Digital Media

Last December, the music industry's message to song writers, publishers, and musicians was that antipiracy help was on the way. Hopes soared after the major labels announced that they had convinced a group of telecoms to work with them.

Filing lawsuits against individuals accused of illegal file sharing was, for the most part, a thing of the past, said the Recording Industry Association of America, the trade group representing the top music companies. The new strategy was to enlist Internet service providers, the gatekeepers of the Web, to issue a series of warnings meant to increase pressure on alleged pirates in what the RIAA called a "graduated response." Under the plan, those subscribers who refused to heed warnings could eventually see their Web connection suspended.

Six months later, the music industry is still waiting to hear from the RIAA which ISPs have explicitly agreed to work with the association. When the RIAA first announced its new antipiracy project, it didn't name partners. Behind the scenes, industry insiders assured the media that the group would disclose the names of partner ISPs "within weeks." Six months later, however, not one ISP has publicly acknowledged working with the RIAA on a "graduated response."

RIAA CEO Mitch Bainwol

(Credit: Declan McCullagh)

That there are still no announced deals--and there's no guarantee the RIAA can sign any of the major broadband companies--indicates that at best the big recording companies may have spoken too soon when they said broadband providers would help, says one ISP executive. Ironically, at a time when many figured the RIAA had finally hit upon a compelling way to go after music piracy, the association's copyright protection efforts may be more toothless than ever.

"(The RIAA) has tried various ways to turn ISPs and other intermediaries into their own Internet cops," said Cindy Cohn, legal director for the Electronic Frontier Foundation, an advocacy group for Internet users. "What the ISPs appear to be saying is that this isn't our job."

To be sure, the RIAA continues to pitch its plan to ISPs, numerous sources have told CNET News. AT&T has launched tests of a graduated response--everything, that is, but service interruption. The telecom said it would never shut off a customer's service without a court order. The recording companies may soon announce some kind of agreement with one of the ISP trade groups. But this won't bind the group's members and the RIAA will still need to strike deals with individual companies.

"We have been working slowly but surely, directly and through the offices of (New York Attorney General Andrew) Cuomo, with virtually every major ISP on common approaches," said Jonathan Lamy, an RIAA spokesman in an e-mail. "During the past six months, a number of different ISPs have forwarded nearly half a million RIAA notices to P2P infringers. They had not done that before last winter. A number of individual ISPs now argue that notices alone are proving to have a sufficient deterrent impact."

What the RIAA seems to be suggesting here is that it doesn't need a threat of service termination for a graduated response to be effective. This, however, conflicts with what music executives say in private. They want a carrot and stick approach. They know they have to offer the public inexpensive and easy-to-use alternatives to illegal peer-to-peer sites. They also believe chronic abusers won't stop without the threat of a serious punitive consequence.

So, why did the RIAA announce the ISP-based program without any ISPs on board so many months ago?

Some RIAA critics have speculated that the December announcement was a smokescreen to cover the music industry's retreat from the 5-year-old and highly controversial strategy of filing copyright lawsuits against individuals accused of copyright violations. The theory goes something like this: the RIAA needed a face-saving way to walk away from the litigation, which resulted in more than 30,000 people being sued, a fortune in legal fees, a huge public relations black eye, and didn't do all that much to stop piracy.

Ernesto, founder of the blog TorrentFreak, which focuses on file sharing, was always skeptical of the RIAA's announcement. He noted that some telecoms have voluntarily sent warning notices to subscribers accused of illegally downloading songs for years, while other companies refused. He says he sees nothing new.

"Yes, the RIAA, MPAA and other outfits do plan to send copyright infringement warnings to ISPs," Ernesto wrote in March, "but they've been doing so for at least half a decade. Every other month these Hollywood lobbyists pitch their antipiracy efforts to the public...this doesn't mean, however, that something is about to change."

According to the ISP executive who asked for anonymity because he's involved in negotiations with the music sector, the RIAA's tactics in dealing with the ISPs have been too heavy handed.

The executive complained that the RIAA has tried to use Andrew Cuomo to push the ISPs into helping. But Cuomo doesn't have the kind of political muscle to sway the major ISPs when they are acting well within the law, the executive said. There's nothing in the Digital Millennium Copyright Act that requires ISPs to send their own warning letters to subscribers.

