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23–572 PDF 2005

REDUCING PEER-TO-PEER (P2P) PIRACY ON

UNIVERSITY CAMPUSES: A PROGRESS UPDATE

HEARING

BEFORE THE

SUBCOMMITTEE ON COURTS, THE INTERNET, 

AND INTELLECTUAL PROPERTY

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

SEPTEMBER 22, 2005

Serial No. 109–56

Printed for the use of the Committee on the Judiciary

(

Available via the World Wide Web: http://judiciary.house.gov 

(II)

COMMITTEE ON THE JUDICIARY 

F. JAMES SENSENBRENNER, JR., Wisconsin, Chairman 

HENRY J. HYDE, Illinois 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

DANIEL E. LUNGREN, California 

WILLIAM L. JENKINS, Tennessee 

CHRIS CANNON, Utah 

SPENCER BACHUS, Alabama 

BOB INGLIS, South Carolina 

JOHN N. HOSTETTLER, Indiana 

MARK GREEN, Wisconsin 

RIC KELLER, Florida 

DARRELL ISSA, California 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TOM FEENEY, Florida 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

MARTIN T. MEEHAN, Massachusetts 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California 

CHRIS VAN HOLLEN, Maryland 

DEBBIE WASSERMAN SCHULTZ, Florida

PHILIP G. KIKO, General Counsel-Chief of Staff 

PERRY H. APELBAUM, Minority Chief Counsel 

SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

LAMAR SMITH, Texas, Chairman

HENRY J. HYDE, Illinois 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

WILLIAM L. JENKINS, Tennessee 

SPENCER BACHUS, Alabama 

BOB INGLIS, South Carolina 

RIC KELLER, Florida 

DARRELL ISSA, California 

CHRIS CANNON, Utah 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

HOWARD L. BERMAN, California 

JOHN CONYERS, JR., Michigan 

RICK BOUCHER, Virginia 

ZOE LOFGREN, California 

MAXINE WATERS, California 

MARTIN T. MEEHAN, Massachusetts 

ROBERT WEXLER, Florida 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California

BLAINE MERRITT, Chief Counsel 

DAVID WHITNEY, Counsel 

JOE KEELEY, Counsel 

RYAN VISCO, Counsel 

SHANNA WINTERS, Minority Counsel 

(III)

C O N T E N T S 

SEPTEMBER 22, 2005

OPENING STATEMENT 

Page 

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Chairman, Subcommittee on Courts, the Internet, and Intellectual Property .................................................................................................... 1

The Honorable Howard L. Berman, a Representative in Congress from the 

State of California, and Ranking Member, Subcommittee on Courts, the 

Internet, and Intellectual Property .................................................................... 9

WITNESSES 

Mr. Daniel A. Updegrove, Vice President for Information Technology, University of Texas at Austin 

Oral Testimony ..................................................................................................... 11

Prepared Statement ............................................................................................. 14

Mr. Richard Taylor, Senior Vice President, External Affairs and Education, 

Motion Picture Association of America (MPAA) 

Oral Testimony ..................................................................................................... 35

Prepared Statement ............................................................................................. 37

Mr. Norbert W. Dunkel, Director of Housing and Residence and Education, 

University of Florida 

Oral Testimony ..................................................................................................... 41

Prepared Statement ............................................................................................. 43

Mr. William J. Raduchel, Chairman and Chief Executive Officer, Ruckus 

Network 

Oral Testimony ..................................................................................................... 50

Prepared Statement ............................................................................................. 52

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Report from the Joint Committee of the Higher Education and Entertainment 

Communities submitted by the the Honorable Lamar Smith, a Representative in Congress from the State of Texas, and Chairman, Subcommittee 

on Courts, the Internet, and Intellectual Property ........................................... 3

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Howard L. Berman, a Representative 

in Congress from the State of California, and Ranking Member, Subcommittee on Courts, the Internet, and Intellectual Property ......................... 63

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Member, Subcommittee on 

Courts, the Internet, and Intellectual Property ................................................ 64

Prepared Statement of the Honorable Adam B. Schiff, a Representative in 

Congress from the State of California, and Member, Subcommittee on 

Courts, the Internet, and Intellectual Property ................................................ 65

Prepared Statement of Frederic Hirsch, Senior Vice President, Intellectual 

Property Enforcement, Entertainment Software Association (ESA) ............... 65

Supplementary Statement of Daniel A. Updegrove, Vice President for Information Technology, University of Texas at Austin ........................................... 69

(1)

REDUCING PEER-TO-PEER (P2P) PIRACY ON 

UNIVERSITY CAMPUSES: A PROGRESS UPDATE 

THURSDAY, SEPTEMBER 22, 2005

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COURTS, THE INTERNET,

AND INTELLECTUAL PROPERTY, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC.

The Subcommittee met, pursuant to notice, at 9:15 a.m., in Room 

2141, Rayburn House Office Building, the Honorable Lamar Smith 

(Chair of the Subcommittee) presiding. 

Mr. SMITH. The Subcommittee on Courts, the Internet, and Intellectual Property will come to order. 

I have to tell you, I do think several Members are on the way, 

but apparently this is an early hour for a number of them. In point 

of fact, we originally were going to meet at ten o’clock and, because 

of conflicts with other Subcommittees, we needed to move up our 

hearing time. I can only say that I am grateful that the witnesses 

are all here and that there is still a large audience who are interested in the subject at hand. 

We are going to proceed, incidentally, with the agreement of the 

Ranking Member, Mr. Berman, who is on the way but will be delayed a few more minutes. I am going to recognize myself for an 

opening statement, and then we’ll move on and begin to hear from 

the witnesses. 

Today the Subcommittee will receive an update on the progress 

that has and has not been made in combatting peer-to-peer piracy 

on university campuses. First, let me note that there have already 

been several significant actions that have occurred off of the university campuses. Only a few months ago, the Supreme Court 

clearly delineated the lability of P2P software providers. Until this 

decision was released, certain P2P providers had consistently disclaimed any liability for the piracy that their software enabled. 

Now many of these services are trying to become distributors of 

legal sources of content. However, universities are aware P2P piracy flourishes, and I am pleased to see progress on many campuses in combatting such piracy. 

Copyright issues are no longer an afterthought at many universities. During the last academic year, several universities offered 

legal services to lure students away from illegal downloading and 

file sharing. Other institutions offered serious education programs 

or better enforcement of their copyright policies. 

2

Coming from high school environments where copyright issues 

are usually ignored, or simply unknown to parents and teachers, 

college students are ready to use the high-speed Internet connections as a source of free content. While college students often test 

boundaries, campuses should not be places where illegal activity 

becomes a routine of a student’s life that will only continue after 

their graduation. 

Universities have recognized their part, and their educational 

mission is not only centered on turning out architects, lawyers, 

nurses, musicians, and economists. Their mission also includes 

graduating well-rounded individuals who respect others as well as 

the laws of the country. 

Several years ago, it was obvious that respect for the nation’s 

copyright laws was not a high priority of many university students 

or their universities. To address this issue, a joint university content owners group was created in 2003. Co-chaired by Graham 

Spanier at Penn State and Cary Sherman of RIAA, this working 

group has met regularly to bring together groups that have rarely 

interacted before. This working group has provided the Subcommittee with an update of its activities in its written submission 

today. 

The Subcommittee will hear today from two universities, including one from my own district. Both universities have undertaken 

several efforts related to student education, ranging from copyright 

information provided on orientation day to automated systems that 

warn students of conduct not permitted under university guidelines. 

We will also hear from one provider of legal content to universities, and the experiences that they have had. Finally, we have a 

representative of a content trade association, who can speak to the 

increasing use of high-speed university networks to transfer large 

video files. This is a good time to understand why some universities have clearly stepped up to the plate of educating their students, while others simply have not. 

The Subcommittee will continue to hold hearings on P2P piracy 

to monitor progress and to update Congress on what still needs to 

be done. 

I mentioned in my opening remarks a minute ago the Joint Committee of the Higher Education and Entertainment Communities 

that had been meeting since 2003. One of the co-chairmen of that 

group is Cary Sherman, who happens to be in the audience today. 

Glad to see you. And since you’re here, I want you to note that 

we’re going to, without objection, be putting in the record your 

most recent report that we saw yesterday. 

[The information referred to follows:]

3

REPORT FROM THE JOINT COMMITTEE OF THE HIGHER EDUCATION AND ENTERTAINMENT COMMUNITIES SUBMITTED BY THE THE HONORABLE LAMAR SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS, AND CHAIRMAN, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY


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Mr. SMITH. And also, maybe just as a part of my opening statement, let me read a couple of the conclusions from that report, as 

well: ‘‘This joint committee today issued an update to Congress outlining the latest efforts to address illegal file sharing on campuses 

and the emerging challenges ahead.’’ According to the report, and this is the good news: 

‘‘The number of schools with legitimate services on campus has 

more than tripled, to nearly 70 in the last year.’’ Now, that’s the good news. The other news is that, according to 

the report, student-run file-sharing systems on schools’ local area 

networks, as well as the increased use of unauthorized hacks of the 

legitimate online services, iTunes, are emerging as significant problems. So obviously, there’s much work to be done, but we are making progress. 

That concludes my opening statement, and the gentleman from 

California, Mr. Berman, is recognized for his. 

Mr. BERMAN. Well, thank you very much, Mr. Chairman, and I’m 

sorry I was late. But I personally appreciate you scheduling this 

hearing on campus-university peer-to-peer piracy. 

I think there’s no question of the devastating impact piracy has 

had on the entertainment industry: a serious decline in total value 

at the retail level. In March 2005 alone, 243 million songs were 

downloaded from illicit peer-to-peer services. It’s estimated that approximately 400,000 films are illegally downloaded every day. 

But when it comes to downloading content that is not paid for, 

there seems to be a disconnect between—there’s a disconnect that 

students exhibit between intellectual knowledge and actual behavior. 

There was a very telling discussion that occurred during a program about P2P file sharing organized by my colleagues, Adam 

Schiff and Linda Sa ́nchez, and me, for students from different colleges who are interning on the Hill. The students all acknowledged 

that downloading content from P2P networks was possibly morally 

wrong, probably legally wrong, and potentially harmful to their 

own networks from spyware or adware; yet many of them continue 

to use P2P file-sharing as a means of obtaining music, movies, television shows, and games. 

At this hearing last year, Gordon Spanier—Graham Spanier—

one of the chairs of the joint committee, and a man who’s really 

a visionary in undertaking the lion’s share project at Penn State, 

testified, ‘‘I don’t think there is any one part of the solution. It has 

to be a set of variables that universities use to bring about progress 

in this area.’’

Awareness of the effects and solutions to the piracy problem can 

be addressed through education, enforcement, technological improvements, and affordable legitimate alternatives. The good news, 

in no particular order, is that there has been progress on every 

front. The Supreme Court’s decision in Grokster set a clear message that companies that encourage theft can be held liable. Immediately after the decision, iMesh, one of the original peer-to-peer 

services, announced the transition from a free to commercial-based, 

authorized P2P business model, which ensures competition to creators—compensation to creators. Others began to follow suit. As 

10

late as this week, Grokster itself is rumored to be attempting to 

turn legit. 

Since the Grokster decision, there have been other positive impacts on campuses around the country. The University of California and Cal State University, two institutions I know well, announced a deal with Cdigix which provides administrators at all 13 

UC and 23 Cal State campuses the option of offering online music 

and movie sales to students. 

Of course, providing students with legitimate alternatives to the 

KaZaAs and the Groksters is a key part of any solution to the piracy problem. But as the report released yesterday by the Joint 

Committee on Higher Education and Entertainment Communities 

indicates—the report that the Chairman referred to at the end of 

his opening statement—we have a long way to go. 

