Lawmakers call P2P technology a “national security threat”
Digital Media Wire

Lawmakers on Tuesday called peer-to-peer networks a potential "national security threat," as some users may inadvertantly made sensitive or classified documents on their computers available for sharing with others, CNET News.com reported. While benefits of peer-to-peer technology were mentioned at the Government Reform Committee hearing yesterday, both Chairman Henry Waxman (D-Calif.) and ranking member Rep Tom Davis (R-Va.) said file-sharing technology posed a national security threat, and that they are separately considering related legislation. The Committee tested file-sharing software Lime Wire, and said it was able to find "personal bank records and tax forms, attorney-client communications, the corporate strategies of Fortune 500 companies, confidential corporate accounting documents, internal documents from political campaigns, government emergency response plans and even military operation orders," Waxman said. A representative from the Federal Trade Commission testified that the agency's studies found that potential P2P security issues "stem largely from how individuals use the technology rather than being inherent in the technology itself."

Google, others contest copyright warnings
Wall Street Journal

A computer-industry trade group says warnings from content producers and others like it on movies and books are restricting consumers' rights to fair use of copyrighted content. The Computer and Communications Industry Association -- a group representing companies including Google Inc., Microsoft Inc. plans to file a complaint with the Federal Trade Commission, alleging that several content companies, ranging from sports leagues to movie studios to book publishers, are overstepping bounds with their warnings. The group wants the FTC to investigate and order copyright holders to stop wording warnings in what it sees as a misrepresentative way. CCIA President Ed Black said the warnings create a "chilling effect," dissuading consumers from using portions of the content in ways that are lawful.

The CCIA said copyright holders should let audiences know they may have a right to reproduce some of the work. They even provide examples of how it can be done, as in this warning in the John Wiley & Son's 2007 book "Hotel California." The warning says, "No part of this publication may be reproduced...except as permitted under Section 107 or 108 of the United States Copyright Act," referring to the sections that deal with fair use and reproduction by libraries and archives.

Justin Hughes, a professor of law at Cardozo School of Law at Yeshiva University in New York, said the notion of fair use is expanding in the digital age, with consumers getting used to copying CDs, for example, as a gift for somebody. A difficulty with the concept of fair use is that while the Copyright Act establishes what fair use is, the application of the rules is still somewhat subjective, said Mr. Hughes. They call for courts to consider several factors ranging from the nature of the use -- such as whether it is public or private -- to whether the reproduced work had any effect on the market for the original. Article

New members boost Audible
PW Daily

Revenue at Audible rose 36% in the second quarter, to $25.9 million, and the company’s net loss was trimmed to $125,000 from a loss of $2.2 million in last year’s comparable period. An increase in the number of AudibleListener members—to 431,000 from 309,000 a year ago—was a key factor in the higher sales. In addition, 96% of the new members who joined in the recent quarter were Gold or Platinum members, customers who spend more money on the service. In last year’s second quarter only 47% of new members fell in both categories. For the first half of the year, the company had a net loss of $1.3 million, down from $5.2 million, and sales rose 32%, to $51.2 million.

Harlequin profits jump, eBook sales rise
PW Daily

Harlequin posted modest gains in the second quarter ended June 30, with total revenue up 1.2%, to C$116 million ($110.2 million). E-book sales also rose in the period, albeit from a small base. Still, Harlequin has seen enough growth in the format to introduce a new line. Spice Briefs will be original erotic e-books in the 5,000- to 15,000-word range. The price will be $2.99, although the company is offering the titles at 99 cents until Aug. 15. Two titles will be published per month and will be available in all e-book formats. Hayes said that beginning this month, Harlequin will create an e-book edition of every new book it releases, a total of 1,300 books a year. Article

Survey: One in Five U.S. Internet Users Watch Online Video Daily
Digital Media Wire

Some 57% of U.S. Internet users have watched videos online, and about one in five (19%) do so daily, according to a new telephone survey of 1,492 Internet users conducted by the Pew Internet & American Life Project. Among those who have broadband both at work and at home, 75% said they watch or download video online. More than half (57%) of Internet users said they share links to videos they find with others, and 75% said they receive links to watch videos from others. News is the most popular form of online video, followed by comedy. Just 7% of all users said they had paid for some form of online video, a figure that rose to 10% for the 18-29 age demographic. The survey also found that a "motivated minority" of online video viewers -- mostly young adults -- actively exploit the participatory features of online video, such as rating content, posting feedback or actually uploading video themselves. Article

Report: 72% of U.S. Adults now have broadband access
Digital Media Wire

Seventy-two percent of U.S. adults have access to a broadband connection and more than half of American households now subscribe to broadband, according to new research by the Consumer Electronics Association (CEA).The organization said that 57.8 million U.S. households subscribe to broadband at home, an increase of 21% from a year ago."With 20% of non-broadband subscribers expecting to adopt this service in the next two years, future growth looks strong," said Gary Shapiro, the president and CEO of the CEA. Article

Google to Spend $4.6 Billion in Spectrum Auction if FCC Adopts Rules
Digital Media Wire

In a filing with the FCC on July 9, Google urged the FCC to require the adoption of four types of "open" platforms as part of the license conditions, which the company said would best serve consumers' interests. The company has argued that such conditions are necessary to prevent a small group of telephone and cable giants from simply outbidding smaller rivals, while spurring additional competition from software applications providers, content providers, handset makers and ISPs. In a letter sent Friday to FCC Chairman Kevin Martin, Google CEO Eric Schmidt said that should the FCC adopt his company's requests, "Google intends to commit a minimum of $4.6 billion to bidding in the upcoming auction.". Article