Jungle Musings: September 2005

p2pnet Special:- An unusual, extremely expensive, international online club is starting to form.

Its first member was Patricia Santangelo, a single New York mother of five.

Next came Dawnell Leadbetter, another single mother, this time from the Seattle area. If you’re a regular p2pnet reader, you’ll recognize both of the above names.

The third member was someone you haven't met before: Tanya Andersen (right), a single mother who's living in Oregon and who's seriously disabled with a painful medical condition. She and her eight-year-old daughter get by on social security payments.

By now, you'll have probably guessed the club members are all women being brutally victimized by EMI, Universal, Warner and Sony BMG, the huge, multi-billion-dollar record label cartel that's using its immense financial and political weight and deep, dark connections to law enforcement agencies in a bizarre marketing scheme.

Instead of wooing customers, it's suing them and so far, it's clocked up close to 14,000 people.

But the significance of the three women isn't that they're among the unfortunate victims.

Rather, they stand out because they're standing up, defying the Mafia-like labels and their teams of hired legal thugs who work through 'Settlement Centers' which aim to terrorize people into paying 'fees' which usually start out at $7,500 to be 'negotiated' down to around $3,500.

Do you think the superlatives victimize, brutal, terrorize and bizarre are too strong?

They're not strong enough.

The We're Not Taking Any More club

Patricia Santangelo was the first to take the labels on, represented by Ty Rogers, Ray Beckerman and Dan Singer of New York’s Beldock Levine & Hoffman.

She tells other victims, "Don't let your fear of these massive companies allow you to deny your belief in your own innocence. Paying these settlements is an admission of guilt. If you're not guilty of violating the law, don't pay."

Dawnell Leadbetter, backed by Lory Lybeck of Lybeck Murphy in Oregon, says she’s not willing to let the labels walk all over her. We'll be running our interview with her within the next few days.

More recently, Tanya Andersen, also represented by Lybeck, has decided she’s not going to put up with Big Music’s bullying either.

"It was something I got in the mail and that I didn't quite understand from them stating they were releasing my private information," she told p2pnet. "They had a subpoena attached and it basically sounded to me when I read it that they were just investigating something and wanted my information.

"I thought, 'Well I haven't done anything wrong so I'm not going to worry about it'."

However, this was far from being an innocuous inquiry. In was the beginning of a nightmare for Anderson. And it's still going on.

The letter she refers to was from ISP Verizon telling her the company was releasing personal information to the Big Four's RIAA (Recording Industry Association of America), fronted by one of the Settlement Centers the enforcement unit uses to do its dirty work.

'I have no money and did not do what is being said'

In a March 6, 2005, letter to Mark Eilers at the Tukwila, Washington, 'Settlement Centre,' Andersen states categorically that neither she nor anyone in her household has ever downloaded "illegal" digital files.

"If somehow this activity was to somehow been pinned to me, it was somehow done so fraudulently," she says. "There is no way it came from my household.

"I have the least expensive computer system you can buy from Dell. The type you order off television for $499.00. It was purchased in the summer of 2002 and has the smallest hard drive they make. I have no cd writer on it and the cd-rom that I do have, does not even work correctly.

"I live alone with my 8-year-old daughter (who would have been seven at the time the alleged occurrence took place). I am a single mom who is disabled and unable to work. I live on Social Security disability and struggle to support my daughter and myself. If I am put in a position where I need to defend myself regarding this situation, it would create extreme financial hardship on me. I have no money and did not do what is being said. I also must admit that all this stuff that has been occurring with this whole ordeal has triggered my medical condition to flare lately.

"I have always been against music downloading. In fact, I have been a member of BMG's music club for quite some time and I purchase my music either from there or from Target. When I first got my computer set up almost three years ago, I had a friend set it up for me since I did not know how to do it. She had put Kaaza Lite on there and told me what it was. I never used it and had no interest in doing so. I deleted it since I had no use for it. Even though I deleted it correctly, as is recommended by Microsoft, Mr. Eilers has told me it can hide out in my system and play without me knowing about it. I have done a total check
of my computer and it is no where on there.

