February 1, 2010
Volume XXIX, Issue 7
P2PMS at CES Archive and P2PCMC at MSNY Coming
For DCINFO readers unable to attend the P2P MEDIA SUMMIT at CES in January, keynote presentations by the DCIA's Marty Lafferty, Abacast's Jim Kott, Aleric's Vincent Hsieh, Hudson Square Research's Scott Tilghman, Harris Interactive's Mike Saxon, MotionDSP's Mike Sonders, LimeWire's Nathan Lovejoy, Microsoft's Jin Li, and Oversi's Gilad Peleg are now archived here.
In addition, thanks to Abacast's Jason Vosburgh, an A/V webcast of the event is available here; including keynotes as well as session tracks on policy, technology, and marketing issues; and panels on content distribution, solutions development, and consumer protection.
Coming on March 9th will be the P2P & CLOUD MARKET CONFERENCE, being held in conjunction with Media Summit New York (MSNY). Please scroll down to this week's Report from the CEO for details.
The Next 40 Years of the Internet? Video
Excerpted from Information Week Report by Suraj Shetty
Internet history teaches us that service innovation follows bandwidth expansion in a "virtuous circle" of development. Application continues to drive bandwidth and bandwidth will drive new applications.
In 1995, 56k accelerated walled garden services from AOL and online bulletin boards. From 1997 to 2000, broadband speeds of 512k-1MB and the introduction of NetScape gave birth to the World Wide Web.
In early 2000 with 2MBs, came peer-to-peer (P2P), file sharing, online games, music downloads, and Napster. In 2005, bandwidth of 2-5MBs brought us Web 2.0, MySpace, and Facebook. Today, a speed of 10-50 MBs brings us high-definition (HD) Internet protocol television (IPTV) and video-on-demand (VoD).
With history the best predictor of the future, what should we expect from the next 40 years of the Internet? Video will completely reshape the Internet and its use. Video will be the driving force behind a total transformation of the user experience.
Users will immerse themselves in video-based interactions anywhere, anytime, on any device. Today's Web 2.0 and TV services will merge into a unified, ubiquitous, interactive, social, and media-rich experience for a new breed of viewer/user.
In five years, annual global IP traffic will reach two-thirds of a zettabyte (the equivalent of 250 billion DVDs = 1 zettabyte) and the sum of all forms of video will exceed 91% of global consumer traffic. A prediction - annual global IP traffic will reach a yottabyte (250 trillion DVDs) within 40 years!
The source of video content creation will shift from a small number of centralized, organized professionals producing premium content, to billions of dispersed, independent individuals producing informal, personalized content as easily as they generate e-mail today.
Imagine telepresence as a daily experience in the home and workplace, video mail as mundane and highly productive, and shopping as akin to taking a walk down virtual aisles. If 6 million meetings per day took place over telepresence, 12 million metric tons of carbon dioxide emission would be saved daily.
Ultimately, the distinction between applications and devices will become meaningless - they will all be a seamless, continuous and holistic video experience, a "normal" part of everyday life.
Mobile Internet and data center/cloud services will be the driving forces behind a transformation of the Internet to medianet.
3G/4G and Wimax end-to-end mobile networks will deliver robust video and voice services on an unlimited number of channels and smart devices. Leveraging IPv6 addressing, networks will enable literally billions of devices to proliferate and communicate while addressing the IPv4 address exhaustion issue.
Media data centers will deliver billions of video streams through virtual clouds to billions of devices and people.
The distinction between landline and wireless will disappear as device experience fragmentation is resolved through the medianet. Applications will function in essentially the same way regardless of the device used.
Network openness and virtualization will facilitate the flexibility and velocity that robust video service demand, while maintaining network integrity and security. With millions of video streams distributed, network content delivery capabilities be transformed. Content caching at the network edge will accommodate massive amounts of traffic.
Most important, network flexibility combined with creative business strategies will generate an incalculable number of new applications. And so the "virtuous circle" will continue, providing limitless opportunity for those who have the vision to see the future of video.
The next 40 years of the Internet? Video - good for business, good for entertainment, and good for the planet!
Consumer Sentiment Hits 2-Year High
Excerpted from MarketWatch Report by Rex Nutting
US consumer sentiment improved in January, as a closely followed survey rose to its highest level in two years.
The Reuters/University of Michigan consumer sentiment index rose to 74.4 in January from 72.5 in December, according to media reports.
It's the highest since January 2008. The preliminary mid-month reading was 72.8. Economists were expecting an increase to 73.0 in the final numbers.
The index has been little changed in the past five months after falling to 55.3 in November 2008.
Report from CEO Marty Lafferty
 The Distributed Computing Industry Association (DCIA) proudly announces the agenda and principal speakers for our upcoming P2P & CLOUD MARKET CONFERENCE.
