July 1, 2005 9:00 AM PDT

Week in review: Judging tech

Some of the most important technology decisions this week were made not in the boardroom but by nine men and women wearing black robes.

The Supreme Court handed movie studios and record labels a sweeping victory against file swapping, ruling that peer-to-peer companies such as Grokster could be held responsible for the copyright piracy on their networks. In a unanimous decision, the nine justices said companies that build businesses with the active intent of encouraging copyright infringement should be held liable for their customers' illegal actions.

The decision comes as a surprisingly strong victory for copyright companies and stands to reshape an Internet landscape in which file swapping has become commonplace.

The ruling will give the recording industry and Hollywood immediate ammunition to file lawsuits against file-trading companies. It could also be a boon for legal music services such as Apple Computer's iTunes, which could see their strongest competitors--freely downloadable songs--driven further underground.


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The decision, however, is unlikely to put a damper on illegal sharing anytime soon, industry experts say. The ruling casts uncertainty on the fate of Grokster and other file-swapping companies, but not on the viability of swapping itself, an activity that has only flourished under legal attacks, observers say. That's because the software that underlies peer-to-peer networks is designed to function and evolve without the aid of any particular commercial venture.

At the same time, recent surveys indicate that growth of unauthorized file swapping has slowed somewhat as online music stores, such as iTunes and RealNetworks' Rhapsody, have taken off. The slowdown may also be tied to the fact that the Recording Industry Association of America has sued hundreds of file swappers during the past year or so.

Many musicians, songwriters and music publishers reacted positively to the court's ruling. Although peer-to-peer networks have allowed smaller bands and musicians to reach wider audiences, illegal downloads have hurt their bottom lines by depressing sales.

"It became so rampant that it was hurting everyone," said Matt Whittington, label manager for Eighteenth Street Lounge Music, or ESL. "Everyone wants to get paid for what they do."

In another key decision, the Supreme Court ruled that cable companies will not have to share their infrastructure with competing Internet service providers. In a 6-3 decision, the court overturned a federal court decision that would have forced cable companies to open up their networks to Internet service providers such as Brand X and EarthLink.

The decision likely will not affect consumers immediately, since cable companies have long been exempt from having to share their networks. But Brand X and its supporters believe that over the long term, the decision will hamper competition and ultimately lead to higher broadband prices.

The political spat likely to play out over the next few years will center on whether DSL (digital subscriber line) technology should enjoy the same immunity as telephone companies. The Federal Communications Commission is mulling whether DSL should be regulated as a "telecommunications service" and thus subject to the weighty stack of regulations designed for the analog telephone system of the early 1900s--or as an "information service," which would be relatively free from government control.

Certain types of DSL should be treated with a light touch, the agency has tentatively concluded. But any definitive ruling will have to wait until a successor to FCC Commissioner Michael Powell is confirmed by the Senate. Kevin Martin, a commissioner since 2001, has been selected to fill Powell's role as chairman. But Powell's departure still leaves a vacant seat on the five-member panel.

Chip clash
As the high court was making its rulings, Advanced Micro Devices was firing off a federal antitrust lawsuit against Intel, claiming that its rival has a monopolistic grip on the PC industry. The suit details alleged scare tactics and coercion that AMD claims Intel imposed on 38 companies, including large-scale computer makers, small system builders, wholesale distributors and retailers.

In its 48-page complaint, AMD alleges that former Compaq Computer CEO Michael Capellas complained that Intel withheld delivery of server

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4 comments

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Suprising? $$$
no it's not suprising. It just means that record lables have VERy big pockets and can manage to slip some spare change into the right hands.


It's not suprising at all. Besides You have to have an INTENT for illegal downloads. So there are still may technicalities *(spelling?) that can be worked around. Also... The companys that make have the servers like grokster can simply move there servers off-shore where domestic laws have jurisdiction.
Posted by mentorkyrom (13 comments )
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The need for a protocol to communicate permissions
Two of this week's stories mentioned here indicate the need for a good protocol to specify the permisions that a file/content owner has specified for the use of content:

One of them is the story about people uploading pirated material to Google video search.

The other one is of course the supreme court ruling on P2P.

P2P needs a way to specify what may be done legally with a file. Then distributors of P2P software can include features to allow users to prefer material that has been granted use rights by the publishers in advance, and can make these settings as the default ones, showing that they are encouraging legal use of P2P file sharing and discouraging illegal use.

Search engines need it for about the same reason: to encourage people to prefer legal content. But also so uploaded materal could be required to have explicit permisions and the uploaders authenticated, at least to a point that they can be liable for illegal action. Certainly if someone makes another person's work available with permisions not granted by the rightful owner they are commitng a crime. Right now what peole do is just making files accessible, without explicitly specifying there is a permision to use the file. Adding such a permision is going a giant step to the criminal side, and most people that are willing to "share" copyrighted material that is not their own would not make that step. SO perhaps they would be able to make a file accessible. But downloaders would also be able to filter that file out for lack of permissions if they want to.
Posted by hadaso (468 comments )
Reply Link Flag
Who owns the copyright?
When you buy a movie,(or record) you have pay for the copyright, & if you wish to share it with someone, or a 100 it should be your right to do so.
Sharing with other has allways been good in life.
Posted by Earl (60 comments )
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