Distributed Computing Industry
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In This Issue

P2P Safety

P2PTV Guide

P2P Networking

Industry News

Data Bank

Techno Features

Anti-Piracy

February 8, 2010
Volume XXIX, Issue 8


P2P & CLOUD MARKET CONFERENCE

The P2P & CLOUD MARKET CONFERENCE will explore marketing strategies, business models, case studies, and future opportunities related to peer-to-peer (P2P) and cloud based commercial offerings.

This first-ever DCIA special event is scheduled for Tuesday March 9th at the Princeton Club of New York and is being held in conjunction with Media Summit New York (MSNY). Special early registration rates end on March 2nd.

Akamai Using P2P for Enhanced Video Delivery

Excerpted from Online Video Watch Report by Ben Homer

Akamai has been looking for a way to implement P2P technology for some time. Since its April 2007 acquisition of RedSwoosh, it has kept pretty quiet about its intentions. Now, it appears that we're beginning to see P2P in mainstream use by Akamai.

Akamai and NFL.com have released a high-quality video experience that requires a client-side download called Akamai NetSession, which "connects your machine and other end-user machines and uses those machines' capacity to help speed delivery."

According to the download's end-user license agreement (EULA): "The Akamai NetSession Interface accomplishes this by coordinating all caches of content on the Akamai network, including caches on end-user machines as well as web servers and other sources. In order to speed the download process, the Akamai NetSession Interface connects end-user machines to use multiple sources of data, look for faster/nearer sources of a file, and route your download around network congestion and traffic spikes."

So it seems that Akamai has integrated P2P technology into its core content delivery network (CDN) and has a large-scale client using it in the NFL.

Akamai says P2P "greatly enhances the quality and speed of downloads and video streams you get from websites that support Akamai technology" and, considering the Akamai client list includes just about every major media company worldwide, could foreseeably reach a critical mass of users very quickly.

In 2008, Akamai began redirecting traffic from RedSwoosh.net to a site for Akamai Network Manager, a client-side application, integrated into applications offered by existing Akamai clients that handled "the caching, reflecting, and sending of files delivered through the Akamai network." RedSwoosh.net has since been taken down entirely.

This sounded like the evolution of Akamai's P2P strategy - integrating peering into its existing CDN to make it more efficient - and elicited the following response from an Akamai spokesperson to an inquiry at that time: "There's been no change in our strategy since the acquisition. We think over time that end-user resources and client-side software will become a component of how we operate at scale and economic efficiency."

You will find few references to the term "peer-to-peer" on the NetSession website because it's considered a bad word by media companies which still associate it with copyright infringement, and Akamai downplays the role of what it instead calls "client-to-client delivery capabilities."

But this is what Akamai is doing, and the NFL is now a partner using P2P technology to improve the viewer experience for fans and lower the cost of delivery.

If implemented on a more widespread basis using Silverlight and/or Flash, this would offer a major competitive advantage for Akamai as a CDN, and offer a powerful example of how to effectively use P2P for content delivery.

Interest in Cloud Computing Soars 3,233% Since 2007 

Excerpted from Web2 and More Report by Kevin Tea

That "Man about the Cloud" Reuven Cohen reports in Elasticator that interest in cloud computing has soared by 3,233% since 2007. Now, the cynical among us could rightfully argue that this is hardly surprising because, prior to 2007, the term cloud computing was largely unknown. However, such a phenomenal increase is hard to ignore, and Reuven explains how he looked at and interpreted the trends.

He writes: "If you are a frequent reader of my blog, you'll know I enjoy looking at trends. A particularly good analytics tool is found at Google's Insights for Search. The site analyzes a portion of worldwide Google web searches from all Google domains to compute how many searches have been done for the terms you've entered, relative to the total number of searches done on Google over time."

"The site also allows the underlying characteristics of the data sets to be compared, for example against a broader industry. In our case, I compared 'Cloud Computing' and a few other related terms against the broader 'Computers & Electronics' industry to determine how much interest there was in cloud computing."

What is fascinating is that, if you follow Cohen's link, the top five countries showing an interest are in the Far East - India, Singapore, South Korea, Hong Kong, and Taiwan. India doesn't surprise me because some of the most innovative services in this sector come from there, but even Malaysia is further down the top ten chart.

From a European point of view, Ireland leads the way - with no other European country appearing in the top ten.

Report from CEO Marty Lafferty

Photo of CEO Marty LaffertyThursday's Federal Court ruling in Sydney, Australia in favor of the nation's third largest Internet service provider (ISP), iiNET, which has 750,000 broadband subscribers, may set a precedent globally. Please scroll down for a news report of the court's landmark decision from the International Business Times.

