Week in review: Net music wars

Apple unveiled its latest line of digital music products, including a long-awaited Internet music store and ultrathin versions of its popular iPod portable MP3 player. The iTunes Music Store is launching with a library of 200,000 tracks, with participation from all five of the major record labels. In addition, the store will list exclusive tracks from 20 artists, including Bob Dylan and U2.

The songs cost 99 cents each to download, with no subscription fee, and include the most liberal copying rights of any online service to date. CEO Steve Jobs also unveiled new ultrathin iPod models, advertised as being as thick as two CD cases together. The devices come with 10GB, 15GB and 30GB of storage, costing $299, $399 and $499, respectively.

Songs are available only for the Macintosh running the OS X operating system and for iPod, although older versions of iPod require a software upgrade. Jobs said a version for Microsoft's Windows operating system is in the works and is expected to launch by the end of the year.

iTunes could help shift the battle to control digital media away from Microsoft's proprietary file formats. The new service uses technology known as Advanced Audio Coding (AAC), which has won positive quality comparisons with its main competitor, MP3, but it has been kept on the sidelines in part because of licensing delays and a lack of built-in anticopying controls.

After a slow start, AAC is gaining popularity with content companies such as America Online, which recently decided to use the format in its Radio@AOL service in place of technology from RealNetworks. If the iTunes store proves to be a success, AAC could win wider industry support as a download format and further complicate efforts of proprietary vendors to establish their technology as the de facto industry standard.

Despite the hoopla, a quick look suggests that it's a solid, but hardly revolutionary, addition to the market, analysts say. Jobs didn't note the debt Apple owes to those services and to the defunct music companies that came before them, which have spent years in painful negotiations with the record companies, progressively winning more flexibility for online music distribution. Apple's service may be the least restrictive of the current services, but that's largely because other companies did the hard work of paving the way.

File-swapping salvo
Fresh from a surprise court ruling that the makers of Grokster and Morpheus aren't liable for copyright infringement occurring as a result of people using their peer-to-peer software, the recording industry turned file swappers' own tools against them with a new campaign to send warnings to people who are offering copyrighted materials online.

Tapping into the chat functions built into software programs such as Kazaa and Grokster, the Recording Industry Association of America (RIAA) started sending automatic messages to people who are providing copyrighted songs online, warning them that they're breaking the law. About 200,000 people who use Kazaa and Grokster received the warning notice Tuesday, and millions more will get notices in coming weeks.

The ruling gave a big boost to StreamCast Networks' Morpheus. Once the Net's most popular file-swapping software, Morpheus is being reborn yet again with new technology, and StreamCast also has a new CEO: Former Chief Executive Michael Weiss.

StreamCast, which saw most of its top executive staff depart last month, said that it would release a wholly new version of its file-trading software this week. StreamCast's quick announcements mark the first of what is likely to be a string of similar reactions from a rejuvenated peer-to-peer community collectively rejoicing over its first legal win in the United States.

Four university students agreed to pay thousands of dollars each to settle online music piracy charges, ending the record industry's most aggressive thrust yet against individual file swappers. The RIAA sued four students separately last month for running services that searched computers connected to their college networks for MP3 song files. The lawsuits marked the first time that the RIAA directly sued students, as opposed to companies, associated with peer-to-peer piracy.

The settlements will see each student making payments to the RIAA totaling between $12,000 and $17,000, split into annual installments between 2003 and 2006. The lawsuits as filed could have entailed damages (in theory) of up to $100 million.

Canning spam
The top three e-mail service providers are pooling their resources and technical expertise to reduce unwanted commercial solicitations, or spam, that is inundating their systems. America Online, Yahoo and Microsoft sketched a broad outline that calls for technical changes to e-mail to make it more difficult to send the widely reviled messages.

Among the steps are plans to hinder spammers from creating multiple fraudulent e-mail accounts in bulk and to determine the real identity of the senders. The three companies said they would work with organizations across the industry to drive technical standards and guidelines that will work for any software or hardware systems.

A new Federal Trade Commission study on spam finds that most spammers lie. Whether disguising who they are, providing misleading subject lines, or offering false deals that are too good to be true, spammers are more likely to mislead recipients than to tell the truth about their offers, the study found.

The FTC's study, "False Claims in Spam," which analyzed 1,000 pieces of unsolicited commercial e-mail gleaned from FTC databases and government officials' in-boxes, found that 66 percent of spam contains some type of fraudulent claim. The FTC study found that nearly all spam pitching business opportunities contained some type of claim that appeared to be fraudulent, while half of all health-related spam was misleading.

The deluge of unsolicited bulk e-mail has snarled networks, clogged servers and created such a public nuisance that new laws are necessary, participants concluded during the first day of a three-day FTC summit on spam. As consumer outrage and complaints from legitimate businesses have kept pace with the growth of bulk e-mail, Washington has declared open season on spam.

For Sen. Charles Schumer, D-N.Y., it's personal: He told the crowd that his 14-year-old daughter was inundated with spam that promoted pornographic Web sites and that he was "utterly amazed" to learn that no federal criminal laws existed to punish that practice. In response, Schumer said, he asked his staff to draft a set of bills that would create a national "do not e-mail" list and levy criminal penalties on repeat offenders.

Spam has become such a vexing problem that, if current trends continue, e-mail could become a far less useful way to communicate. But some of the muscular responses to unsolicited bulk e-mail, such as blacklists that target Internet providers used by spammers, may have created problems of their own.

Participants at the summit sparred over whether such blacklists are legal and whether they do more harm than good. Some speakers warned their use means that legitimate e-mail is often lost or silently discarded--becoming an accidental casualty in the war on spam.

Coming attractions
A more advanced test version of Windows XP's successor has leaked onto the Web, and analysts say it indicates that Microsoft has stepped up work to deliver the new operating system. The operating system, code-named Longhorn, is expected to debut late next year or early in 2005. But analysts who examined the latest test release, dubbed "Milestone 5," which leaked onto the Web last week, said Microsoft appears to be slightly ahead of schedule.

The new test version is more refined than the one that leaked during the last week of February, said analysts. Now that the company has shipped Windows Server 2003, its new server operating system, Microsoft appears to be rapidly shifting development resources to Longhorn, the next major release of Windows for the desktop.

Intel has released software that lets computers read lips, a step forward that could lead to better voice-recognition applications. The Audio Visual Speech Recognition (AVSR) software tracks a speaker's face and mouth movements. By matching these movements with speech, the application can provide a computer with enough data to respond to voice recognition commands, even when these are given in noisy environments.

Computer companies have tried to popularize voice recognition applications for years, but have been stymied by a shortfall in processing power in most computers and by the restricted performance of their software.

Also of note
Lines from Unix's source code have been copied into the heart of Linux, sometimes exactly and sometimes in a modified form designed to disguise their origin, SCO Group Chief Executive Darl McBride said--an accusation that cuts to the heart of the open-source movement's legal and philosophical underpinnings?In an attempt to open its business portals to cell phones, IBM has introduced software that enables its Web sites to take dictation...The Justice Department has charged an Intel engineer with conspiracy to levy war against America and with supporting terrorist organizations...Worldwide chip sales are expected to rise 16.7 percent in 2003, largely driven by an anticipated increase in business spending.