Van der Sar, Ernesto. "TorrentFreak". weblog. 14 July 2009 .

Begun in Germany by "Ernesto Van der Sar" (pseudonym), TorrentFreak is a weblog devoted to all things having to do with filesharing. Included in the top 100 blogs by Technorati, it is the home of the most recent news relevant to filesharing and everything involving the BitTorrent protocol. It's content is under the Creative Commons Attribution_Share Alike license. In August of 2007 TorrentFreak was the first to report that Comcast was manipulating the bandwidth available to BitTorrent users. TorrentFreak is frequently quoted for their "Top 10 Most Downloaded Torrents of the Week" by many newspapers reporting on filesharing. 

The site's homepage is simple, with the most recent entries listed on the left and a few advertisements aimed at BitTorrent users on the right, including ads from Frostwire, Wyzo and MP3Rocket, all open source Gnutella clients. Also a right is a list of most popular articles (TorrentFreak's top ten list is usually at the top) and then a list of categories including "DRM and Other Evil" and "Tutorial & How-to." At the very top right of the page are tabs navigating, among other things, to "About" and the "Forum."

TorrentFreak will be useful for my paper because of its thorough coverage of the Pirate Party's ascent into Parliament. It also keeps track of other Pirate Parties as they show up across Europe and the world. Their most recent political entry being the Pirate Party's gaining of a seat in the German Parliament just two weeks after the same thing happened in Sweden. Other articles include, "Pirate Parties to Conquer Europe," "International Umbrella for Pirate Parties," and a US Pirate Party Interview. Each article runs from 300-500 words. TorrentFreak to date has 898 active members contributing to the Forum.

Mason, Matt. The Pirate's Dilemma How Youth Culture is Reinventing Capitalism. New York: Free Press, 2008.

After presenting the reader through a plethora of examples of how much our culture is dependent on piracy, Mason comes to the conclusion that we have reached "the pirate's dilemma." Much like the prisoner's dilemma in game theory (here the two prisoners are represented by individuals and companies trying to sell their products), the players will have to choose between cooperation with the pirates or fighting them. At this point if one player decides to join in with the pirates by competing and changing their business model, the other will lose. If they both join the pirates, then competition will be even tougher, but they will have a chance at remaining in the market, which they wouldn't if they choose not to participate and fight the pirates with laws. As an example of this model, Microsoft is Player A and decides to fight piracy and Player B is Linux who decides to cooperate with pirates through open source. Player B is ultimately the winner, their prize being innovation, competition, while Player A will remain inefficient and will lose profits.

Though Mason's ideas are intriguing, I think that he is just rehashing the general argument for open source, which most of his book supports through examples. I believe Chapter Two of this book will be most useful for my paper. Titled "The Tao of Pirates: Sea Forts, Patent Trolls, and Why we Need Piracy," Mason explains the use of Sealand as an autonomous state outside the jurisdiction of the UK and how it is the home of the "Royal Family of Sealand's" pirate radio station and the data sanctuary of HavenCo. The Pirate Bay recently tried to purchase Sealand after a damaging fire for 500,000 Euro to house their servers, but their plans were thwarted by the trial. Mason gives some brief information on the Pirate Party. In this chapter he also outlines the "3 habits of highly effective pirates" and encourages youth to look outside of the market, create a vehicle, and to harness their audience. What is most interesting about Mason's book is that he is giving directions on how to harness the power the privacy, which is already forward thinking and more evidence that change is inevitable.

 

Li, Miaoran, "The Pirate Party and the Pirate Bay: How the Pirate Bay Influences Sweden and International Copyright Relations" (2009). Pace International Law Review. Paper 290.

Li's paper is both an introduction to the Pirate Party as well as an analysis of the party's obstacles in the EU, namely the TRIPS Treaty and the WIPO Copyright Treaty. It is broken into three sections. The first section is an overview of the history of copyright infringement beginning with Catholic Saints, moving through cassette tapes, floppy disks, the Bulletin Board System and ending with Napster. He briefly reviews the history of the copyright regulations important to his analysis including the Berne Convention and ending with IPRED (similar to the US's  DMCA.  In this section he also mentions the party's three most important issues:  1. Reform of the Copyright System 2. Abolition of the Patent System, and 3. Respect for personal privacy. In Section II, Li focuses on the three likely outcomes of the party's success in Sweden. The first is a run in with the International Court of Justice, the second is that their nonconformity would bring in the WTO's dispute resolution system and finally he speculates that the pressure from the success of the Pirate Party of Sweden will cause a harmonization of international copyright laws. He furthers this last point using the examples of the Swiss Copyright Law, which changed after receiving pressure from Germany, and the Indian Patents Act influencing laws in Uruguay. The third section of the paper outlines how the Pirate Party might change international intellectual property laws. He splits this topic into two possible outcomes, that it will change the laws directly and indirectly. Directly, the party will gain representation in Parliament. Indirectly, it's major ideas will be incorporated into other Parties' including the Moderate Party of Sweden.

Li's paper will be useful as a basic introduction to the EU's IP laws especially TRIPS and the WIPO Copyright Treaty, both very actively addressed by the Pirate Party in Sweden today. It is also significant that since this paper has been written (February, 2009), the Pirate Party has indeed gained a seat in Parliament. This allows me to see if what Li describes in Section II are true possibilities.

This project is about the future of the Pirate Party, whether their recent attainment of an EU Parliament seat launches them into a promising future or if their strength is simply the tenuous reaction of young file sharers to the Pirate Bay trial. I would also like to address the party's focus on the retention of privacy and what the party could be capable of should they prove a tenable force in influencing internet policy.

