The File- Problem

Samuel Hwang, Eric Makhni, Melvin Makhni

February 19, 2006

1 Law and Recording Industry Association of America

Copyright is the protection of the original expression of an idea, whether it is expressed in the form of , a painting, or written material. Copyright law started with the "The Statute of Anne," the world’s first copyright law passed by the British

Parliament in 1709. In the United States, the copyright law was established during the

Constitutional Convention of 1787 when James Madison suggested that the Constitution include language "to secure to literary authors their for a limited time" (RIAA).

The provision passed unanimously and is found in Article I, Section 8, of the U.S.

Constitution. It states, “The Congress shall have Power . . . To promote the Progress of

Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries . . .” (U.S. Constitution).

Before free speech, before freedom of assembly, before freedom of religion, there was copyright protection in the United States Constitution. The founding fathers knew copyright protection could improve society by preserving the economic incentive for people to come up with brilliant ideas and inventions. They also realized the fundamental fairness of granting control of the creative work to the author.

President George Washington signed the first copyright law on May 31, 1790.

Nine days later, author John Barry registered his work, The Philadelphia Spelling Book, in the U.S. District Court of Pennsylvania, making it the first "writing" protected by copyright. Since then, the copyright laws have been revised numerous times. The revisions have been aimed at balancing the author’s right to reap the benefits of his or her work, and society’s ability to benefit from that same work.

2 The U.S. Federal Copyright law “protects copyright owners from the unauthorized reproduction, adaptation, performance, display or distribution of copyright protected work (RIAA). Penalties for copyright infringement differ in civil and criminal cases. Civil remedies are generally available for any act of infringement without regard to the intention or knowledge of the defendant, or harm to the copyright owner. Criminal penalties are available for intentional acts undertaken for purposes of "commercial advantage" or "private financial gain." "Private financial gain" includes the possibility of financial loss to the copyright holder as well as traditional "gain" by the defendant.

Where the infringing activity is for commercial advantage or private financial gain, sound recording infringements can be punishable by up to five years in prison and

$250,000 in fines. Repeat offenders can be imprisoned for up to 10 years. Violators can also be held civilly liable for actual damages, lost profits, or statutory damages up to

$150,000 per work (RIAA).

Specific legislation has been passed to more directly address digital concerns. The

No Electronic Theft (NET) Act criminalizes sound recording copyright infringements occurring on the Internet regardless of whether there is financial gain from such infringements. A copyright is infringed when a song is made available to the public by uploading it to an Internet site for other people to download, sending it through an e-mail or chat service, or otherwise reproducing or distributing copies without authorization from the copyright owner. In civil cases copyright infringement can occur whether or not money was exchanged for the music, and in criminal cases there only needs to be a possibility of financial loss to the copyright holder or financial gain to the infringer. The

NET Act sets penalties for willful copyright infringement (RIAA).

3 The Recording Industry Association of America (RIAA) is the trade group that

represents the U.S. recording industry. Its mission is to foster a business and legal

climate that supports and promotes its members' creative and financial vitality. The

RIAA is comprised of some of the biggest record companies in the United States. RIAA

members create, manufacture and/or distribute approximately 90% of all legitimate sound

recordings produced and sold in the United States. In support of its mission, the RIAA

works to protect intellectual property rights worldwide and the First Amendment rights of

artists; conduct consumer industry and technical research; and monitor and review state

and federal laws, regulations and policies (RIAA).

Napster, Audiogalaxy, , , etc.

The turn of the century, in the “internet media world” was plagued with lawsuit

after lawsuit targeted at media moguls and other such companies. Lawsuits were

filed by not only several different recording artists, but by the recording industry itself.

What exactly was so offensive about these companies that everyone sought after their

destruction? And how, even after all the lawsuits, the settlements, and the bankruptcies, are there still ways to download music, almost undeterred?

It all really started in 1999, when Shawn Fanning, a student at Northeastern

University, wrote a program that would make it considerably easier to download songs,

in format (a very convenient and compressed version of a digital song), from the

internet. This program, later known in households across the country as “Napster,”

allowed for a peer-to-peer network, in which users could connect to the site,

whatever songs they may have on their computer, and upload them to a central storage

4 unit, housed by Napster. And, with more and more users logging on, virtually every song

was now made available to a rapidly growing online media community. Songs that

weren’t even released by the record labels were somehow appearing, free, on the website

(CBS News).

Within months, however, several major record companies had filed lawsuits

against the company because of alleged copyright violations. It had gotten to the point

that there were such massive traffic and flows on the website that several labels were

concerned that there was just too much pirating going on, and, according to them,

encouraged by Napster itself. But somehow, that didn’t deter the online community from

continuing its piracy. At the current time, the lawsuits were specifically against Napster;

individuals weren’t being touched. As far as the public was concerned, it was their duty

to download as much media as possible before, heaven forbid, Napster got shut down.

