not included.) Evidently, the only pop business that's got money to throw around right now is the carbonated kind.
http://www.villagevoice.com/issues/0404/soti.php

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Analysis

Not Yet Time For Record Labels To Be Smug About The End Of Piracy
Faultline

There is an increasingly smug feeling among the big record companies and their various agents, that has been brought about by the supposed demise of music piracy.

There are three related important points to establish about music piracy. Firstly it is illegal and also morally wrong to obtain copies of music or film or other entertainment without some form of payment. Secondly the process has been stimulated by the perception that record companies neither have the interests of the artists at heart, and they have in the past made huge profits by overpricing music.

Thirdly music companies have been slow to realize that digital music requires a rights regime that allows various personal copies of music to be moved between different personal types of players.

Quite simply, young people would rather break a law than pay the current prices, and certainly break the law to copy tracks they have already bought for one player, which won’t play on another.

It is only one third of this equation that may have been addressed so far, that of stopping piracy, and Faultline would argue that this has not been finally or successfully addressed, despite claims to the contrary, made throughout this week.

An annual online music report out this week from the International Federation of the Phonographic Industry (IFPI) said this week that the arrival of the legitimate online music services will take a large market share against the illegal use of peer-to-peer file sharing networks like Kazaa, during the coming year.

There are two pieces of evidence that it cites. It says that the imminent arrival of iTunes, Rapsody and Napster, the more successful of the online music services offered in the US, will see a healthy rise in paid for, online sales. IFPI also says that US buyers have bought 30 million songs through these services, and while Europe has only, so far, purchased 3 million, this is set to rise. Online music supplier OD2 said this week that its sales are rising at the rate of 25 per cent per month.

IFPI points out that there are already 30 existing online services and credits part of their growing success to the awareness growing that not only is file sharing of a copyrighted work illegal, but it is now becoming obvious that people that do it can get caught. The number of music files available on the Internet has fallen by 20 per cent to 800 million over the last year, after peaking at one billion at the start of 2003.

IFPI finished with: “For everyone working to create a successful legitimate online music business, this report reflects a new sense of optimism and evidence of real change,” this from IFPI chairman and CEO Jay Berman. He added: "We believe the music industry's Internet strategy is now turning the corner, and that in 2004 there will be, for the first time, a substantial migration of consumers from unauthorized free services to legitimate alternatives."

However three million downloads in a year are not enough to turn the tide, even if those downloads are growing at 25 per cent a month (as OD2 claims in a statement this week), because there have been four years of declining CD sales, and during 2002 EMI lost 11 per cent of its revenue, down by some $460 million, and for 2003, although it has yet to publish its final figures, it is likely to be flat for the year, at best.

At the current price for European downloads (generally 99p a track, almost double the US prices for the same music) three million downloads yields £3 million, or $5.4 million. Even if 50 per cent of that money was due to EMI’s catalog, this would only be $2.7 million, and after delivery database OD2’s take and the take from etailers HMV etc… this would be reduced to about $1.3 million. It is hardly going to replace $460 million in lost revenues.

If these three million paid-for downloads were increasing at 25 per cent per month through 2003, then they began on about 55,000 downloads in January 2003 and ended on 640,000 in December 2003. Taking the number on from there, growing at 25% per month, this 3 million will go up to 43 million downloads in 2004, and if that same growth continued through 2005, this would take paid music downloads in Europe to 631 million, grossing some $1.1 billion. Once again if half of that belonged to EMI (and it won’t) and half of that was taken by the distribution process (which it will) then that might add up to $250 million, about half of what EMI has lost. Hardly time for dancing in the streets at the EMI shareholders meeting.

And we have more problems with this. No growth, including the original take up of browser technology on the internet, sustains a growth rate of 25% per month (the world wide web once had 15 per cent a month growth for about two years, but nothing else has come close). So this growth rate will not be sustained. Also it was not gradual and linear in the first place. Digging between the lines among OD2’s statements this growth was mostly in one huge leap when Microsoft added the service to MSN, and then more modest movement month to month.

So expect perhaps 25 per cent growth per month for a few more months and then seasonal variation and tailing off to perhaps 10 per cent growth for the rest of the year. Also expect a price war. This is a land grab market and already there is the announcement of Coca Cola entering the online music wars, again off the back of the OD2 delivery network, to launch its own music site next month. While they all use the same delivery mechanism it is likely that prices must be the same. But yet to come to Europe are music services from Apple, RealNetwork’s Rhapsody, Walmart, Musicmatch, the company that powers both Dell and Hewlett- Packard’s forthcoming online music web sites and of course Sony, that will tightly integrate its site with its own electronic players.

It will be strange if all of these charge almost double the price in parts of Europe, that they do in the US, given that many of the artists are European, and in EMI and Universal and Bertelsmann, the music companies are owned in Europe. Online services generally tend to flatten global pricing, and the resentment of the European youth will continue until they can see that they are being charged the same as their US counterparts, and while they are resenting overcharging, they will continue to indulge in piracy. So either price cuts, or more piracy.

Already Playstation and Xbox games, often written by European companies, are sold online in the US by Amazon for instance, for a fraction of European prices but cannot be shipped over to Europe. And DVDs are also the same, with a grey importer of Far East DVD movies being forced last week, in a settlement with US studios, to charge more in Europe than either the US or the Far East.

It is these inequalities that bedevil the operations of the troubled music companies, as much as piracy. There is a feeling still in the minds of aging executives, that one day the industry will all go back to being the same as it was before, once they’ve “fixed” the piracy question. But the internet has changed forever the global cross communication over pricing, and this has still to be addressed.

And yet EMI’s share price has gained over 40 per cent since 2004 started. Surely for EMI to recover we must see a return to the retail environment to buy CDs, not just an acceptance that online music is here to stay.

More likely to put the recording studio mess to rights is an announcement from Macrovision this week that it has a new release of its CD copy-protection system. This version will use the full Microsoft DRM system; Macrovision says the CDS-300 will offer multi-level protection and rights management for music CDs. CDs made with this system can seamlessly create playlists, export to portable devices and makes authorized burns to another CD, and offers one-click access to bonus content on the disc, or premium content via web links.

The company claims that the average consumer should not even notice that their CD is copy protected and says that content owners can set usage rights, for example, allowing consumers the ability to export to compliant portable devices (with a specified number of exports), as well as burn CDs (with specified number of burns). Copied files will not play if emailed or distributed via the Internet.

But will the content companies actually set these kinds of rights? We don’t think so. They have shown themselves to be solely interested in returning the industry to where it was before piracy took off, and will only use innovative and intricate rights regimes to combat other music companies that offer the same, not to tempt people away from piracy. At least not so far. Almost all the OD2 tracks for sale in Europe are not for sale to burn to CDs or to play on a PC, and yet this system uses the very same DRM protection that Macrovision is just introducing and the facility to do so is supported by OD2.

It will be a long battle before music companies start experimenting with attractive rights, long after piracy is under control. But this is a chicken and egg argument. No rights experiments and people will continue to pirate.

In the meantime the main game in reducing piracy, the messy public legal actions that are designed to scare customers out of file sharing, continue. In Europe we are told that the first suits are about to be filed, but as yet there are no named individuals coming to trial, while in the US the Recording Industry Association of America (RIAA) filed another 532 suits this week.

These new filings serve two purposes. One to keep the pressure up on reducing file sharing, but secondly also to clarify that the RIAA has not given up on its legal actions just because Verizon, just prior to Christmas, convinced a US judge that the fast subpoena process that the RIAA was pursuing was not legal. Now every suit has to be filed as a “John Doe,” action against someone with no known name, and will have to go to a judge in order to force the ISP to name their customer.

Would that put the RIAA off? Will the judge always agree to grant a motion to discover the name? These two questions need answering quickly and in the RIAA’s favour and need to be made public very loudly, or file sharing would immediately go back on the increase. November figures released last week shows that file sharing has already risen by 1 million individuals from October. Another rise and it could mean that all of the RIAA’s prior legal work would all be wasted. Finally the RIAA will find itself on the receiving end of a copyright legal action any day, now that a US federal judge has given leave to Kazaa to sue them. The Kazaa case rests on the fact that the RIAA is alleged to have used unlicensed versions of Kazaa to monitor the internet for copyright infringers. This amounts to a violation of the Kazaa license and Kazaa wants it stopped.

And if the RIAA is blocked from using this software to find pirates, then it is back to the drawing room for the RIAA, EMI, the IFPI and a move back to rampant piracy once again. Like we said, it is far too early for the music companies to be smug about the demise of piracy.
http://www.theregister.co.uk/content/6/35131.html

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Voice Mail In Your Inbox, Caller ID On Your TV. What Can't Broadband Do?
Nicole Davis

PS Illustration by Garry Marshall

Could the landline be going the way of the telegraph? To find Web-tech enthusiasts who think so, just ask any one of the two million plus people who have downloaded Skype, peer-to-peer software that allows users to make calls anywhere in the world, for free, over the Internet. "I'm speaking to you through a headset connected to my regular telephone, connected to my laptop, which is wireless," says Skype CEO Niklas Zennström, calling an ordinary phone in New York from Sweden. "Like a very big cordless telephone."

That "very big cordless" is threatening to further rock the already battered telecom industry. Thanks to today's critical mass of broadband connections, Voice over Internet Protocol (VoIP), the nine-year-old technology behind Skype, is finally going mainstream. So much so that some experts predict that 40 percent of the world will be using VoIP within the next five years, a prospect that has telecom giants scrambling to keep pace, and profits. Already MCI, AT&T and SBC offer some type of VoIP calling plans to their customers. And while the big guys play catch-up, smaller players like Packet8 and Vonage are winning over callers at breakneck speed with long distance Internet calling plans as low as $20 a month.

Skype plans to cash in as well. This winter the company will introduce a new fee-based service that will allow users to make and receive calls over the Internet from regular phones.

But there are still a few technical hurdles on the road to ubiquity. The extra equipment VoIP requires -- at minimum, an analog-to-digital converter to patch your phone into the Internet -- feels cumbersome, and service can be spotty. From his oversize "cordless," Zennström is barely audible as he speaks about becoming the leading player in VoIP. "VoIP is notorious for poor quality," says Andrew Odlyzko, director of University of Minnesota's Digital Technology Center. "But in the long run, it has the potential to transcend the limitations of telephony."
http://www.popsci.com/popsci/interne...582766,00.html

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FREEZE FRAME

Striking A Discordant Note

Instead of constantly crying wolf, the music industry needs to adapt as fast as possible to technological change.
Amit Khanna

The recorded music industry worldwide has been caught in turbulence for the past few years. In fact, it is the only segment of the entertainment industry whose growth rate has fallen.

In India too the sound of music has been a bit jarring. This distortion amidst a booming economy and a flourishing sector is a classic twenty-first century dilemma.

The digital economy opens several new opportunities but it forecloses a few. One very obvious disruption by technology is the whole market flow of the music industry.

While it was almost certain that the rapid spread of the world wide web and its concomitant use of peer-to-peer and other file-sharing technologies would change the contours of the music business, what has surprised many is the speed and severity of the change.

While the global music business remained stagnant at around US$ 30 billion last year, India’s music industry’s turnover has seen a sharp decline from around Rs 800 crore to Rs 600 crore.

Of course, both these figures exclude almost an equivalent amount in the unaccounted market – the result of piracy, counterfeit products and P2P.

Yet in spite of sales falling, the actual consumption of musical products has increased. More people in India and around the world are listening to music today, be it on hard media (MP3, CDs, cassettes, records) or on soft media (the radio, internet, TV).

The problem is that reach and penetration are not translating into revenue. The digital world is a much more democratic world the digital divide notwithstanding.

Sheer convenience overcomes all guilt in accessing intellectual property unfairly as long as the act does not entail any public display of the process.

The success of Napster, Kaaza and many such file sharing websites is based on this premise. Most people indulge in copyright theft even as they condemn it.

Once you are used to accessing content free it becomes very difficult to start paying for it, unless the price of the legitimate product appears reasonable and it is easily accessible to the consumer.

The music companies failed to realise this. There has been some consolidation in the industry but by and large the old ‘analogue’ distribution still dominates.

Till Apple figured out a business model in I-tunes, most efforts at creating workable P2P sites were disasters.

Now several subscription-based models for digital downloads are emerging. Varying technologies allow you limited or unlimited use of either a fixed number or any number of titles from a catalogue.

This appears to be a near-term solution in the more developed markets which have high PC penetration and better connectivity.

· India is one of the few markets in the world where 70 per cent of the revenue comes from the sale of audiocassettes

· Not only are piracy levels high but gross margins are low

· The music industry’s problems are further compounded by FM radio

However, India has more problems. It is one of the few markets in the world where 70 per cent of the revenue comes from the sale of audiocassettes. Not only are piracy levels high but gross margins are low too.

The problem is further compounded by the nascent FM radio. Suddenly, Indian music lovers are getting to hear a wide variety of music round the clock on affordable stereo systems or even low-priced FM radios.

With the number of FM stations expected to rise to a few hundred in the next few years, even a small broadcasting fee can be a substantial source of revenue for the music companies.

Similarly, a plethora of TV channels which broadcast songs 24x7 can be looked upon more as a revenue source than a threat. From telephone ring tones to piped music and live concerts – many new business streams are emerging.

People can choose from a fair amount of free music. As a result, the number of paying customers is actually dropping in an otherwise expanding market.

Having said that, there still is enough opportunity provided the music industry is swift in its response to the changing paradigm and customer needs.

Traditional sales models will have to be dumped fast in favour of newer methods of digital distribution and airplay. Music companies with large catalogues can specially benefit from these.

In the past, whenever a major technology shift (shellac to vinyl discs, discs to cassettes, cassettes to CDs and now the P2P and digital downloads) happened, the music industry, particularly in India, has been slow in adopting the new technology.

Since a market does not support a vacuum, pirates and interlopers have taken large chunks of revenue away. Now with increasing digital connectivity and affordable devices, a huge opportunity stares music makers in the face. The key to all this is affordability.

We have seen in various product categories – from mobile phones to shampoos (sachets) – that the right pricing has led to an explosion in dormant demand in a huge market like India. Most of the time the music industry has priced itself out of a new opportunity.

Unlike any other market, the Indian music scene is dominated by film music. Except for the cyclical race to acquire the rights to top films, very little innovation has been done either by film producers or the music industry to push sales.

Creatively too, the industry has been on a downslide in the last few years, with not a single blockbuster of a song emerging. Except for remixes with bawdy videos, nothing has caught audience imagination.

Instead of constantly crying wolf, the music industry needs to adapt as fast as possible to technological change, spruce up its marketing and get the creative juices flowing. There’s no reason the sound of music should not translate into money even in the digital age.

The author is chairman of Reliance Entertainment.
http://www.business-standard.com/ice...69&story=32982

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Internet Lite

A look at the Net's gated communities

The idea of a common Internet _ the Internet _ is losing its validity. For a long time now I've thought of the Internet as a series of networks that happen to pass data to each other _ but there's nothing that consistent about them.

If countries like China and Vietnam cut off their citizens' access to various parts of the Internet, then they are essentially on an Internet Lite, so to speak. Similarly, some countries have adopted their own domain name system for Internet addresses using different character sets. This is also a way of possibly creating a segregated network, or a walled community if you like.

IPv6, the next generation of Internet addressing, has the potential to create other divisions. While the developer community is trying to ensure that there will be compatability between IPv4 and IPv6, there will always be some parts of the network that are more advanced and off-limits to those without the right technology. Similarly, researchers out there working on so-called Internet2 and other research networks are essentially working on a private network.

But perhaps the biggest move to private networks, and a trend that might see even further fragmentation of the Internet, is in the area of peer-to-peer (P2P) networks, also known as file sharing networks.

The music industry crackdown on the swapping of music files is creating a new series of underground P2P networks that are closed to outsiders. According to some reports I've been reading, these new networks are using encryption technology to make sure that all of the activity on the network is hidden, and you have to be invited by an existing member to join the club.

One of the hidden spin-offs of the file sharing crackdown is a move to encrypted spaces and easier encryption tools, according to Clay Shirky, a professor at New York University who also has a popular mailing list on media, culture and technology. He says that while earlier pushes for encrypted communications failed _ a result of user apathy and the fact that most users don't have too much to hide _ it is now being taken up in large numbers.

Shirky writes: ``In response to the RIAA's suits, users who want to share music files are adopting tools like WINW and BadBlue that allow them to create encrypted spaces where they can share files and converse with one another. As a result, all their communications in these spaces, even messages with no more commercial content than "BRITN3Y SUX!!!1!", are hidden from prying eyes. This is not because such messages are sensitive, but rather because once a user starts encrypting messages and files, it's often easier to encrypt everything than to pick and choose.''

According to Shirky, the music industry's attempts to control what users do on the Internet will have two lasting effects. One will be an increasing move towards more widespread P2P networks _ ie, an even more fragmented Internet _ while the other is widespread adoption of encryption, which will often work seamlessly in the background. In other words, there will be even more gated communities in the future.

Another report I was reading on this cited an upcoming release of the file-sharing program Blubster that apparently seamlessly encrypts files before they are transferred and then decrypts them for the end user. One more example cited is a program called Waste, which can be used to set up an encrypted instant- messaging and content-sharing network of up to 50 users.

EMAIL TUESDAYS

Of course, there's an even easier way to keep users from communicating on the Internet _ it's called Chinese New Year. Trying to get email out of anyone in China, Singapore and even sometimes here in Thailand was almost impossible last week. Another time I always avoid sending email is on Friday afternoons. I figure that often the person is wrapping up for the day and then when they see the message on Monday _ and the fact that it is already a couple of days old _ they're more inclined to ignore it.

It just so happens that my suspicions on this were confirmed via a recent report from EmailLabs, which apart from surveying email habits also makes its own email software. According to its survey, Tuesday is the most popular day for companies to send out emails, while Wednesday is the most popular day for opening them. And as you can imagine, Saturdays and Sundays are out.

Apparently the reason for the mid-week popularity is that companies avoid Mondays and Fridays for sending, but usually draft up their email on these days, leading to Tuesdays and Wednesdays being the most common send days. But the only problem with this, as EmailLabs points out, is that you will also be competing for attention with all the other emails sent on this day if you follow the strategy.

And if you're waiting for an email out there right now (mindlessly passing the time reading this column, obviously), we can report that the most popular send time is 9am, which leaves this 11pm sender scratching his head.
http://www.bangkokpost.com/Database/...04_data05.html

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Online Music Industry Is Focusing on Europe
Victoria Shannon

CANNES, France, Jan. 25 - Europe is the next battlefield for portable digital music, with its eager consumer market and attractive demographics, but complex cross-border legal and financial obstacles are delaying the entry of the biggest names, including Apple Computer.

