Clips January 5, 2004

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips January 5, 
2004

ARTICLES

Foreign Visitors to U.S. Will Cross Digital Divide
Cities in revolt over Patriot Act
Anti-Spam Suit Dismissed; AOL May Re-File
Regional grid monitors reach data-sharing agreement
Five Giants in Technology Unite to Deter File Sharing
Identity theft often begins with Social Security number
BellSouth shutting down 3,400 Kentucky pay phones
Down on Downloading [Piracy]

*******************************
Los Angeles Times
Foreign Visitors to U.S. Will Cross Digital Divide
Starting today at major hubs, travelers will be scanned. Some expect
delays and loopholes.
By Ricardo Alonso-Zaldivar
January 5, 2004

WASHINGTON  Adapting a concept that supermarkets have perfected,
U.S. immigration authorities today will begin using a digital inventory
control system to keep tabs on millions of foreign visitors who enter the
country with visas.

Instead of bar codes and scanners that shopkeepers use to track cereal
boxes, the government will take digital fingerprints and photos to
register visitors as they arrive in the United States, and eventually to
confirm their departure.

The system  United States Visitor and Immigrant Status Indicator
Technology, or US-VISIT  will be formally inaugurated today at 113
airports and 14 seaports. Homeland Security Undersecretary Asa Hutchinson
is expected to oversee the launch at Los Angeles International Airport, a
major gateway for travelers from Asia and South America.

The government calls US-VISIT the most significant immigration technology
in decades, and promises it will add only seconds to the processing of
arriving travelers. But some are concerned about potential loopholes, and
the travel industry worries that the system will create added burdens for
law-abiding visitors. 

Initially, US-VISIT will have significant gaps. It will register only
arrivals, not departures. Technology to digitally record departures by
air and sea is months away from deployment, according to optimistic
estimates. Moreover, no system has been set up to digitally track either
arrivals or departures by land, which account for the majority of border
crossings.

That would mean that, at least for the rest of 2004, the government will
be like a supermarket tracking merchandise and sales by simultaneously
using bar codes and computers, as well as hand counts and paper inventory
sheets.

"The exit control part is critically important for a coherent
immigration system," said Steven A. Camarota of the Center for
Immigration Studies. "It's the exit part that's always been the
challenge."

In addition to the technological questions, the travel industry and
others fear that the program could lead to misunderstandings, a decline
in tourism and delays at points of entry.

Along the border with Mexico, business groups have warned that the
application of US-VISIT could cripple commerce if not carried out
carefully. The system is supposed to be phased in at the 50 largest
vehicle and pedestrian crossings, such as the one between Tijuana and San
Ysidro, by the end of 2004.

Federal officials say US-VISIT is overdue. Congress has been calling for
such a system for nearly a decade. The government hopes that it will
deter not only potential terrorists, but illegal immigrants as well.

"We are looking at two purposes: to increase security and to improve
the integrity of immigration control," Hutchinson, the Homeland
Security undersecretary, said in an interview. "A key thing is that
we will be able to know who is overstaying their visa and violating the
terms of their admission to this country."

With nearly 500 million border crossings a year  many by visitors
who come more than once a year  the United States has one of the
most open borders in the world.

The Sept. 11, 2001, hijackers initially entered legally. Balancing the
imperative for tighter security in the face of terrorism with the need to
provide access for foreigners traveling for business, tourism or family
reasons is one of the biggest challenges for the State and Homeland
Security departments.

"We don't want there to be long delays for international travelers
entering the United States," said Rick Webster of the Travel
Industry Assn., an umbrella group representing tourism and business
travel interests. "If visitors have to wait several hours to get
processed, we clearly will need to tell Homeland Security to go back to
the drawing board."

U.S. citizens and green card holders will not be subject to US-VISIT, and
neither will people from 27 countries whose citizens are not required to
have visas to travel to the United States. The Pacific Rim countries on
this list include Australia, Japan, New Zealand and Singapore. (A
complete list, as well as more detailed information on US-VISIT, is
available on the Internet at http://www.dhs.gov/us-visit.) 