This historic litigation, led by the Australian Federation Against Copyright Theft (AFACT) on behalf of its thirty-four motion picture industry members - including Hollywood's major studios - sought during the eight-week trial to require iiNet to prevent its customers from abusing BitTorrent file-sharing software to download unlicensed films.

In essence, the provider was accused of being directly responsible for the actions of its Internet customers. The court's decision in this case supporting the broadband network operator has the potential to profoundly impact the distributed computing industry worldwide as it sets a legal precedent surrounding how much ISPs are required to do to protect copyright.

In his 200-page judgment dismissing AFACT's claims and ordering it to pay court costs, Justice Cowdroy said that iiNet had not intended to infringe copyright and had not authorized its subscribers to do so and shouldn't be held liable for the actions of its customers:

"iiNet has no control of the BitTorrent system and is not responsible for its use. iiNet is not responsible if a subscriber uses that system to bring about copyright infringement. The law recognizes no positive obligation on any person to protect the copyright of another. The mere provision of access to the Internet is not the 'means' of infringement."

He added that while iiNet was entitled to protection under the safe harbor provisions of Australia's Telecommunications Act, there was no need for iiNet to take advantage of this as it had not authorized its users' copyright infringement.

The Justice also noted that the case had attracted widespread interest both in Australia and abroad. It was the first Australian trial to be covered on Twitter and the first trial of its kind in the world to proceed to hearing and judgment.

The plaintiffs had argued that iiNet should be held accountable because it was aware that movie infringement was taking place on its network. However, the Justice ruled that, even though iiNet had knowledge of the activity and did not act to stop it, the ISP itself was a legitimate communication facility that had no control over the file-sharing system or the actions of its users.

iiNet responded that it was not required by law to act on ''mere allegations'' of copyright infringement, that customers were innocent until proven guilty in court, and that the case was like suing the electric company for things people do with their electricity.

Its chief executive, Michael Malone, however, also said that, "In relation to copyright holders, we do not, and never have supported, encouraged or authorized unlawful sharing or downloading of files in breach of the copyright laws, and are eager to engage with the film industry to make this material legitimately available."

Charles Mok, Chairman of the Internet Society's Hong Kong Division said, "The ruling will serve as a reference to similar cases in other jurisdictions, and shows that if an ISP can demonstrate it has put in place a mechanism for dealing with complaints from content owners, then the law will afford an adequate safeguard.

The suit has parallels to earlier litigation involving photocopiers and video cassette recorders (VCRs), for example, where manufacturers weren't held liable for the actions of users. While evidence showed copyright infringement occurring on a large scale, iiNet was not held responsible.

As the judgment stands, ISPs are not obliged to police their customers' copyright infringement. This is the case even where the ISP has been notified of customers' alleged infringement and doesn't disconnect them.

The motion picture industry and other content rights holders will have to find ways to work with the new modes of distribution. To work against them ultimately will spell ruin. This applies not only to movies, but also to music, games, software, books, newspapers, and magazines. And ultimately, it should mean selling properties more cheaply to more people in different ways that expand revenues and improve margins.

Responses from industry observers and bloggers in Australia have been fascinating. Other than content rights holders, few believe that disconnecting Internet subscribers is a good plan.

Jorge Imperial, a 33 year-old analyst opined, "If ISPs were forced to be accountable for actions of all of their users, then who knows where that could lead. Maybe they'd start monitoring or censoring."

Blogger Techydude sent an acerbic letter to AFACT Members: "Australian law rightly deflected your specious attempt to shift your problem to a third-party. Rather than proceed with these knuckle-dragging tactics of lawsuits against organizations or individual consumers, why not recognize that you've squandered a decade of opportunity and goodwill, and genuinely embrace digital distribution starting in 2010?"

Roy Vib continued along that line, "AFACT, you have done an unprecedented job of crippling your short-term chances to win over the hearts and minds of Australian Internet users and convert them into a viable market. Would that you had spent the money wasted on senseless court action to come up instead with a winning strategy to distribute your wares online at reasonable prices. Instead, you chose to engage in a high-risk, high-stakes gamble and you lost. Had you spent the cash more wisely, imagine the job prospects and job security you could have provided for the 50,000 Australians in the film industry."

As Chris Z pointed out, "The fundamental right of every citizen in a democracy should be and usually is the presumption of innocence. The burden of proof should rest on the accuser. iiNet has a moral and legal obligation to take action only against copyright infringers, not alleged infringers. AFACT wanted - no demanded - that iiNet take action against alleged infringers. Allegations of unlawful activity can only be proved in a properly constituted court of law."

