Legal Summary/Chkpt 2

When assessing the legal viability of Bittorrent and iTunes merger, it is prudent to focus in on two issues. The first issue is how Tortunes’ DRM software would operate under the Digital Millennium Copyright Act. The second issue focuses on how Tortunes, which relies on Bittorrent’s network architecture to provides users with incentives in exchange for their bandwidth, will handle personal security issues.

We think it is legally feasible for iTunes and Bittorrent to merge into Tortunes because under iTunes’ DRM, FairPlay, Tortunes can not only qualify for “safe harbor” status under section 512 of the Copyright Act, but can also best uphold copyright law [1]. Tortunes’ is a viable legal option because its P2P status fulfills certain requirements like immediate notification of infringing users and lack of financial windfall in the case of an infringement.

In addition, Tortunes’ is a legal option because iTunes’ FairPlay DRM is more potent in deterring copyright infringement than other DRMs like the Windows DRM used in Bittorrent’s current legal movie site. Most of the power behind FairPlay is Apple’s refusal to license it. This decision makes FairPlay a “closed” DRM system in which only iTunes or an iPod can run media purchased on iTunes. Also, even though Apple chooses not to license out FairPlay, courts are generally in their favor in protecting the FairPlay DRM from infringement, even from legitimate corporations. In addition, because Tortunes would be as constantly and quickly updated as iTunes, it doesn’t make business or legal sense for companies to constantly create FairPlay infringing programs as often as the new Tortunes would come out.

DRM remain, even increased under Apple

People’s ID, released because of bandwidth needs, are secure because of Apple security

Apple DRM- Plays only on iPods or iTunes- FairPlay does not affect the ability of the file itself to be copied. It only manages the decryption of the audio content.

Movies and TV shows purchased from the iTunes store have even stricter DRM. You can’t burn them to disk and reimport them in a different file format – they are locked .MP4 files. You can only burn them to a CD or DVD as a data file – you can’t purchase a TV show or movie from iTunes, burn it to DVD, and play it back in your home DVD player. Using iTunes, you can copy a purchased movie or TV show to an iPod video, and watch the program on the iPod video screen. Or, you can connect the iPod video to a television, and see the purchased TV show or movie on the TV screen. You can also watch iTunes-purchased media on up to five authorized Macs.

http://blog.smalldog.com/article/468/drm-music-purchased-from-itunes-store

iTunes user sues Apple over FairPlay DRM- http://forum.dbpoweramp.com/showthread.php?t=6802

illegal in Norway

Apple will get its DRM way-

http://www.macnewsworld.com/story/55557.html

Apple has refused to license Fairplay in France and courts agree

DVD John- An attorney, though, might say that you are buying a license to play a song on a specific set of devices - and that using Johansen's software violates Apple's user agreement (the one you didn't bother to read when you signed up for iTunes).

http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391726/index.htm

Realplay stopped from cracking DRM

iTunes, DRM and competition law- http://www.reckon.co.uk/open/iTunes

However the US’s Digital Millennium Copyright Act (DMCA) prohibits circumvention of encryption or rights management systems [17] and thus the legality of the tool is in question.

http://people.cs.uct.ac.za/~aarnab/masters/sota.pdf

Bittorrent DRM- Windows DRM- can only work on the media player (no Macs), but itunes drm can work on any system with itunes/ipod

First of all, because the store uses Windows Media DRM, you can’t play back content on a Macintosh — even with the Flip4Mac plugin for QuickTime³. It also means that you can’t play it on any number of media players for Windows, such as my personal favorite, VLC⁴. You are stuck with using Media Player.

http://newteevee.com/2007/03/01/bittorrent-fast-but-drm-a-downer/

Microsoft sues over source code theft

http://news.com.com/Microsoft+sues+over+source+code+theft/2100-1025_3-6119892.html

Windows Media DRM FAQ- http://www.microsoft.com/windows/windowsmedia/forpros/drm/faq.aspx#drmfaq_1_1

Gutmann argues, for example, that in order lock down High Definition content, Vista limits the number of connectivity options to users. 'Windows Vista includes an extensive reworking of core OS elements in order to provide content protection for so-called "premium content", typically HD data from Blu-Ray and HD-DVD sources.

http://www.theregister.co.uk/2006/12/27/windows_drm_monstered/

Microsoft's Zune Won't Play Protected Windows Media

http://www.eff.org/deeplinks/archives/004910.php

The films will be locked to a single PC, so we suspect that the films will be packaged in Windows Media DRM.

http://www.drmwatch.com/ocr/article.php/3605616

General Summary

Amy Benzyk

General Proposal from Group 6:

