June 7, 2010
Volume XXXI, Issue 1
Level 3 and Solid State Networks Support UTV True Games
Level 3 Communications this week announced its work with Austin, TX based UTV True Games, an international pure-play online game publisher for massive multi-player online games (MMOGs), to provide content delivery network (CDN) services and advanced reporting analytics to support UTV True Games' MMOG game titles.
Under the terms of the agreement, UTV True Games will leverage both Level 3's CDN services and game publishing software from Solid State Networks, a Level 3 Solutions Partner. Solid State Networks will provide its integrated game publishing solution alongside Level 3's caching and download services, origin storage, and Content Analytics reporting service.
"We've been impressed by both the quality of the service as well as the level of responsiveness and collaboration we've experienced with Level 3 and Solid State Networks," said Mick Giles, Chief Technology Officer (CTO) for UTV True Games. "With the insight the companies have provided, we've significantly improved our download process over the past year to our players' benefit."
Level 3 and Solid State Networks offer game delivery solutions for developers and publishers designed to increase player conversion and retention, improve operational efficiency, and provide actionable reporting metrics.
Level 3 and Solid State Networks have been working with UTV True Games to support the company's Warrior Epic MMOG title and the upcoming launch of the Mytheon game, currently in beta. By examining the extensive metrics provided by both companies, UTV True Games was able to identify areas for improvement in its download experience and make adjustments to its process, thereby increasing the number of successful game downloads.
"This is a great example of the benefit of the solutions Level 3 and Solid State Networks provide to meet the specific needs of live game operators," said Peter Neill, Senior Vice President of Content Markets at Level 3.
"UTV True Games has access to a high level of actionable reporting metrics and - just as importantly - the support of a team that understands online game publishers' requirements and can help implement new and better solutions for their business."
For more information on Solid State Networks industry leading peer-to-peer (P2P) based software solutions for games and game updates, please visit www.solidstatenetworks.com.
UK Government Embraces BitTorrent
Excerpted from The Next Web Report by Martin Bryant
The UK government has released nearly 10GB of data about public spending today via BitTorrent.
Yes, the file-sharing technology usually only addressed by governments when they're trying to crack down on its abuse as a copyright infringement tool is being used to allow anyone who wants it to grab detailed data about public spending over the past two years.
While we don't have time to spare poring over the data in the Treasury's "COINs" database, armies of journalists and open data enthusiasts up-and-down the country are doing just that.
The Guardian is live-blogging its search for stories and scandal amongst the data. Meanwhile, it looks like open data hackers will be teaming up to find an easier way to browse the data over the weekend.
The COINs database is the latest information to be released as part of data.gov.uk, the UK government's open data site spearheaded by "father of the web" Sir Tim Berners-Lee that launched in January this year.
Digital Watermarking Alliance June 7th Webcast
The ease and speed with which digital content circulates across the Internet has provided unprecedented opportunities for both creators and consumers; however, it also presents a major issue: once content makes its way to the web - whether it's a photograph, book, document, song, TV show, or movie - it can be immediately viewed by anyone and be subject to appropriation by well-meaning and unscrupulous users alike.
On Monday, June 7th at 10 AM PT/ 1 PM ET, the Digital Watermarking Alliance (DWA) will present "The Case for Content Identification: Supporting New Business Models and Effectively Managing Key Business Assets," a forward-thinking webcast on how digital watermarking can address this issue as well as enhance consumer experiences.
During this free, hour long webcast, you can expect to learn: the importance of content identification in today's digital world; what is required for digital content to reach its full potential; how content identification through digital watermarking can benefit consumers, copyright owners, brands and distributors; how content owners can leverage the power of content identification to provide their consumers with new and personalized rich media experiences; and new consumer experiences made possible by effective content identification.
Please click here to register for this webcast.
Report from CEO Marty Lafferty
 DCINFO readers will recall that the US Federal Communications Commission (FCC), in response to an unfavorable April 5th court decision regarding its authority to regulate broadband network management practices, has proposed a reclassification of Internet service providers (ISPs) that would instantaneously grant the agency vastly expanded regulatory authority over network operators.
Federal Communications Commissioner Mignon Clyburn spoke at the Media Institute this week in defense of the FCC's net neutrality proposal against charges from industry observers that it would represent a throwback to the days of voice-telephony regulations, that there has been no market shift to justify such a change, and that it would foster even greater uncertainty in the regulatory arena than currently exists.
Her defense was forceful and well articulated, but one cannot escape the fundamental fact that this in essence would be a "power grab" - how else could one interpret the FCC's plan to reclassify ISPs as common carriers?
Therefore, says the FCC, a purported key to its intended implementation would have to be one of "forbearance," in effect contradictory to the nature of the change itself.
