Justice Dept. probes for pirates

The U.S. Department of Justice announced on Wednesday that it has launched a federal criminal probe of piracy on a peer-to-peer network.

Federal agents have searched five homes and one Internet service provider in three states, seeking evidence of criminal copyright infringement, according to a Justice Department statement. The investigation--dubbed "Operation Digital Gridlock"--is targeting a specific file-swapping group called the Underground Network.

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What's new:
The Justice Department launched a federal criminal probe of piracy on a peer-to-peer network, searching five homes and an ISP in three states.

Bottom line:
This milestone in federal law enforcement's treatment of P2P technology could portend deepening scrutiny of a much more casual brand of online copyright infringement than has previously been targeted.

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"The execution of today's warrants disrupted an extensive peer-to-peer network suspected of enabling users to traffic illegally in music, films, software and published works," Attorney General John Ashcroft said in a statement. "The Department of Justice is committed to enforcing intellectual-property laws, and we will pursue those who steal copyrighted materials, even when they try to hide behind the false anonymity of peer-to-peer networks."

Although no charges have yet been filed, the action is a milestone in federal law enforcement's treatment of peer-to-peer technology. It could portend deeper scrutiny of casual online copyright infringement, expanding beyond the tightly organized groups typically targeted by investigators in the past.

Like most high-profile federal actions, Wednesday's searches targeted a group suspected of being high-volume copyright infringers rather than everyday computer users who might use a mainstream program such as Kazaa or eDonkey. But unlike the secretive "warez" groups that have been the focus of earlier FBI investigations, the Underground Network appeared to have had minimal membership requirements and little organization linking its most casual users.

The Justice Department has routinely pursued online copyright infringers in the past, often at the behest of trade associations such as the Recording Industry Association of America, the Motion Picture Association of America and the Business Software Alliance.

The MPAA immediately welcomed news of the enforcement actions.

"The results of 'Operation Digital Gridlock' should send a strong message, to everyone who contemplates stealing movies and distributing them on the Internet, that illegal actions are not without real consequences," MPAA Chief Executive Jack Valenti said in a statement. "This should also puncture the myth that illegal activity on the Internet is 'safe' because it is untraceable."

Getting inside the network
According to documents provided by the Justice Department, the sting operation has been under way since at least March. Undercover FBI agents joined the network by loading two computers with copyrighted material and applying for membership with those machines. Like many other similar groups, the Underground Network required that members be able to provide copyright materials for download by other users instead of simply "leeching" on others.

The network has been based on Direct Connect technology, which enables individual computer users to set up private file-swapping networks similar to the original Napster. With Direct Connect, ordinary PCs serve as "hubs," keeping indexes of what files are available and linking search requests with the computers where files are stored.

Once a part of the network, the FBI agents identified five of the most active "hubs" in the United States and downloaded a total of 72 gigabytes of copyrighted material--including 84 movies, 40 software applications, 13 games and 178 songs, according to the Justice Department documents.

The FBI actions culminated in searches early Wednesday morning of homes of those believed to be associated with the operators of those hubs. According to the Justice Department statement, the investigation is ongoing.

Attorney Robert Andris said the Underground Network hub operators, if ultimately charged with criminal copyright infringement, would face legal tests similar to those seen in the civil cases of Napster and Grokster. However, criminal cases do have a higher standard of proof, he said.

"A court would be looking at essentially the same conduct (as in the civil cases)," said Andris, a partner with Ropers Majeski Kohn & Bentley in Redwood City, Calif. "What it comes down to is the ability to control (swapping activity), and knowledge that it's going on."

In Napster's case, judges made preliminary rulings that the company had enough control over its network to make it potentially liable for its users' actions. In last week's decision on Grokster and StreamCast Networks, a federal appeals court ruled that those companies did not have enough control over the operations of their decentralized networks to make them legally responsible for copyright infringement.

Caught in NET
Until a few years ago, only commercial pirates doing things like selling illegal copies of CDs or DVDs could be prosecuted under a criminal charge, while copyright infringers who weren't doing it for profit had to be sued in civil court. Then, in response to an Internet piracy case involving a Massachusetts Institute of Technology student, Congress enacted a 1997 law called the No Electronic Theft (NET) Act that made nonprofit piracy a federal crime.

The NET Act says that peer-to-peer pirates may be given up to $250,000 in fines and prison terms of up to three years--though people targeted under the law typically agree to plea bargains that carry milder punishments. In general, violations of the NET Act are punishable by one year in prison, if the total value of the pirated files exceeds $1,000. If the value tops $2,500, that term is not more than five years in prison.

Proving that file swappers violated the NET Act is not a trivial task. It requires a prosecutor to demonstrate not only that defendants made the files available, but that they actually made or distributed copies.

That's why the RIAA is lobbying hard for new legislation that would make it easier for federal prosecutors to land convictions under the law. The RIAA is backing the Piracy Deterrence and Education Act (PDEA), which says prosecutors would no longer have to prove that copyrighted materials were downloaded by others. Instead, they would need only to show that those files had been publicly accessible in a shared folder.

RIAA lobbyist Mitch Glazier said in an interview this week that he expects Congress to approve PDEA by the end of the year. On behalf of the industry group, Glazier is also pressing for the passage of a second bill, called the Pirate Act, that permits the Justice Department to hit infringers with civil lawsuits in addition to criminal ones.

