PI Newswire

The Government today outlined how the cost of tackling online copyright infringement, as laid out in the Digital Economy Act, would be met.

Ed Vaizey, the minister for communications, said that rights holders would absorb 75 per cent of the cost of sending warning letters to web users suspected of online copyright infringement, while internet service providers would be responsible for covering the remaining 25 per cent.

“Protecting our valuable creative industries, which have already suffered significant losses as a result of people sharing digital content without paying for it, is at the heart of these measures,” he said.

“The Digital Economy Act serves to reduce online copyright infringement through a fair and robust process and at the same time provides breathing space to develop better business models for consumers who buy music, films and books online.”

The fees will cover the cost of notifying suspected copyright infringers, and of administering the appeals process. Consumers who wish to appeal a so-called “notification of copyright infringement” – a letter sent through the post – will not have to pay a fee in order to have their case heard.

But the decision has been met with dismay from internet service providers, who say the cost of the measures could push up the price of home broadband connections for consumers.

“Consumers should not be picking up the tab for the enforcement of copyright laws that will benefit the music industry to the tune of millions of pounds,” said Robert Hammond, head of post and digital communications at watchdog Consumer Focus.

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A world record for street singing made the headlines during the German music industry trade fair Popkomm. Singing for ones supper, literally or figuratively, may be the norm for the lesser known artists and performers. Music industry executives and their lawyers have a different tune.

For solutions to the digital challenge the music industry has turned to lawyers and accountants. Major label owners – Sony, Universal, Vivendi and EMI – and trade organization International Federation of the Phonographic Industry (IFPI) spared no expense lobbying for tougher laws on internet piracy and pursuing prosecutions wherever possible. File sharing websites Napster and Pirate Bay were effectively shut down. Grandmothers and 12 year olds were sued. Strong “three-strikes” laws came into force: HADOPI in France and the Digital Economy Act in the UK over the howls of outrage from internet service providers (ISPs), who incur direct costs from implementation and indirect wrath from customers, and civil libertarians who see creeping invasion of privacy.

Emboldened by the success the music industry opened opportunities for entrepreneurship. Companies sprang up offering cost effective technical solutions for finding people who might be illegally downloading music, videos or games. On behalf of the French music rights collecting organization Société Civile des Producteurs Phonographiques (SCPP), “smart pipes” company Vedicis tested and implemented deep packet inspection (DPI) to identify the IP addresses and block “illegal traffic”. The Recording Industry Association of America (RIAA) in the United States uses MediaSentry/Safenet.

In a coincidental prologue to Popkomm, a raid coordinated by Belgian authorities (September 7) netted ten individuals for operating illegal file-sharing networks in Belgium, Norway and Sweden. The target was a network operating in 14 countries to illegally distribute movies. A few days earlier (September 4), an individual in Sweden was busted for downloading 6,000 tunes.

“We have received a notification from the music industry’s association and the data provided pointed us to an address outside Östersund (central Sweden),” said Chief Prosecutor Henrik Rasmussen, quoted by radio channel P4. Last year Rasmussen, considered a specialist in intellectual property law after the Pirate Bay prosecution, busted a website owner for linking to video of a hockey match.

Concerned by the length and breadth of issues related to the digital coming-to-age of the creative and artistic industries, the European Commission (EC) DG Internal Markets has been holding a series of stakeholders hearings in advance of a new E-Commerce Directive. Within the EC there are sympathies toward the economic argument (big companies and employment), digital development (the future), creative industries (cultural impact) and civil liberties (privacy). It’s complicated.

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Net neutrality regulations could, if the music industry gets its way, usher in more Internet surveillance and a crackdown on suspected pirates.

This week, just about every music trade group called for broadband policies–which could include a new federal law–that would “encourage” Internet providers to crack down on suspected piracy by their customers.

“The current legal and regulatory regime is not working for America’s creators,” the groups, including the Recording Industry Association of America (RIAA), said Wednesday in a letter to Google CEO Eric Schmidt. “Our businesses are being undermined, as are the dreams and careers of songwriters, artists, musicians, studio technicians, and other professionals.”

The music groups’ letter came in response to a joint proposal that Google and Verizon Communications released last week. Their proposal says that Americans will “have access to all legal content on the Internet,” which leaves open the questions of access to illegal content and who decides what material may violate copyright law.

The Internet should be “predicated on order, rather than chaos,” wrote the 13 groups that signed the letter, which also included the American Federation of Musicians, the American Society of Composers Authors and Publishers, and the National Music Publishers Association. It said that broadband providers must “take measures to deter unlawful activity such as copyright infringement.”

Google and Verizon’s proposal, which is not suggested legislation but rather a collection of concepts, represents the companies’ attempt to craft a workable compromise and bring some finality to the often-chaotic discussions of which regulations could be imposed on tomorrow’s Internet. The proposal recommends giving the Federal Communications Commission explicit regulatory authority, but stops short at extending that power to wireless broadband.

