Darknet

McGuinn on the folk tradition vs. the record labels

For the past three months, I've been publishing a new excerpt or interview from "Darknet" here nearly every week. Here is this week's installment:

Roger McGuinn on the folk tradition vs. the record labels (on Ourmedia)

I spoke with McGuinn -- a renowned solo artist who was lead singer of the Byrds in the mid-'60s -- about McGuinn's Folk Den, a Web site devoted to continuing the folk tradition of storytelling, which he says is in danger of being obliterated by commercial interests.

What's your opinion about the whole file-sharing phenomenon?

As an artist, I think it's just like being played on the radio. It's good publicity. I went to the Senate and testified on that. The only money I ever got out of the record deal was the advance, which was pretty small when you boil it down, and the money I made secondarily, through playing concerts. The record labels have very creative accounting. At Aristra Records, I sold half a million copies of "Back to Rio" and never got a penny in royalties.

It sounds like sour grapes, but it's a fact of life. The labels say, well, we need to do that because not all the albums sell and we have to subsidize the others. But nobody has ever audited the record companies and come away empty-handed. ...

This guy Cory Doctorow [of the EFF], he points out that every time a new technology gets in the way of copyright, they try to break the technology. They have to drag the copyright people kicking and screaming to the money tree, because they always make more money. It happened with piano rolls, it happened with radio, it happened with VHS videotape. The studios make more money off video than they do in the theaters. With the Internet, they haven't figured it out yet, but they're going to make money there, too. The blanket license might be one approach.

Story: The tech exec who broke federal law (and why the law is broken)

The following story recounts how the vice president of Intel Corp. violated the Digital Millennium Copyright Act (DMCA) without realizing it — by making a home movie of his son playing Pop Warner football and incorporating snippets of a Hollywood movie. (I took the above photo of Donald S. Whiteside at Digital Hollywood 2002 in Beverly Hills.)

Excerpted from chapter 7 (A Nation of Digital Felons) of Darknet: Hollywood's War Against the Digital Generation. This is another in a series of excerpts from the book, along with new material, appearing every Monday for the next several weeks.

Driving to Intel’s new research lab at the University of Washington at daybreak on April 3, 2002, Donald S. Whiteside drank in the spectacular Seattle morning. The sun glinted off Elliot Bay, the Cascades gleamed in the distance.

Newly minted the year before as vice president in charge of Intel’s broadband and content program, Whiteside was one of the executive team’s stars. Whether facing hostile congressmen on Capitol Hill or meeting with Hollywood executives in swank corporate high-rises, he cut a dashing figure. Tall, ruddy-skinned, and imposing, with silvery hair and sculpted features, Whiteside had quickly become one of the leading figures in the digital rights wars because of Intel’s vast influence in the technology world. Computers made with Intel’s chips are changing modern life more than any other product. The Microsoft-Intel alliance, dubbed Wintel, powers more than nine of every ten personal computers.

With $27 billion in annual sales and sixty thousand employees, Intel was the only company with representatives on both the 4C and 5C industry groups, which hammer out the technology rules for recording and networking media throughout a house or a business.

On this particular morning, a congressional fact-finding delegation was convening at the Intel lab, followed by trips to Amazon and Microsoft. For the twenty or so senior and midlevel staffers from the House Judiciary Committee, Senate Commerce Committee, and other key panels, the trip was more than a junket to the nation’s java capital. It was an opportunity to press the message that Washington was unhappy with the pace of progress by the high-tech sector in protecting movies and music from Internet piracy.

The aides, whose philosophical outlook cut a wide ideological swatch across both political parties, were not of a single mind on the torturously complex subject of copyright law. But many held the view that high tech’s potentates possessed a technological silver bullet that could solve the problem of Internet piracy once and for all. At the very least, the technowizards could certainly come up with a solution if forced. Perhaps they needed a nudge from Washington. Many of the assembled staffers on that spring morning seemed to believe that Washington probably would have to intervene in some way to sort out this mess.

If hubris flowed like wine, the Seattle region’s vintners would have faced serious competition from this strutting little delegation.

Whiteside parked his rental sedan and greeted his guests in the lab’s largest conference room. No reporters were present, so the give and take could be frank and forthright. Whiteside fired up his laptop as a lab employee connected it to a projection screen for a presentation of PowerPoint slides. Whiteside, who flew in from Phoenix, apologized for his less-than-dapper appearance: the airline had lost his luggage, and he could rustle up only an ill-fitting shirt this early in the morning.

Whiteside quickly launched into a slide show for the aides and a few interns lurking in the wings. He was an articulate evangelist for Intel’s vision of the networked home. While industry titans like Bill Gates and Steve Jobs sometimes seemed a bit out there, preaching about smart homes and the Web lifestyle and pervasive computing that would reach into every crevice of our lives, Whiteside tended to bring the discussion down to earth, talking about the technological forces and business imperatives that were driving the digital revolution. The trend lines were unmistakable: the networked home was very real and quickly becoming an integral part of middle-class America.

The aides, serious men and women in their twenties to forties, seemed caught up by Whiteside’s click-and-tell. He briefly recounted the evolution of personal computing. The era of stand-alone boxes was ending, he told his audience. We’re now at the dawn of a new phase of the computer revolution. Whiteside called this “the era of the extended wireless PC.” That was one way to frame the discussion, although the PC was only one component of this new era of connectivity. (Bill Gates calls this “seamless computing.” I’d argue that a better term would be “personal media networks.”) By whatever name, these are the connections that are making all our high-tech stuff talk to each other.

This trend will touch all of us in profound ways. Forget the nonsense you may have heard about the digital home. It’s not about walking into a room and having the network flick on the lights, turn on the stereo, and mix you a martini. It’s not about your smart refrigerator ordering milk when you’re a quart low. It’s about new ways to share and exploit personal media—bringing digital music, photos, television, movies, voice, and audio together in an intelligent way so that content and communication can flow instantly from one device to another in the universal language of 0’s and 1’s. Home networks will let you capture a movie or show from the Web or your cable system and zip it wirelessly to let you watch it on the TV in your living room, in your car, or on your boat. Stream music from your PC to the high-fidelity speakers in the family room. Show your latest family photos in a slide show on your TV set. We will bank, learn to cook, and consult with doctors over the network. We’ll look in on loved ones when we’re at work.

And we will do countless other things no one has thought of yet.

The rudimentary plumbing for this network has already begun to appear in the homes of early adopters. Hundreds of thousands of people have networked their televisions to stream recorded programming from the digital box in one room to another room. Tens of millions have bought TV tuner cards, letting viewers watch television on their computers. Others are taking the MP3 music files on their computers and playing them on their home entertainment systems. Further out, engineers at Intel were working on an ultrasmall “silicon radio” that would be embedded in the corner of every one of the billions of chips it makes as part of this wireless hive. It was all about connections.
The tech industry, mired in the worst downturn in its history, had risen up as one to embrace the idea that its salvation lay in the converged, connected, networked home. Plans were formulated, industry standards were set, and now came the job of making the vision a reality—rolling it out in a way simple enough for customers to use without getting a graduate degree from MIT. (The Yankee Group reports that 30 percent of all home networking products sold are returned because the buyer can’t get them to work. It’s hard to make this stuff simple, but techies need to get serious about making this their top priority.)

It turns out, however, that the most maddeningly difficult part of this new wireless bazaar was not about how to get everyone connected. The hardest part was figuring out how to allow some connections but prevent others. Two reasons for this: you and I don’t want our private information—about health, money, shopping habits, political beliefs—to seep out into the digital ether. Tech gurus were tackling the problem, figuring out how a conversation could take place through the air between your PC and your television set fifty feet away, but sealing it off from your neighbor or a stranger on the street. The second reason for restricting certain connections: the efforts by media and entertainment companies to protect and control their digital goods.

Here, the issues were even more tangled. When a consumer bought digital content, did he own it, or was he just “licensing” the bits? What rights did he have to watch, use, share, or transfer digital media both inside and outside his house? And who should decide?

Whiteside ended his PowerPoint show with a discussion of digital piracy. Piracy runs the gamut from the casual copier and hobbyist to the hacker, small-scale pirate, and professional pirate. Technology, he said, might be effective against the casual copier, but it almost never thwarts determined pirates.

He fired up a video clip. The motion picture Titanic flashed onscreen in remarkable clarity and audio fidelity. “I captured this video clip by pointing my camcorder at the television in my living room,” he told the aides. The only additional piece of hardware needed was an inexpensive time base corrector to synchronize the television and camcorder refresh rates, available at any Radio Shack and used for a wide range of legitimate purposes. Legislate all the technological safeguards you want, he told them, and piracy still would be this easy to accomplish.

Then it was the congressional staffers’ turn. They jousted with Whiteside on the subjects of technology mandates, copy protection, and digital piracy. The government mandated unleaded gasoline, one aide suggested, so why shouldn’t it mandate technological measures in consumer devices to protect the content industry? Another suggested requiring companies to place watermark technology in all camcorders to thwart pirated recordings of movies.

Some of the aides admitted to downloading songs using Napster, while others fulminated against what they considered to be rampant online piracy being enabled by technology companies. Several staffers spoke up in agreement with an aide who called television’s V-chip a great success story. Whiteside alternately sparred, coaxed, cajoled, and educated his guests. A senior aide to a Democratic senator would tell me later, “The session at Intel was by far the most stimulating of the trip.”

Toward the end of the meeting, Whiteside fingered the jewel case of a homemade DVD he had created months earlier. He cued up the video in his laptop and froze the opening frame on the projection screen.

Time to get personal.

Whiteside explained how the homemade DVD came to be. His nine-year-old son Timmy played on a Pop Warner team called the Typhoons, and Whiteside spent the better part of a football season capturing images of the action with his digital camcorder. At long last Whiteside culled together the highlights, imported them into his PC, and began creating his digital masterpiece.

“I used a program to copy a few seconds from the DVD of the movie Rudy,” he said. “It’s the scene showing the final game of the Notre Dame season with Rudy’s family in the stands cheering wildly when he got to play. I then spliced in some snippets of pro players doing a touchdown dance from NFL Films, and I overlaid it with audio from ‘Who Let the Dogs Out?’

"I stitched this all together with video of my son, and it turned out to be the piece of home video that gets watched the most in our house. When relatives or members of the football team come over, we pop it in and we just laugh. The added scenes and music really bring it all to life.”