Initially, US-VISIT will affect only people traveling on visas who arrive
at major air- and seaports. The government estimates that this category
of international visitors accounts for about 24 million border crossings
a year.

Arriving visitors will proceed through the usual customs and immigration
checks, with two additional steps. First, they will have two
fingerprints  the right and left index fingers  scanned by an
inkless device. Then, a digital photograph will be taken.

The information will be instantaneously compared with government security
databases and watch lists. If there is no match to a suspicious or wanted
person, the traveler will be allowed to proceed. If any alerts are raised
by the database check, the traveler will have to step aside for further
questions.

During 2003 trials of US-VISIT at Atlanta's Hartsfield-Jackson
International Airport, the system added an average of about 15 seconds to
arrival processing, the government said.

The departure component of US-VISIT is supposed to take effect by the end
of 2004. Visitors leaving the country will be required to have their
fingerprints scanned at special kiosks.

Arrival and departure information would then be automatically reconciled,
a big improvement over the current system that involves paper records.
The government expects to dramatically reduce the number of foreigners
who overstay their visas. Overstays account for about a third of the
estimated 10 million illegal immigrants in the U.S.

Hutchinson said the travel industry should welcome the new system because
of the added security it will provide. "We are working very hard to
make sure that US-VISIT facilitates travel," he said.

US-VISIT would also replace the domestic registration of visitors from
mostly Middle Eastern and Muslim countries, which created diplomatic and
civil rights controversies.

On the Mexican border, where US-VISIT is scheduled to be phased in at
major crossings by the end of 2004, the exit portion of the system is
creating anxiety. Currently, people leaving the United States at land
crossings do not usually have to stop for American authorities.

Border crossing points are not designed to accommodate exit checks, say
critics.

"We are against any exit system that will slow down legitimate trade
and travel," said Garrick Taylor, director of policy development for
the Border Trade Alliance, a Phoenix-based business group. "We are
certainly supportive of the goals of US-VISIT  it's the
implementation that's got to go right."

At the request of border-area groups, the government is considering a
recommendation to exempt Mexican citizens who hold a U.S. border crossing
card from US-VISIT.

Holders of the card, who generally have strong work-related or family
ties in the United States, account for about 30% of all land
crossings.

Hutchinson said no final decisions have been made on how the system will
work at land crossings. "The last thing we want to do is develop a
system that clogs the borders," he said. "We have a commitment
to make sure we do not implement this in a way that harms border
communities."
*******************************
Washington Times
Cities in revolt over Patriot Act
By Audrey Hudson
January 4, 2004