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Digital technology has made it possible for users to share perfect copies of audio and video files over the Internet, skirting copyright laws. And, as Tony Award-winning songwriter Jason Robert Brown discovered recently, even sheet music isn’t immune. When he published correspondence about the issue between a teenage fan and himself on his blog, he unleashed what he has called a “firestorm” of responses.

As a theater songwriter, Brown may not be as well-known as Stephen Sondheim or Stephen Schwartz, but his finely crafted songs have been performed on and off Broadway. Brown makes a healthy upper-middle-class living from a variety of sources — he gets royalties from productions of his shows, and he teaches and performs. And, he estimates, about one-third of his income comes from the sale of sheet music. He says he had heard about websites where sheet music is shared, without any payment, and decided to check one of them out.

“I typed in my name and I got 4,000 people, 4,000 individual users who were all saying, ‘We have music of Jason Robert Brown and we will trade it,’ ” he says. “And I thought, ‘Well, 4,000 people is an epidemic!’ That’s an enormous amount of possible sales that I’m losing.”

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LOS ANGELES (Reuters) – Country-pop starlet Taylor Swift’s record label was forced to release the first single from her upcoming album 12 days ahead of schedule on Wednesday, hours after a bootleg version appeared online.

Big Machine Records said in a statement that the MP3 file of “Mine” was “low-quality,” and it wanted fans to hear the single in its proper form via iTunes and country radio. It was not immediately known who was responsible for the leak.

Swift’s third album, “Speak Now,” remains on course for a worldwide release on October 25. It marks the follow-up to her album of the year Grammy winner “Fearless,” which has sold 5.95 million copies in the United States and currently sits at No. 45 on the pop album chart in its 90th week.

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Did the Feds knock out thousands of blogs?
The U.S. government’s recent crackdown on intellectual property theft has had serious consequences for one blog provider whose free platform is the engine for more than 70,000 blogs. A government sweep identified 73,000 blogs in Blogetery’s network of sites with a purported history of IP abuse.

After complying with a secret order from U.S. authorities, hosting provider BurstNet shut down Blogetery.com with no warning and no way to get the blog provider’s servers back up and running. According to Blogetery, BurstNet is under a gag order, so Blogetery has no way of knowing the specifics of the complaint, the basis for legal action, or even whether the order was legal.

On a blog forum, Blogetery further complained that BurstNet would not even specify which agency or government authority ordered the shutdown.

Shutdown’s impact for cloud providers
Not only did the investigation bring down thousands of sites, but it also highlighted true security concerns surrounding cloud computing. Some of the penalized sites were simply link farms to copyrighted content, begging the question of whether even a giant like Amazon could avoid service interruption if its users post illegal content.

The operator of Blogetery said that he has always obeyed copyright law and removed illegal material within 24 hours.

Other countries — such as China and Iran — have strict controls on Internet content and have drawn harsh international criticism. The U.S. has been more circumspect, but it does have the legal authority to seize or examine digital content, sometimes without a warrant, in U.S. data centers.

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The RIAA (Recording Industry Association of America) claims it’s the trade organization that supports and promotes the creative and financial vitality of the major music companies. No, it’s not. It’s designed to support a broken, old business model of selling CDs to frightened music lovers. No where do you see that more than the RIAA spending $17.6 million in 2007 to recover a mere $391,000.

It’s actually worse than that. According to the DailyTech’s numbers, the RIAA spent about $64 million to make $1.4 million between 2006 and 2008. So why are they doing this? Because the RIAA’s membership actually want to make money from these lawsuits? No, they just want to scare you back into record shops to buy CDs again.

If the RIAA had its way they’d set the wayback machine to 1992 before the Internet really took off and it became child’s play for people to trade files back and forth between each other. Now, I happen to believe that artists should be paid for their work. A lot of people seem to agree with me since, even though CDs still are the most popular way to distribute music, more than 35% of all music in 2009 was sold over the Internet.

Still, the RIAA continues its flood of lawsuits. Indeed, it welcomes such cases as Joel Tenenbaum’s where the court first ruled that he should pay $675,000 for sharing music files. While the Tenenbaum judgment has since been reduced to $67,500, the sheer size of that initial fine is the kind of thing that the RIAA hopes will frighten your file-sharing socks off.

It would be so, so much better for music lovers if the RIAA would just get over this, and focus on embracing new online business models. Instead, they’re still fixated on the idea that people want to buy albums rather than tracks, and that people actually don’t buy music so much as they do rent the use of music for use on one device.

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Judge Nancy Gertner said that although she agreed with the guilty verdict against PhD Student Joel Tenenbaum, the idea of paying $675,000 just for sharing music was way too excessive.

Joel Tenenbaum was the second person to actually go to court over charges of copyright infringement. Unlike most people who settle for a relatively small amount, Tenenbaum fought the case, and lost.

Tenenbaum was accused of, and admitted to, illegally downloading and sharing “hundreds of songs,” according to Reuters, between 1999 and 2007. But Gertner said an award of $675,000 was just too much.

“This award is far greater than necessary to serve the government’s legitimate interests in compensating copyright owners and deterring infringement,” wrote Gertner in her decision.