There was just one problem. “It turns out to do this, I violated the DMCA. I used the DeCSS program to circumvent the encryption and access the movie clips on the DVD that I own,” Whiteside told the aides. “The end product is a DVD that I don’t sell or distribute but is considered a derivative work under copyright law.”

To their credit, none of the congressional aides flipped open their cell phones to call the attorney general. (When I described Whiteside’s home movie to Jack Valenti, he said, “He’s committing a violation of federal law.”)

DeCSS, software devised largely by fifteen-year-old Norwegian Jon Lech Johansen in 1999 to circumvent the digital locks on a DVD, has been widely popular since it first appeared on the Net. (He wrote the code so he could play a DVD movie on his Linux computer. Johansen tells me his original DeCSS code may have been downloaded a million times over the years, and related ripper programs millions more.)

Authorities have brandished the Digital Millennium Copyright Act as a club, threatening to use it against anyone who uses, distributes, or even links to a program like DeCSS. First-time offenders are subject to civil fines of up to $2,500, with penalties of up to five years in prison and a $500,000 fine if the violation was willful and for profit. Whiteside said he didn’t know he was violating the law at the time and hasn’t done it since.

The point of his demonstration, Whiteside said, was not a mea culpa, but a real-world example of how Washington’s penchant for legislative solutions can hobble a new, flowering marketplace of innovation.

“This is precisely the kind of exciting consumer creativity that should be enabled,” he said. “I don’t claim to have all the answers. Should I have to go clear rights to use ten seconds from Rudy in my son’s video, or does it fall under fair use? Should I have to pay pennies for every second of a snippet? I don’t know. But I do know that we have to figure out a way for consumers to do something creative without breaking the law.

“To me, this episode was a great way to frame the question: Should copyright law permit this or not? Should the DMCA criminalize this sort of thing? Or should the creative community, high-tech community, and lawmakers get together to try to stimulate this kind of innovative behavior?”

(From Darknet: Hollywood's War Against the Digital Generation. You may copy excerpts from this entry to comment on or critique the work or to otherwise engage in fair use.)

Story: Your locked-down digital future

Better pay attention: Hollywood is adding such little-known weapons to its arsenal as “certification” and “renewability”—new forms of copy control that are about to enter the living room by stealth. The following is excerpted from chapter 6 (Cool toys Hollywood wants to ban) of Darknet: Hollywood's War Against the Digital Generation. This is another in a series of excerpts from the book, along with new material, appearing every Monday for the next several weeks.

The crowd at Oakland’s Black Box spills out the door into a warm summer night. The event, part of the Illegal Art exhibit held to dramatize the tightening noose of misapplied copyright laws, features creators of electronica, digital film, and “appropriation-based” art along with leaders of the free culture movement. More than 150 people mill about, from deeply earnest Berkeley activists to nose-ring-clad San Francisco fashionistas. A college student lets his black T-shirt speak for many here with its simple sentiment: “Sharing isn’t stealing.”

Six of us huddle around a television as a scene from Teletubbies appears onscreen. But this is not your father’s PBS: as morning dawns in Teletubby-land, the sun morphs into the face of George W. Bush and begins shooting death rays at bunnies and wild creatures.

In the next video, we see the Little Mermaid, but the animator of this five-minute film short inserted burning skeletons, a menacing cat-faced woman, the ominous sound of a music industry lawyer, and the voice of the Little Mermaid dubbed over the band Negativland’s helium-tinged cover of Black Flag’s “Gimme Gimme Gimme.” Not exactly Disney fare—and this may have been the artist’s point.

Here, and at a related show across the bay at the San Francisco Museum of Modern Art Artists Gallery, we see works pushing the edge of cultural expression, pricking our dulled sensibilities. But now large corporations are pushing back. Mattel sued artist Tom Forsythe, who placed Barbie in a blender as a way to expose the efforts to sell “an impossible beauty myth” to children. Playwright Jason Sherman’s play The Message, about the last years of Marshall McLuhan’s life, was set to open in Toronto in fall 2003 but was canceled when McLuhan’s family made vague threats about suing for copyright infringement. A court banned a documentary on Karen Carpenter’s battle with anorexia from movie theaters because it included music by the Carpenters without authorization; the film portrayed her brother, Richard, in an unflattering light, and he refused to grant the filmmakers permission to use the music. Thus the screening shown tonight is a bootleg. The exhibit also features a CD containing two dozen songs that have been embroiled in legal troubles.

Near the doorway, Richard Prelinger, the silver-haired film archivist who has put twelve hundred public domain films online at the Internet Archive, inspects a Krishna wall mural. The movies he oversees were downloaded about a million times in the past year, but few additional films will be added to the collection over the next twenty years, thanks to the Sonny Bono Act. “Members of the public have no affirmative right to access cultural information,” Prelinger tells me. “People need to understand that it’s the middlemen—distributors and publishers—who are using copyright laws to clamp down on expression and trying to turn the Internet into a read-only medium. Artists have to organize and stop letting the corporations act on our behalf to impose an all-rights-reserved view of the world. Art has never been about that.”

Next, I run into one of the night’s speakers, Fred von Lohmann, the ponytailed attorney for the Electronic Frontier Foundation. Whenever the EFF defends a file-sharing network or someone charged with violating
the Digital Millennium Copyright Act, the dark-eyed, boundlessly energetic von Lohmann typically appears in court or files briefs. As I peer around the gallery, I tell von Lohmann that while the clampdown on artistic freedoms is important, I suspect many people in my suburban town would find the issues too abstract and removed from their lives. How is middle-class America suffering, as he claims, from the entertainment industries’ regime of tightening control?

He begins by mentioning court cases in which musicians have been fined as much as $90,000 and had their albums recalled for failing to secure the proper licensing rights to borrow from earlier works. Since the early 1990s, court rulings have so drastically limited the art of sampling—forcing bands to sometimes pay six figures for a snippet lasting a couple of seconds—that many musical acts have given up on sampling. The hip-hop group Public Enemy never regained its earlier mass appeal after the courts turned sampling into pay to play. Sampling now enjoys its greatest popularity in underground dance clubs.

The court battles over file sharing show no signs of subsiding, with the entertainment industries seeking to shut down Kazaa and other file-trading networks and the recording industry, filing hundreds of lawsuits against individuals who make copyrighted music available to others on peer-to-peer services. (My own view is that Kazaa is largely an outlaw outfit but that not all file-sharing networks are equally culpable.)

“Lawsuits and legislation have become the weapons of choice for dealing with file sharing and cultural recycling,” says von Lohmann, wearing a black blazer, jeans, tennies, and EFF cap.

But he says the clampdown on digital culture is taking place not only in the courts but also in neighborhoods, nightclubs, exhibit halls, and homes, where the culture of reinvention is under assault. If the current legal climate had been in place decades ago, all of jazz would have been illegal. Traditions that rely on reworkings of real-world images, such as surrealism, collage, and Pop Art, might have been smothered in the cradle.

Public libraries are another battleground. Librarians are trying to protect the public’s access to new books and articles against the efforts by some publishers to push a pay-per-view model so that whenever a reader wants to access information on an electronic device, it becomes a billable event. Many e-books forbid copying or making printouts, even for books in the public domain. Copy protection also impairs a library’s ability to archive and preserve materials that may disappear within a few years. Over the long term, such practices could jeopardize the very underpinnings of the free public library system.

Closer to home, the media players and digital devices entering our living rooms are being designed in ways that serve Hollywood at the expense of the public. Von Lohmann predicts we’ll soon see personal video recorders that automatically delete recorded shows after a certain amount of time at the copyright holders’ behest. “I’ll guarantee you that’s coming,” he says. Hollywood already has the right to begin erasing a digital pay-per-view program from your recording device as soon as ninety minutes after the telecast ends.

Von Lohmann and Kraus both point out that computer companies and consumer electronics companies had long acted as surrogates for the public in these private industry forums. Because the interests of Hollywood, the tech industry, and the CE industry overlapped but did not align completely, the hardware manufacturers could be counted on to fight for consumers’ rights. “My, how things have changed,” von Lohmann says. “Sony led the fight for home taping because it had a business in selling VCRs. Today it’s harder to think of Sony as an advocate for the public interest because their business is now so deeply intertwined with content. Microsoft traditionally has served as a proxy for the public because they empowered people to use computers in new and creative ways. But Microsoft now has a second agenda, which is to gain market share by wooing Hollywood with the most restrictive digital rights management technologies they can devise. So when these three industries get together in cross-industry groups, the deals they cut sometimes don’t reflect the public interest. I don’t think we’ll see them trade away things like the consumer’s ability to time-shift television. But they’re perfectly happy to trade away future innovations that would benefit the consumer, so long as they can be assured that everyone must give up those same innovations. That’s where legislation, regulations, licensing rules, and tech mandates all come in.”

Licensing standards set within the clubby confines of these private industry groups rarely get much attention, but the rulemakers effectively dictate consumer electronics policy for the public, which rarely has a seat at the table during negotiations. Take the DVD. In 1996, Hollywood was all set to launch the new DVD format for playback on DVD players but not on computers. It was only the tech industry’s proposal to include copy protection, and a decision by Warner Home Video and Toshiba to fend off a rival format by Sony and Philips called the Multimedia CD, that led the studios to agree to make Hollywood DVDs compatible with the computer’s DVD drive. Several studio executives have suggested that if they had to do it all over again, they never would have agreed to allow DVDs to play on computers, given how trivial it was for the encryption to be broken. “Frankly, we made some mistakes last time,” says Adrian Alperovich, executive vice president of Sony’s Columbia TriStar Home Entertainment. “I think the standards should have been tougher.”

Today, Hollywood, consumer electronics makers, and tech companies are back at the bargaining table, hammering out how the next generation of high-definition DVDs will behave. The new discs, under development for years, will hold four to five times more video and audio data than standard DVDs. This time around, studios want an airtight protection scheme, a digital vault that even the best minds at the National Security Agency cannot penetrate.

Hollywood is adding such little-known weapons to its arsenal as “certification” and “renewability”—new forms of copy control that are about to enter the living room by stealth. (Another feature, called "selectable output control," allows copyright owners to turn off a viewer's set-top box's outputs under certain circumstances, as when a copy protection scheme has been hacked. But consumer groups and electronics companies say honest viewers shouldn't be prevented from, say, playing HDTV movies or recording high-def television just because someone somewhere else foiled the industry's copy control system.)