This DCIA-hosted special event is scheduled for Tuesday March 9th at the Princeton Club of New York in conjunction with Media Summit New York (MSNY).
The P2P & CLOUD MARKET CONFERENCE will explore marketing strategies, business models, case studies, and future opportunities related to peer-to-peer (P2P) and cloud based commercial offerings.
We are very pleased to announce that our keynotes will include John Waclawsky, Member Services, DCIA; Rick Kurnit, Partner, Frankfurt Kurnit Klein & Selz; Mike Saxon, SVP, Technology, Media and Telecom, Harris Interactive; Zeeshan Zaidi, COO, LimeWire; Kumar Subramanian, CEO, MediaMelon; Michael Papish, CEO, MediaUnbound; Nicholas Longano, CEO, MusicMogul; Robert Levitan, CEO, Pando Networks; and Lydia Parnes, Partner, Wilson Sonsini Goodrich & Rosati.
P2P & CLOUD MARKET CONFERENCE early registration rates, which offer substantial savings, end March 2nd. For more information, please visit www.dcia.info/activities.
The day-long Tuesday March 9, 2010 conference features keynotes and panels of industry leaders from the forefront of innovation. There will be a continental breakfast, conference luncheon, and VIP networking cocktail reception.
P2P & CLOUD MARKET STRATEGIES will address questions such as how are the market strategies different for using P2P or cloud computing to distribute consumer entertainment and corporate enterprise data? What characteristics are required for software companies to succeed in key market segments? Should software companies concurrently pursue multiple strategies? How do live P2P streaming and wide-area cloud deployments impact major market segments? What unique market attributes can yield new opportunities for monetization?
Panelists will include Simon Applebaum, Host & Producer, Tomorrow Will be Televised; Ian Donahue, President, RedThorne Media; Jason Henderson, Games Product Manager, Verizon Communications; David Johnson, Of Counsel, Jeffer Mangels Butler & Marmaro; Mark Mackenzie, VP, Digital Media Ventures, Alliance Bernstein; and Mike Tedesco, VP, Product Development and Technology, World Wrestling Entertainment.
P2P & CLOUD BUSINESS MODELS will zero in on such issues as has as any alternative business model - paid-download, subscription, or advertising-supported - yet proven to be the most promising in the consumer sector? Have any more innovative approaches been attempted? What are the most advanced approaches for P2P content protection? What wholesale content and enterprise business models are coming into play? How can users, both at the consumer and corporate levels, navigate among P2P and cloud service offerings?
Panelists Will include Mick Bass, VP, Alliance Management, Ascent Media; Vincent Hsieh, CEO, Aleric; Steve Lerner, Practice Director, CDNs & Management, RampRate; Dan Schnapp, Partner, Hughes Hubbard & Reed; and Greg Stephens, Director/VP, Songwriters Association of Canada (SAC).
P2P & CLOUD CASE STUDIES will ask what techniques have proven best so far in terms of monetizing the enormous traffic that P2P generates? What successes in cloud computing have been achieved in the wholesale entertainment and enterprise categories? What has been the relative worth of the different formats and interactivity that this channel supports? What case studies from related businesses can be applied to P2P and cloud computing and how?
Panelists will include Melike Amjarv, Independent Producer; Tom Chernaik, Principal, DigComm; Norman Henderson, VP of Business Development, Asankya; Steve Mannel, Media & Communications Industry Director, Salesforce.com; and Chuck Stormon, VP, Strategic Accounts & Alliances, PacketExchange.
P2P & CLOUD FUTURE OPPORTUNITIES question what can the industry do to ensure that the benefits of P4P and similar mechanisms are applied to the distribution of copyrighted works? How can participants at various levels of this channel gain support of rights holders? Which identification techniques (e.g., watermarking and/or fingerprinting) should be used to protect content and enhance the ecosystem? What new solutions will impact P2P and cloud computing software developers and distributors to the greatest degree?
Panelists will include Scott Campbell, CEO, Virtually Atomic; Lawrence Low, VP of Product Management & Strategy, BayTSP; Rich Moreno, Principal, Sivoo; Graham Oakes, Chairman, Digital Watermarking Alliance (DWA); Neerav Shah, VP of Business Development, Verimatrix; and David Ulmer, Senior Director, Multimedia, Motorola.
Registration can be done online here or by calling 410-476-7965. For sponsor packages and speaker information, please contact Karen Kaplowitz, DCIA Member Services, at 888-890-4240. Share wisely and take care.
Steam Realizes Extraordinary Growth in 2009
Valve this week announced extraordinary 2009 growth data for Steam, a leading platform for PC games and digital entertainment, with major increases in accounts, concurrent players, unit sales and more. The year also marked tremendous adoption of the Steamworks suite of publishing services in the tangible and electronic versions of many of the year's biggest releases.
During the last calendar year the platform surpassed 25 million active accounts, up 25% from the prior year. Of the 25 million accounts, over 10 million of those have profiles in the Steam Community.
