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September 7, 2009
Volume XXVII, Issue 10

Happy Birthday: The Internet Turns Forty

Excerpted from Mashable Report by Stan Schroeder

It's impossible to set an exact date for the birth of the Internet. You could say that it was born when the first two nodes of the ARPANET were connected between UCLA and SRI International in Menlo Park, CA on October 29th, 1969. Or you could say that it all began when Len Kleinrock and his team at UCLA transferred some data between two computers on September 2nd that same year.

However you look at it, the date is now very near, and in its 40 years of existence the Internet has changed our lives forever. However, as AP's Anick Jesdanun, notes, if you look at its last couple of years, the Internet - once flying almost solely on enormous enthusiasm of everyone involved - is now definitely going through a crisis, perhaps somewhat obscured by the shiny new tools at our disposal.

On one hand, you have the evident rise of social media and social networks, which are becoming an essential part - the meat around the bones, if you will - of the Internet. Twitter and Facebook don't really enable you to do anything you couldn't have done before with old protocols and services such as Internet Relay Chat (IRC), but they focus on you - the person - and they make it easier than ever to share and to connect with other people. To us who follow these new tools and write about them daily, it feels like a wonderful revolution.

The Internet is, however, today also plagued by countless problems. Uneven standards, censorship in many countries, countless lawsuits, and the subsequent ostracizing of sharing content altogether, net neutrality issues, and finally, copyright issues that are fueling stricter - often way too strict - laws which are towering over our online freedoms.

All of these are causing a fragmentation of the Internet that might have long lasting consequences, especially for the developing countries.

Remember when the Internet was about sharing everything with everyone? If you happen to be living in the wrong part of the globe, industry-leading media sharing services don't even work for you. It's getting harder and harder to connect and to share on the Internet.

In China, the country where the iPhone is made, people are still waiting to be able to buy an iPhone. When they do, they won't be able to access the same websites; they won't get the same search results; and various online services will behave differently or won't work at all.

One day, we'll wake up and see that there are many Internets out there. Will your Internet be a world full of possibilities, open for sharing and connecting with others, or will it be a place full of restrictions, restraints, and limitations? Think fast, because soon it may be too late.

Videogame Industry Fares Well in FCC Report

Excerpted from Game Culture Report

Last week, news broke that US regulators are considering a universal rating system for television, film, videogames, and media distributed over wireless telephones. Prior to opening an inquiry on the subject, the Federal Communications Commission (FCC) was waiting to deliver a report to Congress. That report landed on Monday.

The report was commissioned as part of the Child Safe Viewing Act (CSVA), which mandated that the FCC report to Congress by August 29th on the state of parental control technologies and ratings systems for media programming.

Although the report is heavily focused on television and the infamous V-Chip in particular - which has largely been a failure - the FCC also sought comment on videogames, despite the fact that games were not part of the CSVA.

Judging from the comments in the report, the Entertainment Software Association (ESA) has done a much better job of getting its views heard by regulators in Washington than the TV industry. The section on games cites the ESA and Microsoft extensively and repeats the videogame industry's contention that it provides "one of the most robust voluntary rating systems available."

The report also cites a finding by the industry-friendly Progress and Freedom Foundation (PFF) that describes videogame ratings as "in many ways the most sophisticated, descriptive, and effective ratings system devised by any major media sector in America."

In fact, the Members of Congress who will receive the FCC's report will find almost nothing negative about the game industry's handling of parental control technology and ratings.

Common Sense Media's concern about unrated online content and user-created content is noted but countered by the ESA, which points out that "no rating system or control device can anticipate the extemporaneous world of the Internet."

Conspicuously absent are any of the salacious Jack Thompson-esque claims that have riddled previous government inquiries, or even the more rational dissent typically offered by groups like the National Institute on Media and the Family (NIMF).

While the FCC says it intends to launch a Notice of Inquiry specifically for games, this first round is a clear victory for the industry. At this rate, even if regulators decide to pursue a "universal rating system," it could end up looking a lot like the system developed by the Entertainment Software Rating Board (ESRB).

Report from CEO Marty Lafferty

Photo of CEO Marty LaffertyThe DCIA is pleased to officially announce our call for participation in the newly formed P2P-for-Games Working Group (PFGWG) and for speakers at the inaugural P2P & GAMES CONFERENCE at Digital Hollywood Fall.

Qualified interested parties are invited to e-mail PFGWG@dcia.info or call +1-410-476-7965 to sign-up or for more information.

The purpose of this working group is to help leading P2P software distributors and online games publishers develop best practices that will optimize commercial distribution of digital games and updates to personal computers (PCs), game consoles, and mobile devices by means of P2P applications and P2P-enabled software.

Co-Chairs for the PFGWG are Rick Buonincontri, CEO of Solid State Networks and Rich Roberts, Vice President of Sales and Business Development at PlayFirst, representing the interests of P2P software developers and distributors and games publishers and marketers, respectively.