And some ISPs say the DMCA is unclear about when they must terminate service of repeat offenders. AT&T executives say they won't cut off someone's Web access based solely on evidence supplied by the recording industry and will only do so after receiving a court order.

"We keeping hearing about how (Cuomo) is supposed to make this happen," said the executive. "You don't see much changing, do you?

So if Cuomo isn't enough, why don't the music labels appeal to Congress to legislate the ISPs into submission? That's easy. The ISPs have much more influence in Washington than the music sector. There's also little public sympathy for recording stars, who are often perceived to be rolling in money--even if this is a reality for a tiny fraction of working musicians.

In an interview with CNET last week, Paul McGuinness, manager of the rock band U2, says that ISPs have for a long time profited from selling broadband to file sharers and have little interest in taking action without seeing financial reward. But he sees some progress around the globe.

"Perhaps broadband subscription sales are saturated in many territories and the ISPs are belatedly but realistically now turning to building revenue collection businesses with the content owners," McGuinness said. "I just hope it's not too late."

Cohn, from EFF, sees it differently. To her, cutting off someone's Internet connection for file sharing is like refusing to sell shoes to someone accused of jaywalking.

"Every day that passes we realize how important Internet connectivity is to people's lives," Cohn said. "The RIAA looks so out of step with what most people think is a reasonable response to (copyright) infringing behavior. Even to the people that believe we're locked into this 19th century view of copyright law, the RIAA looks hysterical."

In response to the reopening of an investigation into inadvertent file sharing with peer-to-peer software, an executive for Lime Wire told Congress in a letter on Friday that the new version of the program is "the most secure file-sharing software available."

The main investigative committee in the U.S. House of Representatives reopened a probe of Lime Wire and other peer-to-peer file-sharing companies last week, citing data breaches blamed on the technology.

In February, a security firm alleged that information about President Obama's helicopter was breached via P2P. There have also been reports of inadvertent exposure of consumer financial data and medical records over peer-to-peer, according to the Committee on Oversight and Government Reform.

In a letter sent Friday to the Committee and congressional members, Mark Gorton, the chairman of Lime Wire parent Lime Group, said LimeWire 5, released on December 8, was designed to eliminate inadvertent file sharing in response to privacy concerns.

LimeWire 5 by default does not share documents, it automatically un-shares documents a user may have shared using an older version of the software, and by default will not share documents regardless of whether they exist in a folder that has been shared or whether a user shared the document in an older version, said Gorton's letter, a copy of which was obtained by CNET News.

"In short, there is absolutely no way to access a LimeWire 5 user's documents unless that user affirmatively elects to make them available," he wrote. "LimeWire 5 does not share any file of any type without explicit permission from the user."

Meanwhile, the company has no specific information about the reports of data breaches that the Committee had mentioned, Gorton said.

The Committee initially launched its probe into inadvertent file-sharing with P2P in mid-2007 and had called Gorton and others to testify.

Meanwhile, another congressional subcommittee is planning to hold a hearing on P2P technology. The House Energy and Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection has scheduled a hearing for Monday at 2 p.m. EDT on the "Informed P2P User Act," introduced by California Rep. Mary Bono Mack, a Republican, her office said.

Scheduled to testify at the hearing are the Federal Trade Commission, the Business Software Alliance, the Center for Democracy & Technology, the Electronic Privacy Information Center, the Distributed Computing Industry Association, Tiversa, and the Progress and Freedom Foundation.

Lime Group's letter assures Congress that its new peer-to-peer software eliminates inadvertent file-sharing.

(Credit: Lime Group)

LimeWire 5.0 allows users to share files with friends on any Jabber-compatible system, as well as to have search results incorporate files from the LimeWire store.

(Credit: Lime Wire)

LAS VEGAS--Get ready for the collision of social networking and peer-to-peer file sharing.

With the beta release of LimeWire 5.0 (download for Windows| Mac), which was announced at the Consumer Electronics Show here, the popular P2P service is incorporating a social element that will enable people using Jabber-compatible services like Gmail to share files with friends on their buddy lists. Lime Wire calls this a "personal sharing network."

The idea, said Lime Wire CEO George Searle, is to add trusted context to user searches for content, given that people are more likely to want--and feel comfortable with--content from people they know.

Additionally, Searle explained that the new social features of LimeWire--which has 70 million monthly unique users and more than 5 billion queries a month--will enable people to choose whether to make files available to the public at large, or just to their friends and family.