Not employing many of the potentially applicable rules under Title II of the Communications Act that could be included with this change would be necessary to maintain the FCC's desired "light touch" over Internet regulation.
To us, this extreme awkwardness begs the question as to whether imposing an old regime, even under severe constraints that would limit its scope to anti-discrimination against third-party applications, content, or services, would really be the optimal approach. But this has also spawned an outpouring of paranoid conspiracy theories and related attacks from many quarters.
Would it not simply be better to invest the necessary time and effort to develop a new approach uniquely appropriate to the realities of the Internet?
Congressional leaders, including nearly all Republican and 73 Democratic Members of the House of Representatives, seem to agree with us in questioning the wisdom of the proposed reclassification of ISPs from information service providers to telecommunications service providers.
The FCC's proposed "authority revamp," in its response to the court judgment underscoring that the Commission did not have the power to sanction ISPs for certain network management practices, was essentially a knee-jerk reaction. In contrast, the cautionary ruling from the Judicial branch of the government that caused this reaction was well-reasoned and thoughtfully supported.
The more prudent course now would be to embark upon a careful and deliberative review of the now outdated Communications Act, which could address this issue in a more appropriate and meaningful way.
As Commissioner Clyburn also acknowledged, the Washington Post has further editorialized that the FCC should have to have a strongly reasoned justification in order to reverse its 2002 position regarding the classification of ISPs:
"To reverse course now by classifying broadband as a telecommunications service would require the agency to throw out years of its own data and analysis. While agencies have broad latitude in reevaluating regulatory schemes, reversals should be linked to significant market shifts. The facts do not support such a conclusion, and the FCC should not now try to shoehorn broadband into an existing - but incompatible - regulatory scheme."
While the Commissioner claimed that no law requires the FCC to demonstrate such a market shift, the Post went on to argue:
"What is needed is a fourth way: The agency, industry, consumer groups, and other interested parties should work with Congress to craft clear but limited rules tailored to broadband."
Lastly, Clyburn spoke against the large number of critics who believe reverting to Title II could cause greater uncertainty for ISPs, Internet-based companies, and subscribers than retaining the status quo.
In doing so, she qualified this claim as really being about "predictability" as opposed to absolute "certainty." And, indeed, that is all that industry seeks in order to justify continued investment and development of innovative new products and services on the Net.
While she asserted and demonstrated that the FCC would benefit from this change - in driving forward with its Broadband Plan - she did not show how it would benefit the private sector or consumers.
Comparisons to the wireless industry, with its substantially different legacy service offerings, delivery technologies, business models, carrier controls, software applications, and data requirements to support the FCC's proposal to regulate ISPs belie the fact that, if anything, market forces are driving the wireless sector more-and-more to emulate the Internet, with its increasingly rich media content offerings, which is what consumers demand.
And as DCINFO readers know, competition is particularly intense in the wireless sector. If anything, more competition would be desirable from the end-user perspective in the broadband arena, and, perhaps ironically, that will come as wireless, hardwire, fiber-optic, and satellite platforms converge. It is not clear, however, that any consumer benefits immediately would be derived from additional regulation.
The most troubling aspect of what would be lost under the FCC's plan is a current, and possibly even unintended, regulatory balance that exists between major Internet content sources, like commercial search engines, and ISPs. Only ISPs would be constrained in new ways, while web-based content suppliers would not be, and this could have profound repercussions to users going forward that would not necessarily be positive.
Industry participants need to pay attention to this process and weigh in. Share wisely, and take care.
Cisco Projects Global IP Traffic to Quadruple by 2014
Cisco Systems announced the results of its annual Visual Networking Index (VNI) Forecast 2009-2014, which projects that global Internet traffic will increase more than fourfold to 767 exabytes, or more than 3/4 of a zettabyte, by 2014. This amount is 100 exabytes higher than the projected level in 2013, or an increase the equivalent of 10 times all the traffic traversing IP networks in 2008.
The growth in traffic will continue to be dominated by video, exceeding 91% of global consumer IP traffic by 2014. Improvements in network bandwidth capacity and Internet speeds, along with the increasing popularity of HDTV and 3DTV are key factors expecting to quadruple IP traffic from 2009 to 2014.
The Cisco VNI Forecast, which focuses on two primary user groups - consumers and businesses - was developed as an annual study to estimate global IP traffic growth and trends.
Projections are based on Cisco analysis and modeling of traffic, usage, and device data from independent analyst sources. Cisco validates its forecast, inputs, and methodology with data provided by service providers worldwide.
To help network users better understand global IP traffic growth drivers and trends, Cisco updated several of its unique resources including: the VNI Forecast widget, which provides customized views of the growth of various network traffic types around the globe (revised for this 2009 - 2014 forecast period); and the VNI PC Pulse application for desktop and laptop computers helps consumers learn more about their individual impact on IP networks and compare their network usage with that of others around the world.