In addition to the millions of new accounts created during the year, the peak number of concurrent users eclipsed the 2.5 million mark during the month of December, pushing Steam's average monthly player minutes to more than 13 billion.
Meanwhile, Steam now offers over 1,000 games from over 100 developers and publishers around the world. Unit sales for 2009 increased by more than 205%, marking the fifth straight year the platform has realized over 100% year-over-year growth in unit sales.
2009 also delivered a wave of titles supported by Steamworks, in tangible and electronic versions, including "Call of Duty: Modern Warfare 2," "Dawn of War II," and "Empire: Total War." Empire also used Steamworks for the delivery and management of its paid downloadable content releases.
"Steam turned five years old in March 2009," said Gabe Newell, President of Valve. "With the introduction of each new platform feature released over the years - such as the Steam Community, Steam Cloud, and Steamworks - we've seen corresponding growth in account numbers, concurrent player numbers and developer support for the platform. As such, we plan to continue to expand and grow the platform to better serve the developers supporting the open platform and millions of gamers logging in each day."
RightsFlow and PRS for Music Agree to Share Data
RightsFlow, a leading provider of bulk mechanical licensing and royalty services, announced an agreement with PRS for Music, the music copyright organization representing 65,000 UK songwriters, composers and publishers, to allow RightsFlow to identify and license PRS for Music works for mechanical uses in the United States. The project fills a crucial gap, ensuring that UK songwriters receive royalties from digital transactions in the United States even where content does not have North American representation.
The agreement puts in place a data-sharing capability whereby RightsFlow can send usage information to PRS for Music who will cross-check this with their own copyright systems. The result will be better matching of the appropriate sub-publisher or licensing body in the US, or where works are unrepresented direct accounting to PRS for Music.
RightsFlow CEO Patrick Sullivan added, "We are extremely proud to announce this agreement with industry leader PRS for Music. Not only will this help simplify the process of international licensing, but it will also significantly improve royalty accounting and payment for UK songwriters. We are very excited about the continued expansion of our robust worldwide data and licensing network."
RightsFlow's proprietary mechanical licensing 'FLOW' system is built to license, account, and pay publisher royalties for physical mechanical, DPD, interactive streams and limited downloads, including subscription and ad-supported models, licensing with all local societies and publishers.
Under US Copyright Law, mechanical licenses are required for music to be distributed through online music services. The current US statutory mechanical rate for permanent downloads is 9.1 cents for songs five minutes or less and 1.75 cents per minute for songs over five minutes. Limited download and interactive streaming services generally pay a mechanical royalty of 10.5 percent of revenue, less amounts owed for performance royalties.
Miramax Dies - Is This a Sign of the Times?
Excerpted from Special Report by Richard Affannato Co-Founder and CTO of Hyper MP
I came across this article about Miramax Films' untimely demise, and thought I would share it with everyone reading DCINFO.
I've been following the trend of the movie companies for the past 3 years, and it's sad to see this actually happen. For a long time now, the impact of copyright infringement to the studios has been theoretical. Now it's real.
As CTO of Hyper MP, a company that has developed a secured way of marketing and monetizing long-form, high-quality video content that can be securely distributed over P2P and BitTorrent networks, I wonder on a daily bases if there is anything more I can do for the studios and content owners.
Since content owners and copyright holders are losing a lot of revenue due to unauthorized distribution over these networks, I'd be interested to know what your thoughts are about embracing these networks using technology like Hyper MP.
Also, the environmental and economical benefits of such technology are profoundly inherited since there is no need to manufacture, package, or distribute DVD/Blueray discs.
If you are interested in distributing and monetizing your video content to an audience of 300+ million per month and growing, please let me know. I'm here for you.
Should PC Game Publishers Drop DRM?
Excerpted from CrunchGear Report
The music industry should be commended for relaxing its digital rights management (DRM) requirements. Every single song on iTunes is DRM-free, as are the songs on Amazon MP3.
But PC game publishers still impose DRM requirements, such as on BioShock 2 and presumably on Ubisoft's upcoming releases. What's it going to take for PC publishers to realize that DRM does absolutely nothing to prevent infringement? Not only that, it encourages infringement because the unauthorized version of the game ends up being superior to the licensed copy.
DRM's avowed purpose is to control the distribution of copyrighted works. Company A sells you "Its Stuff" but doesn't want you to make copies and give them to your friends, or to several thousand of your online friends on BitTorrent. That's fine theoretically, except that DRM implementations are often destructive, gunking up your PC with all sorts of unwanted nonsense. Never mind the fact that they simply don't work.
When "Half-Life 2" first came out, in 2004, people didn't think it could be infringed because it required Steam server validation. So what did hackers do? They reverse-engineered the handshake between the game and the servers, then created an emulated server for the game to connect to. And this wasn't months later, either, but within a few days of the game's release.