Free is still an option; and while the Grokster decision may have 

stemmed the wave of piracy, many continue to ride that wave and 

persist in illegally downloading music, movies, and software. Again, 

as the report mentioned, we have to confront the piracy which 

takes place on the schools’ local area networks and the increased 

use of unauthorized hacks of legitimate online services. 

Just this Monday, the movie industry announced a concerted effort dedicated to mitigating the effects of piracy. The goal of the 

new non-profit research and development company, Motion Picture 

Laboratories Inc.—‘‘MovieLabs’’ it’s known as—will be to create 

new technologies to protect the distribution of films and other 

works, as well as to protect against electronic theft, particularly on 

the Internet. 

Just last week, RIAA and MPAA joined Internet2, something we 

had been concerned about. They joined as corporate members, with 

the objective of working together on new technologies for secure 

digital distribution. 

It is the combination of the many methods, and not just one silver bullet, that will address the campus peer-to-peer issue. Perhaps, as more simply put by Aristotle—that’s what good staff is 

for—‘‘In educating the young, we use pleasure and pain as rudders 

to steer their course.’’ I could give you the exact cite, if you’d like. 

[Laughter.] 

The universities and content providers must educate well; as it 

is this future generation which will educate the next. I look forward to hearing from the witnesses. Thank you, Mr. Chairman. 

Mr. SMITH. Thank you, Mr. Berman. I liked your quote by Aristotle. I don’t think you’ve ever quoted him before. 

Mr. BERMAN. I have. I have on many occasions, but not in this 

Subcommittee. [Laughter.] 

Mr. SMITH. Okay. I won’t ask you for the reference for the quote, 

either. But, appreciate your comments. 

Before I introduce our witnesses, would you all stand and be 

sworn in, please. 

[Witnesses sworn.] 

Mr. SMITH. Our first witness is Daniel Updegrove, Vice President 

for Information Technology at the University of Texas at Austin, 

where he is responsible for the university’s information technology. 

He is also an adjunct faculty member at the UT School of Information. 

11

Mr. Updegrove is a member of the Network Planning and Policy 

Advisory Council of Internet2, and is on the Board of the World 

Congress on Information Technology for 2006. Mr. Updegrove previously held positions at Yale University; the University of Pennsylvania; Educom; the National Bureau of Economic Research; and 

Cornell University, where he did his undergraduate and graduate 

studies. 

Our second witness is Richard Taylor, Senior Vice President, External Affairs and Education, at the Motion Picture Association of 

America. Mr. Taylor joined MPAA in 1995. In his current position, 

he is responsible for forging partnerships and strategic alliances on 

behalf of MPAA, as well as increasing outreach to students, teachers, and administrators. Mr. Taylor graduated from Brown University in 1986, with a bachelor of arts degree in history. He has also 

studied public policy at American University. 

Our third witness is Norbert Dunkel, Director of Housing and 

Residence and Education at the University of Florida. His primary 

responsibilities include serving as chief housing officer for 9,000 

students and their families. Mr. Dunkel serves on the executive 

board of the Association of College and University Housing Officers 

International. He has also authored or edited eight books and 

monographs and over 40 other publications on various aspects of 

campus housing. 

In 2003, his network services staff developed the groundbreaking 

software platform ‘‘Icarus,’’ which has transformed the University 

of Florida housing network through education and mitigation of 

peer-to-peer file sharing. 

Our final witness is William Raduchel, Chairman and Chief Executive Officer of Ruckus Network, a digital entertainment service 

for universities. Before joining Ruckus Network, Mr. Raduchel 

served as executive vice president and chief technology officer at 

AOL/Time Warner, and as chief strategy officer for Sun Microsystems. Named CTO of the Year in 2001 by InfoWorld Magazine, 

Mr. Raduchel has been a professor of economics at Harvard University, and holds several issued and pending patents. After attending Michigan Technological University, Mr. Raduchel received 

his undergraduate degree in economics from Michigan State University, and earned his AM and PhD degrees in economics at Harvard University. 

Without objection, your entire opening statements will be made 

a part of the record, but please limit your oral testimony today to 

5 minutes. And I thank you all, and Mr. Updegrove, we’ll begin 

with you. 

TESTIMONY OF DANIEL A. UPDEGROVE, VICE PRESIDENT FOR 

INFORMATION TECHNOLOGY, UNIVERSITY OF TEXAS AT 

AUSTIN 

Mr. UPDEGROVE. Good morning, Chairman Smith, Ranking 

Democratic Member Berman, and Members of the Subcommittee. 

Thank you for this opportunity to discuss the University of Texas 

at Austin’s approach to reducing peer-to-peer piracy on our data 

network. 

12

Let me begin by stating that the university is dedicated to developing leaders who exhibit responsible and ethical civic behavior, 

whether in the real or virtual world. 

Founded in 1883, UT Austin is the flagship of the 15-campus 

University of Texas system. Of 50,000 enrolled students, 6,500 reside in campus housing, and approximately 95 percent own computers. Already one of the largest U.S. campuses, our ranks increased when we welcomed 425 students and 20 faculty members 

displaced by Hurricane Katrina. I can’t predict what our enrollment will be next week. 

The campus data network, UTnet, links to the commodity Internet, Internet2 Abilene Network, NSF TeraGrid, Texas Lonestar 

Education And Research Network, and National LambdaRail. 

UTnet serves 55,000 computers on campus, and 1,300 wireless access points. 

Management of information and technology resources is based 

upon four principles: respect for intellectual property, including its 

fair use in the academic setting; respect for privacy and academic 

freedom of students, faculty, and staff; compliance with law and 

UT regents rules; and stewardship of our financial resources. 

Quoting from our policy: 

‘‘It is a violation of university policy and Federal law to participate in copyright infringement. Copyrighted materials include, but 

are not limited to, computer software, audio and video recordings, 

photographs, and written material. Violators are subject to university discipline, including suspension, as well as legal liability, even 

if the work did not contain a written copyright notice. It is a violation to use your computer to copy, display, or distribute copyrighted 

materials such as software, MP3 files, or MPEG files illegally.’’ This policy is supported by extensive information programs, a 

network bandwidth monitoring system, compliance with the Digital 

Millennium Copyright Act, and campus-wide licensing of securityrelated and other software. 

Our staff conducts a mandatory orientation for freshmen before 

they can obtain IT services. We highlight use policy and respect for 

copyright, which are reinforced by posters and screen savers in 

computer labs focused on risks of illegal music sharing. 

This year, we added a streaming video program on IT policy, security, and copyright concerns. I welcome the opportunity for you 

to view the video, and will be happy to make it available to you. 

While they represent only 13 percent of total enrollment, students in our residence halls receive special attention, since they are 

more likely to use network connections for recreation. Students pay 

a fee to access the residential network, and their use of external 

bandwidth is subject to weekly limits. 

Our website lists legal alternatives for obtaining music and videos over the Internet, including Apple’s iTunes Music Store, 

Napster, Ruckus, and others. UT monitors experiences of universities that provide blanket access to commercial services either at 

no cost to students or at substantial discounts. The no-cost model 

holds little interest for us, however; as it would require either a diversion of scarce academic funds or a universal fee imposed on students who may not use the service. One or more optional services 

available at discount would be more attractive; although the takeVerDate 0ct 09 2002 13:47 Nov 29, 2005 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\092205\23572.000 HJUD1 PsN: 23572
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up rate for such services on other campuses appears to have been 

low. 

Monitoring of data traffic is not limited to students in ResNet. 

We have established a set of predicted patterns of external network 

usage, as well as programs to detect unusual activity. Substantial 

traffic into and out of UTnet may be normal for key servers supporting research, instruction, and administration, but elsewhere 

could merit further scrutiny. We believe students subject to network authentication and bandwidth quotas are less likely to engage 

in piracy and other illegal behavior. 

DMCA compliance is entrusted to the information security office, 

which responds within one business day to any complaint. First offenders receive a warning, 71 percent of which elicit a response and 

are closed out within 24 hours. Close-out requires take-down of any 

copyrighted material and a first-offense official referral to the 

dean’s office. In the rare case of a second offense—only eight in the 

past 14 months—access is automatically disabled, and a student 

must meet with student judicial services before service can be restored. 

Respect for intellectual property at UT is not limited to music 

and video file sharing. The university licenses a broad suite of security and other software. And UT’s software licensing supports 

copyright compliance, as well, since one source of pirated content 

is insecure computers hijacked via the Internet. 

UT and other members of the Internet2 consortium are aware of 

the rogue i2Hub file-sharing system that uses the Internet2 Abilene network for data transport. This activity is in no way affiliated 

with or endorsed by Internet2 or any of its 207 university members. At UT Austin any illegal use of i2Hub is subject to the same 

sanctions as other violations. 

Looking forward, UT Austin is critically dependent on access to 

information, computational resources, and collaborators around the 

world. Technological innovation is transforming what, whom, and 

how we teach; the foci and methodology of our research programs; 

and our ability to serve society. 

Critical to innovation and service to society, as anticipated by the 

framers of the Constitution, is a balanced view of copyright. As the 

pace of innovation increases, the university is committed to participating in this ongoing discourse with our partners in industry and 

Government, to maintain the balance. Thank you very much. 

[The prepared statement of Mr. Updegrove follows:]

14

PREPARED STATEMENT OF DANIEL A. UPDEGROVE


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Mr. SMITH. Thank you, Mr. Updegrove. 

Mr. Taylor. 

TESTIMONY OF RICHARD TAYLOR, SENIOR VICE PRESIDENT, 

EXTERNAL AFFAIRS AND EDUCATION, MOTION PICTURE ASSOCIATION OF AMERICA (MPAA) 

Mr. TAYLOR. Thank you, Chairman Smith, Ranking Member Berman, and Members of the Subcommittee, for the opportunity to appear here today. I have the privilege of representing the member 

company studios of the MPAA and the hundreds of thousands of 

workers within our great industry. 

I’m particularly grateful that this Subcommittee has recognized 

the pivotal role the university environment can play in curtailing 

theft of movies and other copyrighted works online. The U.S. Supreme Court in the recent Grokster case cited earlier not only clarified its Sony Betamax decision, it voiced a very clear message to 

users of the Internet: theft of intellectual property is wrong; whether it takes place by stealing a physical copy from a video store, or 

downloading it in cyberspace. As Justice Breyer said in his concurring opinion, ‘‘Deliberate, unlawful copying is no less an unlawful 

taking of property than garden-variety theft.’’ The Members of this Subcommittee are well aware that piracy is 

the greatest obstacle facing our industry. And I’d like to use my 

time today to outline some measures we are taking and recommending in order to reduce current online theft levels. 

As mentioned earlier by Ranking Member Berman, we have recently had two significant announcements that are reflective of our 

industry’s tradition of being at the forefront of technology. Along 

with RIAA, we announced that we’ve formally joined Internet2 as 

a corporate member. And we plan to collaborate with the IT community to develop innovative content distribution and DRM technologies. We’re excited at the opportunities the emerging technologies bring as a means to allow more people safe and legal access to movies and television programming. 

Earlier this week, we also announced the establishment of Movie 

Labs. This industry-funded initiative will be dedicated to advancing 

the future of distribution by identifying secure means of protecting 

our valuable creative works. 

Now, another essential area of focus for our industry is the education community. And in recognition of that, MPAA president Dan 

Glickman recently established a new external affairs and education 

department within our organization, dedicated to this mission, 

which I’m privileged to lead. And through face-to-face meetings 

with university administrators and students across the nation, 

we’ve begun to identify best practices that, when in place, can significantly reduce campus network abuse. These practices target 

four key areas: technological measures, the offering of legitimate 

alternatives, education, and enforcement. 