"These files you are speaking accusing me of sharing (which Mr. Eiler told me about), are not and never have been on my computer system. Several of those artists, I have never even heard of! One, I understand, is a rap song. I am 42-years-old and do not even like rap music. The login that this person who did this apparently used, which Mr. Eiler told me of, is not a login name I have ever used or heard of.

"There is no one at my household who could have done what is being said at all. Mr. Eiler had brought up the fact that maybe a babysitter could have done it and that is impossible because I seldom have a sitter since I can't afford to pay one and am usually home."

'Turning her life upside down'

Andersen contacted the recording industry, Verizon, the Settlement Support Center, US congressman David Wu and US senators Ron Wyden and Gordon Smith, "pleading for their help and investigation," her lawyer, Lorry Lybeck, told p2pnet, going on:

"She didn't engage in any copyright infringement nor did she download or share any songs on her computer. After offering to make her computer available to the strong-arming record industry and explaining to them that she could not, and did not, engage in any prohibited conduct, the secret suit was dismissed and she was then sued in her name by another group of large record companies in federal district court in Oregon.

"The continuing victimization of Ms Anderson and the unwillingness of the record companies to conduct even the most basic investigation before turning her life upside down betrays the total lack of concern they have for any concepts of fairness, due process and the rights of the individuals who they have wrongfully targeted.

"If this lawsuit were filed for real purposes of fact finding and a determination of damages owed, the record companies would have been required to undertake a real investigation and determine whether a real basis existed to sue Ms Anderson.

"In this circumstance, the real motivation and purpose of this suit (and the 15,000+ others clogging the federal courts) is to promote a national PR campaign being conducted by the RIAA. Because of this, the 'plaintiffs' in these many suits have no interest in investigating whether facts actually exist to support the allegations in the lawsuits. It is the publication of the threat of the suit that the RIAA wants.

"The federal courts have important business before them. It is an outrage that the RIAA is abusing the federal court system to obtain the ability to threaten many many thousands of American citizens.

"Copyright infringement is wrong. Thug-like threats by multi-national, multi-billion dollar businesses against people who cannot afford to speak or even explain their innonence is a much greater wrong. The music industry with all of its assets and all of its talents has the ability to handle the 'problem' of downloading much more effectively and much more humanely. Their present tactics cause real harm to real people.

"Theses tactics do nothing to address highjackers, spoofers and commercially motivated copyright infringers around the world.

"The RIAA needs to stop hurting innocent people."

Candy, James and John

And now, three more people have joined the We're Not Taking Any More club.

Candy Chan, James and Angela Nelson and John Harless are all from Michigan, all represented by John Hermann and all determined not to cave in to EMI, Universal, Warner and Sony BMG.

Hermann gave us brief breakdowns of each of the three cases:

Priority Records v Candy Chan - US District Court Eastern District of Michigan Southern Division Case No 04-cv-73645-DT Honorable: Lawrence Zatkoff.

Candy Chan herself knows nothing about computers, but she does have a 13-year-old daughter and the RIAA went after her, contending she was indirectly liable for providing a computer to her teenage daughter, who denied doing anything wrong. Chan senior said she didn't know who may have downloaded or exchanged music files. But she said she's seen other kids playing with her daughter's computer after school, or at sleep-overs.

"After taking Ms Chan's deposition, the RIAA moved to add the daughter," Hermann told p2pnet. "I objected, arguing that the daughter was a minor and that they had to appoint a guardian ad litem before for the child before they could proceed.

"In the meantime, I threatened filing a motion for summary judgment on behalf of Ms Chan and they immediately moved to withdraw the complaint against her, which the judge granted."

Mowtown Record Company v James and Angela Nelson - US District Court Eastern District of Michigan Southern Division Case No 04-73646; Honorable: Bernard Friedman.

John Nelson freely admits that when it comes to computers, he doesn't have a clue. The Big Four nonetheless accused him of copyright infringement, ignoring his assurances that not only did he not own a p2p file sharing application, but he didn't even know what it was.

