InfoTech & Public Policy

Recently Yahoo launched a pair of PC-to-phone VoIP services called Phone In (calls from traditional phone lines that can be received on your PC by logging into your account which has an assigned phone number)  and Phone Out (calls from your PC to fixed and mobile numbers) which competes directly with Skype. Similar to Skype’s service, the per-minute rates for the Phone Out service are pretty cheap at about 1 cent per minute to call any number in the U.S. (unless it’s directory assistance, then it’s 8 cents per minute), Canada or London.  Contrastingly, the Phone Out service seems to work more like Vonage’s VoIP service, where there is a fixed charge per month or year.  For Yahoo’s Phone Out service, users pay upwards from $29.90 per year for each numbered account.  

Entry into VoIP is not new for Yahoo. It has offered such services to its customers for some time. However, the additional features that come with these two new services put them head to head with Skype. There is some speculation that Google will get in this market too, but I do not know of any similar service being offered by them yet.

Notably, when Yahoo launched their Phone In and Phone Out services, they became part of the group that is required to provide enhanced 911 and CALEA to all of its customers.

Very recently, despite the overall difficulty of the task, the RIAA has once again clamped down on file sharing, this time on the local area networks of colleges and universities.

It seems that since the RIAA began a wave of lawsuits against illegally file-sharing students just a few years ago, the thing to do was to change the technical implementation of how music was downloaded. Many campuses have encountered the use of Direct Connect, DC++, Bit Torrents, and other file swapping technologies. Each one tried to circumvent the wording of piracy laws and allow users to continue to share files, particularly music and movies. Of course colleges and universities, where students share and download all kinds of media, typically operate one (ore more) local area networks (LANs). Many students seem to think that because LAN traffic only travels locally and not on the public, that they are less prone to being subpoenaed by the RIAA. In some sense, this is true. It is more difficult for the RIAA to monitor the local traffic of external networks, but not impossible. In light of recent work by the RIAA, they have contacted 40 university presidents across the United States with a letter urging them to seek and employ the technological means to curb on-campus file sharing via local networks.

It was initially thought that repeated lawsuits against college students would begin to instill fear in most students and deter them from illegal file sharing. However, this has not been the case, and file sharing is still an issue. In addition to taxes that are in place against many universities, the RIAA has urged many of these schools to use network filters to stop illegal file sharing. In light of the continuation of illegal file sharing, I wonder if it is possible (or feasible) for the RIAA to seek government assistance in forcing schools to employ counter file-sharing techniques. I looked into some other issues, and saw that Congress was ready to approve a bill that called for the mandatory retention of important ISP information for some extended period of time to aid in investigations, or matters of national security. Also, network non-neutrality has been suggested in Congress as a means to curbing P2P traffic. So, is it long until the government intervenes? If so, then they may be imposing large costs on many schools across the country. Some technology experts even argue that the technology is not very sound and is easy to get around.

I am not convinced that there is a simple, elegant solution to this problem, and being a music fan, I am not even sure if I want one. However, if the government can cut funding to schools that refuse to allow military recruiters on their campus, then it may not be long until mandatory file-sharing filters are on networks near you.

Recently, we’ve heard a lot of talk about network neutrality. To a lot of people, especially those who are of the technical persuasion, non-neutrality over a computer network immediately seems like a bad idea. It did to me when I first heard about it. However, it seems to me that non-neutrality might be a good thing in at least one instance: P2P file sharing.

We have noted how regulating networks, communications networks in particular, could be biased in the way that it could favor a certain type of user over another, but I believe that network mandates against file sharing on behalf of internet service providers are a mutually beneficial way for all users of that company’s network service to enjoy better performance. P2P traffic takes up a notable amount of bandwidth despite technologies (like BitTorrent) that pretty effectively distribute large files to various users over the Internet. This traffic usurps such large amounts of bandwidth that other users often experience delays to net congestion. So, does this fact make it a viable option for ISPs to limit the amount of bandwidth that goes to P2p traffic on their network? I would argue “yes”.

I think a main problem with this particular type of network traffic is that users simply initiate a download, and then let it run for hours, or even days at a time. This essentially limits the bandwidth available to other users who are “surfing” the Internet or using it more analogously in general. Limiting bandwidth to these “touch-and-go” users would certainly yield improvements for more casual users, but is this method of capping the bandwidth the best solution? Are there other ways to justify limiting P2P traffic while maintaining network neutrality?