When a transaction takes place between a customer and movie studio over the Internet, certification tells the merchant who you are and whether you have the authority to place the order.10 It can monitor what kinds of movies or programs you’ve been watching. The technology can be used in other ways as well. Because copy protection on DVDs has been broken and DVD burners are proliferating, the studios are pushing for ways of signaling to a DVD player or receiver that a disc or a recording is authorized. The video would shut down if it doesn’t have the proper clearances. Entertainment analyst Tim Onosko predicts: “Next-generation DVD players on the drawing boards will most likely dial a mothership to check the legitimacy of your content. If it’s a disc that somehow violates the rules, or is a bootleg or an illegal clone copy, the player will balk.”

Renewability means if someone has bypassed the copy protection on a home electronics product, the system can be updated with new copy protection. Also called upgradeable DRM, renewability puts devices on a digital leash, giving the entertainment companies the power to cut the cord to any technology or media player it believes has been compromised—and effectively turning Hollywood into the warden of our entertainment experiences.11 Nurse Ratchet, meet your match. Because it is impractical
to introduce a major new format more than once or twice a decade,
the studios’ answer lies in retaining a format like DVD but changing its copy protection. Hollywood appears excited by the prospect of forcing all media players to abide by its rules of control. Mitch Singer, executive vice president of digital policy for Sony Pictures Entertainment, said at the 2004 Digital Hollywood summit, “We want to make sure any future devices will be updatable, especially as we move into high-def.” Tech representatives have signaled their willingness to add such renewability features in future media players.

You say you want to use fifteen seconds from that new Eddie Murphy film as part of your school project? Today millions of people are able to assert their fair use rights by downloading software from the Darknet to circumvent the DVD’s copy protection. Tomorrow, when Hollywood introduces a new copy protection scheme, as soon as a hacker cracks and distributes the encryption key, the studios will be able to send a firmware update to your next-gen DVD player so that the crack no longer works—and you won’t be able to snag those fifteen seconds after all. Or, say you transfer movies or TV shows to your Archos portable media player. (The French devicemaker Archos subverts copy protection by letting users plug the device into a DVD player and transfer a movie to it.) If Hollywood has detected that 0.01 percent of Archos’s customers are illegally uploading movies to the Internet with the help of Archos players, it could update the software inside DVD players or set-top boxes to prevent the transfer of films and TV shows to all Archos players. Hollywood would maintain a “whitelist” of approved devices and a blacklist of naughty devices that aren’t sufficiently locked down. Von Lohmann says your DVD player would not need to be online: when you drop a commercial DVD into the player, a hidden track on the disc will update your player’s firmware without your knowing it.

Of course, if that happens, some users will be tempted to simply point a camcorder at a TV or computer screen or theater screen to capture the scene they want. The media companies can’t stop that, can they? But Hollywood may trump you there, too. Cinea of Herndon, Virginia, has devised a Cam Jam technology to modify the image projected on theater screens and some small screens so that you can watch it without noticing anything amiss, but a videotape taken of the same image comes out marred. Engineers at the Dolby Laboratories-owned start-up—mostly the same crew who came up with the Circuit City DivX pay-per-play scheme that consumers so thunderously rejected—came up with the copy protection solution after studying differences between the way humans process moving images and the way cameras record them. No doubt the Cam Jam technology—without an accompanying warning label—will soon be coming to a camcorder near you.

Score one for “information with a ball and chain,” as Steven Levy put it in a Newsweek column discussing the coming era of digital rights management—technologies that govern how you may use digital media:

We’re entering the age of digital ankle bracelets. . . .
Like it or not, rights management is increasingly going to be a fact of your life. Not only will music, books and movies be steeped in it, but soon such mundane artifacts as documents, spreadsheet files and e-mail will be joining the domain of restricted information. In fact, the next version of Microsoft Office will enable creators of certain documents to issue restrictions that dictate who, if anyone, can read them, copy them or forward them. In addition, you can specify that the files and mail you send may “sunset” after a specified period of time, evaporating like the little tapes dead-dropped to Peter Graves in Mission: Impossible.

Von Lohmann sees some of the biggest battles ahead over the public’s use of video. “The natural thing for people to do is appropriate, mix up, edit, and play the video that’s all around them. That’s what we’ve seen in music with mash-ups and sampling, that’s what we’ve seen in art with collage and pastiche-based expression.”

The restrictions on new technologies can only serve to dampen innovation, he says. Von Lohmann tells of a phone call he received from a real-estate developer who builds homes in new subdivisions. The developer told him, “I’m putting in all these houses that can be wired together, and people will want to put personal video recorders in their houses. Once I have a cluster of these houses in a subdivision, I could effectively digitize all television signals, using the different PVRs to record different films and channels. And if they were all connected together, there could be a service for this suburb where you could get just about any TV show you wanted through this distributed network.”

Von Lohmann says he responded, “‘Yes, that’s a great idea. And you will get sued within a week if you build it.’ That chilled him on it. The studios and networks would sue him because this is their nightmare scenario, where the future of television is taken out of their hands and put in the hands of someone like the user or the subdivision developer.”

In the end, this may be the greatest potential loss to society: the service that never rolls out, the device that never gets invented, the cultural advancement that never takes place—all for fear of a Hollywood lawsuit.

(From Darknet: Hollywood's War Against the Digital Generation. You may copy excerpts from this entry to comment on or critique the work or to otherwise engage in fair use.)

Interview: Jack Valenti

People are taking fair use and changing it to unfair use and claiming that it’s fair use. — Jack Valenti

Jack Valenti was CEO and president of the Motion Picture Association of America for 38 years. He stepped down in September 2004, but his legacy lives on. This interview with J.D. Lasica is perhaps his most wide-ranging on the subjects of piracy, DRM, fair use and technological innovation.

Let’s start with the big question. How important is the issue of movie piracy, and what will happen to movies and entertainment if real piracy is left unchecked?

Well, what we know is that in analog piracy, hard good — that is hard-good DVDs and analog VHS — we lose about $3.5 billion a year in lost revenues worldwide. Now, we don’t have a number on digital piracy yet, but know that digital piracy will be far worse than analog piracy if left unchecked. A VHS tape has to go into a manufacturing plant, it has to be packaged, stamped, it has to have slave machines. But with digital piracy, you can have an eminently watchable thing you bring down from the Internet, you burn it on a DVD, and copy it 10,000 times, and each copy is as pristine and pure as the original. Now I’ve seen camcorded movies that are uploaded to the Net and they are very, very watchable. A lot of camcording going on is taking advantage of the fact you can go into a theater and plug in to one of those sound systems you have in the armchair for hard-of-hearing people. And the sound comes over crystal clear — beautiful sound. These camcorders are small, they’re digital, and they do a remarkable job of duplicating the film.

Do you think there’s a copyright crisis in this country?

I have been to eight universities — Harvard, Yale, NYU, Stanford and Duke — I’ve talked to about 3,500 students. I believe there is a disengagement by young people about who owns what and why. I think there’s a few out there who say, because I have the technological power to do so, I’ll take down anything that’s up there and I don’t care who owns it. They have rationalized, how can it hurt a big movie company if you bring down one movie, but they don’t realize that 10 million people are swapping these things. We only have about 17 million homes today with broadband, but two, three, four years from now you’ll have 30, 40, 50 million homes on broadband. Every university in the country has state of the art, large-pipe, high velocity broadband. So when you put that all together, the possibilities for movie theft begin to grow exponentially, and as the technology becomes faster, you can deliver it faster.

Days ago I delivered the DuBridge Lecture at Caltech. I visited their labs, and they have an experiment called FAST where they have brought down a DVD quality movie in five seconds. That’s 4.6 gigabytes. And Internet2, a consortium of European and American scientists have sent 6.7 gigabytes 12,500 miles — halfway around the diameter of the earth — in one minute. I asked Dr. Newman at Caltech, how soon can this be in production in the marketplace, three or four years? He said, no, if a company wants to come and put in money, it could probably be operative in the market in 18 months. Well, my face blanched.

That’s what we’re facing. I’m trying to put baffle plates in place now. I want to baffle piracy. We’re trying to do it looking two or three years out. If everything stopped right now, if everything stayed just as it is, we could probably survive it, because even with broadband it takes at least an hour to bring down a movie. You can bring down a song in 90 seconds. So I’m trying to put in place technological magic that can combat the technological magic that allows thievery. I hope that within a year the finest brains in the IT community will come up with this stuff. A lot of people are working on it — IBM, Microsoft and maybe 10 other companies, plus the universities of Caltech and MIT, to try to find the kind of security clothing that we need to put around our movies. It may be possible to so infect a movie with some kind of circuitry that allows people to copy to their heart’s content, but the copied result would come out with decayed fidelity with respect to sound and color. Another would be to have some kind of design in a movie that would react with some kind of design in a movie that would say, copy never, copy once. Some new business model may want to put a movie out on the Internet just after it leaves theatrical exhibition. We can’t afford to let that be copied at that juncture because it’s the aftermarket where you make your profits. Forty percent of all the revenues that comes to the major studios comes from home video. So if you allow a movie to be abducted early in its journey and everyone has it before it goes to home video, why do you want to buy home video when you already have it in pristine form?

I know you’ve taken to college campuses to talk about the morality of file sharing and piracy. How has that message been received by young people?

When I ask, how many of you believe that what you’re doing is wrong, morally and legally, most of their hands go up. But they rationalize it by saying, yes, it is a kind of stealing, but everybody else is doing it, and it costs too much to go to a movie. There’s a rationalization that goes on, but I am convinced if we keep putting this moral imperative before them and if the professors follow through on this, it will make an effect.

Let me tell you what we’re doing. We've been meeting for about a year with the representatives of universities: Dr. Graham Spanier, the president of Penn State; Dr. Charles Phelps, the provost of the University of Rochester; Rick Levine, the president of Yale; John Hennessy, the president of Stanford, and Dr. Molly Broad, the president of the University of North Carolina. We’ve been working with them to try to establish codes of conduct so that, at many universities now, they are instructing students when they return to campus that copyright must be observed. Some of the codes say, if we catch you the first time you will be admonished, if we catch you a second time, you can probably lose your computer privileges; third time could be a severe penalty. More and more universities are putting that in, and the word is getting through.

