File-Sharers Fight Back, Apple Mulls Subscriptions, China Cracks Down

Since the RIAA and record companies began their campaign of suing college students, grandmothers, children, single moms and anyone else who might have shared a song over peer-to-peer networks, most people on the receiving end of the lawsuits have meekly agreed to pay settlements amounting to far less than the RIAA warned they could be sued for.

A handful have fought back, though. One was single mother Jammie Thomas, who lost and is now looking at a lifetime of bankruptcy as punishment for stealing 24 pop songs. Another, Tanya Andersen, was more fortunate — the case against her was dismissed.

However, now, Andersen is countersuing, and she wants to make it a class action. She claims that in her case — and in the cases of thousands of people who paid to settle — the RIAA and its member companies illegally looked at the hard drives of people they intended to sue.

In other words, they spied on them. In many cases, they falsely claimed they had proof the defendants had infringed copyrights, then basically overwhelmed defendants with a bunch of lawyers and intimidated them into settling, Andersen says. We’ll be keeping a close eye on this one.

Listen to the podcast (13:30 minutes).

iTunes Unlimited

For years, Apple has resisted calls from record labels to open an iTunes subscription service that would make all the store’s music available to users for payments of a few dollars a month. Apple has insisted that its customers would rather just buy songs and own them.

However, now rumors are flying that Apple is in talks to open a subscription service — sort of. Rather than go the Rhapsody route and charge per-month fees, the iTunes model reportedly would mimic Nokia’s Comes With Music system. Here’s how it might work: You buy a device — in Apple’s case, an iPod or iPhone — and that specific device can get any music from iTunes for as long as it keeps kicking.

Most iPods remain functional for about two to four years, but remember they become very unstylish every time a new batch is introduced. iPods that come with unlimited iTunes access would supposedly cost US$100 more, a premium that might be split somehow with record companies.

As to whether any of this is actually true, an Apple spokesperson who talked to ECT News Network said the company had no comment. Not a denial — but sometimes Apple doesn’t even deny things that are false. You could call them and ask if they plan on coming out with a new line of semiautomatic handguns, and they’d say no comment. That’s all part of the mystique, see — they just have no comment, ever.

Chinese Crackdown

The Chinese government blocked access to YouTube after the site featured about 20 videos of Tibetans rioting in their capital city of Lhasa.

The trouble came to a head last week, when peaceful demonstrations led by Buddhist monks turned violent. The crowds had gathered to mark the anniversary of the failed 1959 Tibetan uprising against Chinese rule, which culminated in the flight into exile of the Dalai Lama and most of the leading Tibetan Buddhist monks.

The YouTube videos consisted primarily of foreign news reports and montages of photos taken at the scene in Lhasa, as well as footage of related protests overseas. Google News and Yahoo were also blocked. China-based Web sites, and didn’t post any protest videos; it’s widely believed the Chinese government warned them not to.

Flash Flap

A few weeks ago, Apple CEO Steve Jobs basically called out Adobe at a shareholder meeting, saying that neither Adobe’s Flash nor its Flash Lite have what it takes to function with the iPhone’s Web browser.

Flash is a technology that allows video and animation to appear on Web pages. It’s a plug-in that can be easily installed on most desktop browsers, but it can’t be found on the iPhone.

Jobs’ remark might have gotten under the skin of Adobe CEO Shantanu Narayen. Earlier in the week, he told investors, “We are also committed to bringing the Flash experience to the iPhone, and we will work with Apple. We’ve evaluated the SDK — we can now start to develop the Flash player ourselves.”

The problem with that statement was that the SDK, or software developer kit, doesn’t actually appear to give developers the kind of access to the iPhone that a Flash plug-in would need. To get that close to the browser, Adobe will likely need to develop a version of Flash alongside Apple, not on its own — and any outsiders Apple works with usually have to play completely by Cupertino’s rules.

Later in the week, Adobe released a statement to clarify: “Adobe has evaluated the iPhone SDK and can now start to develop a way to bring Flash Player to the iPhone. However, to bring the full capabilities of Flash to the iPhone Web-browsing experience, we do need to work with Apple beyond and above what is available through the SDK and the current license around it.”

Like Steve said, they don’t have what it takes.

Journalism 2.0

With the advent of Web 2.0, the conventional wisdom was that the populace was suddenly hearing from a variety of new voices that previously had no outlet, adding a wealth of diversity to the public discussion.

A new study, however, appears to show the opposite. Sure, there are more outlets, but variety of voices? Not so much. It’s pretty much a case of a lot more people parroting the same message — repackaged and amplified, but unchanged.

The study, released by the Project for Excellence in Journalism, focused on seven areas: restructuring content, emerging business models, traditional advertising models, public ownership of media, developing online-specific content, blogging and ethics in a digital age.

The researchers found that news outlets are increasingly exploring niche markets around topical areas such as politics, but steering away from the bread and butter of local journalism, such as education and government.