TankGirl. "Pirate leader Falkvinge: 'Our enemy has no intellectual capital to bring to the battle'.” P2P Consortium Interview. 12 January 2008. 20 July 2009.  

P2P Consortium member going by the avatar of TankGirl, interviews Rickard Falkvinge, chairman of the Swedish Pirate Party. At the point of this interview, the Pirate Party has yet to gain a seat in the EU Parliament, but many of his responses predict the Party's later success. The questions are consistent with the Pirate Party's primary issues including the filesharing debate, privacy issues, and the spread of IPR revolution across Europe. In the first question, TankGirl mentions the adoption of the PP's principles by the Moderate Party and whether Falkvinge thinks that this is productive. He agrees that it is productive in applying pressure to larger parties, but he explains that the MP is "technophobically luddite" and does not understand the issues as well as he would like them to. The second question is about whether Falkvinge's vision of the IPR revolution, why is has its beginnings in Sweden, and will it eventually infect other countries in Europe and the world? Falkvinge explains that file-sharing issues seem to be strongest in Sweden today, which might be because they were slightly ahead in high-speed broadband access. He no longer gets asked questions about monetary compensation of artists in Sweden, meaning that they already understand that the debate goes beyond that. He is hoping that Sweden will set an example in Europe. He is less optimistic about the Pirate Party in the US noting that the party has much less influence on the political system. In response to the third question about privacy and integrity, Falkvinge explains again that file-sharing cannot be stopped, eventually it will be completely anonymous and that cell phone file-sharing would soon be ubiquitous. The last question addresses personal integrity and surveillance being instituted for "anti-terrorism reasons." Falkvinge gives a brief lexical definition of fascism and says to remember that we have brought the cameras into our homes ourselves. The best thing to do against the Big Brother Society is to be constantly vigilant of the government. Turn the eye onto them.

In this interview with P2P Consortium, Falkvinge answers more specific questions about the filesharing debate, most significantly the idea of an impending Big Brother Society that could potentially sweep across Europe. Falkvinge's thoughtful responses have a hint of the revolutionary, something that doesn't come out in his speeches and the Swedish Pirate Party blog.

This is from Gerd Leonhard's 2009 book The End of Control. Leonhard is a media futurist and writer.  He discusses how the record industry has attempted to control their product but ultimately failed. The music industry must admit to what is happening and let go of there old economy business models and belief that content is king. They must accept it fast as the longer the wait the more they have to lose. Advances in technology such as memory sticks, iPhones, wireless hard drives / music players have made file sharing easier and easier and its popularity will grow exponentially. Record companies must embrace the end of distribution control and stop harassing their customers with lawsuits and threats. They must move to a service based model.

 

 Leonhard proposes blanket licensing as the best solution. Existing public performance blanket licenses given by collectives are easy to get and make economic sense. The system is straightforward and benefits performers and artists but a new method will be needed for the internet. A blanket scenario would work best and he likens music to commodities such as water or electricity in that everyone should be a legal user. However, it is important to recognize in any discussion that music can be consumed unlimitedly, thus in determining the appropriate fee, TV is provided as an example. Flat rates could be connected to service or other methods.

 

 The article's most interesting topic is its emphasis placed on control. Music companies still hope to maintain control of their product which does not make sense considering how uncontrollable it is. The movement of data has become so commonplace that controlling it seems almost ridiculous. Record companies have no other choice; they should strongly consider the prospects of blanket licenses. Flat rate licensing would work better as it would get money to creators who are not being served properly by the groups trying to represent them. I think this is probably the reason voluntary collective licensing has still not hit the mainstream. Middlemen like record companies realize their role will be diminished in a world where artists can provide their product directly to their fans.

 

The Higher Education Opportunity Act written in August 2008 contained a few mentions of file sharing on campuses. The act addressed three main areas. First, students must be warned about illegal downloading and illegitimate P2P file sharing. They must be notified about potential repercussions such as civil and criminal liabilities. Next, institutions must certify that they have developed plans to combat the unauthorized distribution of copyrighted materials including technology based deterrents. Third, they must, to the extent possible, provide alternatives to illegal downloading.  The timing for this is 1 year after the Act was signed.

The Act is quite specific in its requirements. Universities must both combat and provide solutions to the peer-to-peer file sharing dilemma that has run rampant on college campuses since the creation of Napster over a decade ago. Numerous attempts of other services have been tested, but all have failed the ultimate goal of compensating creators and giving students the music they want. Ruckus was the most recent failure. With the Act in place, universities must address the issue in the near future giving Choruss a unique opportunity as it is backed by both labels and file-sharing proponents. The controlled nature of campuses and use of a central ISP makes them a very attractive place to test the subscription model and this will be important to watch develop for the future of collective licensing.

The editorial by Reihan Salam discusses the benefits and issues with voluntary collective licensing. Four music companies (Universal, Warner, Sony BMG, EMI) control 90% of all record sales in the U.S and have blamed piracy for the 40% decline in music sales over the past decade. Some opinions in the article describe voluntary collective licensing as a "music tax" or even an extortion scheme. Issues such as the masses paying for the actions of a few and the recording industry gaining too much are reflected. Salam believes the system is actually beneficial as it rewards smaller artists and will help creativity. If artists are not compensated and royalty streams dry up, they will in fact stop recording.  I do not necessarily subscribe to this as plenty of musicians do so out of passion not profit.

