News Blog

[Update 6/10/2008 1 p.m.: We've found out details about what's going to happen. Time Warner Cable will pull the plug on tens of thousands of Usenet discussion groups after the N.Y. attorney general's office found child porn on 88 of them. Verizon and Sprint plan to limit Usenet, too. Earlier reports that the three broadband providers would block access to, say, overseas Web sites may not have been accurate. --Declan McCullagh]

Internet service providers Verizon Communications, Sprint Nextel, and Time Warner Cable have agreed to block Internet newsgroups and Web sites nationwide that disseminate child pornography, The New York Times reported Monday.

The move--part of an agreement with New York Attorney General Andrew Cuomo expected to be announced Tuesday--will affect customers across the country, the newspaper reported. Negotiations are reportedly continuing with other ISPs.

Part of the plan is to shut down access to Usenet newsgroups known to traffic such images, as well as Web sites that host child pornography.

"The ISPs' point had been, 'We're not responsible, these are individuals communicating with individuals, we're not responsible,'" the newspaper reported Cuomo as saying. "Our point was that at some point, you do bear responsibility."

The agreement was reportedly reached after the attorney general's office threatened charges of fraud and deceptive business practices when the companies ignored investigators' complaints.

Cuomo has made safety of children on the Internet a priority of his office. He subpoenaed Facebook in September 2007 after his office conducted an undercover investigation that he said yielded a slow response from the social network to complaints of harassment and inappropriate conduct. The subpoena eventually led to an agreement between Facebook and the attorneys general of 49 states.

Earlier in 2007, Cuomo joined a group of New York lawmakers in introducing a bill to crack down on the presence of sex offenders on the Internet, specifically on sites where they could get in touch with minors.

Comcast said Wednesday it has changed its mind on a joint wireless communication venture with Sprint-Nextel, according to a Reuters report.

The service, called Pivot, was begun as a partnership between the cable giant, Sprint, Time Warner, Cox Communications, and Advanced/Newhouse Communications in 2006. It offered a package of services, including TV, broadband, and both a landline and wireless phone service.

"We decided to discontinue the service because the product required a lot of operational complexities, so we decided it wasn't the approach we wanted for the long term," said a Comcast spokesperson.

Well, that's one way of putting it. By the end of last year, demand was so low for Pivot they stopped marketing it. Part of the problem is that nearly 80 percent of U.S. residents already subscribe to a cell phone service. And the cable operators weren't given much freedom in pricing or packaging the Pivot service to make it enticing enough for people to switch carriers.

Comcast said its Pivot mobile customers would be switched to a similar Sprint package.

CNET News.com's Marguerite Reardon contributed to this report.

The controversy over whether an internet service provider should charge for music is once again coming to a boil.

Pundits, music-industry insiders and members of the public are bashing Warner Music Group exec Jim Griffin after he acknowledged in a interview that he is working on a plan to collect music fees from consumers via their ISP bills.

I haven't seen backlash like this since rocker Trent Reznor told me in an interview two months ago that an ISP tax might be a good idea. It didn't matter to some that Reznor also made a seemingly conflicting statement in the same interview when he said perhaps music should be given away for free.

This kind of off-the-cuff musing was enough to make Reznor a target of widespread criticism. Nobody seemed to care that the leader of the band, Nine Inch Nails, was a digital-music innovator and had long called on the record industry to improve its treatment of fans. What happens is that people hear the word "tax" and objective analysis goes out the window. People condemn and vilify. Out comes the torches and pitchforks.

Nearly two weeks after our Q&A appeared, Reznor disavowed his statements about the ISP tax. Griffin now appears to be tip-toeing away from some of his comments.

"We are in the earliest stages of what is a dynamic conversation about licensing opportunities in the global digital marketplace," Griffin said in a statement issued by Warner Music on Friday. "It would be unfortunate if a creative and fruitful dialogue were sidetracked by a rush to judgment about what was simply my own illustrative example of one of many concepts I have in this space."

The proposal outlined in the interview Griffin gave Portfolio.com suggested that ISP fees could create a $20 billion pool that would go to artists and copyright holders. Consumers would have the option of paying the fee or submitting themselves to advertising.

"All stakeholders stand to benefit from the kind of process that results from the willingness to consider a variety of raw concepts without prejudice," Griffin said in the e-mail.

But there's plenty of prejudice and Griffin should know this. The reality is music fans are distrustful of record companies. They resent talk about charges being quietly tucked into their monthly bills.

Griffin could have hardly done more to stoke paranoia than to attempt to sell his plan with comments such as this: "Music will feel free," Griffin told the magazine (the italics are mine).

He could be a digital-music genius for all I know. But Warner Music should have been smarter in broaching the subject of ISP fees than to allow Griffin to casually toss out ideas in print if--as he said in his e-mail--this is only one of "many concepts" the label is considering.

Warner Music now has a firestorm on its hands and few are trying to assess the idea dispassionately. That's too bad because the label, like its top three competitors; Universal Music Group, Sony BMG Music Entertainment and the EMI Group have appeared to be headed in the right direction of late. They've been experimenting with models and ideas they flat out rejected not long ago.