Now, there are innovative and effective technological tools available right now, today, that can greatly reduce campus network piracy. In Grokster, the Supreme Court found that, ‘‘there is evidence 

of infringement on a gigantic scale’’ on P2P systems. Studies have 

also shown the prevalence of pornography, identify theft, spyware, 

viruses, and other malware, courtesy of these P2P services. And 

36

therefore, it seems appropriate to restrict illicit P2P access in university networks. 

The University of Florida, with Icarus, has impressive statistics 

that show how restricting access to illicit P2P can be a tremendous 

benefit to an institution. I believe Mr. Dunkel will be sharing some 

of those stories with us shortly. 

Other technological options include network filtering, which filter 

out infringing transmissions by matching their fingerprints against 

a master database. Also available are bandwidth shaping tools, 

which ratchet down bandwidth allowances for users systemwide or 

individually, and thus limit the volume of uploading and 

downloading taking place. 

Legitimate services, as the Chairman referenced, can also play 

an important role in encouraging legal activity on campus. However, the experience of our friends in the music industry has shown 

the legitimate services can best take root once technological measure to block illicit P2P have been adopted on campus. 

It’s critical that students being prepared for their place in society 

are encouraged to obtain their entertainment legally, and not via 

illegal P2P means. It’s also critical that colleges and universities 

clearly and repeatedly inform students of the importance of respecting copyrighted works, campus policies, and the law. 

Some suggested steps in the area of education include: 

Clear acceptable use policies, easily accessible by school network 

users, not buried several clicks within a site; 

Orientation materials should include information on copyright 

and illegal file theft; 

Parents, through letters and orientation sessions, should also be 

informed of the seriousness of the issue and the legal and institutional penalties that await violators; 

Students should be required to take and pass a brief quiz reflecting school policy regarding their network use; 

And universities should implement visible, pervasive anti-piracy 

campaigns throughout the campus. 

In order to make clear the institutional commitment to its policies, enforcement measures must be consistent and meaningful. 

We’ve found that recidivism is low at those schools with well defined and applied enforcement policies. And I would add that, while 

we are encouraging strong enforcement by university administrators, we continue to take enforcement actions ourselves in order to 

protect our creative works. A prime example is our actions against 

users of the i2Hub system referenced earlier. 

Now, we believe that application in these four areas will greatly 

deter and reduce piracy, while making clear to students the universities take seriously this issue. 

I thank the Chairman, the Ranking Member, and all Members 

of this Subcommittee for holding this hearing. I would ask that if 

any Members of this Subcommittee have institutions within their 

district they would like for us to specifically reach out to, we’d welcome that opportunity. And the MPAA would also welcome an opportunity to return before this Subcommittee at a later date, to reexamine the piracy landscape at colleges and universities. 

I look forward to answering any questions that you may have 

about this important matter. Thank you. 

37

[The prepared statement of Mr. Taylor follows:]

PREPARED STATEMENT OF RICHARD TAYLOR

On behalf of Dan Glickman and the companies that comprise the Motion Picture 

Association of America, I very much appreciate this opportunity to testify about the 

film industry’s efforts to address peer-to-peer (P2P) piracy on university campuses. 

The livelihoods of nearly one million men and women in America are impacted by 

the film and television industry, which entertains millions of consumers every day. 

Piracy is the greatest obstacle the film industry currently faces, costing our indus- try approximately $3.5 billion annually due to hard goods piracy of DVDs and VCDs 

alone. Deloitte and Touche estimates that approximately 400,000 films are illegally 

downloaded every day. CacheLogic, an Internet monitoring group, has estimated 

that over 60 percent of all Internet traffic in the U.S. is attributable to peer-to-peer 

usage. In Asia, over 80 percent of all traffic on the web is from P2P. Furthermore, 

well over 90 percent of all the content on P2P networks consists of unauthorized 

copyrighted files. 

In light of these facts, it is important to understand that the film industry rests 

upon a fragile fiscal base. Each film is a massive upfront investment with absolutely 

no guarantee of return. The average film costs over $100 million to make and market. Only one in ten films recoups this investment through its theatrical release. Six 

in ten films never break even. To recoup the considerable investment required to 

make and market a movie, the film industry relies on foreign distribution and ancillary markets (home video/DVD, pay per view, premium cable, basic cable, free TV, 

etc.) to make a profit or break even. It is these ancillary markets, especially home 

video and foreign distribution—economic engines that are essential to this industry—that are most vulnerable to the corrosive effects of film piracy. 

Contrary to the repeated accusations of those who oppose reasonable content protections, the film industry has always been in the forefront of technological innovation: DVDs represent but one example. This tradition is even more important now, 

and the MPAA is working with the technology sector to help move our industry into 

the future. Our consumers have clearly shown a desire for more choices and flexibility in their filmed entertainment choices, and in turn the MPAA and its member 

companies are heavily involved in ongoing efforts to create the next generation of 

secure digital delivery platforms to meet that need. We recognize that the speeds 

of transfer so dazzling today will likely seem akin to a horse and buggy when new 

technologies such as Internet2 become the standard. To that end, two weeks ago 

MPAA joined Internet2 as a corporate member. MPAA plans to collaborate with the 

Internet2 community to consider innovative content distribution and digital rights 

management technologies, and to study emerging trends on high-performance networks to enable future business models. We view secure, high speed Internet delivery of films as being integral to our industry’s future, and we are excited by the 

possibilities this collaboration presents. 

In addition, MPAA this week announced the establishment of ‘‘Movie Labs,’’ a research and development venture that will develop copyright management and other 

technologies to protect against piracy. The future of film depends upon the development of innovative delivery technologies allowing new, user-friendly business models, and the film industry is diligently working to make these technologies a reality. 

So you can see that, while we continue our appeal for others to do their part in preventing the illegal abuse of copyrighted works, we are appropriately taking the lead 

in this regard. 

I am particularly grateful that this Committee has recognized the pivotal role the 

university environment can play in curtailing the theft of movies and other copyrighted works online. As you are well aware, college campuses today harbor some 

of swiftest computer networks in the country and that, unfortunately, has led to a 

situation where a significant level of piracy is taking place around the clock on our 

nation’s campuses. 

The MPAA is aware of the critical need to reach out to the education community, 

from elementary school-aged students to university administrators, in order to tackle head-on the threat of piracy and to stem the disturbing societal trend of illegal 

activity online by students of all ages. That is why Dan Glickman has established 

a new enterprise within the MPAA called External Affairs & Education. This new 

department, which I am honored to head, is dedicated to working with educators, 

administrators and student leaders to affect behavior and policy. 

Since the establishment of this new department within MPAA, I have been spending a good bit of my time on the road, traveling to a dozen campuses and convening 

face to face meetings with administrators and students. Dan Glickman will also be 

doing a speaking tour of college campuses. The chief goal of these sessions has been 

38

to learn more about what universities are currently doing to address this issue of 

piracy. Truly, we are just at the start of the MPAA university initiative, so it is 

somewhat premature at this point to gauge success. However, as we get farther 

along into it, I would welcome the opportunity to report back to the Subcommittee 

about the successes we do achieve, and any ongoing obstacles we face. 

Even at this early stage, however, it is clear that there are a range of measures 

available to universities today that can significantly reduce piracy on campus. This 

emerging set of what the MPAA would call ‘‘Best Practices’’ provides a roadmap for 

administrators to follow in order to meaningfully impact the problem of network 

abuse and illegal copyright theft. I’d like to use the remainder of my time to share 

with this Committee what we have discovered and what we would recommend university administrators adopt to impede their students’ illegal activity via campus 

networks. 

Our suggestions focus on four areas in which schools have taken action: (i) network filters and other technological measures, (ii) legitimate online services, (iii) 

education, and (iv) enforcement. Undoubtedly, education and enforcement continue 

to be important components in any program schools undertake to address piracy. 

However, experience has shown that the offering of a legitimate online service, coupled with an effective network technology that decreases or, preferably, eliminates 

illicit peer-to-peer (‘‘P2P’’) file-sharing traffic, produces the best results for colleges 

and universities. 

TECHNOLOGICAL MEASURES

As you are undoubtedly aware, a significant proportion of piracy on campus is occurring through illicit P2P services, which enable individuals to copy and distribute 

millions of unauthorized songs, movies, software applications and games. The P2P 

applications that enable this illegal activity, freely available as downloads over the 

Internet, are hugely popular at colleges and universities where students have access 

to extremely fast computing networks. 

In the much-publicized Grokster case, the U.S. Supreme Court recently stated 

that ‘‘there is evidence of infringement on a gigantic scale’’ on P2P systems, and it 

has been estimated that over 90 percent of the use on these systems is infringing. 

(Of course, other studies have also reported that pornography, including child porn, 

and identity theft are prevalent on such systems.) With such a disproportionate 

amount of illegal traffic on certain P2P protocols (and given the threat to network 

security and individual PCs from viruses and other malware), it seems entirely appropriate to restrict the use of these illicit P2P systems generally. While prohibiting 

the use of predominantly illegal P2P applications, universities can still protect and 

promote the legitimate use of other P2P applications for research and scholarship. 

This approach has already been employed at certain universities to extraordinary 

effect. For example, the University of Florida developed Icarus, a network-based system, that can selectively prohibit the transmission of any information bearing the 

signature of an unapproved P2P application, and manages adherence to University 

policies. The Icarus architecture supports other capabilities to address the full range 

of security management issues including: viral and worm attacks; spyware; and 

other outbound malicious behavior. All of these can have huge effects on the operation and cost efficiencies of the university network. 

Some statistics on implementation of Icarus tell the whole story. In the first year 

of operation, there were nearly two thousand students that attempted to use P2P 

systems. They were effectively stopped and reminded online through an educational 

message that such activity was against University policy. Only 20 percent tried a 

second time and only 2 percent a third time. As new classes of students were introduced in the next two academic years, these numbers were reduced by 50% and 80 

percent respectively. Additionally, the school has received no DMCA infringement 

notices since the inception of Icarus. Additionally, last year the developers of ICARUS were recognized by the Davis Productivity Awards for their work. The awards 

are part of a government improvement initiative in Florida and sponsored by Florida TaxWatch. The awards panel estimated that ICARUS saved the University of 

Florida nearly $500,000 by reducing the flow of illicit P2P onto UF computer networks and automating the notification process when a violation of policy did occur. 

While exceptions can be made for appropriate use of such applications, it is not 

surprising that the school has received very few requests for permission to use illicit 

P2P systems. Indeed, it is questionable whether such P2P applications are at all 

necessary (or beneficial) in an academic environment. Faculty and students remain 

able to share and distribute academic material through such secure and reliable 

means as websites, FTP, and email. In addition, there are legitimate and licensed 

39

P2P networks emerging—such as Penn State’s LionShare—which are dedicated to, 

and specially configured for, academic environments. 

Should a university not find feasible the implementation of programs such as Icarus, MPAA suggests installing a network filtering system. Rather than prohibiting 

all P2P or other applications based on a particular protocol, these systems filter out 

infringing transmissions by matching them against a master database. While these 

types of applications are content-based filters, this technology is in fact no more intrusive than what most schools are already employing to scan for viruses and other 

malware. 

A third option is to effectively implement a bandwidth shaping tool such as 

Packeteer. Although limiting the resources available for infringement is always a 

positive step, the way such technology is being implemented at most schools too 

often renders the application ineffectual. These schools ratchet down bandwidth allowance during the peak hours of the day, then provide increased bandwidth at 

night. While this process may indeed reduce infringement to some extent, it unfortunately sends the wrong message that illegal file-sharing is acceptable—as long as 

it’s done at certain times. This is a minor and short-term fix for a much larger and 

long-term problem. By sanctioning such ‘‘windows of infringement,’’ schools do little 

to discourage students from engaging in piracy (and, of course, fail to impart a sense 

of ethical behavior and appropriately prepare their students for life after college as 

moral and law-abiding citizens). 