We propose that Apple change the iTunes Store from its current client-server model to a new model we call TortTunes, which integrates the P2P model with the current iTunes model. Our proposal will support the implementation of TortTunes through technical, legal, economic and ethical evidence that this new model is the best solution for Apple to distribute movies more effectively to users. Instead of iTunes adding more costly servers to maintain fast download rates, this new integrated model is an alternative and more efficient solution for broadband network problems. Economically, TortTunes will attract new customers as a result of the improved quality of service that iTunes will provide as well as attaining a portion of BitTorrent’s former customers. TortTunes will give its users the choice to participate in BitTorrent, but will offer incentives (such as free movie downloads) for those who do and contribute the use of bandwidth. Legally, DRM will still be in place and TortTunes will not infringe on any copyright laws. Although some claim there might be drawbacks concerning personal security, there are ways to mitigate them and create a secure, reliable and legally-sound network. Overall, the pros outweigh any cons for this newly proposed model, and TortTunes is the best solution for Apple at this time.

ETHICS

There are several ethical issues that will be addressed throughout the proposal:

1. Ethical questions are raised over the controversial reputation of BitTorrent as being an aide to piracy and copyright infringement. Obviously, Apple does not want a close association with a company of questionable ethics. But it is important to note the recent changes BitTorrent has made to partner with various movie studios in order to legally distribute films online. This initiative is still in the early stages, but improves the image of BitTorrent significantly.

Also, it is important to distinguish that TortTunes is not the same thing as BitTorrent. TortTunes will maintain the current security and legality of iTunes. Although TortTunes will incorporate the peer-to-peer structure of BitTorrent, it will maintain DRM and enforce payment for the distributed products. TortTunes will not enable its users to pirate any movies, songs, or other media.

2. Another ethical question to address is that by using TortTunes, users will be required to upload in addition to downloading files. Ethically, we must make sure that customers are informed that downloading from TortTunes will also mean they are uploading to TortTunes and therefore sharing their bandwidth with the network. We propose an explanation of this stipulation that users will be required to read and accept while creating their account on TortTunes.

3. Movie studios are constantly complaining about Internet technology that is taking away from their business revenues. Some film industries think that software such as TortTunes that enables customers to purchase and download movies over the Internet takes a substantial amount of business away from movie theater showings and DVD sales. But what these companies don’t realize is that TortTunes would actually be beneficial in maximizing their profits. With the constantly evolving and advancing technology of the Internet, movie studios must realize that they must adjust and update their products in order to keep up. Currently, many people download movies illegally online as a significantly cheaper and more convenient way of attaining these films than purchasing or renting DVDs. Therefore movie production companies are no longer competing with each other to gain business, but they are also competing with the vast possibilities for free movie downloading that the Internet now offers. In order to compete with these free (yet illegal) downloads, movie companies would benefit from offering low priced movie downloads over the Internet. More people are likely to stop illegally downloading movies if they can legally download the movie for $3 or $4, rather than if they have to buy the DVD for $15.

Amy Benzyk

Tech Chkpt 2

Today, ITunes implements the client-sever model that people are used to. In
other words, Apple has many servers with music on it and clients purchase a
song or video and download it from their server. When the server crashes,
clients cannot access these files. This model is terrific if you have are
only in the music industry and distributing small music files, however it
fails when try to supply very large files like High Definition Movies, like
The Prestige.


When small files are being downloaded, the server is not put under a lot of
stress and the bandwidth [(the data rate supported by a network connection
or interface; it is most commonly expressed in terms of bits per second
(bps)] is minimal. However, with a multi-GB HD file, the network is used up
very quickly.



There are two options to answer this problem. One, you can increase the
network load by adding new servers. This will be extremely expensive and
will have to happen on a regular basis. It also does nothing to alleviate
the real problem. That is, everyone downloading from Apples servers costing
you multiple resources. A second option is to find a way to distribute the
bandwidth load. BitTorrent provides this option.



Bittorrent solves the bandwidth problem by sorting out the bandwidth needs,
by sharing bandwidth among peers. The more users, the faster the network.
I propose a technical solution that integrates Itunes current model with the
Bittorrent model. Allowing people to benefit from the pros of both.



The applicable measures of performance of bittorrent and Itunes are download
performance, content life time, and pollution level. BitTorrent is the
indisputable leader in download performance. Do the to architecture of
BitTorrent the availability of content is unpredictable "flash crowd
effect:" (when a file is first injected . as well as the gradual decreases
in popularity). When the last peer/seed with certain content goes offline,
the content dies. The dynamics of content lifetime are important because
the availability of content is of great interest to users. Finally, the
pollution level is the fraction of corrupted or wrong content.