The labels have finally embraced open MP3s and struck deals to offer ad-supported music (albeit only in a streaming version) with social networks Imeem and Last.fm.

"There's a lot of experimentation in the marketplace right now and that's ultimately a good thing for the industry and for fans," said Mitch Bainwol, chairman and CEO of the Recording Industry Association of America. "It's important to note that all of the many ideas being floated out there involve voluntary payment systems, and not a government-imposed compulsory license. This would be the marketplace at work."

Bundling subscription fees into ISP bills on a voluntary basis may prove to be a bad idea. At this point, nothing is certain so shouldn't every proposal at least be explored?

We won't know if the public will embrace an all-you-can-eat music service from the ISPs until the music industry presents a formal plan, one that will hopefully be coolly and carefully analyzed.

Guest post: Editor's note: Music attorney Chris Castle is all for finding a way to boost the music industry out of its current nosedive. But bundling music charges into ISP bills is not the way to go, he says.

Jim Griffin's idea sounds very much like the Lawrence Lessig-William Fisher "alternative compensation scheme" that has been around for a long time. Griffin's proposal is voluntary, like the version proposed by the Electronic Frontier Foundation, (which advocates for Internet rights).

There are many problems with the system, but here are three:

First, Griffin's plan produces a disaggregated chunk of money that is collected based on headcount, not based on music usage. One way to divide up that money that advocates often raise is based on some kind of sampling of usage (I think I've heard the Electronic Frontier Foundation talk about the sampling method used by the American Society of Composers, Authors and Publishers as a proxy. If you are going to sample peer-to-peer or BitTorrent files, you need to identify tracks. That can be done with fingerprint technology, and there are several companies out there that do that.

However, if you can identify the tracks on P2P systems enough to sample, you can identify the tracks enough to block and filter. So why not give copyright owners that right? The Portfolio.com story seems to say that Warner Music Group intends the system to cover all the world's music, but that must be a typo, for Warner Music obviously can only speak for its masters and the compositions they administer (even that is subject to artist and writer consent in many instances).

If you are going to divide up the disaggregated sum collected the Griffin's system on a method not based on sampling, then what exactly would that be? I call this the "Carl Sagan Scheme" because it promises "billions and billions" of dollars to the creative community. It also ignores what I think will be billions in the transaction costs of implementing the scheme--ISPs won't do this for free, and will want protection from copyright infringement claims of any stripe.

It's also important, for obvious reasons, that the company holding the data be "Swiss." I doubt that the labels would allow one of their number to control it, and a joint ownership scheme would face an inevitable antitrust challenge if the others were involved.

In order to be effective, Griffin's plan would require amending the Copyright Act. A voluntary plan is unlikely to attract a sufficient number of copyright owners. But without all copyright owners, ISPs and their users would still be exposed to claims of copyright infringement. If you think that gaining relief from prosecution is an incentive for ISPs to adopt this complicated plan, then you would, I think, assume that ISPs would want to protect their users from all claims for copyright infringement.

Which leads to the second problem. In order to get that global protection for users requires amending the Copyright Act. Without amending the Copyright Act, you will always have the "lone gunman" problem, or the copyright owner you missed getting permission from. It's tough enough to amend the Copyright Act on things that people agree on, and you'll never get anyone to agree to amend the Copyright Act on things that people are bitterly opposed to, such as Griffin's system.

In addition to these problems, if you go down the route of amending the Copyright Act, which seems to be the only realistic way to accomplish what Griffin desires, there are people who say such an amendment would violate the U.S. government's treaty obligations, such as the Berne Convention, the TRIPS Agreement, and NAFTA.

Also, it's likely the rest of the world may have a problem with Griffin's system, even if it's a voluntary system. A similar system was resoundingly defeated in the French Parliament, and President Nicholas Sarkozy has clearly come out against any such ideas. One reason is that it is hard to put a border on the plan, but this is really a worldwide solution that Griffin seems to be proposing.

We have only been focused on issues affecting artists and songwriters, but ISPs and P2P operators will likely have many other negative reactions to the plan. I can't imagine the Pirate Bay signing up for this.

It's a head scratcher, that's for sure. I'm sure there's a lot more to it than has come out in the exclusive interview.

There must be.

There are a lot of smart people at Warner Music, and I'm sympathetic to their desire to keep an open mind about possible new business models. But this one is old news and has not been well received in the past, so seems unlikely to bear fruit.

A digital rights group in Ireland condemned legal action taken by the major music labels against an Irish ISP.

Lobby group Digital Rights Ireland warned that attempts by the four largest music labels to hold ISPs accountable for copyright violations committed by users threatens privacy, and Ireland's reputation as an "Internet-friendly country," according to a story on Siliconrepublic.com.

"Internet Service Providers (ISPs) are intermediaries. They are not, in law, responsible for what Internet users do, any more than An Post is responsible for what individuals send in the mail," Digital Rights Ireland chairman, TJ McIntyre, told the online publication.

Universal Music Group, Sony BMG Music Entertainment, Warner Music Group, and EMI Group brought legal action against Eircom, the largest telecommmunications operator in the Republic of Ireland, according to the report by Siliconrepublic.

