The Role of Digital Content In Social Networking: Twitter v. Facebook

May 5th, 2009 | COMMENTS(0)

Admittedly, the headline of this post is extremely ambitious and could lend itself to a 200+ page book discussing the imapct of Twitter and Facebook on society, sociology, journalism, technology, relationships and more. For now, I’ll just have to publicly draw a vastly more limited and possibly controversial conclusion based on nothing more than recent news stories and a dash of personal experience.

On April 29th, press accounts reported a rather startling statistic. According to Nielson Online, more than 60% of Twitter users abandon the service about a month after joining. According to the same report, Facebook and MySpace have retention rates in the 70% range.

The next day, I read a press story about Facebook’s plan to seek additional private capital, reportedly based on a $5B-$6B valuation. An impressive valuation, particularly when compared with Twitter’s reported pre-money valuation earlier this year of $250M.

Why the disconnect in retention rates? From my personal experience, the Twitter experience is just too fleeting and unsatisfyingly devoid of content. I’m definitely in that 60% of users who’ve practically abandoned Twitter. My followers, all 19 of them, will probably argue that, to the contrary, they have seen many tweets from me, all with a disturbing similarity. In each case, my tweets reported my immediate status to be currently engaged in drinking a bottle of wine. Apparently, I unwittingly left the “publish to Twitter” box checked on my Cellartracker account. Every time I cracked a bottle of the good stuff and updated my cellar logs, my faithful followers received the pointless and concerning update.

My participation in Facebook is quite a different story. I’m sure the reason is the wealth of rich digital content that can be shared on Facebook. Frankly, Facebook delivers a much more satisfying and involved experience. I check it almost daily. I enjoy sharing photos and videos that relate to my life, my family and my friends, and I enjoy seeing what my friends choose to share. The digital content we share with each other makes the experience richer. I am still amazed that 24 years later, through Facebook, I am in touch with so many friends and classmates who attended a tiny American High School in Ankara, Turkey. The connective experience of Facebook is technology used transformatively.

There are more elevated critiques of Twitter available on the Internet than I can muster tonight. One of my favorites bemoans the impact of Twitter on journalism, the growing attention deficit of social networking and the new apps poised to feed the tweet-addicted:

But Twitter is unique and more dangerous because of the rolling, inherently contentless and bite-sized nature of the tweets. It reflects and feeds an autistic culture unable to focus on anything but the tiny feed box in front of it, and even that only when medicated. Programs like TweetDeck (currently in public beta) are working to perfect a permanent desktop scroll and filter—an intravenous Twitter drip.

So, does it come down to the digital content? Is Twitter’s 140 character limitation just enough or not nearly enough? Your humble correspondent suggests its the digital media content. The numbers tell the story in this case. Twitter: 40% retention rate, 7 million unique visitors in February 2009, $250M valuation. Facebook: 70% retention rate, 200 million users, $5B-$6B valuation. It’s gotta be the content!

Viewdle Keeps Rolling

December 10th, 2008 | COMMENTS(0)

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Last Spring I posted about video search company, Viewdle, which I thought was a company to watch. Well, the folks at Le Web ‘08 think so as well, awarding Viewdle top honors today at the Paris event. Viewdle’s technology uses facial recognition technology to index broadcast and other video streams in real time or faster. At Le Web, Viewdle demonstrated how its technology can be used to index videos of people appearing in videos uploaded to Facebook. Viewdle calls this use of its technology VideoFriends, and you can find it on Facebook here. Think of it as automated tagging for Facebook videos. Once a friend is tagged, VideoFriends will automatically tag that person in any other videos that are uploaded.

VideoFriends seems like a clever way to increase mass adoption of Viewdle’s facial recognition technology, even though it probably generates little or no revenue today. Time will tell if the Facebook experiment will succeed in generating more visibility and exposure for Viewdle. Viewdle is maturing, and remains a company to watch, in my humble opinion.