What was considered to be an uncrackable game was cracked without breaking a sweat. People have been cracking games for how many years now? There's an awful lot of programming know-how to draw upon.
DRM only serves to annoy legitimate customers. You need to enter a CD key. You need to keep the disc in the drive. You need to authenticate your installation at first launch. You can only install the game five times before having to call the FBI to get permission to install again.
A CD key I can see; that's only fair. But why do I need to keep the disc in the drive if I've already installed the game to my hard drive? Why should I have to authenticate when I just put in a CD key? And what happens on release day when authentication servers are getting absolutely hammered, and are unable to authenticate anything? What happens if the authentication servers are disconnected in five years? What if the DRM trashes my Windows installation, and I have to reinstall the game? What happens if that happens five times?
All the while, Mr. High School Hacker can hop on BitTorrent or Rapidshare or whatever, download the game as fast as his connection will allow, copy over a CD crack, and put up with none-of-the-above. The DRM has stopped nothing, and the infringer has a better gaming experience.
I understand that publishers freak out over copyright infringement, particularly on the PC where the perception is that it's easier to infringe a PC game than it is a console game. That's nonsense, by the way. Any 16-year-old kid with a free afternoon can hack his Xbox 360 and infringe games all day long.
It comes to a point where publishers have to realize the only thing that DRM does is to upset legitimate customers. That's putting it mildly, because it's not uncommon for DRM to totally hose a system.
How long is it going to take PC publishers to set aside the notion that you need to lock down a person's gaming experience in order to protect their investment? PC gamers, who are a prickly lot to begin with, would like to be treated with a bit of dignity.
Discussing the Economics of Content
paidContent:2010: Discussing the Economics of Content, on February 19th in New York, NY, is proving to be especially topical. Last week's news that NYTimes.com will move to a metered system in early 2011 led directly to its booking a conference luncheon panel comprised of Arthur Sulzberger, Jr., Chairman of The New York Times Company and publisher of its flagship paper; Janet Robinson, its President and CEO, and Martin Nisenholtz, its SVP, Digital Operations.
There will also be a Q&A with Devin Wenig, CEO of Thomson Reuters Markets, who is responsible for that firm's global financial services and media businesses.
James McQuivey, VP and Principle Analyst for Forrester Research, will open the day with industry analysis about consumer attitudes towards paying for access.
John Kosner, SVP and GM, ESPN Digital Media, whose portfolio includes ESPN.com; ESPN360.com; and all content development for mobile, interactive television, interactive gaming, and other emerging digital media will also be a featured panelist.
These latest speaker additions join an already-strong roster with Hilary Schneider, EVP for Yahoo North America, who will take part in a Q&A; Steven Brill, Co-Founder, Journalism Online; Bruce Campbell, President, Digital Media and Corporate Development, Discovery Communications; Rio Caraeff, CEO, Vevo; Josh Cohen, Senior Business Product Manager, Google News; Shawn Colo, Co-Founder, Demand Media; Bart Decrem, Co-Founder and CEO, Tapulous; Kenneth 'KC' Estenson, SVP and GM, CNN.com; Rob Grimshaw, Managing Director, FT.com; Cella Irvine, President and CEO, The About Group; Patrick Keane, CEO, Associated Content; Marty Moe, SVP, AOL Money & Finance; Quincy Smith, partner, Code Advisors and former head of CBS Interactive; and John Squires, Interim Managing Director, Next Issue Media.
Tickets are selling fast so please register now. The price is $1,195 with a discount for groups of three or more. Please contact paidContent2010@ContentNext.com for more details.
Will Net Neutrality Kill Cloud Gaming?
Excerpted from Gaming Insider Report by Josh Lovison
Let's get some definitions out of the way. First off, for the purposes of this post, "cloud gaming" refers to games that are rendered in the cloud (i.e., on servers). In essence, this is the promise of services like OnLive, a gaming offering that portends high-quality gaming on the simplest of devices by centralizing the heavy lifting in the cloud. It's not there yet, but the intent has many gamers' hopes up for a day in the future when they can leave the hardware arms race behind.
"Net neutrality" is the idea of non-discrimination for network traffic. In essence, this means that high data streams like BitTorrent or online video can't be throttled by ISPs. It also means ISPs can't charge companies for preferential treatment (like a gaming service such as Xbox LIVE receiving preferential bandwidth when the network gets congested). Game developers are getting behind the initiative because they want to prevent ISPs from charging them for preferred streams, which will add cost, or throttling traffic, which will deliver sub-par experiences to customers. And while this scenario hasn't occurred so far, the whole point of ratifying network neutrality rules is to prevent it. But one crucial point is overlooked: network neutrality has nothing to do with billing.