Still, the online music industry is hungry for the European market, according to many executives at an international music conference that started here on Saturday, and it is preparing to take on the established European leader, On Demand Distribution, a company co-founded by the musician Peter Gabriel that is known as OD2 and powers most existing music services in Europe.

No one involved doubts that the European appetite exists. Last week, the Coca-Cola Company began an Internet-based music downloading service in Britain that attracted 10,000 downloads in its first 24 hours.

Europe is the world's second-biggest music market, behind the United States, and has sales of about $11 billion. According to Forrester Research, European download sales were just 24 million euros ($30.5 million) last year.

The diverse languages and cultural tastes seem the least of the hurdles in Europe. Here, a lower percentage of households have personal computers, are connected to the Internet or have fast, broadband network connections than in the United States.

"A majority of the U.K. population has yet to experience downloading," said Rafael McDonnell, head of strategic marketing alliances for Coca-Cola in Britain, at the conference here, known as Midem. "We need to drive that habit."

Executives at Apple and Napster said over the weekend that they would love to help Coke do that, but they are still held back by arranging downloading rights across Europe. Eddy Cue, Apple vice president for applications and Internet services, said that the company still planned to offer its iTunes Music Store in Europe some time this year, but he declined to give a specific date.

"Different prices in different countries, different release dates, there are obstacles we are still sorting through," Mr. Cue said. "They're not insurmountable."

Chris Gorog, the chairman and chief executive of Roxio, which owns the new Napster service, said he, too, would open for business to Europeans this year as well - as soon as the licensing hurdles are overcome and consumers can get the same kind of choice as the United States version.

"We debuted with over half a million tracks in the U.S., and we'd like to start with the same in Europe," Mr. Gorog said. "The music studios are rolling out the red carpet, but the primary obstacle now" is getting agreements from music publishers that represent songwriters, country by country. "Our approach to the market will be to create local, national services reflective of the culture," he said.

William Booth, head of music publishing for EMI, said Sunday that he expected a single royalty agreement that covers most of Europe's publishing collection agencies to be settled within the next three to four months.

Coke solved the problem by offering its service on Mr. Gabriel's OD2 platform. OD2 has worked over the last several years to extract agreements throughout Europe, and so far it is the only service to have done so. The OD2 platform is branded largely by Web portals and Internet service providers in individual national markets, like Wanadoo in France, Tiscali in Italy and Virgin Downloads in Britain.

Charles Grimsdale, chief executive of OD2, noted that the company has had to develop support for various release dates by country, 6 pricing systems and 13 payment mechanisms. Purchases made via Carte Bleu, for example, the leading payment card in France, are cleared only by French banks.

On Monday, Cable and Wireless will introduce a music-download package for the European market. Like OD2, Cable & Wireless is aiming at companies that want to brand their own service, like Internet service providers or retail companies.

"From our analysis, there's plenty of business to be done," said Andrew Wilding, an executive with Cable and Wireless, which is a partner with the 24/7 Music Shop. "The vagaries of the European market have been factored into the platform," he added. Cable and Wireless's first customer is expected to be Phonofile, a Danish Web site.

Negotiations with holders of music licenses have not been concluded. Even before all the digital music participants are in place - Sony has said it will begin its Connect downloading business in the United States, Europe and Asia this spring, and the Rhapsody service from RealNetworks intends to export its service to Europe - analysts are predicting the inevitable shakeout.

Josh Bernoff, principal analyst at Forrester Research, said participants like Coke in Britain and Wal-Mart Stores in the United States are unlikely to be long-term players. (Coke has said it has no plans to expand the service beyond Britain.)

"This is not part of Coke's core business," Mr. Bernoff said. "The connection to music is valuable to them, but it doesn't make sense to me that a soft drink company would be the leading download site in Europe."
http://www.nytimes.com/2004/01/26/te...y/26music.html

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New Digital TV Rules Draw Fight
AP

To most couch potatoes, digital television means a sharper picture. Broadcasters see another advantage, though: They could offer up to six times as many channels.

Broadcast networks say they'll offer more channels if the government requires cable companies to carry them. More channels would mean more choices, stiffer competition and better programming, they say.

But cable companies, which have room for only a limited number of channels, say a federal mandate could force them to drop cable services to make room for extra broadcast channels. Those channels might carry nothing but infomercials or home shopping shows, they say.

The cable industry, which serves more than two-thirds of the 108.4 million U.S. households with television, insists that it, not the government, should decide which channels find homes on their systems.

The issue is before the Federal Communications Commission, which is expected to decide by spring whether cable companies must carry the extra broadcast channels.

The fight is due to the transition to digital broadcasting, which will be standard in most areas by 2006. A digital signal can carry more information than the current analog transmissions without using any more space on the broadcast spectrum.

While some stations may use their digital signals for larger and sharper high-definition broadcasts, others may use the spectrum to air to up to six channels.

Broadcasters said the newer networks -- Fox, the WB, UPN and Pax -- became viable only because cable companies were forced to carry the UHF channels with that programming. Requiring cable to carry the digital broadcast channels will offer even more alternatives, they said.

``Cable is definitely afraid of competition from free local broadcast channels,'' said Dennis Wharton, a spokesman for the National Association of Broadcasters. ``Consumers ought to be afforded the choice.''

The cable TV industry said those extra broadcast channels may eventually wind up on cable systems, but the First Amendment gives operators, not the government, the power to make that decision.

``Generally speaking, cable wants to carry compelling programming,'' said Dan Brenner, senior vice president for law at the National Cable and Telecommunications Association. ``If broadcasters have compelling programming, we'll carry it.''

Consumer advocates worry the extra channels would give the largest broadcasting companies even more control over what people see and hear. Instead of four network-controlled channels in a market, viewers could see up to 24 if each of the four major networks -- ABC, CBS, NBC and Fox -- opts for the maximum six channels.

``Until steps are taken to reduce broadcasters' dominance over the most important sources of local news and information, they should not be given the benefit of more channels that cable operators are forced to carry,'' said Chris Murray, legislative counsel for Consumers Union, the publisher of Consumer Reports magazine.

The FCC ruled in 2001 that cable companies only have to carry a single network digital channel. Of the current five commissioners, Chairman Michael Powell was the only one on the panel then. Powell supported the original ruling but has said he will consider new arguments.

The head of the FCC's media bureau, W. Kenneth Ferree, said the complexity of this issue ``makes it very difficult to predict how any of this may come out.''

In urging the FCC to reverse course, broadcasters cited the benefits of the extra programming they planned to produce if they are guaranteed space on cable systems.

ABC, for example, touted its Fresno, Calif., station that offers separate local news and weather channels. NBC's affiliates said they might carry channels devoted to city council meetings, high school sports and local traffic and weather, or use the extra channels to bring the WB, UPN and Spanish-language networks to communities. DIC Entertainment, producer of such cartoons as ``Madeline'' and ``Inspector Gadget,'' said it would create a children's network using the extra digital channels.

On the other side, networks that can be seen only on cable or satellite systems and not on over-the-air television worry that their programs will be sacrificed to make room for the extra broadcast channels. Discovery Communications, for example, says its Discovery Kids network could be dropped from cable systems if they are forced to carry DIC's children's channel.

In the months leading up to the expected decision, lobbyists for the broadcasting and cable industries have submitted thousands of pages of documents and met with commissioners and their staffs.

Those supporting the broadcasters include the lawyer-lobbying firm of Shaw Pittman, whose members include former Sen. Connie Mack, R-Fla. Cable industry advocates include Laurence Tribe, who represented Al Gore before the Supreme Court in the 2000 Florida recount case.
http://www.nytimes.com/aponline/tech...igital-TV.html

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Government Planning Cyberalert System
Robert Lemos

The U.S. Department of Homeland Security plans to announce details of a cyberalert system on Wednesday, two days after a virus called MyDoom spread rapidly across the Internet.

The system, which will be detailed by the department's National Cyber Security Division, could mimic the color-coded scheme the government uses to warn citizens and alert law enforcement authorities of terrorism threats, a source familiar with some details of the plan said.

The latest e-mail virus, MyDoom, underscores the need for a system to alert and inform Internet users. The mass-mailing computer
virus took off on Monday, spreading faster than any previous virus, security experts said this week. The alert system could include a common way for home and business users to report security issues and Internet threats.

Details of the early warning system will be outlined by Amit Yoran, the division's director, according to a press release issued by the department Tuesday.

The announcement comes about two months after officials met with technology industry experts to form plans in five areas: awareness for home users and small businesses, cybersecurity early warning, corporate governance and security, technical standards and building better security into software.

Those meetings built upon the National Strategy to Secure Cyberspace, a policy blueprint the Bush Administration released almost a year ago. While the strategy has been criticized as being soft on an industry keen to avoid regulation, several administration officials talked tough at the National Cyber Security Summit in December.

The National Cyber Alert System will be announced at a press conference in Washington, D.C., early Wednesday.
http://news.com.com/2100-7348-5148708.html

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TiVo Acquires Start-Up Strangeberry
Richard Shim

Digital video recording company TiVo announced Tuesday that it purchased start-up Strangeberry for an undisclosed sum in equity. San Jose, Calif.-based TiVo is acquiring intellectual property assets and engineering staff from Strangeberry, which has been using home networking and broadband technologies for content delivery and other entertainment services on televisions. The deal allows TiVo to step up a strategy, which it outlined at the Consumer Electronics Show earlier this month, of expanding the TiVo service beyond digital video recording.p>

TiVo separately announced the issuance and sale of 8 million shares of common stock at $9.30 per share to institutional investors managed by a firm headquartered in Boston. Proceeds of the offering will go toward general corporate purposes, primarily to fund sales, marketing and customer acquisitions as well as research and development, capital expenditures and working capital.
http://news.com.com/2110-1041-5148579.html

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P2Pca$h?

Cash Is Not King: The Future Of Consumer Electronic Payments
Honnus Cheung and Ben Arber

Yahoo's regional financial controller Honnus Cheung and HSBC vice president Ben Arber discuss the future of consumer electronic payments.

- While many payment solutions have been on offer in the recent past, most of them have proven unsuccessful due to overambition and failure to focus on the customer.

- However, the advent of e-mail brought versatility to these solutions for merchants and has proven attractive to customers who appreciate online auctions.

- E-mail money allows cross-border payments for customers, and holds additional corporate opportunities with its cost savings, risk reduction and increased efficiency.

- However, the growth of such solutions may be inhibited by the lack of inter-operability, customer registration, regulatory environ-ments, and security issues.

No more coins and notes. That is the banner under which numerous new business-to-business (B2B), business-to-consumer (B2C) and consumer-to-consumer (C2C) electronic payment solutions have been launched. Even for a close industry watcher, the sheer weight of new schemes launched is difficult to keep up with, particularly as most have names that end in "-cash" or start with "pay-". Many failures litter the landscape. Yet there have also been some notable success stories, and the potential benefits remain attractive for both consumers and merchants.

So why have so few of these payment solutions succeeded? What is the promise of such initiatives? And how relevant are they to the corporate treasurer - now and in the future?

The Story

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Revamping Costs and Rising Yen Hurt Sony Profit
Ken Belson

Profit at the Sony Corporation fell 26 percent in the October to December quarter, hurt by restructuring costs, a stronger yen and declining revenue in the movie and video game divisions.

Sony's profit of 92.6 billion yen ($874 million) in the quarter was, however, larger than expected, in part because of improved sales of home electronics during the holiday shopping season. Sales over all rose 0.7 percent, to a quarterly record of 2.32 trillion yen ($21.9 billion).

Sony, the world's second-largest electronics maker, also raised its profit goal for the financial year ending in March by 10 percent, to 55 billion yen ($519 million), because of the yen's decline against the euro. The company did not alter its revenue goal of 7.4 trillion yen or its operating profit forecast of 100 billion yen.

While the declines in revenue from PlayStation 2 consoles and movies were expected, the recovery in home electronics sales was encouraging for investors. Sony, which generates more than 60 percent of its sales from audio-visual equipment and other electronics, has been hurt by low-cost competitors and a lack of hit products.

Sony's performance, while far from robust, suggested that the company's biggest worries had eased. For the first time in three years, sales of electronics grew by more than 10 percent in every major region in the world.

"Our year-end performance was stronger than expected," Sony's chief financial officer, Takao Yuhara, said. "What is important is that we continue to perform well in the coming quarters and remain on a growth trend."

Sony's movie studio has also had trouble keeping pace with its record run in 2002. Recent releases like "The Missing" and "In the Cut" have done poorly at the box office and have fallen far short of previous hits like "Spider-Man" and "Men in Black II." Profits from the movie unit fell 82 percent in the quarter.
http://www.nytimes.com/2004/01/29/bu...ss/29sony.html

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P2P Companies Say They Can't Filter
John Borland

Responding to sharp criticism from legislators, a group of file-swapping companies told Congress that they had no ability to block copyrighted files or child pornography from their networks.

As part of a lengthy letter to Sen. Lindsay Graham, R-N.C., the P2P United trade association said Wednesday that file-swapping companies should not be held to a standard that is technologically infeasible.

Lawmakers "have been deliberately misinformed by self-interested industry about the technological capability of peer-to-peer services," said Adam Eisgrau, P2P United's executive director. "It is not that we won't filter out copyrighted material and inappropriate sexual material. It's that we can't."

The group's claim, backed up by considerable technical documentation, comes as calls for filtering of file-swapping networks are rising in Congress and in courts.

Graham and a quartet of other legislators sent a letter to P2P United's member companies last November, asking for assurances that the file-swapping companies would attempt to stop illegal material from being traded through their networks.

Most pointedly, the letter asked that the companies work to create some kind of filters that could block copyrighted material and pornography.

File-swapping companies have contended that this kind of filter is impossible in a decentralized system such as Gnutella or Kazaa.

In older file-swapping services such as the original Napster, in which searches were routed through a central point, a filtering mechanism was more feasible.

But in wholly decentralized networks, in which searches radiate out through a constantly shifting array of "nodes," or individual computers, filters are impractical, the group said. Only by forcing the networks to change into something else--a centralized system, for example--would effective filters be useful, the group added.

However, some companies say they have the ability to do some effective filtering.

A company called Audible Magic, which installs song-recognition software inside Internet service provider networks, with the promise of identifying and blocking trades of copyrighted songs, demonstrated its software to members of Congress and the press in Washington D.C.

The demonstrations, set up by the Recording Industry Association of America (RIAA), were intended to refute the notion that filtering is impossible on file-swapping networks.

"Audible Magic proves (filtering) can be done," RIAA Chief Executive Officer Mitch Bainwol said. "This is not speculation; it's a real live technology that's on the market today. If the peer-to-peer community is serious about becoming legitimate, one would think they would explore this kind of technological tool to help address the piracy problem."

P2P United's Eisgrau said that neither the RIAA nor Audible Magic had contacted the organization or its members with any information about the technology. He said that the file-swapping members would be happy to do a live engineering test under the auspices of Congress.

"If the equivalent of cold fusion has been invented in the software context, it ought to be a matter of science and engineering to see if it works," Eisgrau said.

The two sides may be talking about different types of filters, however.

As currently offered, Audible Magic's technology functions inside telecommunications or corporate networks, essentially serving as the equivalent of a roadblock, looking into cars--or in this case, data packets--as they pass and obstructing unauthorized information. That could stop file swappers on a given service provider's network, but would do little to impede swapping overall.

By contrast, a filter that worked universally throughout a distributed file-swapping network such as Kazaa would likely have to be integrated into the software itself. Additionally, unless a gigantic and constantly changing database of songs, movies and other material were to be included along with every piece of file-swapping software, it would require the software filters to check in with a central server each time a trade or search was initiated.

Peer-to-peer companies say they don't intend to add those centralization features to their software and note that a federal judge has said that decentralized file-swapping network tools such as Gnutella are legal to distribute. An appeals court in Pasadena, Calif., will re-examine that ruling next week.
http://news.com.com/2100-1038-5149720.html

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Sun Sees Jxta Gathering Steam

More than 2 million developers have downloaded the free code
James Niccolai

Sun Microsystems Inc. says its Jxta technology for peer-to-peer computing is gathering steam and may soon make its way into some of its own products.

The number of developers who have downloaded the free Jxta code from the Web passed 2 million recently, up from about a million last March, said Juan Carlos Soto, director for advanced technologies at Sun. The number of developers who have registered at www.jxta.org is much lower, however, at about 16,200, up from 12,000 a year ago.

"There's a lot of interest in Jxta out there and a lot of developers are working with the technology," Soto said.

A key goal at Sun has been to make Jxta better suited for use in commercial applications. In December it released version 2.2 of the J2SE (Java 2, Standard Edition) implementation of Jxta, an upgrade which focused on improving security and performance. A further release, with the code name Churrasco, is due in March.

Unveiled almost three years ago by Sun's then chief scientist, Bill Joy, Jxta provides a communications mechanism for linking peers -- such as a PC, server, phone or PDA -- in a distributed network. Such peer- to-peer networks typically aren't run by a central server, and Jxta provides a way for the peers to locate and communicate with each other directly.

It is offered under an open source license, which means developers can tinker with the code. It is also free, making it attractive to some. But the fact that it is free has also been a source of criticism. Some analysts have wondered what Sun gets in return for its investment in developing Jxta, and why it hasn't made use of the technology itself.

That may be about to change. Jxta is mature enough that Sun will soon be using it in some of its own desktop and server products, Soto said. "What you are going to see is more and more Sun products start to include the Jxta technology in them," he said.

Sun has already shown how Jxta could work as part of its N1 system for managing data centers. Installed on a group of servers, the technology can be used to indicate when servers go on and off-line, and help to allocate computing jobs accordingly, Soto said.

Jxta may also find its way into Sun's Java Enterprise System, a bundle of server software formerly called Sun ONE. For example, it could be used to improve the performance and scalability of the instant messaging component, in part because Jxta is unhindered by firewalls and NATs (network address translators), Soto said.

"Some of these things will be coming out pretty soon," he said, declining to be more specific.

In an effort to show that interest in Jxta is growing, Sun is also highlighting companies using Jxta in their applications. One of them is Verizon Communications Inc., which is using Jxta as part of an upcoming service called iobi, an advanced call management service designed to help customers juggle calls between their work, home and cellular phones.

As part of the service, due later this year, iobi will be able to set up a data channel automatically between two PCs, so that callers can exchange files or collaborate on documents. Iobi uses Jxta to locate those PCs on a network and establish the connection, said Nosh Minwalla, a Verizon senior architect.