And as Budde blogged, "This is a good day for civil rights and freedom of the Internet. How refreshing to see a courageous and independent judgment by Cowdroy against the might of Hollywood giants. While I understand the film and music industry's torment, I have no sympathy for their tactics and for holding a small ISP to ransom in an uneven legal battle. Perhaps this can serve as yet another wake up-call to those who still dream of controlling the Internet and wish to curb its potential as the most effective tool to enforce civil liberties and protect democracy in the 21st century."

Matt concluded, "Fantastic result and, as plenty have already said, a win for common sense. The case and its fight have wide implications for the entire Internet community and, if lost, would have changed Internet access for all Australians. The win now means that we can continue to legally use our connections and expect a service provider to be exactly that. Congratulations on what was a very large, complex, expensive, and important win."

Common sense has indeed prevailed, for now, although it would be unwise to think that what happened this week in Australian Federal Court will necessarily set the standard for all other jurisdictions around the world.

iiNet shares surged 11% on news of this ruling, their largest gain in eight months. AFACT has three weeks to appeal the decision, which it is expected to do. Share wisely, and take care.

Special Notice for Kazaa Subscribers

Kazaa, which after its re-launch as a licensed digital music offering has become one of the world's fastest growing such services, has been compelled to issue a global consumer alert and special notice to its customers after Symantec - for the second time in recent weeks - incorrectly identified an authorized digital music service as being high risk.

As a result, some Kazaa users with Symantec software installed were unable to use their music service because Symantec's security software errantly flagged Kazaa as adware.

While users of the service had never received advertising from Kazaa, some of those who contacted Brilliant Digital, Kazaa's distributor, with their concerns said that they had been sufficiently spooked by Symantec's unilateral action that they followed Symantec's advice to remove the software.

Kazaa is a licensed music download and streaming service with over one million tracks licensed from the major record companies available to customers. It is a subscription offering and does not serve advertising of any kind.

Symantec had justified turning off the music for some of Brilliant Digital's customers by flagging files in the Kazaa music plug-in application as high risk due to these files being used for serving ads. As a result, Kazaa subscribers running Norton Anti-Virus had these files stripped from the application, which prevented them from being able to use the service.

Emanuel Krassenstein, Kazaa's Chief Technical Officer (CTO), said, "A cursory glance at the Kazaa website or a simple test of the service would be enough to prove that Symantec's claim was just plain wrong. There is no basis on which the claim that Kazaa serves advertisements can be made; it is demonstrably false."

The Kazaa service continues to develop a groundswell of support among consumers by offering innovative service, value, and variety in its catalogs. While this has allowed the service to continue growing despite a crowded market and difficult economic times, the company said it will be difficult to quantify the harm done to the brand by Symantec's mistake.

"We are deeply sorry that Symantec has done this to some of our customers and have worked hard with them to resolve the issue as quickly as possible," said Krassenstein.

Symantec's error, hot on the heels of a similar mistake against P2P music streaming service Spotify, highlights the potential for anti-virus companies to do more harm than good in the effort to displace illegitimate operations from the online marketplace.

"As self-appointed sheriffs of the Internet, anti-virus companies have considerable market power and need to renew their efforts to ensure that they don't harm legitimate businesses," said Krassenstein.

uTorrent and Vuze Enable Torrent Downloads on the Go

Excerpted from NewTeeVee Report by Janko Roettgers

Both BitTorrent and Vuze released significant updates to their clients this week that include features to remotely control the applications from devices like the iPad or smart-phones. BitTorrent also included a new protocol dubbed uTP with its flagship uTorrent client that could help to avoid network congestion issues.

Remotely controlling your BitTorrent downloads through a browser on your office PC or a mobile device isn't exactly new; both uTorrent and Vuze have previously offered such functionality or supported access to it through third-party plug-ins. However, the process has been cumbersome in the past, and the new upgrades should help to make this function much more accessible.

Vuze unveiled a functionality called Vuze Remote earlier this week that makes it possible to pair a Vuze client with any PC or mobile device with a browser without having to know the IP address of the client's host machine. Users simply enter an access code generated by their client on the site http://remote.vuze.com, and they're greeted with a web interface that resembles the look-and-feel of the original client, or a mobile-optimized interface in case they're accessing the page with a smart-phone browser.

Vuze allows users to remotely administer torrent downloads, making it possible to start a download on your home PC from your laptop of mobile phone while on the go. Functionality to remotely access these downloaded files seems to be in the works, but has not yet been included into the current release.

BitTorrent launched a limited test for a similar, albeit even more ambitious feature a few days ago that goes by the code name of Project Falcon. uTorrent users with access to the Project Falcon beta can control their client through a web application that adds another layer of security to remote torrent downloads.