Internet service providers (ISPs) and telecoms are looking at network neutrality and their dream of a B2B revenue stream is being crushed. At the same time, cable subscriptions are being threatened by broadband video. So these companies are looking at their current business model, and trying to figure out how to grow profits despite decreasing revenue streams. The answer many are considering quite carefully is something called "consumption-based billing." In essence, pay for what you use. But this model could be a death knell for cloud gaming depending on the level of costs.
The issue comes down to speed versus volume. An absence of net neutrality threatens the promise of high-speed, low-latency gaming. Consumption-based billing either increases costs to consumers, or decreases margins to game service providers (depending on who is footing the bill). A net-neutral world with consumption-based billing would mean very little for consoles and high-end PC games that have much of their content on disc. But for services rendering frames centrally and piping that down to computers as an HD stream - well that could cost a pretty penny.
Both network neutrality and consumption-based billing are a far way off for terrestrial ISP networks, but they present a very interesting scenario to ponder. But as digital distribution increases in share of sales, and as cloud gaming starts taking its baby steps, these issues are going to dramatically impact the future direction of a number of gaming services. Let's watch and see how things play out.
Net Neutrality or Protection Racket?
Excerpted from ZDNet Report by Simon Bisson and Mary Branscombe
If P2P-based file-sharing content traffic is clogging the Internet and slowing down P2P-based Skype calls, why not mark the file-sharing content as lower priority and do the downloads overnight?
The software updates and "World of Warcraft" files that legitimately use P2P aren't hugely urgent and that kind of "when you're not busy" bandwidth usage is how Microsoft makes Windows Update polite (the Background Internet Transfer Service doesn't work quite like P2P but some of the principles are similar).
The problem with that, Skyfire CEO Jeff Glueck commented when he was demonstrating the new Symbian version of his mobile browser to us, is that it's the thin end of the wedge. "Our perspective as a start-up is that some proposals being floated around for quality of service (QoS) are quite radical and potentially threatening to the open democratic process," he said.
Glueck was invited to testify at the FCC hearings on net neutrality in Boston and he thinks that the proposals to charge Internet services more for lower latency when there's network congestion will play in favor of incumbents with deep pockets. The big sites are popular, but they're far from being all people want on the Internet. He knows that from what pages Skyfire users visit. "The long tail for Skyfire just continues to amaze me," says Glueck.
"We always think if there's some density in the number of people watching the same site, can we create efficiency by caching it? But it really isn't the same sites people visit - other than Google search. It's just tens of thousands of sites with two or three visitors each."
"Telcos and cable companies are eager to start creating toll roads and steerage class on the Internet, but these rules could make it hard to ever see the next eBay, YouTube, or Facebook. The NBCs and Foxes, and now Google, will just kill innovation and buy priority access for all their content. Those of us who require live access to a server and aren't downloading files overnight will be restricted to steerage class unless we pay protection money. We do believe there is a tragedy of the commons on mobile. Something has to change; but don't throw out the baby with the bathwater - don't throw out the open Internet."
Is Net Neutrality Good for Gaming Generally?
Excerpted from Computer World Report by Alex Wawro
The FCC has been working since October of 2009 to establish "net neutrality" guidelines. In a nutshell, net neutrality means that all service providers must allow non-discriminatory access to all lawful content and must consent to all reasonable requests regarding the disclosure of service management information to ensure that all customers receive equal broadband access.
These new guidelines follow four key freedoms established by the FCC in 2005: 1) Consumers are entitled to competition among network providers, application and service providers, and content providers. 2) Consumers are entitled to access the lawful Internet content of their choice. 3) Consumers are entitled to connect their choice of legal devices that do not harm the network. 4) Consumers are entitled to run applications and use services of their choice (subject to the needs of law enforcement).
Nowhere in any of this are videogames mentioned - but net neutrality does have an impact on online games. Leveling the Internet playing field might have serious consequences for online latency; but at the same time, demanding transparency from all Internet service providers (ISPs) protects developers from getting slapped with unfair fees.
Here's how the debate breaks down on both sides:
Last Thursday a coalition of game developers met with FCC representatives to show their support for net neutrality guidelines and urge the FCC to prevent ISPs from segregating the Internet based on a multi-tiered broadband price plan. The developers (among them Christopher Dyl of Turbine, who worked on "Lord of the Rings Online") asserted that all modern multiplayer games have been developed for the current Internet infrastructure, and that "balkanizing" the network based on ISP preference would be "a substantial drag on innovation because it would divert resources from development" of future titles.
"All we want is transparency and protection against discrimination; if you're making or playing a game, you want to know what kind of data your ISP will block and why," says Dan Scherlis, former CEO of Turbine and producer of "Asheron's Call." Speaking to GamePro, Scherlis pointed out that "without net neutrality guidelines, your ISP is free to shake down developers with access fees, stalling innovation, and pushing smaller games out of the market entirely."