Global IP traffic is expected to increase more than fourfold (4.3 times) from 2009 to 2014, reaching 63.9 exabytes per month in 2014, up from approximately 56 exabytes per month in 2013. This is equivalent to 766.8 exabytes per year - almost three-quarters of a zettabyte, by 2014.
The nearly 64 exabytes of global IP traffic per month projected for 2014 is equivalent to 16 billion DVDs; 21 trillion MP3s; or 399 quadrillion text messages.
By 2014, the highest IP-traffic generating regions will be North America (19.0 exabytes per month), Asia Pacific (17.4 exabytes per month), Western Europe (16.2 exabytes per month), and Japan (4.3 exabytes per month).
The fastest growing IP-traffic regions for the forecast period (2009-2014) are Latin America (51% compound annual growth rate [CAGR], 7.9-fold growth), the Middle East and Africa (45% CAGR, 6.5-fold growth), and Central Europe (38% CAGR, 5.1-fold growth).
By 2014, the sum of all forms of video (TV, VoD, Internet video, and P2P) will continue to exceed 91% of global consumer traffic.
Global Internet video traffic will surpass global P2P traffic by the end of 2010. For the first time in the last 10 years, P2P traffic will not be the largest Internet traffic type.
The global online video community will include more than 1 billion users by the end of 2010.
By 2014, it would take more than two years to watch the amount of video that will cross global IP networks every second; to watch all the video crossing the network that year would take 72 million years.
Globally, advanced video traffic, including three-dimensional (3-D) and high-definition TV (HDTV), is projected to increase 13 times between 2009 and 2014.
By 2014, 3-D and HD video is forecast to comprise 42 percent of total consumer Internet video traffic.
Global file sharing traffic is projected to reach 11 exabytes per month in 2014, 22% CAGR from 2009-2014.
P2P will grow at a CAGR of 16%, while web-based and other file sharing will grow at CAGR of 47% from 2009-2014.
By 2014, global P2P traffic will be 17% of global consumer Internet traffic, down from 36% in 2009.
Cloud Computing Is a Disruptive Business Process
Excerpted from Information Week Report by John Soat
Make no mistake, the cloud is a disruptive force in information technology (IT). Like the PC, which introduced the consumerization of IT, and the Internet, which networked the global village, the cloud represents a radical restructuring of how IT services are created and deployed. And with anything truly radical, there is always a certain amount of pain that comes with the gain.
DISRUPT: verb, transitive. 1a: to break apart, rupture; b: to throw into disorder. 2: to interrupt the normal course or unity of.
The disruptive nature of cloud computing was made apparent earlier this week when Hewlett-Packard (HP) announced that it is accelerating automation of its data centers and as a result laying off 9,000 employees in its services division and taking $1 billion in charges. "We think the next five-to-ten years is all going to be about who can best use technology to automate the delivery of services," said HP executive VP Ann Livermore during a conference call.
Translation: cloud computing.
And it isn't just vendors or service providers who will make wrenching changes in IT provisioning as a result of this radical restructuring. "'Let go' are hard words," one CIO told me when I asked about IT layoffs connected with his move to the cloud. "Let's just say, there's been significant attrition."
Still, the CIO said the downsizing of IT had an upside because the remaining tech experts are able to work more closely and effectively with the business side on the actual implementation of the technology. "We've dramatically shrunk the size of IT to help the business with things that are hard for business," he said.
The ultimate convergence of IT expertise and business process has been forecast for many years. Cloud computing is a big step along that evolutionary path, but it won't happen without a certain amount of pain to offset the gain.
Information Week is conducting a survey to determine the effect of cloud computing on IT hiring plans. The survey called "Will Cloud Decimate IT Ranks?" is available here if you want to participate.
How Skype will Dominate Enterprise VoIP
Excerpted from Internet Telephony Report by Brough Turner
After years of little or no traction with enterprises, Skype is now poised to dominate business communications services. It's the company's Skype for session-initiation protocol (SIP) service that will turn the tide, but not quite the way most people expect.
Skype is already the world's largest carrier of international voice traffic (12% of all such traffic in 2009) and the dominant platform for person-to-person voice and video everywhere. But this is based on individuals. Skype remains a no-no for most IT directors. There are several issues.
The primary issue is Skype's P2P technology. P2P technology allows Skype to scale with almost no cost. It also connects calls despite firewalls and network address translation. As a result, Skype just works, where other voice-over Internet protocol (VoIP) services have configuration and support problems. So P2P is a critical advantage for Skype.
Unfortunately, the term P2P has nefarious connotations, and the idea that Skype can penetrate firewalls goes against basic IT precepts.