The precedent had already been set after Jammie Thomas was sued by multiple record companies. Her groundbreaking case answered the question as to whether or not people who share copyrighted songs on services like Kazaa are actually breaking the law. The answer was yes. The jury found Thomas guilty and found her liable for nearly $2 million in damages. That was later reduced to $54,000.

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Major recording studios sued pay-to-see Internet website operators, claiming they violate copyright by synchronizing pornographic videos to songs by major artists. The studios claim that Miami-based RK Netmedia and Realitykings.com “are engaged in copyright infringement of the most blatant and offensive kind.” They want the websites shut down, and punitive damages.

Warner Bros. and others claim the unlicensed use of their recordings in pornographic videos “tarnishes” the songs and “diminishes their value.”

“In no uncertain terms, defendants are engaged in copyright infringement of the most blatant and offensive kind,” the complaint states. “Defendants know that major record labels, recording artists, and music publishers do not license their works for use in such pornographic content, especially the type of extreme, sexually explicit videos that defendants produce and distribute. So, defendants simply stole these sound recordings and musical compositions, synchronizing plaintiffs’ works more that 500 times into the soundtrack of their pornographic video without license or consent from plaintiffs, apparently hoping that their conduct would go unnoticed.”

The defendants own and operate “no fewer than 28″ for-profit websites that sell and distribute pornography, according to the complaint.

The complaint includes an 18-page list of violated copyrights, and claims that “defendants not only incorporated plaintiffs’ works into their videos, but then used them to draw an audience to their Web site and to advertise and promote the videos, including by naming the videos after popular songs.”

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The Pirate Bay has been compromised by an Argentinean hacker who made off with usernames, email and internet addresses of more than four million people signed up to the BitTorrent tracker site.

KrebsOnSecurity.com reported yesterday that Ch Russo broke into TPB’s system and grabbed the info from the notorious website, which might amuse some pro-copyright groups

Russo had considered selling the private data, but in the end decided to go public about TPB’s shaky security credentials. He accessed the information via the site’s user database by exploiting its weakness to SQL injections.

“We wanted to tell people that their information may not be so well protected,” Russo said.

Meanwhile, it may be a coincidence, but The Pirate Bay is currently out of action and carrying the following message:

“Upgrading some stuff, database is in use for backups, soon back again.. Btw, it’s nice weather outside I think.”

Closing some holes in the system are you, boys?

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Microsoft has named and shamed 25 UK resellers caught trading in counterfeit software, following a recent anti-piracy clampdown by the firm.

The software giant has confirmed court settlements with 21 independent computer shops, who all admitted hard disk loading and selling counterfeit Microsoft products.

In addition, four rogue traders were also caught using internet auction site eBay to peddle illegal goods.

Out of the 21 resellers caught, six were based in Birmingham and five were from Liverpool, resulting in Microsoft labeling the areas “piracy hotspots”.

Michala Wardell, head of anti-piracy at Microsoft, blasted the firms involved for putting the post-recession recovery of reputable resellers at risk.

“Piracy not only impedes growth but puts local hard-working computer shops out of business,” she said.

“This is none more so the case than in piracy hotspots such as Merseyside and Birmingham, where honest resellers feel the cumulative effect of being out-priced by a number of local illegal traders.”

Amar Mahmood from Discount Computer Warehouse in Birmingham, one of the 25 firms implicated, said the company has put in place measures to ensure it steers clear of pirate activity in future.

He added: “It’s fair to say we made a mistake, but it is now firmly behind us. I’d like to reassure all of our customers that we are committed to providing top-quality customer service, sales and support.”

Colin Carney from SXC Industries, another of the firms involved, said: “When we were first contacted by Microsoft, we realised we needed to change the way we operated. We certainly do not condone piracy of any sort.

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College and universities that don’t do enough to keep students from illegally sharing movies and music could lose federal funding.

A provision of the Higher Education Opportunity Act of 2008 is making schools a reluctant ally in the entertainment industry’s campaign to stamp out illegal file sharing.

Colleges and universities must put in place plans “to effectively combat the unauthorized distribution of copyrighted material by users of the institution’s network” without hampering legitimate educational and research use, according to regulations that went into effect Thursday.

Tennessee handled this well in advance of the new law, universities’ information technology officials say. The state’s Higher Education Commission required all of them to file reports last year that outlined what they were doing to combat piracy.

At Middle Tennessee State University, for example, the wireless system scans each computer for peer-to-peer software before allowing it access to the Internet. If it finds any, a message pops up explaining that the user will have to remove the software before continuing. As a failsafe measure, MTSU system checks files being transferred over its system, looking for markers of illegal file sharing, and shuts down access to any user doing it.

“You get a screen that says you’re running peer-to-peer software, if you do a removal of the software, you can get back on the network,” said Greg Schaffer, assistant vice president for network and information technology security. “The system remembers them. The next time, the system says, ‘This is your second time. If you get caught again, you will go through a judicial process to get access.’”

The university also nudges students toward legal sites such as iTunes, a requirement of the new law, he said.

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