"Instilling the greatest degree of consumer confidence in, adoption of, and satisfaction with P2P technologies used for the distribution of digital games and updates is a key priority for this working group, and we intend to accomplish this by offering consumers optimal transparency, control, and value when using P2P technologies for the distribution of games," said PFGWG Co-Chair Rick Buonincontri.

"Providing industry participants with practices and procedures that will ensure the protection of intellectual property (IP) of such content offerings is also a key priority for our work, and we intend to provide relevant vendors and Internet service providers (ISPs) with recommendations for how they, too, can participate in the commercial enhancement of IP protection for digital games and updates distributed by means of P2P technologies," added PFGWG Co-Chair Rich Roberts.

Solid State Networks is a leading developer of specialized, high performance content delivery solutions. Since early 2007, Solid State Networks has steadily gained recognition within the gaming industry as a highly innovative company with reliable technology and versatile game delivery and patching solutions for companies such as Funcom, Wizards of the Coast, Abandon Interactive, Riot Games, and others. For more information, please visit www.solidstatenetworks.com.

PlayFirst is an innovative entertainment company that makes games appealing to everyone. PlayFirst creates engaging story worlds that capture imaginations and makes those experiences available everywhere consumers want to play. PlayFirst teams create outstanding games, then they bring those games to life across popular platforms worldwide including PC, Mac, mobile, handheld, and console. The company's portfolio includes world-renowned titles, such as Diner Dash, Wedding Dash, Chocolatier, and Dream Chronicles. PlayFirst games are available in major retailers and on more than 500 sites in 20 languages. For more information, visit www.playfirst.com.

Charter members of the PFGWG include Abacast, Activision Blizzard, PlayFirst, Real Networks, Solid State Networks, Turbine, Velocix, and Yummy Interactive.

Membership in the PFGWG is organized in two groups: P2P software developers and distributors; and games publishers and marketers.

Qualifications for participation in the PFGWG are that the primary business of prospective participants be one of the above two categories. For such PFGWG participants, there is no cost to participate in the PFGWG and no pre-requisite for acceptance into the PFGWG.

The PFGWG is open to all P2P software developers and distributors and online games publishers and marketers on a global basis, subject only to the approval of PFGWG leadership. In addition, DCIA Member companies in good standing are entitled as a privilege of Membership to participate in the PFGWG.

A membership class of observers may be created for vendors, Internet service providers (ISPs), and support entities that are interested in the PFGWG but are not otherwise qualified to actively participate.

The PFGWG will also seek to enlist public and IP interest groups specializing in games as co-sponsors. In addition, appropriate US federal regulatory authorities have been invited to participate in and monitor PFGWG activities.

The first-ever day-long P2P & GAMES CONFERENCE will take place in Santa Monica, CA on Thursday October 22nd in conjunction with Digital Hollywood Fall.

The conference will focus on consumer issues, business models, revenue generation, market trials, content protection, and case studies that demonstrate the benefits of P2P and cloud computing for the distribution of games and updates to networked devices from PCs to consoles to mobile-phones. Digital Hollywood Fall is the premier entertainment and technology conference in the country.

To extend the reach of the P2P & GAMES CONFERENCE to those unable to personally attend the event, which is being held in the Catalina Room of Loews Santa Monica Beach Hotel, a live interactive webcast of the event will also be provided, which will be viewable on-demand after the conference as well.

Prospective speakers are welcome to call +1-410-476-7965 or e-mail at PGC@dcia.info. Share wisely, and take care.

Casual Connect Seattle Sessions Online 

Missed a session at Casual Connect in Seattle? Check online for the "new burst" to find over 50 lectures you can download for free.

To get you started, here are nine of the most requested favorites: Jeremy Lewis on Leadership; Arthur Humphrey on Brands; J. Alison Bryant on Our Consumers; Megan Gaiser on Growing Leaders; Kenny Shea Dinkin on Creativity; Cooper Moo on Competition; Greg Ballard on Mobile & iPhone; Tim Conkling on Design; and Tim Chang on Emerging Trends.

OnLive Opens Beta for Cloud Computing Game Service

Excerpted from Gamasutra Report by Brandon Sheffield

OnLive, which announced its cloud computing gaming service at GDC 2009, revealed today that it has entered open beta. The service allows gamers to play PC titles through their own PCs or television sets, without needing to render the game on their own hardware - rather, it is rendered remotely and sent frame-by-frame back to the local display device. 

In a blog post, OnLive CEO Steve Perlman described the unique challenges of the beta rollout. "One of the key challenges that OnLive technology addresses is providing a high-quality, fast-response gaming experience over a wide range of situations: different speeds/locations/types of broadband services, a variety of different PC and Mac configurations, several kinds of input and display devices, etc.," he said. 

"So, a major focus of OnLive Beta is to test as many of these different situations as we can." 