   The number of Americans coming under scrutiny of the Patriot
Act is growing significantly, and so is the number of Americans calling
on Congress to repeal or modify the law. 
    Hundreds of city and county governments across the
nation last year initiated the grass-roots effort by passing resolutions
declaring they would not cooperate with the federal government in
enforcing the law, which they claim undermines civil liberties. 
    Those voices grew louder last week when the nation's
oldest and largest national group of elected municipal government
officials, the National League of Cities (NLC), passed a resolution at
its annual meeting calling for Congress to repeal parts of the act. 
    "Cities and towns need a partnership with the
federal government on homeland security issues that makes sure we have
the resources we need to get the job done but also preserves the
liberties that Americans hold dear," Charlie Lyons, NLC president
and Arlington, Mass., selectman, said in a written statement. 
    The NLC members represent 18,000 cities with 225
million residents. 
    The concerns listed by the NLC mirror those expressed
by civil liberties and national librarian organizations, as well as some
Republicans and Democrats on Capitol Hill pushing legislation to overhaul
the act, which became law in the month after the September 11 terrorist
attacks. 
    Critics question the law's broad powers, such as
allowing law enforcement to perform "sneak and peek" searches
without notification or anyone present, and permitting FBI officials to
obtain records from libraries while prohibiting librarians from notifying
the persons involved. 
    Justice Department officials defend the Patriot Act as
a needed tool in the war on terrorism, and say criticism of its use is
overblown. 
    After the American Library Association last year
attacked a provision allowing the review of library records, Attorney
General John Ashcroft declassified information to show the act had never
been used to look at library records. 
    The resolution passed by the NLC urges the president
and Congress to amend the Patriot Act "to restore and protect our
nation's fundamental and inalienable rights and liberties." 
    The group also cited the following concerns: 
    ?The secretary of state is given broad powers to
designate domestic groups as "terrorist organizations" and the
attorney general has power to subject immigrants to indefinite detention
or deportation even if they have committed no crime. 
    ?Public universities are required to collect
information on students who may be of interest to the attorney general.
    ?Law enforcement officials are given broad access to
sensitive mental health, library, business, educational and financial
records. 
    Many Americans are encountering the Patriot Act when
opening bank accounts. The law requires financial institutions to run the
names of customers through the Office of Foreign Asset Control database,
which lists people who are known terrorists or who associate with known
terrorists. 
    New bank customers are asked how many wire
transactions they expect to make each month. If the reply is five or
more, the customer would be reported to the federal government. 
    The Patriot Act also gives the Treasury Department
authority to order financial institutions to search private accounts and
transaction records and report suspicious activity. 
    This information program administered by the Financial
Crimes Enforcement Network (FinCEN) is used by federal law enforcement
agencies and in 2003 provided data for 64 terrorism financing cases and
124 money-laundering investigations. 
    "The program enables federal law enforcement
agencies, through FinCEN, to reach out to over 29,000 financial
institutions to locate accounts and transactions of persons that may be
involved in terrorism or money laundering," said a statement posted
on FinCEN's Web site.
*******************************
Reuters
Anti-Spam Suit Dismissed; AOL May Re-File
Tue Dec 30,11:54 PM ET

LOS ANGELES (Reuters) - A federal judge has dismissed a lawsuit by AOL
against a group of Florida computer technicians that the leading Internet
provider charged with helping deliver spam e-mails, lawyers for the
technicians said on Tuesday. 

   

Judge Claude Hilton of the U.S. District Court in eastern Virginia
dismissed the lawsuit on Dec. 24, Albo & Oblon, the firm representing
the defendants, said in a statement. 


Hilton ruled that Virginia courts did not have jurisdiction over the
Florida-based defendants, even though AOL, a unit of Time Warner Inc.,
does business in Virginia and the unwanted e-mails were directed there,
lawyers for the alleged spammers said. 


But AOL said the ruling left open the prospect that it could either
resubmit its lawsuit -- first filed in April -- with additional
information in Virginia or file suit in Florida if necessary. 


The company, which has been an enthusiastic proponent of federal laws and
industry efforts designed to curb the flow of spam, said it would press
ahead with its legal fight over unsolicited e-mail. 


"The court's decision is based on a mere technicality. The legal
issue that was decided by the court was how much detail needs to be
included in a complaint essentially in order to get the legal ball
rolling," said AOL spokesman Nicholas Graham. 


"AOL intends to take all steps necessary to hold these defendants
responsible for their actions and is prepared to amend its complaint in
Virginia to include additional detail showing these defendants are
subject to suit in Virginia." 


He added: "This case is ongoing and the company intends to continue
to vigorously pursue all persons it has alleged conspired to send spam to
AOL members."
*******************************
USA Today
January 2, 2004
Regional grid monitors reach data-sharing agreement
By Tom Davies, Associated Press

INDIANAPOLIS  Two regional electrical grid monitors blamed by
regulators for a lack of coordination before the August blackout that
darkened homes in eight states and Canada said Wednesday they had reached
a deal to exchange detailed information on their operations. 
Officials of Midwest Independent Transmission System Operator and PJM
Interconnection said the agreement would give each organization a broader
perspective on the electrical grid and establish procedures to help
improve the grid's reliability. 

The two monitor use of the grid by power companies in 22 states, the
District of Columbia and parts of Canada. 