Video Gaming: Weathering the Recession in Hi-Def

December 9th, 2008 | COMMENTS(0)

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So its official. Our country is in an economic recession and has been for at least the past year. When times are tough, Americans often seek solace in entertainment. During the Great Depression, many turned to radio, music and cinema to forget their worries. Today, I believe, the economically depressed will likely be turning to video games.

According to Daniel Terdiman of CNET News, while the video game industry will suffer in this recession along with every other industry and is not recession-proof, it will probably weather the economic storm better than most other industries. According to Terdiman:

In the short term, then, there is ample evidence that the video game business may well prove to be stronger than most others. No one is going to do better than companies producing cheap liquor, of course, but in the technology world, it may be tough to identify a sector that could better persevere than video games.

There is data to support Terdiman’s assessment. Sales of video game hardware and software are up, despite the Consumer Confidence Index plunging to an all-time low in October. According to Wedbush Morgan (as reported by the Washington Post), video game sales for November were up 7% over the same period in 2007. Nintendo Co. President, Satoru Iwata, expects steady and increasing demand for its highly successful Wii and DS game systems, and Nintendo’s impressive November sales figures support his statement. Nintendo is so optimistic it has increased production of the Wii video game console from 2.4 million units per month to a higher undisclosed figure. Of course its not all good news. Just today, video game publisher Electronic Arts announced it expects lower revenues in 2009 due to disappointing holiday game sales and confirmed it will cut jobs to stem its losses.

Adding to today’s interesting video game news is Pew/Internet’s report that:

[M]ore than half - 53% - of all American adults play video games of some kind, whether on a computer, on a gaming console, on a cell phone or other handheld device, on a portable gaming device, or online.

Here’s how I see it. Most of these video gaming adults have been video gaming for years. They are not all hard-core gamers. Some dabble, some go in and out of serious gaming, but they all have video gaming experience. If all those adults have to cut back on Vegas trips and Caribbean cruises and look for more economical entertainment alternatives, don’t you think video games will be on their short list? Especially if video gaming leverages the home entertainment equipment they already have? I do, and here’s why.

Video gaming has progressed to an astonishing level of realism, controller technology and community. Games are now routinely published in high-definition to take advantage of your 1080p-capable flat screen. The resolution and clarity of today’s hi-def games are nothing less than stunning. Although this clip is not in hi-def itself, it does allow one to see the incredible things that are possible with today’s gamng technology, and rest assured it does look spectacular in hi-def on a PS3 connected to a plasma TV.

Wireless controller technology is clearly here in a big way. The Wii controller is the obvious popular hit in wireless controller tech, but the PS3’s new Six-Axis Dualshock controller is also an excellent wireless controller and includes pressure sensors that rumble with each action, allowing users to “feel” the action as they play. More than ever, controller technology is pushing the envelope of immersive video game experiences.

The community aspect of gaming is also built into many of today’s games, allowing a single gamer at home to play with or against one or many other gamers via the Internet. The Playstation Network is basically free and boasts 14 million users. All you need is a PS3 and an Internet connection. Xbox Live has just as many users and is free for limited access, and fee-based for its full-access Gold service. Now, the average cost of a new video game title ranges from $40 to $60, so they aren’t exactly being given away. Still, if you buy one title you really enjoy and join an online gaming community, you can get quite a few hours of gaming at an entertainment cost-per-hour that is far less than the price of a single movie ticket. And if you don’t want to buy the game, most are also available to rent from companies like Gamefly (think Netflix for video games). Earlier this year I spent some time (Ok, a considerable amount of time) onlne playing Call of Duty 4: Modern Combat. Take the $50 cost of the game, divide by the number of hours I played, which was, ummm…let’s just say that my per-hour cost of gaming was extremely economical!