Scherlis and other advocates of FCC regulation are encouraging gamers to support net neutrality out of a fear that ISPs may begin limiting access to select websites or imposing bandwidth caps in the near future. Multi-tiered service packages (in which a provider might offer preferential access to Internet services and increased bandwidth caps in return for higher fees) are a very real possibility without federal oversight, leading to a possible future where an ISP charging extra for the ability to play games online is just as acceptable as Microsoft charging for an Xbox Live Gold Account is today.
Without established net neutrality guidelines, we also risk fragmenting the online gaming market; if service providers are free to throttle bandwidth we may soon see an Internet segregated by competing telecommunications companies. Allowing the FCC to enforce Scherlis' twin standards of transparency and equal access would prevent platform exclusivity deals like those made by Microsoft and Sony from erupting between ISPs.
Supporting net neutrality may seem like the obvious choice for consumers interested in open access to the Internet without fear of regulatory oversight; by deputizing the FCC to enforce a free and open Internet, consumers protect themselves from exploitation with blanket provisions against censorship. But consider that putting the FCC in charge of how ISPs do business implicitly condones Internet regulation by expressly permitting a government regulatory body to punish companies offering preferential service.
"The Internet landscape will look radically different in ten or twenty years, and we'll be stuck beneath the same regulations the FCC is currently creating," says Ryan Radia, Associate Director of Technology Studies at the Competitive Enterprise Institute. Radia told GamePro that "99% of Internet customers have never and will never suffer discriminatory treatment; allowing for mistakes to be made encourages innovation by helping Internet providers understand what the market is capable of."
Radia is referring to mistakes like attempts to throttle "excessive traffic" by blocking BitTorrent data transfers without informing customers. In 2008 the FCC decided 3-2 that such throttling was unlawful, slapping the ISP with the first cease-and-desist order ever issued based on net neutrality guidelines.
Such active federal oversight is precisely what the detractors of net neutrality fear, because giving the FCC jurisdiction over what is and is not fair use of the Internet may lead to more stringent regulation in the future. Most net neutrality proposals expressly forbid service providers from prioritizing data traffic based on content. "The best way to guarantee equal quality of service is to ensure providers have no incentive to keep their general service inferior," says Scherlis. "Without federal oversight, service providers might intentionally degrade or throttle data traffic to encourage customers to upgrade their service plan."
Thankfully the data traffic generated by online gaming (whether on XBox Live, PSN, Steam, or any other service) is comparatively sparse next to heavy lifters like BitTorrent downloads or streaming video; gamers only need to exchange the most basic information between client and server to ensure that all players have an accurate play experience. Unfortunately, the fast-paced nature of online gaming renders even a momentary traffic disruption or data loss blatantly obvious to a player.
"I'm a pretty hardcore gamer, and when I score a headshot I expect it to count," says Radia. "Barring ISPs from offering prioritized traffic means more delays, and gamers notice congestion much more readily than the average consumer. In the absence of net neutrality guidelines, service providers are free to experiment with competitive service plans that minimize game lag."
This spectre of game-breaking lag haunts every multiplayer experience, and developers have spent the last ten years creating multiplayer games that mitigate or eliminate data loss on an unregulated Internet. If net neutrality legislation passes and the FCC begins preventing your ISP from prioritizing select data traffic, lag may become a serious problem as gaming traffic gets pushed to the back of the bus (figuratively speaking) to make way for bandwidth hogs.
Many financial conservatives and free market advocates are opposed to net neutrality laws because they interfere with the ability of a free market to self-regulate; in the absence of government oversight the invisible hand of the market will slap down ISPs who treat their customers poorly (with censorship, traffic throttling, or excessive fees.) By allowing the FCC to regulate the Internet, many fear we may be eliminating a minor inconvenience today in exchange for significant government censorship in the future.
"We should be concerned when a regulatory body attempts to expand its power, no matter the reason," says Radia. "The FCC is staffed by bureaucrats and not elected officials; it means gamers are totally unable to hold the FCC accountable for its actions, and that's a terrifying thought."
Midem: Artists Praise File Sharing
Excerpted from Music Week by Eamonn Forde
Pharrell Williams used his talk at this weekend's MidemNet to cast doubt over the alleged damage of file sharing, suggesting instead that it can have an enormously positive impact.
"You need to embrace technology and see how it can help you," he said. "As for unauthorized downloading, does that really hurt you if the downloaders love you? It's just taste-testing."
Ed O'Brien of Radiohead took an even more extreme stance, suggesting that anyone who opposed the UK government's "three strikes" disconnection policy was being wrongly portrayed as an enemy of the civilized world.
In a video message broadcast during the Saturday morning sessions, the band's guitarist explained that the Featured Artists' Coalition (FAC) took the stance that the "three strikes" strategy "was not a workable policy. "But if you disagree on that point and you're typecast as the Taliban."
Tough words for the industry to take in, especially as other panels during the day praised record labels for licensing to new services and for innovating in a time of crisis.