Linking the PCs in a peer-to-peer fashion is preferable because it saves the expense of running an email server and storing files there, he said. Jxta also helps "tag" the data files so they are tied to a particular voice call. At the end of the day a user can view all related calls and file transfers in one list, Minwalla said.

Verizon explored other technologies, including Gnutella and some peer-to-peer tools that Microsoft Corp. recently introduced. It picked Jxta mainly because "it's very extensible -- there aren't a lot of restrictions on how we run our applications," Minwalla said. It also liked that the software is open source, and that it can handle firewalls and NATs straight out of the box, he said.

Another company using the software is Nokia Corp., Soto said. The company installed Jxta on some of its infrastructure servers used internally, creating a peer-to-peer server network. "When one of these servers comes online or goes offline it is automatically discovered, and when it does come back online you can send the latest software to it," Soto said.

Yet another company, Brevient Technologies Inc. of Milwaukee, used Jxta as a communications protocol for its file sharing and Web conferencing product.

To give users more visibility into what's coming, Sun has also published a roadmap for Jxta at http://platform.jxta.org/. It has also switched to releasing updates on a quarterly release cycle, as it does with its other products.

"Our main focus is around the areas that we think will enhance the capabilities for enterprise use -- that's around enhanced security, enhanced performance and simplifying the APIs (application programming interfaces)," Soto said.
http://www.infoworld.com/article/04/...sunjxta_1.html

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US DOJ Probing DVD Group
ILN

The US Department of Justice has started a preliminary inquiry into the activities of a DVD industry group, led by Sony, Matsushita, and Philips Electronics. The inquiry is part of a global battle, involving powerful companies from the consumer-electronics, high-technology and movie industries, over a new format for DVD players.
http://online.wsj.com/article/0,,SB1...410861,00.html

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Stores Nix Disposable Flicks
Katie Dean

A Texas grocery chain has decided to stop selling disposable DVDs, a product that outraged environmentalists and apparently didn't sell too well, either.

About 20 H-E-B grocery stores in the Austin area sold the EZ-Ds, vacuum-sealed movies that, once opened, play for 48 hours before a chemical reaction on the surface of the discs renders them unplayable.

Buena Vista Home Entertainment, a division of Disney, has been test marketing the product since September. More than 30 movies are now available in the disposable format, including Chicago, Freaky Friday and The Waterboy. The discs sell for about $7.

H-E-B stores will stop selling the EZ-Ds in the next two or three weeks, according to Susan Ghertner, environmental affairs manager for the grocery chain.

Ghertner said the decision was not made for environmental reasons; rather, company officials "made the decision strictly on sales."

"It just wasn't a good fit for us," she said. "It didn't turn out to be an item that our customers were looking for."

A Buena Vista representative declined to comment.

Environmentalists cheered the news. "We consider this a big victory," said Robin Schneider, executive director of the Texas Campaign for the Environment, which has protested outside stores that sell the EZ-Ds. "We are calling on other retailers to follow the lead of H-E-B."

"There are clearly less-wasteful alternatives to marketing movies than disposable DVDs," she said.

Flexplay, the company that manufactures the discs, has touted the product as a solution for those who find renting movies inconvenient and are sick of paying late fees. "Make it EASY on yourself," the EZ-D website reads.

The disposable movies are currently available in three other markets around the country: Kansas City, Kansas and Missouri; Charleston, South Carolina; and Peoria and Bloomington, Illinois. Stores that sell the movies include 7-Eleven, Walgreens, Winn-Dixie, Sam Goody and Cub Foods, among others.

Last October, Wired News surveyed a handful of stores that sell the EZ-D and found that the product hadn't really caught on with shoppers.

Buena Vista and Flexplay offer several options for those conscientious customers who want to recycle their expired EZ-Ds. Movie fans can mail old EZ-Ds to GreenDisk to be recycled, or they can drop off the useless DVDs at drop-off sites listed on the EZ-D website.

Customers also can participate in the EZ-D Incentive Program, which awards a free disposable DVD to customers who send back six expired movies.
http://www.wired.com/news/digiwood/0,1412,62083,00.html

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MikeRoweSoft Names His Price
AP

Mike Rowe, a 17-year-old resident of Victoria, British Columbia, has agreed to pick a new name for his website, currently called www.mikerowesoft.com, said Microsoft spokesman Jim Desler on Friday.

Mike's father, Kim Rowe, confirmed that his son had struck an agreement with Microsoft. Rowe said his son could not be interviewed Friday because he had to study for final exams.

Mike also is working feverishly to put together a new website, his father said.

Desler said Microsoft would cover Mike's costs of changing to a new website and redirecting traffic from the old site. Microsoft also had agreed to help the teen get Microsoft certification training and other gifts, including an Xbox game console, he said, and has invited Mike to a technology festival in March at the corporation's headquarters in suburban Redmond, Washington.

"We wanted to do this in a way that's going to foster his interest in technology," Desler said.

In a posting on his website earlier this month, the teen said he received a 25-page letter from Microsoft informing him he was committing copyright infringement, and threatening legal action.

Desler said Friday that Microsoft believes it's important to take steps to prevent widespread infringement of its name. But he conceded Microsoft's original approach was "admittedly maybe impersonal."
http://www.wired.com/news/business/0,1367,62044,00.html

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Six Plead Guilty To Stealing And Distributing Computer Software
David Tirrell-Wysocki

CONCORD, N.H. — Six people have pleaded guilty to stealing and distributing computer software around the world after undercover agents got into the operation and sorted through millions of computer transactions to build cases against them.

Dozens more arrests are expected in the schemes in which suspects copied and shared the software through stolen Internet links at banks, communications companies and data centers, including at the Nebraska Department of Roads.

"We have records with respect to thousands of people," said Assistant U.S. Attorney Arnold Huftalen. "Everyone we are looking at is involved in high-priced software applications. It's not a $5 song. We've got pieces of software on servers with retail value in excess of $115,000 per copy," everything from games to IBM and Microsoft programs, he said.

Huftalen said the case developed with the help of a New Hampshire resident involved in one of the schemes.

He said the software industry estimates it loses $12 billion a year to pirates, who generally are not in it for money.

"It's a combination of ego and a sense of culture that they've grown up with," he said.

It took authorities three years to compile the case — entering secret networks, seizing computers, tracking connection records and matching coded transactions with suspects.

"We used informants, cooperative witnesses and undercover agents who assumed false identities through the Internet to infiltrate a number of software piracy groups around the country," Huftalen said.

Agents seized computers two years ago, he said, and had three computers of their own working 24 hours a day, seven days a week for a year recording transactions.

Without the knowledge of the businesses, the servers used to distribute the software were based at the Bank of America in Boston; Verio Data Center in Sterling, Va.; Qwest Communications lab in Balston, Va.; a cable television company in Maryland; a computer communications company in Brandon, Fla.; an apartment at Tulane University in New Orleans; and the Nebraska Department of Roads.

Others were based at a North Easton, Mass., house and an Ames, Iowa, apartment.

Business or university computers generally are used, he said, because they have larger bandwidth, or Internet connectivity, and heavy Internet traffic is unlikely to be noticed or detected.

Seven people from at least four states have been charged. Six have pleaded guilty to violating federal copyright laws. Most were computer system operators at their companies, Huftalen said.

Three entered pleas this week: Jordan Zielin, 30, of Brooklyn, N.Y., a computer support employee at the Bank of America; John Neas, 49, of Holbrook, Mass.; and Kenneth Woods, 31, of Warrenton, Va., who worked at Verio Data.

Three others pleaded guilty previously, one is expected to plead next week, and dozens more may be arrested, he said. "We're far from finished."

Huftalen said operators steal an organization's computer services and often convert their employer's computer equipment to run the operation.

He said a New Hampshire resident who managed a piracy group began cooperating with the FBI in 2000. The witness had access to several sites and introduced undercover agents to them. The agents made other contacts and spread their links to more sites.

Huftalen said getting into a network was the easy part. The tedious examination of seized computers and their data lengthened the investigation.

Huftalen said the individual sites contained information ranging from enough to fill about 275,000 floppy discs to more than 700,000 floppy discs. Packed neatly, he reported, 700,000 discs would fill about three dump trucks.

Here's how a system generally worked:

A pirate removed anti-copy protection from software and posted it on a private site.

"Once posted ... and the cracking group or individual responsible takes its, or his bow, so to speak, for having been the first to crack it, the software is thereafter made available for distribution to other" sites, Huftalen said in his presentation.

"And so it goes, on and on, until the cracked software has been posted to hundreds, if not thousands" of sites, he said.

The networks are protected by security codes and connections that hide their addresses and only allow access from users with a password who use pre-registered computers.
http://www.usatoday.com/tech/news/co...ate-days_x.htm

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Comcast Targets Internet 'Abusers' But Won't Reveal Limits
Matthew Fordahl

By all accounts, George Nussbaum demands a lot from his Internet connection. He streams video and transfers large files from his office. His family downloads movie trailers and his stepson listens to and buys music online.

Nussbaum subscribes to his cable TV provider's high-speed Internet service, which, he thought, was built for such high-bandwidth activities. Then, in November, he got a letter from the provider, Comcast Corp., ordering him to dial down his usage or face service termination.

Until last summer, the service was advertised as "unlimited."

But Comcast, citing a fuzzy "acceptable use" policy, is now cracking down on the heaviest users on the premise that their consumption could degrade neighbors' service.

A number of broadband providers are beginning to offer different tiers of service, charging high- volume users more. Some, particularly wireless providers, charge extra for heavy use.

Comcast, critics say, is trying to impose limits without telling consumers that the service is limited.

Nussbaum, who at first had no idea how many gigabytes he consumed, was willing to cut back. He called to find out by how much, but customer service had no answer. Then he asked how much he used. Again, Comcast wouldn't provide a number.

Last month, Nussbaum got a second letter threatening suspension or termination, so he decided to sign up for a digital subscriber line offered by his phone company, Verizon Communications.

"How am I supposed to know what my limits are?" said Nussbaum, an engineer from Plaistow, N.H. "It was actually kind of ridiculous."

Comcast's letters have been a hot topic of discussion on BroadbandReports.com, a popular online forum. More than 5,000 messages have been posted since the warnings started arriving last summer. Most offer comments, though some are reports of having received a warning.

"They have the right to control their service and offer different services to different people," said David Willis, an analyst at the Meta Group. "The problem is you can't keep changing the rules all the time."

Most broadband companies have vague policies, but Comcast's appears to be the most aggressively enforced. It provides no tools for monitoring bandwidth, and does not give any specific guidance.

Comcast says the few people who receive the warning letters typically consume 100 times more than the average user.

"The total number of customers who have had their service disconnected is well below one one- hundredth of one percent of our overall Internet customer base," spokeswoman Dana Ryan said, reading from a prepared statement.

But the nation's largest cable company refused to reveal the average consumption among its 4.8 million high-speed Internet subscribers. Ryan also would not say how many received warnings or exactly how many have had their accounts suspended or terminated.

A senior Comcast technician, who asked to remain anonymous for fear of losing his job, said letter- triggering usage is typically about 100 gigabytes a month, though it varies from city to city.

A hundred gigabytes of usage a month may not strain the system but some abusers, he said, consume more than a terabyte of data each month -- equal to about 1,000 gigabytes, or 1,000 copies of the Encyclopedia Britannica. Many run Web servers or offer copyright music or videos. Thirty minutes of high-quality video can consume up to a gigabyte.

Excessive use is a problem for Comcast and other providers because they must predict bandwidth use and buy the capacity. If too much is consumed, not only can the local network bog down; it also could affect Comcast's profit margin.

The enforcement comes as cable companies are trying to maintain their lead over DSL, which offers high-speed access over phone lines. Comcast and several other cable firms are doubling their top download speeds to 3 megabits per second, which makes it easier for users to consume more bandwidth and cross any limits.

DSL providers are fighting back by dropping prices -- as low as $27 a month, compared to Comcast's $43. The phone companies stress that they don't restrict usage.

They're less likely to do so because digital subscriber lines are not shared until they reach the phone company's facility. Cable users share the same data pipe with their neighbors.

"I am not aware of any DSL provider that limits the number of bytes available or charges more if a circuit is used more," said Verizon spokesman Eric Rabe.

But cable companies have a history of limiting use. Until recently, for example, Comcast specifically barred its residential customers from using virtual private networking software, which creates secure connections for telecommuters, unless they upgraded to the business plan.

"The cable companies in the U.S. have this history of trying to engineer multiple, tiers, multiple grades of service," Willis said. "So far they've been highly unsuccessful in doing that."

People who received Comcast's bandwidth abuse letters and were willing to discuss their usage patterns publicly were shocked at the "Twilight Zone" experiences they had with customer support.

Randy Jackson of Colonia, N.J. received form letters with blank date fields. Longtime subscriber Tallon Nishihata of suburban Tacoma, Wash., said his letters referred him to a pricey business-grade service that's not available in his area.

One man, a British expatriate in Philadelphia who used to transfer home movies to family in Europe, asked for anonymity because he feared Comcast would unplug him, leaving him with nothing but a dial-up connection because he doesn't qualify for DSL.

"They play the card that I've been causing problems for people in the neighborhood," he said. "If that's the case, that's fair enough, but show me some evidence."
http://www.securityfocus.com/news/7940

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Porn in pain.

Sex Site Sues Credit Cards Over Piracy
Adam Tanner

Internet piracy has devastated the music business, threatened the movie industry and may now undercut one of the most successful corners of the Web: pornography.

A California publisher of a pornographic magazine and Web site sued Visa, MasterCard and other financial institutions on Wednesday, alleging they facilitated the illegal sale of pirated sex images flooding the Internet.

Perfect 10, whose slogan is "The World's Most Beautiful Models Expose All", based the case on claims other Web sites were stealing their sexual imagery to make money, often through duplicitous advertising.

In a complaint filed in the U.S. District Court for Northern California, the firm sued Visa International, First Data Corp., Cardservice International, MasterCard International, Humboldt Bank and Does 1-100.

"The defendants in this case ... are knowingly providing crucial transactional support services for the sale of millions of stolen photos and film clips worth billions of dollars that belong to Perfect 10 and third-parties," the suit reads.

The complaint says these firms have made large sums from the sale of pirated erotica and thus should have a responsibility for any related copyright violation.

"Perfect 10 has concluded that the only way to stop the proliferation of such Web sites is to go to the top, namely the payment card associations and the primary third-party processor, each of which is knowingly and effectively acting as fences for the sale of billions of dollars of stolen content," the lawsuit reads.

MasterCard officials did not return calls for comment. A Visa spokesman said he was unable to find company legal experts for their response.

A Losing Proposition

The publisher of Perfect 10, Norman Zada, said in an interview that he had lost $29 million since setting up his business in 1996, including $8 million on legal fees. He said the problem was that he was spending thousands of dollars for nude photography sessions while many Internet sites were stealing his and other images.

"The reason it was so hard to make money is because while we were paying for our content, there were many Web sites out there that were competing against us that were stealing theirs," said Zada said, whose business is based in Beverly Hills. "It's pretty impossible to compete in that situation."

The problem of Internet piracy has hit the bottom lines of many businesses, with the recording industry, Hollywood and software businesses the most prominent.

"There probably isn't a lot of sympathy for people in the adult magazine business and that might be part of the problem," Zada said. "But the thieves are stealing from everybody so all the copyright holders are suffering as a group."
http://uk.news.yahoo.com/040129/80/eknjl.html

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Uber-Nerd Couture Takes Centerstage
D. Parvaz

Mike Urban/Seattle Post-Intelligencer

The nature of fashion is insiderish -- it's all cliques, what's in, what's out. And like life, the definition of what's in can seem terribly limited and arbitrary.

Hence the creation of the nerd (aka geek, dork, etc). This awkward, frequently brainy outsider often comes into his or her own later in life, when nerddom can be celebrated with great gusto and expressed even in the form of fashion. That's where outsider chic (the less rebellious cousin of fashionista misfit chic, a la mass-produced John Galliano creations) comes into play.

Outsider chic is "sort of a realization that it (fashion) can be awkward but fun," says Brooke Fotheringham, one of 11 local designers who will be featured at Friday's Nerd Rock fashion show downtown.

The soft-spoken 28-year-old says she grew up shy and nerdy, but she found a way to get attention with her own odd style. She relied on her clothes as conversation starters (so she wouldn't have to take that no-doubt terrifying first step herself). Fotheringham's designs for tonight's show are informed by oceanography (nerds of the world, rejoice!), a sort of "nerds under the sea" theme.

A Joan of Arc purple sheath with a fishnet overlay is worn with a headdress Fotheringham (whose Late Night Creations/Insomnia Designs will be available at Belltown's Damsel Collective soon) says is inspired by a hammerhead shark and Holly Hunter's hairstyle in "The Piano."

"These are nerdy because ... they really don't belong anywhere," says Fotheringham. But her clothes are only one incarnation of outsider chic.

"Most of my girls are foxy," says designer Julia Carlisle, who describes her aesthetic as one that provides girls with "super sexy, super fun, super slutty" things to wear. A Carlisle girl isn't afraid to show off her body in "costumey, burlesque" pieces. Carlisle herself shows up to our interview with lots of leg wrapped in tights (with visible garters, of course) and smoky eyes and bright red lips.

"This whole gray suicide city ... I'm over it," says Carlisle, 21, clearly not down with our more austere ways. Then again, neither is Fotheringham, who injects her fashion with crazy colors -- a filmy goldfish orange top here, an abbreviated salmon-skin jacket there (remember, these aren't wallflower nerd gear -- they're conversation pieces).

This naughty-kitty look, believe it or not, is Carlisle's response to living in Seattle -- you can check out her Heroin Swank Designs at Capitol Hill's Krystal Vintage.

Braylene Jones embodies the DIY element of outsider fashion. Can't find it? Make it. Her leather accessories -- cuffs, bags, change purses -- have a homespun look. With their exposed stitching and hand-stamped skull 'n' crossbones, they look anything but mass-produced.

"I just couldn't find anything that I liked -- or if I found something I always had to have it altered," says Jones, explaining her desire to construct sturdy leather bits. She says that in L.A., she sells the accessories in "ridiculous" colors like hot pink with floral attachments.

The Seattle market sticks with red, black and white as its faves (her stuff can be found at Capitol Hill's Hello Gorgeous and Double Trouble).

The three designers have come together as part of a large group of artists taking part in the Hometown Gravy fund-raisers (tonight's will be the first of eight) for a community arts school. Carlisle, Fotheringham and Jones, among dozens of others, are on board with the project. Hometown Gravy is a non-profit arts organization that aims to open a community arts education center in Fremont next year.