The agreement calls for more sharing of computer data and a new
communications system, said Gary Rasp, a spokesman for Carmel, Ind.-based
Midwest ISO. 

"They'll be sharing information on all their operations all the way
down the line," Rasp said. 

U.S. and Canadian investigators in November faulted Midwest ISO and
Akron, Ohio-based FirstEnergy Corp. for not containing the blackout,
which started with the failure of three FirstEnergy high-voltage lines in
northern Ohio. 

The Midwest ISO's members are spread in a hopscotch pattern across 15
states from Ohio to Montana and the Canadian province of Manitoba. PJM
Interconnection, based in Valley Forge, Pa., oversees power grid
operations in parts of seven states from New Jersey to West Virginia.

Michigan regulators criticized a lack of coordination between the Midwest
ISO and PJM as the blackout spread on Aug. 14, ultimately leaving 50
million people in the dark. 

PJM spokesman Joe Patterson said the agreement would help better monitor
the movement of electricity in and between their systems. 

Patterson said there has been a general movement since the blackout to
improve the complex systems that allow grid managers to collect data and
spot potential problems before they become serious. 

Portions of the agreement can be implemented immediately, but some
sections still must be approved by the Federal Energy Regulatory
Commission, Rasp said.
*******************************
New York Times
January 5, 2004
Five Giants in Technology Unite to Deter File Sharing
By JOHN MARKOFF

SAN FRANCISCO, Jan. 4 - The technology and entertainment industries have
long been at odds over the best way to secure intellectual property
rights as digital technology advances.

Now, five of what industry executives say are the world's most powerful
computer, cellphone and electronics companies are planning a new system
for protecting digital music, video and software from illicit file
sharing that they hope will at least narrow that gap.

A global consortium of technology companies is laying the groundwork for
a campaign to convince Hollywood and the recording industry that it has
finally found an acceptable way not just to limit the copying of music
CD's and movie DVD's, but to protect digital content in the fast-growing
market for hand-held devices capable of playing music, video clips and
computer games while wirelessly connected to the Internet.

As these groups prepare to converge on Las Vegas this week for the annual
Consumer Electronics Show - by far the biggest trade show for the makers
of digital devices and the shapers of what goes into them - the fight
over what has come to be known as "digital rights management'' is
expected to move to the back burner, at least briefly. 

That way everyone can celebrate the long-awaited recovery for the
consumer electronics and entertainment businesses that manifested itself
in their best holiday buying season since the late 1990's. But the issue
will not go away. The consortium - known as Project Hudson and made up of
Intel, Nokia, Samsung, Toshiba and Matshushita - plans to announce its
new approach in early February to precede the Grammy music awards and the
movie industry's Academy Awards ceremony, executives say. Unlike the
system used to protect DVD content, an Internet-based wireless protection
plan could permit users of hand-held devices to share movie or music
files on a limited basis or permit files to be shared for promotional
purposes. Users could also hear a song before deciding whether to buy it.

For the entertainment industry, the Internet has often been viewed
primarily as a threat because it makes it possible to transmit copies of
just about any original work that can be converted to digital code to
just about anyone in the world. But it is increasingly being viewed more
positively by some entertainment strategists, who recognize that the
Internet's nature as an "always on" medium makes it possible to
refine new "digital leashes" to help ensure that copy
protection plans are not subverted.

Beyond trying to convince Hollywood and the recording industry that new
technology can prevent illegal sharing of digital content without unduly
restricting use, the consortium's approach represents an effort to
control the standards and garner the rewards from developing a successful
system. Project Hudson pits the new group against other copy protection
systems being advanced by Sony and Royal Philips Electronics, Apple
Computer, RealNetworks and others. But the most important target is
probably Microsoft.

"They would say they are anti-Microsoft forces," a recording
industry executive close to the companies said. "The alternative is
to sign up with Redmond."