In a strange way, the lawsuits filed by the music industry have had an interesting effect. Some of the heads of the universities laud it because the word has gotten out, hey, you can really be injured with heavy fines. I think that message is getting through. The record people tell me that in their surveys, the number of people who think it’s illegal to do that has gone up from 20 percent to 50 or 60 percent. I think movies will be the beneficiary of that kind of gradual change in attitude.

I hear from a lot of students that they don’t consider it theft or stealing because you’re merely making a perfect copy. What do you say to a student with that view?

Well, if you can make a perfect copy of a silver plate in front of your home, why would you want to go to Tiffany's to buy one? Any time you make a perfect copy, why would you want to go to a Blockbuster store and rent or buy that DVD? So if you have 50 million perfect copies and subtract 50 million sales from the Blockbuster-type stores, that’s a serious decay.

Last week I interviewed two movie pirates, young men who are members of organized movie encoding groups. What would you say to them?

I’d do what the attorney Joe Welch said to Joe McCarthy, ‘Sir, have you no shame?’ I’d ask the young man, would you go into a Blockbuster store and furtively put a DVD under your jacket and walk out with it? Of course you wouldn’t. But you see no harm about putting a movie in your digital hard drive jacket and walk off with that. The reason you’re doing the latter is you think it’s risk-free and high-reward. But don’t you know it’s wrong? Don’t you know it’s stealing? They’ll rationalize it but they know it’s stealing. Everybody does it so what’s the big deal.

A lot of file traders on the Internet, especially those who live abroad, are unhappy with the studios’ region coding system, or windowing system. Do you think that system will ultimately have to change, perhaps to allow simultaneous worldwide releases of films?

That’s to stop parallel importing. If you didn’t have that, you’d have people stealing it here and then transporting it all over the world in analog form. That’s what you’re talking about, analog form. And parallel importing can kill sales within a particular country. You’re bringing it in from somewhere else. Now, if you’re stolen something that’s region coded for America, you couldn’t sell it in Europe. This is a contagion we’re fighting here now. Particularly abroad, organized crime is in it. I had the FBI tell me that if a criminal invested $50,000 in heroin and crack cocaine he could make a lot more money with 100% less risk by getting into the movie stealing business. Your profit goes up. It’s difficult to go to jail if you steal a movie.

I had the occasion a few weeks ago to interview Les Vadasz of Intel, and I know you’ve had some public exchanges with him over the years, at last year’s Aspen summit, for example. What should the tech sector be doing to help in fighting piracy, and are they doing enough? [Valenti told Vadasz, "It is easy to tell a man to go to hell, but much harder to get him to do that."]

We’re very good friends now. We’ve been meeting with the IT community for about five years, including the chip manufacturers and the consumer electronics people. Right now the IT people are fairly rigid in their belief that they don’t want to do anything in their computers, they want to keep the computer just the way it is without any kind of responsive circuitry in there that could stop piracy. We’ve been working with them, because I’ve said to the heads of some of these computer people, I tell them it’s in your long-term interest because one of the reasons why broadband is lagging in this country is because in a survey I saw done by the consumer electronics industry, about 68 percent of computer owners said that everything that was available on the Net they could bring down with a 56K modem. They didn’t need broadband and $50 a month. But if movies were on the Internet, and available for a fair and reasonable price, broadband would be something they’d consider.

Do the technology companies need to reengineer the PC to make it a trusted appliance for watching copyrighted entertainment? I attended Digital Hollywood last year and MPAA vice president Brad Hunt said the challenge facing the entertainment and computing industries was "How do you make the PC a trusted entertainment appliance?"

Right now, I don’t know exactly. But in time, the technology innovation is moving with such celarity that Gordon Moore’s old deal, that every 18 months a chip doubles in capacity and power, is being brought down to about 12 or 8 months. When I look at what Caltech and Internet2 are doing, it’s there. I think in time I believe that technological innovation is the best way to go. All of our companies are working very closely with the best brains in the information technology industry right now to try to see if there’s some way that we can deal with this. We’re trying to set up an independent research financing group where they put in millions of dollars and then outsource it to the best brains in the IT industry, with mandating certain objectives to reach.

Let me ask you about Moore’s Law. The storage capacity of hard drives and media centers is doubling every year, and in 5-10 years people will be able to store vast amounts of television and movie programming on those boxes.

I don’t think there’s any question about it. And with compression techniques you can pretty much do it now.

Is that a concern?

Well, it is, but I have said, technology is what causes the problem and technology will be the salvation of the problem. I really do believe we can stuff enough algorithms in a movie that only the dedicated hackers can spend the time and effort to try to plumb through that 1,000 algorithms to try to find a way to beat it. In time we’ll be able to do this, I really believe this, because I have great faith in the technological genius that’s out there.

But all it takes is one hacker to release the movie and then millions of people can access it.

That may be.

It doesn’t bother Hollywood if people will be able to store hundreds of movies on their hard drives?

Well, it doesn’t bother us if those movies were all purchased at a fair and reasonable price — and that’s a definition to be defined by the consumers, not by the studios.

What about free movies on TV — should people be allowed to store those indefinitely?

Well, free movies on TV have already been through Blockbuster and pay per view and Showtime and the airlines. By the time they get to networks and individual stations, they’ve been out there for quite a while, and they should be copied at will, free over the air.

We just won a victory at the FCC with the broadcast flag, and the broadcast flag says copy to your heart’s content, but if you attempt to redigitize that movie — the digital movie comes into an analog set, then it’s transferred into analog, and all of its encryption is stripped away, so you can take that, redigitize it and, through what’s known as the analog hole, you can redistribute that back onto the Internet. All the broadcast flag does is keep you from redistributing it back onto the Internet, but the customer will never know there’s a flag because he’s copying to his heart’s content.

Now that you’ve won the broadcast flag, where do you go from here? Are there other government mandates you’re pursuing?

Well, the big problem is the analog hole, and that’s a technological aberration that can only be solved through technology.

In layman’s terms, what do you want done?

By the way, this broadcast flag only applies to digital television sets, so we’re preparing for the future. There’s nothing you can do about the 100 million analog television sets out there. But they will gradually disappear in the next years. Maybe in the next 10 years most people will have digital television sets. In this interim period of the next two years, we need to have the technological magic available to us, and I don’t know what it is, to protect our movies.

Would you like to sunset those analog sets?

Well, no. I’ve got analog television, and I want to use them till they wear out and then I’ll get a new one.

Let me ask you about these software programs and TV tuner cards that let you watch, record and retransmit television programming and movies on a computer.

You mean like TiVo?

No, like Snapstream or El Gato’s EyeTV.

The PVRs.

Well, OK, let’s talk about those. Do you have any concerns there?

I have a TiVo set. The movies I get on TiVo come from television, HBO or pay per view. We do not yet have video on demand. When you have video on demand, you’ve got to be able to protect those movies, because they’re streaming down. You say, I want to watch Gladiator or Lord of the Rings and instantaneously you’ve got the movie coming over your television set — we’ve got to be able to protect that. Right now, there’s no video on demand, there’s semi-video on demand, things like CinemaNow and Movielink. But the technology is moving with such speed that video on demand will be here shortly.

What about movies appearing on television that you can watch and record on a computer. I have EyeTV on my Mac in the next room.

That’s right. But you’re not seeing Lord of the Rings or Matrix Revolutions, unless you bring it down from the Internet in an outlaw form.

So there are no restrictions that Hollywood wants to place on what people can do with media on their computers?

Well, I can’t tell you that. We have to see what the technology can provide.

There was announced yesterday by Rep. Cornyn of Texas and Sen. Feinstein of California a bill that would make it a felony to camcord a movie in a theater, which I think is terrific, because our piracy research tells us 92 percent of the stuff that gets uploaded is camcorded.

I’d like to ask one question about the DMCA, and its effect on home moviemaking for personal use: Let’s say a homeowner is making an amateur video using video footage of his son playing pee-wee football. To jazz it up, he buys a copy of the movie Rudy and uses the De CSS program to strip it of its copy protection—

Well, then he’s committing a violation of federal law.

So if he wants to add a few seconds of crowd shots to the final version of the new home video he’s creating—

He should go to the company that owns the movie and get permission to do it. If you start that, where does it end? How much is a little snippet? Is it 10 seconds? Ten minutes? Thirty minutes? He might want the first 23 minutes of Saving Private Ryan, or all of Gene Kelly’s Singin' in the Rain. Once people have the power to do a snippet, they could do a whole movie.

So you’re suggesting there is no fair use right to a few seconds?

There is no fair use to take something that doesn’t belong to you. That’s not fair use. If you’re a professor in a classroom, you show Singin' in the Rain to your class. You can fast forward it, and there’s no performance fee for that. That’s fair use. Now, fair use is not in the law. People are taking fair use and changing it to unfair use and claiming that it’s fair use.

The Los Angeles Times on Sunday carried a story saying that you were advising the studio heads to continue exploring more advanced technological copy protection, but the studio chiefs instead pushed ahead with a plan to move ahead with lawsuits against those who infringe on movie copyrights. Can you tell me whether there’s a disagreement about strategy?

I can’t comment on that because somebody leaked a story. All I can tell you is that there are no plans at this time to file suit against anybody. On the other hand, I have said publicly that when you’re being pirated and pillaged and plundered, you can’t rule out any option. But at this moment, I can assure you, we’re not ready to sue anybody. [note: Two months after Valenti stepped down, new MPAA chief Dan Glickman announced the studios would begin suing movie file sharers.]

Let’s spend just a quick minute discussing the Oscars screeners controversy. As I understand this, a compromise was reached: the academy members received VHS videotapes of the nominated films, and they were admonished by the academy not to loan the tapes and to destroy them once they had been watched. Is that where things stand now?

If they sign a paper in which they authorize the academy to send their address, name to the studios, if they pledge they are not going to let those VHS screeners out of their home, and recognize that the studios reserve the right to mark every screener, and if a pirated screener is traced back to an academy member, he will be summarily expelled from the academy, and would never receive a screener so long as he lived. We sent out 68 titles as screeners; 34 were pirated. The problem has gotten out of hand A friend of mine just traveled on a China Airlines flight. For their in-flight movie, they showed a film, and at the bottom it said, ‘For your consideration.’ It was a pirated screener, and they were showing it on China Airlines.