The driving forces behind Hometown Gravy are two self-professed nerds, Megan Newman and the Rev. Levi "Bubba" Greenacres (otherwise known as DJ Nerd Rock).

The two have been working with local artists and activists for some time, trying to get their project off the ground. They have the support of local artists, their Fremont location and now they're working on funding.
http://seattlepi.nwsource.com/lifest...derchic30.html

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Pay Service Turns CDs Into MP3s
Leander Kahney

Nova Spivack, a well-heeled New Yorker and technophile, had been dying to get an iPod for a long time.

The problem wasn't money, but Spivack's giant CD collection. He couldn't face the chore of converting 1,000- plus CDs to digital format.

Then Spivack discovered RipDigital, a firm that offers a surprising but timely service: For about a dollar a disc, the company converts entire CD collections to MP3 files, all nicely organized by artist and album.

Spivack boxed up his CDs and shipped them to Rip Digital. Four days later he got them back, along with an external hard drive containing MP3s of his entire CD collection.

"It's really changed my listening experience," Spivack said. "The nice thing about digital is it reminds you what you have, instead of it sitting in a case on your wall. I made a bunch of playlists, and I'm listening to music all the time again."

It may seem odd that a company could turn a profit by doing a chore that anyone can do. But RipDigital is another sign that music is steadily going digital. Instead of downloading MP3s from file-trading networks and ripping them to CDs, customers like Spivack are more interested in converting their CD archives into MP3s.

"I plugged (RipDigital's hard drive) into my PC, plugged in my new iPod and 10 minutes later I had my collection on my iPod," Spivack said. "I got my whole collection on my PC in about half an hour, instead of a month."

Spivack, the CEO of Radar Networks, isn't looking back. Having digitized his collection, Spivack tossed all the CD cases in the trash. He's keeping the original disks only as backup.

"I'm going to be buying music online from now on," said Spivack. "I'm never going to touch another CD. I'm not even going to look at another CD."

Dick Adams, one of the company's three co-founders, said the service has been growing in popularity since its launch in December.

"We've been overwhelmed with orders and scrambling to keep up," he said. "It's been fabulous."

Adams said the company initially targeted DJs, radio stations and institutions like hotels and libraries. Adams said they hoped for demand from audiophiles and collectors, but were surprised by the reaction from consumers.

"There are a lot of people out there who have more money than time," said Adams. "Most people don't roll their own cigarettes, and a lot of people don't want to do this themselves."

After receiving an order, RipDigital sends customers a box with spindles for their CDs (the jewel cases aren't shipped) and a shipping label.

Customers load up the spindles, ship the package to RipDigital, and about a week later they get their discs back, along with DVDs containing their songs in high-fidelity (224 kbps) MP3 format. If they prefer, songs can be loaded onto an external hard drive.

"The quality is good," said Neal Howard, a professional DJ from Atlanta, who is using the company to steadily digitize his collection of several hundred CDs.

Though RipDigital uses MP3 format by default, the company will rip songs using any codec the customer wants -- Microsoft's WMA or Apple's AAC, for example. Adams said so far, the WMA/AAC split has been about 50/ 50.

The ripping process is highly automated -- Adams declined to go into detail, citing "competitive reasons." He said each CD is ripped individually, and the files erased after they are dispatched to the customer. The company does not keep a library of files it has ripped, Adams said.

RipDigital marks each song with a digital watermark, which can be used to uniquely identify each client. Adams said the watermark is insurance should customers start loading songs onto file-sharing networks. The company is not using the information, and has no plans to do so, Adams said.

Joe Wilcox, a senior analyst at Jupiter Research, said he was surprised that anyone would pay for a service like this. Wilcox said he ripped 400 CDs of his own on a Sunday afternoon. "It's not that painful," he said.

Wilcox also doubted that CDs are doomed. Jupiter's studies predict that for the next several years the number of people downloading music will remain in single-digit percentages compared with the number of CD buyers, Wilcox said.

"Our data shows that CDs are going to be around for a long time," he said. "MP3s and other digital formats are still in their infancy."

But for Spivack, the CD is a thing of the past.

"I've become a total iPod fanatic," he said. "In the week I've got this, I've spent about $500 at the Apple music store. My productivity is going down. Now all I do is play with digital music."

http://www.wired.com/news/digiwood/0,1412,62027,00.html

Until next week,

- js.

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Current Week In Review.