 

The part of the article that is most interesting is related to Apple, which record companies believe has a virtual monopoly on music downloading and must be kept in check. Voluntary collective licensing helps record companies ease their reliance on the software. Apple's counter attack to voluntary collective licensing is also discussed which poses an interesting proposition. A one-time fee on an Ipod purchase would give purchasers access to all music available on the iTunes website. The reason this hasn't yet happened is price and that it further entrenches Apple in its power against record companies.

 

Additional concerns are raised about how VCL would hurt independent labels; the other 10% of record sales and with the Apple plan its effects on other music software programs. It also discusses what actually may work best and sides with William Fischer’s book Promises to Keep and its strategy of an actually government music tax. Such a strategy would benefit artists and consumers but may cut out the powerful RIAA, which is well liked by the current administration.

 

The Apple tax idea is interesting and one that sticks in my mind, but again grants power to Apple who the record companies are too dependent on already. If an agreement was reached, I think it would be revolutionary but still limit consumers full access to the world’s music catalog as iTunes only holds a small percentage of all music available.

The article provides some interesting insight on the historical precedent of collective licensing, which was first developed in 1851 in France.  It was used to reimburse composers whose work was being performed in cafes without consent. The article mentions the Electronic Frontier Foundation white paper and the RIAA's initial quick dismissal of it. This has since changed with Choruss and the willingness of record labels to explore the idea. The article further mentions the many failures of attempts to discourage file sharing including the abandoning of DMCA and the futility of the RIAA’s continued lawsuits on individual piracy. Opponents of the ISP tax method believe this is almost extortion as ISPs should be responsible regardless of piracy that is occurring on their networks. They feel legislation needs to be put in place requiring ISPs to punish users who take part in illegal downloading. The article goes on to say that some industry leaders think both policies need to be in place (tax and monitoring) so long as artists are getting fairly compensated for their work, the ultimate goal.

 

Still, I feel further issue remain on what the legal duty of ISPs is and how far is too far? Users should have the option to protest any surcharge and the interesting idea of tiered pricing addressed in the article seems like a good solution. Consumers interested in unlimited downloads would pay for the service and the extra broadband required while those not interested would simply not pay. In a number of countries ISPs are being sued for their inaction on illicit downloads and in others ISPs are investigating technology to monitor their customers. Other questions that need to be considered are the limiting of personal privacy and canceling user’s service without legitimate reasons. All in all, the article presents both sides of the ISP tax idea in an interesting light. While it seems obvious that this is the one place where all file shares meet and hence the appropriate toll to tax users, it puts obligations on the ISP to monitor its customers which infringe on privacy.

This is a New York Times article written by Eric Pfanner in January 2009. It discusses a proposal by the Isle Of Man to test voluntary collective licensing. For $1.38 a month, the eighty thousand residents, who all have broadband access, would be able to download unlimited amounts of music. A fee would be collected by the ISP. The music industry estimates that currently 95% of tracks distributed online are pirated and this is a potential solution offered by the Isle.

 

The article discusses European perspectives on the issue and they do appear to be farther along than the U.S. A similar proposal made it Parliament in France, but it was eventually rejected after a fierce battle by copyright holders. Currently European countries seem more interested in the idea of holding ISPs responsible for illegal downloading on their networks. They have also proposed ideas including a 3 strikes your out rule and the banning of individuals from broadband access. While these idea are taking shape in the U.S., it seems unreasonable to hold ISPs responsible for reporting their customers actions. It also could create competitive advantages for those ISPs who refuse to participate and also distrust in them in general. Similar to phone tapping under the Patriot Act, it impedes on individuals freedom without the concerns of national security. It seems to be another example of the record companies alienating their own customers and building ill will and holding onto their past control ideals vs. adjusting to the future and the fact that file sharing is here to stay.

This transcript is from Jim Griffins keynote speech about Choruss at the Digital Music Forum East in March 2009. Jim Griffins heads Choruss, LLC is a non-profit organization created and supported by major music labels. Choruss aim is to provide voluntary collective licensing to universities. It amazingly is backed by both the RIAA and EFF, who usually are on opposite sides of the music file-sharing issue. Choruss would act as a collective pool and then distribute royalties to artists based on various metrics.  

 

Mr. Griffins discusses the need for a new business model in the music industry as technology has completely changed the game. He states, "It’s a fact of life: If your business model depends on controlling or getting paid for copies of zeros and ones, you may need to look at a new business model." He explains how collective licensing has existed in various industries in various forms and now is no different. Mr. Griffins then specifically addresses a Billboard editorial written by Chris Carter on the issues facing voluntary collective licensing. He provides mitigating arguments to the issues including lack of data to allocate funds, legal implications of collective licensing, opt-in / opt-out, label favoritism, and implementation challenges. He further discusses that this is not an academic pursuit but rather an actual attempt at monetizing and regulating piracy. He stresses that the creation of the system will also expand the market and uses the Copyright Clearance Center as an example of past success. Choruss has the goal to test various systems and eventually make paying for music fast and simple because doing so will release the floodwaters for money to flow.

 

Mr. Griffin is basically heading up the idea of voluntary collective licensing and is the initiatives public face and voice. This transcript gives a cohesive response to critics of voluntary collective licensing. By addressing the concerns of Mr. Castle, he has provided counter-arguments necessary to push the discussion on this revolutionary concept. His answers are based in reality and admit the concerns faced but are optimistic and derived out of reason.