So, if we see confirmable real-time piracy and we don’t do anything about it, we’re both stupid and mad. Remember, the academy functioned for 55 years without screeners.

For the book I’m writing, I’m looking back at the invention of DVD. How important were Warren Lieberfarb’s contributions to the creation of the DVD?

I would say Warren Lieberfarb was the father of the DVD. I’ve had many conversations with him. Early on, he said, 'Jack, this is the future.' He got a group together and led the group to do the CSS copy scramble system on the DVD, and then had me join with him imploring all the companies to get titles out there. It was not easy to do that. But he was the godfather, there’s no question about it.

And now there’s another group figuring out the next generation of DVD copy protection?

MPA’s technology people have been meeting with the IT and CE people and the chip manufacturers. We have meetings every month, trying to find some way to come to some concord about how we’re going to deal with the future.

How is it proceeding?

It’s moving but at a lesser velocity than I would like. It’s very hard. You’re dealing with technology, with fragile concepts. I’m not putting the blame on anybody, I’m just a fellow who likes to move. I’m an action-now fellow, and sometimes I get frustrated.

In an interview earlier this year you said the music industry is suffering significant financial loses and that if compounded over three or four years, “the music industry is dead.” Is that a prediction, or —

That I don’t know. I don’t know about the financials, all I know is what I read about the RIAA and what they say.

What would you say to a law-abiding homeowner who wants to make a backup of his children’s DVD movies?

I would say this: When you go to your department store and you buy 10 Cognac glasses and two weeks later you break two of them, the store doesn’t give you two backup copies. Where did this backup copy thing come from? A digital thing lasts forever. No enterprise in the world gives you a backup copy of anything. You go buy a suit of clothes and you tear it and you come back and the guy says I’ll try to sew it up for you, but he doesn’t give you a backup pair of trousers. If you need a backup copy of a DVD you can go out and buy another one.

What keeps you up at night?

Not a thing. I sleep like a baby. Once my head hits that pillow, I don’t think of anything. I feel like what i’m doing in my mind is right, the long-term interests of what I think is America’s most extraordinary enterprise — the entertainment industry, movies and television.

What's your vision of the future? What would you like the motion picture landscape to look like in five years?

The one thing that won’t change 50 years from now is the story is the thing wherein it will catch the conscience of the king, as Mr. Shakespeare put it.
When Frank Capra was making movies, when D.W. Griffith was making movies, it was the story, and that’s what people in Hollywood are looking for now. Now, we will have technological changes. Already have them, when you can do all sorts of digital things. But digital morphing is not a story, it’s a technical thing to help you enhance your story. So I don’t think technology will make a story. I think the computer is the smartest mechanism the world has ever seen, but there’s one thing a computer cannot do. It cannot predict human behavior. So that’s what is not gonna change.

Does it bother you that you’re portrayed as a villain in some quarters of cyberspace?

I don’t relish it but I know what I’m doing is right. I think I’m on the right side of the future. I don’t try to dwell on the past, I want to look ahead. I want to have what Mr. Churchill says is the seeing eye, to know what’s on the other side of the brick wall. And I believe in change. Change irrigates every enterprise, and particularly the movie business. So, I welcome it, but I want to make sure that thievery is not going to lacerate our future.

The MPAA has a real strong on presence on Capitol Hill.

I’d like to believe we have it all over the world.

Is that due to the good will Hollywood fosters or—?

I think good will takes you so far but if you don’t have merit to your case, you’re dead. I’ve been in politics all my life, and I never saw charm do it. Charm might get you one appointment with somebody, but after that, you better know your brief, you better know what the hell you’re talking about and you better have a good case to make. I don’t believe you can buy a congressman or a senator. I’ve never seen that happen. Therefore if we have some credibility on the Hill, I make sure that we never lie, we never play it cute around the turns, and we treat everybody with respect and courtesy, and never lessen their dignity.

Doesn’t Hollywood also have an advantage in being able to roll out the red carpet for congressmen and fly in Hollywood stars?

Well, people can have dinners with congressmen and senators, you can take them on fishing trips and all that stuff, but when it comes down to it, they’re not doing to vote for something if they don’t think it’s right. They really aren’t. Because in the end they have to get reelected.

You’ve announced plans to look for a successor. It strikes me that you’ve come to personify the MPAA—

Well, I’ve been here almost 38 years, so if you last that long you become an institution.

Will it be hard for anyone to step into your shoes?

I was in Dallas in the motorcade on Nov. 22, 1963, and I saw that day a brave young president murdered, and a new president take over. The president is dead, long live the president, the nation goes on. No one is indispensable, I learned that day in Dallas. Someone will come in take this job and they won’t be me but they’ll be themselves and they might do a hell of a lot better job than I’m doing.

What do you hope your legacy will be?

I hope people will say I never had a hidden agenda and I never played it cute around the turns, and that my integrity stayed intact.

Interview conducted Nov. 14, 2003

'Darknet' foreword

If you look at my earlier books, Tools for Thought, Virtual Reality, and The Virtual Community, you might notice that there are more quotes, and longer quotes, than in my most recent book, Smart Mobs. The explanation for this is that “fair use”—the fundamental scholarly tradition of building upon the (accurately attributed) work of others—has been chipped away by large “content owners.” Publishing used to be a more genteel enterprise, with a great deal of slack granted in the service of culture. As long as we used quotation marks and/or block quotes and/or italics and attributed each quote to its author in a standard footnote and/or bibliography, authors were free to make our cases by referring to the work of others. The rule of thumb was that if the quote was under 500 words, explicit permission was not required.

However, when I wrote those previous books, publishing was a very different enterprise. For example, I could have proposed my book to Random House, Knopf, Doubleday, Dell, or Bantam. Today, all those publishers are part of Bertelsmann. Publishers are no longer solely in the business of producing books; they are profit centers for large entertainment companies. And those companies protect their property through threat of lawsuit, at the expense of fair use. My editor for Smart Mobs told me that I had to obtain written permission for every quote over 250 words. Although there was no case law about this, my publisher’s lawyers didn’t want to court intimidation by the legal departments of the companies that owned other publishers.

If you can afford an assistant, writing a dozen or a hundred permissions letters isn’t a problem, and for the most part, you won’t have to pay a large amount of permissions costs. However, the problem is a larger one. First, it’s just one early restriction of fair use in publishing. Since publishers have given up without a fight, what is to keep large-content owners from pressing forward in future years, requiring all authors to obtain and pay for permissions for all quotes? Second, it isn’t limited to publishing. If you want to make an independent film these days, you better not do it on a shoestring. Every brand, every poster, every possible copyrighted image in the background of your film now requires permission—which is not always granted, nor are those that are granted always affordable. The situation is already out of control and getting worse.

This is no longer a matter that concerns only authors, filmmakers, or other “professionals,” for we are all members of the media now. It has taken a decade for people to accept the notion that every computer desktop, and now every pocket and camera phone, is a global printing press, broadcast station, and organizing tool. The early years of the World Wide Web marked a historic shift of power from big institutions to individuals, from those who horde information and ideas to those who want to share them.

No wonder the media powers are in a froth about the Internet.

Now the next phase of digital transformation lies before us, one that involves democratized media, peer-to-peer networks, collaborative tools, social software, and the ubiquitous computing of camera phones; mobile devices; and cheap, tiny chips embedded into our stuff. The outcome of this next phase of the disruptive Internet is much less certain, as battles rage over control of the social, economic, and political regimes that these new technologies will make possible.

How we resolve this culture war will have far-reaching consequences for all of us. Five or ten years from now, who will be able to create and share media—individuals, or only powerful interests? When hundreds of millions of people walk down the street carrying connected, always-on devices hundreds of times more powerful than today’s computers, what will they be allowed to do?

These decisions, being made today in Washington and in private industry forums, could shape digital culture for generations to come. The battles really boil down to a simple choice: whether we want to be users or consumers.

In one vision, individuals will be free to create and distribute movie shorts, personal musical works, and homemade video, occasionally borrowing bits and pieces from the culture around them. Individuals, acting as personal media networks, will build on earlier works to create and distribute compelling digital stories, true-life dramas, fan fiction, pieced-together television shows, modded computer games, and rich virtual worlds. Some users will go further, creating not just new content but also entirely new forms of media.

The second vision, pushed by entertainment interests and their Washington allies, seeks to preserve the status quo—a constricted view of our digital future that relies on formulaic broadcast content sent along one-way pipes to a passive, narcotized audience. Under this regime, consumers will have the power to choose among five hundred brands offered by the same handful of vendors, with little or no power to create their own cultural products.

Like everything in life, the choice between digital society and consumer culture is not an either-or proposition, for on any given day we juggle our roles as content creators and couch potatoes. But increasingly, we resist one-way media. We reject the megaphone of the broadcast era and turn to the many-to-many collaborative strands of the Internet.

And as we do—as we grow comfortable in our new roles as publishers, producers, designers, and distributors of media—we begin to bump up against a legislative regime that threatens to lock down our digital freedoms and turn millions of us into felons. That’s when the lightbulb goes off and we begin to see the threat posed to innovative grassroots technology.

Some point to our shiny new toys as evidence that all is well. Michael K. Powell, who just recently stepped down as chairman of the Federal Communications Commission, addressed the National Press Club in early 2004. He told the group:

The visionary sermons of technology futurists seem to have materialized. No longer the stuff of science fiction novels, crystal balls and academic conferences, it is real. . . . Technology is bringing more power to people. Computing and communication power is coming to people because the forces of silicon chips, massive storage, and speedy connections to the Internet are combining to produce smaller and more powerful devices that can rest in our hands, rather than in the hands of large centralized institutions.

It boggles the mind to see the fantastic products available to us today. A simple survey suffices to make the point: Digital cameras and photo printers have moved the dark room into the home. Music players, like the iPod, have taken the rows of CDs out of a music store and placed them in your pocket. Personal Video Recorders, like TiVo, have given us more control of what we watch and when. We want movie theaters in our family rooms. GPS satellite receivers come on farm tractors. DVD players let us watch high-quality movies almost anywhere—just look through the back windows of the minivans pulling out of your neighborhood on Saturday morning and you can catch up on the full season of SpongeBob SquarePants.

