The War Over Internet Piracy

The War Over Internet Piracy
Fearing lawsuits, college officials crack down on student abuse of university-owned IT systems.

BY PETER GALUSZKA

Sitting in a booth at Jones Dining Hall at Virginia State University in Petersburg, Quintus Ferguson and Dawn Diggs munch on lunchtime French fries and ponder the economics, convenience and ethics of pirating music on the Internet.
“A lot of kids think, ‘Why bother paying $18 for a CD when you only like one or two cuts on it?'” says Ferguson, a freshman biology major. “You might be able to get a full CD of music you like from somebody who downloads it. He might charge you $5 or $3 if you are friends.” Adds Diggs, also a freshman biology major, “Mixed CDs are very valuable.”
Such business logic is very clear to major recording companies. For years, they’ve been waging a losing war against millions of Net-savvy college students who download and copy digital music or videos and sell or swap them. Many students make illegal use of high-speed computer links owned by universities as administrators catch the flak. Meanwhile, the recording industry and artists claim losses of up to $4.2 billion worldwide. By some industry accounts, 2.6 billion songs are downloaded every month, mostly by college students, resulting in a 31 percent drop in album sales since June 2000.
The theft continues and so far, no one has been able to stop it. The record companies, led by their lobby, the Recording Industry Association of America (RIAA), have used intimidation and hunted down alleged student pirates, slapping them with lawsuits and seeking penalties of up to $150,000 per pirated song. Last year, RIAA sought more than 1,000 subpoenas in federal court demanding personal information about pirates from colleges and Internet Service Providers (ISPs) such as Comcast Cable Communications, Verizon and Pacific Bell Internet. More recently, taking a lighter approach, RIAA has linked up with university leaders to find alternatives such as deals that let students download music for free.
Fearing lawsuits, college officials have cracked down on student abuse of university-owned Information Technology systems. Last year, for example, Harvard University toughened up its rules so that any student caught twice downloading music illegally on university systems will have his or her Internet access cut off for one year. Some 220 Penn State students have had their computer access blocked after trying unauthorized downloads. One reason for the stricter measures is the 1998 Digital Millennium Copyright Act, a federal law that limits liability for online service providers, such as schools, provided that they take corrective steps once abuse is found.
Some schools have turned to their IT departments and in-house computer geeks to come up with arsenals of new electronic weapons to fight piracy. Among the tricks, schools have deliberately slowed down their IT systems to frustrate pirates during peak download hours, usually from afternoon into early evening. At the University of Florida, two graduate students invented ICARUS, or Integrated Computer Application for Recognizing User Service, which pinpoints pirates on the system and then blocks their access. At Virginia State, Ferguson says, the school’s IT system has firewalls that immediately block access to such unauthorized download services as Kazaa or Morpheus. When a student tries to connect with such sites, “up pops a statement that (says) you are being monitored and it lists your name, address and the location of the computer you are using,” Ferguson says.
The problem is: Students quickly find other illegal download sites that the firewalls aren’t yet programmed to block. And, so many thousands of students share or sell illegal downloads that authorities can’t realistically crack down on all of them. Exalting students to be ethical often falls on deaf ears when students consider the billions pocketed every year by monster entertainment companies whom they consider wallowing in hubris and greed. Some wouldn’t think of shoplifting a CD in a store, but don’t see illegal downloads as theft.
Frustrated, the recording industry and several major university leaders joined forces last summer to come up with solutions. They formed a joint committee lead by Dr. Graham Spanier, president of Penn State University and Cary Sherman, RIAA president, that includes other luminaries such as Jack Valenti, president and CEO of the Motion Picture Association of America, Roger Ames, chairman and CEO of Warner Music Group and Sherry Lansing, chairman of Paramount Pictures. On the college side are Stanford President Dr. John L. Hennessy, University of Rochester Provost Dr. Charles E. Phelps and University of North Carolina President Molly Corbett Broad. The committee got to work seeking information on what technologies can curb illegal downloads and file-sharing and how to promote downloading of legitimate content.

Experimental Deals Develop
Early this year, the committee’s efforts started to bear fruit. In pioneering efforts, the University of Rochester and Penn State University announced separate, special deals with Napster, the Internet content provider, to offer their students hundreds of thousands of song titles — all legal but free.
“In January, we launched an online music service with Napster at no cost to the students,” says Tysen Kendig, a Penn State spokesperson. “Students can use university lines to accrue a half a million song titles. The cost is folded into our IT budget.” Penn State students pay a fee of about $160 each year to cover all of their IT expenses including computer links for school work. Napster’s expenses for the Penn State deal are placed in IT funding. While there is no immediate increase in the fee, there could be later, but Kendig says it shouldn’t be much.
What’s in it for Napster? About 83,000 potential customers. That’s how many students attend Penn State and might be included in the download-for-free deal. If they like Napster’s service, Kendig says, they might be inclined to stay with the company after they graduate.
The University of Rochester deal is similar, although it won’t start until later this spring and involves far fewer students — only about 3,700. Napster will supply its Premium service — about 500,000 song titles and access to 50 digital radio stations — to the students and for now all fees will be funded by the university. As part of the deal, students from Rochester’s Eastman School of Music may be able to use Napster’s international network as a way to distribute music they create. Napster’s Premium Service normally costs $9.95 a month. Ironically, Napster faced years of legal challenges from the recording industry throughout the 1990s for allegedly pirating music before the company reorganized.

Future Possibilities
Other music providers are watching the two experiments closely. One is San Diego-based Musicmatch, which produces the music software program, Musicmatch Jukebox along with services such as Musicmatch MX and Musicmatch Downloads. While the firm doesn’t have any contracts yet, it hopes to. “We see this as opportunity, as an investment in the future,” says Jennifer Roberts, director of corporate communications for Musicmatch. “While it’s a huge market in respect to audience, it’s also very low margin. By offering services to students that are virtually free, we increase our brand visibility and loyalty with them as they mature.”
The next shoe to drop appears to be digital video downloads. True, piracy overseas has been prevalent. In Russia, for instance, police estimate that about 80 percent of all DVDs and videos are pirated copies. Students and others have made video cassette recordings of television shows and movies for years, but doing so involves the increasingly obsolete analog system in which sound and video are sent out in waves, rather than digital bits.
The Internet piracy problem is likely to get a lot worse in 2007. That’s when the nation’s television system is due to transition to all-digital formats. At that time, analog sets will be viewed only with special adapters. When digital television reaches its peak, high-quality movies and programs will be transmitted via the Internet and downloaded on computers.
The same dynamics that affect music downloads are certain to play a role in television along with much of the same controversy. Already, technology firms are scrambling to come up with ways to squelch piracy, such as enhancing signal encryption or adding “flags” that can cause videos to self-destruct if tampered with or shared too often.
The war on music piracy, meanwhile, has hardly been resolved. For example, while deals such as Penn State’s and the University of Rochester’s might sound good to college administrators, down at the student level, there are lots of questions. “Would I use Napster legally and for free?” says one Virginia State junior who is majoring in political science. “I guess, but it would depend on what kinds of songs they offer. I’m not sure they’d have everything I or other people would want.” The student, looking out over Virginia State’s hill-top Georgian-style campus buildings, admits that she downloads illegally from a university-owned apartment. She says she’s not too afraid of getting caught.
In the end, the dollar incentive also might be too much to wean students away from legal, campus-sponsored downloads — be they music or video. As Ferguson notes, people can buy big packets of blank CDs at discount stores at a rate of several for the dollar. If pirates download and mix tunes students really want and sell them for $5 each, the margins are just too terrific for many to ignore, he says.  

                 

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