Recent WiRs -

January 24th, January 17th, January 10th, January 3rd

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

29-01-04, 09:19 PM	#1
JackSpratts Join Date: May 2001 Location: New England Posts: 10,017	Peer-To-Peer News - The Week In Review – January 31st, '04 Quotes Of The Week "What we will demand be covered is Johansen's economic losses, and court costs and what could be called compensation." - Attorney Halvor Manshaus after winning second acquittal for client "DVD Jon" Johansen. "If the equivalent of cold fusion has been invented in the software context, it ought to be a matter of science and engineering to see if it works." - Adam Eisgrau, P2P United, responding to attacks that content filtering is technically practical. "Join a bunch of hackers and geeks. Spread the word. Bring people, visuals, music. If you don't make the first train, we're also on the second, and the one after that and the one after that and the one after that." – Subway “Geek Party” invite, San Francisco. Hacker Hero Seeks Compensation After Acquittals In DVD Cracking Case OSLO, Norway (AP) - A Norwegian man who became a hacker hero for cracking security codes on Hollywood DVDs wants police to compensate him now that he's been acquitted twice of computer piracy, his lawyer said Tuesday. Jon Lech Johansen, 20, also known as DVD Jon, was 15 when he developed a program to watch movies on a Linux-based computer without DVD-viewing software. He posted the codes on the Internet in 1999 and became a folk hero among computer hackers. Norway's economic crime police charged him under data break-in laws, demanding a suspended jail sentence, confiscation of equipment and fines. However, Norwegian courts twice ruled that Johansen could not be convicted of breaking into DVDs he bought legally, nor could he be punished for providing a tool -- such as a computer program -- that others might use for illegal acts. The Oslo District Court acquitted Johansen just more than a year ago. Police appealed to the Borgarting appeals court in Oslo, and last month lost that case as well. Johansen's lawyer, Halvor Manshaus, said his client will seek about $21,800 from the economic crime police because the case had been such a burden over the past four years. ``What we will demand be covered is Johansen's economic losses, and court costs and what could be called compensation,'' Manshaus said on state radio network NRK. He did not immediately return calls to his office. Johansen had been charged after police received a complaint from the Motion Picture Association of America and the DVD Copy Control Association, which licenses the film industry's Content Scrambling System, or CSS. This month, prosecutor Inge Marie Sunde unexpectedly declined to appeal to the supreme court. Many, including Johansen, had expected a high court appeal because the case was the first of its kind in Norway. Johansen's program, called DeCSS, is one of many that can break the CSS. http://www.siliconvalley.com/mld/sil...al/7808655.htm ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Study: P2P and Legal Downloads Will Kill CDs James Maguire The combined popularity of peer-to- peer file swapping services and legal downloading sites will cause the CD format to go the way of the vinyl album, according to a study by research firm Forrester. "Piracy and its cure -- streaming and downloads -- will drive people to connect to entertainment, not own it," states the study. In particular, younger consumers have made music downloading part of their lifestyle, Forrester noted, reporting that 49 percent of 12- to 22-year-olds have downloaded music in the last month. Adding momentum to this trend is the proliferation of legal download services, Forrester said. A long list of large corporations -- from Coca Cola to Apple -- are now purveyors of music downloads for a fee. The shift from CDs to download-only music sales will take "a long, long time," Forrester analyst Josh Bernoff, the study's author, told NewsFactor, but is inevitable. "We're training a generation of young people that there's no connection between music and plastic." Launched in the early 1980s, the compact disc caused a sea change in the music industry, turning vinyl albums into collector's items. In addition to offering superior sound quality, the CD was cheaper to manufacture, allowing the music industry to promote niche artists who otherwise might never have emerged. The CD's higher profit margins meant record labels have been reluctant to part with this now venerable medium. But consumer behavior is eroding support for the CD, Forrester noted, reporting that half of downloaders say they now buy fewer CDs. The popularity of unauthorized P2P services, such as Kazaa, have cost the music industry US$700 million in sales since 1999, the research firm said. The downloading trend also is affecting the film industry. One in five young file- sharers have downloaded a film, according to Forrester, which reported that movie piracy is "three years behind music." Record labels have attempted to come to terms with the seismic shift caused by P2P technology, launching legal downloading services. Seeing the trend, dozens of large companies -- from telecom firms like Cable & Wireless to retail mega-store Wal-Mart -- have launched or are planning download services. The sound quality of these music downloads is not superior to that of CDs -- in some cases it is lower quality -- but the files can be shifted and transported among many digital devices, such as laptops and mobile phones. "The download business is growing enormously," Bernoff said. "Getting it right or getting it wrong will make all the difference in the success" of this strategy for music labels and other entertainment companies. The CD is not dead yet, "but the more energy a company puts into trying to preserve the CD business, the worse off they're going to be," he said, "and the more energy they put into trying to get the download business right, the better off they're going to be." By 2008, music downloads will account for a third of music industry revenue overall, Yankee Group analyst Mike Goodman told NewsFactor, echoing a conclusion from the Forrester study. The overall music market will grow, and download sales will lead this growth, he says. The shift away from the CD is not a threat to the record labels in Goodman's view. Much of the record labels' recent revenue dips are not due to digital downloading but to the fact that labels have produced fewer CDs, he explained, focusing only on clearly profitable titles. "Any time the music industry cries poverty, you can take that with a grain of salt," he observed. Whether legal download sites will survive in the face of unauthorized P2P services is a key question facing the industry as it gradually shifts away from the CD. The essential task for the record labels is to "marginalize the P2P services where it's a 'youthful indiscretion,'" Bernoff said. He pointed to the recent decision by Pennsylvania State University to license the now legal Napster service to provide students with an alternative to unauthorized downloading. Many universities are considering a similar approach, he said. The legal services eventually will overtake file-swapping services, but "it's going to be a slow process," Goodman says, not likely to occur before 2007. But he added a caveat to his prediction: "If we see easy-to-use anonymous P2P sites out there," he said, referring to file-swapping sites in which neither the downloaders or file- sharers are traceable, "then all bets are off." http://view.atdmt.com/TMI/iview/nwsf...0751686076306/ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Just Say 'No' to Record Labels Associated Press CANNES, France -- Rock veterans Peter Gabriel and Brian Eno are launching a provocative new musicians' alliance that would cut against the industry grain by letting artists sell their music online instead of only through record labels. With the Internet transforming how people buy and listen to songs, musicians need to act now to claim digital music's future, Gabriel and Eno argued Monday as they handed out a slim red manifesto at a huge deal-making music conference known as Midem. They call the plan the "Magnificent Union of Digitally Downloading Artists" -- or MUDDA, which has a less lofty ring to it. "Unless artists quickly grasp the possibilities that are available to them, then the rules will get written, and they'll get written without much input from artists," said Eno, who has a long history of experimenting with technology. By removing record labels from the equation, artists can set their own prices and set their own agendas, said the two independent musicians, who hope to launch the online alliance within a month. Their pamphlet lists ideas for artists to explore once they're freed from the confines of the CD format. One might decide to release a minute of music every day for a month. Another could post several recorded variations of the same song and ask fans what they like best. Gabriel, who has his own label, Real World Records, said he isn't trying to shut down the record companies -- he just wants to give artists more options. "There are some artists who already tried to do everything on their own," he said, adding that those musicians often found out they didn't like marketing or accounting. "We believe there will be all sorts of models for this." A representative with the venture said other musicians had expressed interest in participating in the alliance, but did not provide names. One band that has found its niche online is the jam band Phish, which sells downloads of its concerts on a popular website. The band's relationship with its devoted fans is often compared to that of the Grateful Dead, and the site is another chance for close contact. But it also generates plenty of money: more than $2.25 million in sales since 2002. What's driving the movement is the success of legitimate download sites such as Apple's Internet music store, iTunes, which sells songs for $1 a pop in the United States. Both Gabriel and Eno started their careers in the 1960s and remain immensely influential. As a means to help unsigned artists, their effort "is certainly going to be a valuable and interesting thing to do," said Josh Bernoff, principal analyst with Forrester Research in Cambridge, Massachusetts. "But for anyone (already) signed it's almost certainly a violation of their contract," said Bernoff, who addressed the conference over the weekend. "It's not in a record company's best interest to have large pieces of music out there that they don't have control of." Gabriel co-founded a European company, On Demand Distribution, which runs legal download sites in 11 European countries. The company would provide the technology for MUDDA, though Gabriel and Eno are looking for online partners. Europe's sites haven't yet caught up to the success of the U.S. portals. Apple's iTunes, for example, is planning a European launch this year, which is expected to build interest in legal downloading in a market where many people don't realize there's even such a thing. Because both legal and illegal sites offer tunes a la carte, many in the industry believe they'll make albums less important by putting the focus on catchy singles. Eno and Gabriel both suggested they'd welcome a chance to make songs that stand alone. "I'm an artist who works incredibly slowly," Gabriel said. "If some of those (songs) could be made available, you don't have to be so trapped into this old way of being confined only by the album cycle." The former Genesis singer and world music promoter is interested in putting multiple versions of the same song online. He's also looking forward to being able to hear unfinished music from other artists. "We tend at the moment ... to try to find a moment when a song is right. You stick the pin in the butterfly and put it in the box and you sell the box," he said. "Music is actually a living thing that evolves." http://www.wired.com/news/digiwood/0,1412,62050,00.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ CD Lock Loosened For Freer Copying John Borland Macrovision released a new generation of its antipiracy technology on Thursday that it hopes will make copy-protected music CDs more attractive to consumers and record labels. The update attempts to simulate most of what people are doing with CDs on their computers. Content owners such as record labels would be able to set the "usage rules" on the Microsoft Windows Media files included on a Macrovision-protected CD, allowing a specified numbers of CD burns and transfers to portable devices, for example. Macrovision hopes that its new technology, called CDS-300, will make CD copy protection more palatable to consumers who have grown used to the restrictions on music purchased from online song stores. "Before, you had the 'second session' that was bolted to the disc," said Adam Sexton, Macrovision's vice president of marketing. "We're pleased we can now deliver the same functions and can go 'mano a mano' with the online services." The copy-protection company's previous software blocked people from making copies of CDs by rendering the music files invisible to most computers. However, the protected CDs also held additional versions of the songs in the Microsoft Windows Media format, which could be played on PCs. This separate set of music files, called a "second session," could not be transferred off the CD or put on portable devices, however. That restriction stood in poor contrast to songs purchased from Apple Computer's iTunes, Napster or other services, which can be burned to a CD, used on several computers, or transferred to a portable device. They also include some anticopying restrictions, however. Loosening the restrictions on copy-protected CDs may represent a step forward for digital rights management, but the company's technology is likely to remain controversial with consumers. Macrovision's software and rival products from companies, such as SunnComm Technologies, are intended to curb unregulated CD copying and the practice of "ripping" unprotected MP3s, which can be distributed through file-swapping services or by other digital means. Record labels are eager to bring both activities under control. But they're also leery of a backlash from consumers, who are used to copying and ripping CDs and who might view the new CD protections as an unfair constraint. Several lawsuits have already been filed in the United States and the United Kingdom over CD copy-protection techniques. To date, CD copy protection has not been widely distributed in the United States. Record labels there are looking for even greater protections, such as preventing burned CDs from being copied additional times, according to Sexton. The new Macrovision technology is being tested in production plants in Europe, and it is not likely to find its way to a commercial release for at least another quarter. It will be available for record labels to use around the world. http://news.com.com/2100-1027-5145961.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Hollywood Group Drops DVD-Copying Case John Borland A high-technology group associated with Hollywood has dropped a long-running lawsuit against a California programmer it accused of putting DVD-cracking code online, attorneys for both sides said Thursday. The DVD Copy Control Association (DVD CCA) has asked California state courts to dismiss its case against programmer Andrew Bunner. The group sued Bunner and a long list of other Web publishers four years ago, alleging that the act of posting code called DeCSS, which can help in the process of decoding and copying DVDs, violated its trade secret rights. The trade group's decision marks the close of the last prominent legal battle over the DeCSS code. Despite the DVD CCA's move, one federal appeals court ruling in New York found it is illegal to distribute the code in the United States. Nevertheless, Bunner's attorneys called the unexpected decision by the DVD CCA to drop its case a victory for free speech. "I think that they are sick of losing," said Allonn Levy, one of several attorneys who had worked on the case on Bunner's behalf. "I think they have finally reached the conclusion that it is not a fight that they can win." Attorneys for the DVD CCA could not immediately be reached. In a statement, they said the group is "evolving" its legal strategies based on other court decisions, and that the California state trade secrets case was no longer necessary. "The trade secrets case, together with (other) litigation, set important precedents and sent important messages," Robert Sugarman, the DVD CCA's lead attorney and a partner at Weil, Gotshal & Manges, said in the statement. "The owners of trade secrets will not stand by and allow their property to be misappropriated without action, and the rulings of the courts have shown protection of intellectual property is an important priority for the legal system." Although the unceremonious close to the case will have little impact on the online availability of the controversial DVD software, Bunner's fight has been a closely watched test of how much freedom individuals have to distribute software online that runs against corporate or other powerful interests--or even violates a law. Bunner's attorneys had sought broad First Amendment free-speech protections for posting software code online, while the DVD CCA had argued that speech rights did not cover trade secrets. An appeals court ruled in favor of Bunner, affording software the highest protection available. But that verdict concerned Silicon Valley companies, which worried that it would provide a shield in cases such as disgruntled employees posting a company's private source code online for competitors to read. "The appeals court ruled that you couldn't have a preliminary injunction (blocking online posting of code) in a trade secrets case that involved software," said Jonathan Band, an intellectual-property attorney with Morrison & Foerster. "That was a very odd decision...and was extremely problematic for (the) software industry." However, a state Supreme Court ruling overturned that lower-court ruling late last year, saying software should have some First Amendment protections but that trade secret rights might take precedence. Hollywood's four-year fight The DVD CCA decision follows a series of setbacks for Hollywood in attempting to control the spread of DeCSS code and other DVD-copying tools. Written by Norwegian teenager Jon Johansen, the code was initially aimed at letting Linux-based computers play DVDs. However, the code became widely distributed as a means for breaking through, or decrypting, the Content Scrambling System, an anticopying technology the DVD CCA created that most DVDs use. Norwegian courts ruled last month for a second time that Johansen did not break that country's laws in releasing the DeCSS code online. Hollywood studios have fought a long-running battle against distributors of the code in the United States, however. Soon after the DeCSS software emerged, studios sued a number of Web publishers in federal court, arguing that Johansen's software violated provisions of the Digital Millennium Copyright Act. Just one of those defendants, 2600 publisher Eric Corley, ultimately fought the lawsuits. He lost, after a federal judge ruled that he could not post the DeCSS code, or even link to it online. At the same time, the DVD CCA took Bunner and other publishers to court in California, saying their publication of the DeCSS code violated the technology group's rights to keep the CSS code a trade secret. Most of those defendants also declined to fight the lawsuit. The ruling in the Corley case ultimately made the California case redundant, since the code was already illegal to distribute, attorneys said. If it had pursued its case further, the DVD CCA would have also risked prompting a ruling against it, since the California Supreme Court had expressed skepticism in its last ruling that there were any trade secrets to protect. In its statement Thursday, the DVD CCA said it will pursue other avenues in protecting its code, including possibly filing patent infringement suits. It also said several outstanding Hollywood cases against commercial publishers that offer DVD-copying software will help protect its rights. http://news.com.com/2100-1025_3-5145809.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ File-Sharing Sites Kazaa And Grokster To Offer Free Downloads Of Shatner/Nimoy Priceline.com TV Ad Press Release Haven't seen the new priceline.com TV ad with William Shatner and Leonard Nimoy? Don't worry - help has arrived. Priceline.com and Altnet, Inc. announced today that the new priceline.com TV spot is being made available for free downloading on the Altnet Network, which includes peer-to-peer affiliates Kazaa and Grokster. The spot is available today on Kazaa and will be added to Grokster next week. This is the first time Priceline.com has utilized peer-to-peer file-sharing networks to get its commercial message into the hands of consumers. "The entertainment value of the spot is so high that we believe Shatner and Nimoy fans will want it, even if it is an advertisement," said Brian Harniman, priceline.com's Vice President, Online Marketing. http://home.businesswire.com/portal/...&newsLang =en ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Penn State File-Sharing Trial Grows In Popularity Elizabeth Thomas The file-sharing program at Penn State University has met with tremendous success in its first two weeks. The agreement between Penn State and Napster, originally signed in October, offers students membership in the file- sharing program as a part of their tuition. In the first few hours, over 2,000 students signed up for Napster 2.0, and the numbers continued to rise steadily. By the end of the week, approximately 8,000 students had registered, equaling nearly half of the on-campus population. Thus far, the program is only available to the 17,000 students who reside on the State College, Pa., campus. By next fall, officials hope to extend Napster 2.0 to the off- campus students who compose the remainder of Penn State's population of 83,000. "The success and reaction to the Napster program has everyone at the university ecstatic," Penn State spokesman Tysen Kendig said. "We were confident that it would be a successful addition to the student experience and set a trend in higher education over time, so in that sense, we were not surprised." The program offers three ways to access music. The first two -- using streaming audio and downloading songs onto a hard drive -- are free. Students who wish to download songs that they can then transfer off of a computer system and onto a CD or MP3 player must pay a small fee for each downloaded track. "The songs can be paid for with a credit card or Napster gift cards," said Sam Haldeman, special assistant to the associate vice provost of Information Technologies. "By the end of the semester, students will be able to bursar their music purchases." Of the 100,000 songs that students downloaded or streamed within the first few hours of the launch, "it is safe to say that the majority of those would have been illegally obtained had we not made this decision," Haldeman said. Despite some initial student concerns before the Jan. 12 program start, Kendig said he had "not heard of any negative reaction, and didn't expect to hear of any once we launched the service and students actually got to hear all that it has to offer." "It's certainly been a top hit this semester, and we expect it to stay that way for a long time." While the administration at Penn currently has no plans of offering a legal downloading service, it is "exploring options similar to Penn State's Napster service," said Dave Millar, University Information Security officer. Millar said that people who continue to download music illegally are increasingly subject to lawsuits from the Recording Industry Association of America. "Most importantly, people need to know that if they share copyrighted files without permission, they are personally liable and may face significant fines," Millar added. "With all the commercial options available for legal file sharing, from iPod to Wal-Mart and everything in between, people are wise to only download files legally." http://www.dailypennsylvanian.com/vn.../4014b7b87ddef ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Pressure to use only Napster. Penn State Puts Firewall In Dorms Residents of Atherton, McKean, McElwain and Packer Halls were the first students to get this security. Kristen M. Neufeld Residents of Atherton Hall became some of the first Penn State students to experience the university's new firewall when it was activated in their building at 8 a.m. yesterday. Intended to protect Penn State's network from malicious codes like worms, viruses and Trojan horses, the firewall will also block peer-to-peer file-sharing programs like Kazaa and prevent students from running servers out of residence hall computers, said Joel Weidner, associate director of information systems for Housing and Food Services. However, the decision to block Kazaa and similar programs "was intentional," he said, because it will help fulfill Penn State President Graham Spanier's initiative to curb the illegal trading of copyrighted materials. The firewall will not affect Penn State's Napster program, Weidner added. Furthermore, according to the university's recently revised policy AD-20 on network security, students are no longer allowed to run servers in residence halls, he said. "The firewall is intended to stop that from happening," he said. Firewalls were also activated yesterday in McElwain, McKean and Packer Halls, he said. The Office of Housing warned students of the firewall's activation via e-mail Wednesday afternoon, said Atherton resident Michael Young (senior-computer science). Many students, particularly those studying computer- related fields, say the firewall will be an inconvenience to them. In the past, Young, a Linux user, said he used a server called a Secure Shell Host to upload files to his Web space. This allowed him to work on large files for classes in a computer lab and then access them from his personal computer, and vice versa. "Now I won't be able to do that" because of the firewall, he said. Weidner said there are alternatives for running servers and sharing files. The U:/ drive, 100 megabytes of network space on which students can store data, is one possibility, but Young said it takes more time and effort. "It is so cumbersome and inefficient," he said. "It's another hassle, another level of hindrance." Other Secure Shell Host users say they will face the same problems. "I see a big problem with getting my work done," Linux Users Group President William Enck (senior-computer engineering) said. "I'm going to have to walk all the way across campus to get files on my computer. Then if I need to work on them in the computer lab, I'll have to walk all the way back." Many students in computer-related majors work in labs in the new Information Sciences and Technology Building, which will be especially inconvenient for residents of Atherton Hall who need to make that kind of round trip to work on projects, he added. "I see more problems it's going to create than it will solve," he said. Even more frustrating is the fact that firewalls can be programmed selectively to block potentially hazardous activities, like spam e-mail messages and viruses, while allowing safe ones, Young said. "Instead of just stopping known issues, they are blocking every port," he said. "It's like using a sledgehammer instead of a flyswatter." Weidner said the university could have decided to selectively block ports, but chose to block them all because of policy. The new firewall will have a lot of implications, Linux Users Group member Tom Keiser (junior-computer science and electrical engineering) said. "We will lose a lot of productivity and flexibility in how we use our computing resources," he said. "Then what's the point of having a residence hall server at all?" Some students are already looking for ways to circumvent the firewall, such as using AOL Instant Messenger to transfer files, he said. "There is already a backlash against it," he said. http://www.collegian.psu.edu/archive...04dnews-12.asp ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Napster's Fanning Has Snocap-ped Vision John Borland and Stefanie Olsen Far from his anarchic Napster days, file-swapping pioneer Shawn Fanning and several of his old colleagues are quietly working on a new venture called Snocap that is aimed at turning peer-to-peer networks into dollars for record companies. Based in San Francisco and backed by angel investor Ron Conway--who also initially funded Napster--Snocap has for months been quietly writing code and building the bridges to the music world that Napster lacked, according to sources familiar with the company. Fanning's role as the creator of the music industry's archenemy does not seem to be holding him back. Snocap's plan, which involves identifying music files being traded through file-swapping networks and then attaching a price tag to them, is resonating well with music industry executives. "It's a pretty well thought-out