Experiment

My experiment's goal is to analyze the problem associated with the
exponential decrease in content following the "flash crowd" effect. I
downloaded the same movie from the current ITunes store and also a Bit
Torrent client and recorded download rates.



I chose to pick a movie that fit the following characteristics: 1) was
available on both Itunes and Bittorrent. 2) was more than 5 years old.





Key Differences in BitTorrent Implementation and Itunes BitTorrent
implementation would be the following. A centralized file search through
ITunes that allows the searching of offered content. Only Itunes Moderators
can injected files into the market. Itunes has all original seeds. Itunes
would have to create incentives for others to become seeds and/or barter
through Store Credit. Improvements would be the following. Content life
time can be improved if sharing of old content is rewarded. Download speed
can be improved by having peers keep track of performances.

[1] http://www.bittorrent.org/bittorrentecon.pdf

[2] http://www.pam2004.org/papers/148.pdf

[3] http://portal.acm.org/citation.cfm?id=1015508

[4] http://research.microsoft.com/~padmanab/papers/msr-tr-2005-03.pdf

[5] http://www.zhenxiao.com/papers/jsac2007_bt.pdf

[6] http://www.sbaer.uca.edu/research/sbi/2006/pdffiles/papers/cases/016.pdf

[7] http://www.list.gmu.edu/zhang/pub/bt.pdf

[8] http://people.cs.uct.ac.za/~aarnab/masters/sota.pdf

[9] http://pdos.csail.mit.edu/6.824-2004/reports/jwolfe.pdf

[10] http://www.pds.ewi.tudelft.nl/~pouwelse/bittorrent_measurements.pdf

[11] http://cfp.mit.edu/groups/core-edge/docs/Digital-Music_Casestudy.pdf

[12] http://werbach.com/docs/VideoP2P.pdf

[13] http://www.leaonline.com/doi/abs/10.1207/s14241250ijmm0601%262_7?journalCode=ijmm

[14] https://cato.org/pubs/pas/pa534.pdf

[15] http://www.cs.sfu.ca/~jcliu/Papers/P2PBoadcast.pdf

-Rick Lindquist

Econ Checkpoint 2

Economic Checkpoint 2

After having researched much of this Bit Torrent problem, I have concluded that there is a fundamental prisoners dilemma that must be dealt with. This multiparty prisoners dilemma involves people who will defect (or in this case, use illegal torrent websites) and people who will take part in the new pay torrent sites. According to Ashwin Navin, a co-creator of the original Bit-Torrent and a main proponent of a new pay site, 90% of people will feel compelled to use the new pay site while 10% will try and hack through protections and keep the old method going. The key is to make it worthwhile to people in that 90% to not cooperate with that 10%. What can be done to ensure this is fair pricing structures that do not punish people for obeying the law, and also a large amount of free programming that is paid for with advertisements, much like television.

A new pricing structure put forth by Bit-Torrent and Navin has new movies at $3.99, old movies at $2.99, Live TV shows at $2.99 and recorded shows at $1.99. This is quite a competitive pricing structure and Apple would do well to be similar to this. However, Apple could also offer much more variety than the new Bit-Torrent service due to the many connections and licenses that they already have within the entertainment community. Currently as well, the Bit-Torrent site only offers movies for rental, and perhaps Apple could offer movies for sale as well, with the same rights protection that limits the ability to burn or distribute these films.

In order to really sell people on the idea of sale, an ad campaign must be organized that emphasizes the legality of legal downloading and the trouble downloaders who download illegally can get into. This, along with the cheap prices, should help convince current illegal down-loaders to switch to a pay system. The key is really measuring incentives and trying to get people to change their mindset about downloading, from being able to do what they want without restriction, to being able to do more than ever before but within the means of the law.

http://www.reghardware.co.uk/2006/05/02/apple_osx_leopard_bittorrent/

http://torrentfreak.com/bittorrent-vs-apple/

http://en.wikipedia.org/wiki/Ashwin_Navin

http://yro.slashdot.org/article.pl?sid=06/10/27/0119226&from=rss

http://www.isohunt.com/

http://www.asiamedia.ucla.edu/article-us.asp?parentid=64527

http://news.bbc.co.uk/2/hi/technology/6396733.stm

http://ce.seekingalpha.com/article/9980

-Tariq Mohideen

Edit: It is also necessary to consider just how many customers would actually switch to using an Apple sponsored torrent service. Currently, though movie downloads are on the rise, they are still a small minority in comparison to illegal downloads. Furthermore, much of the movie-download market rests amongst the younger generation, who, specifically tend to download these movies because they do not have the money to pay and watch them. Those with money will tend to be older (and by older I mean in their mid to late 30s and above) and trying to get these individuals to download movies via Bit-Torrent is a stretch. It is true though, that Apple has created a legal download market with iTunes, but I believe it is quite difficult to expand that market much further than where it is, unless it becomes a better choice for consumers to use legal downloads. Also, while a torrent system would allow Apple to have faster download speeds (theoretically) and carry more movies, there is still the risk of piracy through torrents.