Which gaming system is best? Well, this is a flammable topic with strong opinions on every side. If you are a PC gamer, this isn’t really your issue. If you are a console gamer or want to be, then I recommend PC Magazine’s most recent roundup and analysis of the major players in the industry, Nintendo, Sony and Microsoft.

It’s belt-tightening time, and we all need to stretch our entertainment dollar a lot more than usual. A little video gaming may be just what your financial planner ordered. If you’ve already got some hi-def capable gear in the house, then your gaming experience will blow you away. Saving money in high definition has never been so fun or easy. Who knows? Video games may also bring your family closer during these difficult times. At least that’s what Electronic Arts and Hasbro must have been thinking when they created “Family Game Night” for the Wii and Playstation 2:

Join your host Mr. Potato Head as you play classic Hasbro games as well as exciting new versions created for the Wii. Hasbro Family Game Night features family favorites such as CONNECT FOUR, BATTLESHIP, YAHTZEE, BOGGLE, SORRY! and the all new, SORRY! Sliders.

New Start-Up RadiantGrid Technologies Explains Digital Media Transformation

December 1st, 2008 | COMMENTS(0)
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Whether its photos, video or music, all digital media is created by a device and then must be transformed in order to be available to an audience or customers, whether via the Internet, mobile or other online distribution outlets. Content creators have to consider multiple formats, multiple bitrates, digital rights management, watermarking, advertisement insertion, metadata and a whole host of other needs and features that must be addressed before content is truly consumable online. Sounds complicated, right?

This past summer, a new Seattle start-up, RadiantGrid Technologies, LLC was launched to address the complex issues surrounding digital media transformation. It’s Founder and Chief Software Architect, Kirk Marple, was formerly a development manager at WindowsMedia.com, Chief Software Engineer at digital media start-up, RocketVox (which was acquired by thePlatform in 2001), and co-Founder and Chief Software Architect of Agnostic Media, Inc. Clearly, Marple has an ideal background for solving complex digital media problems.

In my humble opinion, a major key to a successful business involves taking a complicated problem and delivering a solution that is simple, cost-effective and easy for customers to adopt and integrate into their existing workflow. An excellent example of such success in the area of digital media publishing and syndication is thePlatform. Similarly, RadiantGrid’s attention is focused tightly on solving the problems of digital media transformation, and describes the company as a “manufacturer and provider of enterprise-class media transformation and workflow software.”

To help explain digital media transformation and workflow, Marple published a blog post earlier this year intended to answer the simple question, what is media transformation? Marple’s post is an excellent introduction to the problem RadiantGrid is solving for its customers. With future blog posts, Marple intends to continue his online discussion of digital media workflow by explaining concepts such as multitrack assembly, stitching of logos, and motion graphic overlays.

RadiantGrid is definitely a company to watch in 2009.

DISCLOSURE: RadiantGrid Technologies, LLC is a client of Stanislaw Ashbaugh, LLP

Review: Pioneer BDP-05FD Elite Blu-ray Player

November 28th, 2008 | COMMENT(1)
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I’m going to take an unconventional approach with this hardware review. For a thoroughly detailed review of the BDP-05FD, I recommend David Vaughn’s review for UltmateAVMag.com, and Gary Murrell’s review for Home Theater Forum.

Now for my two cents. My experience with the BDP-05FD began with the death of my trusted Panasonic DVD player, originally purchased circa 2001. Since November 2006, the Panny was part of a two-man team that included a PS3 for Blu-ray duty. A few things about the PS3. It is obviously an incredibly flexible device because its primary function in our home is hi-def gaming. The PS3 playback for Blu-ray discs is high-quality, with almost a workmanlike quality to its performance. The excellent video quality of the PS3 is aided by its HDMI 1.3 outputs and its ability to support 1080p video. Throw in 7.1 channel audio and the built-in ethernet jack for Internet connectivity to support BD-Live features and online firmware updates, and you pretty much have a perfect Blu-ray player for about $400 for the 80GB version, or $300 for the 40GB version. Drawbacks? During Blu-ray playback the unit is a bit too loud and a bit too hot for my tastes. Annoyingly, the unit does not come with a usable remote control for Blu-ray playback, requiring a separate purchase. More annoying than that is the fact that the PS3 remote, like its controllers, operate via Bluetooth. The problem is that my Phillips Pronto universal remote (UR) and every other universal remote on the market operate by infrared (IR). So while you may be able to control every other component in your system with your UR, the PS3 operates like a prima donna requiring you to use a separate remote. Why Sony’s engineers did not think of this and add IR capability to the PS3 is beyond me.