Each session is encrypted with a session key that is being generated on the fly based on a user's mouse movements, making it impossible for BitTorrent, or anyone else for that matter, to monitor what a user is downloading. BitTorrent VP of Marketing and Product Simon Morris said that the architecture of Project Falcon is actually very similar to a remote access service like GoToMeeting, with the content viewed through the web app being completely isolated from the server infrastructure.

Falcon is also eventually going to support direct access to downloaded files through the browser, and uTorrent will even extend streaming functionality to its remote access. This means that users will be able to download a video file to their home machine and then stream it to a machine in their office - a set-up particularly useful in situations where access to P2P protocols or applications is blocked.

BitTorrent also released a stable version of uTorrent 2.0 this week, which includes the company's UDP-based uTP protocol. uTP aims to prevent network congestion by automatically slowing down transfers once signs of congestion appear, and previous tests have shown this to work much better than using TCP for BitTorrent transfers.

Tech Spending Bounces Back as Profits Rise

Excerpted from Wall Street Journal Report by Ben Worthen and Don Clark

Business spending on technology goods and services is returning as the economy mends, pumping new life into suppliers such as Cisco Systems, though it has been slower to reach other sectors.

The big maker of networking gear Wednesday posted a 23% jump in quarterly profit and 8% gain in revenue, its first such increases in a year.

The economy has entered a new "phase of the recovery," said John Chambers, Cisco's chief executive, in a call with analysts, adding that he planned to hire up to 3,000 workers in coming quarters. "This is one of the most robust positive turnarounds I've seen in my career," he added.

Cisco's results add to a growing body of evidence that companies are starting to open their wallets after the recession. The Commerce Department last week said business spending on equipment and software rose at a 13.3% annual rate in the fourth quarter, adjusting for inflation. That was the fastest growth since early 2006.

Still, spending was 18.5% below the level it reached in late 2007. Just to keep pace with depreciation, economists reckon companies will need to continue raising capital-spending levels in the quarters to come.

That might happen, especially with improved corporate profits helping to fuel optimism. Through Tuesday night, with 255 companies in the Standard & Poor's 500 having reported, earnings were 47% higher than a year ago, excluding financial-services companies whose troubles last year would skew the figures. Sales growth was 3.8% so far, excluding financial-services companies, noted S&P.

Mr. Chambers said that Cisco's return to growth was partly a result of a rising tide. Cisco's growth "was too uniform" across product lines and geographies for it not to signal a greater shift in the economy, he said in an interview.

Companies appear particularly eager to spend on technology, which forms the backbone of many corporate infrastructures and can boost productivity. As a result, Cisco and its peers, which fell into a severe slump starting in the fourth quarter of 2008, have rebounded sooner than companies in other sectors, such as industrial equipment.

The growth trend is headed upward for the company and for business spending in technology, according to Cisco CFO Frank Calderoni.

While most of the tech sector's initial gains came from selling products such as laptop computers and smart phones to consumers, recent results point to improvement in sales to business.

Intel last month said revenue for the division that sells chips for corporate server systems rose 42%. Sybase, known for database software that is popular among financial-services companies, last week reported a 34% jump in profit for the period ended in December - which it characterized as the best quarter in its history.

Signs of capital spending outside the tech sector have been gloomier. Though many companies are predicting a rebound, the evidence of a turnaround has been scant so far. General Electric's revenue fell 10% in the fourth quarter, on declining orders for industrial equipment and the shrinkage of GE Capital, for example, while hydraulic-parts maker Parker Hannifin said revenue declined 12%.

Telecommunications provider Verizon Communications, for one, said sales to businesses fell in the fourth quarter and added it wasn't seeing any significant pickup yet in capital or technology spending by its largest customers. "The signs of recovery are slow," John Killian, Verizon's Chief Financial Officer, said last week.

Cisco is one of the first tech companies to report earnings that include January. The company is widely seen as a barometer for the tech industry because its customers span a variety of industries and sizes.

It's clear the economy "is getting better," said Nikos Theodosopoulos, an analyst at UBS Securities, adding, "Now the story is the slope" and how Cisco differentiates its recovery from the rest of the industry. Cisco's revenue increase was significant, he said, and likely helped by customers looking to spend the remainder of their tech budgets at the end of December.

For its fiscal second quarter ended January 23rd, Cisco's profit was $1.85 billion, up from $1.5 billion a year ago. Revenue rose to $9.8 billion from $9.1 billion a year earlier. Before these results, Cisco had experienced four straight quarters of declining sales and profits, including a 13% revenue drop in the October quarter. For the current quarter, Cisco forecast revenue would rise 23% to 26% from a year ago.

The results sent shares of the San Jose, CA company up 3.6% to $23.90 in after-hours trading, after closing at $23.07 in trading on the Nasdaq.