Also, in terms of availability of movies, Bit-Torrent is dependent upon the presence of seeders and leachers for people to be able to actually receive files. Esoteric works then are unlikely to be found and it might be more conducive for these movies to be on a large server a la iTunes. Also, the advent of movie rental services such as NetFlix has made rental all the more cheaper and convenient for people. This coupled with burning softwares that enable people to rip movies on their own leads to almost a redundancy with downloads. Also, these downloads (as with the recent Bit-Torrent pay service) are temporary, and with DRM they cannot be played after a 24 or 48 hour period, making them not much better than rentals. The incentives to such systems is that the capacity to pirate is limited, however, the consumer is also hurt, and the incentive to download illegally is only heightened.

http://arstechnica.com/news.ars/post/20061227-8500.html

Technical Chkpt 1

Technical Post:

Very little progress has been made, but I have begun researching the technical issues related to current bittorrent implementations. Specifically I am looking into torrent tech issues that have been identified with regard to certain OS, scripts, and file systems, and past solutions to these problems. I have found some good articles that I need to sit down and read. My main goal right now is to figure out how to successfully use DRMs with Bittorrent and how it would fit into the current Itunes model.

The next checkpoint will go more into depth

Rick Lindquist

Economic Analysis

Economics

Most Bittorrent users currently use the service for free. Recently however, Bit-torrent COO Ashwin Navin announced the creation of a fee based Bit-torrent download service that sells new movies for $3, older movies for $2, and TV shows for $1. There is a 30 day limit to the movies but TV shows can be kept indefinitely on a computer. The question is, how can people be convinced to the economic incentive of paying for items that they already find for free, especially when overseas there are many distributors of this material?

• Need to have a pricing scheme that allows users to think it is actually worthwhile to pay for viewing material. Don’t have something prohibitively expensive.
• In order for users to be held to the idea of buying movies, they need to be able to realize that they could get in serious trouble without a pay service. Perhaps market this is as doing it the legal way keeps you safe from legal action?
• Make the videos on this pay service of a higher quality than those distributed for free. Also, enable encryption on these videos that they can only be downloaded through Bit-torrent users subscribed to the service. Look at the new pay Bit-torrent site for an idea on how to do this.

However, this also has to be economically worthwhile for Apple. They cannot under price their goods but at the same time they need to stay competitive in a market that sells for free.

• Ensure a higher standard of quality for videos so that people have an incentive to pay to use this service. Charge less than a DVD for a movie for a month but give people the option of being able to pay the rest of the price of a DVD at the end of that month if they wish to keep the movie.
• Allow users after that month to burn that movie file once without having to pay extra. This keeps people from ripping off your system.
• Aggressively market the campaign in a popular campaign and emphasize the benefits of a pay service: legal safety, video quality, and a better deal than risking it on free downloads.

By Tariq Mohideeen

Legal Analyst's Outline

Legal Consultant

The question at the heart of this issue is how iTunes and Bit Torrent can ensure movie companies that consumers will not use an iTunes/Bit Torrent movie store to infringe on copyrighted movies.

When beginning to address this question, it is important to look at the status quo of iTunes’ movie store. What film companies does Apple currently have deals with? As of right now, Disney and Lionsgate Films are the only film companies to provide iTunes with full-length feature films. We plan on focusing on the details of the legal wrangling behind the iTunes Disney/Lionsgate deal. Some questions we plan to ask are:

• Does Disney or Lionsgate forbid certain titles to be on iTunes? What about new releases?

• What DRMs are in place? Is Apple or the film companies responsible to enforce them?

• Does streaming video work downloaded on iTunes USA work outside the US like in Asia where iTunes’ movie store purposely operates on a limited basis because of piracy concerns?

• Do the DRMs preclude “fair use” like multiple plays on different iPods, backing up movies, or transferring a movie to another computer?

• If someone infringes the copyright, who is legally accountable, iTunes or the consumer?

• In regards to HD movies, do the film companies allow them to be played on televisions through a computer connection?

