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Wireless: A peer-to-peer music asylum

File-swapping software makers are finding new business with cellular carriers.

While the technology has been vilified for making it easier to swap illegally copied music over the Internet, peer-to-peer software is increasingly being embraced by cellular phone manufacturers and service providers to help their nascent music businesses.

Handset maker Nokia has reportedly developed peer-to-peer software that would allow sharing of text documents, photos and, eventually, music between its 6600 model phones.

It's not just Nokia. Electronics maker Mitsubishi says it too has developed a prototype peer-to-peer phone. And three weeks ago, Canadian cell phone operator Rogers Wireless started using peer-to-peer software as a marketing tool for its music download service. Rogers lets users send the first 30 seconds of a song to a friend's cell phone. If the friend likes it, he or she can buy the rest of the song.

So why are cell phones becoming a haven for file sharing? The tight control cellular providers have over their networks, it seems, makes them an ideal host. Cell phones use privately owned networks in which operators can track every piece of data sent. They also have tough software that manages digital rights, and they typically have tracking technology built in to meet federal 911 laws, so operators can locate anyone they believe is illegally swapping files.

Such tight controls are just what the recording industry is looking for. Recently, the recording studio EMI licensed access to its song catalog to Seattle-based cell phone peer-to-peer software maker Melodeo. Melodeo is now in talks with U.S. cell phone operators and is providing the software behind Rogers Wireless' new service, according to Melodeo senior director Stan Sorensen.

"Operators and labels have learned from the free sharing days and are starting from the premise that there's money to be made," said Sorensen.