Cisco's bullish outlook holds particular weight as it was among the first companies to say the downturn, once limited to the financial sector, was affecting the rest of the economy. Also, Cisco has a track record of emerging from recessions and continuing to grow. A highflier during the dot-com era, Cisco suffered a revenue decline when that bubble burst and took several years to fully recover.

But Cisco nearly doubled its revenue between 2004 and the start of the current recession, as businesses invested in their infrastructure as the Internet took on an increasingly important role in day-to-day business.

Mr. Chambers said Cisco would "continue to be very aggressive" and didn't plan to stop expanding. He added that Cisco, which trimmed its work force last year, expects to hire between 2,000 and 3,000 new workers during the next several quarters. The company currently has just over 65,000 employees.

IPEVO Launching Mini Network Storage Adapter

Internet-based technology company, IPEVO is now premiering its newest product - the Mini Network Storage Adapter (MNSA). The MNSA turns any USB storage device into a versatile file-sharing server for use on a local area network (LAN). Users - both wired and wireless - can share and access files located on the USB storage device through their accustomed operating system environment - Mac, PC, or Linux.

MNSA's name is derived from its small size - it measures only 2.9x2.5x1.2 inches and is lightweight at a mere two ounces. The leprechaun green, box-shaped adapter features an Ethernet port to connect to a router, as well as a high-speed USB 2.0 port to connect to the storage device. The MNSA is powered with an included AC adapter. By default, the adapter uses a dynamic IP address assigned by the router, though it can be configured to use a static IP address.

Device management for MNSA is accomplished through an included interface called the IPEVO Mini Dashboard, which appears in the administrator's default web browser. Dashboard provides several customization options, including: set-up and modification of FTP and Samba (SMB) servers for users (up to 8) to connect to the storage device; password protection and access restriction; the choice of which folders to share; disk utility features like scanning, power-saving shutoff mode, and FAT 32 formatting (drives must conform to FAT32 format); and one-click firmware upgrade for any future versions of the software.

Dashboard also allows a network administrator to make video, photo, and music files available for Xbox 360, PlayStation 3, and iTunes, allowing users to stream multimedia content directly from the drive.

In addition, Dashboard features a BitTorrent client to facilitate torrent downloads. Up to 4 torrent files can be simultaneously downloaded directly to the USB storage device, without the need for a computer intermediary. Additionally, up to 32 torrent files can be queued at one time. The BitTorrent client provides the ability to pause, stop, and restart torrents in the download queue. Users can also elect to receive email notification when a torrent is fully downloaded.

IPEVO's MNSA is being released worldwide in February, and will be available exclusively through the company's online store at a price of $59.

Makara Smoothes the Road to Cloud Computing

Excerpted from VentureBeat Report by Anthony Ha

As more and more companies are looking at cloud computing, a start-up called Makara is announcing new tools that should make it easier to get traditional software applications onto cloud infrastructure.

Plenty of other start-ups, such as Heroku, help companies deploy and manage their cloud applications. But Redwood City, CA based Makara says that with its Cloud Application Platform, developers can build applications as if they were meant to work in a traditional data center. Those applications placed in an application capsule, then Makara's platform handles deploying the app to the cloud, scaling the app based on demand, and monitoring for any problems.

Makara supports applications that run on an online public cloud, on a private cloud (i.e., private data centers that use cloud computing architecture), or applications that move back-and-forth between both (for example, testing the application on Amazon's infrastructure, then running the real thing on a private cloud behind your company's firewall). You can see more details about how the platform works in the video here. And kudos to Makara for making a cloud computing video that didn't put me to sleep.

The company is launching its platform in testing mode this week, for free, with plans to launch Version 1 and start charging in a few months. It's also announcing a name change - until now, Makara was known as webappVM, but apparently Makara will be easier for people to remember. The company raised a $6 million first round from Sierra Ventures, Shasta Ventures, Mark Andreessen, and Ben Horowitz.

UStream Potentially Grabbing $75 Million

Excerpted from Digital Music News Report by Alexandra Osorio 

Streaming upstart UStream has just rallied a $75 million Series B, according to information shared by the company on Monday. The massive round comes from Softbank of Japan, a major Internet and telecoms company with a serious mobile presence. 

That sounds huge, though Softbank clarified early this morning that the round features a $20 million upfront injection, with an option to invest $55 million in the future. 

The round will be used to spearhead an expansion into Asia, particularly Japan, China, Korea, and India. That initiative will also be fueled by even more capital, particularly from the US and Asia, according to company executives. 

That is a huge bet for streaming video, another fertile area for the music industry. 

Just recently, UStream hosted more than 3.4 million live viewers for the red carpet pre-show at the American Music Awards. That was beaten - only slightly - by the Obama inauguration, which attracted 3.8 million. 