idea, but the success of it hinges on everybody in the ecosystem getting involved," said one record label executive familiar with Snocap. "The key to its success is the peer-to-peer companies agreeing to participate. If they do participate, it could be phenomenal." Requests for comment from Fanning and other Snocap employees were not returned. Fanning's return to the peer-to-peer world is one of the most ambitious of several ongoing attempts to bring about a detente between file-swapping networks and record labels, which have been at war almost since the day Napster launched in 1999. Today's unrivalled file-swapping leader, Sharman Networks' Kazaa, is closely affiliated with Altnet, a division of Brilliant Digital Entertainment that seeds file-swapping search results with authorized files such as games or music. Altnet has been trying unsuccessfully for more than a year to strike distribution deals with major record labels and movie studios. Sharman is now suing the entertainment companies on antitrust grounds, alleging that they are colluding against peer-to-peer companies. Altnet and Sharman have also helped create a forum called the Distributed Computing Industry Association, which is trying to bring entertainment companies and file-trading companies to a negotiating table in order to work out their differences. That effort is still in the early stages, however. After the flood A filing with the California Secretary of State states that Snocap was incorporated in Delaware on Oct. 28, 2002, with Conway as president, listed as the sole officer. The filing also notes that the company changed its name to Snocap from Open Copyright Database on June 25, 2003. The company, at least in its early stages, looks much like Fanning's old one. According to sources familiar with the company, Ali Aydar, who worked with Fanning on pre-Napster projects and ultimately became a key engineer at the file-swapping company, is chief operating officer. Jordan Mendelson, who helped develop Napster's search technology in its early days, is also a co-founder. Mendelson registered the Snocap.com domain name. Mendelson has chronicled a few moments in the company's development on his Web log, including a recent flood caused by an errant sprinkler that temporarily forced the start-up out of its San Francisco offices. A visit to Snocap's office in San Francisco's trendy "SoMa," or South of Market, district bears out the flood's damage. A Snocap banner and a few scribbles on a white board now overlook empty desks and exposed wallboards. Nevertheless, the company is growing, with a total of nine employees as of early January, according to Mendelson's blog. A few job listings also are posted on the company's Web site. The technology itself, according to sources familiar with the company, takes a page from Napster's last days as a file-swapping company. In late 2001, courts forced the company to block copyrighted songs before they were traded through the network. Napster, with partner Relatable, worked to develop a way to identify and filter material. Ultimately, the company decided to shut the service down rather than try to develop the technology under the court's order. The Napster name is now being used by the Roxio-owned digital music download service, a rival to Apple Computer's iTunes store. The new Napster service does not have any of the file-swapping capabilities of the original, however. Snocap has been working on ways to identify songs, as they are traded through a file-swapping network, including using a technique called "audio fingerprinting," which monitors the sonic characteristics of music files. That fingerprinting tool could be integrated into the file-swapping software itself in several different ways, sources said. When a file is being downloaded, the software could check its "fingerprint" and then compare it against a database Snocap operates, for example. Once an identification is made, the download could be blocked, unless the computer user pays a fee, as if they were downloading a song from iTunes or another digital song store. Alternately, some mechanism could be established, under which the file-swapping network operator would pay for the downloads that are tracked by Snocap's system and would later be reimbursed by subscription fees or advertising revenue. Fanning has been explaining his ideas to record label executives, who are interested but not entirely sold, sources said. His background with Napster may be helping him win meetings with the labels, rather than hurting him, they suggested. "Shawn is a smart, articulate guy. That goes a long way," said one source familiar with Fanning's discussions with record labels. "He walks in a world that they desperately want access to." Peer-to-peer companies, however, may also be a difficult sell. Executives from several major file-swapping companies said Fanning has yet to contact them; some said other companies with similar ideas based on audio fingerprinting were looking for support. "We had a very similar idea run past us," said LimeWire Chief Technology Officer Greg Bildson. "We basically ended up not following up on it. It is interesting, but we're not interested in building filtering and any centralization into our client." http://news.com.com/2100-1025-5146858.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Music Labels See Recovery In Downloads, Lawsuits Reuters A music industry trade organization said Thursday that new online download services are winning over customers and warned that a globe-spanning legal crackdown on file sharers is imminent. On Thursday, the International Federation of the Phonographic Industry (IFPI) released a progress report on its year-old campaign to develop and promote online music stores and spread its message that online song swapping is illegal. In a rare upbeat statement, the IFPI said its initiative is building a vibrant, albeit small, market for selling music downloads that appears to be stealing momentum from peer- to-peer networks such as Kazaa and WinMX, where all varieties of music are available for free. "We believe that the music industry's Internet strategy is now turning the corner, and that in 2004 there will be, for the first time, a substantial migration of consumers from unauthorized free services to legitimate alternatives," said Jay Berman, IFPI's chief executive. "The start of 2004 brings a new sense of optimism along with evidence of real change," Berman said in a statement. The IFPI, which represents a host of independent and major music labels including EMI, Warner Music, Bertelsmann's BMG, Sony Music and Universal Music, also said it would get tough with prolific song swappers this year. "It is likely that there will be lawsuits against major Internet distributors internationally in 2004, similar to those filed in the U.S.," the IFPI said in its report. European music industry executives have been warning for weeks they will follow in the controversial footsteps of the United States, where a legal clampdown on file sharers has resulted in hundreds of lawsuits. On Wednesday, the Recording Industry Association of America launched its largest wave yet of file-swapping lawsuits against individuals. The crackdown could intensify in Canada and Asia too, industry officials said. The industry blames file-sharing networks for contributing mightily to a three-year decline in music sales. Citing a variety of independent and industry-backed studies, it says the lawsuits do serve as an effective deterrent to file sharing. The IFPI said its own probe of file-sharing networks revealed the availability of unauthorized music files on the services dropped from 1 billion in April 2003 to 800 million this month. Industry reports offer contradicting evidence that the file-sharing phenomenon is tailing off, however. It is believed music executives will invest more money in the development of online music stores before they round up the lawyers. In Europe alone, some 50 new industry- backed download stores are expected to launch this year, bringing the continental total to over 80. Berman said he expects that the most popular online music store, Apple Computer's iTunes, along with offerings from Roxio and RealNetworks Industry officials told Reuters recently that in 2003 American music fans purchased 30 million downloads, while Europeans bought 3 million from industry-sanctioned sites. http://news.com.com/2100-1027-5145267.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Governments Vote Against Microsoft David Becker Microsoft has had its share of bad courtroom experiences, but lately the software giant has been taking some of its hardest knocks in city council and legislative chambers. While government customers account for less than 10 percent of Microsoft's revenue, according to analyst estimates, they've caused a disproportionate share of headaches for the company over the past year. Ambitious projects to migrate government computers to Linux and other competing software, official decrees favoring open-source products and hard- nosed licensing negotiations have put government customers well ahead of private business when it comes to testing Microsoft's mettle. Some of Microsoft's most publicized business defeats recently have come from government plans to migrate official computers to open-source software. The German city of Munich became one of the most high-profile Microsoft defectors last year, voting to move 14,000 city-owned PCs to open-source software. The Texas city of Austin embarked on a similar Linux project late last year. A number of British government agencies are looking at open-source, as are official agencies in Korea, China and Germany. And the Commonwealth of Massachusetts last year adopted an IT purchasing policy that favors open-source software, but it later modified the policy to emphasize "best value" products. While some of announcements seem little more than negotiating tactics, the sheer volume of deals point to a greater willingness among governments to move out of Microsoft's fold. And it isn't just Linux on servers that's garnering interest: The open-source operating system finally seems to be making headway on the desktop. "These kind of deals are symptomatic that Linux is really gaining credibility on the desktop," said Stephen O'Grady, an analyst for research firm Red Monk. "What we're seeing from government...is that certain constituencies are ready for that migration." Follow my leader? The fear for Microsoft is that business customers--the company's bread and butter--might soon follow suit. "Governments just get it faster in some areas, and I think open source is one of them," added Sam Hiser, the marketing guru for open-source software group OpenOffice.org. "Enterprises are very clubby; they need a sense of confidence that individually, they're not the odd one out. Governments will act more quickly--especially if there's a case for cost-cutting and doing the right thing with taxpayers' dollars." Maggie Wilderotter, senior vice president of business strategy for Microsoft, argued the situation is one of perception more than reality. Governments aren't making radical IT moves with any more frequency than businesses, she said. They're just getting more attention when they do. "I really believe it's more about publicity than government moving faster than anyone else," Wilderotter said. "In a lot of cases, government involvement is just more high- profile. These are more transparent contracts because of the bidding requirements. If a business decides on a new software package, it's not a press-release thing." "There are also a lot of wins Microsoft has made with governments in the last year," she added, "but we don't spend a lot of time hyping those in the press." Stuart Cohen, chief executive of Open Source Development Labs, said government motives for moving to open-source software vary. It is different around the world," he said. "I think in the U.S., they are very focused on the total cost of ownership and flexibility. I think in Europe, they seem more focused on the open-source concept of where Linux comes from. In Japan, I think they are focused more on the import-export ratios, and they would like to see more exporting of software versus importing of software. And I think in China they are interested in using what they build, and they are building Linux-based applications today." Cost is often the first factor to motivate governments into considering open-source software. "These guys are really strapped for cash; many of them are in a state of near financial crisis," said Mike Cherry, an analyst for research firm Directions on Microsoft. "They are really looking at any way to save money. If they have a Linux advocate in the IT organization who says, 'I can save you money,' that's going to get some attention." The overall cost of buying and running Windows as opposed to Linux and open-source software has become one of the most contentious areas of the debate between open-source software advocates and proprietary software backers. Microsoft claims that while open-source products are cheap or free to acquire, increased administration and support costs make them more expensive in the long run. Several third-party studies, including an influential report by research firm IDC, have supported Microsoft's claims. But others argue that cost advantages from switching to Linux continue to accrue well after the initial installation. http://news.com.com/2100-7344-5145332.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ UK Music Industry Wins Web CD Pricing Dispute Bernhard Warner The British music industry has settled a legal dispute with CDWow.com over the sale of discounted compact discs after the online retailer agreed to raise its prices in the UK and Ireland, the parties said on Wednesday. In reaching an agreement, trade body The British Phonographic Industry (BPI) and Hong Kong-based CDWow.com avoided a February 2 court hearing to determine if the online retailer could continue to import products from outside the European Union and sell them on to Irish and British customers. The profitable three-year-old firm has been able to undercut high street retailers by as much as three pounds by obtaining the music from record companies and wholesalers in cheaper markets around the world. The BPI said the practice violated EU trade law, once again landing a virtual retailer in a legal quagmire over how to apply local laws to its global customer base. Under the terms of the agreement, reached late on Tuesday night, CDWow.com said it agreed to ship products to customers in the UK and Ireland that are sourced from within the European Economic Area, in accordance with European trade laws, the parties said. As a result, CDWow.com will raise CD prices by two pounds ($3.67) or three euros ($3.75) as of Sunday night for all deliveries to the UK and Ireland, respectively, said Philip Robinson, co-founder of CDWow.com. "We will be expressing it as a surcharge," said Robinson. "A pop-up window will appear when the shipping information is submitted that says this charge is due to the BPI." Prices for most CDs will rise to between 8.99 pounds and 10.99 pounds on CDWow.com. Pricing for DVDs and video games will not be affected, Robinson said. Earlier this month, the BPI said it was investigating a number of Web retailers, including Amazon.com, to determine if the products they sold were properly sourced. The probe is being conducted amid a prolonged slump in CD sales as the popularity of file sharing services such as Kazaa and eDonkey continues to build a black market for free music on the Internet. The industry is in a tight spot, though, because it often acknowledges that Internet retailers have become an important source of revenue to counteract weak store sales. "We are growing the market," said Robinson. "There was a strong appetite for product at 8.99 pounds. We met the consumer's value point, which is why the business grew so wildly." Record companies have begun cutting the price of CDs in many countries over the past year. In the UK, album sales were up 7.6 percent as price discounts took hold. Robinson said a similar complaint from the BPI's German counterparts has recently been lodged, setting the stage for a pricing change there. http://www.reuters.com/newsArticle.j...toryID=4177141 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Silicon.com Should The UK Music Industry Take The Legal High Ground? In business you have to make unpopular decisions, that's a given, but nobody has actively courted negative press with the same kind of vigour that the record industry has displayed in hastily dragging its name through the mud. In the US, the Recording Industry Association of America has made more enemies than it has records in the past 18 months and, worryingly, its UK equivalent, the British Phonographic Industry, seems to think that this is an approach it would be wise to follow. Andrew Yeates, director general of the BPI, has warned that legal action may be the only option left for a beleaguered record industry. But is this really worthwhile? For starters, there is the age-old argument that the record industry is barking up the wrong tree. Many believe file-sharing and music downloads have little to do with a dent in record sales that is more likely to be attributable to a drop in the standards of music being produced. This is born out by the fact that independent labels, typically those producing more innovative sounds, have not seen any decline, while major labels, dependent upon tiresome cover versions, rehashed identikit pop acts and the nauseating Pop Idol format, have been found out and subsequently witnessed a drop in revenues. The truth is that the record labels were too slow to embrace technology, leaving a chasm that was filled by the likes of Napster. Originally the labels turned on Napster and Kazaa but successes, after the closure of Napster, were few and far between. Now behind the times and in a strop, the labels are picking on 'the smallest bloke in the pub' by turning on individual consumers unlucky enough to be singled out from the millions using download services. Such action will be costly, time consuming and will ultimately offer very little reward. Some might call it spiteful; others might call it misguided. http://www.silicon.com/networks/webwatch/ 0,39024667,39117791,00.htm Web Wrongly Blamed For Child-Sex Offence Explosion Children's charity NCH has today blamed the internet for a 1500 per cent increase in child-porn related offences. Its figures reveal that 549 child-porn offenders were charged or cautioned in 2001, compared with only 35 in 1988. And that's all the evidence the charity felt it needed to start whipping up a storm of anti-internet propaganda, which was doubtless music to the ears of the lazy hacks on the Daily Mail and other even-handed rags that are always willing to blame 'newfangled' technology for all society's ills. There are also claims flying around that 3G mobile phones are likely to make matters even worse. There's no evidence to support that claim, but it makes for good copy. Examining the figures further, however, it's worth pointing out that until 1988, the law on possessing child pornography was very different - hence the apparently arbitrary year chosen to compare to the present. Until this time, being in possession of child pornography was not illegal, and subsequent enforcement of new laws may not have been as rigorous as it is now. We are not comparing like with like. Then consider the fact that these figures could actually be construed as good news. The fact that 549 child-porn offenders were charged or cautioned compared to 38 is a victory of sorts for law enforcement. The internet hasn't created paedophiles; these higher contemporary figures merely portray the number of offenders who previously may have been escaping detection. You can bet there were not only 38 offenders in 1988 and 549 in 2001 - these are merely percentages of a far more concerning figure. To say the numbers of those caught have increased solely because of the internet also detracts from efforts by the UK police force to stamp out child pornography. More people are being caught because the police are working far harder and far more efficiently to catch them. While the research from the NCH deals specifically with child-porn related offences, there is an implication that the rise of child porn on the internet has led to a rise in instances of what it calls "hands-on" abuse. We can only hope NCH isn't claiming for one minute that the internet has actually created more paedophiles - but that would appear to be the suggestion. While it is clear that the internet has provided a channel for procuring and sharing pornographic images, it is unlikely that it has had any impact on the actual numbers or proclivities of child-sex offenders. The ignorance inherent in suggesting people have been encouraged to take up child abuse because of the ubiquity of the internet is alarming. These offenders have always existed. The internet is merely a technological means to an end that like anything is open to abuse. The fact of the matter is that yes, the internet has become a stalking ground for sex offenders who will use chat rooms to 'groom' unsuspecting victims, but the internet is not to blame. It's merely a technology and, if anything, it's the users who are to blame. Since the 1950s, generations of parents have been sitting children in front of the television set. As a 'third parent', it was there to act as babysitter, educator and entertainer. A child could be left in front of the TV and the parents could go about their business. Too much of the same thinking now governs how people treat the internet within the home. The fact of the matter is that lazy parenting is just as responsible for the exposure of children to sex offenders online. The internet doesn't have to be dangerous. Too many parents are unaware of who their children are talking to and what they are doing online. Too many will allow children to have an internet-enabled PC in their bedroom, when common sense says to put it in a communal room, and too few parents are installing monitoring and filtering software on the family PC or locking it with a password of which they are guardian. Rather than standing back and blaming 'the internet', broadcasters, charities, MPs, parents, newspapers and schools would be of far more use collaborating on schemes to better educate the public about the dangers lurking online, rather than hiding behind headline-grabbing scaremongering. http://www.silicon.com/hardware/storage/ 0,39024649,39117724,00.htm Corporate America Divided Over File-Sharing Today sneak previews of Pepsi's latest advertising campaign have been leaked onto the internet, ahead of its debut during Sunday's Superbowl. The campaign promotes a joint venture between Apple and Pepsi which will see Pepsi drinkers win the opportunity to download free music from iTunes. But the messages it sends out may confuse many, as it makes heroes of convicted file-sharers. Apple and Pepsi are giving away 100 million free songs - which equates to around one winner in every three Pepsis bought during the promotion - but the message is very much "we're still going to get out music for free off the internet". The issues here are manifold. First there is the fact that this provides the hugely popular iTunes service with a massive competitive advantage. Of course there is a high likelihood that many winners won't be converted into regular users of iTunes but there is also a chance that it will sign-up many new converts through the promotion. Then there is the small matter of Coca Cola's recent foray into online music services. Coke comes to the market with financial clout, advertising dollars and know-how as well as huge youth appeal. So it must be doubly pleasing for Pepsi to be giving Apple such assistance in keeping the old enemy at bay. And then there is the issue of file-sharing and the messages which Pepsi's campaign sends out. The advert features a group of teenagers who have all been charged and convicted by the Recording Industry Association of America accompanied, we assume, with no little irony by a Green Day cover version of I fought the law (and the law won). We say irony, because the law and those who uphold it - such as the RIAA - are largely seen as the villains of the piece, while these teenagers are doubtless even now benefiting from Pepsi's mega-bucks. Who said crime doesn't pay? http://www.silicon.com/networks/webwatch/ 0,39024667,39118092,00.htm ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Macworld iTunes Superbowl Ad To Show Sued File-Swappers Pepsi's forthcoming iTunes music promotional SuperBowl ad looks set to cause some controversy, as it features twenty teenagers sued by the Recording Industry Association of America (RIAA). The RIAA took the teenagers to the courts and accused them of stealing music. Pepsi's ad identifies the miscreants as "a few of the kids sued for downloading music free off the Internet." One of these – 14-year old Annie Leith – then appears (to a Green Day version of "I Fought the Law") holding a Pepsi and says: "We are still going to download music for free off the Internet." The announcer then introduces the giant Pepsi iTunes Giveaway, in which Pepsi is offering 100 million free tracks from the iTunes Music Store. RIAA chairman Mitch Bainwol told USA Today: "This ad shows how everything has changed. Legal downloading is great because fans are supporting the future of creative work in America." The music industry has little choice but to get behind digital music distribution, if claims by Forrester Research are true. The analyst claims music downloads will make CDs obsolete in the next five years. Analyst Josh Bernoff said: "The industry is going through a complete change in the way people consume music." He also warned that by the end of 2004 "half the businesses that started out" in the sector will fail, comparing the digital music explosion to the dot-com boom: "I haven't seen this level of irrational exuberance since the height of the bubble," he said. http://www.macworld.co.uk/news/main_...fm?NewsID=7757 Apple 'Will Drive Consumer Music-Making' Karen Haslam Apple's recent audio related announcements are "very welcome" and are likely to encourage "increased growth at the consumer end of the market", according to Emagic UK distributor Sound Technology's managing director, David Marshall. Last week's Logic announcements, and Apple's update to SoundTrack, joined the company's recently announced GarageBand application, repeating the segmented approach to market-capture that it revealed with its digital video products: Final Cut Pro, Final Cut Express, and iMovie. Marshall told Macworld of his appreciation of Apple's audio strategy: "GarageBand is very welcome. With this new consumer-focused application Apple is making everyone aware that they can make their own music and is therefore opening up new markets for us. This news will help to grow the market for audio." He added: "The audio market has been growing year on year for at least the last seven years at the professional end. Now we will see increased growth from the consumer end." Apple acquired Emagic 18 months ago. At the time there was some concern over Apple's announcement that it would no longer support the Windows operating system in future product releases. According to Marshall, these fears were unfounded: "Before Apple bought Emagic most of the market used Macs so we weren’t too concerned about the fact that Apple would not continue to develop for the PC. We didn't experience any loss of business even though we were now selling only a Mac product." The effect of discontinuing development on platforms other than the Mac OS has had a positive effect for Apple, according to Marshall. He explained: "Many of the our customers who were Windows users have now switched to Mac." Education breakthrough And it isn’t just that the Mac platform is growing in popularity in the professional audio market. "We have seen an increase in interest in the Mac from our education customers," said Marshall. "When Apple bought Emagic, 85 per cent of our education business was Windows based; we have since seen a huge increase in Apple's education market share." Marshall thinks this increase is partly due to universities switching to Macs and schools "following their example". Marshall's findings reflect the analysis of analyst firm Gartner who announced recently that Apple's UK education market share is now 8.5 per cent – up from 6.4 per cent a year ago. "Audio is definitely helping Apple to win back the education market," said Marshall. http://www.macworld.co.uk/news/main_...fm?NewsID=7747 Will Apple’s Music Plan Pay Off? Apple is enjoying great success with the iTunes Music Store and the iPod, but is this enough to turn around the company’s fortunes? Three Business Week reports look into this question. The first report looks at Apple's victory with regard to online music downloads. Speaking to Business Week, Apple CEO Steve Jobs predicts that any new players entering the market now will have to work hard in order to be successful. He says: "Whoever enters this market now is going to enter a market that's not in its infancy. And they'll