Well, I was managing with my Panny-PS3 team until the Panny croaked, giving me the perfect excuse to consider replacing it with a stand-alone Blu-ray player. After a bit of research, I settled on the BDP-05FD, and here’s why. Blu-ray movies are simply beautiful to watch using the BDP-05FD. Other reviewers can give your more geek-specs than I will here, so my contribution to the constellation of reviews is simply to tell you the machine is superb, but not perfect.

Your mileage may vary, so you should know my setup involves using the BDP-05FD’s HDMI 1.3 outputs directly into a Pioneer Elite VSX-84TXSi A/V receiver, which is in turn connected to a Pioneer (not Elite) 50″ plasma that is not 1080p capbable. Someday soon my Pioneer plasma will die so I can move on to a newer Pioneer plasma, like the Kuro line, that is 1080p capable. If I’m blown away by the BPD-05FD now at only 1080i…

The BDP-05FD is sturdy. It sports a single slot for discs and in addition to playing Blu-ray discs also upconverts standard DVD’s, making them look much, much better than they did in the ol’ Panny. So, what’s not to like about the BDP-05FD? Not much, really, but I have had a few negative experiences that are worth reporting.

Within the first week of operation I ran 5 Blu-rays through it. All except one played flawlessly. The problems started with Batman Begins. Immediately, I noticed the audio and video were out of sync. A quick call to Pioneer resulted in a suggestion that I download and install the latest firmware, version 1.02. As a PS3 owner, I’m used to firmware updates downloading automatically via its Internet connection. Remember, the BDP-05FD has no Internet connection so firmware updates are a manual process. I located the firmware file on Pioneer’s website, burned it to a DVD as instructed, inserted the DVD into the player and waited about 20 minutes for the update to complete. Once the update was complete, I put Batman Begins back in and again the audio and video were out of sync. While researching on AVSForum, I learned that many owners were experiencing the same issue, and also other issues. It became clear that I was the owner of a quirky, high-end Blu-ray player and that Pioneer’s engineers were still working on software issue with the unit. Yeah, I felt like a guinea pig that had also been shaken down for $700. On the other hand, the system was working beautifully except with respect to Batman Begins (though I really do enjoy that movie).

After a few weeks of sulking and researching, I began reading about a rumored firmware update from Pioneer that would solve all problems with the player and bring peace to the galaxy. Some AVSForum members seemed to have connections to Pioneer and suggested the promised firmware was only days away. Well, it wasn’t days away, it was two and a half months away! On November 13, Pioneer released firmware version 1.17, which did not include any information regarding the fate of versions 1.03 through 1.16. The rumors were true. The firmware cured Batman Begins and now all is right with the world.

A few closing thoughts. I remain stunned by the visual beauty of Blu-ray discs played on the BDP-05FD. Believe it or not, the unit has noticeably superior video playback quality over the PS3. it is not a major difference, but it is noticeable. It seems silly to me that the BDP-05FD does not include an ethernet connection. When I first bought the system, I knew it was a Profile 1.1 system and had no ethernet jack. I was fine with that because I am not truly particularly interested in the BD-Live features that come with Profile 2.0 compatibility and offer access to online content. [For an excellent description of the Blu-ray player profiles, 1.0, 1.1 and 2.0, check out Matt Moskovciac's post on Crave.] I still don’t want BD-Live support. I just want the ethernet jack so I can make firmware updates easy, the way they are handled by the PS3.