Those are huge numbers on well-produced events, though anyone can grab a camera and start broadcasting on UStream. And, hardly a one-way channel, UStream also enables Twitter, Facebook, MySpace, and AIM integrations.

Watch Super Bowl XLIV Online Free

Excerpted from Associated Content Report by Zac Wassink

It's the biggest day of the year in professional sports (in the United States, at least). Super Bowl XLIV features the Indianapolis Colts and New Orleans Saints. The game takes place on February 7th and can be watched live on CBS.

The Super Bowl is an event shown around the world so finding the game on television overseas isn't necessarily an impossible task. If you just can't get in front of a TV on Super Bowl Sunday, you might not have to settle for a radio broadcast.

Here is how you can watch Super Bowl XLIV online for free.

To watch Super Bowl XLIV, you will first need to download a couple of media players. These players will be used to open Super Bowl XLIV streams, letting you watch the big game online for free. I recommend downloading Stream Torrent, TV Ants, and Sopcast. The TVU Player will also most likely host a stream for Super Bowl XLIV. Downloading these software programs will also let you watch numerous sports, movies, and other programs online for free.

Download links for each of these players can be found here. Once these players have been installed, visit the NFL thread on the My P2P website.

On the day of Super Bowl XLIV, a streaming thread for the football game will be listed at the top of the NFL page. Once you click on the Super Bowl XLIV thread, several different game links will be listed. Select one of the various links and Super Bowl XLIV will begin playing in one of the programs that you downloaded or in a separate tab in your Web browser. How Super Bowl XLIV opens will be determined by the type of link that was uploaded onto the website.

My P2P will also host links that will allow you to watch pre-game and post-game shows for Super Bowl XLIV so you may want to check those out, as well.

Those not interested in downloading any new media players could also attempt to use the Channel Surfing website in order to view Super Bowl XLIV online for free. As with other football Sundays, however, the Channel Surfing website may experience a little overload on Super Bowl XLIV Sunday, preventing you from watching the game online for free.

For this reason, it is recommended that you download the previously mentioned software programs to ensure that you can watch Super Bowl XLIV online for free.

DRM - International Market Trends

Digital Rights Management (DRM), despite controversies surrounding its implementations, continues to find favor among content developers as a potential tool to safeguard their valuable content against possible unauthorized distribution. Hence, the demand for DRM solutions continues to grow, especially in the media and entertainment industry. 

The future for other DRM applications also looks promising as there is an increased level of caution among content developers about the safety of their valuable content.

These and other market data and trends are presented in "Digital Rights Management (DRM): International Market Trends" by BizAcumen. Please click here to view the table of contents and order this report.

Obama Touts Neutrality, But Can FCC Deliver?

Excerpted from Online Media Daily Report

President Barack Obama reiterated his support for net neutrality this week during an interview on YouTube.

"I'm a big believer in net neutrality," he said, responding to a viewer's question about the issue. "My FCC Chairman, Julius Genachowski, has indicated that he shares the view that we've got to keep the Internet open, that we don't want to create a bunch of gateways that prevent somebody who doesn't have a lot of money, but has a good idea, from being able to start their next YouTube or their next Google on the Internet."

Obama's remarks aren't surprising, given that he has consistently touted the importance of improving broadband access and insuring neutrality. But whether the FCC will be able to enact neutrality regulations remains to be seen.

Already the commission's attempt to craft rules pitted Web companies, Internet service providers, entertainment organizations, civil rights advocates and media reform groups against each other.

Warning of an FCC power grab, the digital rights group Electronic Frontier Foundation says the commission lacks authority to impose regulations.

Hollywood and the record industry want the FCC to encourage network providers to prevent piracy -- presumably by deploying filtering technology or otherwise blocking the transfer of copyrighted material.

For their part, ISPs argue that they should be allowed to make deals to charge companies more for prioritized delivery.

Meantime, it's not clear that any new neutrality laws would even be legal. Industry watchers are awaiting an appellate decision about whether the FCC had the authority to sanction Comcast for throttling peer-to-peer traffic. But the only real question appears to be whether the court will overturn the FCC's ruling on relatively narrow procedural grounds, or whether it will state more broadly that the FCC lacks authority over the Web.

If Obama really wants to see neutrality protections enshrined in law, he might have to encourage elected officials to pass new legislation, rather than hope that any rules crafted by the FCC hold up in court.

Smart Grid Problem: Smart at the Edge, Dumb In the Middle

Excerpted from Earth2Tech Report by Katie Fehrenbacher

Too much intelligence at the edge of a network, and not enough in the middle, makes for a volatile network. That's according to Ray Gogel, President and Chief Operating Officer (COO) of the Current Group, quoted in Forbes this week.