The related issues are security and privacy. Here the problem is mostly perception, as Skype calls are substantially more secure than most other phone calls, time-division multiplexing (TDM) or VoIP. But perceptions are important, and changing minds can take years. Initially, VoIP was less than toll quality, and lingering perceptions took years to overcome.
Today, fear of VoIP is largely behind us. New PBXs support VoIP, and service providers have begun offering SIP trunking. But SIP trunking is still fairly difficult to deploy - features vary and configuring firewalls or installing session border controllers can be complex. Here's where Skype sneaks in.
Skype for SIP is simplistic - voice only and public switched telephone network (PSTN) numbers only. The company doesn't even call it SIP trunking, although it is. But it's low cost - perfect for IT departments on a tight budget, in other words, all IT departments!
Then Skype's simple installation makes it easy to trial, and importantly, easy to deploy as a secondary service - avoid the TDM vs. SIP decision. Once Skype is in the door, its competitive advantages will win it an ever-increasing share of the enterprise's communication minutes. Low cost and actually works wins business.
But once the IT department stops fighting Skype, Skype's rich communications on PC clients will capture the rest of an enterprise's internal communications - first individuals, then departments, and then the whole enterprise. Why invest in specialized video gear when Skype video on PCs is easy to use and free?
Skype for SIP is simple and limited to voice, but that's the key for Skype to penetrate enterprises and then take over enterprise communications.
File-Sharing Pioneers Now Selling Music
Excerpted from NY Times Report by Brad Stone
In the music business, they would call it a comeback.
Almost a decade ago, Niklas Zennstrom and Janus Friis, European technology entrepreneurs, unleashed the Napster-like file-sharing program Kazaa on the web, allowing millions of users to freely download songs, movies, and TV shows.
Kazaa was sued by record companies and Hollywood studios and settled the litigation for tens of millions of dollars, just as the pair sold their next company, Skype, to eBay for more than $3 billion.
Now Mr. Zennstrom and Mr. Friis are returning to their musical roots.
Their new start-up, Rdio, will unveil itself on Thursday amid what is suddenly becoming a crowded market for Internet music services, a field still largely dominated by iTunes from Apple.
Rdio will charge $5 to $10 a month for unlimited access to a large music catalog, including songs from the major record labels. This is a similar approach to that of other subscription music services that have not fared well, including the newly independent Rhapsody and Napster, a division of Best Buy.
Rdio customers paying the full amount will be able to stream and store songs on a range of mobile devices, beginning with the BlackBerry and iPhone, and soon, phones running the Android operating system from Google. The company is backed through the founders' Atomico Ventures, a venture-capital firm based in London.
"Kazaa exploded and was used by an extreme number of people," Mr. Friis said. "We tried to negotiate some of the things we are doing now with Rdio, but it was obviously way too early."
Mr. Friis said that during the years spent in courtrooms and across negotiation tables, he and Mr. Zennstrom developed good relations with music industry executives. "You gain a certain respect for each other, through a good fight, so to speak," he said.
Michael Nash, an Executive Vice President for Digital Strategy at the Warner Music Group (WMG), which has licensed its catalog to Rdio, said the duo's history creating free file-sharing tools had been forgiven amid the industry's search for a business model, as CD sales continued to decline.
"We resolved the past," Mr. Nash said. "These guys are focused on the future."
Rdio, which has headquarters in San Francisco, CA and 22 employees, will open this week in an invitation-only preview period and will become more widely available later this year. Its Chief Operating Officer is Carter Adamson, an original programmer at Skype. Its Chief Executive Officer is Drew Larner, once an executive at the film studio Spyglass Entertainment, who still looks to Hollywood for clues about the future of the music business.
"The sale of DVDs once drove the movie business, but a lot of people don't care about owning DVDs anymore," Mr. Larner said. "We think that is going to apply directly to music."
Despite the recent emergence of companies like Rdio and a similar subscription service, Mog All Access, subscription Internet music has not yet captured mainstream consumers. Rhapsody, introduced in 2001 and spun out of the digital media software maker RealNetworks in April, has lost money and still has about 650,000 subscribers. Napster has declined to release membership numbers since Best Buy bought it in 2008. Steve Jobs, Apple's chief executive, has repeatedly said Apple is not interested in offering a subscription service.
Also, the major music labels have so far rejected a United States version of Spotify, a popular European subscription service. Music executives object to the fact that music can be played free on Spotify, along with ads.
A person briefed on Spotify's plans said the company, based in Sweden, was still aiming for a United States introduction this fall, though elements of the service here could be altered.
Some industry analysts say companies like Rdio and Spotify can exploit technological changes that have improved the viability of subscription music by allowing people to more easily and cheaply listen to Internet music on a wide range of devices. They point to the proliferation of smart-phones, the emergence of broadband wireless networks and the expanding ecosystem of applications allowing complex software to run on mobile devices.