By employing technologies that prohibit infringement-based P2P-networks on 

campus or at least make it harder for students to infringe on such systems, schools 

are laying the groundwork for the second component of a proven anti-piracy campaign: the successful implementation of a legitimate online service on campus. 

LEGITIMATE ONLINE SERVICES

Adoption and sign up rates of legitimate online music and movie services by students is often highest when the school has first reduced the availability of illegal 

file-sharing, thus developing the thirst for legal content. Services and schools alike 

have reported particularly positive results from this staggered approach. (Experience has also shown that it may be unwise to implement both network filtering 

technology and a legitimate online service simultaneously, as students tend to 

blame the online service for the cutoff in illegal file-sharing.) Without first addressing the illicit P2P problem on campus, it is extremely difficult for legitimate services 

to take root. If students have unfettered access to enormous amounts of pirated content, no service—regardless of pricing or content offerings—will be successful in that 

environment. 

Overall, the growth of legitimate online services at colleges and universities 

across the country has been exceptional. In the past year alone, the number of 

schools partnering with a legitimate service has grown more than threefold to nearly 70. Services such as Cdigix, Napster, RealNetworks’s Rhapsody, and Ruckus offer 

students a wide array of entertainment content in a fun, safe, and legal way, and 

help to build a sense of community on campus 

Of course, it is true that legitimate online movie services are not yet a compelling 

substitute for the illegal P2P services. Besides the little matter of price point, no 

legal online movie service currently has the breadth of selection, new releases, ease 

of use, and interoperability of the illegal P2P services. 

Why is this? Not for a lack of incentive or effort. As for-profit enterprises, MPAA 

member companies have every incentive to tap the clear consumer demand for online access to movies. MPAA member companies are committed to developing compelling, consumer-friendly online movie services, and each one devotes considerable 

resources to this effort. The MovieLabs and Internet2 announcements are just the 

latest evidence of their commitment. 

However, in order to protect their huge investments, our member companies must 

ensure that their services operate in a secure environment. Learning from the experience of the music industry with its initial rollout of legal services, they also know 

it is critical that the consumer’s first experience with a legal service a happy one. 

Thus, legal services must be out of beta and fully ready for mass consumer adoption 

before they are rolled out widely. 

EDUCATION

Obviously, education is an extremely important component of any anti-piracy 

campaign. Colleges and universities are in the best position to inform students of 

the importance of respecting copyright and valuing the creative effort invested in 

copyrighted works. Further, as creators, developers, and owners of intellectual property themselves, colleges and universities have a huge incentive (and responsibility) 

40

to instill in their students such respect and values. The following are some examples 

of steps schools can take toward educating students about illegal file-sharing and 

copyright infringement generally:

• Institute Acceptable Use Policies that clearly outline the appropriate use of 

school resources. Such policies should illustrate unacceptable behavior, including illegal file-sharing, and provide details on penalties imposed for failure to abide by such regulations. A comprehensive policy, however, is only as 

useful as it is accessible; administrations should conduct surveys or otherwise 

ensure that students (and others) are able to find them, including on the 

school website.

• Include information on copyright, piracy, and illegal file-sharing in orientation materials.

• Inform parents, through letters and at orientation, of the seriousness of copyright infringement and the penalties imposed, both legally and academically, 

for violations. Encourage them to discuss the risks with their children.

• Require students to pass a quiz about P2P and piracy before allowing access 

to the school’s computing network. This educates the student and provides 

documentation negating any claim of lack of awareness.

• Engage students by incorporating discussion of illegal file-sharing on school 

websites and radio stations, and in papers and classrooms.

• Launch pervasive and visible anti-piracy campaigns using posters, brochures, 

banners, videos, fliers, etc.

• Send students periodic emails directly from the President/Provost/Dean to remind students that the school takes copyright infringement very seriously 

and to indicate the seriousness of any offense.

While it is indeed beneficial to offer an in-depth look at copyright, P2P, and illegal 

file-sharing, the first step in any educational campaign is to express concisely and 

unequivocally that copyright infringement, through physical or online piracy, is illegal and simply wrong. The U.S Supreme Court in Grokster not only clarified its 

Sony Betamax decision, it voiced a very clear message to users of the Internet: theft 

of intellectual property is wrong, whether it takes place by stealing a physical copy 

of a movie from a video store or by stealing a movie in cyberspace. As Justice Breyer 

said in his concurring opinion, ‘‘deliberate unlawful copying is no less an unlawful 

taking of property than garden-variety theft.’’

ENFORCEMENT

As with any education campaign, it is necessary to ensure adherence to rules and 

regulations through consistent and meaningful enforcement measures. The administration should remind students that entertainment and other content industries 

have sought to enforce their copyrights through lawsuits against students and other 

individuals. Students clearly are not immune to legal action, and this awareness is 

reflected in the many steps taken by schools to curb piracy on campus, as well as 

in the overall change in attitude of administrations and students alike. Yet, there 

undoubtedly remains a feeling by some students of ‘‘safety in numbers’’ inherent in 

a nationwide campaign. The threat of disciplinary action by schools, however, resonates locally and can quickly diminish the sense of security from enforcement (and 

anonymity) mistakenly felt by students. 

We are not suggesting that enforcement is solely the responsibility of these institutions. In addition to bringing action against theft enablers such as Grokster, our 

industry has also sued individuals engaged in copyright theft. We have also pursued 

those using I2Hub, a pirate file trading network catering exclusively to university 

students. This ‘‘darknet’’ system took extraordinary steps to exclude individuals 

from outside of university networks in order to frustrate enforcement efforts by 

rights holders. However, our investigators were able to learn a great deal about this 

phenomenon. For example, on April 11 at 4:23 p.m. EST, there were 7,070 users 

connected to I2hub sharing 99.21 Terabytes of content, enough space for 99,000 

movies! As you can see, this closed network of activity can inflict a great deal of 

damage. I raise this particular form of piratical activity to demonstrate that there 

are unique areas where we do need the university networks administrators to be 

particularly aware and vigilant. The scale and scope of illegal activity within this 

campus-linked arena is significant. 

I would like to add that school-wide Acceptable Use policies regarding online piracy and the appropriate use of school resources are not merely for the benefit of 

copyright owners. Such rules and regulations, just as with those regarding hacking 

and other violations, safeguard the security and integrity of the school’s computing 

41

system. Illegal file-sharing applications and illicit P2P networks threaten such systems with increased bandwidth costs, as well as with malicious viruses, worms, Trojan horses, and spyware. 

Students should understand that there are extreme repercussions for violation of 

these policies. Accordingly, schools must be diligent in learning of such infractions 

and in carrying out swift and appropriate punishment. Most schools take a tiered 

‘‘three strikes’’ approach:

• First offense: Remove the offending computer from the network until the student complies with any obligations and understands the repercussions for further violations. Some schools require the student to talk to a University administrator before network access is restored.

• Second offense: Students lose network access for a certain period of time. 

Some schools are increasingly imposing fines.

• Third offense: Students usually permanently lose all network access privileges 

and must report to the Dean of Students or Judicial Affairs for formal disciplinary proceedings. While rare, some schools have suspended or even expelled students for third offenses.

Of course, enforcement measures vary widely from school to school. For example, 

Harvard University has stated that it will terminate a student’s network access for 

one year upon a second offense. Students at UCLA will be summoned to the Dean 

of Students after their second offense. In any case, experience has shown that recidivism is rare at schools with well-defined and strongly-implemented policies. 

It is important to note that the model enforcement policies described above only 

work when a copyright owner is able to find an infringement taking place and notifies the university. And, in most cases, copyright owners will not be able to find all 

infringement on campus. While setting out and implementing a strict enforcement 

program is important, it is the application of effective technical measures that can 

best stop the vast majority of piracy before it takes place. This reduces the burden 

of processing potentially dozens of DMCA notices and directly targets the problem 

of student piracy on university networks. 

We believe strongly that universities taking these measures will significantly reduce the level of illegal activity taking place via their networks by students under 

their charge. 

While I know today’s session is devoted to a discussion of college campus piracy, 

I think it is worth noting that the MPAA is also working diligently to reach and 

educate students at the secondary school level as well as educating parents of 

school-aged children. We are working with well-respected Internet safety organizations such as WiredKids and iSafe to raise awareness and understanding of this 

issue to the emerging generation of computer users so that, hopefully, when they 

do arrive on the campuses of this nation, they will be better equipped to understand 

and adhere to the rules of the university and the law of this land. 

I thank the Chairman, the Ranking Member and all Members of this committee 

for holding this hearing. I know that if I were to ask anyone in this room to name 

their favorite film, a lively conversation would begin. Such is the love of this uniquely American art form and all the more reason that we all have a stake in its continued health and survival as well as the health of all of the creative industries from 

music to books to software. The stakes are very high, not just for those who have 

the privilege of working within these industries but to the overall economy of this 

great nation.

Mr. SMITH. Thank you, Mr. Taylor. 

Mr. Dunkel. 

TESTIMONY OF NORBERT W. DUNKEL, DIRECTOR OF HOUSING 

AND RESIDENCE AND EDUCATION, UNIVERSITY OF FLORIDA 

Mr. DUNKEL. Thank you, Mr. Chairman, Ranking Member Berman, and distinguished Members of the Subcommittee. Good morning, and thank you for the opportunity to appear before you today. 

I will provide you information regarding the education of college 

and university residence hall students, stewardship of our technological resources, and an update on a very successful software program to mitigate P2P file sharing. 

42

First, I want to take us back just a few years when we lived in 

our college or university residence hall. You will remember coming 

to college with one suitcase, a box, perhaps a piece of carpet, a 

radio—and someone had the typewriter. Today, our students are 

bringing color TVs and stereo DVD players, refrigerators and video 

game systems, desktop computers and laptops, along with their 

Blackberry, iPod, Nano, Razor cellphone, and a lot of clothes. 

It is this technology that they use to communicate, to study, to 

receive entertainment, and to research. Today it’s more important 

to plug the computer in before they plug in their refrigerator. 

We now have over two million students living in residence halls 

on campuses in the United States. One of the greatest additions to 

campus life in recent years is the high-speed Ethernet connection 

and wireless environments. These connections are used to support 

the institution’s mission by allowing students access to online 

classes or class syllabi, signing up for classes, replaying video classes, and the like. 

We are seeing connection speeds that only seven or 8 years ago 

were the slow dial-up modems, to speeds now at 1,000 megabits or 

a gigabit connection. As a comparison with the dial modem, it 

would take a person about 29 hours to download the 2-hour movie 

‘‘Star Trek.’’ With a gigabit connection, it takes about 6 seconds to 

download that same movie. Downloading music files are inconsequential at that speed. The speed and efficiency is tremendous, 

and will only continue to gain in the future. 

In the housing profession, we know we have a captive audience. 

Most of the first-time-in-college students will live in on-campus residence halls. We have an opportunity to educate our residence students as to the acceptable use of their computer and the network. 

We also have a duty to be good stewards in maintaining our 

technological infrastructure. A colleague and I found that 92 percent of institutions with high-speed connections actively or passively educate their students. Some institutions, like the University 

of Delaware, require students to take a responsible computing 

exam before they can obtain a network ID and password. The University of Hawaii in Moana has residents sign for a handbook accepting responsibility for reading and following the rules contained 

within. 

At the University of Florida, residents register their computer 

online and electronically sign that they have read, understand, and 

will abide by the policies governing acceptable use. We know that 

for some students reading the policies is all they’ll ever need. These 

students will accept the policies and make no attempt to circumvent policies. For other students, we need to be more active in 

our oversight and education. 

To be good stewards of our technological infrastructure, my staff 

developed software to serve as a new network management program. We had to develop this software because the network could 

no longer support the academic needs, due to high peer-to-peer volume. One tool available through this program mitigates illegal 

peer-to-peer file sharing, while continuing to simultaneously educate students; all while maintaining a network service free of illegal copyright sharing behaviors. 

