Power to the Peer
In the last hours of the 12th annual conference on "Computers, Freedom and Privacy," held at a San Francisco hotel mid-April, Frank Hausmann of CenterSpan Communications delivered a pitch for his company's solution to the legal puzzle of Internet music sharing: a "distributed network" called C-StarOne, with content to rival Napster's finest hour on a platform that will also allow users to pay for what they download.
Hausmann, underscoring the need for such a service, described how horrified he was when he came home to find his 9-year-old daughter on the family computer downloading her favorite songs using KaZaA, a client for sharing files on the FastTrack network servers. He sat her down and explained to her that file sharing was stealing, and reminded her it was wrong to steal. Seated to his left on the "Peer to Peer and copyright" panel, however, was Verizon Vice President Sarah Deutsch, who had earlier briefed the audience on the ways in which her company handles "notice and takedown" requests to suspend subscribers for copyright infringement. Deutsch countered that the kids she knew had been taught the virtues of sharing, "and it's hard to explain why that's illegal over the Internet."
Despite the increasingly weird slogans of the Recording Industry Association of America (the new one: "As Old as the Barbary Coast -- New as the Internet"), and Elvis Costello's recent statement to The New York Times that there's no ambiguity about file sharing -- "If somebody makes something and you take it, that's stealing" -- there still exists no agreed-upon moral absolute about sharing digital content with an ever-expanding network of sometimes anonymous "friends."
An estimated 40 million people living in the United States use various peer-to-peer networks to share files, presumably to get instant access to copyrighted work as well as the other kind. KaZaA alone reports 1.4 million users logged in at any one time, according to Redshift Research. Among those people are responsible parents and teachers, law-enforcement personnel and people in the record industry, many of whom object on the face of things to peer-to-peer yet realize they'd be idiots not to exploit it.
Because peer-to-peer file sharing has proved to be a lawsuit-resistant Hydra -- hobble one network and two more rise up to replace it -- and because the record companies' collaborative stabs at delivering music online, such as Pressplay and MusicNet, miss the point of the whole exercise (that people sometimes like to share music with each other, as opposed to having taste dictated to them by A&R men) and because there are obvious problems with an industry dependent on the public's fickle affection branding its most enthusiastic consumers criminals, major labels and movie studios have begun to get anxious for a solution to their peer-to-peer woes, which the International Federation of the Phonographic Industry recently blamed for a 6 percent drop in CD sales in 2001.
So have longtime defenders of digital freedom: In the audience of "Peer-to-Peer and Copyright" at CFP were Jessica Litman, one of the country's premier experts in copyright law; Mike Godwin, longtime legal counsel for the indefatigable Electronic Frontier Foundation; and Phil Zimmerman, creator of the cryptography program Pretty Good Privacy. Perhaps because peer-to-peer remains the only frontier still not completely drawn and quartered by media conglomerates, passions to protect or control it run high.
One solution comes from Senate Commerce Chairman "Fritz" Hollings, a Democrat out of South Carolina as beholden to the movie industry as Bush and Cheney were to Enron before the fall. Hollings' Consumer Broadband and Digital Television Promotion Act, also known as the unpronounceable CBDTPA, would mandate hardware solutions to prevent unauthorized copying of content protected with Digital Rights Management technology ("DRM-wrapped"). The CBDTPA would spell economic doom for hardware manufacturers, who would have to invent machines that do less than the ones on the market now.
As Philips and Intel have ponied up for their own legislators in Washington, the bill seems unlikely to pass. Another solution comes from Sharman Networks Inc., the Australian firm that acquired KaZaA last winter, which proposes an "Intellectual Property Use Fee" -- an across-the-board, flat-fee royalty paid out to content owners by the entire web of parties implicated in peer-to-peer networks, from computer makers to Internet service providers. ("It's ridiculous," opined RIAA CEO Hilary Rosen.) Another idea might be a wide-open content-swapping network that will allow users to compensate artists or, if they must, the record companies themselves.
What the RIAA forgets when it accuses peer-to-peer users of a "why pay for it when it's free" mentality is that some people actually like to pay for things, and even those people use LimeWire and KaZaA and WinMX to download music, because file-sharing -- illegal, immoral or not -- is the only way they can get what they want in an instant. No one -- not John and Sean Fanning of Napster fame, not Sharman Networks, not the sprawling community of software developers who manage Gnutella -- has yet invented such a beast, and for one simple reason: The record labels haven't figured out how and to whom they should license their music. And you can't pay someone for something you don't have permission to possess.
"Getting content is next to impossible," says Brian Zisk, the director of technology for the Future of Music Coalition, who also worked on a content-distribution network called Peer Genius, which for a time had episodes of The Simpsons on its servers. "But once we closed everything off and tried to get legitimate content," he says, "we got almost none. I had friends at the record labels who had always called me back. As soon as I was calling them trying to get content, they stopped returning my phone calls." As you can't have subscribers to a service with nothing on it, and since Peer Genius' creators didn't want to get sued, the project was halted. "As long as the record companies see licensing content for online distribution as a threat to their sale of plastic discs," says Zisk, "any network with licensed content is likely to have only a fraction of what you can get off KaZaA."