Though there are competitors in the cloud computing game-service space, such as Dave Perry's Gaikai, OnLive is the first to enter into public beta. OnLive requires a small download to function on a PC, or a dongle called a MicroConsole in order to interact with televisions. It appears that at the present time, only the PC service is being beta tested. 

The beta is ongoing, and still accepting new applicants on both Windows and Mac-based operating systems. 

"Beta is an awesome milestone for OnLive, capping many years of work," said Perlman. "We're really looking forward to hearing what users think."

LimeWire Store Unveils its Latest Free Digital Sampler

Excerpted from Plug In Music Report

LimeWire Store shines the spotlight this month on Detroit's current crop of independent artists in "Ear to the Ground: Detroit."

Curated by the staff of Metro Times, the free 16-track digital-only sampler - available exclusively at LimeWire Store - is a broad overview of local acts who are keeping Detroit's rich musical history alive.

"Ear to the Ground: Detroit" features contributions from local cult hero Rodriguez as well as bands-of-the-moment Deastro, Friendly Foes, The Hard Lessons, and Silverghost.

"We're very pleased to be associated with LimeWire and this compilation. It's already helping to spotlight current Detroit music on a national level," said Metro Times Music Editor Bill Holdship.

"I even saw that Patrick Boissel of LA's Alive Records featured a link to it on his Facebook page earlier today. Detroit has been facing its economic and social problems as of late, but the Ear to the Ground compilation proves that - from Rodriguez to Deastro - this city remains a breeding ground for some great music. Plus, the price is right!"

The album is available for free from the LimeWire store at www.store.limewire.com/detroit.

MOL Media and QTRAX Enter into Strategic Partnership

MOL Media and QTRAX this week announced a strategic partnership to market QTRAX's free-and-legal high-quality P2P music downloads in Malaysia and other selected Southeast Asian communities.

MOL Media publishes, aggregates, markets, and distributes high-bandwidth broadband content through various media including personal computers (PCs), mobile devices, and televisions. MOL Media monetizes the content through the MOLePoints payment system that has over 500,000 payment channels across 75 countries worldwide.

According to Ganesh Kumar Bangah, Chief Executive Officer (CEO) of MOL, "The QTRAX value proposition is its vast music and related library - killer content in today's fast moving Internet industry."

He added, "The launch of QTRAX in the region is well timed as the public realizes that file-sharing music download services, while popular, are unauthorized. The launch of QTRAX will enable Asian consumers to listen to music free while helping compensate artists for their hard work."

"The availability of such a service is long overdue in the region. MOL Media will direct traffic from our sites as well as our affiliate sites to further promote QTRAX, and we are confident that local advertisers will come onboard."

Allan Klepfisz, President & CEO of QTRAX said, "We expect to be announcing partnerships throughout Asia in the period prior to launch and we are thrilled to begin with MOL. Ganesh has created an impressive, cutting-edge organization with MOL via its various businesses including those of its associate, the Berjaya Corporation Group of companies. They will be able to add considerable value in terms of traffic and advertisers. Additionally, their global payment system will prove very useful in monetization for us moving forward."

Jay Berman, Co-Chair of the QTRAX Advisory Board, commented, "Having spent many years as Chairman and CEO of the RIAA and subsequently the IFPI, in promoting respect for music copyright, I'm pleased that QTRAX will spearhead, together with substantial regional partners, a vastly superior alternative to infringing sites- something that has been sorely lacking."

Blake Indursky, EVP of QTRAX observed, "I have been involved in several of the negotiations that QTRAX has undertaken in the region and cannot help feel that history is in the making."

Miro Makes it Easier to Download and Enjoy Web Video

Excerpted from PC World Report by Andrew Brandt

What a difference a year makes. When we last reviewed the free Miro peer-to-peer television (P2PTV) player in 2008, we loved the fact that it essentially turned your PC into a Swiss Army Knife for video: It can download or play streaming video, download and play video hosted in the BitTorrent file-sharing network, and even set-up searches for video from within the player itself. With the latest update, however, Miro has added several new tools to its kit.

Now you can pull together all your streamed and downloaded videos, podcasts, and video feeds into Miro: a single, streamlined player and library-organizer.

Several of the big new features have do to with downloads: Miro can download videos directly from YouTube with a single button-click, download audio as well as video podcasts, and download videos automatically if you add the RSS feed of that video source.

Sharing is the other new theme. You can now share videos or links to streamed videos with friends and family by e-mail, social networking posts, or by exporting lists of feeds to a file which you can share.

As with previous versions, Miro can play video encoded in virtually any format, including high-definition (HD) video. It can also remember where you were in a video when you stopped watching it, so you can resume playback later from the point where you stopped.

If you use your computer as part of a home theater, the program has keyboard shortcuts for all playback commands so you can easily set-up a remote control to issue commands to your Miro player from across the living room.

Damaka Extends its UCC Solution to Android

Damaka, a P2P technology pioneer in Mobile Unified Communications and Collaboration (UCC), announced the launch of its UCC product suite on Google's Android platform. With this release, Damaka further augments its Mobile UCC offering which is already supported on iPhone, Symbian, and Windows Mobile.