One possible solution is for the providers to acquire more bandwidth for its users, but as we have seen in class, this imposes an enormous cost on the provider, one that is so great in fact, that the prices for customer are likely to be so high that providers might expect to lose business in spite of providing greater transfer rates. Another possible solution is to offer tiered services, which a fair amount of providers offer already. This requires that those who wish to use larger amounts of bandwidth be responsible for footing more of the cost. Perhaps you could be expected to pay more per unit of time downloading or per amount of data you download. This seems like a reasonable solution at first, but it is easy to see that users paying for some basic network access service will continue to pay the non-premium rates, but continue downloading at an alarming rate. So essentially, tiered services do nothing to stop network congestion due to P2P traffic.

All this being the case, I believe that restrictions on P2P traffic that will improve the connection quality of all network users goes to further the end-to-end principle, and is seemingly an acceptable form of network non-neutrality.

During our class on copyright a couple weeks ago, we discussed music and file sharing on college campuses.  We also discussed one of the proposals in the paper by Lichtman and Landes which involved increasing the price paid to an Internet Service Provider, distributing the extra money to copyright holders, and allowing file sharing.  The possibility of creating a limited system of this type (for example within a university), or offering it as a commercial service, was also mentioned.   Coincidently, in an e-mail I recently got from my sister (a freshman at the University of Delaware), she mentioned that Delaware had recently gotten into an agreement with the “Ruckus” download program which enables students to get music for free.

I looked a little bit more into Ruckus, and it seems to be somewhat similar to the system we had mentioned.  Ruckus Network is designed specifically for college students.  Through the licensing agreements that is has negotiated with various media companies, it is able to advertise the 1.5 million songs it has available for free download and hundreds of videos and tv shows is has available inexpensively ($15/term at UD) to the students at the nearly 40 universities with which it is partnered.

Ruckus has taken a number of measures to deal with the issues of licensing and copyright that come out in the information available to UD students about the service.  Firstly, the music distributed by Ruckus is protected by Microsoft’s Digital Rights Management (DRM).  This means that the music is encrypted and cannot be played without a valid license, can be played only on Windows machines (it will not work on Linux or Macs) in compatible applications, cannot be played on iPods (though it can on some other portable players with a $20 subscription to the Ruckus-To-Go service), and cannot be burned to CD.  Furthermore, the licenses issued must be renewed every 30 days (5 days for movies).  This can be done simply by playing an expired song, and can be done an unlimited number of times as long as a user is a Ruckus subscriber, but it does mean that if a user wishes to continue to play their music when Ruckus is not being offered for free by the university (after graduation, or during the summer, for example), they must pay to continue their subscription.

For most students looking for access to media, convenience and cost are what they’re going to be looking for.  The cost of music offered by Ruckus is unbeatable, and for movies, and tv it is quite cheap.  In terms of convenience, much of its convenience stems from the fact that it is legal – it can be used without any worry about the RIAA or any difficulty involved with finding illegal access to copyrighted materials.  That said, it clearly does not remove all demand for finding music illegally – especially for non-Windows and iPod users, or students wanting to maintain a music library without needing to pay for continued use of the songs when the free university service is not available to them.

What Ruckus shows is that the demand to find legal venues for file sharing is opening up a market for companies to provide such service commercially by themselves making deals with copyright holders.  Given the limitations of Ruckus, it seems as though there is space for other competitive systems to emerge with other ways of managing the copyright issues and different (and fewer?) constraints on use.  Perhaps Ruckus is an early entrant into a market for file sharing services where the conveniences of legality will increasingly be worth the limitations that result from copyright compliance.

In class it was mentioned that an alternative copyright system would be a kind of “some rights reserved” system, different from the “all rights reserved” that current copyright policy entails.

One such system that currently exists as such is Creative Commons. The idea behind Creative Commons was to enable authors, artists, etc. to make their works available to the public while maintaining their copyright and imposing some limitations. It offers a number of different licenses based on the limitations the creator wishes to place – a combination of the following four: Attribution (give the creator credit), Noncommercial (don’t make money off the product), No Derivative Works (redistribute it only in its original form), and Share Alike (distribute derivative works under a CC license with the same conditions applied to the original). Through Creative Commons, a work may also be released to the public domain.

