[Reader-list] Here I come Peer to peer sharing networks---RIAA

Jaswinder Singh Kohli jskohli at linux-delhi.org
Sat Oct 6 16:32:09 IST 2001

Dotcom Scoop Exclusive
Internal Memos Outline RIAA's Strategy To Launch Offensive Against
Peer-To-Peer Networks
Recording industry eyes battle as RIAA Chief tries to rally troops
RIAA files lawsuit against three file sharing networks (see Update
section at bottom)
RIAA memo citing strategy & analysis to battle P2P networks
Letter from RIAA President & CEO to industry leaders

By Ben Silverman
Editor, Dotcom Scoop

Wednesday October 3, 2001 @ 12:01 A.M. EDT (Updated 3:10 a.m. EDT)

As the battle between the music industry and Napster nears an end, the
major record labels are preparing to launch a new offensive aimed at
wiping out the new breed of peer-to-peer file sharing services, and it
may include help from inside the beast itself.

In a memo prepared by the Recording Industry Association of America
(RIAA), exclusively obtained by Dotcom Scoop, the lobbying organization
for the music industry outlines its strategy and findings to combat
services that have quickly replaced Napster as the vehicle of choice for
file sharing.

"We have solid claims against FastTrack, MusicCity, and Grokster of
secondary liability for copyright infringement. The claims are not as
strong as those against Napster, but they are also not so remote as to
be wishful," reads an excerpt from the memo distributed on September 25,
2001 internally and eventually to some of the organization's member

FastTrack, a Netherlands-based company, is the leading force in the
post-Napster file swapping frenzy. The company has launched the KaZaA
service and licensed its code to MusicCity and Grokster.

MusicCity is a Nashville outfit that's backed by Timberline Venture
Partners, an affiliate of respected VC firm Draper Fisher Jurvetson.
Grokster has incorporated in the tiny Caribbean island of Nevis.

The RIAA's strategy calls for litigation against FastTrack, MusicCity
and Grokster, and possibly against Timberline Venture Partners. But the
RIAA believes it has found a potential ally in FastTrack.

The memo states that FastTrack representatives are willing to sit down
with the record labels and discuss alternatives to litigation. The RIAA
recommendation is that after litigation is filed against the three
companies, they enter in discussions with FastTrack.

"Immediately thereafter [ed. note; filing a lawsuit] initiating
discussions with FastTrack about resolving our claims in a way that will
provide us with useful information and testimony against MusicCity, and
if possible obtain FastTrack's cooperation in shutting down or
converting MusicCity and Grokster," states the memo.

The memo notes that the RIAA believes MusicCity is awaiting litigation
and would like the RIAA to file a lawsuit.

A source close to the RIAA told Dotcom Scoop that the RIAA will be
joined by The International Federation of the Phonographic Industry
(IFPI) and The Motion Picture Association of America (MPAA) in
litigation against the peer-to-peer networks. But the source warned that
the RIAA's case is weak and the association will need cooperation from
FastTrack if it wants to win.

"This scenario is very different from the challenge the industry faced
with Napster," the source told Dotcom Scoop.

"[The RIAA] will be dealing with companies that are more rogue in nature
and that have a better grasp of technology that masks actions and skirts
copyright laws. They will need FastTrack in their corner. FastTrack
controls the code that enables these three networks."

The RIAA has been working with Los Angeles-based network security
solutions firm Vidius to study how peer-to-peer networks operate. The
RIAA states in the memo that more information about how the FastTrack
code utilizes supernodes, high-bandwidth computers that connect multiple
"peers," is needed.

"Our claims would likely be strengthened by learning more about the
designation of supernodes and the content of communications within the
system. However, the encryption of this communication precludes further
learning absent cooperation from one of these companies or court ordered
discovery," the memo states.

According to the RIAA's findings, the supernodes effectively act as
search agents for peers, or users, looking for specific data files.
Computers designating as supernodes have been found at IP addresses
linked to major universities and even NASA's Jet Propulsion Laboratory.