Chris Castle is a California attorney who represents clients on music technology and public policy. He wrote this editorial in January 2009 and takes a much needed look at the problems with voluntary collective licensing and ISP taxes. He explores what would happen in a world where suddenly downloading music is free. The main issue he brings up is without any legitimate proven tracking sources, ISPs would basically be providing good guesses on how the fees garnished should be distributed. Other concerns he raises are about file quality, illegitimate lawsuits and the lack of feasibility of the plan in actual implementation. He further comments that the record industry would be exchanging one form of uncertainty for another.

 

The editorial further accuses proponents of voluntary collective licensing of ignoring the positive results in the billion dollar industry of quality digital content such as Hulu and Itunes which are experiencing successful growth. The author questions how collective funds would be distributed with no good data and the addition of another middle-man pulling money out of artists pockets. Questions are also raised about any promises to not sue ISPs, especially by those who opt-out of collective licensing. ISPs will also face issues related to other content illegally downloaded on their sites like images, movies, etc. and international trade agreements that may be tested.

 

While voluntary collective licensing on a topical level sounds great, Mr. Carter raises some very legitimate points and the issues that could be present in actual practice. ISPs will have to take on additional duties and are vulnerable to attack for participating as a middle-man whether it be voluntarily or involuntarily. Consumers may also be at risk in a world where authorized and unauthorized works are at their fingertips with no clear ability to distinguish between the two. If this is the case, lawsuits may continue unabated.

This is Chapter 6: An Alternative Compensation System from William Fisher III's 2004 book Promises to Keep. Mr. Fisher is the Hale and Dorr Professor of IP Law at Harvard and Director of the Berkman Center for Internet and Society. This is a very comprehensive discussion of the creation of a governmentally administered reward system for music and movie file sharing. Its basic premise is musicians or filmmakers would register their work with the copyright office and be given a unique identifier that would be used to track downloads of their work. The government would enact taxes which would be used to create a central fund.  Using techniques created by television rating agencies, performing rights organizations, etc. the government would determine what frequency the work was used. The artist would then receive their royalty payment. The benefits would be consumers would pay less for more entertainment and artist would receive their fair share. Distribution companies would largely become obsolete over the long run. Society at large would benefit with less litigation and transaction costs. 

 

The chapter goes on in detail to explain the various components of the plan. It also performs a deep analysis into revenue sources to determine the financial impact of the system. In the end, Mr. Fisher determines a tax of approximately $27 per year per household would make the system work. Concerns with this do exist such as consumers potentially supporting music they are morally or ethically opposed to. Another funding source could be taxes on the goods and services that are used to gain access to the media. Items such as ISPs, mp3 players, etc. are all explored and in the end an approximately tax of 12% is calculated as being appropriate. This is very deep and thoughtful analysis on what the actual numbers are that is helpful in pushing the discussion of voluntary collective licensing forward.

 

The chapter raises very important issues about voluntary collective licensing including derivative works, artists gaming the system, the inadequacy of the current copyright office, and how to create an appropriate sampling system. This is deep dive is essential to my research project as it peels back the surface to explore further ideas that will have to be confronted as the method moves forward. While a required government tax may face strong opposition, the idea of taxing devices is logical. My other concern with this strategy is the involvement of the government as the EFF plan to have non-profit collectives seems more in-line with letting the market do its work in maintaining innovation and efficiency.

This is The Songwriters Association of Canada’s proposal for monetizing file sharing of Canadian music. It lays out a voluntary collective licensing scheme similar to that proposed by the Electronic Frontier Foundation. The plan highlights its unobtrusive nature which will basically let consumers continue to download music as they wish but remove the legal risks and legitimize their actions. Consumers would have unlimited access to the world's music collection both preserving and fostering its growth. The association believes the voluntary collective licensing method will usher in a "Golden Age of creativity."

 

The background of the proposal provides some interesting statistics on music downloading. The estimate 98% of all music is shared and only 2% is actually purchased obviously indicating that sharing is the preferred method of the public at large to access music. The proposal also argues that legalizing file sharing would increase the amount of high quality virus-free music available as only 6mm of the 100mm recordings created are available on legal sites. Legitimizing file sharing will hence increase society's access to all music promoting the arts. It will also answer the most important dilemma: compensation for creators.  

 

The proposal is an amendment to the current copyright act instituting collective licensing and the payment by consumers of a monthly fee on internet and wireless accounts. This would basically be a government tax but with an opt-out option. Consumers could sign documentation stating they will not share files and face penalty for breaking their agreement. Creators could also opt-out. The proposal would not only benefit consumers, but also ISPs and the music industry. ISPs would receive an administrative fee and record companies would finally receive compensation for file-sharing. The collective would be responsible for tracking music file sharing and distribution of royalties and could be outsourced to firms currently doing similar work.

 

Overall, the system seems very reasonable and a solution to the secular downward trend facing the record industry. The proposal is broad in its strokes, but it is the details of voluntary collective licensing that make it difficult which are not addressed. Issues such as how royalty streams are fairly distributed, misuse for non-music materials, cheating by artists, impact on record companies and current providers of legal file sharing are not fully tackled. Still the proposal takes the next steps necessary to move the method forward.

This is Fred von Lohmann of the Electronic Frontier Foundation's whitepaper on voluntary collective licensing.  The EFF has been a proponent of the idea since 2004 and put its seal of approval on current attempts to give life to the idea such as Choruss. The idea has gained traction with both Warner Music and Universal expressing interest. There has been a plethora of comments by writers, bloggers, panel discussions regarding the subject.