There are a couple of notable things about Creative Commons that seem particularly relevant to our discussion of copyright and P2P. Firstly, the nature of the Creative Commons system makes it fully supportive of P2P distribution of the products that are under CC licenses. In fact, the CC website says “we see peer-to-peer file sharing software as an excellent distribution mechanism for Creative Common works, especially in large music, picture, and movie files that the authors might not have the bandwidth or tools necessary to distribute themselves.” For material distributed on the internet, a digital code is provided along with the license with the intention that it will make it easier for search engines, etc. to locate licensed material and to determine the limitations placed on its use.

Further, the Creative Commons site provides a page to help users find CC licensed works available on the web. The Find page includes a search option to enable Google or Yahoo searches for licensed material, and a list of directories containing licensed works. Directories are included for audio, text, images, video, educational material, and filesharing, and some of the directories listed are ones that have been mentioned in class (Flickr, and Morpheus to name a couple).

It has been mentioned in class and in previous blog posts that it would be a mistake to crack down on the illegal uses of P2P for copyright violation to the point where the technology itself is stifled and positive uses are unable to develop. Creative Commons finds that an important aspect of its system is that it allows new creators to build upon previous works (see the “Building on the Past” video), and there is evidence that its existence has lead to the development of novel uses of technology to facilitate the spread of information and creativity. For example, the “Reticulum Rex” video which talks about the progress of CC after its first year of licensing describes licensed MIT course material being translated and used by an academic program in Vietnam, and a “duet” created when a violinist found a song that she liked and rerecorded it with her own music added in. The Beastie Boys are even releasing acapella tracks to encourage fans to make noncommercial remixes. One of Creative Commons’ newest creations is a site, ccMixter, designed to encourage new creation by remixing CC-licensed material. While a new way to remake a Beastie Boys hit may not be the epitome of realized technological potential, these examples to show that the value of Creative Commons is that it enables people to legally experiment with and develop creative new applications for available technologies.

Creative Commons has taken a valuable step by making “some rights reserved” licenses available to artists, etc. they have made it more attractive for creators to make their material available to the public. While we can’t expect all creators to buy into this system that makes their works publicly available without compensation, we can seek to encourage further development of systems that facilitate the legal use of P2P technologies.

The recording industry is playing whack-a-mole with file-sharing technology, and like most carnival games it can’t win. Innovation will always outpace litigation, and the sooner the recording industry embraces peer to peer (P2P) networks the better.

It’s not for want of opportunities. With millions of songs available online, people need innovative ways to find music they enjoy. One way is to publish, rank, and share playlists. The research firm Gartner Inc. predicts that by 2010, 25% of online music purchases will be based on others’ recommendations.[1] The industry can promote this form of advertising by making sound clips available for sharing and publication online. It can also make trusted celebrities of their record professionals, whose job it is to identify new talent. Users could receive monthly playlists of new artists from their favorite professional, and vote to help determine who earns a recording contract. A third way to encourage consumer-to-consumer recommendations is supporting the MP3 blogs described by Ashley. Again, the record companies could distribute sound clips, or even entire tracks to popular MP3 blogs.

Pricing is another area for innovation. Lowering prices is the best way to encourage honest behavior. Many in the recording industry lament Apple iTunes’ 99 cents-per-song pricing policy, favoring variable pricing. But even 99 cents is too expensive. A given album with 12 songs would cost $11.88, which is barely cheaper than buying the CD. That price in no way reflects the reduced manufacturing and distribution costs of selling online, and consumers know it. Not that the cost of a CD ever did. Album prices doubled soon after the introduction of CDs, even though they were cheaper to manufacture than vinyl records.[2] Instead of passing on the extra revenues to artists, they were used to line the pockets of industry executives. People who feel they’ve been cheated have few qualms about pirating music. Remove the injustice, and most will pay.