43

Before we turned on the Icarus program on October 1, 2003, we 

were using 85 percent of the upload bandwidth of the entire University of Florida pipeline. When Icarus was turned on, we immediately dropped 95 percent of our impact on the upload bandwidth, 

because we immediately stopped 3,000 students illegally sharing 

copyrighted music. Perhaps amazingly, we saw an increase in 

download bandwidth, because students were migrating to legitimate network sites, such iTunes or streaming radio. Since implementing Icarus, we have not received a DMCA complaint. 

We wanted first-time-in-college students to understand when 

they arrive on campus and move into the residence hall a new level 

of personal behavior and responsibility on the use of their computers and Internet would be expected. Most students arrive on 

campus having unabated access to the network, no knowledge that 

they need to install virus protection; and they allow anyone to use 

their computer with their password. The education taking place on 

campuses stresses that students need to take responsibility for 

their computer and the use of their computer. 

With me today is Mr. Rob Bird, the architect of the Icarus software platform, and Rob is also available to answer any technological questions surrounding Icarus. Thank you. 

[The prepared statement of Mr. Dunkel follows:]

PREPARED STATEMENT OF NORBERT W. DUNKEL

I want to thank you for the opportunity to appear before the Subcommittee on 

Courts, the Internet, and Intellectual Property to provide you information regarding 

the education of resident students and a new approach to mitigating Peer To Peer 

(P2P) file sharing. With me is Mr. Rob Bird the architect of the Icarus software platform. 

There are over 2 million students living in residence halls on campuses in the 

United States. Today, first year students are moving into residence halls where 

suites and apartment style living is becoming increasingly available. There exists 

greater studying and recreational facilities; contemporary dining accommodations; 

and larger rooms with more storage to name a few. However, one of the greatest 

additions to residence halls has been the high speed Ethernet connection. 

The Ethernet connection in residence halls serves as its primary purpose to support the academic mission. Many institutions, including the University of Florida, 

utilize this high speed residential connection for on-line classes; accessing on-line 

services (i.e., class registration, room sign-up, ordering class textbooks, etc.); replaying video classes; accessing class syllabi; working on group projects, and the like. 

We are seeing connection speeds that only seven or eight years ago were the slow 

dial up modems to now 10 MB, 100 MB, or 1000 MB (1 Gigabit) speeds. As a comparison, with a dial up modem it would take a person about 29 hours to download 

the two hour movie, Star Wars. With a Gigabit connection it takes about 6 seconds 

to download that same movie. The speed and efficiency of this technology is tremendous and will continue to gain in the future. 

In the housing profession and as a member of the Association of College and University Housing Officers—International, we have two duties regarding the data connections we provide to students in residence halls. First, we have a duty to educate our resident students as to the acceptable use of their computer and 

the network. Second, we have a duty to be good stewards in maintaining 

the technological infrastructure that we provide students in the residence halls. 

EDUCATION

In educating the resident students, we know many of our housing operations 

across the United States have integrated the academic community within the residential setting. Institutions have residence halls with live-in faculty, ‘‘smart’’ classrooms, faculty offices, space for tutoring, space for academic advising, and the like. 

We see science-based (i.e., engineering, math, etc.); education-based (teaching, etc.); 

and fine arts-based (i.e., architecture, dance, theatre, etc.) residentially-based academic communities. These types of arrangements and others lead to increased grade 

44

points for residents, increased graduation rates, increased respect for faculty, and 

increased psychosocial development, to name a few. The education of our students 

does not only take place in the classroom environment. The classroom environment 

is now in the residential setting. 

Accompanying the residential academic environment is the need for housing operations to assist in the education of resident students on acceptable uses of the technology available to them. In an on-going study (J. Haynes and N.W. Dunkel, 2004), 

we have found that of the institutions surveyed with high speed connections in residence halls, 92% actively or passively educate their residents on the acceptable use 

of their computer and the Internet. 

There exist a number of different approaches to this education. The information 

that is shared with residents may be as simple as defining terms and providing answers to frequently asked questions. The information may provide a general overview of the various aspects of a network and computer usage. At the University of 

Delaware students must take a responsible computing exam before they can obtain 

a network ID and password. The exam covers copyright resources, computer security, spam and harassing e-mail, bandwidth measurement, and commercial and 

charitable use. At the University of Hawaii in Manoa residents sign for the handbook accepting responsibility for reading and following the rules contained within. 

At the University of Florida residents register their computer on-line and electronically sign that they have read, understand, and will abide by the policies governing 

acceptable use. 

We know that for some students reading the policies is all they will ever need. 

These students will accept the policies and make no attempt to circumvent the policies. For other students we need to be more active in our oversight and education. 

STEWARDS OF TECHNOLOGY

Housing professionals must be good stewards of the technological infrastructure 

provided to students. The information that follows provides a summary of the Icarus 

software platform developed by Mr. Rob Bird. 

Introduction 

The University of Florida Department of Housing and Residence Education’s Mission Statement is to provide well-maintained, community-oriented facilities where 

residents and staff are empowered to learn, innovate, and succeed. As staff worked 

to develop a software program to mitigate P2P file sharing, discussion continued on 

how to simultaneously educate resident students while maintaining a network service free of illegal copyright sharing behaviors. This was a daunting task as most 

first year students arrive to campus having practiced P2P file sharing at home during their high school years. According to students, during high school years very little education on illegal file sharing was provided either by their high school or by 

their parents and student behavior remained unchecked. 

University of Florida housing staff wanted resident students to understand that 

when they arrive on campus a new level of personal behavior and responsibility on 

the use of their computer would be expected. 

Icarus 

Described as ‘‘an extraordinary success’’ (Sherman, 2004), Icarus is a massively 

concurrent, distributed processing engine designed to provide the power of collaborative grid computing to the enterprise network management and security space. 

This patent-pending system is based on the Java language. The Icarus engine has 

been built to act as an open-standards middleware processor, allowing applications, 

libraries and scripting languages to be harmoniously coordinated together to accomplish tasks across the enterprise or federation. It has extensive applications in distributed computing, security, collaboration and management. By applying this system, a comprehensive net has been constructed at the University of Florida to eliminate P2P and residential ‘Dark Nets,’ while comprehensively addressing the educational needs of the students. In addition, Icarus integrates with the University’s 

Judicial Affairs, trouble ticket and network management systems, solving all facets 

of the management problem. Icarus is currently licensed to Red Lambda Software 

(www.redlambda.com) by the University of Florida. 

Department of Housing and Residence Education Network Architecture—Technical 

The University of Florida Department of Housing and Residence Education computer network (DHNet) consists of Cisco switching equipment, and supports standards-compliant TCP/IPv4-services for its residents. The core network consolidates 

edge switches via Gigabit Ethernet connections. Each resident is supplied with a 1 

Gigabit Ethernet connection, monitored and regulated by Icarus. Virtual LANs are 

45

deployed on a per-building basis to provide proper segmentation and encompass 

multiple levels of access granularity (Table 1). Specific services are subsequently 

provided to the resident depending on the source of access.

Development and Deployment of Icarus 

Beginning in December of 2002, the Department of Housing and Residence Education Network Services group initiated the development of a system to automate 

the enforcement of its computer security policy. The system that was created was 

known as Icarus. 

Icarus was designed to meet three primary design goals. First, to create a fullydistributed processing framework that allows for the collection of information from 

a variety of disparate sources so that the data can be evaluated and acted on in 

a unified fashion. Second, to create a system that allows for the real-time identification, containment, and education of managed network users while striving to minimize the impact on their academic use. Third, to contribute to the community software environment through the advance of internet standards and technologies using 

BSD and GPL-style licenses. 

Initial development of Icarus focused on three core tasks. First, it was necessary 

to build a system for identifying users and tracking hardware movement within the 

network while allowing for the flexibility required of a residential system. The initial system comprised three levels of access, and did not include a registration process for residents. While this system was adequate for private residence port authorization, it did not adequately support the use of public access ports, accommodate 

Icarus’ protection on wireless networks, or provide a way to handle the containment 


NWD1.eps
46

of security outbreaks. This solution was also deemed inefficient due to its heavy reliance on SNMP. Later, this system was expanded to ten levels of access to address 

these additional operational requirements, and moved to leverage VMPS for superior access management. At this time, the Icarus team released the first databasebacked VMPS server to the open-source community. User registration was also 

added to more positively establish authorization without the use of network logon 

technologies, which are often cumbersome in ‘‘always-on’’ residential environments. 

Second, development was focused on containing P2P application use as an example 

of Icarus’ ability to detect and react to complex network management situations. By 

combining data from a variety of tools, it became possible to take an automated 

multi-factor approach to application recognition. This approach allows Icarus to detect so-called ‘‘secure’’ encrypted P2P applications, and quickly react to both changing applications and policy requirements. This flexibility is accomplished by removing the reliance on a single application or appliance’s ability to fully identify and 

contain unacceptable P2P use, virii, malware and other security challenges. Third, 

development was focused on creating an extensible GUI interface to allow the management of large Icarus ‘clouds’ or collections of cooperating Icarus peers. This system makes full use of open standards, and supports a federated management architecture to allow organizational collaboration without exposing organizational concerns. 

EDUCATION OF RESIDENT STUDENTS

The education of resident students takes place passively and actively. The passive 

educational program includes: 

(a) Distributing an acceptable network use brochure during the check-in process. 

This brochure contains information on the overview of the housing network; the fact 

that housing aggressively enforces its ISP policies; briefs the student on servers, 

copyrights, and the Digital Millennial Copyright Act (DMCA); provides information 

on the housing network monitoring and service restriction process; provides answers 

to frequently asked questions; and information on how student computer behavior 

is a part of the University of Florida Student Code of Conduct. 

(b) The placement of informational stickers by each housing data port. These informational stickers provide instructions to resident students on how to register on 

to the housing network. 

(c) The residence hall staff have participated in a training session prior to student 

check-in. This training session provides them basic information to be able to answer 

many of the student questions regarding the housing network. 

(d) The UF DHNet web site contains all the information regarding HRE Network 

Services. Students can read the information prior to their arrival at the University 

of Florida to understand what is expected and necessary when they register on to 

the housing network. 

The active educational program designed by HRE is powered by ICARUS and supported by the UF DHNet and HRE websites. When Icarus detects user activity 

deemed unacceptable by policy, an appropriate series of actions are performed. In 

the case of a violation of the HRE P2P policy, for example, the user in question is 

sent a notification pop-up message to their machine, a notification email to their official University email account, and all the computer systems owned by that resident are promptly restricted to campus-only network access (Table 2). This restriction is in effect regardless of where the resident physically goes within the HRE network, preventing abuse by those using public access ports. Simultaneously, an entry 

is created in the DHNet violation system, HAMMER. A snapshot of the user’s activity, including all evidentiary data, is then added to the database, and correlated 

with past violations (if any). Residents are required to then visit the DHNet website 

in order to restore their access. When the resident visits the website with any of 

their computers, the page automatically recognizes them, and presents the resident 

with the list of violations. Instructions are provided for remedying each violation, 

and then a violation-dependent policy presentation is provided. Student violators are 

then presented with the terms of their restriction. It should be noted that the time 

counter for restriction does not officially begin until they have signed the on-line 

form with their University ID (access was still restricted before, however).

47

Residents who ignore the restriction, and take no action, automatically have their 

network access terminated after 10 days. 

Similar action scenarios exist for a variety of situations, from virus/worm quarantining, to the active notification about available operating system patches, to the active control of malicious activity. 