The Damaka UCC solution is available in both P2P and traditional SIP based client server architectures.

"We are excited to launch the industry's only UCC solution for the Android platform with presence, IM, and voice features," said Ramesh Chaturvedi, Damaka's Chief Strategy Officer. "Although Android currently has relatively small market share in the smart-phone space, it has been gaining traction with adoption by major device OEMs. It represents a key element of our overall product strategy for new market entry. Damaka's software application is based on patented direct-peering P2P technology with a highly optimized footprint for smart-phones running on different operating systems."

As part of the next phase release for Android, Damaka will be launching collaboration features such as application-sharing and real-time video calling. Damaka already supports real-time voice-enabled application sharing and video-calling on iPhone, Symbian, and Windows Mobile devices.

This solution is available for Internet service providers (ISPs), IMS deployments, and enterprises.

isoHunt Launches Social BitTorrent Site

Excerpted from TorrentFreak Report

For years, most torrent sites have shared a similar layout where torrents are listed in several fixed categories designated by the site's owners. Hexagon opts to do things differently.

"The main difference that sets Hexagon apart from other social file-sharing and BitTorrent sites is that everything is centered around groups. With most file-sharing networks and flash-video sites, a key piece we found missing was social context," isoHunt's Founder Gary Fung said.

With Hexagon, Fung hopes to bridge this gap by allowing people to start groups where they can share content within a certain niche. These groups help to organize content and allow people to share with others who are interested in the same material, privately or in public.

In addition Hexagon is aimed at content producers and independent artists who want to promote their content using BitTorrent. For this group, Hexagon offers monetization opportunities such as direct fan contributions and sharing of advertising revenue.

"We have contacts with game publishers and independent musicians and film makers, who are very interested in creating their own groups where they can directly market their music, videos, or games and interact with their fans, and generate sales directly or indirectly," Fung said.

Hexagon is certainly not your average torrent site and we must admit that it took us a while to fully grasp the new sharing interface. That aside, it is great to see people innovating and trying to improve the BitTorrent sharing experience.

The isoHunt team is offering invitations for TorrentFreak readers who want to give Hexagon a spin, so you can decide for yourself. Here are 3,000 invites, and 10,000 extra just in case.

First Einstein@Home Search Results Published

Excerpted from Scientific Computing Report

Results of the first Einstein@Home search for continuous wave sources in LIGO S5 data have been published in Physical Review D. The project's objective is to find the first physical evidence of one of Einstein's greatest predictions - the existence of gravitational waves. It is one of the world's largest public volunteer distributed computing projects, with more than 200,000 people donating time on their computers to search data for signals from unknown pulsars.

Gravitational waves are ripples in the fabric of space and time produced by events in the universe such as exploding stars (supernovae) or extremely dense, rapidly rotating stars (pulsars). They carry new information about their sources and the nature of gravity itself and will help scientists visualize invisible events in space by mathematically mapping the ripples.

But to scan the massive amounts of data to make the comparisons requires enormous computing ability, found by borrowing idle cycles. The distributed computing approach was constructed with input from the architects of the SETI@Home project, which searches radio telescope data for signs of extraterrestrial life.

Based at the University of Wisconsin Milwaukee (UWM) and the Albert Einstein Institute (AEI) in Germany, the revolutionary astrophysics project is analyzing data taken by the Pulsar Arecibo L-band Feed Array (PALFA) Consortium at the Arecibo Observatory in Puerto Rico, which is the largest single-aperture radio telescope on the planet and is used for studies of pulsars, galaxies, solar system objects, and the Earth's atmosphere. Using new methods developed at the AEI, Einstein@Home searches Arecibo radio data to find binary systems consisting of the most extreme objects in the universe: a spinning neutron star orbiting another neutron star or a black hole.

Current searches of radio data lose sensitivity for orbital periods shorter than about 50 minutes. But the enormous computational capabilities of the Einstein@Home project (equivalent to tens of thousands of computers) make it possible to detect pulsars in binary systems with orbital periods as short as 11 minutes.

"Discovery of a pulsar orbiting a neutron star or black hole, with a sub-hour orbital period, would provide tremendous opportunities to test General Relativity and to estimate how often such binaries merge," said Professor Jim Cordes of Cornell University and Chair of the Arecibo PALFA Consortium.

"The mergers of such systems are among the rarest and most spectacular events in the universe. They emit bursts of gravitational waves that current detectors might be able to detect, and they are also thought to emit bursts of gamma rays just before the merged stars collapse to form a black hole," he added.

The large data sets from the Arecibo survey are archived and processed initially at Cornell and other PALFA institutions. For the Einstein@Home project, data are sent to the Albert Einstein Institute in Hannover via high-bandwidth internet links, pre-processed and then distributed to computers around the world. The results are returned to AEI, Cornell and UWM for further investigation.