enter a market against a competitor that has a 70 per cent market share – and surprisingly, that competitor's name will not be Microsoft. It will be Apple. Now, I understand that there's no guarantee we'll stay on top, but that's the situation." And Jobs has no fear of Microsoft in this new market, despite the fact that the Seattle-based software giant has many partners in hardware and on the services side using Microsoft technologies. He told Business Week: "The people using their technologies have yet to be successful." Jobs puts down the success of the iTunes Music Store to four factors: "Apple is the most creative technology company out there. Almost all recording artists use Macs and they have iPods. And there's a trust in the music community that Apple will do something right – that it won't cut corners – and that it cares about the creative process and about the music. "Also, our solution encompasses operating-system software, server software, application software, and hardware. Apple is the only company in the world that has all of that under one roof. We can invent a complete a solution that works – and take responsibility for it." The second Business Week report notes: "The iTunes Music Store managed to clock 30 million downloads in 2003 without the assistance of any marketing by a PC partner. Adding HP to the mix could push the total to over 100 million in 2004 and well above that in the future." The report considers that even though Apple says it doesn't make money from selling digital downloads: "At those types of volumes, Apple will make money." iPod gamble The reports also examine the success of the iPod, suggesting that this also bodes well for the company. The digital music player was a big seller this Christmas – so popular in fact that many shops ran out. Apple could have had even fewer iPods available. The company made 750,000 units for Christmas, despite predicting that it would only sell in the region of 500,000. Jobs told Business Week: "It was a big gamble on our part. We thought we could be way too high." But Apple sold every one. "The thing that I love is that the best product is winning for a change," said Jobs. Regarding the success of the iPod Jobs said: "It's very exciting to be able to apply Apple's innovation, engineering excellence, and marketing skill in a market where we don't have that 5 per cent market-share ceiling to see what we can do. And it feels good." And this level of market share includes Windows users: "We sell more iPods to owners of Windows PCs than we do for the Mac, and it has been that way for a long while," Jobs told Business Week. Business Week's third report goes on to suggest: "If Apple can maintain its success with the iPod, and follow up with other non-Mac products (the iPod works with the Mac as well as with Wintel PCs). Indeed, the iPod just might cast the Mac in an entirely new light." The report notes that the iPod actually brought in more revenue ($256 million) than Apple's consumer flagship iMac line ($251 million), and suggests: "Why not focus on using the Mac to boost the bottom rather than the top line?" Profits over market share Apple had a positive reception to its first-quarter results, but shares fell 5.6 per cent the day after the earnings report. According to the Business Week report this was for two reasons: "The stock had run up in anticipation of solid numbers. And the Street had been hoping for bigger sales numbers on Power Mac G5 desktops." According to the report, analysts are warning that the iPod sales growth could dim soon, so it is increasingly important that Apple keeps churning out Mac-related profits. "After all", notes Business Week, "that product still brings in nearly 70 per cent of sales, and that's not likely to change in the short term". Merrill Lynch analyst Steve Milunovich adds: "If they're going to make Wall Street happy, it's going to be about PCs." But in the Business Week interview Jobs suggests that analysts should start measuring the Mac by the profits it produces, rather than by its market share: "We've got 25 million customers that want the best computers in the world. If our market share grows, we're thrilled. But we've held our own, while our rivals were losing hundreds of millions of dollars a year. We're in pretty good shape." Business Week suggests that Apple may experience stronger Mac sales as a result of the "return to strength in the ad and media biz" predicted for 2004. The report also notes that Apple is developing a strong niche in the scientific computing market. Although this may only result in tens of thousands of machines per quarter, "this can make the difference between a good quarter and a ho-hum quarter for the Power Mac line," according to Needham & Co analyst Charles Wolf. Apple is looking at other ways of increasing its profits. The Business Week report notes that by selling Mac OS X updates, the newly updated iLife suite, iChat software, and .Mac accounts to Mac users: "Jobs is clearly in the process of building a recurring revenue stream of hundreds of dollars per customer. Granted, not all Apple buyers will bite, but if even 10 per cent of the faithful buy in each year, that could mean hundreds of millions in new revenues." And, according to the report, there is evidence that Apple is winning back the education market. However, according to Gartner's preliminary market-share data, Apple held just 1.8 per cent of the worldwide PC market in the fourth quarter of 2003. And, Business Week suggests: "Some think Apple's share will fall further, if it can't keep pace with surging overall PC demand." http://www.macworld.co.uk/news/main_...fm?NewsID=7759 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Smart File Sharing Between Macs and PCs Wei-Meng Lee I know many MacDevCenter readers use more than one platform in their daily lives. You may use a Windows PC in your workplace then use a Mac for all your other creative tasks at home. In any case, it is inevitable that sometimes you need to transfer files from one platform to the other. While there are many ways to do this (via USB flash drive, FireWire, Ethernet, shared folder, etc.), most of them still require you to either mess with lengthy cables, or need you to know how to mount a file share in Mac OS X. But there's an easier way through the use of an inexpensive application called "PC-Mac-Net FileShare." Obtaining and Installing PC-Mac-Net FileShare You can obtain the free Lite edition of PC-Mac-NET FileShare from Lava Software. The Lite edition allows you to transfer files of sizes smaller than 10MB and supports up to a maximum of three users in a workgroup. The Standard and Pro editions of PC-Mac-Net FileShare cost $24.95 and $39.95 (per user), respectively. The Standard edition does not have the restrictions of the Lite edition, and the Pro edition supports file encryption, which is especially useful over a wireless network. The licensing cost is for each computer, which means that if you have a Mac and a PC, you need two licenses. But at this moment, Lava software is selling it two-for-one, which makes it affordable. PC-Mac-Net FileShare allows you to share files over TCP/IP. You can either use it in your local network (such as in the office or at home), or over the Internet. When used over the Internet, be sure to check that your firewall opens up port 3300, the default port used by PC-Mac-Net FileShare. I downloaded the Lite edition and installed one copy on my PC and one on my Mac (note that you have to run the software on both machines in order for file sharing to work). The user interface for both platforms looks identical. One note for Windows XP users: most people on Windows XP use the built-in firewall to protect against unauthorized entry, so you need to change those settings in order for PC-Mac-Net FileShare to work (even to use it on the local network). To configure your built-in firewall for PC-Mac-Net FileShare to work, right-click on My Network Places and select Properties. Right-click on your network connection and select Properties. Click on the Advanced tab (see Figure 1). http://www.oreillynet.com/pub/a/mac/.../pc_share.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Looting The Music Industry Corey Deitz As part of the Radio industry, music has always been a central element in my work. I’ve done this long enough to have witnessed the transition of DJs from playing vinyl 45s-to tape cartridges-to CDs-to-.mp3 files on hard drives. It’s been a fascinating metamorphosis. Until just a few years ago, there were only two distribution systems for recorded music: Radio and record companies. With one, consumers received it for free and with the other, they paid for it. Since Radio stations paid licensing fees for the right to distribute copyrighted music, it was free for listeners. Hell, listeners could even record it if they wanted but, everyone knew you could never quite get a perfect copy of a song without some Disc-Jockey talking over the beginning or the end of it. (A characteristic of Radio noted and applauded by the Music industry.) Alas, that was the trade-off for getting it free. The other distribution source was the Record companies, themselves, who gladly sold the music directly to consumers - for a price. The status quo of this arrangement sat well with all for most of last century. Then, all-of-a-sudden, beginning in the late 1990s, things began to change and anyone with a computer and a dial-up connection could circumvent BOTH distribution systems. This change has thrown the Music Industry into an hysterical tailspin in search of copy- protection schemes, experimental Internet streaming partnerships, and a way to hold on to a fleeting reality. Something occured to me the other day about the peer-to-peer music sharing phenomenon. I think it can be better understood by making an analogy in using the recent looting that occurred in Iraq. Saddam Hussein put the screws to his people for years, repressing them and taking advantage of them. But, when the opportunity presented itself, hundreds - if not thousands - thought nothing of looting his grand palaces, government buildings and any insitution associated with the former authority in Iraq. Think of the music-buying public as the Iraqi people and the Music industry as the former Hussein Regime. For years, the Music “dictators” have been able to charge inflated prices for CDs because they owned the distribution system (creating and marketing the CDs). But, with the advent and convergence of .mp3 technology, the ability to burn CDs and the Internet, the distribution system was suddenly yanked away from the music moguls. And what did people do? They traded .mp3 files by the millions. In effect, they LOOTED the formerly oppressive Music industry. Though most of us didn’t condone the looting in Iraq, we certainly understood it. It’s the same with sharing music: ask most people if they feel badly about grabbing .mp3 music files and they’ll say, “Yeah, I know it’s stealing....technically” but, they UNDERSTAND it. They accept it and rationalize it as proper payback for the inflated profits the Music industry extorted from them for years. There’s no doubt musicians and artists should be compensated for their work. In the old days, the only way to make a recording that could reach the public was through a record company. Not so, today. Artists can deal with their fans directly because of the Internet and all the associated technologies that allow them to get their music to the listeners. The Music industry, like the former Iraqi Information Minister, is in denial. “Downloading? No. Not at all. No one is downloading files and we are selling CDs as never before.” Yet, as they clamour to try and put the Genie back in the bottle, peer-to-peer file sharing is toppling the Music industry's statues, day-by-day. http://radio.about.com/library/weekly/aa050103a.htm ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Music Royalties Rise, Even as CD Sales Fall David Bernstein Despite the travails of the music industry, with CD sales still slumping and record executives still suing suspected Internet pirates, one part of the business is thriving. Royalties paid to songwriters and music publishers from radio and television broadcasts of their songs, and from live performances, are at record highs. "When it comes to the downloading issue, which is killing record labels and music publishers, we're only indirectly affected by it," said Bill Velez, the head of Sesac, one of the leading performing rights organizations in the United States. "We're able to weather economic storms better than other segments of the entertainment industry." In 2003, America's three recognized performing rights organizations - Sesac, B.M.I. and Ascap - reported record revenues, which, in turn, have generated bigger royalties distributions to songwriters and music publishers. Ascap - the American Society of Composers, Authors and Publishers, a nonprofit association - is the oldest and by most measures the largest of the performing rights organizations in the United States. Its preliminary data indicate that Ascap took in $668 million in 2003, 5.2 percent more than in the previous year. The association plans to release its official year-end results at its annual meeting in February. B.M.I. - Broadcast Music Inc., also a nonprofit and the longtime chief competitor to Ascap - reported that revenue in its last fiscal year, which ended in October, increased 9.7 percent, to nearly $630 million, from $574 million in fiscal 2002. Sesac - once known as the Society of European Stage Authors and Composers, now based in Nashville - is the smallest of the three and the only for-profit organization of the group. Mr. Velez declined to disclose revenue, but said Sesac had gains in 2003 of about 30 percent, which he said continued the pace of the last decade. Performing rights organizations track and collect royalty fees for public performances of copyrighted music and distribute the money to the copyright owners. Their role is to ensure that songwriters, composers and music publishers are paid for the use of their creations on broadcast radio and on network, cable and satellite television as well as in public places. Senior executives of the three organizations credited their revenue growth mainly to royalties collected from two relatively robust media: radio and cable television. They also said there were more public performance outlets now than ever: live concerts, restaurants, nightclubs, taverns, amusement parks, shopping malls, health clubs, cruise ships, even telephone on-hold music. The organizations have expanded their coverage in recent years to more businesses, some of which had once been considered inconsequential or not worth the expense of pursuing for license fees. "If you had told me 20 years ago that we would get around to licensing funeral homes, I would never have believed it," Mr. Velez said. One of the most rapidly expanding new sources of performance royalties, the executives say, is cellphone ring tones, digitized melodies that play on mobile phones. Last year, 9.9 million people purchased cellphone ring tones in the United States, paying a total of nearly $57 million, according to IDC, a technology research firm. Downloadable ring tones, typically costing $1 to $2, are the most popular Internet content offered for download, said Dana Thorat, an analyst at IDC, who projected that sales of tones would exceed $1 billion by 2007. Even if performance royalties add up to only a small percentage of that total, the revenue to songwriters and publishers could be tens of millions of dollars. New technologies, including "audio fingerprinting" and music identification software, have helped the organizations track music use around the world more easily and efficiently, trimming operating costs. Each performing rights organization has a roster of affiliated songwriters and publishers from all genres; they license only the copyrighted works of their artists. Ascap represents more than 170,000 songwriters, lyricists and music publishers and has a catalog of about eight million musical works. B.M.I. has close to double that number of creative artists and publishers, with 300,000 affiliates, although its song repertoire of 4.5 million compositions is only about half as large. Sesac represents 4,000 songwriters and 3,000 publishers, but counts some widely known artists on its roster, including Bob Dylan and Neil Diamond. As royalties from album sales decrease, Frances W. Preston, the president of B.M.I., said, songwriters have become more dependent on performing rights organizations to maintain a steady income. "The bottom hasn't dropped out of the performing rights business," Ms. Preston said. "They look to us for their royalties because the record company royalties, in some cases, are almost nonexistent." Approximately 50 percent to 75 percent of songwriters' compensation now comes from performance royalties, according to B.M.I. The increase in such royalties has been the music industry's "one saving grace," in the view of Carey Ramos, a lawyer for the National Music Publishers' Association, which represents music publishers and songwriters. Mr. Ramos said increased performance royalties had helped songwriters offset some lost income from mechanical royalties, as fees from record sales are known. But, he added, "I'm quite sure it doesn't make up for the mechanical losses, by any stretch of the imagination." From 1996 to 1999 - the year the file sharing service Napster began - annual collections of mechanical royalties grew 18.5 percent, Mr. Ramos said, while performance royalties increased 19.8 percent. From 2000 to 2002, he said, mechanical royalties fell 22 percent, while performance royalties kept growing, by 13.6 percent. "The continued rise in public performance royalties reflects a growing demand for music," he said. "That tends to confirm that the dramatic decline in mechanicals is attributed to Internet piracy, not because there is less demand for music." Although the Internet has proved a challenge to the business practices of record labels and music creators, the performing rights organizations recognized almost immediately its potential as a major source of royalty revenues. Ascap, B.M.I. and Sesac have licensed several thousand Internet sites and online music subscription services that use streaming audio technologies. "After tracking radio and television and cable for all of these years, suddenly you're tracking something much bigger than all of that put together," Ms. Preston said of the Internet. "Where I think a lot of other people in the business were spending time with lawyers trying to find ways to sue everybody,'' she said, "it was pretty clear to us that the public had accepted all of this new technology. There was no way to kill it even if you wanted to. So, you might as well get out there and embrace it and find out how you can license it and how you can collect from it." Still, the expansive and unruly Internet has not been an easy outlet to license, nor has it become the pot of gold that the performing rights organizations had expected. "Because of piracy, the Internet has not been able to grow as other broadcast venues of entertainment have grown," John LoFrumento, chief executive of Ascap, said. Ascap, for example, took in just $10 million in royalties last year from about 2,000 Internet licensees, a pittance compared with the group's overall revenue. Mr. LoFrumento said Internet collections had doubled annually in the last few years, however, and he predicted that the Web, in time, would be a significant revenue source. Radio and television, meanwhile, are likely to continue providing the bulk of performance royalties. "It's a growth industry," Mr. Velez of Sesac said. "Unless there's a total catastrophe in terms of a recession, and radio stations and TV stations go out of business in leaps and bounds and can't pay their license fees, unless something like that happens we're going to have a good year every year." http://www.nytimes.com/2004/01/26/bu...ne r=USERLAND ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I’m Depressed Frank Field So, a couple of years into tracking this set of issues, and it feels like I’m just spinning my wheels. My accomplishments in this domain mostly have to do with the students that I’ve had the chance to teach about this, but that’s a really long term strategy – and, at the rate things are going, there might not be enough time to hope that strategy will come to fruition. The notion that Congress is priming to overturn the principles in Feist is just horrifying. After all the critisim of the European legislation in this area, I can only believe that this is willful ignorance of the threat. The opportunities for abuse are going to be legion, and it’s clear that, in the current climate, those abuses will be undertaken and exploited as fully as the market and the technology will allow. It’s actually a little perverse. Creating a database and locking it up behind a pay-wall certainly allows the creator to extract rents from his/her labors. But, putting it out on the WWW for free generates traffic only for as long as the database is well- maintained and the content updated regularly. With copyright extended to databases, it could easily be the case that publishing a database online will award the creator with a monopoly that might allow his/her to extract rents, but no longer requires the database owner to maintain the database itself. The barrier to entry that copyright awards will limit competition. I would argue that competition is, in this domain, the engine for creativity – and the monopoly that copyright awards in fact undermines the creativity that copyright is supposed to engender. In fact, I’m beginning to wonder if the real innovation that needs to be protected is the ability to innovate new ways of making money/conducting business. This is the kind of meta-innovation that emerges out of technological advance, and increasingly it appears that our construction of copyright is limiting that creativity in favor of other kinds of creativity. And, I fear that protecting the latter at the expense of the former will just ensure the decline of the marriage of technological advance and market innovation that has produced so much progress and wealth to date. Oh, well. It’s late, I’m tired and it’s been a long week. I’m out of touch with what my online friends have to say. I need a little optimism and I hope that, as I catch up on things this weekend, there will be some of that to find. But, for the moment, I understand why Larry has such a hard time expecting that people will see the light. He’s worked a lot harder, and with a lot more apparent success, yet we’re still having weeks like these. Maybe it’s time for a change in tactics……….. http://msl1.mit.edu/furdlog/index.php?p=1218&more=1&c=1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Coleman Criticizes RIAA's Renewed Efforts To Crackdown On P2P Users Through The Courts Senator Norm Coleman (R-MN) today criticized renewed efforts by the RIAA Wednesday to continue to use the courts to sue individuals that the industry group believes are illegally sharing files on the Internet. "I don't believe lawsuits are the answer to the RIAA's problems," Senator Coleman said. "While the industry has every right to protect its intellectual property, lawsuits should not be the primary means by which they do so. The recording industry sued 532 computer users Wednesday — the largest number sued at one time since the RIAA first launched its legal battle against illegal file sharing last summer. The defendants were identified only by their numeric Internet protocol addresses, since a federal appeals court last month ruled that the recording industry can't use the subpoenas to force Internet providers to identify music downloaders without filing a lawsuit. RIAA spokesmen said they will identify the defendants, who if convicted face civil penalties or costly settlements, through the legal process. "The decision by the RIAA to rely primarily on the fear of the courts and litigation to pummel P2P users is unfortunate and misdirected," Senator Coleman said. "Although the John Doe lawsuits now utilized by the RIAA may afford the consumer some additional protection than the previous litigation governed by the Digital Millennium Copyright Act (DMCA), I still believe litigation alone is not the answer." Coleman called upon industry officials to seek a more proactive, long-term solution, instead of using the fear of lawsuits to deter illegal file sharers. "I urge them to participate in a dialogue with the broader digital community to find solutions that will not only address the economics of the entertainment industry, but the powerful potential of technology to open new doors of economic opportunity and growth," Coleman said. As chairman of the Permanent Subcommittee on Investigations, Coleman has held numerous hearings to address the problems facing the music and motion picture industries, which have found that technological innovations, rather than more legislation, can combat illegal downloading. Within several weeks Coleman will convene a roundtable of industry and technology leaders to address the crisis facing the industry and find a proactive solution. http://mi2n.com/press.php3?press_nb=61889 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ France Joins U.S., Britain Against Song Swappers Bernhard Warner CANNES, France (Reuters) - Add the French to the war on Internet song swappers. Facing their first annual sales decline in recent memory, officials from the world's fourth largest music market told Reuters Sunday they would fight back with lawsuits. Monday, French music industry trade body SNEP will report that recorded music sales fell 14.6 percent in revenues in 2003 to just under 2.1 billion euros, said Herve Rony, SNEP general manager. The culprit, according to Rony, is the growth in file-sharing services such as Kazaa and possibly CD-copying by home users. "It happened very suddenly. Apparently, there is a link to the fall in the market and the increase in access to the Internet," Rony told Reuters on the sidelines of the Midem Music conference in the French seaside city. "It is the first year we can say France has to face the Internet crisis." The French music industry had defied the odds for much of the past decade, growing annually while CD sales in the rest of Western Europe and the United States dip as file-sharing and physical piracy proliferate. Last year the Recording Industry Association of America (RIAA), took the controversial step of suing the largest Internet song swappers in the United States, hoping the legal crackdown would act as a deterrent. The RIAA's sister organizations -- the BPI in the UK and the IFPI, representing music labels around the world -- said earlier this month lawsuits would be inevitable in other territories, perhaps this year. Rony said that while lawsuits against French file-sharers, or "uploaders," was inevitable, he could not say when. He said there was some urgency though as a number of industry-backed services were set to launch this year, including Apple Computer's. "If we want to convince consumers to go off the illegal offers you have to take out the stick," Rony said. French law does not offer the same levels of protection to copyright holders as British and American laws afford. For this reason, Rony said a legal crusade could be hard to stir in France. "It will be difficult convincing parliament," he said, adding that the French Ministry of Culture had already expressed its support. SNEP represents roughly 50 independent and major music labels including Universal Music, Warner Music, Sony Music and Bertelsmann's. http://www.reuters.com/newsArticle.j...toryID=4202096 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Chatterbox From News.com: Snocap has been working on ways to identify songs, as they are traded through a file-swapping network, including using a technique called "audio fingerprinting," which monitors the sonic characteristics of music files. “yeah whats new allways trying to find new ways to monitor our online trading habbits- bastards, i want to trade like the old days with no one watching over me ....those days are gone perhaps....” - esteeaz ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Music Labels See Recovery In Downloads, Lawsuits Reuters A music industry trade organization said Thursday that new online download services are winning over customers and warned that a globe-spanning legal crackdown on file sharers is imminent. On Thursday, the International Federation of the Phonographic Industry (IFPI) released a progress report on its year-old campaign to develop and promote online music stores and spread its message that online song swapping is illegal. In a rare upbeat statement, the IFPI said its initiative is building a vibrant, albeit small, market for selling music downloads that appears to be stealing momentum from peer- to-peer networks such as Kazaa and WinMX, where all varieties of music are available for free. "We believe that the music industry's Internet strategy is now turning the corner, and that in 2004 there will be, for the first time, a substantial migration of consumers from unauthorized free services to legitimate alternatives," said Jay Berman, IFPI's chief executive. "The start of 2004 brings a new sense of optimism along with evidence of real change," Berman said in a statement. The IFPI, which represents a host of independent and major music labels including EMI, Warner Music, Bertelsmann's BMG, Sony Music and Universal Music, also said it would get tough with prolific song swappers this year. "It is likely that there will be lawsuits against major Internet distributors internationally in 2004, similar to those filed in the U.S.," the IFPI said in its report. European music industry executives have been warning for weeks they will follow in the controversial footsteps of the United States, where a legal clampdown on file sharers has resulted in hundreds of lawsuits. On Wednesday, the Recording Industry Association of America launched its largest wave yet of file-swapping lawsuits against individuals. The crackdown could intensify in Canada and Asia too, industry officials said. The industry blames file-sharing networks for contributing mightily to a three-year decline in music sales. Citing a variety of independent and industry-backed studies, it says the lawsuits do serve as an effective deterrent to file sharing. The IFPI said its own probe of file-sharing networks revealed the availability of unauthorized music files on the services dropped from 1 billion in April 2003 to 800 million this month. Industry reports offer contradicting evidence that the file-sharing phenomenon is tailing off, however. It is believed music executives will invest more money in the development of online music stores before they round up the lawyers. In Europe alone, some 50 new industry- backed download stores are expected to launch this year, bringing the continental total to over 80. Berman said he expects that the most popular online music store, Apple Computer's iTunes, along with offerings from Roxio and RealNetworks Industry officials told Reuters recently that in 2003 American music fans purchased 30 million downloads, while Europeans bought 3 million from industry-sanctioned sites. http://news.com.com/2100-1027-5145267.