It is not that we have access to electronics that is earth shattering, it is that we have access to pocket super computers that not long ago would have been the exclusive domain of MIT, NASA, or the phone company. The economics of these mean that they will keep getting more powerful and cheaper, thus the future will stay bright. In short, we are accelerating our ride into the future.

In his speech, Powell overlooked a few things. He neglected to mention the corporate efforts to lock down the Internet and limit the ability of ordinary people to produce cultural works that compete with media conglomerates. He failed to mention Hollywood’s attempts to replace the open Net with a secure content-delivery system that resembles television. He didn’t mention efforts made to control the flow of information online through a fundamental revision of the PC architecture for the sole purpose of serving the short-term interests of the entertainment industry. He forgot to mention Hollywood’s successful efforts—before his own FCC—to impose a tightened regime of control over digital television that strips away rights enjoyed by viewers during the analog era.

When I see my college-age daughter, I think about what kind of media world awaits her. It’s imperative that young people who have grown up with the freedom that the PC, the Internet, and the mobile phone granted them won’t settle for being put into a passive box.

In Darknet: Hollywood’s War against the Digital Generation, journalist and open-media advocate J.D. Lasica offers the first comprehensive look at the restrictions being placed on our digital freedoms by the major media powers. He also offers a positive vision of the opportunities open to the people who use tomorrow’s technologies—if only fearful entertainment executives and misguided lawmakers would get out of the way.

In less capable hands, this might have been a book about the excesses of copyright law, or about the public policy wars over piracy and file sharing. But the author reaches for something larger: an accessible collection of stories about people whose lives are at the center of this epic struggle over digital culture’s future. You don’t have to be a technology geek, law student, or policy wonk to keep up with the important issues described in these pages.

Here is why all of this matters profoundly: online and many-to-many technologies can shift the locus of the public sphere from a small number of powerful media owners to entire populations. In the years ahead, Internet-based media will exert more and more influence over what people know and believe, how they interact with each other, and how they stretch communication and entertainment in new, creative directions.

Spread the word—much is at stake. Right now is the time to act intelligently on behalf of our shared future. We can create a world so much richer than the wasteland of today’s mass media.

Howard Rheingold
Mill Valley, California

Story: Fair use in the digital age

This story — about enabling fair use in an age of countless online fandom sites — is taken from chapter 4 of Darknet: Hollywood's War Against the Digital Generation. I'm publishing excerpts from the book, along with new material, every Monday for the next several weeks.

Philip Gaines, a multimedia developer in Bellevue, Wash., was such a devoted fan of the sci-fi TV show Firefly that he refused to see it vanish into the abyss when Fox canceled the series after a three-month run in 2002. Instead, he spent months, and $700, creating a fan DVD that paid homage to the show.

What inspired him? “First, this was one of the great TV shows of our time, and I wanted to highlight that,” he says by phone from his home. “Second, the project served as a digital portfolio that showcased my skills as an editor and writer. And finally, this is a step that advances intellectual discourse among fans. This shouldn’t be confined to professors talking about the show in an academic setting. I wanted to bring the discussion out into the open for the rest of us.”

The result is Firefly: A Special Feature, a charming, quirky 3½-hour documentary that may well serve as a prototype for similar homespun multimedia efforts. (If you'd like to write to Gaines, let me know.) His project probes the deeper textures of the series, laying out the arguments of why it was brilliant, complete with audio commentary interspersed with series clips. Since the project’s completion in November 2003, Gaines has given away 600 copies of his two-DVD set, asking only a $9 donation to cover costs.

The enterprising 29-year-old began by writing a 30,000-word script, a fusion of wry observations and essays on subjects like irony and violence. Next, he obtained a DVD from a member of a Firefly fan site, who downloaded episodes from the Darknet because Fox had not yet released an official home video version. Then, he spent eight hours, at $45 an hour, recording the script onto a CD at a local radio station. (He could have bought a digital tape recorder for less.) Finally, he used encryption and decryption tools, as well as DVD authoring software to pull together his audio and scenes from the TV series into a 40-part DVD presentation. He encourages recipients to reproduce his digital tribute and offer it to others.

Gaines took a graduate course at the University of Washington that covered fair use and infringement. “I consider what I’ve done to be fair use, but I’ll admit that in using 3½ hours of video I’m entering a seriously gray area,” he says. To ward off liability, he did not include any media company’s trademarks—“that’s where they usually get you,” he correctly points out—and he made certain to use no more than one-third of any single episode. More important than the legal issues, though, are the practical considerations.

The creators of Firefly have responded favorably to his do-it-yourself DVD, he says, and “Fox would have no interest in suing an underdog like me who only wants to promote their show.”

Gaines’ effort mirrors the territory mined by film critic Roger Ebert, who was so enthralled with the 1998 film Dark City that he recorded a lengthy commentary that was included in the DVD released by the studio. Few of us have that kind of clout, however.

In late 2002, Ebert proposed an alternative way for fans to participate, suggesting the creation of do-it-yourself film commentaries, made up of recorded audio tracks that could be traded over the Net and synched up with the movie. Months later, a website called DVDTracks.com began doing just that, with scores of people participating in film culture and cementing the rubric that everybody’s a critic.

Gaines, apparently, is the first to take this idea a step further. Instead of the clumsy approach of listening to a downloaded audio file while watching a DVD movie on the TV or a computer, he put his commentary right onto a remixed DVD. “The concept of a self-made DVD has gotten the biggest response from people,” he says. “They like the idea of regular folks creating parallel media. I think you’ll be seeing much more of this. The online environment allows for much faster and more diverse discourse, and it gives people access to media they wouldn’t be able to otherwise get.”

Before I can ask him about Hollywood’s claim that the studios need to sign off on any use of their work, Gaines beats me to the punch. “No matter what Jack Valenti says, they are in a hopeless position if they want to keep people from trying to manipulate their finished product. If they put out a movie, people will take that movie, re-edit it, and re-release it.”

Gaines predicts someone will soon take The Lord of the Rings trilogy and edit out scenes that he or she believes slows the narrative. It won’t be Gaines. “There were three unaired episodes of Firefly that I wasn’t able to cover in my original project. I’m contemplating using those unaired episodes in a new project and inviting other viewers to submit essays that I could include in a sequel DVD.”

An entire conference could be built around the legal issues raised by Firefly: A Special Feature. While Darknet focuses primarily on the digital media revolution, a word about the law may be in order here.

Siva Vaidhyanathan, director of communication studies at New York University and an author who has written widely on copyright law, says users are within their rights to borrow and remix cultural works—including movies—for private, non-commercial uses. “Jack Valenti may want to wish away fair use. But his position is in direct conflict with more than a century of case law on the matter. And it ignores the specific language of the 1976 Copyright Act, which codified fair use. In the United States, we have a clearly defined tradition of fair use that speaks to the fact that small, private, non-commercial uses of someone else's copyrighted material should be allowed without having to resort to permission seeking or payment.

“If it's fair use for someone to quote a paragraph of my book and use it in another context—let's say, to criticize it or to write a research paper for school—then it must be fair use to use a snippet of a Star Wars film to show that Jar-Jar Binks is a racist caricature,” he says. “I should not be allowed to veto the use of a small portion of my work and thus prevent a greater social good. Neither should George Lucas. The law does not affect video differently than text, music, or software.”

Vaidhyanathan says we should encourage low-cost, potentially critical uses of copyrighted works because education, scholarship, criticism, and new art are all important and under-funded aspects of our cultural lives. “The scary thing about Valenti's comments is that he basically writes American copyright law these days. Congress listens to him and gives him whatever he wants, regardless of whether it's good for America. And federal courts listen to Congress. If Congress would listen to the American people, it would strengthen fair use. Alas, we may be seeing the last days of fair use because Jack Valenti has declared it so.”

Yale Law School cyberlaw expert Ernest Miller offers a different take, illustrating the law's devilish complexity—and the unsettled nature of users’ rights in the digital age. “The problem is that fair use analysis is incredibly fact-dependent. Even copying a small amount of a copyrighted work as part of another, new work is a violation of copyright,” he says. “For example, a few seconds in a videotape where portions of a copyrighted poster can be seen in the background have been found to meet the threshold for infringement. So, although I would argue that such uses are fair uses, the courts might not agree.”

Users who record audio of their armchair criticisms (as on DVDTracks) would undoubtedly be protected by fair use, but Miller cautions that the law does not allow you to burn a DVD of an entire Hollywood film overlaid with your commentary. He also points out that any use of DVD ripping software—which breaks the copy protection on a DVD—is a federal crime on its face (see chapter 6). And he notes that George Lucas’s production company, Lucasfilm, threatened to sue any website operator who posted a copy of The Phantom Edit, created by a fan who edited out 20 minutes of the annoying Jar-Jar Blinks from the official version of the 1999 film Star Wars: Episode I - The Phantom Menace. (The Phantom Edit proved to be extremely popular online, and copies still circulate in the Darknet. Here's Siva's take in Salon on Phantom editors.)

While sounding a guarded legal note, Miller thinks the issue goes beyond legalisms to social freedoms and cultural values. He says Hollywood would benefit from embracing digital tools that allow users to contribute appreciations and commentaries attached to DVDs. “The studios would sell more copies,” he argues. “Gaming companies know this already. The makers of games like Quake and Unreal provide users with the ability to create new levels of play or to introduce new characters, giving rise to entire communities that support such efforts.”

Gaines points out that it has become commonplace to include supplementary material on Hollywood DVDs—interviews with everyone from the director right on down to the sound designer and key grip. Why not provide an easy, legal way for fans to provide full commentaries as well?

(From Darknet: Hollywood's War Against the Digital Generation. You may copy excerpts from this entry to comment on or critique the work or to otherwise engage in fair use.)

Interview: A major pirate in the movie underground

record labels themselves are due to die. the artists are the ones who will eventually control their own productions, as they should — beneaththecobweb

Following is the transcript of an Apple iChat between J.D. Lasica and the head of six movie release groups — the first published interview with a major movie pirate. This transcript (which does not appear in "Darknet") is appearing here for the first time in this Web exclusive as an unfiltered look at the mindset of a leader of the scene.