"The Einstein@Home computing resources are a perfect complement to the data management systems at the Cornell Center for Advanced Computing and the other PALFA institutions," Cordes said.

Please click here for more information.

The United Federation of Cloud Providers

Excerpted from SYS-CON Media Report by Reuven Cohen 

Cloud Computing is undoubtedly a hot topic these days. Lately, it seems just about everyone is claiming to be a cloud of some sort. The real problems are not in building these large clouds, but in maintaining them. Deploying 50,000 machines is relatively straight forward; updating 50,000 machines or worst yet taking back control after a security exploit is not. 

There are a number of organizations looking into solving the problem of cloud federation. Traditionally, there has been a lot of work done in the grid space. 

More recently, a notable research project being conducted by Microsoft called the Geneva Framework has been focusing on some of the issues surrounding cloud federation. Geneva is described as a Claims Based Access Platform and is said to help simplify access to applications and other systems with an open and interoperable claims-based model. 

In case you're not familiar with the claims authentication model, the general idea is using claims about a user, such as age or group membership, that are passed to obtain access to the cloud environment and to systems integrated with that environment. Claims could be built dynamically, picking up information about users and validating existing claims via a trusted source as the user traverses multiple cloud environments. 

More simply, the concept allows for multiple providers to seamlessly interact with one another. Authentication seems to be at the heart of Microsoft's interoperability focus. 

For the more academically focused, I recommend reading a recent paper titled Decentralized Overlay for Federation of Enterprise Clouds published by Rajiv Ranjan and Rajkumar Buyya at the The University of Melbourne. The team outlines the need for cloud decentralization and federation to create a globalized cloud platform. 

In the paper they say that distributed cloud configuration should be considered to be decentralized if none of the components in the system are more important than the others. The paper also outlines the opportunities to use P2P protocols as the basis for these decentralized systems. 

A lot of the work being done in decentralized cloud computing can be traced back to the emergence of modern botnets. A recent paper titled An Advanced Hybrid P2P Botnet by Ping Wang, Sherri Sparks, and Cliff Zou at the University of Central Florida (UCF) outlines some of the opportunities by examining the creation of a hybrid P2P botnet. In the paper, the UCF team outlines the problems encountered by P2P botnets, which appear surprisingly similar to the problems being encountered by the cloud computing community.

The paper lays out the following practical challenges faced by botmasters: 1) How to generate a robust botnet capable of maintaining control of its remaining bots even after a substantial portion of the botnet population has been removed by defenders; 2) How to prevent significant exposure of the network topology when some bots are captured by defenders; 3) How to easily monitor and obtain the complete information of a botnet by its botmaster; and 4) How to prevent defenders from detecting bots via their communication traffic patterns. 

In addition, the design should also consider many network related issues such as dynamic or private IP addresses and the diurnal online/offline property of bots. A very interesting read.

Bram's Cube Is Harder than Rubik's Cube 

Excerpted from Slippery Brick Report

Alright all you eggheads who can solve a Rubik's Cube in like ten seconds. Here's a harder challenge. Meet Bram's Cube, invented by the creator of BitTorrent, Bram Cohen. It offers more of a challenge by incorporating gears into the design.

It's a two-by-two Rubik's Cube, which seems like an easy puzzle to beat, but the gears add another layer of difficulty that is sure to be frustrating. 

I wouldn't even know where to start with this thing. Sure you can align the blocks, but then the gears are all out of whack. It hurts my head just thinking about it.

4th Annual Cloud Computing Conference & Expo Speakers

This year's featured speakers at the Fourth International Cloud Computing Conference & Expo were announced this week, including the Senior Vice President of Cloud Computing at Yahoo and the Director of Platform Research at Salesforce.com

The Conference, hosted by SYS-CON, will be held from November 2nd through 4th at the Santa Clara Convention Center in Santa Clara, CA. 

Typically held three times a year in New York, Prague, and Silicon Valley, this year's conference theme is "Bringing the Economics of the Web to Enterprise IT Through Cloud Computing." 

The three-day event will feature keynote speakers Rich Marcello, Senior Vice President of Unisys; Shelton Shugar, Senior Vice president of Cloud Computing at Yahoo; and Richard Sarwal, Senior Vice President of Development for Oracle Enterprise Management. 

Additional speakers and session leaders include Cloudera Co-Founder Christophe Bisciglia, Sun Microsystems Chief Security Architect Glenn Brunette, Sybase CTO Irfan Khan, Salesforce.com Director of Platform Research Peter Coffee, and Yahoo Cloud Computing Director of Product Management Dekel Tankel. 

The conference will address the present and future of cloud computing, a market that is expected to grow from $6.4 billion globally in 2008 to $14.8 billion in 2012, according to Compliance Research Group.

EBay CEO Confident Joltid Litigation Won't Disrupt Skype Sale

Excerpted from eWeek Report by Clint Boulton

Now that eBay has agreed to sell 65% of the P2P industry's most successful property, Skype, to Silver Lake and other investors for $1.9 billion in cash and a $125 million loan from eBay, there remains the question of what sort of risk the investors are taking.