Gogel says a lot of the attention so far on the smart grid has been focused on "the edge" of the network - power generation and consumer energy consumption - and he's worried that if there are too many nodes (renewable energy, smart meters) added at the edges of the network before the middle of the grid can catch up, in terms of intelligence, it will make for a volatile smart grid. The situation "scares utility people like myself," he told Forbes.

The point he makes is valid in terms of there being a lack of smart systems and software to control electrical functions deeper in the grid. That's one of the reasons why utilities have been actively asking for software layers and applications that will help them manage that energy info within the network.

Warren Weiss, Managing Director of Foundation Capital, said last week that these types of applications, particularly to help utilities intelligently manage renewable energy, are an untapped area for innovation. Gogel's company Current not surprisingly makes technology to monitor and control electricity in the middle of the grid.

How "volatile" could the situation be? Electricity consumption and generation at the edges has to be tightly managed to make sure the grid doesn't get overloaded in some areas or have blackouts in others. At the Black Hat security convention, Max Davis of security firm IOActive explained how turning on and off a large number of meters - say, 50,000 meters and 3

MW worth of electricity - could cause major problems for stability in that section of the grid.

But in terms of the communication and computing portion of the smart grid (not the electrical control aspect, as moving and managing electrons is different than moving data) utilities and smart grid players are increasingly acknowledging that more intelligence at the edges of the network will actually be necessary.

Eventually the smart grid - as broadband networks do - will have some sort of distributed model of computing "where automated decisions are made at the edge of the network but with some sort of supervisory control layer," explained Andy Tang, Senior Director of the Smart Energy Web for PG&E.

That distributed computing model will be quite different from the centralized mainframe model and point-to-point system that utilities largely have in place today, said Tang. The process of adding more computing intelligence at the edges of the network will take many years. And there will be a lot of debates among utilities about what their smart grid networks will look like.

The telecom and broadband industries have been debating whether intelligence of the network resides more in the edges, or in the core, for decades.

In the late '90s David Isenberg wrote a seminal article called Rise of the Stupid Network in which he argued that intelligence is shifting to the endpoints and the data services and that the phone companies needed to evolve to that model in order to survive. Nowadays, however, the rise of cloud computing and cheap/dumb netbooks raises new questions about where to place intelligence.

Ultimately the communications industries realized that certain levels of intelligence are needed in both areas, and there have been shifting trends for both. For the data layer (not the electrical control portion), the smart grid industry will discover the same thing.

ISP iiNet Prevails in Movie Infringement Case

Excerpted from International Business Times Report

The verdict of the long awaited trial is that iiNET has won its Federal Court battle in Australia against Hollywood movie studio heavyweights, which accused the Perth-based Internet service provider (ISP) of encouraging copyright violations.

The trial had gained much interest from the federal government and foreign observers. Basically, the group of Hollywood studios represented by AFACT brought a case against iiNET to hold the firm liable for the alleged copyright infringement activity by its customers.

The studios, headed by Village Roadshow, argued that iiNet should have taken "reasonable steps" to act on infringement notices that contained Internet addresses of computers using the ISP's service to apparently share infringing movies and music on file-sharing networks.

However, the Federal Court this week found that iiNET did nothing to encourage copyright violations by allowing users to download infringing movie files through its network. The judge, Justice Dennis Cowdroy, explained that his decision-making was based on the fact that iiNET had no control over the file-sharing system, called BitTorrent, and therefore could not be held liable.

iiNET was satisfied with the judgment, and affirmed that it never supported breaches of law including infringement of the Copyright Act of the Telecommunications Law.

"Today's judgment is a vindication of that and the allegations against us have been proven to be unfounded," iiNet said.

"In relation to copyright holders, we conclude by again saying we do not, and never have supported, encouraged, or authorized unlawful sharing or downloading of files in breach of copyright laws.

"We are eager to engage with the film industry and rights holders to make this material legitimately available."

The judge recommended the application be dismissed and that the consortium of studios pay the court costs.

Internet Access Restored to Wrongly Accused Qwest Sub

Excerpted from Digital Media Wire Report by Mark Hefflinger

A 53-year-old grandmother was wrongly accused by copyright holders of downloading eighteen films and TV shows, and further had her Internet service suspended by Qwest before media inquiries eventually helped resolve the matter, CNET News reported.

Colorado resident Cathi Paradiso denied to CNET that she had ever downloaded a movie or song, and also said as much in a letter to the movie studios that had wrongly accused her. 

"Take me off your hit list," Paradiso wrote. "I have never downloaded a movie. Period... You'll need to admit you made a mistake and move on to the correct perpetrator... I am saying this once more: My computer is not a toy. My livelihood depends on my ISP's reliability. Look for the perpetrator and leave my service alone." 