In conclusion, if you are not a purist when it comes to Blu-ray video quality, can tolerate a little bit of machine noise, and don’t mind that it won’t work with your universal remote, then get the PS3. It’s basically half the price of the BDP-05FD and its disc load times are much faster. However if you want what I believe is the best Blu-Ray player currently on the market, go with the BDP-05FD. If you really want ethernet support and can stomach paying an additional $300, Pioneer is rumored to be close to releasing a Profile 2.0 Elite Blu-ray player that will be its flagship player, cementing the BDP-05FD as its mid-range machine.

Update: Legal Confusion Persists Regarding the “Making Available” Doctrine

November 28th, 2008 | COMMENTS(3)

Earlier this year, I posted my personal opinion that the “making available” doctrine urged on this country’s courts by the Recording Industry Association of America (RIIA) should die a quick death. As articulated by Marybeth Peters, the Register of Copyrights, the doctrine essentially holds that “making [a work] available for other users of [a] peer to peer network to download . . . constitutes an infringement of the exclusive distribution right, as well as the reproduction right”. Letter from Marybeth Peters, Register of Copyrights, to Rep. Howard L. Berman, Rep. from the 28th Dist. of Cal. (Sept. 25, 2002).

Well, this Fall we witnessed the the destruction of the “making available” doctrine in a federal court in Minnesota, only to see it emerge like the fabled phoenix in a federal court in Texas. So, here we go…

Jammie Thomas Update

On September 24, 2008, Judge Michael Davis declard a mistrial in the case of Capitol Records, Inc., et. al. v. Jammie Thomas, vacating a judgment against Thomas for $222,000 in penalties, and ordered a new trial. At the heart of the ruling is Judge Thomas’s conclusion that a jury instruction based on the “making aavailable” doctrine was clearly erroneous. In what I consider a well reasoned opinion, Judge Davis thoroughly covers the legal arguments for and against the doctrine, but in the end his decision rests on an entirely lucid interpretation of the Copyright Act and correct application of canons of statutory construction. The RIAA urged the Court to find that simply making a copyrighted work available for distribution violates the copyright owner’s exclusive distributions rights. To prove its point, the RIAA cited to other provisions of federal copyright law that define “distribution” as including “offers to distribute.” Judge Davis noted, properly in my opinion, that “distribution” is defined differently throughout the Copyright Act, and that “when Congress intends distribution to encompass making available or offering to transfer, it has demonstrated that it is quite capable of explicitly providing that definition within the statute.” The Judge then concluded:

The Court’s examination of the use of the term “distribution” in other provisions of the Copyright Act, as well as the evolution of liability for offers to sell in the analogous Patent Act, lead to the conclusion that the plain meaning of the term “distribution” does not include making available and, instead, requires actual dissemination.

Earlier this month, The Progress & Freedom Foundation, a think-tank supported by many media industry companies, published what I believe is a truly vociferous hit-piece against Judge Thomas’s opinion. According to the article’s author, Thomas Sydnor, Judge Thomas’s opinion has caused “the analysis of this important issue degenerated from unreasoned to unreasonable to injudicious.” A casual reader of Sydnor’s article will, I think, be stunned by its strident tone and unadulterated hostility toward Judge Thomas decision, and perhaps even to the Judge himself. Sydnor characterized Judge Thomas’ opinion as “[l]awless and arbitrary.”To be sure, Sydnor has a few valid arguments to make, particularly with respect to the proper application of canons of statutory construction, but any persuasiveness in his arguments is overwhelmed by his negativity. One cannot help but suspect his shrill tone is the product of intellectual desperation. Following is how Sydnor begins his analysis:

The problems in Thomas began when its analysis of statutory interpretation and judicial precedent became unreasoned: Thomas failed to show that the consistent application of any principle of law could produce the clashing results achieved. Then its analysis became a self-parody as Thomas fired Gatling-gun accusations of unreasonableness at dozens of district-court judges, the Court of Appeals for the Eighth Circuit, other circuit courts, the Supreme Court, three Presidents, six Congresses, the Copyright Office, the Patent and Trademark Office, various U.S. Trade Representatives, and the Department of Justice—among others.