Microsoft, based in Redmond, Wash., is promoting its own plan, known as
the Windows Media Rights Manager. But it has been held back, in part, by
a legal challenge over infringing on software patents belonging to a
smaller American company, Intertrust, which was acquired in late 2002 by
Sony and Philips.

Fears in Hollywood and the recording industry over Microsoft's potential
control had also stalled the software maker's thrust into the world of
digital media. But those fears have lessened lately, in part because of
the emergence of competing technologies from Apple, RealNetworks, Roxio
and others. Digital content providers are increasingly finding ways to
use some of Microsoft's technology without giving up control of their
content.

"There had been a general fear that Microsoft would own the entire
security stack," said William Randolph Hearst III, a partner at
Kleiner Perkins Caufield & Byers, the prominent Silicon Valley
venture capital firm in Menlo Park, Calif. But companies are starting to
tell Microsoft that they are willing to use only part of its software
protection technologies, he said.

Another new consortium of companies is engaged in an effort to create a
set of standards that will make it possible to universally distribute
digital content across different platforms and technologies. That group,
known as the Content Reference Forum and backed by Microsoft, Nippon
Telegraph and Telephone, Universal Music Group, VeriSign and others,
announced its effort last month.

The group cites an example of a personal computer user who wishes to
share a digital video file with a friend. Instead of sending the file
directly, the file owner would first send a "content
reference," a digital pointer that permits the file to be downloaded
tailored to the receiver's own country as well as the specific computer
or other playback device. If the file needed to be purchased, the system
would perform the commercial transaction before sending the
file.

The interest in new copy protection approaches has also been spurred by
Apple's successful iTunes music store, which has shown that consumers are
willing to put up with digital copy protection plans that do not
seriously interfere with their ability to enjoy entertainment products
easily when and wherever they want and, within limits, share what they
buy. 

"If you put up the right kind of speed bump people will generally
honor it," said Mike Godwin, a lawyer who represents Public
Knowledge, a group in Washington that advocates giving consumers greater
weight in the struggle with business interests over intellectual property
rights.

Adding to the interest in developing new copy protection approaches was
Sony's announcement last May that it expects to introduce a new wireless
hand-held device in time for the 2004 holiday buying season.

Sony, with its Walkman line, was once the leading force in the field of
portable electronics, but it has lost a lot of ground by not keeping up
with innovations from others, particularly Apple's increasingly popular
iPod digital music player.

To help itself get back in the game, Sony, which controls its own digital
content and technology standards, is also expected to introduce a smaller
audio CD standard.

Other consumer electronics companies consider the potential popularity of
the format a threat, said Richard Doherty, an industry consultant who is
president of Envisioneering of Seaford, N.Y.

After years of separate development of various hand-held digital devices,
industry executives expect music and video players, cellphones, personal
digital assistants and hand-held video game players to increasingly
converge on common portable platforms. Moreover, such devices will have
data networking capabilities that rival personal computers connected to
the Internet via high-speed cable modems and DSL phone lines.

Sony has a great deal riding on its new hand-held player. Ken Kutaragi,
the Sony executive who created the company's highly successful
PlayStation business, has referred to it as a "Walkman for the 21st
century.'' 

He said the Japanese electronics company was going to great lengths to
create strong data protection plans for what it is now calling the PSP
after facing extensive software piracy of videogame titles designed for
its first generation PlayStation.

Balancing the proliferation of competing digital information protection
plans is a growing realization that the industry needs common standards.

That failure is hampering the growth of digital technologies, said
Leonardo Chiariglione, an Italian electrical engineer who founded the
group that developed the original MP3 digital audio compression standard
widely used to play music on computers and share it across
networks.

"Content should be as transparent as it is today with MP3," Mr.
Chiariglione said. "It should be movable anywhere and still be
protected. If we stay with digital islands people have a legitimate
excuse to piracy.''
*******************************
USA Today
Identity theft often begins with Social Security number
By William McCall, Associated Press
Posted 1/5/2004 12:16 AM     Updated 1/5/2004 7:15
AM

BEAVERTON, Ore.  A young clerk at a busy Hollywood Video store in
this Portland suburb was apologetic when a customer recently asked why a
Social Security number was required on an application form to rent videos
and DVDs. 
She said it was just a formality, and if a customer refuses, the clerks
enter a string of ones or zeroes on the electronic version of the form,
one line above the entry carrying the driver's license number of the
customer. 