Skype licenses its core technology from Joltid, a P2P technology company owned by Skype Co-Founders Niklas Zennstrom and Janus Friis. Earlier in 2009, Skype and Joltid became locked in a licensing dispute that is now wending its way through the UK court system. The issue has forced Skype to develop a replacement technology should it lose the right to retain the license.

EBay has said the substitute software would be expensive and could fail. Worse, Skype could lose the case and be forced to shut down. Some 481 million users place free calls from their computers through Skype, which posted sales of $551 million in 2008. EBay expects Skype's sales to top $1 billion by 2011.

The suit, then, comes as Skype is at its strongest, yet most vulnerable. A decision enjoining the leading VoIP provider from serving millions of users would be disastrous to its business, particularly as it is trying to become independent. Enderle Group analyst Rob Enderle told eWeek the move "raises a large red flag and makes the litigation a very important part of Skype's ability to execute its strategy."

Why, then, would investors Silver Lake, Index Ventures, Andreessen Horowitz, and the Canada Pension Plan Investment Board take the chance of investing in Skype? Clearly, eBay and the buying parties aren't too worried about the Joltid case, which is set to go to trial in June 2010.

EBay CEO John Donahoe expressed his confidence in the sale in a television interview on CNBC September 1st. Donahoe noted that after eBay learned of the suit, the company disclosed it.

Moreover, "The fact that a group of top-notch, high-caliber, independent third parties have now bought Skype at a $2.75 billion valuation, I think is evidence of their independent confidence in the future of the business and their confidence in the future of this particular legal claim," Donahoe said. 

"We're not going to let that get in the way of the business. We're confident about Skype's future. That will play its way out as it does. Our focus is going to be on building Skype's technology, building its business into its extraordinary potential."

While Donahoe said the litigation will "play its way out," he could easily have said eBay will "pay its way out" of the suit without causing people to blink.

It has become increasingly common for larger vendors to pay their way out of lawsuits. Sometimes vendors do this because they want to resolve the legal mess quickly and go merrily on their way. Sometimes it's because they don't feel they can win. Whatever the case, if eBay and the investors are concerned, it's not showing.

Yankee Group analyst Carl Howe told eWeek that while pending lawsuits can be sand in the gears of acquisitions, it's rare to find a company with no pending lawsuits. "I have to believe the buyers discounted the value of the lawsuit," Howe said. "For a lot of these lawsuits, you can make them go away if you just pay enough money. Some of these lawsuits are the cost of doing business in the technology sector."

See more about this issue here.

Spotify Takes Legal Advice over Add-On

Excerpted from Web User Report

Popular P2P music-streaming service Spotify is considering taking legal action against a website called Save Spotify. The site claims to offer a way of recording songs streamed through Spotify so you can listen to them whenever you choose and has been sending out e-mails pushing its services. 

"If you would like the option to keep the tracks you hear forever, with the ability to save them to your MP3 player or personal computer (PC) then download the free add-on software from Save Spotify," the e-mail reads. 

However, according to broadband-comparison website Broadband Genie, Spotify has been quick to distance itself from the add-on. 

"This looks like a fairly crude method that simply records the sound coming out of a user's sound card, nothing new or revolutionary. Looking a bit deeper, you'll find that the site links to a piece of software that actually costs money to work properly," a Spotify spokesman told Broadband Genie. 

"We're taking various steps to protect both the service and our users where necessary. Clearly this site is using our name to try and benefit itself, and we'll take appropriate actions," the spokesman continued.

Canadian Songwriters Propose Voluntary File-Sharing Tax 

Excerpted from Zeropaid Report

As town hall meetings are conducted across Canada to discuss reform of the country's copyright laws, the Songwriters Association of Canada (SAC) reminds people of its proposal for a voluntary music file-sharing tax.

The proposal is simple: in exchange for a monthly fee set by Canada's copyright board, Internet subscribers would be able to share music so long as it's not for financial gain.

SAC wants the monthly fee to be voluntary since not everyone shares music online. However, non-subscribers would have to "sign an undertaking to pay a pre-determined amount of damages if they are subsequently caught file sharing."

SAC says the proposal is simply a matter of facing reality and trying to figure out a way to monetize file sharing.

"SAC believes - and Internet technical experts agree - that unauthorized file sharing cannot be stopped without actually shutting down the Internet," says Bill Henderson, VP of SAC, in an op-ed for Straight. "Attempts to sue it out of existence are futile. They alienate our audience, and earn us no money."

Precisely. It's a mark of a rather poor business model when you begin suing your own customers in order to try to convince people they should hand you over their hard earned money. Henderson doesn't stop there:

"Canadian songwriters don't want to sue file sharers. In fact, we like file sharing. It's the most efficient distribution system of the largest repertoire of music ever assembled, and it's available to virtually everyone. What's not to love about that? We don't want to stop it; we just want to get paid for the use of our work. We think that most music fans agree with that, and that millions of Canadians would welcome an authorized way to share any and all music files," he adds.

