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Is the Record Industry About to Bust Your Teen?

Forget Napster: In a Shift, Music Labels
Now Target People Who Download Songs
By DENNIS K. BERMAN and ANNA WILDE MATHEWS
Staff Reporters of THE WALL STREET JOURNAL, 3.1.28

The war over illegal Internet file-swapping has raged from Silicon Valley to
Washington.

Next stop: Your doorstep.

Until last week, the estimated 63 million Americans who spend hours
downloading a wide variety of recordings, including Eminem's latest scathing
track and every known rendition of "The Girl from Ipanema" had little to
worry about. For all the record industry's bluster about cracking down on
music sharing, its focus has been on shutting down services such as Napster
Inc., rather than going after individuals.

But a ruling by a federal court raises the stakes for the growing crowd of
teenagers, college students and even their parents who are going online to
get free digital music. The ruling, by a U.S. district court in Washington,
gives entertainment companies the right to get your name, address and phone
number if they have evidence you are using the Net to get, or pass on, their
copyrighted works. Verizon Communications Inc., the company on the losing
end of the recent ruling, is appealing, which will affect the timing of the
entertainment industry's next moves.

Still, the record industry is gearing up to target individuals with a range
of legal tactics. The initial focus is expected to be on so-called
superusers -- "the 10% of users who offer 90% of the files," says Cary
Sherman, president of the Recording Industry Association of America, a trade
group. Industry officials say the most common approach will be to send
warning letters to infringers not to sue them. But the Verizon ruling is a
sure sign that media companies are getting closer to taking some of the most
egregious offenders to court.

 THE RULING



* Read the judge's ruling1 in the Verizon case, by arrangement with FindLaw
(www.findlaw.com2).

MORE ON THE DISPUTE



* Judge Orders Verizon to Name File-Swapper in Music Dispute3
01/22/03

* Music Labels Want Verizon to Identify One Subscriber4
10/07/02




All this affects more than just people who burn and sell CDs for a living. A
lot of ordinary music lovers could be at risk as well. The Verizon case
involved someone who was sharing 600 music files. At first glance that may
seem like a lot, but it is only the equivalent of about 60 CDs, a middling
music collection by many standards. Nor are teens and college kids the only
ones doing the downloading. Market researcher Ipsos-Reid estimates that
almost a third of the people who pull music off the Web are over the age of
35.

These services, called peer-to-peer networks, work like a global digital
swap meet. While the industry succeeded in shutting down the groundbreaking
Napster service, many other free options -- with such names as KaZaA,
eDonkey and Gnutella -- have arisen in its place. Using free software, they
allow users to search and download music (as well as movies and other
images) from each others' computer hard drives.

All of this raises a troubling question for families: Do you now need to be
worried that the Internet police are going to turn you or your child in for
downloading top-40 hits instead of buying them? "The Internet is so vast,
it's hard to believe they would really start tracking people," says
53-year-old Al Glueckert, who -- having learned how to use the services from
his 16-year-old son -- has become fond of pulling up Beatles and Barry
Manilow tunes.

The bottom line for downloaders: If the latest court decision stands, media
companies will have quick access to your name, address and phone number from
your Internet-service provider. In the case that prompted last week's
ruling, Verizon was ordered to turn over the name and address of a
subscriber who was offering songs by Billy Joel, the rapper Mystikal and
other artists.

Now, other users, even those who only download music for their own purposes,
could potentially be outed as well. BellSouth Corp., which like Verizon
offers Internet service, says it has already turned over one name. The
company says it opposes the Verizon ruling, but will comply with the final
court decision.

Electronic 'Robots'

There is a potential for more severe consequences than simply getting a
letter asking you to stop. In fact, not everyone will be warned before a
lawsuit is filed, say some industry officials. And the legal question
remains murky whether you, or your kid who does the file-sharing, is liable
for actual damages, which run as high as $150,000 per song.

To help direct its legal assault, the industry is increasingly deploying
electronic "robots" that monitor the traffic on the file-swapping networks.
Since these networks are open to the public, the robots can within seconds
see what files you are sharing with others. At the same time, they note your
Internet Protocol, or IP address -- the unique string of numbers that you
are assigned each time you log on to the Internet.

But the robots aren't perfect. A court filing in the Verizon case cited a
document called "Harry Potter" that was flagged by a bot -- but actually
turned out to be a book report on the famed wizard-in-training, not a copy
of the Harry Potter movie.

The record labels will have to proceed carefully. Suing your own customers
doesn't exactly breed loyalty, after all. Nonetheless, most Internet
attorneys expect at least one lawsuit to be filed by year end. Such a case
might at last stanch the flow of pirated songs and movies into the free
electronic bazaars. Last year, music-CD sales shrank by 8.8%, which record
companies largely attributed to sales lost to file-swappers and compact-disc
burning.

What is the best way to reduce your exposure? "Well, if it's illegal, then
don't do it," says Les Seagraves, chief privacy officer of EarthLink Inc.,
an Internet-service provider. Both the recording and movie industries also
offer paying alternatives, such as Movielink and pressplay, which sell songs
and films for an average of a few dollars each.

Some ISPs Resist

A number of small Internet-service providers, such as New York's Bway.net,
continue to say they would resist such subpoenas "to the fullest extent of
the law," says marketing manager Joe Plotkin. "We don't monitor what our
customers do, that's not our role." Mr. Plotkin notes that Bway.net keeps
only some of its IP record logs, which means it may not be able to tie a
person to the IP address logged by the robots.

Furthermore, the Internet providers say, it is often impossible to tell who
was using a computer at the time that a copyright violation occurred.
"Nothing is perfect," says Sarah B. Deutsch, Verizon's vice president and
associate general counsel. "Sometimes whole neighborhoods piggyback" on one
subscriber's wireless computer network, she says.

Making Users Anonymous

And with the new legal landscape, some subscribers may attempt to withhold
their personal data and pay their fees online or through some other process
that shields their identities. Most tech experts expect peer-to-peer
software to grow more sophisticated, and eventually become able to disguise
users' IP information. Already a service called Freenet offers this
capability by decentralizing the traded files and making users anonymous.
But it remains a highly technical undertaking for average users, and it
makes searching for files harder than it would be with other swapping
services.

All these maneuverings seem a million miles away to Tommy Williams, a senior
at Western Kentucky University in Bowling Green, Ky., whose friends make him
CDs full of downloaded songs. He says it will be tough to change college
students' habits. New civil and criminal cases "will only have an
urban-legend validity," he says, "until someone you know gets busted."

Write to Dennis K. Berman at [log in to unmask] and Anna Wilde Mathews
at [log in to unmask]

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