JD: wanna introduce yourself pleez?

well, why not.. i'm beneaththecobweb
my birth given name means nothing, so ill stick to that one

ok. tell me about your background and main interests

sure, im currently living in europe, and based on the reason for this conversation in the first place.. i am very interested in the "scene"

ok. what attracted you to the scene?

the amazing part of the scene is that it represents an inner-circle
its a place where people in hundreds of different countries connect, and work for a common purpose

whats wrong with the way Hollywood and the music biz release their stuff now?

ah, good question, i've been thinking about this a lot lately
both hollywood and the music businesses are not adapting to changing times
for example, the music business is attempting to force consumers to pay ridiculously high prices for cds, even when realistically the cds cost them nothing to make, and only a small fraction of the money made goes to the creators, the artists

what would you say to Jack Valenti if you had the chance?

interesting question, perfect timing too.. if you've been paying attention to his recent policy, his attempt to ban dvd screeners, you'd see exactly what i meant in the above 'lack of adapting,'' .. dvd screeners are NOT what cause piracy, or even make dvd studios or movie industries lose money, dvd screeners if anything promote movies, especially the limited or low budget films that many people wouldnt otherwise hear about
and for what its worth, i have an evergrowing dvd collection, and i pay for the movies that are worth the money to pay for
if i'm not willing to pay for Dude Where's My Car 2, i apologize greatly
lol

if you arent uncomfortable, could you mention some of your more important releases of the last year

i can't go into specifics, because it would be easy to pinpoint certain things if i went into a long list of specifics
however..
if i mentioned movies either of equal or greater revenue to matrix and/or lord of the rings, i wouldn't be making an understatement

ok

and of course, the low budget quality films, Hollywood cannot compete with such films
perfect example: memento.

can you simply lay out how something is released

i can give you a basic outline, of course avoiding specifics
basically you have a dvd, let's call it dvd x
when you put it into your computer, the dvd is composed of several 'vob' files, defined as basically the meat of the dvd, the data
what you basically need to do, is rip those vob files, decrypt them, and downsample both the audio and the video to a smaller, more containable and transferrable size
you can perform that using several forms, SVCD, VCD, XviD, DivX, 4 major and commonly used encoding types
in the end, you turn an 8GB (8000mb) dvd into .7GB (700MB), a much easier to transfer file
with minimal or no loss of quality
thats basically it

after it's made, you mentioned 'releasing'

releasing is simply making it available
whether it is by Kazaa, IRC, word of mouth, or whatever method shows up along the way, thats how you get it out
because people WANT it, its not hard to get them what they want

thats great
ok about members of a release group - what are the average demographics? Male? College age?

the 'scene' consists of a greatly mixed demographic
to put it simply
i've seen people as young as 14
and as old as .. 62
if i were to pinpoint an average age, i'd say 21
mostly male

now, do some group members do it just for fun or do they make a profit doing this (like blanket sales on NY streets)

most group members i come across do not do this for profit
ill give you an example
you're a high school student and you're 16
you're trying to become 'known' in your school, so you decide to design your schools website
problem comes across, you have no suitable a) html editor and b) photo editor
is someone of your statute capable of paying for the likes of Adobe Photoshop and Microsoft Frontpage?
*stature, it think thats how its spelled
so you go to Kazaa and you download it, knowing its not 'right,' but also knowing you don't have a choice
you have no intent to sell or use it in any form but helping yourself

hm ok
do you consider copyright infringement ethical in this particular application?
movies, etc

in my mind, copyright infringement is a loose and unadaptive policy
pretty soon, everything will be on the internet
if it isn't already
the only reason major corporations are arguing the merits of copyright infringement is because they themselves haven't adapted to changing times
but me specifically, i buy what i can buy, and i download what i cannot
i do not make enough money to pay for Adobe Photoshop or Windows XP
but i dished out the money for office XP and windows 2000

ok what do you say to the studios when they argue that piracy will make it harder to create big budget films

i'd have trouble saying anything at all, i'd be busy laughing my little head off.. but what i'd try to say is that any quality movie, such as return of the kings that premieres in december, will be paid for. the crap will not be paid for and will inevitably lose money. it's competition, its what america was made for and its what europe is going towards

can you say how many people are in a typical release group

realistically, the scene is not a very big place
the largest group i've seen is around 30 members
and the smallest i've seen is 2
avg lets say, 15

cool
very broadly, in what area do you work legitimately?

you mean my personal occupation in life? or in the scene?

your personal occupation....like student, businessman, IT guy....

i'm a network administrator

good enough
broadly....what part of europe are you in...eastern, western, northern....

western

do you look at this as more of a enjoyable pursuit or a philosophical cause

to say the scene isn't at least a small 'movement' would be a lie, becasue much of the scene does disagree with 99% of the policies issued by the riaa/mpaa/etc, but as the scene grew it became much more an enjoyable situation with a hierarchy that you can climb up

what should movie studios and record labels be doing now?

ill go into one of them, its basically the same plan for both
record labels themselves are due to die
the artists are the ones who will eventually control their own productions, as they should
the artists should start meeting up with large corporations that deal with consumer products, for instance.. snapple.. and make a deal with them
'we'll give out your music for free, and you'll get a percentage of our sales and we'll promote your concerts'
selling cds isnt really all that important anymore, most of the cash gets pocketed by the record labels themselves, its about time the artists see more of their money

whats the greatest misconception about release groups and filesharing

ah, good question
the news/media/mpaa/riaa paint the release groups as kniving [conniving] thieves
(sorry if spelling is wrong on that word)
basically, we don't go out to steal peoples money for their hard work
its not about theft, its about, to put it simply, equal opportunity
if you want me to elaborate on that i can, but i think based on what i've said before it should be pretty clear

just tell us a little more about 'equal opportunity' -- does that mean early access to movies, easy access to affordable music in digital format, or what else is involved?

i think everyone should be allowed to experience great music
(for example)
throwing a $20 price tag on a great album is limiting your audience
if you give it to them for free, whether it be by downloading or free promotions, everyone will be able to experience it
no matter their social class, taste, or budget
the key is removing the middle man, in this case the record label

so far the riaa and mpaa have not identified a single movie release group member, much less gone after them legally. why is that? are they incompetent or do you all take extreme precautions?

i'd take the position
of alot of both
they are extremely incompetent, they have no idea about what is going on around them
but, equally as much
group members take every precaution available to them
they do not speak on public networks, they use encryption to speak to each other
they often don't even give specific life information to their fellow group members
constant paranoia would be putting it lightly

are your release group members in the us, europe or both?

everywhere
as i said earlier, the scene is international
you'll find group members in asia, europe, the US, and i've even seen a few from africa and south america
oh, and i'm forgetting the aussies

i've heard that often release group members have never met one another. is the work done in these groups largely independent, with people working alone/solitary?

you'd be correct
very few members have met each other
(that part was correct)
but the work itself is done as a group
a cooperative mission if you will
some members are fit for certain parts of a task, and some members are not
it becomes the equivalent of an assembly line

is there anything you can tell me about the different facets of that assembly line ... rippers and distributors and couriers?

what do you want to know? rippers rip the DVD (from DVD to compressed footage)
couriers are in charge of 'making the release available' for the enduesr
distributors? i've never heard of that word in this context

distributors like on irc. but: i don't want to use my terms. just thought it would be interesting to hear from someone on the inside how it all works, what roles the different people play. is it all just rippers and couriers, and the occasional donator?

yup
different forms of donating though
whether it be money, supplies, etc
ripping is very CPU intensive, you need to have the latest gear

how does someone hook up with a release group (someone who legitimately wants to help the cause and join the scene)?

not going there, i apologize

cool
wondering why you've agreed to give this interview today.

well, first off, i'm happy i was able to convey my outrage with the common misconception
the misconception that we're evil little thieves
if all i needed to do was answer a few questions to clear that misconception
i'm all ears

where do you see all this heading, in a year or 5 years? who'll win, how will the music and movie industries (and TV?) change or evolve?

refer to music is free
that's where i see us
as soon as a year, and as late as 5
ultimately, the record labels are fighting a losing battle
subpoenas for kazaa downloaders get the RIAA nowhere
banning dvd screeners gets the MPAA equally as far

so they need to work on their digital distribution model?

that's putting it lightly
they need to change their entire business model
they need the 'dynasty leaders' out
and the youth in
running their companies based on antiquated models has brought them close to extinction

but they still have a right to make a profit, no? or should the distributors be removed from the process and only the artists receive compensation?

the latter
the labels are thieves
they are complaining of cd sales dropping and money losses
but its not their money
they consider their advertisements and promotions of artists to be almighty and powerful, you don't need to give the labels 99% of your cash to achieve the same purpose

but you're mostly involved with releasing movies, not music, and we can't get the movie studios out of the movie business, right? Isn't the problem with Hollywood the release windows and their current business model?

i don't think you can completely eliminate movie studios from the business
that's absolutely correct
release windows and their current business model need changing

ok. anything else you want to add, or that we haven't covered, or that you'd like to get out to a national audience?

basically, above everything else, i'd like to make it known that the RIAA and MPAA are accomplishing nothing for the studios of both media businesses, and i dont understand why the studios are cooperating with any of their policies

cool. appreciate your forthrightness.

no problem, its been a pleasure to meet you JD

Interview conducted 2:42 PM to 3:55 PM on Oct. 27, 2003

Story: The Prince of Darknet

Forest is in many ways the ultimate digital renegade, the kind of copyright-flouting, authority-taunting Young Turk who gives movie studio titans and record company executives the cold sweats. Except for one thing: He is being paid to commit piracy by a major media company.

The following account is an exclusive look inside the high-tech bunker of the corporate spy who oversees the rippers, coding wizards and unrepentant scofflaws of the Internet movie underground.

Bruce Forest rocks back in his office chair, convulsed in laughter at the latest attempt by federal agents to smash the pirates of Darknet. The U.S. Attorney General had just announced the FBI’s latest crackdown on Internet piracy, this time against 7,000 members of the Underground Network who had been trading movies, songs, games and software over secret online networks.

Forest cradles his computer keyboard and taps out another scorching barb to his fellow renegades at the authorities’ expense. “If the goal was to slow down file trading in the underground, then it failed completely,” he tells me, running stubby fingers through a mop of unkempt brown hair as a one-carat champagne diamond stud earring gleams in his left earlobe. “The people they raided are nobodies — not even near the top. It’s had no effect whatsoever on the scene.”