At the same time, music labels have become more flexible on licensing terms and no longer wrap individual songs in so-called digital rights management software, which often created technical problems for customers trying to get music services to work on various mobile devices.
But one problem is that many of these new subscription music services are nearly identical. Rdio is betting in part on its social elements - the ability to follow friends on the site, see what they are listening to and see a list of the most popular music among people you know. But such features may not make much of a difference to casual users.
Survival might ultimately come down to which music start-up has the largest bankroll, and which service can ally itself with big companies like cable providers and wireless carriers that might want to wrap subscription music into their more comprehensive monthly plans.
Rdio executives say they are looking at that possibility. They also say they could link up with Skype, the free Internet calling serviced used by 560 million people around the world. Last year, Mr. Zennstrom and Mr. Friis joined an investment group that bought Skype back from eBay - another example of their returning to their roots.
"We obviously will be doing distribution deals," Mr. Friis said. "And Skype is definitely one of the companies where there could be a compelling fit."
Why Hasn't Spotify Launched in the US Yet?
Excerpted from TechCrunch Report by Mike Butcher
European P2P music-streaming start-up Spotify has all its "ducks lined up" for a US launch, we've heard from multiple sources. It has servers ready to go in the US and, crucially, users already there, even though it has not yet officially launched.
Although the company downplays this, it has 30,000 users in the US, according to the chatter coming out of the Stockholm tech scene where the company has its main development arm. But these users are being kept quiet.
So why isn't Spotify launching in the US right now?
It has a wealthy Asian investor in Li Ka-Shing, who invested in Facebook in 2007, Northzone Ventures and Creandum as backers. It has investment from the big music labels - Universal Music Group, Sony BMG, EMI Music, Warner Music Group. It also has "strategic" investors, which include rights holders in other geographic locations, according to our sources, and a mooted $250 million valuation.
We've also heard that monetization of the platform is going gangbusters, with most of the upgrades to premium subscriptions being driven by the ability to hold a library of music on the iPhone and Android.
Even Google is on board.
So what gives?
The simple reason, as one of our well-placed sources close to the company tells us, is this blunt fact: "Warner is being impossible."
As you will no doubt recall, Warner was the one music label that had huge legal wranglings with YouTube, until the video-site eventually called its bluff and deleted all of Warner's artists from the service. It was only after that happened that Warner came back to the negotiating table, some months after.
But our information is that Spotify has actually been technically ready for a US launch since October last year. It is only protracted legal negotiations with Warner that is holding everything up. All the other labels are apparently now on board.
Now, of course that is just one side of the story. But Spotify knows that it can't launch in the US without Warner's artist roster in its catalog.
Canadian Copyright Bill Represents Compromise
Excerpted from National Post Report by Don Martin
The Canadian federal government's latest bill to arbitrate good and bad behavior in the digital age strives for a mushy middle between entertainment consumers and creators. As with most legal compromises between conflicting interests, the bill unveiled yesterday contains a mix of positives and negatives that ensures nobody will be totally happy.
True, Canadians can finally relax and view movies or television shows from their personal video recorders (although they can't collect an entire season); ditto for the files they've been transferring from laptop to iPod for years.
But there's a queasy Big Brother aspect in a bill that requires Internet service providers (ISPs) to collect and pass along personally identifiable information (PII) from customers found to be downloading protected files for potential legal action.
And then there's the most dreaded of downloading phenomenon - the digital lock. They are to be enforced with a blanket "Do Not Pick" rule, which ensures everything of any value will quickly be padlocked at the source.
But what's a government to do? Allow geeks to freely unlock protected files and reproduce at will?
"It's not the government putting in place the locks," argues Heritage Minister James Moore, rather sensibly. "If somebody's invested millions of dollars to create a great piece of processing software or a great web browser and your business model requires you to have a lock to get a return on investment, people shouldn't be allowed to hack that lock."
Imposing guidelines on digital-shared technology was deemed necessary to prevent Canada from remaining a pirate nation outside the circle of trust called the World Intellectual Property Organization (WIPO).
Mercifully, however, the Canadian government has softened the proposed legislation somewhat from the Americans, who enforce the toughest anti-piracy laws in the world.
It will not impose new taxes or fees like those on blank recordable CDs or DVDs, which give artists or creators a royalty bump.
Educational institutions and libraries will receive exceptions from the copyright protection. News programs or comedy shows will be able to lift clips from a protected source without penalty.
It seems a serious attempt to impose reasonable proprietary protection on a free-wheeling marketplace by two of the most tech-savvy federal ministers in the cabinet - Mr. Moore and Industry Minister Tony Clement.
Mr. Moore, a self-described technology addict, is already on his second Apple iPad, a technology that only arrived in Canadian stores last month. Apparently his first model didn't download at maximum speed, so he's upgraded to a faster unit.