In many ways, this is much like many other content-sharing systems. But to Searle, adding a social component to LimeWire means making what is already an extremely popular service more personal to many users.

Essentially, the way the new feature works is that users will be able to decide whether to make files--photographs, for example--available to anyone on LimeWire, or just to people on their buddy lists. Similarly, users will be able to search for files from their friends. And this will take advantage of a sharing system that tens of millions of people already use, something that Lime Wire hopes will encourage many on the service to adopt the social elements.

Searle said he hopes that the social feature will allow users to trust the sources of the content they share across the system in a way that's not really possible when sharing with strangers.

Consumers are increasingly willing to pay for songs they acquire over the Internet, but declining interest in CDs is dragging down overall music consumption among Internet users.

During the third quarter, there was an increase both in the number of people buying digital downloads and in the number of tracks sold, according to market researcher NPD Group. Legal music downloads were up 29 percent from the same period last year, and sites such as iTunes and Amazon MP3 chalked up an additional 2.8 million music buyers, to a total of 15 percent of Internet users.

That jibes with reports from Warner Music Group and Universal Music Group. Both labels have recently seen vigorous growth in sales of digital music. Warner, for instance, said last month that in the third quarter, digital music sales rose 27 percent to $167 million.

Peer-to-peer sites, meanwhile, saw an increase in the overall volume of song files being shared, up 23 percent for the same quarter last year, though some of that increase was attributed to a greater number of downloads per user, according to NPD. The number of P2P sharers among Internet users, NPD reported, stayed flat at 14 percent.

Not surprisingly, teenagers were a big factor in the gains--they accounted for 34 percent more paid downloads than in the third quarter of 2007, and P2P downloading spiked 46 percent among 13- to 17-year-olds.

Also, credit popular video games such as Rock Band and Guitar Hero with spurring consumers to make a music purchase of some sort. In many cases, "gaming can help remind customers of the music they grew up with...and to re-engage with the artist," said Russ Crupnick, entertainment industry analyst for NPD.

But the music labels, knocked off their stride by the advent of the digital music era, still face challenges.

Among Internet users, according to NPD, overall music demand was down 2 percent year over year in the third quarter of 2008. That figure takes into account purchased CDs, purchased digital music downloads, files obtained via P2P sites, and music files borrowed to rip to a computer or burn to a CD.

Largely, that slippage is a result of the continuing drop in sales of CDs (down 19 percent in the third quarter), most notably among teens and young adults, but also including adults over the age of 36.

"The value of each music customer is declining," Crupnick said. But, he added, "anytime you can add 2 (million) to 3 million buyers year over year, that's very encouraging."

D.J. Donahue says his school's ban on P2P and BitTorrent unfairly punishes gamers and Linux users.

(Credit: Michele Wilson)

Truth be told, the state of Tennessee didn't need a lot of prodding from the recording industry to pass a law that requires universities and colleges to filter for unauthorized music downloads.

Remember, Tennessee is the home of Nashville, country music, and Elvis. Some of the music industry's largest music publishers are based there. Some schools were apparently eager to comply with copyright protection. The University of Tennessee at Knoxville began blocking access to BitTorrent and file-sharing sites for possibly the last month, said D.J. Donahue, a graduate research assistant at the school.

"I have been unable to access any torrent or P2P sites for several weeks, and there was an e-mail sent to students about it," Donahue told CNET News.

News broke on Tuesday that Tennessee's governor signed a bill into law that was designed to thwart music piracy at the state's campuses. The bill requires Tennessee public and private schools to exercise "appropriate means" to ensure that campus computer networks aren't being used to download copyright material via file-sharing programs, according to the Web site of the Recording Industry Association of America.

A spokesman for the school could not be reached for comment.

"This is just another turn of the big orange screw," Donahue said referring to the university. "This places a burden on those of us who use the torrent and P2P systems for legal downloads."

Donahue said his school's ban on P2P and BitTorrent unfairly punishes gamers and Linux users like him.

"I am a Linux user, and the best way to download many distributions is through a torrent system," Donahue said. "I'm trying out new Linux distributions, trying out the new stuff that comes along and one of the major sources of that are peer-to-peer and torrent sites. Since Linux is a free download, their sites can't support massive HTTP bandwidth."

Donahue said that game sites, which issue big update files, often use torrent sites. He said that gamers at the school will be unjustly blocked from receiving these updates.