Copyright holders have turned to Internet service providers (ISPs) to help stem unauthorized sharing of their content online. For its part, Qwest told CNET it sent 18 claims of infringement to Paradiso across three months before suspending her account. Paradiso told CNET she never received any e-mails or letters from Qwest. 

As it turns out, following inquiries about Paradiso from CNET, Qwest investigated and found that her network had been compromised - meaning she was not in fact responsible for the movie downloads. 

Qwest spokeswoman Monica Martinez told CNET the company works with customers who believe they've been wrongly accused. "We will work with them if there is a security issue or a mistake as much as we can," said Martinez. 

"This goes to show that there's a problem with due process in these kinds of situations," Fred von Lohmann, Senior Staff Attorney at digital civil liberties group the Electronic Frontier Foundation (EFF) told CNET. "If you're going to kick somebody off the Internet, there are a lot of procedures that need to be put in place to protect the innocent. It doesn't look like those were in place here."

BPI Criticizes Law Firm's Mass File-Sharing Lawsuits

Excerpted from Zeropaid Report by Jared Moya

The British Phonographic Industry (BPI) is speaking out against the mass lawsuit approach of ACS:Law, a UK-based law firm that "specializes in assisting intellectual property (IP) rights holders exploit and enforce their rights globally."

"We don't favor the approach taken by ACS:Law to tackle unauthorized file sharing, which is at odds with the proportionate and graduated response advocated by BPI and proposed in the Digital Economy Bill," said BPI spokesman Adam Liversage.

ACS:Law announced an initial plan to target some 15,000 alleged file sharers across the UK last December as part of a "revolutionary business model that would "generate revenue for rights-holders and effectively decrease copyright infringement in a measurable and sustainable way" unlike what it said were "costly and ineffective" anti-infringement measures used by other companies.

After careful review it later decided to drop a number of those cases, limiting their lawsuits only to those it deemed "viable" or "beneficial to its clients."

Last week, we learned they weren't careful enough after Which UK, the largest consumer body in the UK with over 650,000 members, reported it had received letters from more than 150 people claiming to have been wrongly accused - with even more now choosing to come forward after hearing they're not alone.

"My 78 year old father yesterday received a letter from ACS law demanding £500 for a porn file he is alleged to have downloaded," read one letter. "He doesn't even know what file sharing or BitTorrent is, so has certainly not done this himself or given anyone else permission to use his computer to do so."

Liversage added that the BPI doesn't condone the idea of mass lawsuits and thinks that legal action should be used only in limited cases.

"We uphold the highest standards of evidence, and our view is that legal action is best reserved for the most persistent or serious offenders - rather than widely used as a first response," he adds.

Perhaps this is because it's afraid of permanently angering music fans once and for all, or perhaps because it's seen how a similar plan by the RIAA failed miserably in the US.

Coming Events of Interest

Cloud Computing Forum - February 10th online. Open source software developer Red Hat will host an online forum on open source cloud computing. The forum will include technical presentations from across the cloud computing industry, as well as discussions on current challenges and solutions offered by open source technologies.

paidContent 2010 - February 19th in New York, NY. Join paidContent.org for its first namesake conference with senior business leaders representing publishers, content technology companies, investors, analysts, and leading members of the press and blogging community to discuss the most pressing business issue of our day. 

10th Annual Digital Music Forum - February 24th-25th in New York, MY. The only event in the United States that brings together the top music, technology, and policy leaders for high-level discussions and debate, intimate meetings, and unrivaled networking about the future of digital music. 

P2P & CLOUD MARKET CONFERENCE - March 9th in New York, NY. Strategies to fulfill the multi-billion dollar revenue potential of the P2P and cloud computing channel for the distribution of entertainment content. Case studies of sponsorships, cross-promotion, interactive advertising, and exciting new hybrid business models.

Media Summit New York - March 10th-11th in New York, NY. MSNY is the premier international conference on media, broadband, advertising, television, cable & satellite, mobile, publishing, radio, magazines, news & print media, and marketing.

Cloud Computing Congress - March 16 in London, England. A practical guide on cloud computing for business - the value proposition, and the impact on the IT function. Building and managing applications in the cloud - how to manage and control applications and resources in the cloud environment. Security, testing and management of cloud infrastructures.

Cloud Expo - April 19th-21st in New York, NY. Co-located with the 8th international Virtualization Conference & Expo at the Jacob Javits Convention Center in New York City with more than 5,000 delegates and over 100 sponsors and exhibitors participating in the conference.

Copyright 2008 Distributed Computing Industry Association
This page last updated February 14, 2010
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