However, as more and more users starting getting attached to the media sharing online,

more and more media sharing communities started springing up. Soon, other media sites

started popping up; some popular ones were Audiogalaxy and Kazaa.

Following lawsuits from the record labels, individual artists started taking action.

The most infamous of these was from the hugely popular band Metallica, and the lawsuit

was spearheaded by Metallica’s drummer, Lars Ulhrich, who was happy to take their

lawsuit into the hands of the media. The lawsuit by Metallica was followed by several

artists (a notable one included the prominent hip-hop artist, Dr. Dre), and soon the media was having a field day with all the hype centered around this novel, yet extremely popular, idea of , and its legality (CNN).

5 Filled with accusations, stays, reinstatements of original injunctions, and overall

frustration for both sides, the Napster battles continued for several months, with no

definite decision in place. All the while, as aforementioned, several other media sharing

sites were popping up left and right, sure to provide backup in case Napster fell. As the

battle wore on, Napster was required to provide and enforce several regulations which

would hopefully appease RIAA and the rest of Napster’s enemies. Napster agreed to

start charging a membership fee from its users, so that some monetary compensation

could be awarded to its opposition side. Further, Napster even implemented a “Tune

Blocking Tool.” In accordance with a tech company out of Virginia, Napster deployed software that would track recognizable sound patterns from various copyrighted songs, banning them from their user’s hands online. However these measures ultimately proved ineffective.

As more and more users began to log on and file swap, more and more recording

artists were getting aggravated. Some artists even had to rush the release of their own

records because the tracks were already being swapped on sites like Napster and its

sibling sites. It was clear that a decision would be made that would either severely halt

file sharing, heavily inconveniencing the growing peer-to-peer population, or validate it,

opening the door to media piracy for the indefinite future. As is no surprise, however,

Napster did lose, and in mid-2002 filed for bankruptcy, and eventually sold by its co-

founders to a German media company, Bertlesmann, for $8 million (InternetNews). And

so, with Napster taking the fall, how did media sharing still survive? Why is it still an issue today? Further, how are companies like Kazaa still around today, seemingly

6 immune to the disease that inflicted Napster? The answer simply lies in the structure of

Kazaa, and how it compared to that of Napster.

The way Napster was set up was actually quite simple, conceptually. Users

would register with the site, and would select a folder in which he/she housed their media

(in this case, mp3 formatted songs). Upon registration, the website would scan the

selected directories from the new user, and it would upload the contents of the directory

onto the main Napster server. Now, the registered user could instantly access the

plethora of other shared, uploaded songs on the Napster website and simply point and

click, downloading virtually any song he/she wanted to. Due to this fundamental

structure, the various prosecutors could effectively end the Napster regime, for Napster,

as an entity, was indeed promoting the illegal sharing of copyrighted material over the

internet. By first downloading the media from the users, and then uploading the newly

acquired music to its’ hundreds of thousands of registered online clients, Napster was

directly breaking copyright regulations, and thus was shut down.

However, the structure of Kazaa is fundamentally different from that of Napster.

Whereas Napster itself housed the media it shared, Kazaa is a strict peer-to-peer network

of users. When a new user registers with Kazaa, he/she too now has a folder which stores all new incoming music from the online media community. However, Kazaa does not upload this content from its users. Instead, Kazaa simply provides a “meeting place” for several thousand users to log on and have access to their peer’s music and media collections, with the ability to download from other users, not from Kazaa. So, how is

RIAA attacking this situation? Recently, RIAA has started going after individual users who are breaking the copyright laws, as stated earlier. Be it a “scare tactic” or an

7 effective punishment means, RIAA’s goal is to attack the peer networks at the root – the

peers themselves. If RIAA can get individual users to discontinue sharing their files, then

how can you download them? Without the peer, there is no peer-to-peer network. And,

with the recent lawsuits and settlements, there is definitely a trend to less sharing on these

servers.

Recently, the RIAA has been evaded again by the evolution of the bittorrent file- sharing community. Another example of peer-to-peer distribution, bittorrent has made efforts to improve upon the efficiency and the legality of servers such as Kazaa.

Advertised as a “free speech tool”, bittorrent allows for cooperative distribution among file sharers. Traditionally, users with a popular download would require increased bandwidth to prevent their servers from crashing. Bittorrent instead uses the resources and upload capacity of users downloading files; the file being downloaded onto their network is simultaneously offered as an upload to others, thereby relieving the uploading stress on the initial file sharer and maximizing network bandwidth (Bittorrent).

