[Ecommerce] Wall Street Journal: Ashcroft Targets Illicit Distribution of Movies, Music

[Thiru Balasubramaniam]

Ashcroft Targets
Illicit Distribution
Of Movies, Music

By *MARK WIGFIELD* and *ETHAN SMITH *
*Staff Reporters of THE WALL STREET JOURNAL*
August 26, 2004; Page B6

Attorney General John Ashcroft announced what he called the first
federal law-enforcement action targeting distribution of copyrighted
materials over so-called peer-to-peer networks.

Mr. Ashcroft said five homes and one Internet-services provider, or ISP,
were raided in a probe of networks organized to distribute massive
quantities of copyrighted movies, music, software, games and other
materials over the Internet.

No charges have been filed, and Mr. Ashcroft wouldn't reveal the name of
the ISP while the investigation continues. He said the five networks had
made 45 terabytes of materials available for distribution, or material
the equivalent of more than four times the size of the print collection
of the Library of Congress.

The networks consisted of individuals who, as a condition of
participation, were required to make available for download as much as
100 gigabytes of material, Mr. Ashcroft said. One gigabyte is about the
amount of space required to store 250 songs on a computer hard drive.

Peer-to-peer, or P2P, software enables Internet users to download
materials from other individuals' computers connected to the Internet.
Popular peer-to-peer platforms include Grokster and Kazaa. Mr. Ashcroft
noted that there are legal uses of file-sharing programs.

According to an affidavit by an FBI special agent filed in support of
the search warrant executed yesterday morning, the people whose homes
were searched were members of a 7,000-member operation called the
Underground Network. The network ran using freely available software
called Direct Connect. The investigation leading to the search began in
March.

The affidavit alleges that 200 to 300 users were typically active on the
Underground Network at any given time, trading movies, music and
software, including Bruce Springsteen's "Greatest Hits" album, and the
films "Cold Mountain" and "The Road to Perdition."

An e-mail to the Underground Network site wasn't answered.

Mr. Ashcroft's announcement came on the same day the Recording Industry
Association of America brought copyright-infringement lawsuits against
744 people using a variety of peer-to-peer platforms to share music. The
music industry has attributed a sharp decline in sales to file-sharing,
but said traffic on one of the largest systems is down as a result of
the trade group's decision to sue downloaders.

Separately, the Justice Department is preparing to announce the results
of a nationwide campaign against the purveyors of fraudulent e-mail
"spam" that involves more than 100 arrests, search warrants, subpoenas
and other law-enforcement actions, industry and law-enforcement
officials said.

*Write to* Mark Wigfield at mark.wigfield@dowjones.com
<mailto:mark.wigfield@dowjones.com> and Ethan Smith at
ethan.smith@wsj.com <mailto:ethan.smith@wsj.com>