Finally, these unreasonable claims became injudicious as the Court offered an advisory opinion, questioned the wisdom of the jury and Congress, and usurped the jury’s function by mischaracterizing the Defendant’s motives and conduct so egregiously that looting became a non-profit avocation and the deterrence of deceit became “oppressive.”

On the merits of Judge Thomas’s opinion, I am persuaded by his observation that by a plain reading of the statute, § 106(3) of the Copyright Act does not include an “offer to distribute.” The opinion exhibits a respectable level of judicial restraint by refusing to imply a Congressional intent not expressly stated in the statutes. In fact, the opinion concludes with an appeal to Congress that it review the Copyright Act in light of the flood of peer-to-peer cases (now estimated to be more than 30,000) being advanced by the RIAA and its allies based on the “making available” theory. While I personally hope Congress never expressly adds a “making available” right to § 106(3) of the Copyright Act, Judge Thomas’s approach is undoubtedly the correct one under our system of government. In the end, Sydnor’s core claim appears to be that history, judicial precedent and canons of statutory construction would have provided ample cover for Judge Thomas if he had instead chosen the path of judicial activism and implied a “making available” right as part of the exclusive right to distribute. Judge Thomas was correct to ignore the seductiveness of that path and refuse to legislate from the bench. The RIAA should make its case to Congress so that the voices of consumers, technology innovators and copyright owners can all be heard.

In addition to being legally correct, in my view, Judge Thomas’s opinion comports well with the technological realities of digital media in today’s world. As digital media becomes more portable and the number of devices facilitating portability increase, judicially implying a “making available” right into § 106(3) of the Copyright Act will unreasonably empower the RIAA to stifle technological progress that benefits consumers. Judge Thomas has it exactly right when he insists that infringement of the distribution right requires proof of actual dissemination of a copyrighted work. The RIAA can and should pursue cases of actual illegal dissemination of a copyrighted work, but the courts should reject shrill appeals to judicial activism, like those of the RIAA and Mr. Sydnor.

Following Judge Davis’ ruling, the RIAA filed a motion requesting the Judge allow an appeal to the 8th Circuit. Judge Davis has not ruled on the appeal motion, and has tentatively set a new trial of March 9, 2009.

The “Making Available” Doctrine Fights Back

In late October 2008, U.S. District Judge Xavier Rodriguez upheld his decision one month earlier finding a Texas college student liable for copyright infringement based on her use of the Kazaa P2P network, and ordering her to pay $7,400. Judge Rodrigez acknowledged that the 5th Circuit had not yet ruled on the question whether a “making available” right is part of § 106(3) of the Copyright Act, and chose to follow those courts, including the 9th Circuit, holding such a right is implied in copyright owner’s exclusive right to distribute a work. The student’s lawyer has promised an appeal.

What now?

It would be helpful for all concerned if one of these “making available” cases can make its way to the U.S. Supreme Court. If Judge Thomas allows the RIAA’s appeal, then the 8th and 5th Circuits will have the issue of the “making available” squarely before them. If one of those appellate courts rejects the doctrine and he RIAA appeals, then there should be enough of a split in the circuits for the Justices to deem the case worthy of review. Given the enormous number of cases filed by the RIAA, it will not be difficult for the Justices to recognize the need for clear guidance from the SCOTUS. Until then, the battle lines remain drawn and there is confusion in the courts that will lead to unpredictable rulings and uncertainty for the digital media marketplace.