But experts on identity theft say a Social Security number is a key
ingredient in an epidemic of fraud across the nation, and any form
combining it with a driver's license number  another key
ingredient  is a potentially risky business practice. 

"Once they have both, they're well on way to getting credit cards,
and then they're on the way to your bank accounts and they're off to the
races," said Jay Bienkowski, an FBI fraud specialist based in
Portland. 

"That's primarily how the FBI gets involved in identity theft,"
he said. 

Many people, however, tend to just fill in their Social Security number
when confronted with the official look of a business or retail form,
Bienkowski and other experts say. 

"You don't have to give out your Social Security number except for a
handful of reasons, most of them dealing with government agencies,"
said Chris Hoofnagle of the Electronic Privacy Information Center in
Washington, D.C. 

Banks and financial institutions typically use Social Security numbers to
determine creditworthiness, but retailers generally have no right to
demand it, Hoofnagle said. 

Retailers, however, can refuse to accept an application form or provide a
service without the number, he said. 

"To protect your Social Security number you really have to be a
stickler," Hoofnagle said. "You have to be willing to
complain." 

Some banks and other institutions that rely on Social Security numbers
for financial records are working to find alternate ways to identify
their customers, said Carolyn Cheezum, a Social Security Administration
spokeswoman in Washington, D.C. 

But she noted her agency is responsible only for issuing numbers and
keeping records. Fraud investigation is left up to the FBI and police
while consumer privacy protection is up to the Federal Trade Commission,
Cheezum said. 

The potential for fraud has spread from paper forms to online forms with
the increase in Internet shopping, said Betsy Broder, an attorney and
assistant director for planning for the FTC. 

"They call it 'phishing,'" Broder said of electronic fraud
dealing with Internet application and credit forms. 

'"Phishing' is a way to snag information  it looks as authentic
as can be, it has all the right logos, but it's not legitimate and
they're trying to steal your numbers," Broder said. 

She said the FTC did a survey during the past year because there were no
statistics on identity theft but it appeared to be a growing problem. The
numbers from the survey proved agency suspicions right, Broder said.

"The results were fairly dramatic," she said. "About 10
million adults experienced some form of identity theft, from wholesale
theft to minor fraud, and it was increasing." 

The FTC and law enforcement agencies have found that merchants and
retailers are increasingly vulnerable to disgruntled or dishonest
employees with access to huge databases full of Social Security numbers
that can be sold illegally or used for fraud, officials say. 

The clerk at the Hollywood Video store in Beaverton, a teenager who asked
not to be identified, told a reporter the Social Security number for a
customer and his wife without requiring any proof besides a street
address. 

Hollywood Entertainment, the parent of Hollywood Video, said it is
reconsidering its application form policy. The chain, based in suburban
Wilsonville, is the second-largest in the nation after Blockbuster, with
more than 1,800 stores around the country. 

"Hollywood Video understands that identity theft is an important
issue," said Jennifer Brauer, vice president of marketing and
community affairs. 

"Which is why Hollywood Video has been actively reviewing the types
and amount of personal information required on its rental
applications," Brauer said. 

But for the time being, "it's really up to individual to take
whatever steps they can to protect their number," warned Cheezum,
the Social Security Administration spokeswoman. 

"Certainly you can ask questions about how will it be used, and how
will it be secured," Cheezum said. "And you can always say
'no.'" 
*******************************
USA Today
BellSouth shutting down 3,400 Kentucky pay phones
January 3, 2004

LOUISVILLE (AP)  BellSouth is shutting off 3,400 pay phones across
Kentucky, spurring the state government to find ways to make sure no
communities are left without any public-phone access. 