• Can users legally swap or exchange movies, although one of them may have paid for another title?

Bit Torrent is popular among consumers and detested by movie companies for mostly the same reason: it greatly facilitates copyright infringement. Still, Bit Torrent has decided to “play by the rules” to an extent by making deals with the MPAA and Warner Bros. to legally place copyrighted movies on their network. However, the structure of Bit Torrent- decentralized and unstructured- raises some legal issues:

• Do the MPAA and Warner Bros. have legal power to shut down P2P sharing of their movies not legally licensed to Bit Torrent?

• Based on Bit Torrent’s structure, how do the MPAA and Warner Bros. ensure that a legal user “shares” his movie with someone who hasn’t purchased it, much the same way someone might loan a DVD to someone else?

• Now that Bit Torrent has some responsibility for copyrighted material on its network, is Bit Torrent held responsible for copyright infringement?

• Is it illegal if someone uses a Bit Torrent “E gift-card” to download a movie for someone in France though the movie has had a European release yet?

If Bit Torrent and iTunes’ movie store were to team up, it would also present some interesting issues. Some of the issues we plan to tackle are:

• Is Apple or Bit Torrent legally accountable for ensuring DRM standards?

• Can users legally share iTunes’ gift cards or season passes over Bit Torrent?

• iTunes allows movie sharing on a limited number of “authorized” computers. Is it infringement if a Bit Torrent/Apple movie store customer uses Bit Torrent to download a movie onto another an “unauthorized” computer although he has already purchased it?

• How does Bit Torrent’s massive P2P capabilities factor into Apple’s spat with Norway over copyrighted material?

• How does iTunes stop Bit Torrent users from sharing movies with Bit Torrent users in Asia where iTunes movies are limited because of piracy concerns?

• How does Bit Torrent ensure that movies show up on iTunes first?

• Under Bit Torrent’s massive structure, how are infringers outside of America prosecuted under the DMCA?

• Are the consequences for infringement more severe in a Bit Torrent/iTunes movie store?

By Steven Sunmonu

Edit:

As the “Guru” of this project, I want to make sure everyone has a fundamental understanding of how BitTorrent works. Here are some basic notes that I think will help:

NOTES ON BIT TORRENT (from the article “Give and Ye Shall Receive!...)

- BitTorrent = a form of peer-to-peer (P2P)

- popular because of fast download rates

ETHICS

Users of P2P software in some EU (European Union) countries can legally download copyright protected materials as long as they don’t upload.

- But the idea of BitTorrent is that all users download pieces of the file and then begin to upload them to each other

- Therefore BitTorrent makes it impossible to just download, and therefore can cause liability for copyright infringement.

- BitTorrent was written by programmer Bram Cohen.

HOW IT WORKS

1. First, download file with a .torrent extension, which contains information about the file you are looking for: length, name, hashing information, and URL of tracker.

2. Next, open the .torrent file in a BitTorrent client software.

3. Then the client software connects to the tracker, which locates all the “peers” in the process of the same .torrent file.

4. Client Software starts connecting to the various peers, called a peer set.

swarm = total number of users downloading the same .torrent file at the same time

5. The BitTorrent client software begins to download small parts (about 256kB each) of the .torrent file in a random order from users in the peer set.

6. Each time a peer completes downloading one of the small parts, BitTorrent client software informs the peer set and uploads these small parts upon request to other peers.

*Basically, “you send parts that you have finished downloading as you request finished parts from others, and vice versa.”

Two kinds of peers:

1. Leecher: peer in the process of downloading the file

- leechers cannot disable uploading to other peers

- As long as someone is downloading, he must upload the file parts to other peers

2. Seed: peer that has finished downloading the entire file

- used as sources that upload parts of the file until their BitTorrent client software is closed

Traditional P2P vs. BitTorrent

· Traditional P2P program examples = Napster, Kazaa and Limewire

- With these programs, the download rate depends on the upload speed of the user being downloaded from (if upload is slow, download is slow)

- The more popular the file, the slower the download rate.

· But with BitTorrent, a user downloads small parts of a file from a great number of other users

- Downloading parts from various sources simultaneously allows for faster downloading rates

- With popular files, there are more uploaders (because more users are downloading and have to upload) and downloading is faster.

-Amy Benzyk

Test

This is the first post of Group 6. We will be using this blog over the next few weeks to analyze Bit-Torrent and how Apple could use this to distribute movies. We will look at the business/economic, ethical, technological, and legal facets to this issue. This will include looking at copyright law, the economics of a big company such as Apple and the ethics behind issues such as these.