At a conference in Aspen, Colo., two years ago, a top Justice Department official indicated that prosecutions under the NET Act would be forthcoming.

A July 2003 letter from members of Congress to Ashcroft complained of "a staggering increase in the amount of intellectual property pirated over the Internet through peer-to-peer systems." Signed by 19 members of Congress, including Sen. Joseph Biden, D-Del., Rep. James Sensenbrenner, R-Wis., and Sen. Dianne Feinstein, D-Ca., the letter urged Ashcroft "to prosecute individuals who intentionally allow mass copying from their computer over peer-to-peer networks."

CNET News.com's Declan McCullagh contributed to this report.

What were they sharing?

It's interesting that they were able to join into the DirectConnect system. In order to do that, especially on the busiest hubs, you usually have to share between 5 and 20GB, yourself.

Were they breaking the same laws that they are trying to implicate others on? I wonder how many movies I downloaded directly from them. I'd like to sue them for making them available to me. Yeah right...that'll happen.

They would have to have been..

They would have to have been breaking the same laws. I think these peoples lawyers are going to have fun with that. Our justice system should not allow the authoritize to break the law themselves just to catch people that are. Because of this this sting just became entrapment.

Robert

They only accused the Web Page

They did not connect to Direct Connect to implicate Underground Network. They are trying to say Tyler Durden used the web site to promote illegal file sharing and the like.

[jadester]

I agree

Were they online sharing files? Isn't that illegal and called ENTRAPMENT?
And also with winxp pro, when I installed it, it made its own shared files directory - which is now technically illegal - so can microsoft be sued over this issue in their software?
The USA is obviously on a witch hunt - the reason for decline of sales of music is because the music out there is ***** - and has been for the last 5-7 years - so RIAA if you want to keep customers get some better music out there and stop suing individuals!! Make more live bootlegs available as well - i want to hear live music more than buy a crappy cd that has maybe 2-3 songs on it that are okay - the last cd i bought was pearl jam live bootleg recently - before this cd the last cd i bought was from 2 years ago. I'd rather jump off a cliff than buy ***** music which i will never play - why would i waste my money on it?

Stealing Music = JAIL, Steal Millions $ as Corp. heads = freedom

Does it seem odd that companies that have caused major economic problems for the entire country because of fraud and other illegal activities are escaping punishments?
Yet if you steal a song or two, according to this article, you can get jail time?

I haven't heard of too many corp. execs being held accountable.

Don't get me wrong - I don't think stealing on either end is wrong, but why should those stealing "pennies" get a harsher punishment than those stealing "millions"?

correction

Last line should have read "Don't get me wrong - I think stealing on either end is wrong, but why should those stealing "pennies" get a harsher punishment than those stealing "millions"?

[Prndll]

Nothing is being stolen.......

When an MP3 is downloaded, NO ONE at all is denying who wrote and performed the song. I (for one) would never claim to have written or sung any of the music.

What this is, is a ploy by the powers that be to maintain absolute power over all of us. Even when the people of the world have the ability to do things for themselves, the recording industry still maintains the line of thinking that it must go through them. Even to go to such great lengths to use federal strongarm tactics and lawsuits against little girls.

There is a better way. The RIAA does not want to use that better way because it is not the "norm", it is not the thing they are use to. What they fail to realize is that the world is changing. They MUST change with it or be trampled under the wheels of all humanity. Everything they do to try to inforce copy protection just angers people even more and causes those that have a tech savy mind to come up with a way to circumvent them.

If their sales are truly going down, it has nothing to do with downloaders. It has more to do with the industry itself: The crap they put out, their business ethics, and power hungry train of thought that keeps them from making smarter business decisions.

I for one would rather pay TimeWarner for the installation of Winamp than to see all this.

TimeWarner owns Winamp. TimeWarner complains about people downloading music to play on Winamp. It is (in large part) TimeWarner's servers that are used to download mp3's. TimeWarner even creats the hardware to play and record mp3 using cd's.

They give us the ability to do something and then use their influence in the goverment to put people in jail for using that ability.

It is not MY morality that is in question here, it is THIERS. THEY are they true thieves here.

Ya know, the man that owns the "MP3" format is proped up and allowed to further his work. If the RIAA wants to complain about someone, let them complain about him.

The ONLY way the recording industry will ever win is to have pc's not able to record or play sound. As long as computers can play and record sound, people will continue to do this kind of thing with music. WAKE UP......Pandora's box has been opened.....The RIAA does not have the power to close it.

Did we catch the Thieves or the Network Admins?

As a friend of someone who was questioned by the F.B.I. about the offending service provider I must point out that the Law enforcement agencies should remember that Underground Network was only providing a service. The webpage was nothing more than a chat/forum server page. I know that the great Tyler Durden was questioned along with Spartacus, but what of the other owner? What exactly is the Government searching for in the Underground Network? The webpage like I said only provided help with connecting to Direct Connect and whatever else one had trouble with could find help on the page. I'm just trying to state that the members so far questioned were only the Web Page adminstrators. Why hasnt the FBI investigated Diret Connect if it is so illegal?
if anyone has questions comments or concerns e-mail me @ [e-mail]