BellSouth's plan to shut down its Kentucky pay phones within three months
is part of a nationwide initiative to abandon its coin-phone operations,
which the Atlanta-based company says has been made unprofitable by the
popularity of cell phones. 

The Kentucky Public Service Commission, for now, has denied BellSouth's
request to be released from a requirement that it supply at least one
public coin phone in each of its exchanges. BellSouth may fulfill its
requirement by contracting with other pay-phone companies for service.

The commission will consider creating a "public-interest pay
phone" program to bring phones to areas that haven't attracted a
provider. 

The number of pay phones in Kentucky has steadily declined in recent
years, according to papers filed with the commission. 

On Dec. 24, the commission approved BellSouth's formal request to end its
pay-phone service by March 31. 

Still, some people question whether competitive pay-phone companies will
be able to fill the gap when BellSouth leaves the market. 

"BellSouth would love for the private pay-phone providers to take
over every location, and that's just not going to happen," said
George Sowards, executive director of the Kentucky Payphone Association.

Persuading companies to put phones in sparsely populated areas will be
hard, but such places may need pay phones the most, said Winchester Mayor
Dodd D. Dixon. 

"There are citizens who are very poor, perhaps transient, that do
not have a land line or wireless telephone," Dixon said. 

The Louisville-based Metro Human Needs Alliance, which is made up of 30
community nonprofit and governmental agencies, argued in a filing with
the commission that pay phones "provide basic communication"
for many poor people. 

"We're very happy that the commission has decided to take a closer
look at this issue and to see what is the need for public-interest phones
at this point," said Lisa Kilkelly, a staff attorney with the Legal
Aid Society, which is representing the alliance. 

The alliance recommended that the commission look into creating a
public-interest pay phone system similar to one in Indiana. 

The Indiana Utility Regulatory Commission considers requests from
government units, such as cities, schools and libraries for placement of
phones, and then works to provide a phone and funding if the request is
approved. 

But Indiana has received only three applications since beginning the
public-interest pay phone application process in 1998. In each case, the
commission was able to place a phone without public funding. 

For more developed areas, Sowards said private enterprise will meet the
need, and independent pay-phone companies will profit from BellSouth's
exit.
*******************************
Washington Post
Down on Downloading 
By Cynthia L. Webb
Monday, January 5, 2004; 9:38 AM 

Was 2003 the beginning of the end for illegal downloading and sharing of
music over the Internet? And if music piracy is on the downturn, does it
have more to do with the success of legitimate e-music services or the
recording industry's decision to sue hundreds of file-swappers?

First, the facts: A survey of 1,358 Internet users conducted in November
and December found that the percentage of Americans who said they
downloaded music dropped to 14 percent of Internet users (or about 18
million people), compared with 29 percent (some 35 million people)
revealed in a similar Pew survey last spring. 

The findings -- reported by the Pew Internet & American Life Project
-- showed that "the numbers who are downloading files on any given
day have plunged since the Recording Industry Association of America
(RIAA) began filing suits in September against those suspected of
copyright infringement. Furthermore, a fifth of those who say they
continue to download or share files online say they are doing so less
often because of the suits," according to Pew. 

"Clearly, the RIAA suits were a watershed moment for the downloading
community," said Pew Internet project director Lee Rainie, according
to The New York Times. "Past surveys showed that many people did not
fully understand that they were infringing on the copyright of others by
downloading free music, Mr. Rainie said. Despite the abuse heaped on the
industry for its tactics, he added, that message appears to have gotten
through. Before the lawsuits, interviewers were often told, 'We think
what we're doing isn't a violation, because we're just sharing,' Mr.
Rainie said. Now, he said, 'significant numbers of people are thinking
differently about it, in part because of the RIAA message,' even if the
lawsuits were 'not a high-water mark for the reputation of the recording
industry,'" the Times added. 