O'Brien argued, however, the industry was not innovating quickly enough. "Times of uncertainty are always accompanied by fear among some people," he said. "But there is scope for enormous creativity. That's what the industry needs."
File sharing was inevitably a background issue in all the panels, but it was the artists who pushed it to the forefront during their talks.
Terry McBride of Nettwerk Music Group praised streaming services as the best way to tackle online infringement. Highlighting the disorganized nature of hard drives filled with downloaded files, he suggested users would pay for a "digital valet" service like P2P music streaming service Spotify to give them organized and convenient digital access to enormous catalogs.
He called for labels and services to be braver in their deal-making, suggesting that record companies do a revenue-share with these "valet" services. "That way," he said, "the labels get one more kick of the can."
Thomas-Rasset Vows to Pay Nothing
Excerpted from Ars Technica Report by Nate Anderson
Mules, long noted for stubbornness, would seem to have nothing on either the music labels or Jammie Thomas-Rasset. Both sides have dug-in deep and are prepared, almost unbelievably, to have a third trial on the question of whether Thomas-Rasset infringed copyright and what she should pay if she did.
Thomas-Rasset was the first US defendant of the RIAA lawsuit campaign to take her case all the way to trial. That first trial in 2007 found her liable for copyright infringement and fined her $222,000. She was then granted a retrial by the judge on the grounds that he had been misled on one particular jury instruction that described simply "making available" a copyrighted file as copyright infringement. Citing Eight Circuit precedent, the judge decided that this wasn't good enough and that only actual proof of a file transfer could be counted.
At the second trial, in 2009, Thomas-Rasset was again found liable, but the jury this time fined her $1.92 million. Last week, federal judge Michael Davis decided that this was "monstrous" in its disproportionality and slashed the damages by an astonishing 97% to $54,000. The recording industry could either accept his decision or request a third trial.
The RIAA then sent a letter to Thomas-Rasset's lawyers with an alternate offer. Thomas-Rasset could settle for only $25,000 ("We are willing to negotiate a payment schedule for this sum," said the letter), and she wouldn't even need to pay the labels - all cash could go to a charity benefiting musicians. The entire settlement would be conditioned on the judge vacating his recent remittitur order.
"We do not believe embarking on a third trial is in anyone's interest," said the letter. "Continuing to use scarce judicial resources as well as spend our respective clients' time and money strikes as unwise and pointless."
It does not strike Thomas-Rasset that way. Her lawyers have already responded: no deal.
Kiwi Camara, one of Thomas-Rasset's lawyers, confirmed that the settlement was ruled out. He added that Thomas-Rasset would likewise rule out any settlement asking her to pay damages, and that the Camara & Sibley law firm was ready to represent her pro bono once more.
Given the facts in the case, which after two trials don't appear to be in dispute, it's hard to see how Thomas-Rasset hopes to prevail without paying a dime, but that appears to be the plan. If she had been willing to pay something, she would have done so long ago, when the RIAA offered her a settlement of a few thousand dollars. Instead, Thomas-Rasset has spent years of her life working with two law firms on two federal trials, and she's willing to risk a third.
The stubbornness isn't just on one side of the aisle, however. The RIAA is completely unwilling to abide Judge Davis' ruling that the jury's damage award was excessive. Accepting that ruling would set an unacceptable precedent for judges to alter jury awards in copyright cases at their whim. It's not the amount, but the principle - something shown by the fact that the trade group is willing to drop roughly a bazillion dollars more on the Denver law firm that has been prosecuting the case in order to do it all again. In addition, conversations with industry lawyers and executives over the years have also revealed a strong sense that Thomas-Rasset needs to take responsibility and pay something; there's a very real sense that, apart from issue of statutory damage law, Thomas-Rasset is thumbing her nose at the industry and hoping to get away with no penalty.
Thus - a third trial. "It is a shame that Ms. Thomas-Rasset continues to deny any responsibility for her actions rather than accept a reasonable settlement offer and put this case behind her," RIAA spokesperson Cara Duckworth said. "Given this, we will begin preparing for a new trial."
Camara & Sibley are also ready to go, so it looks like everyone will trek back to Minnesota to rehash the same issues for a third time. Judge Davis' patience with the entire proceeding seems thin; he has already trashed two jury verdicts and called publicly on Congress to change the law, but he has also made clear that Thomas-Rasset should take responsibility. The judge must be about as thrilled as we are to see the case take up another full week on his docket.
Much more interesting, however, would be a major class-action lawsuit against the recording industry. Such a lawsuit would get even more intriguing if the prosecuting lawyers said that they plan to "get the $100 million that the RIAA stole" by suing people and collecting settlements.
That's exactly what Camara plans to do. He told us about it last year, but is the case still in the works? Camara tells us that it is.