IMPACT OF ICARUS

The impact of Icarus on P2P usage, and more importantly, behavioral trends, has 

been immediate and profound. The recidivism rate and first-offender rates have 

dropped dramatically, and exhibited a downward trend, despite an increased number of residents over time, and the impact of mass quarantines due to Internet 

worm outbreaks. Furthermore, fewer residents even attempt to use P2P applications, showing Icarus’ unique ability to sidestep the ‘P2P arms race’ and change students’ perception by consistently integrating comprehensive education with enforcement (See Table 3).


NWD2.eps
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NWD3.eps
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NWD4.eps
50

We are pleased to provide you with this information. Housing professionals do 

have a responsibility to educate resident students on the acceptable use of their 

computers and the network. There exists numerous opportunities for students to use 

technology with legitimate purposes. Educating students to these purposes is part 

of our responsibility and stewardship. 

REFERENCES

Haynes, J., & Dunkel, N.W. (pending). P2P resident education in the United States. 

Joachim, D. (2004, February 19). The enforcers. Network Computing, pp. 40–54. 

Sherman, Cary, President, RIAA (2004, September 3). College and record executives 

tell Congress steps to curtail music piracy. Chronicle of Higher Education.

Mr. SMITH. Thank you, Mr. Dunkel. 

Mr. Raduchel. 

TESTIMONY OF WILLIAM J. RADUCHEL, CHAIRMAN AND 

CHIEF EXECUTIVE OFFICER, RUCKUS NETWORK 

Mr. RADUCHEL. Thank you, Mr. Chairman, Ranking Member 

Berman, other Members of the Subcommittee. On behalf of our employees, investors, content and distribution partners, and the creative talent to whom we pay royalties, I thank you for the opportunity to be here today to talk to you about the legal market for 

music and media services in campuses. 

In the last year, we’ve seen a marked increase in demand from 

institutions. It’s gone from trial to adoption. Schools are buying 

this as a regular part of their operation. Where the institutional 

support has included a blanket purchase agreement so that all students have access to the service from the beginning, we’ve generally been able to get adoption rates over 60 percent, some as high 

as 85 percent. But where the schools have chosen instead to tell 

the students that they must opt in for the service on an elective 

basis, the entire industry has faced significant challenges in getting 

students to move from what they call the ‘‘free model.’’ Music and movie downloading is not just about an individual activity. It’s also a community activity that is very much about sharing and expressing preferences with other students. The experience 

is therefore a lot richer when all the students are there from the 

beginning as part of the community; and less rich when the students have to join one by one, and the first students do not see 

much of a community, obviously, because there aren’t many people 

there. 

As you reported in the report that you read in your initial remarks, Mr. Chairman, there has been a great increase in the number of schools. 

[Sound of buzzer.] 

Mr. SMITH. You can ignore that. 

Mr. RADUCHEL. Ignore that? Okay. Our investors have invested more than $20 million in capital. Our students now have access to 

over 1.2 million tracks of music, which is about what’s available legally, and a bouquet of video content that changes daily. Subscribers can take the music on portable players, as long as they are 

the right form. And we just added an exciting roster of films and 

TV from Warner Brothers, one of the members from the MPAA. 

So we’ve been getting support from lots of quarters. We found a 

path to let students share both their experience and their preferences among each other. They want to share their media with 

friends. They want to use people as the way to find media, because 

51

in a 1.2 million track library searching for a title isn’t nearly as 

interesting as seeing what you like, or the person next to you likes, 

or your neighbor down the hall. So we’ve tried to support that 

along the line. We’ve tried to understand student behavior. 

But we all face four major obstacles in the legitimate services 

area. Two years ago, our research showed that students arrived on 

campus and learned about file sharing in the first week. It happened very quickly, but it happened on campus. Today, with much 

greater penetration of broadband and with faster computers and 

bigger hard drives, students frequently arrive on campus today 

with their music library already built up illegally, and frequently 

with a portable player already filled with that illegal music. Obviously, that creates a challenge to start selling them a legal service 

once they arrive on campus. 

Secondly, as the report you mentioned in your opening remarks 

cited, more and more of the file sharing now occurs within the campus, rather than to the campus from the Internet. The Hartford 

Courant had an editorial recently we think we copied, which was 

talking about, with anonymous interviews, how students use 

DirectConnect, myTunes, Redux, and ourTunes to copy music on 

the campus. We attached an editorial from the Diamondback at the 

University of Maryland about what students do there. So the copying has moved onto the campus, and it’s much less, I think, to and 

from the Internet. 

When subscription music libraries number in the thousands of 

tracks—and that’s what the students have—the only economic option that’s viable is a subscription service for $15 a semester. That, 

students can contemplate. Buying 5,000 tracks is something students are not going to go do. But there are technological restrictions that make subscription services feasible [sic]. 

At one of our schools, the school mistakenly identified us as the 

reason that they blocked peer-to-peer with a service similar to Icarus. Our employees on campus that day had to turn their teeshirts 

inside out and leave the campus, because they were being abused 

so strongly by other students. The students do not like restrictions. 

They want this content, you know, for free, without restriction; 

which I guess anybody could want. But opinion is not yet there. 

And finally, as has been discussed at earlier hearings, there’s a 

lot of complexities about getting content. It’s very hard to explain 

to a student why a song is only available for subscription download, 

is not available for permanent download, or was available last 

week but isn’t there this week. I understand all the reasons for it. 

I’ve been there. But the fact is, it makes it very hard to market 

legitimate services against all of that complexity. 

How can Congress help? I think there are two things that Congress can do. The first is, I believe Congress should look at creating 

a criminal and civil safe harbor for universities that get legitimate 

services operating on their campus, against the copyright liability 

they share, for the internal copying that occurs on those networks. 

This would do two things. This would reward the universities with 

immunity that are driving for legitimate adoption, and it would put 

on notice the other institutions that are not. 

52

And secondly, as you discussed, I believe modernizing the music 

laws is really critical to making online services successful. It’s just 

to hard now, and there’s too much complexity in getting it done. 

Thank you very much for the opportunity to be here today. 

[The prepared statement of Mr. Raduchel follows:]

PREPARED STATEMENT OF WILLIAM J. RADUCHEL

INTRODUCTION

Mr. Chairman, Representative Berman, and Members of the Subcommittee: 

On behalf of Ruckus Network’s employees, investors, our content and distribution 

partners, and the creative talent to whom we pay royalties, thank you for the opportunity to speak with you today about the emerging college and university market 

for legal online music and media services. Thank you also for your attention to this 

marketplace, because without the subcommittee’s vision I’m not sure that campus 

leaders and industry would be collaborating so intensively to educate students about 

the value of America’s creativity, and to promote means of simultaneously enjoying 

and respecting creators and their work. 

STATE OF THE LEGAL DIGITAL MEDIA MARKETPLACE

Formed in 2003 by two graduate students, Ruckus quickly developed strong partnerships with media companies of all kinds and attracted top technical talent to put 

together an innovative product. Like all industries that promote and serve transformative dynamics, Ruckus and our competitors in the industry have hit speed 

bumps along the path to success, but in the last year we have seen a marked increase in demand from institutions. Where institutional support has included a 

blanket purchase, we have been able to gain significant adoption, in excess generally of 60%. However, where schools have chosen an ‘‘opt-in’’ model, where the students have to individually adopt and pay for the service, we, and we understand 

our competitors, have all faced significant challenges in moving students away from 

what they call the ‘‘free’’ model. 

For this demographic, music and movie downloading is not just an individual activity: it’s a community activity that is very much about sharing and expressing 

preferences with other students. To that end, the experience is much richer when 

there is critical mass of people using the service and getting the full benefit of it 

(e.g.; legal filesharing and social networking). By definition, we can offer these services only among subscribers. So it becomes clear that where there’s critical mass— e.g., at blanket purchase schools where it is available to everyone—there is quicker 

adoption and therefore a greater experience because there is a real community behind it. 

The good news is growing demand from colleges and universities. Last year, our 

industry served tens of colleges and universities, but mainly on a trial basis. We 

see more favorable articles about our industry in the media, and perhaps most importantly, administrators from schools are calling us to ask for sales information. 

I think all of the legal digital media services would agree there has been growing 

interest in the market over the past year. 

Our investors have invested more than $20 million in capital so far and will invest more. Our students have access to over 1.2 million tracks of music and a bouquet of video content that changes daily. Subscribers can take their music with 

them on any compatible Microsoft Plays for Sure subscription music players. We 

added an exciting roster of films and TV content from Warner Brothers and a 

unique partnership with Audible, offering price breaks on audio books for our subscribers. In short, there has been significant growth in the content we’re offering 

our customers. 

And Ruckus has found a path—technically—to deliver that content in a style that 

is much more in keeping with the way students want it. Specifically, they want to 

share their media with friends and use their friends to find media. When you think 

for a moment about how unrealistic it is to search or browse a million plus track 

library, you quickly understand why many students prefer searching by people more 

than by song. Ruckus customers can send playlists to friends, make media recommendations, and broadcast to the campus their personal tastes. This is very motivating for this demographic. Finally, we added the capability to quickly share music 

inside the dorm on the university network—legally. 

Today, I believe the industry is making progress in balancing the needs of consumers with the needs of artists and the respect required of copyright law. And I 

believe the marketplace is beginning to realize the importance of this balance. 

53

However, all legitimate services continue to face major obstacles. Two years ago, 

our research showed that students learned about ‘‘file sharing’’ when they arrived 

on campus. Today, increased broadband penetration at home and much larger 

harddrives on ever cheaper computers means that students frequently arrive on 

campus with their music library already built and often a portable player. Persuading them to change to legitimate service is clearly a greater challenge. 

In addition, more and more file sharing now appears to happen inside the university network where it is very difficult to both detect and block. The Hartford Courant covered this in depth just a few weeks ago. Software such as DirectConnect, 

myTunes Redux and ourTunes allows students to easily copy music on their campus 

network. It is this functionality we recreated legally within our service. 

When student music libraries number in the thousands of tracks, only subscription services seem economically feasible as a legitimate alternative for students on 

student budgets. However, the technological usage restrictions and controls required 

to make it economically viable for the music owners are greatly disliked. And our 

usage restrictions can have other unfortunate impacts. At one of our schools last 

year, when the school mistakenly identified us as the reason for their separate action to block peer-to-peer services on their network, our employees had to turn their 

t-shirts inside out to avoid further verbal abuse. We have pushed these limits as 

far as we know how, but we still cannot support all portable players or allow students to mix or mash the music. A June 16 editorial (attached) in the University 

of Maryland student newspaper complaining about one of our competitors—but in 

truth they could have same complaints about us—shows well where much, maybe 

most, student opinion lies. 

Finally, all legitimate services face constraints and complexity in obtaining content. It is very difficult to explain to a student why a song is not available at all 

or is only available for subscription or purchase download but not both, or is not 

available today but was last week. There are complex legal—or music publishing 

legal—reasons for all of these, but they confuse students and encourage them to rely 

on illegal sharing. Moreover, there is a lot of so-called gray content (a recording 

made by someone at a live concert, for example) that is unavailable on legitimate 

services. In fact, Congress recently enacted severe criminal penalties for sharing 

prepublication copies of copyrighted works, precisely the most sought peer-to-peer 

content. 

HOW CAN CONGRESS HELP?

I have been a student, graduate student, teacher and administrator. After leaving 

the university, in my business career, I have been on both sides of the technological 

progress versus copyright protection debate. As a citizen, I find it frightening that 

we are raising a generation with so little respect for fundamental intellectual property rights. A friend of mine, a senior university administrator, was widely attacked 

on his campus for observing that students who illegally acquired media were but 

a small step away from plagiarism, but he was right. 

Congress should consider creating a civil and criminal safeharbor for colleges and 

universities for filesharing inside their networks for those institutions where 80% 

or more of the students utilize legitimate music and movie services. No institution 

can police all of its students all of the time, but institutions that achieve meaningful 

adoption of legitimate services should be rewarded with immunity. At the same 

time, those institutions that knowingly tolerate widespread filesharing on their networks should continue to be on notice that it must stop. 