Another key question is determining if there is a P2P business model that can make money. Some have suggested licensing file-sharing by instituting an Internet service provider tax, with the money redistributed to rights holders. This past December, the French Parliament did just that, passing legislation to permit downloading by those who pay a royalty tax.[3] The jury is still out, but such a policy should work better than Canada’s attempt to support the music industry through a tax on blank media. Many Canadians have taken the tax as sanction for downloading, which may help to account for Canada having the largest online piracy rate in the world.[4]

One industry trying to learn from the music business’s mistakes is television. Television shows are the fastest growing download on the Internet, and producers are trying to minimize the incentives to steal.[5] Disney, NBC, and Viacom distribute shows for sale on iTunes, and CBS uses Google Video. However, recent actions by CBS and NBC towards Youtube.com suggest the major media companies still don’t know how to recognize when fair use is in their interest. NBC required the free online video sharing service to remove a Saturday Day Night Live skit, and CBS followed up two weeks later with a demand to remove a CBS Evening News clip. Rather than seeing the Youtube exposure as an opportunity to revive interest in two stagnant shows, the networks couldn’t get past their simplistic definition of piracy.

In decades hence, historians will look back on this time as a crossroads for the entertainment industry. Thanks to iTunes and their successful litigation strategy they’ve been given a second chance to shape a technology that will revolutionize their business. Whether or not they take advantage of the opportunity remains to be seen. But prosper or die, the band will play on.

[1] Anderman, J. “Study: Online music sharing can spur sales.” Boston Globe 13 Dec. 2005: C1.
[2] Seabrook, J. “Can the record business survive?” The New Yorker 7 Jul. 2003: p.42.
[3] Randall, C. “Web pirates to be welcomed in France.” The Daily Telegraph (London) 24 Dec. 2005: p.12.
[4] Kane, M. “Music exec urges tougher laws on digital copyright: Says sales decline by four per cent in 2005.” The Montreal Gazette 3 Mar. 2006: B2.
[5] Chmielewski, D., and James, M. “TV may be free but not that free.” Los Angeles Times 1 Mar. 2006: A1.

There have been many arguments about the effectiveness of curbing file sharing. Various students have pointed out that the RIAA attempts to curb file sharing have been fairly successful, at least at Princeton[1]. This is especially interesting in light of articles about how file sharing internationally has not been curtailed[2]. I generally agree with the assessment about Princeton filesharing and my (limited) recent experience overseas indicates that file sharing there is much more prevalent. Obviously, the RIAA cannot have as much influence in countries like Russia or China. However, I think there is a more interesting mechanism at work suggested by an argument from Rosner’s post:

Perhaps because they are extremely averse to the penalties they could potentially face.

It naturally begs the question [sic] of why are Princeton students so adverse? One reason might be that we have more to lose. There is potentially a greater expectation that Princeton students are more likely to get high skilled jobs, one for which a file-sharing conviction would be more serious. The extreme case is running for Senator, where a file-sharing charge may come to haunt one during an election. Even for a more ordinary job – say coding at Microsoft – a filesharing conviction could provide ample excuse to disqualify a candidate (after all, if someone cannot be trusted to uphold copyright, what about the company’s patent rights?) In general, higher end jobs tend to be information oriented (read, secrets oriented) and in these jobs, questions of intellectual integrity are more serious. Lower end jobs are more manual and place less of an emphasis on intellectual integrity; I doubt BP would really if their gas station attendant has copied Brittany Spears hits. (Obviously this raises issues about privacy and monitoring addressed in other blogs).

This has interesting implications for the RIAA’s campaign. The fact that they are targeting college students at well-known four year institutions suggests they are intentionally targeting people with ‘more to loose.’[3] However, this tactic may only frighten a small percentage of their potential customer base. To perform a more in depth analysis, one would have to consider (1) that wealthier people are more likely to purchase more music but that (2) this effect cuts off after a certain point as there is only so much music one is interested in owning. I would guess that most affluent families do not spend an appreciable amount of their money on music, so I imagine that saturation point will come fairly quickly.

Nor do I think this trend is likely to change. Many argue that we can use technology to outsmart monitoring. One could imagine an encrypted and decentralized system that only allowed Princeton students access by checking IP addresses. Decentralization would mean there would not be a single vulnerable server (like with Napster); encryption and restricting access would make it difficult to monitor. However, the RIAA would soon discover the systems’ existence if such systems were widespread across many colleges. It could use its clout and the threat of a lawsuit to force colleges to allow access to their network (after all, the DMCA forbids copyright infringement as well as circumvention of copyright protections). Some universities will probably be unwilling to go to court and grant access. Then RIAA would pose as a student and offer ‘content’ in a sting operation to catch a few serious violators who they prosecute in a high profile manner. The cat-and mouse game continues, but at every stage, there are casualties and this seems to be sufficient to deter file sharing. The interesting question is what the social-economic breakdown of this effect is.