Earlier this year, one of the foremost Copyright law experts, Mr. William Patry, ended his Patry Copyright Blog after a 4-year run. In bidding farewell to his readers, Patry lamented the sorry state of U.S. Copyright law:

Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately..

I share his sentiments.

The Window Channel Takes The Lead

September 15th, 2008 | COMMENTS(0)

Earlier this year, I posted about the progress of the ambient/scenic genre and the two main players in the space, The Window Channel and Gallery Player. As exciting as the prospects are for this genre, it is subject to the same rules of marketplace Darwinism that apply to any industry. Just over a month ago, Gallery Play folded up its tent. A short message on its website advises the company “ceased operations” on July 30, 2008. There is some speculation that Gallery Player was sold. Matt Burns, posting on Crunch Gear, reported a statement on the web bio of Scott Lipsky, Gallery Player’s founder, that the company was sold in August to an undisclosed buyer. Confusingly, the statement went on to state the transaction was pending. Mysteriously, the entire statement has since been removed from Lipsky’s web bio, raising the question whether the transaction closed or not.

The demise or sale of Gallery Player leaves The Window Channel as the undisputed leader in the ambient/scenic digital media genre. Adding to its momentum, TWC was recently featured on KING 5 News, the local Seattle NBC affiliate. Check out the video of the new segment, which explains a bit of the company’s production efforts and market approach.

DISCLOSURE: The Window Channel is a client of Stanislaw Ashbaugh, LLP

Comcast Broke the Law

August 1st, 2008 | COMMENTS(0)

Last March, I posted on Comcast’s decision to end its intentional throttling of BitTorrent downloads. Well, today the FCC ruled that Comcast’s throttling of BitTorrent traffic was unlawful. In its news release, the FCC noted that video distribution made possible by BitTorrent and similar technologies “poses a potential competitive threat to Comcast’s video-on-demand (“VOD”) service.” Put another way, trying to protect its own VOD service by clamping down on Internet competitors is not “reasonable network management.”

I found the the opening portion Chairman Kevin Martin’s Press Statement particularly powerful:

Would you be OK with the post office opening your mail, deciding they didn’t want to bother delivering it, and hiding that fact by sending it back to you stamped “address unknown – return to sender”? Or if they opened letters mailed to you, decided that because the mail truck is full sometimes, letters to you could wait, and then hid both that they read your letters and delayed them?

Unfortunately, that is exactly what Comcast was doing with their subscribers’ Internet traffic.

Last year, some broadband subscribers complained to the FCC that Comcast was blocking and delaying their Internet traffic. Our investigation, and the findings of several widely respected engineers, confirmed the complaints. Comcast was delaying subscribers’ downloads and blocking their uploads. It was doing so 24/7, regardless of the amount of congestion on the network or how small the file might be. Even worse, Comcast was hiding that fact by making effected users think there was a problem with their Internet connection or the application.

Today, the Commission tells Comcast to stop, and to disclose to its subscribers how it is going to manage traffic on a going forward basis. We therefore take another important step to ensure that all consumers have unfettered access to the Internet.

Martin’s Statement also reveals the Commission found Comcast’s defense contrary to the evidence, a polite way of saying it was not telling the truth:

While Comcast claimed its intent was to manage congestion, they evidence told a different story:

• Contrary to Comcast’s claims, they blocked customers who were using very little bandwidth simply because they were using a disfavored application;
• Contrary to Comcast’s claims, they did not affect customers using an extraordinary amount of bandwidth even during periods of peak network congestion as long as he wasn’t using a disfavored application;
• Contrary to Comcast’s claims, they delayed and blocked customers using a disfavored application even when there was no network congestion;
• Contrary to Comcast’s claims, the activity extended to regions much larger than where it claimed congestion occurred.

The FCC’s ruling seems to be a big win for advocates of Net neutrality and is a clear and powerful signal that the FCC will enforce its Internet Principles.