The paper presents voluntary collective licensing as a method to combat digital music piracy and create a legitimate revenue source for the flailing music industry. It lays out the precedent, the idea, the logic and the advantages. Voluntary collective licensing could be a way to monetize file sharing and hence provide the creators with compensation for their work, but at the same time provide consumers with what they have wanted all along, complete and uninhibited access to music. Since the creation of Napster, peer-to-peer file sharing has resulted in a secular decline of the music industry. Even through numerous evolutions and legal battles, file sharing has continued illegally and impacted recording artists. Consumers have been sued and accused by record companies of piracy, all of which has resulted in ill will towards record companies and little revenue generation for artists. Lohmann lays out the reasons voluntary collective licensing is needed including artists deserving to be compensated for their work, file-sharing has become the normal mode of music distribution, fans are in fact the best distributors, decision makers and preserves of music and finally the importance of letting the market drive innovation more than the government.

Voluntary collective licensing is compared to the system currently used by radio stations and insights are provided on how the concept will alleviate piracy in the music industry. The idea  is to form "collecting societies" similar to ASCAP, BMI, and SESAC which provide music fans with unlimited downloading in exchange for a reasonable monthly fee. The fees would be collected through a variety of sources including at the ISP, university networks or subscriptions (similar to Rhapsody). All money would move to a central organization who would distribute compensation to artists based on popularity of their music, the technology for which already exists. The whitepaper further answers the most obvious questions including antitrust, division of money, and the impact on unwilling artists.

The Higher Education Opportunity Act made it mandatory for universities to provide alternatives to illegal peer-to-peer networks.

 

Oberholzer-Gee, Felx; Strumpf, Koleman. “The Effect of File Sharing on Record Sales: An Empirical Analysis.” The Journal of Political Economy, Vol. 115, No. 1 (Feb., 2007), pp. 1-42. < www.unc.edu/~cigar/papers/FileSharing_March2004.pdf>

This journal article is a statistical, quantitative analysis of the effects of file sharing on record sales in the United States. It provides a necessary statistical context against which new music initiatives can be explained in terms of new revenue and marketing model development as a result of the digital-music renaissance. It provides data up to 2007 that measures record-sales (online and in stores) as well as expert estimates of file-sharing usage. Additionally, its authors conclude that file-sharing is not primarily responsible for a decline in record sales, a conclusion that has been used in several policy cases regarding the legality of file-sharing.

This article serves several key purposes. First, it provides an empirical background to support the necessary claim that the music industry is changing as a result of online sharing and the proliferation of digital media. Second, its analysis undermines certain assumptions many RIAA proponents maintain regarding the effect of file-sharing on record sales; for example, it is argued that the availability of the “single” online contributes more to the change in revenue structure than P2P networks. Third, it reports digital-music statistics that are important in any argument regarding the business of music on the internet.

In Donna Wentworth's 2004 Op-ed piece, "Dumb and Dumber: Why the Movie Industry Shouldn't Do as the Recording Industry has Done" strongly cautions Hollywood to stray away from actions taken by the music industry regarding file sharing. Wentworth points out that in 2003, movie studios profited heavily from the $41.6 billion in revenues, and enjoyed the second largest culmination of box office totals ever. Wentworth is mystified as to why the industry, and specifically the MPAA, is so worried that film piracy will destroy their business. According to her, the 6,000 lawsuits filed by the recording industry to target file sharing did little to impede illegal music downloads. The "pre-emptive strike agenda," as Wentworth calls it, will likewise be a lost cause in suppressing the prevalence of peer-to-peer file sharing, and will alienate the consumer. Wentworth goes on to reference the famous case concerning VCR use and copyright. The fact that the VCR was deemed legal in all homes allowed for Hollywood to restructure their business model, and reap the profits from VHS rentals. Wentworth also says that the digital age is no different as DVD's often make more money than their box office total. Though Wentworth makes some interesting points, I think that her statements leave a lot of statistical information to be desired. MPAA statistics show that the movie business is in fact suffering in the billions for online film piracy. This doesn't mean that the industry will go out of business in its entirety, but it does effect the output of films significantly. No doubt, the carbon copy superhero and animated films will still be green-lit, but it is the independent and more artistic films that will suffer.

     This article takes a much more anthropological perspective and focuses on the user side of illegal music download sites in Ukraine. Haigh discusses the differences in the music and movie market in Ukraine compared to that of the West. She also talks about the financial limitations of Ukrainians and the limited use of the Internet I that country. She draws parallels between modern norms of illegal fire sharing the heritage of the Soviet Union and its copyright regime.
    This article supplies a crucial perspective for my argument – the motivations of populations to download illegally from the Internet and infringe copyright. The financial situation of Ukrainians is particularly important because it is clear that they cannot afford legal copies of the pirated material. The ACTA and other multinational authorities should be cognizant and offer alternatives to illegal sites in order to give incentives for the users to switch to legitimate materials. This also means that the legal sources should be affordable for the native population. The article also touches on the perception and attitude of Ukrainians toward the western legal copyright framework. This links back to the sentiments of the natives evoked by their life within the Soviet Union. Ukraine is a proud nation and in its history it has been constantly conquered and re-conquered by foreign powers, which imposed their own rule on the population. Ukrainians feel that when the WTO and the US are allegedly trying to protect their intellectual property rights, in effect they are acting just like the USSR and attempting to coerce Ukraine to follow western models even when they are not suited for the needs of the country. This attitude is echoed throughout most other eastern European former Soviet satellites and republics.