However, Nelson's wife, Angela, operates an in-home day care center with several teenagers as her helpers, with all that implies.

"During the deposition of one of the employees, the teenager testified that although she downloaded many of the songs, she did so with Mr and Mrs Nelson's knowledge and approval," says Hermann.

"Based on the teenager's testimony, the RIAA moved to add Mrs Nelson as a defendant.

"During a second series of depositions, the teenage employee recanted her prior statement and said the Nelson's had nothing to do with the downloading and that she'd wrongfully accused them because she was scared and thought she was going to be in trouble herself unless she blamed them.

"Not surprisingly, the RIAA has tried to threaten her in order to change her testimony, even going so far as to hire a private investigator to try and sign a false affidavit indicating that the Nelson's attorney (myself) was active in suborning perjury."

Elecktra Entertainment v John Harless - US District Court Eastern District of Michigan Southern Division Case No 04-cv-74502;Honorable: Bernard Friedman.

John Harless is someone else whose knowledge of computers is to all intents ad purposes, non-existent. But he does have two teenaged children, aged 16 and 14.

The RIAA says Harness infringed its owners' copyrights and, "Although no discovery has been taken, I've tried to obtain information as to the basis of their claims," Hermann told p2pnet.

"Not surprisingly, they've resisted each and every request, no doubt because they have no information other than an IP address and account number.

"I have an order compelling them to produce a Media Sentry representative for a deposition as to the pre-suit investigative procedures, but to date, they've dragged their heels and haven't complied."

Holding a parent responsible

Fred von Lohmann is the EFF's (Electronic Frontier Foundation) senior staff attorney specializing in intellectual property. He represented Morpheus owners Streamcast Networks in the Grokster vs MGM decision.

“Is it acceptable to make parents responsible in a financial or other sense for something their children may, or may not, have done?” – p2pnet recently asked von Lohmann.

“ The increasing number of lawsuits against the parents and grandparents of alleged file-sharers is a particularly unfortunate part of the recording industry's litigation campaign against music fans,” he said. “There is no precedent in copyright law for holding parent responsible for the infringing activities of their minor children. If the question ever went to court, I believe the RIAA would lose.”

But, “Unfortunately, the RIAA has made it clear that, if a parent fights the lawsuit, they will simply sue the child directly.”

Multi-billion-dollar corporations suing children for sharing music with each other? And sadly, it’s not only in America. The labels are using RIAA clones around the world to run similar terror campaigns aimed at bringing former product 'consumers' to heel.

However, if, in their arrogance, they ever do begin to pillory children, they'll suddenly discover who depends on who.

We'll be running p2pnet Q&As with both Leadbetter and Andersen in the next few days, as well as more details from the individual cases.

If you're a lawyer representing someone else who's joining, the We're Not Taking Any More club, please let us know.

Ditto if you know, or if you are, one of the victims.

Meanwhile -------------

FICTION: File sharers are depriving the music labels (not to mention the movie and software cartels) of billions of dollars in lost sales.

FACT: The cartel is reporting substantial drop-offs in sales and much of this is, its owners claim, down to file sharing.

It's eminently debatable whether file sharing has caused the loss of even a single sale. But the labels have cut back significantly on their output in Australia, say new figures from an Australian expert. Given that it's the case in Oz, one can assume it's also true elsewhere.

There have also been a number of academic and other studies pointing up the fallacy of the cartel assertions.

One of the first to suggest EMI, Universal, Warner and Sony BMG were being a little less than forthright in their 'File sharing is costing us billions in lost sales' declarations came from two respected American scholars.

"According to the RIAA (2002), the number of CD’s shipped in the U.S. fell from 940 million to 800 million - or 15% - between 2000 and 2002 (though shipments continued to rise during the first two years of popular file sharing, 1999-2000)," say Felix Oberholzer of the Harvard Business School and Koleman Strumpf of the University of North Carolina at Chapel Hill in their The Effect of File Sharing on Record Sales: An Empirical Analysis.