This is the latest revision to SAC's original plan for the Monetization of the File Sharing of Music proposed in October 2007. Since then SAC has listened to people from all sides of the issue and decided upon three important changes: 1) Internet and wireless subscribers may opt out; 2) participation is voluntary for creators and rights-holders; and 3) the amount of the license fee is to be determined by a regulatory or judicial process.

SAC also puts a lot of careful thought into why each of the affected parties ought to agree to the proposal.

For ISPs: Monetization will dramatically lower bandwidth costs. Costs of infringement notification and responses will be eliminated. Creators and rights owners will be in a position to offer ISPs an administration fee (some percentage of the collected license fees will go to ISPs). Once music file sharing is monetized, other new business opportunities will present themselves to ISPs.

For consumers: Guilt free, low cost access to the world's entire repertoire of music. Clean virus-free files. Access to tens of millions of songs, many of which are not found in digital stores or anywhere else. And consumers can opt out.

For artists: Creators will finally be paid for this new and growing use of their work. The monetization of file sharing will create a low-cost distribution system with equal entry for the works of creators at all levels. There will be a fair distribution of the licensing fee pool. Once music file sharing is monetized, other new business opportunities will present themselves to creators.

For copyright holders: Rights owners will finally be paid for this new and growing use of their catalogs. There will be an increased value of catalog (much of what is file shared is catalog music that may have represented little value to rights owners in the past). Record labels and music publishers will have the funds needed to develop aspiring artists and songwriters. Once music file sharing is monetized, other new business opportunities will present themselves to rights owners

For everyone: Preservation of and exposure to legacy, niche, and ethnic music and culture. While many record labels have come and gone, music fans have stored and now share music that would not otherwise be available from commercial sources.

Talk about a plan that actually makes sense.

SAC President Eddie Schwartz also emphasizes how it will benefit emerging independent artists: "Let me weigh in as President of SAC and one of the authors of the proposal. Most of us who developed this proposal are performers and songwriters. Something like 30% of music downloaded is by independent artists, and the small monthly license fee we suggest would be of tremendous benefit to them, many of whom are at the beginning of their careers. Most of these artists cannot support themselves at this time and cannot afford to tour extensively. This will give them a free, worldwide distribution system that pays them for their work. Please go here to read the full proposal. Many thanks."

If you agree with SAC's proposal, please go here and submit an "I agree" message, or you can submit your own comments to advocacy@songwriters.ca.

Doubt over ISPs' Ability to Detect Unauthorized File Sharing

Excerpted from Computer Weekly Report by Ian Grant

UK Business Secretary Peter Mandelson's decision to force internet service providers (ISPs) to introduce technical measures to combat music, video, and software infringement begs a question: will it work?

James Blessing, a consultant to smaller ISPs and head of the UK Internet Service Providers Association (ISPA), says obtaining proof that unauthorized files are being shared is difficult.

Each message is broken into packets or envelopes of data and each may be sent via a different route to its destination where the bits are reassembled into a coherent message.

It is fairly easy for ISPs to identify P2P traffic using protocol analyzers. Doing anything about it is problematic. "You can't just block P2P because you interrupt legitimate traffic," Blessing says.

This means ISPs will have to open up the packets to see what content they contain. Three problems arise. One is that ISPs have no way of knowing whether the music or video file they find is being transmitted with authorization, or even if the ones and zeros are music, video, or even spam.

Rights holders could put a kind of digital watermark on the content that would indicate what is authorized, but they show no signs of doing so, says Blessing.

Second, the best content inspection appliances are about 80% effective at 400Mbps, and many ISPs have throughputs of 10Gbps or more. They would each need at least 25 such appliances to monitor their present traffic, let alone cope with the jump in traffic volumes that a 2Mbps universal service might bring.

"This is an engineering problem," Blessing says. "ISPs can split their traffic for inspection, but that's inefficient and will raise costs, or they can wait for the engineers to build faster appliances."

Third, if the content is encrypted, as it is with Skype, ISPs can't read it at all. Francisco Mingorance, Senior Director for Public Policy for the Business Software Alliance (BSA) Europe, says encryption services are available to file sharers for $5 a month.

Content filtering risks stopping or holding up legitimate use of file-sharing networks, and content inspection at the very least means messages will take longer to get to their destination, he says.

But ISPs want content owners to provide evidence of such quality that it will stand up in court, says Blessing. Much of the evidence that comes to them is incomplete at best, he says.

Getting solid evidence of wrong-doing is costly, and the return on investment barely justifiable, says John Lovelock, chief executive of the Federation Against Software Theft (FAST). It cost FAST £135,000 to sue just one infringer. The £3,500 fine levied was 100 times the cost of the stolen software, and the thief could pay it back in his own time, if ever, he says.