     In this case the software company known as Grokster along with other companies distributed free software that allowed users to share files between their computers. The software was not intended for illegal downloading but users mainly used the software to download copyrighted files. The software companies knew that this illegal file-sharing was going on and they encouraged it through computer ads. A large group of entertainment companies headed by Metro-Goldwyn-Mayer Studios (MGM) sued Grokster and the other software companies for violation of the Copyright Act. They said that the software companies were intentionally distributing the software so that users could infringe works that had been copyrighted. The district court along with the Ninth Circuit court ruled in favor of Grokster and the software companies stating that the software could have been used lawfully therefore they were not liable for what users chose to do with it.

     Were the software companies liable for infringement? In my opinion they were liable. The fact that the software companies were encouraging consumers to continue to buy and use their product even though a great number of them were using the product for the wrong purpose makes them partially responsible for the user's actions. The encouragement by the companies was only a way for them to get more consumers and thus make more profit.

     The case went to the Supreme Court and they ruled in favor of MGM Studios and the entertainment companies that the software companies were liable for the infringement acts of their users. The court said that although the Copyright Act did not make someone liable for another's infringement, secondary liability applies. The fact that the software was so widely used makes it difficult to deal with each individual infringer therefore the secondary source, the software companies, must be liable.   

     This case shows a pretty advanced form of piracy in music software. The fact that the court system was able to use secondary source liability to persecute the software companies shows the attempts of the court system to keep up with the advancement of piracy in order to fight it.  

The development of internet communities, the phenomenon of file-sharing, chat room hosting, and surfing are all aspects of cyberspace social behaviors that have coalesced to create a thriving social organism, or ecology.  In the book, Huberman makes a scientific observation of this phenomenon as statistically goverened patterns. While discussing the application of such physics concepts as Brownian motion and Zipf's Law, Huberman researches the mechanics of internet social behaviors, and the value of such findings to the future development of internet busines models and application architecture.

In relation to my project, and the accusations from Viacom, YouTube is being accused of actually inducing illegal behavior.  Huberman looks at various problematic features of file-sharing networks, and their contribution to the dilemma of creating user-friendly file-sharing functions at the risk of creating illegally replicated material (69).

Huberman, Bernardo A. The Laws of the Web: Patterns in the Ecology of Information . Massachusetts: MIT Press, 2001

 

The Effect of File Sharing on Record Sales: An Empirical Analysis

Felix Oberholzer‐Gee, Harvard University; Koleman Strumpf, University of Kansas

[Journal of Political Economy, 2007, vol. 115, no. 1]

This press release, while short, is one of the only legal responses specifically relating to BitTorrent within the world of peer-to-peer file sharing.  This tells of the conviction and sentencing of one of the administrators of a BitTorrent tracker called EliteTorrents.com.  The FBI took down the site in 2005, and then over a year later, Grant T. Stanley was sentenced to 5 months in prison, 5 months house arrest and assessed a fine of $3,000 for copyright infringement and conspiracy to commit copyright infringement. The importance of this case lies in the fact that it destroys what was considered the best defense administrators of torrent trackers had.  It was assumed that, because trackers do not actually house any illegal or infringing files, that those who ran such sites couldn’t be held responsible for the infringement of users of the site.  Basically, the precedent set in MGM v. Grokster was applied to this case, and it was determined that the administrator of EliteTorrents was inducing infringement, by providing files which could only be used for an infringing purpose.
This shows somewhat new tactic in the fight against illegal file sharing. Rather than going after the makers of individual programs such as in Grokster and Napster, they went after those providing access to the infringing content.  This has a great deal to do with the nature of BitTorrent itself, and speaks to the fact that the potential for non-infringing use is so great, that the MPAA likely would not have thought it worth their time to fight what would have almost inevitably been a lost battle against the technology.  The people who run and even use various torrent trackers are likely a bit more worried than they would have been even a month ago, but those using BitTorrent for non-infringing purposes likely need not worry.

    This article is a guide written by the Electronic Frontier Foundation, aimed at Universities to provide a guide for establishing policies on peer-to-peer file sharing.  One of the primary issues that the article tackles is the line between fighting copyright infringement while maintaining a suitable learning environment and protecting the rights and privacy of the students.  The issue of determining where to draw the line in regards to students privacy versus complying with copyright law is a delicate one that has been faced by most institutions of higher education at some point.  The key, according to the article, is discouraging copyright infringement while maintaining student’s privacy and freedom.  Without actively discouraging infringement, they could face potential repercussions from those who support the school financially or even legal repercussions.  Maintaining privacy for students is important in keeping the respect of the students and creating a working academic environment.  
    The article also goes into a fair amount of detail as to the establishment of a school’s network.  One possible solution offered by the article is the establishment of a school sponsored download service.  There are downsides to such a solution, but it can have a major impact on illegal downloading, if a legal alternative is easily available at no additional cost (other than what comes out of tuition to pay for the service).  Peer-to-peer sharing is a major issue on most college campuses, and with programs such as BitTorrent, it’s only going to continue to grow.  If a university can curb illegal file sharing, it lowers the chance of RIAA lawsuits coming into the campus, which would be bad for everyone but the RIAA.  