Because these peer-to-peer networks tap into the computing power of the
users, it has been difficult to argue that the companies are directly
breaking copyright laws. However, the memo states that the RIAA has been
able to link a supernode directly to Grokster and that all three
companies maintain log-in servers which facilitate file sharing.

In a separate letter, also exclusively obtained by Dotcom Scoop,
distributed on September 25, RIAA President and CEO Hilary Rosen
implores online music industry leaders to sit down and talk about the
issue at hand.

"It is time to get coordinated and aggressive with the new round of peer
to peer services. The amount of music being downloaded is, as you know,
reaching unprecedented levels. Since college started last week Morpheus
traffic was up to 19 million downloads per day. AND THAT'S JUST
MORPHEUS. With the imminent launch of legitimate subscription services
we have to get our customers back," Rosen told executives at various
major labels, Yahoo, Real Networks, Microsoft and AOL in an email.

"I know you want your new businesses to be successful. So do I. Given
the overwhelming volume of these alternative services, RIAA can't handle
all of the enforcement alone. If they are not controlled more
effectively and consumers redirected to legitimate offerings, there
won't be new businesses. That's obvious," Rosen continued.

Rosen called on the executives to attend a meeting at RIAA headquarters
in Washington, D.C. in the very near future. At the meeting Rosen hopes
to discuss how to "spoof" the new file sharing technologies, how to
promote existing services on legitimate file sharing services, a public
relations campaign and general legal strategies and options.

She asked that only people in the capacity to make decisions and "commit
to spending" attend and that other parties would eventually be brought
in to provide input.

Dotcom Scoop contacted the RIAA and at their request, forwarded the
association unedited copies of the memos.

"We are not confirming whether these are real emails. But if anyone
thinks that the music community is sitting idly by while these services
threaten our industry and our technology partners they are wrong," a
spokesperson for the RIAA told Dotcom Scoop.

Last week Napster came to terms with music publishers, agreeing to pay
out $26 million in damages. An October 10 court date to hear new motions
in the case the RIAA has filed against Napster is on the docket. Napster
is now backed by German media conglomerate Bertelsmann, which is
attempting to legitimize the service.

A number of industry-backed online music and video on demand services
are being prepared for launch.

MusicNet, a joint venture between streaming media firm Real Networks,
AOL Time Warner's Warner Music, Bertelsmann’s BMG Music, EMI Group and
Zomba Music, is set to launch in the next sixty days. MusicNet will
utilize Real Network's streaming media applications.

Meanwhile, Sony Music and Vivendi's Universal Music are preparing to
launch pressplay with help from Microsoft's MSN, Yahoo and Vivendi's
MP3.com. The pressplay service will use Microsoft's Windows Media Player

On Tuesday EMI broke ranks with its competitors and said it had licensed
its catalog to pressplay, a move more likely engineered to quell
antitrust fears.

Bertelsmann is preparing to re-launch the Napster service, which has
been suspended since early this summer. Napster's CEO Konrad Hilbers has
said the subscription service will cost $5 per month. Pricing for the
other services has yet to be announced. Bertlesmann has also acquired
online file storage firm myplay.

Vivendi has created an online music network by acquiring MP3.com, eMusic
and GetMusic since the beginning of the year. Yahoo recently stepped
into the fray with its acquisition of Launch Media.

In the past six weeks, all of the major motion picture and television
production studios have entered into joint ventures with one another to
provide online video-on-demand services.

The peer-to-peer file sharing services are some of the most popular
downloads available online. The free softwares are used mostly to
exchange digital music and movies files, with the vast majority being in
violation of international copyright laws.

Representatives from MusicCity and Timberline Venture Partners did not
return calls seeking comment.


Late on Tuesday, the RIAA and MPAA filed a lawsuit in Los Angeles
against FastTrack, MusicCity and Grokster.

"We cannot sit idly by while these services continue to operate
illegally, especially at a time when new legitimate services are being
launched," Rosen said in a statement, according to CNET News.com.

The article does not specify the content of the lawsuit.


Jaswinder Singh Kohli
jskohli at fig.org
The Uni(multi)verse is a figment of its own imagination.
In truth time is but an illusion of 3D frequency grid programs.

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