In order to avoid legal issues, central bittorrent servers manage the connections

between users but neither store files nor retain any knowledge of the identities of the files

being transferred. Due to such preventative measures, bittorrent has infiltrated the

internet, but not without some companies shutting down along the way. One of the most

popular systems, Suprnova, was shut down in 2004 by Sloncek, the site founder and developer. Although the company had not been successfully charged with any form of copyright infringement, Suprnova was taken offline due to the immense pressure delivered from prosecutors and the media, as well as the repeated raids and investigations from police (Suprnova).

8 We have watched Napster, Kazaa, Suprnova, and several other servers rise and fall, and we are left with mixed feelings about the file-sharing problem and what should be done about it. As students who have limited financial resources, peer-to-peer networks such as Kazaa are extremely useful and valuable. Also, we feel that because recording artists make millions upon millions of dollars even with piracy of music through record sales, concerts, etc. that it seems silly that RIAA is bringing lawsuits against average people who cannot afford to pay for the copyright infringement.

Although we feel this way, we also understand that from the artists’ point of view, things are different. For example, Metallica feels that they are losing a substantial amount of money from record sales because people who would have normally bought their cds are now simply downloading songs off of the Internet for no cost at all. Since file-sharers have been sued by RIAA, certain internet users have been trying to crack the file-sharing problem by trying to create legal ways for people to share their music files and other files online. One such initiative that has attracted a lot of media attention is the Library

Access to Music Project created by two MIT students.

Library Access to Music Project (LAMP)

MIT’s Library Access to Music Project (LAMP) was created by Keith Winstein, a graduate student in course 6 (electrical engineering and computer science) and Josh

Mandel (class of 2005), also course 6. It grew out of a two year project funded by the iCampus alliance between MIT and Microsoft. LAMP was intended to provide a free, legal way for students to listen to their favorite music without traveling.

9 LAMP would provide students and faculty an electronic music library with 3,500 contemporary and classic recordings in many parts of campus. Many libraries have CD

collections but accessing them requires someone actually traveling to the library, finding

the CD, risking that it is not there, checking it out and then returning it. LAMP would

allow the same person to get to his or her favorite song with a few clicks from the

comfort of his or her room. To use LAMP, MIT faculty, staff and students picked songs

or CDs from the LAMP website. The music was then played through the listener’s stereo

or television. Many of the functions like rewind, fast-forward and pause were available

through a “web-based control system.”

The students had to figure out how they could provide this on-demand music

system without breaking the law. Therefore, they turned to MIT’s analog cable television system instead of the internet or MIT’s internal network. LAMP allowed users to listen to the music without downloading or copying it. Licensing regulations of analog- transmitted songs are similar to those faced by radio stations broadcasting FM signal.

Since both are non-digital forms or transmission, exact copies of the songs can not be made. MIT purchased the licenses for this form of broadcast from the ASCAP, BMI and

SESAC. These three organizations have the authority to sanction analog public performances. The cost of this is available at a “reasonable” cost to MIT. The quality of sound reproduction is better than a FM broadcast but worse than an actual CD.

The authorized music was purchased through Loudeye. Loudeye also helped in

securing the necessary licenses for the broadcast. Since October 2002, on many

occasions, Loudeye assured MIT that the recordings were “prepared fully under

authorization from the record labels and on behalf of the publishers” (lamp.mit.edu).

10 However, after LAMP was officially launched, Loudeye acknowledged that some of their earlier assurances may be incorrect. Therefore, MIT has suspended LAMP until the licensing issues are resolved with Loudeye, the record labels and the music publishers.

MIT still wants to pursue with developing a fully legal service. Although LAMP was one possible solution, we will now propose some of our own solutions to the file-sharing problem.

Possible solutions to File-Sharing problem

It is safe to say that a large constituency of the media-sharing pages consists of college students. It is, for most of them, the first time they are living in an environment with high speed internet access, allowing them to download several gigabytes of all kinds of media. Therefore, it might be logical to try to set up a system directly between RIAA and independent colleges, or even public university systems. Our proposition is as follows.

What if there was a way to set up a “Napster” but with exclusive membership to

college students? Obviously, several issues would have to be taken care of. One, for

instance, is the problem of monetary compensation to RIAA and its own constituents,

namely, the artists themselves. Also, another question centers on security and integrity of

the network. How can the network remain exclusive to college students, who have

indirectly (through their own college) paid for the rights to the songs?