Warner Bros. can't protect P2P sites from getting their hands on DVD rips of The Dark Knight

(Credit: Warner Bros.)

Last summer, I wrote how Warner Bros. celebrated that it was able to prevent all but one unwatchable pirated copy of The Dark Knight from appearing on the Web.

Well, this time the pirates won.

According to Ernesto over at TorrentFreak, DVD-quality copies leaked to the Web last week at P2P sites. The DVD version of the movie, the latest in the Batman series, doesn't go on sale in the United States until December 9.

A Warner Bros. spokesman declined to comment.

This from TorrentFreak: "From the looks of it, Batman will crush Iron Man, The Incredible Hulk and Transformers, as it will easily become this year's most pirated movie."

Last July, Warner Bros. went on the offensive to plug any leaks. Anywhere the grainy and poorly lit copy--allegedly taken with a Handycam--appeared online, Warner sent a take-down letter.

The studio said then: "It is impossible to monitor every single screening at every theater worldwide to prevent it from being camcorded. Sadly, it is inevitable that an illegal copy of the film will eventually surface. What was a true accomplishment and unprecedented given the amount of interest and Internet buzz about The Dark Knight was despite hundreds of pre-release press, review, and promotional screenings worldwide, not a single copy of the film leaked prior to the official release."

The Federal Communications Commission is expected to announce this week that Comcast wrongly interfered with file-sharing traffic, according to a report Sunday night on The Wall Street Journal's Web site.

The commission is due to issue a ruling Friday that the cable giant violated federal law when it prevented some customers from swapping videos on file-swapping service BitTorrent, according to the report. Comcast has admitted "delaying" traffic to file-sharing sites. At a public hearing in February, Comcast Executive Vice President David Cohen said, "Comcast may on a limited basis temporarily delay certain P2P traffic when that traffic has or is projected to have an adverse effect on other customers' use of the service."

Late last week, three of the five FCC commissioners voted in favor of an item saying Comcast violated federal policy by dialing down peer-to-peer traffic over its network. The ruling, which won't include a fine, will require Comcast to stop blocking or slowing traffic to peer-to-peer sites like BitTorrent, explain to consumers and the commission how it has blocked such traffic in the past, and publicly disclose how it plans to manage its network in the future.

Comcast, the largest cable provider in the U.S., has been under fire for months after it was discovered the company had been slowing down peer-to-peer traffic on its network. The company claimed it had singled out peer-to-peer, file-sharing traffic, because it was eating up an inordinate amount of bandwidth, which caused degradation across the rest of its customers.

Consumer groups were incensed by the tactic, and the FCC investigation ensued over whether Comcast had violated any of its Net neutrality principles.

The five FCC commissioners grill Comcast representatives at a public hearing held in Cambridge, Mass., earlier this year.

(Credit: Anne Broache/CNET News)

The Federal Communications Commission appears poised to take steps to punish Comcast for allegedly blocking access to file-sharing traffic.

Three of the five FCC commissioners have voted in favor of an item saying Comcast violated federal policy by dialing down peer-to-peer traffic over its network, according to FCC officials cited in The Wall Street Journal.

The news isn't much of a surprise, given that FCC Chairman Kevin Martin has publicly criticized Comcast for the practice and recommended to the rest of the commissioners that they vote in favor of the decision.

"The commission has adopted a set of principles that protects consumers' access to the Internet," the Associated Press quoted Martin saying earlier this month. "We found that Comcast's actions in this instance violated our principles."

If the punishment comes through, which is all but assured now, Comcast wouldn't be fined. But it would be ordered to stop blocking or slowing traffic to peer-to-peer sites like BitTorrent, explain to consumers and the commission how it has blocked such traffic in the past, and publicly disclose how it plans to manage its network in the future.

Comcast hasn't denied slowing traffic to file-sharing sites. At a public hearing in February, Comcast Executive Vice President David Cohen said, "Comcast may on a limited basis temporarily delay certain P2P traffic when that traffic has or is projected to have an adverse effect on other customers' use of the service."

However, Cohen did deny blocking such sites outright, saying, "Comcast does not block any Web site, application, or Web protocol, including peer-to-peer services, period. What we are doing is a limited form of network management objectively based upon an excessive bandwidth-consumptive protocol during limited periods of network congestion," he explained.

A final ruling on the issue is expected to come at a commission meeting scheduled for August 1.