Congress must modernize music licensing laws to make it easier for services such 

as ours to offer students legally what they want. Your hearings have demonstrated 

this need; it is now time to legislate a solution. And device interoperability, as you 

know, remains an obstacle for legal digital media subscription services to compete 

effectively. 

On behalf of Ruckus and the many other stakeholders in our industry, we want 

to express our appreciation to the Committee for your determination to allow legal 

digital media services to compete fairly in the marketplace. 

Thank you.

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ATTACHMENT


WJR1.eps
55

Mr. SMITH. All right. Thank you, Mr. Raduchel. 

Before I begin my questions, let me announce—because it will indicate to our witnesses and to the audience how serious we are 

about trying to reduce piracy on campuses—and that is that in the 

next few days Mr. Berman and I will be signing a letter to the Government Accounting Office asking them to conduct a study of all 

the major universities and colleges in the United States; and not 

just studying to see what their progress or lack of progress has 

been in regard to reducing this piracy, but I actually want them 

to rate the colleges and universities. 

I don’t know if it will be a letter-grade or if it will be a word rating. But I want to move forward with that, so that we can increase 

the scrutiny and increase the public attention to the piracy that occurs on campuses today. 

As I mentioned earlier, we’re making progress, but I want to 

quantify that progress over the course of the next several months. 

Mr. Updegrove, let me direct my first question to you. And this 

really is a follow-up on our earlier conversation before the hearing 

began. I had asked you if the University of Texas was able to sort 

of quantify their progress. You said it had been modest, but at the 

same time successful. And would you elaborate a little bit on how 

the University of Texas imposes sanctions? You mentioned the one, 

two, and three strikes. And just very quickly describe that to us. 

Mr. UPDEGROVE. We have a three-strikes policy at UT. In the 

case of a first offense, a permanent record in the student judicial 

services; in the case of a second offense, service to the network is 

automatically disconnected and an in-person visit is required with 

student judicial services. And frankly, we have never had a third 

offense. We’ve had only 8 second offenses in the last 14 months. 

Mr. SMITH. It sounds to me that would not be modest progress; 

it would be substantive progress, if you’ve had no third infractions. 

Mr. UPDEGROVE. Well, I should confess that when I talk to my 

colleagues around the country, third offenses are very, very rare. 

We believe that there is a prevailing sense that file sharing on the 

Internet is anonymous, voluminous, and therefore safe. And I think 

it comes as quite a surprise to people who’ve been doing it when 

their identity is revealed and when it’s clear that the Internet is 

not—the Internet, properly managed, is not an anonymous haven 

for this kind of behavior. 

Mr. SMITH. A quick follow-up question. Are you satisfied with the 

progress that you’re making at UT? Or would you consider an Icarus type program? Or do you think you’ve got sort of what you need 

in place that over time is going to yield the results we want? 

Mr. UPDEGROVE. We think that we have an appropriate balance 

between controlling the costs of network provision, the behavior on 

the network, and respect for the privacy of our users. I mean, we 

think we could eliminate student parking tickets if we banned cars, 

but we don’t think that we want to go that far. We think that an 

education program, a very well-enforced policy, and bandwidth 

management takes us as far as we wish to go. 

Mr. SMITH. Okay. Very good. Thank you. 

Mr. Taylor, you made it clear what you want universities and 

college officials to do, as well as students to do. Would you elaboVerDate 0ct 09 2002 13:47 Nov 29, 2005 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\092205\23572.000 HJUD1 PsN: 23572
56

rate a little bit more on what MPAA itself is doing, both in regard 

to bringing lawsuits, and so forth? 

Mr. TAYLOR. Well, as Members of this Subcommittee are aware, 

we have begun a number of actions against both end-users, individual end-users, as well as entities who are building business 

models around providing unauthorized access to our copyrighted 

works. We’ll continue to enforce these every step of the way. As I 

mentioned earlier, we’re also looking for better ways to protect our 

works in technological means, to make it more difficult to rampantly borrow, steal, our material. 

But I think it’s also worth noting—and I neglected to in my opening remarks—to say that we recognize that by the time students 

get to the university campus there are some behaviors that are, unfortunately, well ingrained with regards to illegal activity online. 

So part of what we’re trying to do at the MPAA is work with respected educational organizations to reach kids at an earlier age, 

trying to modify behavior before they get to the college campus. 

We’re working with ‘‘Wired Kids,’’ for example, a well known Internet safety organization which now includes piracy as what they call 

their four ‘‘Ps’’ of concern in Internet safety: privacy, pornography, 

predators, and piracy. They all go together. 

And we’re also working, we’ll have an announcement shortly 

with a nationally known education in-school organization to help 

bring this topic to the forefront for principals, students, teachers, 

and parents of younger children. 

Mr. SMITH. Mr. Dunkel testified a minute ago that you can 

download a movie now in 6 seconds. Have you seen an increase or 

decrease in the illegal downloading of movies just in the last few 

months? I mean, is there any trend that’s evident yet? 

Mr. TAYLOR. Well—Well, we have this summer. Thankfully, 

when folks are not on campus there is a down-tick in the levels 

we’re seeing. We’ve also adopted increased ability in our ability, 

however, to monitor the landscape. And we are getting regular reports, and we’re about to have a new report internally that we’ll 

be evaluating. But sadly, the trending is up. We’re monitoring that 

landscape very regularly and prioritizing which institutions to go 

to accordingly. 

Mr. SMITH. You’ll be able to compare this fall, say, to last spring. 

How does last spring compare to the fall before that? Do you know? 

Mr. TAYLOR. Sadly, it’s on the uprise. As it becomes faster and 

easier to do, unfortunately, the behavior continues. 

Mr. SMITH. A lot of work to do. 

Mr. TAYLOR. Indeed. 

Mr. SMITH. Okay. Very good. 

Mr. Dunkel, let me squeeze in a last question for you. I happen 

to think Icarus is a great technological solution. And either you or 

your colleague who is here, who developed it, can respond to this 

question. And that is, it seems like such a great solution; why is 

it more colleges and universities are not using it? Is it just limited 

to the University of Florida, or is it more widespread use than 

that? 

Mr. DUNKEL. Certainly. It has everything to do with where the 

product is in the pipeline, and the availability to private and public 

entities. The company currently is identifying the last of two Beta 

57

sites, and we’re finalizing venture capital for implementation teams 

on those sites. So within about 30 to 60 days after those sites have 

been able to use the Beta, then we’ll make that product available. 

So within a handful of months, it’ll be available to the open market. 

Mr. SMITH. But it’s just not available now. 

Mr. DUNKEL. Right. 

Mr. SMITH. Authority is almost experimental, then? 

Mr. DUNKEL. Correct. 

Mr. SMITH. Okay. And you would expect widespread use, or at 

least greater use? 

Mr. DUNKEL. We’ve had over 200 institutions express a strong interest in the product. 

Mr. SMITH. Wonderful. I’m not endorsing it. I can’t do that. But 

it sounds like a great product to me. Thank you all. 

Mr. Berman is recognized for his questions. 

Mr. BERMAN. Thank you very much, Mr. Chairman. 

I wanted to just make sure I understand. It’s Mr. Raduchel? I 

thought I heard you say during your testimony or in response to 

a question that these days, in terms of college students, most of the 

music they’re obtaining illegally is coming from the universities’

own internal networks, rather than the Internet. Did I hear you 

right? 

Mr. RADUCHEL. Correct. 

Mr. BERMAN. Thank you. You also mentioned that where institutional support included a blanket purchase, we have been able to 

gain significant adoption, in excess generally of 60 percent. 

Mr. RADUCHEL. Sharing is a community experience. So if you 

don’t have everybody in the group, coming in and selling just one 

service, you can’t share any of that music. But if everybody is in 

the group, then the kids can share the music among themselves. 

Mr. BERMAN. I’m curious why it’s only 60 percent in that situation. 

Mr. RADUCHEL. Well, this is where it——

Mr. BERMAN. It doesn’t cost them, right? 

Mr. RADUCHEL. It doesn’t cost them. We’ve gotten as high as 85, 

at a school were the president committed to ethics and said, ‘‘I 

want my students to be ethical.’’ But some kids cannot be weeded 

away from illegal, or they’ve already built up—they’ve already got 

their libraries. Freshmen are easier to switch than seniors. But we 

haven’t been able to get above 60 to 70 percent, in general. 

Mr. BERMAN. Okay. Mr. Updegrove, what can Internet2 do to 

prevent the network from being hijacked by pirate services like 

i2Hub? 

Mr. UPDEGROVE. Internet2 is a passive transport, and the end 

component of Internet2 are the 207 institutions. And so I think it’s 

incumbent upon all of us who share the benefits of Internet2 to 

adopt the four-part strategies that were outlined here: education; 

bandwidth management; strong policy enforcement; and when appropriate, offering a sound commercial alternative. 

Mr. BERMAN. And that implementation will deter or prevent the 

hijacking? 

Mr. UPDEGROVE. Prevention is a difficult challenge, as I’m sure 

you know, Congressman. The Internet protocols are open. There’s 

58

an enormous amount of technical innovation occurring monthly, 

weekly, and daily on the Internet. There is, frankly, a worldwide 

‘‘whack-a-mole’’ challenge going on, with new protections built one 

day and new work-arounds built the next. So it’s difficult for us to 

guarantee that we can prohibit illegal behavior. But we’re all committed to working on it. 

Mr. BERMAN. Mr. Dunkel, you mentioned that using the Icarus 

program has saved the University of Florida money in the long 

run. Would it be difficult or costly for other universities to implement Icarus on their campuses? 

Mr. DUNKEL. It would not. First of all, it saved the University 

of Florida about a half a million dollars in unnecessary infrastructure improvements. It saved our operation—— Mr. BERMAN. Because of the reduction of band using? 

Mr. DUNKEL. Right. Absolutely. It saved our operation about $2 

million. We were able to delay our infrastructure improvements 

and, during that delay, the cost of that equipment came down $2 

million. That was important. 

This is a very easy application for other institutions. It’s an application where institutions do not have to buy additional equipment. It can be installed on the equipment that they currently 

have. 

Mr. BERMAN. Thank you. And once again, Mr. Raduchel, your 

testimony points to issues such as the complex music licensing 

scheme—ah, yes—as one of the barriers to entry with students. 

We’re working on that, sort of. And what are some of the impediments to providing students with access to movies? 

Mr. RADUCHEL. Movies, we just did a deal with Warner Brothers 

which was truly revolutionary in terms of the pricing, giving students, you know, access to movies. But we have to be—the windows 

that exist, of course, for movie release force us to 3- and 4-year-old 

movies, rather than current titles. Again, it’s trying to match— we’re competing against free. So $20 a semester is all we think we 

can charge students and get widespread adoption. 

So now we have to get the movie industry to believe that $20 a 

semester, shared with them and with all the other costs along the 

way, makes for an attractive proposition. We got one studio to go 

along and believe that that’s important, to try to get students attached and attracted to having subscription-based movies. But 

that’s certainly—I mean, the movie industry licensing, as you 

know, is complex, as music. 

Mr. BERMAN. Thank you very much. Thank you. 

Mr. SMITH. All right. Thank you, Mr. Berman. 

The gentleman from California, Mr. Issa, is recognized for his 

questions. 

Mr. ISSA. Thank you. Mr. Raduchel, I guess, if I heard you correctly, you’re trying to compete with free. Because you’re saying 

that when the students have to opt in and pay, they don’t choose 

it; and when the university absorbs substantially the cost, 60 percent participate. Did I hear that right? 

Mr. RADUCHEL. Roughly, yes. 