The scene is the name insiders use for the vast, hidden file-trading underground. Outsiders sometimes call it the Darknet, for nearly all of this illicit activity takes place in the shadows. Either way, it’s a domain Forest knows perhaps better than anyone.

Nearly every day, he holds forth under multiple identities as a master of the digital underworld. He does so from the home office of his ranch house in suburban Connecticut, a five-acre wooded tract that he and his family share with moose, fox, and a flock of guinea fowl that keep Lyme-carrying ticks under control. None of the residents suspects that their bucolic little town is home to the Prince of Darknet.

Forest belongs to several major movie piracy groups. He is also a channel operator on Internet Relay Chat on numerous piracy channels. Forest is in many ways the ultimate digital renegade, the kind of copyright-flouting, authority-taunting Young Turk who gives movie studio titans and record company executives the cold sweats.

Except for one thing: He is being paid to commit piracy by a major media company.

Forest is, in effect, working both sides of the fence. The underground movie groups do not know that he is a full-time consultant for a well-known global entertainment conglomerate — it would be bad news for Forest (his real name) if his online identities were revealed. In turn, his corporate benefactor allows Forest to ply the piracy coves like a swashbuckling one-man Jolly Roger — swapping movie and music files, building up cred in the seamier corners of the Darknet — as a way to infiltrate and keep tabs on the illegal trading networks.

“I guess you can call me a true double agent,” says Forest, outfitted in jeans, casual nylon shirt, and tan socks. He stretches out his 5-foot-8 frame and perches his shoeless feet atop a desk. “I lead a very comfortable double life.”

Forest has become the eyes and ears of an industry that is ramping up plans to make sure the motion picture studios do not suffer the fate that has befallen the record labels. In November, the MPAA announced is intent to begin suing individuals who swap films over peer-to-peer networks. Movie executives worry that Hollywood could become the next modern-day Carthage as Internet connections become lightning-fast, computer hard drives bulk up in size, compression technologies improve, and P2P networks become harder to foil. The battle over movie piracy may prove to be even more fierce and intractable than the one being waged in the music world, given Hollywood’s formidable firepower on Capitol Hill and its presence in nearly every aspect of our celebrity-infused culture. While no one has yet shown a link between movie file sharing and a loss of revenue at the box office or at the video rental counter, Forrester Research estimates that one in five teenagers has illegally downloaded a feature film. Between 400,000 and 600,000 movies are already being illegally traded online every day, studio chieftains have said in Congressional testimony. Some 17 million pirated movie files now float around the Internet, according to research firm BigChampagne, the Nielsens of file trading.

Which brings us back to Forest, who seems to be close at hand — like a veritable Forrest Gump — whenever movies and Internet piracy intersect. It was Forest who came up with Hollywood’s estimate of movie piracy levels, a number he devised after staking out the darkened street corners of the movie underground one blockbuster weekend in May 2002 — the same weekend CNN shot footage of a silhouetted man downloading “Star Wars: Attack of the Clones.” (The shadowy figure was Forest.) When five of the major Hollywood studios unveiled Movielink, their Internet film rental service touted as an alternative to piracy, Forest was one of its key architects, and he owns a patent on the technology. Forest has just unveiled a new business model for digital distribution of music and movies. And when I wanted to interview leaders of the movie piracy underground for this article, it was Forest who successfully set the table for me.

“It has taken me years to build up the trust and respect of my peers,” he says in a breezy, broadband-fast delivery honed during a boyhood on the streets of Forest Hills, Queens. “You can’t just show up on a channel and say, ‘Hi, I’m new here and I want some of your movies.’ They will laugh at you, and then they’ll ban you. It’s rough frontier justice. You have to earn your way in by offering value to other members in the form of gear or coding talent or access to the newest, coolest material.”

Forest acknowledges that in 1997, as he was scratching his way up the piracy hierarchy, he joined his first release group — clusters of individuals who work secretly in teams to illegally distribute digital goods in the Darknet. He started out as a “server,” a low-level position he sardonically likens to a Mafia button man. A server is at greatest risk of criminal prosecution because he distributes infringing movie files on an open Internet address. Performing such yeoman’s work offers advancement in the scene. (Not surprisingly, no one in the scene uses the term “pirate.”)

Forest no longer serves, having parlayed his familiarity with the scene into a lucrative consulting business. “I don’t do anything illegal,” he tells me on more than one occasion. Yet, to prove his privacy chops and to maintain the trust he has gained in the movie underground, Forest shares with a few of his peers the password to his private server, a secret stash of digital goods accessible only by invitation. When I stop by later, I spy a treasure trove of copyrighted booty: thousands of songs, music videos, movie files, television shows (including every episode of The Simpsons), computer games for Microsoft’s Xbox, and software programs that fill up 2 terabytes on his networked hard drives. (Comparisons can be misleading, but the entire Library of Congress is only 10 times larger. Forest's 2 terabytes would fill 1.4 million 3.5-inch floppy disks.) His online hideout includes the Billboard Top 100 of every hit song from the past 44 years and films such as Spider-man, Gangs of New York, Gladiator, The Godfather II, and Austin Powers.

Take what you want, he offers.

College students who run similar private file-sharing networks have been busted for less, but Forest does not fear the copyright cops. When he negotiated his contract, he insisted on an indemnification clause, a hold-harmless provision that shields him from being prosecuted for downloading pirated movies belonging to the major movie studios. He also consults for the music industry and has been indemnified by the Recording Industry Association of America. Forest may be a spy, but he is no snitch, and he takes pains to make clear that he will not fink on anyone in the scene.

Those encounters have come in the form of various personas. He maintains multiple identities, from an entry-level server to a powerful and petulant elder statesman, on different IRC channels as a way to expand his sphere of contacts. “I have different personas on every channel, so I have to be careful that I don’t blow my cover,” he says.

As a full-time consultant, he writes a 200-page report for his corporate client every two weeks in which he outlines his latest findings, charts levels of movie piracy and suggests strategies to protect the company's intellectual property. (Though his work chiefly concerns film piracy, he also tracks the file trading of television shows, music and computer games.)

Release groups and the scene have received little attention in the mainstream press for a simple reason: No participant wants to talk about it. Publicity attracts the attention of law enforcement. But the bulletproof Forest has no such reservations. He agreed to share the highlights of what he has observed during the three years he has infiltrated the darkest corners of the piracy underworld in return for a pledge to protect his online identities and a disclaimer that his personal views do not necessarily represent those of his employer.

This is the first time he has taken a stranger on a tour of the digital badlands.

Most people associate the Internet with the candy-colored playground of the World Wide Web, but millions of others — geeks, college and high school students, hard-core pirates — navigate to other harbors on the Internet. The Darknet is cyberspace’s equivalent of Al Capone country, a lawless, ethics-free frontier impervious even to a legion of industry lawyers. The Darknet is where epic battles over copy protection and file sharing will be joined.

Today, Forest has arranged for me to interview two leading figures in the Internet movie underground. The ground rules are simple. The interviews will be conducted over Apple’s iChat, a software program that allows participants to type messages back and forth on screen. The connection is untraceable, thanks to the “bounces” both they and Forest have set up. They can see me through a Webcam, but I can’t see them. “They want to make sure you’re not wearing a uniform,” Forest half-jokes.

The first underground figure I contact goes by the name of beneaththecobweb. Forest, who has known him for five years, says he is a member of nine movie release groups and heads up six of them. As such, he is one of the highest-ranking members of the scene. Forest describes him as a man in his late 20s from a western state. Beneaththecobweb will say only that he is a U.S. citizen and network administrator temporarily living in western Europe.

“The amazing part of the scene is that it represents an inner-circle … a place where people in hundreds of different countries connect, and work for a common purpose,” beneaththecobweb tells me. The scene is all about giving people of every social class or budget equal access to great music and movies. Hollywood and the music industry must “adapt to changing times,” he says.

The second figure takes the name Ninja. Forest tells me he is a college student on Long Island and a former high-level Internet pirate who left the scene not long ago after running three movie release groups and one music release group. Ninja says he was primarily drawn to the scene because of easy access to new Hollywood releases.

For the next three hours we trade messages about how the scene operates, while Forest tosses in running color commentary.

When copies of The Incredibles, Terminator 3 or other major motion pictures appear on the Internet days or weeks before their theatrical release, it’s almost certain that a movie release group was responsible. Although movie groups first appeared around 1997, the scene got a kick-start in late October 1999 when a Norwegian teenager wrote a few lines of code that made it easy to pluck a Hollywood movie from a copy-protected DVD. A typical release group, bearing names like Flair, Esoteric or Opium, consists of anywhere from a handful to as many as 30 individuals, with 15 members on average. Today there are an estimated 140 underground movie groups worldwide, up from 32 in 2002. Other release groups focus on games, software, television shows, even e-books.

Releasing a movie onto the Internet follows a process that beneaththecobweb likens to a factory assembly line. While decrypting, encoding, and distributing a single movie could be done by a single individual, the chore is sufficiently labor-intensive that it makes more sense to parcel out the duties to a team of specialists. And so an underground cottage industry was born.

To begin the process, release groups usually obtain the movies from a surprising source: Hollywood insiders. A study published by AT&T Labs in September 2003 found that 77 percent of the illegal movies on file-sharing networks come from people associated with the movie industry.

Films leak into the piracy pipeline in several ways. Most treasured is a copy of a master print obtained during a film’s postproduction, when the shooting has been completed and hundreds of employees typically have access to the film master to make edits, adjust colors and sounds, add special effects, and perform other finishing touches. Equally tantalizing for the release groups are “screeners” released on DVD to a select group of viewers before a film opens in theaters. Another source is the pressing plant, where hundreds or thousands of discs with imperfections might be discarded months before a DVD’s retail release. A “telesync” is created when a movie theater employee or his friends set up a camcorder on a tripod and videotape the film from the projection room. Most commonly, someone sneaks a camcorder into a theater and aims it at the screen, though such “screen cams” can produce images with jerky movements and shots of the back of patrons’ heads. Still, the audio quality can be excellent; pirates can get good sound quality by plugging into jacks designed to help the hearing-impaired. (Not long ago, Los Angeles police arrested two eighteen-year-olds for videotaping Star Trek: Nemesis and a twenty-eight-year-old man for videotaping <