"The record industry has claimed this decline is due to file sharing."

The two analyzed the direct data of music downloaders over a 17-week period in the fall of 2002, and compared that activity with actual music purchases during that time, coming to the conclusion that spikes in downloading had almost no discernible effect on sales.

Even under the worst-case example, "it would take 5,000 downloads to reduce the sales of an album by one copy," they wrote. "After annualizing, this would imply a yearly sales loss of two million albums, which is virtually rounding error given that 803 million records were sold in 2002. Sales dropped by 139 million albums from 2000 to 2002."

Nor do downloaded mp3 files replace CD buys.

"While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing," stated Oberholzer and Strumpf.

Their studies concentrated on the American experience. But a more recent study by Dr Tatsuo Tanaka of Keio University in Japan, using the now famous Winny p2p application, says there’s, “not sufficient evidence that file sharing systems are responsible for the recent decline in CD sales”.

To the contrary, p2p usage helps in the promotion of music by allowing users to experience it before purchase; and, it helps in the discovery of new music by users, says Tanaka in Does File Sharing Reduce CD Sales?

"Based on micro data of CD sales and numbers of downloads, we found that there is very little evidence that file sharing reduced music CD sales in Japan. We controlled simultaneous bias between sales and downloads by instrumental variables but did not find correlation between CD sales and numbers of downloads. Although there were large differences in the numbers of downloads among CD titles, these differences did not affect CD sales.

"We also carried out a user survey on file sharing and CD purchases with consideration to the potential bias of respondents trying to understate their illegal copying activity. This survey also showed that file sharing had very limited influence on CD purchases."

Tanaka suggests copyright laws should be relaxed rather than tightened to allow for more positive effects of broadband internet file sharing.

Meanwhile, millions of entertainment industry dollars that should have gone into shareholder dividends are spent on 'reports' meant to counter the papers. But they can be clearly seen for what they are: fruitless attempts to discredit papers which give the lie to industry claims.

FICTION: File sharers are thieves.

FACT: Put at its simplest, to steal something is to remove it from its original owner without his or her permission, causing deprivation through loss. File sharing means exactly what it says. Sharing. Nothing is stolen and no one is deprived of anything. To the contrary, file sharers are exposed to music they may never have otherwise heard. Mp3s are inferior, compressed copies of original CD tracks meant primarily for portable devices. People who listen to mp3s frequently go out to buy the originals so they can be played on home stereo systems.

Moreover, no money changes hands and no profits are made or lost.

FICTION: Targetting people suspected of file sharing has significantly reduced the number of file sharers in the US and around the world.

FACT: The lawsuits have had, and continue to have, zero impact on the file sharing communities. To the contrary, the number of people logging onto file sharing networks everywhere is steadily increasing.

p2pnet has been collecting data compiled by Big Champagne, the American research company which specializes in gathering data on file sharing.

In August, 2003, in the US, on average, 2,630,960 people were simultaneously logged onto p2p networks at any given time. Globally, the number was approximately 3,847,565.

A year later for the same months, the numbers were 4,549,801 and 6,822,312 respectively.

And for August, 2005, Big Champagne statistics show 6,871,308 people were logged onto the networks at the same time in the US, with 9,620,261 individuals checking in around the world.

FICTION: Entertainment industry lawsuits deter people from sharing files with each other online.

FACT: Every day, hundreds of thousands of people around the world log on for the first time meaning the chance of any one individual becoming one of the RIAA's chosen few becomes exponentially more unlikely.

In his Theory of Collective Consumer Risk, "Downloaders are generally less likely to expect a stern warning, expensive lawsuit or even criminal prosecution, the more those around them are doing the same," says Canadian marketing expert Dr Markus Giesler, also quoting p2pnet's contention that the odds of ending up as an RIAA target are akin to being struck by lightning.