Sweden and the Pirates

Try to start a pro-file-sharing lobby group in the U.S., and the RIAA will sue you just for coming up with the idea. In Sweden, though, piracy has a little more cultural acceptance, and such a group actually does exist there.

Sweden is also the home of The Pirate Bay, a popular site that facilitates file-sharing by publishing torrents and generally flouts the law by mocking the billions of cease-and-desist letters it gets. Now, members of the Swedish government are trying make the country a little less piratical with legislation that could force ISPs to turn over IP addresses used for illegal file-sharing to the owners of the intellectual property involved.

The rights holders would be able to get a court order compelling release of the information by furnishing proof of infringement. Current Swedish law protects ISPs from being sued for anything that passes through their networks.

Nacchio’s New Trial

Joseph Nacchio, the former Qwest CEO who last summer was sentenced to a six-year prison term, is getting a second chance to make his case.

A federal appeals panel overturned Nacchio’s conviction, ruling that a federal district court judge erred by excluding an expert witness slated to testify on Nacchio’s behalf. The ruling cleared the way for Nacchio to be tried again before a new judge. Nacchio was convicted on 19 counts of insider trading. He was also ordered to pay a fine of $19 million and to forfeit $52 million earned from stock sales during 2001.

Nacchio — who has remained free on bond pending his appeal — has consistently maintained his innocence. His defense team argued that he sold the shares when he did because his options were set to expire. The excluded witness testimony was from Daniel Fischel.

Described in court documents as an expert on corporate finance, he was scheduled to testify that the stock sales Nacchio made did not follow a pattern that suggested they were based on insider information.

VC Downturn

If you’re still dreaming of cashing in on that oddly named, semi-useful Web 2.0 startup you’ve got in the back of your mind, don’t give up — not quite yet anyway. There still might be some venture capital money to be had. It’s just that the flow is beginning to even out and the market is beginning to mature, according to a Dow Jones VentureSource report.

In 2007, VCs pumped money into a total of 178 separate Web 2.0 companies. Yes, that’s an increase, but it’s only a 25 percent increase over 2006. During the period from 2002 to 2006, that number had been doubling every year. The total amount of VC money that went into Web 2.0 in 2007 equaled $1.34 billion — an 88 percent increase. Of that, $720 million went to companies in the San Francisco Bay Area.

Not bad, but when you take away the $300 million that Facebook raised all by itself, the picture looks a little less rosy. Gains were also seen in places like New England, Southern California and the Pacific Northwest.

Broadband Boosters

Broadband access equals economic prosperity, says the European Commission, and toward that end, it has set a goal to increase broadband penetration in Europe from the current 20 percent to 30 percent by 2010.

The commission announced the target in a progress report on telecom industry. Currently, four of the 27 EU member countries — Denmark, Finland, Sweden and the Netherlands — exceed that 30 percent benchmark. However, only eight — those four plus the UK, Belgium, Luxembourg and France — rank ahead of the U.S. in broadband use.

More than 50,000 European homes and offices added a high-speed broadband Internet connection every day last year. As a result of increased competition, prices have fallen, while connection speeds have increased.

Better Than Blocking

While some Internet service providers have been looking at different ways to interfere with or eliminate file-sharing among their customers, Verizon is encouraging it.

The telecom is working on a protocol that will help peer-to-peer networks transfer large files more efficiently, and it’s offering to share the technology with other ISPs. Verizon said it recognizes that some P2P file-sharing is done for legitimate purposes, and it’s better to make sure that the process goes as efficiently as possible so as not to clog up the lines for other users.

Hello, Comcast? Are you listening?

Ad Space Maneuvers

Microsoft is bolstering its advertising arsenal with the purchase of ad management firm Rapt for an undisclosed amount.

Designed to help smaller online publishers cash in on the growth of online ads, news of the deal surfaced just a day after Google launched a service to do pretty much the same thing.

Google’s new service is Ad Manager, a free Web-based tool meant to help smaller publishers handle such advertising-related tasks as placement, planning, pricing and performance tracking. Microsoft’s newly acquired Rapt provides what it calls advertising yield management solutions — products to help publishers maximize the value of the ad space on their Web sites.

Its customers include The New York Times Co., USA Today, Expedia, NBC Universal, and — until the deal was done — Microsoft.

Part-Time Privacy

Have you been dying to add that photo of you livin’ it up at Mardi Gras to your Facebook page — but you don’t want your professional online so-called friends to spot it?

Facebook has a solution. The popular social networking site has introduced new privacy controls that let users place restrictions on who gets to see what.

Facebook needed to do something — its reputation has been tarnished by accounts of minors being targeted by sexual predators. Plus, Facebook was stunned recently when its intrusive Beacon ad platform sparked a swift and angry user revolt.

The new controls give some substance to Facebook’s claims that it respects its users’ privacy. Just don’t get your lists mixed up and let all your prospective employers in on the Mardi Gras shot.

Also in this episode: Intel maps out path to catch up with AMD; Frank Quattrone makes his triumphant return to high-tech finance; Google gives spreadsheet junkies a fix.

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