IFPI Says 95% of Downloads Are Unauthorized
Excerpted from Prefix Magazine Report by Andrew Winistorfer
According to the major labels and the RIAA, services like MySpace, Spotify, and iTunes are lowering the amount of unauthorized downloads. But the International Federation of the Phonographic Industry (IFPI) reported this week that at least 95% of all downloads on the Internet are still unauthorized.
Which means that if services like iTunes are making $5 million a month on downloads, there are $95 million worth of downloads happening that are unpaid. Which is just nuts.
And actually, that 95% "number" is the same as it was in 2008, so newer P2P streaming services like Spotify haven't had much impact.
Who's Winning the File-Sharing War?
Excerpted from BBC News Report by Rory Cellan-Jones
This morning, I visited a new front in the battle over file sharing. In a room in Westminster, a band of desperadoes gathered to launch a guerilla raid on a hated enemy - the Digital Economy Bill, and, in particular, measures which could see suspected unauthorized file sharers cut off from the Internet.
Actually, that's a slightly colorful description of a lobbying session at which the leading "desperado" was none other than highly respected establishment figure Charles Dunstone.
But the Carphone Warehouse boss and owner of TalkTalk, the Internet service provider (ISP) that has been most vocal in its opposition to the bill, was keen to stress that he wasn't here to advance his commercial interests but to protect the human rights of broadband users.
He'd invited Members of Parliament (MPs) and Lords to hear the case against the bill from various bodies, including Which UK, Liberty, Consumer Focus, and the Pirate Party.
Dunstone wants the whole thing thrown out - his advice to content owners is not to bother asking ISPs to act as copyright police against their broadband customers: "If you think someone has stolen something from you, take them to court."
Which UK brought along a couple of innocent victims of just that kind of legal action, people who'd received letters accusing them of unauthorized file sharing, despite apparently being innocent of any such offense. The consumer organization told me the current state of affairs needs sorting out.
Liberty, which campaigns for civil liberties, saw some problems with requiring ISPs to keep information on subscribers, but preferred that to the threat of disconnections, which could be a breach of the Human Rights Act.
And as for the Pirate Party, its approach was simple - file sharing should be made legal.
So how were artists going to make money, I asked the party's Andrew Robinson, if they had to compete with "free" material? "You just need a slightly different business model," he told me, insisting that file sharing was just "free advertising" for bands.
So what will now happen to the Digital Economy Bill, currently making its way through the Lords and then heading to the Commons amidst this barrage of lobbying from supporters and opponents?
The music and video industries seem confident that the Conservatives support their case, so that it will get through. Shadow Culture Minister Jeremy Hunt's office summarized where Conservatives stood: "broadly supportive."
A spokeswoman said Mr. Hunt backed the Digital Economy Bill, but wanted a couple of amendments on the technical measures, making it clear that these would be a last resort and would be properly assessed by Ofcom.
If the bill doesn't run out of time before the election - and that's a big if - it looks as though its music industry supporters could win this battle.
Coming Events of Interest
Vator Splash Event - February 4th in San Francisco, CA. Vator, a leading platform for innovators and entrepreneurs to broadcast themselves, is holding its inaugural Vator Splash Competition to find 10 promising early-stage start-ups to present at this special event. Enter the competition today using the 25% discount code: VatorDCIA.
Cloud Computing Forum - February 10th online. Open source software developer Red Hat will host an online forum on open source cloud computing. The forum will include technical presentations from across the cloud computing industry, as well as discussions on current challenges and solutions offered by open source technologies.
paidContent 2010 - February 19th in New York, NY. Join paidContent.org for its first namesake conference with senior business leaders representing publishers, content technology companies, investors, analysts, and leading members of the press and blogging community to discuss the most pressing business issue of our day.
10th Annual Digital Music Forum - February 24th-25th in New York, MY. The only event in the United States that brings together the top music, technology, and policy leaders for high-level discussions and debate, intimate meetings, and unrivaled networking about the future of digital music.
P2P & CLOUD MARKET CONFERENCE - March 9th in New York, NY. Strategies to fulfill the multi-billion dollar revenue potential of the P2P and cloud computing channel for the distribution of entertainment content. Case studies of sponsorships, cross-promotion, interactive advertising, and exciting new hybrid business models.
Media Summit New York - March 10th-11th in New York, NY. MSNY is the premier international conference on media, broadband, advertising, television, cable & satellite, mobile, publishing, radio, magazines, news & print media, and marketing.
Cloud Computing Congress - March 16 in London, England. A practical guide on cloud computing for business - the value proposition, and the impact on the IT function. Building and managing applications in the cloud - how to manage and control applications and resources in the cloud environment. Security, testing and management of cloud infrastructures.
Cloud Expo - April 19th-21st in New York, NY. Co-located with the 8th international Virtualization Conference & Expo at the Jacob Javits Convention Center in New York City with more than 5,000 delegates and over 100 sponsors and exhibitors participating in the conference.
|