Or put another way, the risk tied to Internet file-sharing is almost zero despite entertainment industry claims to the contrary, says Geisler, going on: "Downloaders are generally less likely to expect a stern warning, expensive lawsuit or even criminal prosecution, the more those around them are doing the same."

Slyck is famous for its forums and its statistics. In May this year, "From the last capture of the proportion of networks under the RIAA’s gun in November of 2003, 150 users of FastTrack were sued, compared to 5 Blubster users," said the site’s Tom Mennecke in RIAA’s Grand Total: 10,037 - What are Your Odds?, continuing:

"Since the RIAA cannot subpoena individuals anymore, we unfortunately cannot provide a more current proportion. However, common knowledge dictates that FastTrack remains a priority, and on November 13 of 2003 it represented ~96% of those being sued."

But, "If we were to eliminate 96% (proportion of FastTrack users) of the 6,523 sued in 2004, the odds of being sued changes dramatically. If we consider only those using a non-FastTrack P2P network, the total number of lawsuits drops to only ~261. In other words, you then have a 1 in 45,977 chance of being sued if you do not use FastTrack. Comparatively, according to the National Safety Council, you have a better chance of being killed in a transportation or non-transportational accident, death from suicide, death from assault or death by legal intervention (such as execution or being shot by a police officer.)"

Say, however, half of those sued in 2004 were using FastTrack, that leaves 3,261 non-FastTrack related lawsuits, says Mennecke. "You would then have a 1 in 3,679 chance of being sued. That still places you above all external cases of mortality (1 in 1,755), but below all transportational accidents (1 in 5,953.) However, you would still have a better chance of being killed in an unintentional accident (1 in 2,698), then being sued by the RIAA.

"Although these numbers are hardly an exact science, they do reflect the odds of being sued are little different than the risks one takes by simply living day-to-day life. But if we were to get real specific, the odds of being sued by the RIAA for non-FastTrack users (1 in 3,679) is still much greater than death by contact with a venomous snake or lizard (1 in 95 million.)”

FICTION: Thousands of Americans have been found guilty of 'file sharing'.

FACT: Not one person has ever been found guilty of file sharing, or of anything else. And that's because until Patricia Santangelo came along, not one person had been willing to risk going up against the labels. This in turn has meant no one has appeared before a judge and no alleged case of 'file sharing' has ever been taken to its conclusion.

Worse, the practice makes a mockery of a corner stone of the American legal system: that people are innocent until they're proven guilty.

However, the cartel and their RIAA and other similar industry owned enforcement organizations continue to issue disingenuous press releases suggesting they've successfully prosecuted thousands of 'criminal, thieving' file sharers.

We could go on because pick virtually any aspect of p2p file sharing in music industry statements, and the odds are far better than even that they'll be distortions, if not outright lies, carefully crafted to give the appearance that the labels are beleaguered corporate citizens doing their honest best to survive in a world where millions upon millions of file sharing thieves get up every morning, bent on robbing the labels of what's rightfully theirs, depriving their contracted artists of their livings and causing terrible hardship to support workers.

The contention is obvious nonsense. Nonetheless, the mainstream media repeat these "facts" as though they're a genuine reflection of what's occurring, and as though they come from credible and reliable sources.

And while the labels and their counterparts in the movie and software industries do their best to imitate King Canute in his attempts to turn back the tide, the p2p networks have become a permanent part of the online scene, solidly locked in.

Peer-to-peer is here to stay and as British ISP network service CacheLogic says in a just-published report, p2p not only represented 60% of Net traffic at the end of 2004, it “outstrips every other communication and distribution protocol and is still growing”.

Moreover, p2p and broadband are mutually compatible forces, each driving the uptake of the other, says the report.

The old-style monopolies are slowly but surely being broken down, but it'll take a while before the technologically ignorant executives who run the cartels are replaced by people able to function effectively and profitably in the digital 21st century.

The tragedy is: until that happens, people such as Patricia Santangelo, Dawnell Leadbetter and Tanya Andersen will continue to be persecuted.

And for absolutely nothing.

Stay tuned.

Jon Newton - p2pnet

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