Both understand the breakneck speed of change in a wireless world means any new law should apply to existing and yet-to-be-invented technology, with a built-in review every five years to keep it current.
It's difficult to see how the Liberals can object to the general thrust of the bill, but they take the official opposition title very seriously and may well nitpick on some points. Mr. Moore seems genuinely open to suggestions or amendments when the bill is placed under committee study.
The new copyright act seems more reasonable than revolutionary, but I suspect I speak on behalf of many frustrated baby boomers who have paid and paid again for the same music as the same old songs morph into ever-changing technologies.
Having now acquired "Dark Side of the Moon" in five formats - record, cassette, CD, DVD, and MP3 file - this consumer has given Pink Floyd enough of his music money. When the next format comes along, lock or no digital lock, I'm stealing it.
EFF, Public Citizen, and ACLU Ask Judge to Quash Mass Subpoenas
Excerpted from Techdirt Report by Michael Masnick
While some Internet service providers (ISPs) apparently won't stand up to protect their users' rights against the ridiculous and overly broad mass copyright infringement lawsuit filings made by a group called "US Copyright Group (USCG)" (really DC-based law firm Dunlap, Grubb and Weaver), Time Warner Cable is pushing back, but mainly on procedural issues - not in any way to stand up for the rights of those being sued.
Thankfully, it looks like the EFF, Public Citizen, and the ACLU are trying to help out. Those three organizations filed an amicus brief with the court in the Time Warner Cable case, where they point out that there are multiple reasons why the subpoenas should be quashed. Among the many problems with the process used by USCG are the ideas of suing thousands of people in a single lawsuit and all in Washington, DC. Obviously, this makes it easier and cheaper for Dunlap, but it's not how the legal system is supposed to work.
First, it only makes sense that each lawsuit should be filed individually, as each involves different circumstances. Second, they should be filed in the proper jurisdiction, not in DC. As the briefing notes:
"This Court cannot consider this case unless it has personal jurisdiction over the Doe Defendants, and it is Plaintiff's burden to show that such jurisdiction exists. The Constitution imposes that burden on every plaintiff as a fundamental matter of fairness, recognizing that no defendant should be forced to have his rights and obligations determined in a jurisdiction with which he has had no contact. These requirements give a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.
Plaintiff has not met this burden. Instead, the very information upon which Plaintiff relies as a basis for seeking the identity of the Doe defendants - their Internet Protocol (IP) addresses - indicates that few, if any, reside in this District. If, as it appears, the vast majority of the Doe defendants do not have sufficient minimum contacts with this jurisdiction to satisfy due process, the Court should quash the subpoena for information about out-of-district defendants.
Requiring individuals from across the country to litigate in this District creates exactly the sort of hardship and unfairness that the personal jurisdiction requirements exist to prevent. It requires the individuals urgently to secure counsel far from home, where they are unlikely to have contacts. In this particular instance the hardship is very clear. When the underlying claim is a single count of copyright infringement, the cost of securing counsel even to defend a defendant's identity is likely more than the cost of settlement, and possibly even more than the cost of judgment if the Defendant lost in the litigation entirely."
As for lumping all of the lawsuits into a single filing, the brief shows that courts have rejected this approach in the past as unreasonable and should do so again here:
"There is little doubt that Plaintiff's joinder of more than 4,500 defendants in this single action is improper and runs the tremendous risk of creating unfairness and denying individual justice to those sued. Mass joinder of individuals has been disapproved by federal courts in both the RIAA cases and elsewhere. As one court noted:
Comcast subscriber John Doe 1 could be an innocent parent whose Internet access was abused by her minor child, while John Doe 2 might share a computer with a roommate who infringed Plaintiffs' works. John Does 3 through 203 could be thieves, just as Plaintiffs believe, inexcusably pilfering Plaintiffs' property and depriving them, and their artists, of the royalties they are rightly owed. Wholesale litigation of these claims is inappropriate, at least with respect to a vast majority (if not all) of Defendants.
Rule 20 requires that, for parties to be joined in the same lawsuit, the claims against them must arise from a single transaction or a series of closely related transactions. Specifically:
Persons may be joined in one action as defendants if: (A) any right to relief is asserted against them jointly, severally or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action.
Thus, multiple defendants may be joined in a single lawsuit only when three conditions are met: (1) the right to relief must be 'asserted against them jointly, severally or in the alternative;' (2) the claim must 'arise out of the same transaction, occurrence, or series of transactions or occurrences;' and (3) there must be a common question of fact or law common to all the defendants. Joinder based on separate but similar behavior by individuals allegedly using the Internet to commit copyright infringement has been rejected by courts across the country. In LaFace Records v. Does 1-38, the court ordered severance of lawsuit against thirty-eight defendants where each defendant used the same ISP as well as some of the same P2P networks to commit the exact same violation of the law in exactly the same way.