The labels claim that the ISP has refused to implement a filtering technology by Audible Magic that would block illegal file sharing. McIntyre argued that the content filter would erode privacy of Eircom users.

The idea of requiring ISP's to filter has picked up steam in recent months. Most notably, the manager of rock group U2, called for ISPs to more aggressively scrub copyright-infringing content from their networks.

While Europe has taken more of a regulatory approach, in the U.S. there is a Digital Millennium Copyright Act, which proponents say relieves ISPs from responsibility for copyright violations by users.

YouTube goes completely black all over the world for two hours. Is the culprit a complete system failure or a sophisticated denial of service attack?

No. It's a single ISP in Pakistan trying to block access to YouTube in that country. The Pakistan government ordered access to YouTube shut down in that country after cartoons appeared on the site that some Muslims found offensive. Presumably by accident, the ISP took out YouTube everywhere.

On Sunday afternoon, YouTube was inaccessible for two hours. The company said that a network in Pakistan was to blame and that it was investigating.

There's an interesting blog by the people at Arbor Networks on how it might have happened.

Chief Research Officer at Arbor Networks , Danny McPherson guesses that there were two ways that ISP in question goofed and mistakenly started "announcing to the world that you provide destination reachability for the YouTube" IP address.

Either way, said McPherson in his blog post, an upstream provider almost certainly wasn't validating the ISP's prefix announcements. So the world is getting a message that the Pakistan-based ISP is providing access to YouTube.

"All the BGP speaking routers on the Internet believe Pakistan Telecom provides the best connectivity to YouTube," McPherson said. "The result is that you've not only taken YouTube offline within your little piece of the Internet, you've single-handedly taken YouTube completely off the Internet."

In a speech at the Midem music trade show, U2 manager Paul McGuinness claims that Internet service providers bear a portion of responsibility for the sales decline in recorded music. It's so laughable on so many levels that I can't let it pass without comment:

1. File trading's not the sole cause of lower sales. McGuinness, like the RIAA and IFPI and other recording industry bodies, assumes that piracy on P2P networks is the main driver of the decline in music sales. This ignores several studies that have shown that heavy P2P users are also the heaviest music buyers (although those studies themselves are controversial). More to the point, this argument ignores other ways users are getting music for free. I'd guess that friends ripping CDs and swapping music on flash drives account for a fairly large proportion of purchase-replacements--I'm not going to buy a whole record for a song that I heard once on the radio if my friend's already got it and I can just rip it from him. And that's the other big problem: radio. It used to play new music and break new acts. But consolidation has led to exceptionally narrow, lowest-common-denominator playlists, and radio's become irrelevant to hard-core music fans, who drive popularity of new acts.

2. Net neutrality and safe harbor. As Mathew Ingram of The Globe and Mail argued very eloquently, it's absurd and unreasonable to expect ISPs to monitor all traffic traveling their networks for pirated content. Safe-harbor laws ensure that an ISP's not held responsible every time somebody uses their pipe for something illegal--imagine if victims of traffic accidents caused by drunk drivers could sue the state for building roads, or if victims of telephone scams could sue the phone companies. And monitoring is uncomfortably close to giving preferential treatment to content providers in exchange for an extra fee.

An aside: he shows his misunderstanding of the entire situation when he says: "There are many other examples that prove the ability of ISPs to switch off selectively activity they have a problem with: Google excluded BMW from their search engine when BMW started to play games." How is Google an ISP?

3. Broadband demand isn't driven by P2P. McGuinness' assumption that the main driver of ISP fees is P2P music shows the music industry's myopia. As he puts it, "Kids don't pay $25 a month for broadband just to share their photos, do their homework, and e-mail their pals." True, kids don't. Their parents pay the bill--and have been paying since long before P2P music networks became mainstream. People do a lot of things on the Intertubes--read, shop (eBay? Amazon?), blog, send IMs--and all of those things are much faster and more convenient with a broadband account.

4. The hippies cashed out long ago. The funniest and weirdest part of the speech is when he blames counterculture values coming from the West Coast of America for the tacit assumption that music should be free. He may be right that a lot of early techies came out of that community--Steve Jobs attended Reed College, and we all know that Stewart Brand deserves some credit for early online community The WELL--but Silicon Valley's been driven by the profit motive almost since its inception. And it's not like the Grateful Dead was ever a charity organization.

The thing is, I actually agree with his overall thesis: the best future business model for the recorded music industry I can think of is adding a few bucks to ISP fees, watermarking content, then splitting that revenue among rights holders based on how often a particular piece of content is played. The problem is that mandatory fees are unfair to those who couldn't care less about music and might not be legal, while voluntary fees work only if you have some sort of policing mechanism. But these interesting ideas deserve a spokesperson who's a little more familiar with the underlying technology.

(One last dose of vinegar: I can't dispute that U2 has had a lucrative career as a live band, but I saw them on the Zoo Station tour in 1992 and say with confidence that their live show is the weakest part of their act. Great props, great singer, but little variation. Even the ancient Stones swap songs frequently and occasionally stretch out a jam. Flame away.)