    This article by Clive Thompson from Wired is essentially an overview of the history and a glimpse at the future of BitTorrent.  The first part of the article discusses BitTorrent’s origins and its creator Bram Cohen.  Cohen created BitTorrent after a string of unsuccessful projects, when he saw the problems with the current generation of peer-to-peer programs such as Kazaa and decided to make something faster and more efficient.  Although it started out slowly, BitTorrent’s popularity grew immensely in the following years.  The article goes on to discuss what the future of BitTorrent, and peer-to-peer file sharing could look like.  The possibilities of a broadcast industry built around BitTorrent looks to be much more convenient, although more volatile at the same time.  If the television industry were based around BitTorrent, for example, trends could change so quickly that a new show could be canceled, or be signed for more shows, within hours after the initial release of an episode.
    The article also compares the reaction of the MPAA to the flood of movie sharing that has come with BitTorrent to the reaction of the RIAA to the music swapping with Napster and Grokster and the like.  The article considers possible outcomes such as the MPAA adopting BitTorrent technology to provide legal movie downloads, such as was seen with Napster 2.0 or the iTunes music store.  This thought in particular is somewhat prophetic, as just recently Bram Cohen and BitTorrent Inc. have struck a deal with the MPAA.  The history of BitTorrent technology has been one of the great success stories of the information technology age, although depending on whom you ask it could be viewed as one of the worst technologies to hit the Internet.  Whatever opinion you have, it seems BitTorrent will be around for a bit longer.

This is one of the most important, and one of the only, cases regarding peer-to-peer file sharing and copyright.  In this case, the Supreme Court overturned the previous decision of the 9th Circuit Court of Appeals, and ruled against Grokster.  This, along with A&M v. Napster are the two primary cases regarding peer-to-peer file sharing, and the latter in particular came as a surprise to most who follow copyright and technology law.  The decision of the Supreme Court essentially established the doctrine of intentional inducement of infringement, which enables the creator of a technology to be found guilty of infringement if it is found that the technology itself induces infringement, regardless of any or all substantially non-infringing uses.  This goes against precedent established 21 years earlier in Sony v. Universal, in which it was determined that the maker of a technology could not be held responsible for the infringements of the end-user, as long as the technology had the potential for substantially non-infringing uses.  The 9th Circuit Court of Appeals ruled following the Sony precedent, and thus it was quite surprising when the Supreme Court overturned this.  
Essentially, this is the most recent and important case regarding peer-to-peer file sharing, and thus any predictions for the future of peer-to-peer technologies will inevitably be based at least in part on this decision.  In relation to BitTorrent technologies, the object of predicting the future is somewhat more complicated than with past technologies.  It would seem that BitTorrent technology has the potential for a vast amount of non-infringing use, while simultaneously the potential for vast quantities of infringing use.  There are important differences between BitTorrent and previous peer-to-peer technologies, including the open nature of BitTorrent, allowing a myriad of different BitTorrent clients to interact with each other.  Based solely on the precedent set in Grokster, it seems like it would be impossible to find the makers of BitTorrent applications liable for infringement.

This is a report by the Electronic Frontier Foundation on the current state of peer-to-peer file sharing two years after the RIAA first filed lawsuits against its own customers for copyright violation.  The report looks at the effects of the lawsuits, as well as the reactions to the lawsuits from the public.  The report also compares the effects of the various attempts the RIAA has made to curb file sharing over the years.  The first method used was to go after the technology itself, as seen in cases such as A&M v. Napster and MGM v. Grokster.  While these were successful, the file sharers have simply moved elsewhere, most recently to protocols such as BitTorrent and darknet solutions such as swapping music on CD-Rs and iPods.  The second method the RIAA used was to sue students who allegedly gave access to infringing material in the form of search engines which could be used to find and download files.  There were four such lawsuits, and all of them ended in settlement. Following these lawsuits, the RIAA attempted to sue many individual users of peer-to-peer networks by issuing “DMCA subpoenas” which required merely the allegation of infringement to get.  The courts eventually rejected these, due to the efforts of the Electronic Frontier Foundation and other groups.  Finally, the RIAA moved on to the more familiar “John Doe subpoenas” which required them to actually provide evidence of copyright infringement before being able to subpoena for their names from the ISPs.  Despite these many tactics, the results have been the bad for both the public and the RIAA.  Peer-to-peer file sharing has continued to increase and the overall public opinion of the RIAA has been greatly tarnished.  Suing 12 year olds and 74 year olds alike, the RIAA has thus far been unable to curb illegal file sharing.

This paper is the result of a study conducted as a collaborative effort between the University of California Riverside and Cooperative Association for Internet Data Analysis at the University of California, San Diego.  The study was initiated in order to test recent media claims that peer-to-peer file sharing had dropped sharply following the RIAA lawsuits against peer-to-peer users.  This study stands out from previous studies, such as those used by the media to make the aforementioned claims, in that it measured traffic on all known peer-to-peer protocols, rather than focusing only on what the media considered the most popular (Kazaa, Grokster and the like).  In essence, the study is a much more accurate look at peer-to-peer traffic and popularity, and completely refutes the media claims that the RIAA lawsuits had had a cooling effect on file sharing.
The main finding of the study was that contrary to media claims peer-to-peer traffic had never declined.  They claimed that the findings on which the media had based their reports were inaccurate due to the migration within peer-to-peer traffic towards more complicated protocols such as BitTorrent.  The ability to trace and measure peer-to-peer traffic within the more basic protocols, such as those used in Napster, is much simpler than with BitTorrent.  The ability to change ports, and the lack of a centralized server makes it very difficult to get accurate data using outdated methods.  This report is extremely relevant to the topic of BitTorrent within the peer-to-peer world, as it shows the dramatic increase in BitTorrent traffic in the wake of the RIAA’s lawsuits against users.  It shows that the lawsuits seem to have little to no effect other than to give the RIAA a negative reputation among the general public.  