Last October, however, the Justice Department began investigating whether the record companies, by refusing to license content to any but their own online ventures, have been shoring up a crumbling monopoly with a misuse of copyright law. A few months later, on February 29 of this year, CenterSpan signed an agreement with Sony Music to distribute its entire catalog on CStarOne's network, and on Tuesday Sony announced it would make available a handful of artists' work, including songs by John Mayer and Macy Gray, on CStarOne via its Scour.com Web site.
To hear Hausmann tell it, more such liaisons will follow. "We're in formal negotiations," he says, "and we've modeled this thing out, and we're closing in on the ä parameters." And if the parameters work out right, says Hausmann, CStarOne could satisfy consumers' hunger for instant new music and at the same time rebuild the music industry in a way that fits the future.
Cstarone is not, precisely, a peer-to-peer network. In fact, Hausmann told me over the phone, "we've had debates about whether I should appear at anything having to do with this peer-to-peer file-sharing thing, because you'd have no idea that you were part of a peer-to-peer network unless you read your license agreement." CenterSpan Communications, which administers CStarOne, made its name manufacturing joysticks, but the company now focuses on "content delivery networks," or CDNs, a technology traditionally deployed to manage high-traffic Internet enterprises, such as blowout lingerie sales or high-bandwidth Web casts.
CDNs such as Akamai and Inktomi distribute usage over a network of some 15,000 or so machines; CStarOne, says Hausmann, is a CDN that spreads traffic over an even wider network of computers, using computer users' dormant resources in much the same way UC Berkeley's SETI@home project marshaled idle computers to the task of searching for extraterrestrial life. Nor will CStarOne serve the consumer directly as a for-profit retail service: The demonstration of its service on its Web site, Scour.com -- a retooling of the Scour file-sharing network that folded a few years back in the face of crippling legal challenges from the movie industry -- is merely a "technology and marketing showcase," says Hausmann.
Any retailer wishing to offer online content, from Yahoo to MusicNet to, thinking bigger, a reconfigured Napster, could grab content off CStarOne. Hausmann calls it a "value-added CDN": Instead of simply storing the data and moving it around efficiently, CStarOne pulls all the content together on one service, makes sure it's licensed and DRM-wrapped, and makes it available to retailers. Hausmann says this process will save record and movie companies money, thereby motivating them to sign over their songs and videos.
Amanda Collins, a spokesperson for the RIAA, said on Tuesday that she had no official objections. "We're not against the technology," she said, "as long as the copyright owners have a chance to negotiate their own licensing agreements."
Consumers who are reminded of Brilliant Digital secretly embedding its resource-sharing Altnet software in KaZaA's Media Desktop needn't worry: Subscribers who don't want little bits of CStarOne's encrypted data stored on their machines can opt out. "We don't need 100-percent participation for this thing to work," says Hausmann. "We need somewhere south of 50 percent." And resource-sharing has advantages: Instead of waiting in fidgety dismay as user TIMF08767 grinds your whole Dylan collection off your computer with his 56K modem, as often happens on networks where files are shared whole, users on CStar's network scarcely detect retrievals from their hard drives. "The segmentation of CStar solves the problem of other users sucking up your computer's resources," Hausmann told the room at CFP. "There is no degradation at all in usage."
There is one problem with CStarOne's network: No matter how deep it goes or how broad it reaches, it will never offer the kind of surprises currently available on the grittier peer-to-peer networks, for the simple reason that peers can't publish. CStarOne will not only stop me from cutting into Island Records' profits by ripping all the tracks of the new Elvis Costello album and storing them in my "shared" file, it will also prevent me from circulating a rare live recording or the results of a friend's band's gig.
The small record-label owner I met recently who downloaded Shelby Lynne singing "Ode to Billy Joe" live on television (because he wanted to prove to me that she is not, after all, the thinking man's Britney Spears) will never find such things on any service using CStarOne for its content, nor will he find uncopyrighted material guerrilla-marketed by some artist looking to get signed. CStarOne will forever lack the surprises that made some of us into Napster addicts (and, incidentally, more voracious music fans) back in the day. It will never make decentralized networks obsolete.
And maybe it doesn't have to. Fred von Lohmann, the Electronic Frontier Foundation lawyer defending MusicCity's Morpheus peer-to-peer client and others, who also appeared on the CFP peer-to-peer panel, notes that content providers are looking for ways to offer DRM-wrapped content on Morpheus and Grokster, too. "The two systems are not mutually exclusive in any way," he said. "If CStar is fabulously successful, I can see all these technologies competing in the marketplace together."
It's also possible that, once the RIAA and the Motion Picture Association of America have a viable means of distribution and collecting royalties for their digital content, they'll relax a little, and lay off the less controlled networks. Such a paradigm shift would not be without precedent: When the Supreme Court ruled, by a single vote, in the 1984 Betamax decision to allow videocassette recorders into the market, they did so despite the machines' potential for copyright infringement.
Without question the VCR has been used to distribute copyright-protected works more widely than fair use allows, and still, what MPAA Chairman and CEO Jack Valenti once declared the "Boston Strangler" to the movies instead so resuscitated enthusiasm for movie watching that movies are now made exclusively for the video market. In 1999, sales of prerecorded videocassettes hit $742 million. "Trying to measure the promotional value of these networks is hard to do," admits Hausmann. "But as we deploy them, I think it's important that we reinforce the values we've put in place for 200 years." That is: No stealing. Or was that, "It's nice to share with your friends?"