The “Making Available” Theory Should be Made Unavailable

July 8th, 2008 | COMMENTS(0)

Jammie Thomas is a single mother of two. Capitol Records filed a lawsuit against her in federal court in Minnesota, alleging she illegally downloaded 24 songs and uploaded them to Kazaa, a P2P website. Last October, a jury found Jammie liable for copyright infringement and ordered her to pay $220,000. The judge had instructed the jury that Capitol records did not have to prove anyone actually downloaded the songs from Jammie’s Kazaa folder, and that they could find she engaged in unauthorized distribution of copyrighted works by “making available” the copyrighted works over a P2P network. According to one of the jurors, it took the jury 5 minutes to rule against Jammie.

At the heart of the Jammie drama is the “making available” theory, which, in my opinion, represents a real threat to the evolution and progress of digital media. Judge Michael Davis, who presided over Jammie’s trial, is concerned as well. So concerned, he is second guessing his “making available” instruction to the jury and has scheduled a hearing this August on whether he should declare a mistrial. Judge Davis has invited interested members of the public to weigh in, and the amicus curiae briefs filed thus far show how the battle lines are shaping up.

Rushing to Capitol Records’ defense is the Motion Picture Association of America, underscoring the reality that unless it is rejected, the “making available” theory will be used to limit the progress and evolution of digital video. According to the MPAA’s brief, the mere act of uploading a copyrighted work to a P2P network constitutes a “distribution”, regardless of whether actual distribution has been shown. In other words, MPAA believes that when it comes to uploading digital media (or any other copyrighted work) to a P2P network, no proof whatsoever is required that anyone has actually accessed the file on the P2P network and downloaded.

A group of law professors have filed an amicus brief urging the opposite view. As far as I’m concerned, the Professors have it right and their arguments are better constructed and supported. For example, the Professors make the compelling point that uploading a file from a computer to a P2P network is not a distribution; it is a transmission. The distribution can only occur when a third party accesses the P2P network and downloads the file. Consider the following excerpt from the Professors’ brief:

“In the present case, § 106 of the Copyright Act confers upon copyright owners the exclusive right “to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C. § 106(3). As we explain below, the plain language of the statutory text, as confirmed by other courts and leading commentators, compels but one conclusion: that merely making a work available to the public, whether over the Internet or otherwise, by itself does not constitute a distribution. More precisely, because a defendant “distributes” in violation of § 106(3) only when she actually transfers to the public the possession or ownership of copies or phonorecords of a work, no distribution is effected merely by making a work available for distribution on a peer-to-peer network…Although the act of making copies or phonorecords available may enable the public to acquire possession or ownership of the copies or phonorecords, unless and until members of the public actually obtain such possession or ownership the necessary final step for transforming the “making available” into a distribution would be lacking.”

Caution is recommended whenever it is suggested that actual proof of wrongdoing is not required to find liability. If transmitting a copyrighted file is really the equivalent of distribution, we may continue to see the RIAA, the MPAA and the “making available” in courtrooms across the country attacking other forms of “distribution.” For example, are users of Lala.com illegally distributing music when they upload (a.k.a transmit) their own legally obtained music to Lala using their Music Mover application? Is that illegal distribution of a copyrighted work? The RIAA and the MPAA say so. Think about it.

CafePress acquires ImageKind

July 8th, 2008 | COMMENTS(0)

Today, CafePress announced its acquisition of ImageKind. ImageKind’s CEO, Kevin Saliba, also issued a blog post regarding the deal.

First, a matter of full disclosure. Our law firm is counsel to ImageKind and I and two of my colleagues handled the transaction. With that out of the way, this is a deal loaded with synergy. It is also a combination that industry observers could have predicted two years ago. CafePress is now a company to really watch. The National Venture Capital Association recently reported there were no venture-backed IPO’s in Q2 2008. If current conditions change, CafePress could be a good candidate for an IPO. Given that further industry consolidation is the current trend, I would not be surprised to see a bigger fish swimming around CafePress in the near future.