The court explained: 'Merely committing the same type of violation in the same way does not link defendants together for purposes of joinder.'"
The brief also takes issue with the evidence that Dunlap presents in the USCG filings:
"Moreover, Plaintiff provides no specific evidence other than its summary declarations to establish that its investigation was done for each Doe. And such evidence ought to be readily available, including screen-shots showing the IP addresses of the Doe defendants so the Court can see that the addresses submitted to the Court match those discovered during the investigation, copies or real-time capture of the activities of the 'proprietary technologies' used, and shots of the P2P server logs that to which Plaintiff apparently had access. Without those, the declarations merely describe downloading activity in general, and fail to provide the Court with real information linking each of the individuals sued to the alleged infringement."
This is a big concern because Dunlap and USCG are seeking to reveal private information based on incredibly flimsy evidence:
"Robust protection for the right to engage in anonymous communication - to speak, read, view, listen, and/or associate anonymously - is fundamental to a free society. This fundamental right enjoys the same protections whether the context for speech and association is an anonymous political leaflet, an Internet message board or a video-sharing site. Courts in this District have recognized that First Amendment protections extend to the anonymous publication of expressive works on the Internet even where, as here, that publication is alleged to infringe copyrights. As the court noted:
Arguably, however, a file sharer is making a statement by downloading and making available to others copyrighted music without charge and without license to do so. Alternatively, the file sharer may be expressing himself or herself through the music selected and made available to others. Although this is not 'political expression' entitled to the 'broadest protection' of the First Amendment, the file sharer's speech is still entitled to 'some level of First Amendment protection.'
The court continued: 'Against the backdrop of First Amendment protection for anonymous speech, courts have held that civil subpoenas seeking information regarding anonymous individuals raise First Amendment concerns.'"
No one is arguing that a legitimately filed lawsuit shouldn't entitle USCG to get the right to an individual's information. The issue is that not nearly enough evidence is presented in these cases, and what is presented is done in a way that does not allow individuals to protect their First Amendment rights. This destroys the basic balance that the courts have established to permit such lawsuits to go forward. The filing is an important one, and it's unfortunate that it had to come from three public interest groups rather than the ISPs themselves.
Future Tense: A Pirate's Life for Whom?
Excerpted from Maximum PC Report by David Gerrold
First disclaimer: Nothing that follows is intended to be read as an endorsement of piracy, only some thoughts about it as a social phenomenon, and what it might tell us about product demand.
Second disclaimer: I have published over fifty books and a few hundred short stories, columns, and articles, most of which I own the copyrights on. I've also contributed scripts to a dozen different TV series, and although I do not own any of those copyrights, I am entitled to residual participation on those television copyrights. And I have a financial interest in one movie, "Martian Child," which is (loosely) based on the story of my son's adoption. So I am not unbiased on the issue of copyrights and ownership.
Third disclaimer: I don't like piracy, I don't advocate it, I don't endorse it, I don't condone it - but despite my disapproval, people still keep downloading unauthorized copies of music, TV shows, books, comics, and graphic novels, magazines, software, keygens, cracks, and hacks.
So, let's look at all that downloading.
Start with the obvious. People download music and software and movies and TV shows because they want it. They want to listen to the music, watch the movie, play the game, use the software tool, read the book, look at the fanedit, hear or see the mash-up, whatever.
The owners of the copyright don't object to people wanting the product. In fact, they want you to want it. But they also want you pay for it. It's how they stay in business-but sometimes it leads to shortsighted decisions, especially if you don't know what business you're in.
Harvard Business School used to teach a great example of this. After World War II, the government shifted many of its mail contracts from the railroad industry to the burgeoning airline industry. This was millions of dollars of revenue lost to the railroads. Because air travel was faster than trains, more and more people began to travel by air. As more people bought cars, and as the Interstate Highway System expanded, the railroads lost even more customers. The railroads still carry freight, but with the exception of a few high-density corridors, passenger rail travel in this country remains an intolerable mess.
This is because the railroad industry thought it was in the railroad business - they're not. They're in the transportation business. But they thought they were in competition and forgot about the possibility of partnership.
If the railroad industry had thought about providing genuine service to the customers, they would have partnered with the airlines. A train station can exist in a city center, an airport can't. They could have established transportation hubs, with trains delivering passengers from city centers directly to nearby airports. By making it more convenient to use trains to connect to planes, both leaving and arriving, they would have simplified travel. Instead, we have competing facilities, overcrowded freeways, jammed parking lots, and an enormous waste of resources. (Meanwhile, in England, if you land at Heathrow, you can take the tube directly to anywhere in London, convenient walking distance to your hotel.)
