Jail Time for Software Innovators

A. Presentation of the issue:

Over the past few decades, the computer industry has evolved in a way it's almost impossible to control. Even more, up to date there are very few laws that restrict this growth. It is thanks to this freedom to innovate that it is now a multi-billion dollar industry that maintains some countries economies as superpowers. This situation could change sooner than we think. In fact it has already begun.

A bill introduced in California raised the possibility of jail time for software P2P (peer to peer) developers. According to the article, this is due to the impossibility of stopping copyrighted content from being swapped from user to user through the internet through P2P networks such as Kazaa and others. This is a problem because as said earlier, it is thanks to the freedom to innovate that technology develops as fast as it is today and how it helps some economies to be how they are today. If this freedom is blocked by any way, then it would make a breach where possibly some of the most important advancements could be blocked by the law, and not necessarily for the good of anybody more than a sector of industry. Like in this case, the record industry is blocking the software industry.

B. IT Background of the Issue:

Some of the IT equipment created by software developers is P2P (Peer to Peer) networks, which are file sharing programs that can create a network through the internet. The main characteristic of these networks is that they don't require a main server to function and share files. In these cases a single terminal can act as both client and server at the same time serving shared files to the P2P community. One of the most popular P2P program is Kazaa. This program uses a FastTrack network which apart of the main function the P2P has to have, it also includes multiple source downloading so that the user can download songs from many fast connections, and also resume capabilities. One of the trends of P2P networks is to have better TCP/IP management systems so file transfers are quicker. Also they tend to bundle the software with many forms of spyware and adware so that the companies can recover money from these many users around the world and then sell this information to other companies. In contrast, many independent software developers are reverse engineering these programs to distribute a `clean' version of the program like for example `Kazaa Lite K++'.

C. Impact of the Issue:

The concept of this state bill is to impose sanctions such as $US 2500 per charge or a year in jail to software developers that don't take precautions on the content being swapped on their programs. This has been a continuation on the fight of music and film industries to prevent users to download copyrighted content, which has various predecessors as the RIAA project which passed on a bill that allows the government to sue P2P users' large amounts of money for each song they share on a network. This project has a tendency to attack the most naïve users of the network such as minors who have no knowledge on law or copyright but use these P2P software's. But now the RIAA are attacking the direct source of their problems.

This bill has an impact to software developers that are being held back of their technological innovation. It has been the aim of most developed countries to encourage technological growth to maintain its economies. An example is that the government US lowered their taxes to internet companies of broadband connections so that they could spend more money on development and offer a better service. Today it is said that it has the most competitive internet connection to all users (including home users) compared to the rest of the countries. But apparently all these efforts are useless because there cannot be enough development of these services if the state also sanctions the software developers that create the programs that use these networks.

Also music and film fans that already have access to any content they would like for free are affected by this bill. It is thanks that it is free that many poor people and countries can download songs without the need of expensive computers since P2P programs don't require much processing power and large bandwidth connections are recommended but are not necessarily required. If this bill is spread not only across USA but the rest of the world, it will stop a medium of entertainment to people which wouldn't even buy the CD even if they had the money.

D. Solutions Arising From the Problem:

One solution to this whole problem is not to punish neither software developers for making programs nor users for using them, but instead charge an extra tax on the internet bill that would compensate the loss to the industry. By doing this, all internet users will pay more for their internet connection but they could have unlimited access to copyrighted content legally and therefore, all types of royalties would be paid to artist and this would also assure a fixed income for affected artists which are the most directly damaged by the situation. Another solution would be to charge a tax to the P2P companies that would compensate for royalties, proportional to their revenues. Since P2P companies make money out of advertising within their programs, then they could destinate an extra space for the advert responsible for paying the tax.

E. Selection of Sources:

1. Rene Kamita and Dan Rascher, Inter-Industry Comparisons: Lessons From the Semiconductor Industry, December 1997, http://64.233.161.104/search?q=cache:Py9pGzQu2d4J:ist-socrates.berkeley.edu/~iir/worktech/csmfinal/ch4.pdf+computer+industry+government+income+revenue+usa&hl=en

2. John Borland, State bill could cripple P2P, January 18, 2005 http://news.com.com/State+bill+could+cripple+P2P/2100-1028_3-5540937.html

3. Wikipedia Free Encyclopedia, Kazaa, http://en.wikipedia.org/wiki/Kazaa

4. Official Website of Kazaa Lite K++, December 17, 2003, http://www.o-townnet.tk/

5. Liane Cassavoy, `Music Labels Declare War on File Swappers', PCWorld.com, September 08, 2003, http://www.pcworld.com/news/article/0,aid,112364,00.asp

6. Cesar V. Conda, The Bush Broadband Economy, September 22, 2004, http://www.freedomworks.org/informed/issues_template.php?issue_id=2097&isitsearch=1&search1=internet

7. Walter Lippmann, Two Months In Cuba, January 2001 http://www.blythe.org/2months2.html

Rene Kamita and Dan Rascher, Inter-Industry Comparisons: Lessons From the Semiconductor Industry, December 1997, http://64.233.161.104/search?q=cache:Py9pGzQu2d4J:ist-socrates.berkeley.edu/~iir/worktech/csmfinal/ch4.pdf+computer+industry+government+income+revenue+usa&hl=en

John Borland, State bill could cripple P2P, January 18, 2005 http://news.com.com/State+bill+could+cripple+P2P/2100-1028_3-5540937.html

Wikipedia Free Encyclopedia, Kazaa, http://en.wikipedia.org/wiki/Kazaa

Official Website of Kazaa Lite K++, December 17, 2003, http://www.o-townnet.tk/

Liane Cassavoy, `Music Labels Declare War on File Swappers', PCWorld.com, September 08, 2003, http://www.pcworld.com/news/article/0,aid,112364,00.asp

Cesar V. Conda, The Bush Broadband Economy, September 22, 2004, http://www.freedomworks.org/informed/issues_template.php?issue_id=2097&isitsearch=1&search1=internet

Walter Lippmann, Two Months In Cuba, January 2001 http://www.blythe.org/2months2.html