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ To Save Copyright We Must Reform It Prof. Lawrence Solum has written once again on copynorms, commenting on a couple of articles and providing some anecdotal evidence of his own (Lawsuits and Copynorms). Solum questions whether the RIAA's lawsuit-centered tactics are truly affecting norms. Their impact on copybehavior is disputed, but the issue of their impact on copynorms is hardly addressed. Based on the students in his law classes, Solum sums up one developing copynorm thus: It is socially unacceptable to take the position that unlawful P2P filesharing is morally wrong. Frankly, I think that the development of such norms is part and parcel of the RIAA's tactics. The RIAA has taken the strategically foolish position that all filesharing is wrong. To few most people outside of the ABA's IP bar, such an uncompromising approach to all filesharing is clearly incorrect. Most people believe that some sharing (particularly with friends or family) is legitimate, but other sharing is not. To the extent that the RIAA is not willing to compromise its position on filesharing, people will increasingly reject the idea that any filesharing is wrong. This is not a healthy development for those who believe that copyright is worth saving. The only way to save copyright is to reform it. http://importance.typepad.com/the_im...e_copyrig.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The Tyranny of Copyright? Robert s. Boynton Last fall, a group of civic-minded students at Swarthmore College received a sobering lesson in the future of political protest. They had come into possession of some 15,000 e-mail messages and memos -- presumably leaked or stolen -- from Diebold Election Systems, the largest maker of electronic voting machines in the country. The memos featured Diebold employees' candid discussion of flaws in the company's software and warnings that the computer network was poorly protected from hackers. In light of the chaotic 2000 presidential election, the Swarthmore students decided that this information shouldn't be kept from the public. Like aspiring Daniel Ellsbergs with their would-be Pentagon Papers, they posted the files on the Internet, declaring the act a form of electronic whistle-blowing. Unfortunately for the students, their actions ran afoul of the 1998 Digital Millennium Copyright Act (D.M.C.A.), one of several recent laws that regulate intellectual property and are quietly reshaping the culture. Designed to protect copyrighted material on the Web, the act makes it possible for an Internet service provider to be liable for the material posted by its users -- an extraordinary burden that providers of phone service, by contrast, do not share. Under the law, if an aggrieved party (Diebold, say) threatens to sue an Internet service provider over the content of a subscriber's Web site, the provider can avoid liability simply by removing the offending material. Since the mere threat of a lawsuit is usually enough to scare most providers into submission, the law effectively gives private parties veto power over much of the information published online -- as the Swarthmore students would soon learn. Not long after the students posted the memos, Diebold sent letters to Swarthmore charging the students with copyright infringement and demanding that the material be removed from the students' Web page, which was hosted on the college's server. Swarthmore complied. The question of whether the students were within their rights to post the memos was essentially moot: thanks to the Digital Millennium Copyright Act, their speech could be silenced without the benefit of actual lawsuits, public hearings, judges or other niceties of due process. After persistent challenges by the students -- and a considerable amount of negative publicity for Diebold -- in November the company agreed not to sue. To the delight of the students' supporters, the memos are now back on their Web site. But to proponents of free speech on the Internet, the story remains a chilling one. Siva Vaidhyanathan, a media scholar at New York University, calls anecdotes like this ''copyright horror stories,'' and there have been a growing number of them over the past few years. Once a dry and seemingly mechanical area of the American legal system, intellectual property law can now be found at the center of major disputes in the arts, sciences and -- as in the Diebold case -- politics. Recent cases have involved everything from attempts to force the Girl Scouts to pay royalties for singing songs around campfires to the infringement suit brought by the estate of Margaret Mitchell against the publishers of Alice Randall's book ''The Wind Done Gone'' (which tells the story of Mitchell's ''Gone With the Wind'' from a slave's perspective) to corporations like Celera Genomics filing for patents for human genes. The most publicized development came in September, when the Recording Industry Association of America began suing music downloaders for copyright infringement, reaching out-of-court settlements for thousands of dollars with defendants as young as 12. And in November, a group of independent film producers went to court to fight a ban, imposed this year by the Motion Picture Association of America, on sending DVD's to those who vote for annual film awards. Not long ago, the Internet's ability to provide instant, inexpensive and perfect copies of text, sound and images was heralded with the phrase ''information wants to be free.'' Yet the implications of this freedom have frightened some creators -- particularly those in the recording, publishing and movie industries -- who argue that the greater ease of copying and distribution increases the need for more stringent intellectual property laws. The movie and music industries have succeeded in lobbying lawmakers to allow them to tighten their grips on their creations by lengthening copyright terms. The law has also extended the scope of copyright protection, creating what critics have called a ''paracopyright,'' which prohibits not only duplicating protected material but in some cases even gaining access to it in the first place. In addition to the Digital Millennium Copyright Act, the most significant piece of new legislation is the 1998 Copyright Term Extension Act, which added 20 years of protection to past and present copyrighted works and was upheld by the Supreme Court a year ago. In less than a decade, the much-ballyhooed liberating potential of the Internet seems to have given way to something of an intellectual land grab, presided over by legislators and lawyers for the media industries. In response to these developments, a protest movement is forming, made up of lawyers, scholars and activists who fear that bolstering copyright protection in the name of foiling ''piracy'' will have disastrous consequences for society -- hindering the ability to experiment and create and eroding our democratic freedoms. This group of reformers, which Lawrence Lessig, a professor at Stanford Law School, calls the ''free culture movement,'' might also be thought of as the ''Copy Left'' (to borrow a term originally used by software programmers to signal that their product bore fewer than the usual amount of copyright restrictions). Lawyers and professors at the nation's top universities and law schools, the members of the Copy Left aren't wild-eyed radicals opposed to the use of copyright, though they do object fiercely to the way copyright has been distorted by recent legislation and manipulated by companies like Diebold. Nor do they share a coherent political ideology. What they do share is a fear that the United States is becoming less free and ultimately less creative. While the American copyright system was designed to encourage innovation, it is now, they contend, being used to squelch it. They see themselves as fighting for a traditional understanding of intellectual property in the face of a radical effort to turn copyright law into a tool for hoarding ideas. ''The notion that intellectual property rights should never expire, and works never enter the public domain -- this is the truly fanatical and unconstitutional position,'' says Jonathan Zittrain, a co-founder of the Berkman Center for Internet and Society at Harvard Law School, the intellectual hub of the Copy Left. Thinkers like Lessig and Zittrain promote a vision of a world in which copyright law gives individual creators the exclusive right to profit from their intellectual property for a brief, limited period -- thus providing an incentive to create while still allowing successive generations of creators to draw freely on earlier ideas. They stress that borrowing and collaboration are essential components of all creation and caution against being seduced by the romantic myth of ''the author'': the lone garret-dwelling poet, creating masterpieces out of thin air. ''No one writes from nothing,'' says Yochai Benkler, a professor at Yale Law School. ''We all take the world as it is and use it, remix it.'' Where does the Copy Left believe a creation ought to go once its copyright has lapsed? Into the public domain, or the ''cultural commons'' -- a shared stockpile of ideas where the majority of America's music and literature would reside, from which anyone could partake without having to pay or ask permission. James Boyle, a professor at Duke Law School, notes that the public domain is a necessity for social and cultural progress, not some sort of socialist luxury. ''Our art, our culture, our science depend on this public domain,'' he has written, ''every bit as much as they depend on intellectual property.'' http://www.nytimes.com/2004/01/25/ma...COPYRIGHT.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Mydoom Labelled The Worst Virus Ever ILN Finnish security software and services company F-Secure has declared the MyDoom virus the fastest-spreading worm ever and "the worst e-mail worm incident in virus history". F-Secure estimated that the worm was accounting for 20 percent to 30 percent of worldwide e-mail traffic Wednesday, putting it well ahead of previous pests, such as the SoBig.F worm. http://news.com.com/2100-7349_3-5149764.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Software Patents 'Threaten Linux' Open source advocate Bruce Perens tells BBC technology correspondent Clark Boyd why the real threat to Linux and the open source movement is not from the SCO lawsuits, but from software patents. Clark Boyd : Linux seems to be going more and more mainstream. Suddenly there are advertisements by IBM on television promoting Linux. What do you make of this mainstreaming of the whole open source idea? Bruce Perens : I like the fact that the IBM ads emphasise the openness. I saw one the other day that compared Linux to a child that had been adopted by the world. And I think that's a great theme, and it's very different than what you usually hear from IBM. CB : Are the major companies becoming involved in Linux, helping to channel that creativity in ways that didn't exist before? BP : Certainly the entrance of IBM, Hewlett Packard and a number of other companies, is helping. The main way is that it's helping us get more appreciation from the rest of the world. We are no longer isolated geeks making a system only we know is good. And I think there's a lot of benefit. I think maybe some of the more naive around the world may think that Linux comes from IBM, but there are a good many people who appreciate the role of Linus Torvalds who may also appreciate the role of Guido van Rossum, the writer of the Python language. Patent problem CB : What do you see as the main challenges to Linux in the next year to 18 months, especially regarding the lawsuits brought by SCO which are still pending in the courts? BP : The good news is that SCO has pretty much exhausted any chance of being successful in court. Their legal discovery documents have not yielded sufficient evidence. But, let's go on to the future beyond SCO. The biggest challenge that will face us after that is software patenting. Software patents that are being accepted are not necessarily inventions, their definitions are overbroad. And you can never finish a patent search. The definitions are so broad, you can't ever be sure a company would or would not assert their patent on what you are doing. You have to consider engineers today spend their entire careers combining other people's intellectual property. And every small and medium sized enterprise is at risk regarding software patenting. That is a problem in Europe, because representatives to the European Parliament are pushing very hard for software patenting that would indeed shut out all small and medium businesses from the software development business, not just open source. We're looking at a future where only the very largest companies will be able to implement software, and it will technically be illegal for other people to do so. That's a very, very bad situation developing. We must do something so that there is reason for people to innovate, there is reason for people to invent, but that companies can execute without this constant fear that we will be sued into the ground regarding software patenting. 'Lots of friends' CB : What about the positives for Linux coming up in next year to 18 months? I believe you've called 2004 the year of Linux on the desktop? As Linux and open source become more important in business, we hope that those friends will be ones with political influence, who can make sure that the world remains a healthy place for open source software Bruce Perens BP : We have all of the Linux-based software we need for 80% of the people in the world. The other 20% may use specialised applications that are not yet available in open source. And when I say 80%, that's all free software. What we're doing in 2004 is some bug removal, and some integration, not additional features, because the features are all already there. I think we will see some significantly-sized desktop deployments. IBM says they already have 15,000 Linux desktop deployments across the company. We'd like to see the rest of the company using the Linux desktop as well. I think we will see the same in other businesses. The interesting thing here is that because of the sort of benevolent nature of open source, we have a lot of friends. As Linux and open source become more important in business, we hope that those friends will be ones with political influence, who can make sure that the world remains a healthy place for open source software. CB : Looking at the increased commercialisation of Linux-based products, do you see any threat of Linux becoming, in its own way, just as monolithic as Microsoft? Or can Linux grow, and still stay true to its open source roots? BP : We are facing a problem in that there are two dominant companies in Linux distribution - Red Hat and Novell, which just purchased SuSE. We do not intend to let it stay that way. I'm leading a project called User Linux. The project aims to make a zero-cost Linux distribution, where people, if they want service, will pay for service on a services rendered basis. And we're establishing a global support network made of small companies, more than large ones, to make that work. And if we take the open source paradigm, which is a lot of little guys all around the world collaborating to make an organisation bigger than IBM or Microsoft, and we take that to the business sector, we may really invent something new here, taking open source into the economy to a degree it has never gone before. Bruce Perens is the primary author of the Open Source Definition, the manifesto of the open source movement and has been a spokesperson for Linux and the open source movement for more than a decade. http://news.bbc.co.uk/1/hi/technology/3422853.stm ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Lindows To Sell OS For Free Over P2P James Pearce Lindows has announced it plans to distribute its LindowsLive operating system for free via peer-to-peer networks. LindowsLive allows people to run a Linux-based operating system from a CD, without installing it on their computer, and previously retailed for US$29.95. The product was also sold over the Internet in a form which could be burned to a CD. "No, we haven't lost our minds," said Lindows CEO and founder Michael Robertson in a newsletter. "What we're doing is figuring out how we can take advantage of P2P to advance our own business." Robertson said Lindows.com would spend over US$100,000 in bandwidth charges to deliver software used to create installation CDs for LindowsOS. "By allowing people to download LindowsLive from P2P networks instead from our servers, we hope to reduce those costs," said Robertson. "At the same time, we'll be exposing millions of users on file- sharing networks to LindowsOS all at a minimal cost. Hopefully, those users will purchase other products and services from Lindows.com, such as CNR (click and run), web-filtering, virus software or one of the many Click-N-Buy (CNB) games or programs." Lindows has a running legal battle with Microsoft over the name of the company, which the litigation- happy behemoth claimed infringes a Microsoft trademark. There was also bad blood over MSFreePC.com, a Web site set up by Lindows to allow consumers due a refund from the US$1.1 billion settlement Microsoft made last year to lodge their forms online. Earlier this month a judge ruled against the Web site, forcing it to be removed. The move by Lindows will also help the fledgling peer-to-peer industry, which is trying to legitimise the software as an effective and profitable way of distributing legal content to consumers. http://www.zdnet.com.au/news/softwar...9115890,00.htm ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Tech Firms Fail To Squelch Database Bill Declan McCullagh A congressional panel on Wednesday approved a proposal to curb database copying, ignoring the objections of technology companies that launched a last- minute lobbying campaign to kill the proposal. By a 16-7 vote, the House Judiciary committee approved an intellectual property bill that had been opposed by Amazon.com, AT&T, Comcast, Google, Yahoo and some Internet service provider associations. The proposal, backed by big database companies such as Reed Elsevier and Thomson, would extend to databases the same kind of protection that copyrighted works such as music, literature and movies currently enjoy. Its supporters say that such protection is necessary to stop rivals from extracting information from proprietary databases like Reed Elsevier's LexisNexis service instead of going through the far more expensive process of compiling it themselves. The loosely organized technology coalition opposed to the proposal had stepped up its lobbying efforts in the days leading up to the committee vote, joined by library and civil liberties groups. "Proponents of the bill have yet to offer a convincing case that existing federal and state laws, including federal copyright law, federal antihacking prohibitions, and a variety of state contract and tort laws, are insufficient to provide database producers with adequate protection," the coalition said in a letter last week. "They have certainly failed to demonstrate a problem that would justify the fundamental and constitutionally suspect changes to our nation's information policy called for in the legislation." One of the most vocal opponents of the bill has been the venerable U.S. Chamber of Commerce, which argued that database owners already have the ability to protect their property through contracts and terms-of-service agreements. In its own letter to Congress, the Chamber predicted that a financial analyst with access to Dun & Bradstreet databases could violate the law by including that information in a report prepared for a client, as could a research chemist who wishes to reproduce information on the effectiveness of new pharmaceuticals. The Database and Collections of Information Misappropriation Act of 2003 does not include criminal penalties. Rather, it allows the database owner to sue in civil court "any person who makes available in commerce to others a quantitatively substantial part of the information in a database." There are limited exemptions for educational and research organizations and for journalists. The bill, backed by Rep. Howard Coble, R-N.C., also is controversial because, critics say, it would sidestep a U.S. Supreme Court decision that said facts could not be copyrighted. Wednesday's vote follows a 10-3 vote last October in a subcommittee. Now the measure likely will go to the House floor in preparation for a possible vote. http://news.com.com/2100-1028-5145040.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ San Francisco Journal Last Car. Geek Party. Spread the Word. Dean E. Murphy The crowd gathered rather discreetly at the designated subway station, 16th and Mission, at the designated time, 5:30 on Friday afternoon, waiting for the designated train, the eastbound for Richmond. Someone walked by with a piece of paper, an invitation: "The last car on the subway is the party car." The subway train pulled up, and a man named Marc with a floppy blond Mohawk and a crimson sport coat let out a welcoming call from the platform. He carried an e-flat euphonium under his arm and had a habit of making noise, any noise. He was the nonleader of this nonevent: a "spontaneous, digitally organized" party on BART, as the Bay Area Rapid Transit is known. BART's tape-recorded voice announced, "Ten-car train for Richmond," setting off a giggling dash toward car No. 10. The party car was up and running — for dozens of Web freaks, hackers, geeks and others like them — a time and place to meet, mingle, act up, wind down, express themselves, dangle from poles, rage against the machine or do none of that, anonymously, anarchically, all in the cramped, swaying confines of a subway car hurtling underneath this stridently counterculture city, in the direction of Berkeley, where it would be abruptly unplugged. A clown named Romance the Love Pirate brought a rubber chicken. Two men in trench coats smirked near the back. One heavyset man with pale skin and knit cap came dressed in white. He said he worked in a cubicle and did not get out much. What did he do for a living? "I sell drugs," he said. They were joined by three skateboarders and a man wearing black leather pants and a Houston Police Department shirt. That man hung upside down from the handrails. It was a mutinous commute, simultaneously pointed and pointless. "This is our space," said Earl Stirling, an unemployed computer engineer, explaining the party's philosophical underpinnings. "We own public transportation." The BART party was not original (subway parties in New York and London have been around awhile), but it had a compelling San Francisco twist: anonymous, virtual invitations to the entire world. "Join a bunch of hackers and geeks," one of the Web invitations said. "Spread the word," another said. "Bring people, visuals, music. If you don't make the first train, we're also on the second, and the one after that and the one after that and the one after that." As the car rumbled toward the San Francisco Bay, someone with an X-acto knife cut the Jet Blue advertisements into strips, struggling not to slice anyone's wrists with each lurch of the train. The dissected placards were mounted overhead, giving the car the vague feel of a cheap discothèque. A man with long sideburns unraveled a tube of green cellophane, which he used to cover a row of lights with packing tape. Suddenly it was Christmastime. A bag of something edible in the shape of mustaches was passed around. An assortment of small paper cups with Champagne drifted by. When asked, the man hanging from the ceiling volunteered a few thoughts about acts of "urban reclamation" and "space hijacking." "People need to find more interesting ways to have fun," he said. The man with the mustaches, who identified himself as a graduate student in computer science, seemed irritated when questioned. But his idea: The point of the party was that there was no point. "There doesn't have to be a reason," he said. "We're reclaiming public space and showing people that they can make things happen. It is not evolved from corporations." That was the first clue for the reporter on board, who would soon appreciate what it must feel like to be in the employ of Bechtel or Halliburton and wander into an anti- globalization demonstration. Because as much as this party car was about impulsive revelry in a place open to anyone, there was some anger, nastiness and anxiousness about this person from outside the virtual clique. A round man named Michael with a shock of tomato-colored hair sneered and pointed his digital camera at the reporter. Later, he posted the photographs on the Internet, with commentary. "Fight the real enemy," it read above one photo of the reporter. "Damn the man," it said on another. When the reporter approached Marc, the party's nonleader who was described by others on the car as both a chef and hacker, Marc asked to see proof of employment. He looked disdainfully when handed a New York Times business card, refusing to take it. Marc then declined to speak further. After about half an hour, the party took a general turn for the worse when two transit police officers boarded the last car in Berkeley. It was there, with everyone required to assemble on the platform, that Romance the clown joined the reporter on the party's island of misfits. The police were threatening her with a citation for boisterous behavior. More than a few commuters simply wanted to read a book after a long week at work, the officers explained, suggesting that she just shut up. But Romance did not, for the longest of times. Most of the geeks scattered as she endeavored to remain in character, even when her rubber chicken slipped from her belt and an officer ordered, "Don't drop your chicken, ma'am." Once back on the train, with the party crashed and the last car again as quiet as the first, Marc sought out the reporter. He let it be known that the reporter had been an unwelcome partygoer and the events of the evening did not belong in any newspaper, especially one interested in profits, he said. "You are stealing our art," Marc said in what became a long lecture about corporate journalism. "You are commercializing our culture." The spontaneous party car had become unfun for those who could not command its spontaneity. When the reporter got back to his desk that night, the phone rang. It was Hallie, the caller said. Remember? We met on the party car? Hallie had called to pitch a story. The island of misfits was growing. The next day on the Web, center stage for activist clowns and angry hackers alike, Romance wrote of her disappointment. "If Shakespeare was correct in his belief that we are all players, then we are all outlaws, too," she said on tribe.net. "I refuse to be afraid. Let silliness prevail. Children are watching. We must set an example of ridiculousness and play." http://www.nytimes.com/2004/01/29/national/29BART.html

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