Here's a more contemporary example - what if the oil companies realized that they're not in the business of selling oil? They're in the business of providing energy. What if they invested one week's profits into research and development of solar, wind, geothermal, biofuel, and tidal power? When the oil runs out, as it will, they'll still have ways to sell energy to the consumer. But right now, too many people in the oil industry regard all those other energy-production methods as competition, not partners.
They don't know what business they're in.
This is the same mistake that the RIAA and the SMPTP are making today. They think they're in the business of selling discs. They're not. They're in the business of delivering entertainment. And they've forgotten that. At least, their lawyers seem to have forgotten it.
This isn't the first time the entertainment industry has made this mistake. Almost forty years ago, Sony started selling Betamax videotape recorders for home use. Universal and Disney promptly sued, claiming that home video recording would create the opportunity for copyright infringement and they would lose billions of dollars. The Supreme Court ruled against them. Under the fair use provisions of the copyright law, it's legal to record media at home for personal use. Even if some people might use videotape machines for illegal purposes, that was not sufficient justification for denying fair use to everyone else.
After losing that lawsuit, Disney and Universal (and all the other studios as well) began selling their movies on Betamax and VHS tapes, and later on DVD. Videotape sales became an enormous market for the studios and eventually DVD sales accounted for at least half, often more, of a film's total gross income. In fact, the DVD became so profitable that many films were made directly for the DVD market. "Starship Troopers II" and "III," for example.
Or if you want to go further back, almost ninety years ago, when broadcast radio began as a commercial enterprise, the record companies were adamantly against the idea of having their music played on the air. They were certain that if people could hear the music for free, they wouldn't want to buy the records. But what happened instead was that the radio became the primary channel for showing off new music.
Radio play energized record sales into a multi-million dollar industry. By the fifties, record companies were even paying DJ's to have them play records they wanted to promote into hits. It was called 'payola' and when it was revealed, it was a major scandal for the record companies.
Knowing what business you're in starts with knowing who your customers are and what they want, then finding the best way to serve that desire. Customers want music and movies.
Downloading what you haven't paid for is electric shoplifting - no question - but the simple fact that downloading continues on such a scale is evidence of just how much the audience wants easy access to the music.
Amazon and Zune and iTunes all demonstrate that the audience is willing to pay for the convenience of downloading-especially if the prices are reasonable and the bit-rate is high enough. (I'll take lossless, please.)
Disc manufacturing and distribution is cheap per unit, but expensive in volume. Getting the discs to the customers costs more money, the distributor takes a cut, the retailer takes a cut, and the inventory sits in the racks whether it sells or not, adding to the overhead of the retailer. In that model, the profit margin is sliced thin among all the participants, distributors and sales outlets.
But direct-downloading takes at least three steps out of the distribution channel. Record companies can charge less for albums and still show a higher profit per sale-and artists could enjoy a higher royalty rate too.
But a shift to a different business model is only possible if and when the record companies stop thinking that they're in the business of selling records and remember that they're in the business of selling music.
Right now, they're still in the business of suing downloaders. The only people who can benefit from that are the lawyers.
Pfeh.
Coming Events of Interest
Broadband Policy Summit VI - June 10th-11th in Washington, DC. The most comprehensive, in-depth update about the implementation of the FCC's National Broadband Plan. No other forum provides the detailed coverage, expert insight and networking opportunities you'll receive at Broadband Policy Summit VI. The expanded program includes top-notch faculty who will address the most pressing broadband issues in six panel discussions, two debates and four keynote addresses.
Digital Media Conference East - June 25th in McLean, VA. The Washington Post calls this Digital Media Wire flagship event "a confab of powerful communicators and content providers in the region." This conference explores the current state of digital media and the directions in which the industry is heading.
Distributed Computing & Grid Technologies - June 28th - July 3rd in Dubna, Russia. This fourth international conference on this subject, also known as GRID2010, will be held by the Laboratory of Information Technologies at the Joint Institute for Nuclear Research and is focused on the use of grid-technologies in various areas of science, education, industry and business.
NY Games Conference - September 21st in New York, NY.The most influential decision-makers in the digital media industry gather to network, do deals, and share ideas about the future of games and connected entertainment. Now in its 3rd year, this show features lively debate on timely cutting-edge business topics.
Digital Content Monetization 2010 - October 4th-7th in New York, NY. DCM 2010 is a rights-holder focused event exploring how media and entertainment owners can develop sustainable digital content monetization strategies.
Digital Music Forum West - October 6th-7th in Los Angeles, CA. Over 300 of the most influential decision-makers in the music industry gather in Los Angeles each year for this incredible 2-day deal-makers forum to network, do deals, and share ideas about the business.
Digital Hollywood Fall - October 18th-21st in Santa Monica, CA. Digital Hollywood Spring (DHS) is the premier entertainment and technology conference in the country covering the convergence of entertainment, the web, television, and technology.
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