One way to tackle this situation is to have an outside agency negotiate an

agreement between a specific university and RIAA. Such issues as membership (number

of students) and infrastructure (how the songs are “shared”) can be discussed until a

11 compromise is reached. One main factor of these “talks” will center on cost. How much

will the college (MIT for example) pay RIAA to have sharing access of a large number of

songs? Further, the terms of the sharing would also be discussed, and security would be

granted for registered members (currently enrolled students of the university) who own

songs which were accessed from the official college-RIAA system. It would not protect

media downloaded illegally from other sources or websites on the web.

As aforementioned, most of the debate about the legality of file-sharing is focused on monetary compensation for the artists whose music is being downloaded and shared for free. If the individual colleges are allowed to pay a certain amount to RIAA for the rights to these songs, then RIAA can in turn pay the artists. Of course, the database of songs may simply come from artists who wish to contribute their music to such a service, and these artists would be inclined to do so if they were a) being compensated, b) reaching new audiences, or both. Further, the colleges can set up their own system, in which they either charge students who want to use the service, or simply pay for it, including all of their students automatically.

Although the idea about independent agreements between RIAA and several

colleges and universities across the country may be an effective one, it still does exclude

a substantial population of file-sharers, including high-school students, and those in the workplace. Just like college students, these individuals also are heavy traffickers of online media sharing, so there needs to be a solution that would also help them out. One proposal is that a regulated webspace be created, maybe even run/endorsed by RIAA.

The goal of this website is simply to earn revenue for RIAA, so that it can be disseminated to its constituency of recording artists. However, there are already web

12 services for the public that are similar, such as iTunes, and the new Napster site, but these

often come across as too expensive, with $0.99 per song download fees.

Our solution proposes a webserver that pays users to upload their songs and

charges users to download. For example, each user could be paid $0.10 to upload a song,

and could charge $0.50 to download a song, which is much more reasonable. The concept of this website is to encourage file sharing, but regulated sharing, and sharing endorsed by RIAA itself. The hope is that there is enough volume that the costs associated with it from the user side are enough to compensate RIAA and the artists.

It is important for a server like this to dissuade random uploading of all kinds of

songs. For instance, there will probably be hundreds of copies of the same song, and so a

filtering devices would need to be established. The server should allow, for example, 50

copies of any given same song. Further, to ensure quality, those songs should be rated

after they are downloaded based on their quality of sound. Since there is a huge demand for these songs, only songs which have a certain threshold rating will remain on the site.

There are also several intangible benefits to a server like this. This would be a

great way for new bands to distribute their music at a low cost. The website could have a

section specifically devoted to “free media,” songs that the bands themselves have agreed

to release to the site for no charge. The songs could be sorted by category, and it would

give small bands a chance to display a sampling of their songs to the several thousand

users, from which, hopefully, gain an audience. Further, it gives an opportunity for

listeners to explore new tastes, for free, expanding their own musical collection. Ideally,

this server would be a great place for both users, and artists, to share music, and even

profit.

13 Since RIAA and the general entertainment industry has failed to limit people from sharing illegal files, another solution to the file-sharing problem is to try to get cable companies to step in. Peer-to-peer networks are growing because of the decreasing cost of bandwidth. Rather than using a flat-fee pricing scheme, cable companies could start putting limits on the bandwidth usage per month and charge users additional fees if they go above the limit. If critical masses of broadband providers implement plans that make people sensitive to the amount of data they transmit, there will be less sharing of files.

Networks such as Kazaa, LimeWire, and depend on cheap bandwidth for uploading and downloading. Therefore, cable companies pricing based on the amount of bandwidth used will cause these peer-to-peer networks to suffer by making them costly for the users.

After learning about copyrights from Intellectual property related classes at MIT, these are just some ideas that the three of us have posed as possible solutions to the battle between file-sharers and RIAA. The file-sharing problem is not one with simple and obvious solutions, yet we feel that people constantly trying to solve this problem will eventually lead to an answer. For now, we are a few students who are trying to learn what we can about the U.S. patent system as well as copyrights and trademarks so that someday we can try to tackle problems such as the file-sharing problem.

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Bibliography

Bittorrent. “What is Bittorrent?” 2001

CBS News. “Napster Gets Tune-Blocking Tool” 20 April 2001 < http://www.cbs news.com/stories/2001/04/20/archive/technology/main286960.shtml>

CNN. “Napster: Stealing or Sharing?” May 1999

InternetNews. “Napster Files for Bankruptcy Protection” 3 June 2002

MIT. “LAMP” 27 October 2003

Recording Industry Association of America. “About RIAA” 6 December 2003 .

Suprnova. “The truth about Suprnova.org shutdown.” December 2005

U.S. Copyright Office. U.S. Copyright Law. 6 December 2003

United States Constitution. 6 December 2003

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