Pew's researchers cited data from an Internet survey firm that backed up
their findings, washingtonpost.com noted. "The overall decline in
illegal file-sharing is also supported by ComScore Media Metrix data
showing that four major file-sharing services -- Kazaa, WinMX, BearShare
and Grokster -- saw the number of users on their sites fall between
November 2002 and November 2003. Coinciding with the apparent decline in
file-sharing, ComScore found that the number of Americans visiting legal,
paid downloading services like Apple's iTunes and the revamped Napster
service increased in 2003," the Web site said. 

The Wall Street Journal reported that the "increasing number of
music services authorized by the recording industry ... have begun to
provide legitimate alternatives to illegal downloading. Recent figures
from Nielsen SoundScan show the music industry's decline in sales slowed
to almost nothing last year, in large part because of a pickup in sales
since the first lawsuits were filed against users in September. The Pew
survey relies on consumers honestly reporting their online habits; some
users may be less likely to admit they are downloading music owing to
negative publicity surrounding file-sharing." 
? The Wall Street Journal: Online Swapping of Music Declines In Wake of
Suits (Subscription required) 

No surprise here: USA Today reported that the RIAA is cheering the
results. "The Pew study is good news, says RIAA chief Mitch Bainwol.
But 'we still have a ways to go.' Indeed, at CNET's Download.com, where
Kazaa is free, 3 million people downloaded the program last week,
bringing the worldwide total to more than 312 million registered
users," the newspaper reported. 

Flawed Survey?


Of course, fans of free music downloading say that the Pew survey doesn't
tell the whole story. For one, people tend to lie when asked if they are
taking part in an illegal activity. "I completely discount it
all," Wayne Rosso, former president of file-swapping site Grokster,
told The Seattle Post-Intelligencer. "Rosso criticizes the Pew
methodology because, he says, people lie, especially if they think file
sharing will get them in trouble."

Rosso, who washingtonpost.com noted is now chief executive of the
Madrid-based Blubster and Piolet file-sharing networks, "predicted
that the downturn tracked by Pew is only temporary. As the courts make it
harder for record companies to track music piracy and file-sharing
companies develop technology to mask their users' identities,
file-swappers will come back in angry droves." 

The Associated Press noted that the new survey did not differentiate
between free file-swapping sites and paid ones such as iTunes or Rhapsody
-- a methodology that some critics are faulting. "The study noted
that most of the licensed commercial sites did not exist when previous
surveys were conducted, but they have attracted many users," the AP
added. Meanwhile, Reuters reminded readers in an article today that the
RIAA has filed about 400 lawsuits since September. Though the suits have
sought some $150,000 per illegally traded song, about half of those sued
have settled the cases, many for less than $5,000. 
Technology to the Rescue


Some of the world's best-known technology brands are working on ways to
use technology to thwart music, movie and software pirates. According to
today's New York Times, Intel, Matshushita, Nokia, Samsung and Toshiba
are "planning a new system for protecting digital music, video and
software from illicit file sharing." The consortium is slated to
"announce its new approach in early February to precede the Grammy
music awards and the movie industry's Academy Awards ceremony, executives
say. Unlike the system used to protect DVD content, an Internet-based
wireless protection plan could permit users of hand-held devices to share
movie or music files on a limited basis or permit files to be shared for
promotional purposes. Users could also hear a song before deciding
whether to buy it." 

In a separate article today, the Times reported on the toll that illegal
downloading continues to take on songwriters. "Much of the publicity
in the battle over illicit Internet music downloading has gone to artists
and record labels. But songwriters say they are also being hurt
financially. Unless they are also performers, most songwriters are
typically neither rich nor famous, and their names may be known only to
those who bother to read album credits or liner notes. But their incomes
can depend on royalties from sales of recorded singles and albums. In
fact, songwriters' earnings are more directly tied to album sales than
those of recording artists, who can potentially earn substantial sums
through live concerts and merchandise sales," the article said.
"Charles Strouse, a composer best known for his Tony-winning
musicals 'Bye Bye Birdie' and 'Annie,' says illegal downloading has had a
disastrous impact on his profession, not to mention his income."
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