RIAA targeted by hackers, counter-lawsuit
The Recording Industry Association of America (RIAA) has certainly made some enemies. The group that brought down Napster, and hopes to do the same to peer-to-peer swapping site Kazaa, appears to have run afoul of people with the technological know-how to make it sorry. An unknown hacker knocked the RIAA site offline Friday afternoon, and techies have been scrambling ever since to get it back online. The FBI and Secret Service have been called upon to help find the attacker. Then on Monday, Kazaa parent company Sharman Networks filed its long-anticipated countersuit against the organization. Sharman accuses RIAA of anti-competitive behavior because the original suit seeks Kazaa’s shut down instead of demanding a switch to a system that would require user royalty payments. Currently Kazaa customers swap files for free. Sharman also alleges that RIAA has promoted its authorized music download sites, Pressplay and MusicNet, at the expense of Kazaa by refusing co-operation. The Justice Department has begun investigating MusicNet and Pressplay for anti-trust violations.

Earthlink cuts losses, but also slashes staff
Earthlink narrowed its fourth-quarter losses, but apparently not enough to save a quarter of its 5,1000-person work force. The internet service provider (ISP) said Wednesday that broadband subscriptions had helped revenues grow after lowered sales projections back in October. Dial-up customer growth has slowed, decreasing 6 percent during third-quarter 2002 versus 2001. But in the same period, broadband customer sign-ups nearly doubled, to 642,000. Earthlink currently has 4.8 million total customers. The company incurred a net loss of $32.9 million last quarter, compared to $73.9 million the previous year. It predicted a first-quarter net loss of between $29 million and $33 million. But even amid the slightly cheerier prospects, Earthlink made another huge round of layoffs Tuesday. About 1,300 workers in the technical support and customer service departments were let go as the nation’s third-largest ISP also revealed plans to close call centers in Dallas, Sacramento, Seattle and Pasadena this year.

Study: Europeans fast adopting broadband 
And speaking of broadband, Strategy Analytics released its latest numbers on high-speed growth at home and abroad. Although more Americans than Europeans have signed up for broadband service, Europeans are converting faster, the numbers show. A record 6.3 million Europeans subscribed to broadband last year, a 55 percent jump from 2001. Among those subscribers, cable subscriptions dropped from 26 percent to 22.6 percent. Strategy Analytics predicts that 7.2 million more customers will switch to broadband next year, giving Europe 19.1 million total subscribers. That’s 11.9 percent of its online population. The company said Belgium, Denmark and the Netherlands have been quickest to adopt the new technology, and predicted that by 2008, 38 percent of European homes will have broadband. Meanwhile, the company predicted a 40 percent increase in U.S. homes with broadband access this year, jumping from 17.9 million in 2002 to 25.3 million by the end of ’03. By 2008, Strategy Analytics claims, 59 percent (64 million) of U.S. homes will have broadband.

Cybersecurity czar, hands tied, will resign
The U.S. cybersecurity czar will step down after presenting the National Strategy to Secure Cyberspace next month. Richard Clarke, reportedly frustrated with what he considered the lesser positions offered him in the new Department of Homeland Security, will move to the private sector. Clarke faces a tough task nonetheless, as critics charge that the new strategy does not get tough enough on cyberterrorism. With the worst internet attack in 18 months still a fresh memory, internet security experts worry that cyberspace remains an environment too vulnerable to criminals and mischief-seekers. But Clarke says that the government is in a lose-lose situation. Since more than three-quarters of all internet properties are privately owned, there’s only so far federal regulation will go. And massive cuts last week in the proposed Electronic Government Act haven’t helped perceptions. Congress slashed spending for improvements by nearly 90 percent, approving $5 million for initiatives instead of $45 million.

Yahoo settles suit and launches radio site
Yahoo continues its paid content expansion. The internet portal yesterday introduced LAUNCHcast Plus, its first music subscription site, one day after settling a copyright infringement suit brought by Sony Corp.’s Sony Music Entertainment. Yahoo inherited the suit when it bought Launch Media in June 2001, just after several record labels had filed suit against Launch. Yahoo settled with Universal Music Group last year, but the three other cases are still pending. According to the settlement terms, Yahoo gains nonexclusive rights to Sony-owned music in return for making back payments. Yahoo will continue to pay royalties on a per-song basis for future use of Sony music. LAUNCHcast’s commercial-free station costs $3.99 per month or $35.99 per year. Customers can tailor their own internet radio station or choose from pre-programmed varieties.

January 30, 2003© 2003 Media Life


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