NetEqualizer News Blog

By: Art Reisman

Art Reisman is the CTO of APconnections. He is Chief Architect on the NetGladiator and NetEqualizer product lines.

I was going to write a commentary story a couple weeks ago when the news broke about the government shut down of the Megaupload site. Before I could get started, one of my colleagues pointed out this new undetectable file sharing tool. Although I personally condemn any kind of software or copyright piracy in any form, all I can say is the media copyright enforcement industry should have known better. They should have known that when you spray a cockroach colony with pesticide, a few will survive and their offspring will be highly resistant.

Here is a brief excerpt from rawstory.com:

The nature of its technology (file sharing technology) is completely decentralized, leaving moderation to the users. Individuals can rename files, flag phony downloads or viruses, create “channels” of verified downloads, and act as nodes that distribute lists of peers across the network.

In the recent U.S. debate over anti-piracy measures, absolutely none of the proposed enforcement mechanisms would affect Tribler: it is, quite literally, the content industry’s worst nightmare come to life.”

Flash back to our 2008 story about how the break up Napster caused the initial wave of P2P. Back in 2001, Napster actually wanted to work on licensing for all their media files, and yet they were soundly rebuked and crushed by industry executives and the legal departments who saw no reason to compromise for fear of undermining their retail media channels. Within a few months of Napster’s demise, decentralized P2P exploded with the first wave of Kazaa, Bearshare and the like.

In this latest round of piracy, decentralized file sharing has dropped off a bit, and consumers started to congregate at centralized depositories again, most likely for the convenience of finding the pirated files they want quickly. And now with the shutting down of these sites, they are scattering again to decentralized P2P. Only this time, as the article points out, we have decentralized P2P on steroids. Perhaps a better name would be P2P 3G or P2P 4G.

And then there was the SOPA Fiasco

The Internet is so much bigger than the Music Industry, and it is a scary thought that the proposed  SOPA laws went as far as they did before getting crushed.

I am going to estimate the economic power of the Internet at 30 trillion dollars. How did I arrive at that number?  Basically that number implies that roughly half the worlds GDP is now tied to the Internet, and I don’t mean just Internet financial transactions for on-line shopping. It is the first place most communication starts for any business. It is as important as railroads, shipping, and trucking combined in terms of economic impact. If you want, we can reduce that number to 10 trillion, 1/6 of the worlds GDP , it does not really matter for the point I am about to make.

The latest figure I could find is that the Music Industry did approximately 15 billion dollars worth of business at their peak before piracy, and has steadily declined since then. There is no denying that the Music Industry has suffered 5 to 6 billion dollars in losses due to on-line piracy in the past few years, however that number is roughly .06 percent of the total positive economic impact of the Internet. Think of a stadium with 1000 people watching a game and one person standing up in front and forcing everybody to stop cheering  so they could watch the game without the bothersome noise. That is the power we are giving to the copyright industry.  We have a bunch of sheep in our Congress running around creating laws to appease a few lobbyists that risk damaging the free enterprise that is the Internet. Risking damage to the only real positive economic driver of the past 10 years. The potential damage to free enterprise by these restrictive overbearing laws is not worth the risk. Again, I am not condoning piracy nor am I against the Music Industry enforcing their laws and going after criminals, but the peanut butter approach to using a morbid congress to recoup their losses is just stupid.  The less regulation we can put on the Internet the more economic impact it will have now and into the future.  These laws and heavy-handed enforcement tactics create unrealistic burdens on operators and businesses and need to be put into perspective. There has to be a more intelligent way to enforce existing laws besides creating a highly-regulated Internet.

Stay tuned for some suggestions in my next article.