This is an interview of John Hughes and Jennifer Rich of Townsend and Townsend and Crew LLP conducted by FindLaw took place before the Supreme Courts reversal of the original Grokster decision.  In the interview, a proposed congressional bill entitled “Inducing Infringement of Copyright Act of 2004” is discussed.  Senator Orin Hatch, following the initial ruling in favor of Grokster, proposed the bill in question.  The bill would have created a new doctrine of intentional inducement of infringement, making it possible to find the inducer of infringement as guilty of infringement himself.  This was essentially aimed at directly reversing the Grokster decisions, but had the potential to have much more broad and sweeping effects.  FindLaw indicates in the interview that many worried this bill could be used to overturn such landmark cases as Sony v. Universal (1984).  The interviewees admit that, as the bill was written, that was certainly possible, and they suggest possible amendments that could clarify the intent and reach of the bill.
Looking back, it is interesting to note that, while the bill eventually died, the Supreme Court basically applied the bill when they overturned the original Grokster decision.  The Supreme Court’s decision in Grokster was based on this doctrine of inducement of infringement, and just as people worried that this bill would be too broad and reaching, so do people worry that the Grokster decision could be interpreted to negate the Sony decision.  The Grokster decision is of great importance to the future of peer-to-peer file sharing, although there have not been any major movements since the decision.  The fears of broad interpretation have also been, as yet, unrealized.

This article, by Andrew Leonard of Salon.com, comments on the current state of copyright law, highlighted by two stories that had come out recently.  The first was about a new technology from a digital tracking and security company called BayTSP that claimed to be able to identify the first person to upload infringing materials to a peer-to-peer file-sharing network such as BitTorrent.  The other involves the plight of a documentary called Eyes on the Prize.  At the time the article was written, it was illegal to broadcast or distribute the documentary, due to the fact that the rights to archival footage used in the documentary had expired, and were too expensive for the filmmakers to secure easily.  Despite the important educational nature of the film, copyright law was preventing it from being seen, and thus a group decided to digitize and distribute the film via BitTorrent.
The argument of the article is about the counterintuitive and counterproductive nature of copyright law, and how the copyright holders go to great lengths to ensure that it remains this way.  Leonard also seems to be certain that these measures taken by the likes of the RIAA and MPAA such as employing spiders like the one created by BayTSP will not curb the file sharing and piracy.  The file sharers and pirates seem to be perpetually one step ahead of the copyright holders, and it is hard to feel sympathy for the copyright holders, when those copyrights are preventing important films such as Eyes on the Prize from being seen.  BitTorrent is clearly growing in popularity and prevalence, and this article makes it clear that copyright industry is already working to curb infringing use of the technology, so the question then is: what will be the next move for the file sharers.

This piece is a brief on behalf of a group of computer science professors in support of Grokster in MGM v. Grokster (2005).  Their argument centers on the nature of the Internet, and how peer-to-peer file sharing is essentially just an extension of this basic model.  They argue that the United States Government’s definition of the internet is inherently flawed, and that the ability of any participant in a network to act as a client is both intrinsic in the design of the internet, and the key characteristic of peer-to-peer file sharing networks.  Their second main argument is in regards to what they call the end-to-end principal, and challenges the assertions that regulating and checking for infringement should be built into a network.  They assert that forcing networks, such as peer-to-peer networks, to build filtering into the network itself forces them to build inefficiency into the network.  The best and most efficient networks use the end-to-end principal, which states that most functions should be provided at the ends of a network, rather than in the network itself.  They state that this is one of the most important principals in network design, and one that underlies the internet’s own design.
The arguments presented in this brief provide another way to look at this ever-important case regarding peer-to-peer file sharing.  Rather than focusing on legal or even moral standards, such as in the Creative Commons brief also included in this bibliography, they argue from a technological viewpoint.  The idea that forcing networks to build inefficiency into the networks goes against the design of the internet as a whole is interesting, although perhaps not entirely convincing.  Certainly the Supreme Court did not find it convincing enough, as they ruled against Grokster in the end.  Despite this fact, this brief provides a unique look at the design of the Internet and how peer-to-peer file sharing networks are simply extensions of this basic design.

This piece is a brief written by Lawrence Lessig in his capacity as counsel for Creative Commons in support of Grokster in MGM v. Grokster (2005).  The argument presented in the brief essentially deals with the issue of free speech enabled by peer-to-peer software such as Grokster.  Essentially, it is argued that due to the high costs of traditional file distribution technologies such as FTP, the ability to host large files such as videos is limited to larger corporations that can afford to do such.  Peer-to-peer software, on the other hand, enables individuals and non-profit organizations, for example, to distribute larger files without incurring excessive fees.  Lessig argues that, should Grokster be held responsible for the copyright infringement of its users, it will limit the ability of non-infringing users to engage in this specific type of free speech.  Many examples are given, one such dealing with the aftermath of the Indian Ocean tsunami in 2004.  Many amateur videos were taken following the disaster, and only through peer-to-peer file sharing were these videos able to be made public, as the cost of traditional file distribution would have made distribution infeasible. and Creative Commons worry that such legitimate uses would be jeopardized if the Supreme Court ruled against Grokster.

This brief is of great importance to my topic.  There are currently very few cases dealing with peer-to-peer file sharing, and this gives another look at one of those.  While it seems that the Supreme Court disagreed with Lessig and Creative Commons, as they ruled against Grokster, it is nonetheless an important in insightful brief.  The issue of free speech is not what usually comes to mind in regards to peer-to-peer file sharing.  This brief provides a multitude of examples of the legal uses of peer-to-peer file sharing, including BitTorrent, and how ruling against Grokster could impede and severely limit such uses.

AllPeers is a free extension which combines the strength of Firefox and the efficiency of BitTorrent to transform your favorite browser into a media sharing powerhouse.