Kevin Peel, CEO of 4theNet, a Sussex ISP with both business and consumer clients, says the existing system of notification and takedown works well. "The rights-holders tell us which of our customers is infringing, we send them an e-mail, and usually they apologize and remove the offending material at once," he says.

If the government is to pursue its proposals, it will have to be on a cost-recovery basis, Blessing says. Many smaller ISPs already subsist on gross margins of 50 pence per connection per month, he says. Any extra unrecoverable cost will put them out of business.

Blessing rejected the idea that the cost could be passed on to customers. Smaller ISPs are already losing customers to the bigger players that can offer packages that include fixed-line telephony and TV as well as broadband.

The technical problems of accommodating the government's proposals boil down to engineering, cost, and a willingness to reduce the amount of competition in the ISP market. If these could be solved, would they work?

It is unlikely that the draconian measures proposed by Mandelson will have the desired effect. It is more likely that they will encourage persistent unauthorized file sharers to use encryption, anonymizing networks, and other technical measures to evade detection.

File-Sharing Defendant Argues $1.92M Penalty Far Too Severe

Excerpted from Online Media Daily Report by Wendy Davis

File-sharing defendant Jammie Thomas-Rasset has filed new legal papers asking the court to slash the $1.92 million verdict against her.

Thomas-Rasset argues that a seven-figure damage award is disproportionate to any harm she caused the record industry. "The plaintiffs were not able to offer testimony about any actual damage done to them by my conduct beyond perhaps $1.29 per song or $15 per album in lost sales," she argues.

In June, a jury found that Thomas-Rasset had infringed on copyright by sharing 24 tracks on Kazaa and assessed damages of $80,000 per track. The statute provides for damages of up to $150,000 per instance of infringement.

The verdict marked the second time that a jury ruled against Thomas-Rasset. An earlier trial in 2007 resulted in a jury verdict of $220,000, or $9,000 per track. But US District Court Judge Michael Davis in Minnesota set that verdict aside and ordered a new trial because of a mistaken jury instruction.

At the time, Davis expressed concern over the size of the award. "While the court does not discount plaintiffs' claim that, cumulatively, unauthorized downloading has far-reaching effects on their businesses, the damages awarded in this case are wholly disproportionate to the damages suffered by plaintiffs," he wrote.

Thomas-Rasset now argues that the fact that two juries could arrive at such different awards shows that the damages were arbitrary.

The Obama administration recently weighed in on behalf of the record labels, arguing that damages of up to $150,000 per track are constitutional.

The record industry opposes Thomas-Rasset's motion, but also recently said in court papers that it would be willing to compromise on the size of the award. "If the Court nonetheless determines that some reduction is both legally permissible and factually warranted, in order to achieve finality in this case, Plaintiffs would consider a remittitur rather than participating in a third trial," the RIAA wrote in papers filed last month.

Coming Events of Interest

Cloud Computing Conference - September 9th in San Diego, CA. Topics will include what's being done in the cloud today, separating myth from reality, while learning about the cloud's opportunities and challenges, gaining an overview of the multi-vendor, multi-product cloudscape combined with real-world examples and insightful analysis.

all2gethernow! - September 16th-18th in Berlin, Germany. An "open source" forward-looking Music 2.0 substitute for the postponed PopKomm, one of the leading international conferences and expos for the music and entertainment businesses worldwide. 

New York Games Conference - September 30th in New York, NY. Join games industry leaders - including  leading videogame publishers and developers, carriers, portals, technology companies, advertising execs, venture capitalists, lawyers, analysts, and many more.

FMC Policy Summit 2009 - October 4th-6th in Washington, DC. Future of Music's (FMC) annual event where, this year, music, technology, policy and law are going "back to the future." Early-bird discounts are now available.

P2P and Games Conference - October 22nd in Santa Monica, CA. The DCIA's first-ever event focusing on the use of P2P and cloud computing technologies for the distribution of games and updates. Industry leaders from around the world will participate.

Digital Hollywood Fall - October 19th-22nd in Santa Monica, CA. With many new sessions and feature events, DHF has become the premiere digital entertainment conference and exposition. DCIA Member companies will exhibit and speak on a number of panels.

Cloud Computing Expo - November 2nd-4th in Santa Clara, CA. Fourth international conference on this subject. Cloud computing is a game changer. The cloud is disrupting traditional software and hardware business models by disrupting how IT service gets delivered.

P2P MEDIA SUMMIT at CES - January 6th in Las Vegas, NV. The DCIA's seminal industry event, featuring keynotes from top P2P and cloud computing software companies; tracks on policy, technology, and marketing; panel discussions covering content distribution and solutions development.

2010 International CES - January 6th-10th in Las Vegas, NV. The industry's largest educational forum to help companies expand their businesses and understand new technology. Over 200 conferences and more than 300 expert speakers encompass International CES. 

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This page last updated September 13, 2009
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