Mr. ISSA. Okay. One of my challenges is, I don’t think that you 

compete with free and just shift the cost to somebody else, whether 

it’s the university or not. Because in real life, students are going 

59

to leave and it’s not going to be free any more. So that’s one of the 

challenges that this Member faces. The other one, I guess, is, although I would love to have a $20- a-quarter, or a $50- or $60-a-year annual cost of unlimited movies, 

it’s not very American to say that the value of ‘‘Star Wars’’—which, 

by the way, cost me $2.50 in Russia—in Russian. I know you 

haven’t released it in DVD yet, but it is available. And I think I 

paid retail. You know, I don’t want to tell them what the price is. 

So I guess Mr. Taylor, representing the studios, is there a number that we’re starting to get to for subscription that could provide 

substantially all of the catalogue—the backlot catalogue, if you 

will, not the recent releases, but sort of the basis of everything 

that’s ever been on TV? Is that something that is foreseeable, as 

you see it, coming out of the industry? And I guess I’d direct it to 

both of you, because one is a buyer and one represents—— Mr. RADUCHEL. That is what Warner Brothers gave us. So the 

backlog of titles we have available at a very attractive price. So 

that they do have—you know, there is that. New movies, cost 

money. New movies, you’re going to have to pay on a pay-per-view 

basis. 

Mr. ISSA. Right. But that’s one large studio—and granted, a large 

library. But I guess, do you expect to see several other major studios able to bring that together to where you’d have the entire library. 

Mr. RADUCHEL. We’re talking to a second big one now. And we 

hope, if we get that one, we can get a third, and to get more people 

onboard. 

I want to say that in most of the blanket-purchase schools, the 

student government has agreed to the charge. So there is a charge. 

It is a collective charge. But it has been done with the students’ support. And so that does go into the student fees. So there is an 

increase in fees that the students see, and they do vote for it. 

This is not something that’s been imposed, in general, by the administration. So when I talk about blanket purchase, it’s because 

the students have agreed to go along that way. 

Mr. ISSA. I guess I’ll follow up before I go to Mr. Taylor. When 

you have—I don’t know—nine libraries put together, if Warner 

Brothers were the model—— Mr. RADUCHEL. Right. 

Mr. ISSA.—and their contract with you is none of my business, 

but if you were to look at it, the unsubsidized amount, the amount 

to the public—because although today it’s dealing to a great extent 

with universities and peer-to-peer, ultimately the question is if everybody that wants to be able to both have movies to see, 

download, and put on their Digix players—which are now going to 

be very available for Christmas and so on—wanted it, what is the 

subscription fee that you think we would get to? You know, sort of 

forecasting your business model to the entire United States. 

Mr. RADUCHEL. In range, I would say $10 a month for back title. 

The rates we pay are approximately the same rates that a broadcast television station would pay per head for putting a movie up 

to be seen over broadcast television. So it’s not that we’re way off 

scale. I mean, we’re paying roughly the same that a broadcast television station would pay for that same movie. 

60

Mr. ISSA. Okay. Mr. Taylor, how do you view this emerging technology, particularly as it gets past the university? 

Mr. TAYLOR. Well, I would just note that, as a for-profit enterprise, you know, the MPAA member companies have every incentive in the world to provide and take advantage of these new digital delivery means. And I know our member companies are committed to developing new delivery systems and taking advantage of 

those that are emerging. 

That said, like with any business enterprise, we have to make 

sure they can operate in a secure environment. So they’re making, 

you know, business decisions studio by studio. We just heard about 

Warner Brothers’ recent development. I have no doubt our other 

member companies are looking at the landscape and figuring out 

how best to take advantage of it. 

The name of the game, when we make a movie in Hollywood, we 

don’t make it just to show on the studio lot. The more folks who 

can see it, paying a fair and reasonable price, obviously, the better. 

So we’re as excited as anyone by the new technologies that are 

emerging. And that’s one reason we’ve established things like 

Movie Labs and joined up with Internet2, so that we can be at the 

forefront of that movement. 

Mr. ISSA. Okay. And just one follow-up, and this can be done for 

the record. I mentioned the Digix products that are coming out, 

players, en masse for Christmas. I mean, this is going to be the 

first year in which there will be—every Circuit City, every Best 

Buy, and loads of others will all have a large amount of hand-held 

products. Do you, Mr. Taylor, think that any of these models are 

arriving just in time to facilitate the legitimate use of these products? Or are they going to take you where MP3 players such as the 

iPods and so on took the industry of music? 

Mr. TAYLOR. We’ll put on our optimistic hat, and know that as 

we continue to work very hard to secure our works and identify 

business models as an industry that can work, these are the type 

of devices as they come on, provided they respect those protections, 

that can be a great benefit not just to the industry but to the consumer. 

I can look back in recent history at the DVD model. The film industry was the leader in the development of the DVD. And there 

are reasonable content protections on those discs, each of those 

discs. 

And when people hear the term ‘‘content protection,’’ a lot of, you 

know, people’s hair stand up. But what did the content protection 

do? It unleashed an avalanche of titles into the marketplace; it provided a DVD player that respects those protections; and it led to 

the most successful new product introduced in the consumer electronics enterprise. 

And most of all, most importantly, consumers were the great 

beneficiary of those reasonable protections, because now they’re 

building personal libraries of their favorite films like never before. 

So reasonable protections, new technologies: When those go together, good things happen. And we’ll be leading that charge. 

Mr. ISSA. Thank you, Mr. Chairman. 

Mr. SMITH. Thank you, Mr. Issa. 

61

The gentlewoman from California, Ms. Sa ́nchez, is recognized for 

her questions. 

Ms. SA ́ NCHEZ. Thank you, Mr. Chairman. 

Mr. Taylor, one of the concerns that I have with the various subscription services is the impact that they have on the revenues for 

the creators. And I’m going to give you an example. Yesterday I 

had some songwriters come visit me in the office that were talking 

about subscription services that allow people unlimited access to 

download songs for as little as $5 or $10 a month. And they saw 

that as a big threat to their income stream. And I know that the 

business model for the motion picture industry is somewhat different, but I’m wondering if there’s been any discussion of any 

types of safeguards that you might put into place to try to protect 

the creative talent and their revenue as you move forward, in 

terms of the new technology and the subscription services. 

Mr. TAYLOR. Right. Well, in Hollywood, each of the segments of 

the creative community—writers, actors, directors, grips, all of 

them—are represented, and through negotiations these terms are 

worked out. And as new means of delivery come into the marketplace, when next windows for negotiation take place, those are the 

type of things that we’ve worked out in that environment. 

Suffice to say, we’re an industry that has had a long and productive and fruitful relationship with all elements of our creative talent. And one of the reasons that I consider it such an honor to testify on this subject today is it’s not just about the names on the 

marquee that we stand here trying to speak about and protect. It’s 

those names that scroll and continue to scroll as you walk out of 

a theater, get in your car, and drive out of the garage at the movie 

theater. 

All of those folks have a stake in this fight, and they’re the ones 

who are really, truly on the front lines of it. So we are most interested, and very interested, in making sure that everyone in our industry is well taken care of and protected. And it begins by making 

sure that there is some compensation for the works that are available and made. 

Ms. SA ́ NCHEZ. But I mean, have you had meetings with folks, you 

know, from beginning to end of production that contribute to this 

process? It seems to me, and this is sort of a follow-up question 

for—Mr Raduchel; is that correct? You know, who sets the, you 

know, $20-a-semester, you know, subscription, I mean, for an entire catalogue of movies? Call me crazy, but that seems like—you 

know, for all the people and all the work that goes into producing 

these works—very little. 

Mr. RADUCHEL. They only get access to a limited number on any 

given day. It’s 50 titles on any given day, and we cycle through the 

titles over the course of the semester, the course of the month. So 

it isn’t everything. 

You know, you have very good questions. I cannot disagree with 

them at all. The issue that we’re trying to do, and the industry is 

supporting us on, is getting kids to agree to pay anything. And the 

step one is to get them habituated to paying. And the belief is that 

if they’re habituated to paying something, as they get older, have 

more money, go on in life, they will be willing to pay more. 

62

That is the theory. It may be right; it may be wrong. But if kids 

come out of college habituated to paying nothing, unfortunately, a 

24-year-old is not a lot different than a 22-year-old or an 18-yearold, and this habituation to free will go on and persist in life. And 

I think that threatens all of the creative talent. 

I mean, we care a lot about the creative talent. I mean, we want 

them to earn money. That’s what we’re trying to go do. But we are 

competing against free in a very broad catalogue, and so there’s a 

limit to what pricing we can charge and expect we’re going to get 

any adoption at all. But your points are very valid, and I understand them. 

Ms. SA ́ NCHEZ. All right. No further questions, Mr. Chairman. 

Mr. SMITH. Okay. The gentleman from South Carolina, Mr. Inglis. Do you have any questions? 

Mr. INGLIS. No questions. 

Mr. SMITH. Okay. Thank you. Are there any other questions by 

any other Members who are present? 

Mr. BERMAN. Mr. Chairman? 

Mr. SMITH. The gentleman from California. 

Mr. BERMAN. Just to ask if the record could remain open. I think 

the gentleman from California, Mr. Schiff, wants an opportunity to 

put in a written statement on this issue. 

Mr. SMITH. Okay. Without objection, his written statement as 

well as the opening statements of any other Member will be made 

a part of the record. 

Thank you all very much. This has been very informative. And 

this is going to be one of those hearings which lives on, so to speak. 

We’ve had hearings on this subject before; we will have hearings 

on this subject in the future. I mentioned the GAO report that we 

will be requesting in the next few days. And so we’ll continue to 

monitor the progress, and you all have been a big part of the 

progress that has occurred so far. So thank you for your input, and 

thank you for your testimony. 

[Whereupon, at 10:15 a.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA, AND RANKING MEMBER, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Mr. Chairman, 

Thank you for scheduling this hearing on campus university Peer-to-Peer piracy. 

The beginning of the academic year is the perfect time to assess what progress has 

been made by universities to stem the proliferation of illegal file-sharing by students 

on their campuses. 

There is little question of the devastating impact piracy has had on the entertainment industry. The total value for the music industry at retail declined from $14.5 

billion in 1999 to $12.1 billion in 2004. In March 2005 alone, 243 million songs were 

downloaded from illicit peer-to-peer services. (NPD Musicwatch). Furthermore, it is 

estimated that approximately 400, 000 films are illegally downloaded every day. 

However, when it comes to downloading content that is not paid for, there seems 

to be a disconnect that students exhibit between intellectual knowledge and actual 

behavior. There was a very telling discussion that occurred during a program about 

P2P file sharing organized by my colleagues, Adam Schiff and Linda Sanchez, and 

me for students from different colleges who were interning on the Hill. The students 

all acknowledged that downloading content from P2P networks was possibly morally 

wrong, probably legally wrong and potentially harmful to their own networks (from 

spyware or adware). Yet many of them continue to use P2P file sharing as a means 

of obtaining music, movies, television shows and games. 

Last year at this hearing, Graham Spanier, one of the chairs of the joint committee and a visionary in undertaking the Lion’s Share project at Penn State testified ‘‘I don’t think there is any one part of the solution. It has to be a set of variables that universities use to bring about progress in this area.’’

Awareness of the effects and solutions to the piracy problem can be addressed 

through:

• Education

• Enforcement

• Technological improvements and

• Affordable legitimate alternatives.

The good news, in no particular order, is that there has been progress on every 

front. This past June, the Supreme Court, in a unanimous 9–0 opinion in the 

Grokster case, sent a clear message that companies that encourage theft can be held 

liable. Immediately after the decision, iMesh, one of the original peer-to-peer (P2P) 

services announced the transition from a free to commercial-based authorized P2P 

business model which ensures compensation to creators. Slowly others have begun 

to follow suit. As late as this week, Grokster is rumored to be attempting to turn 

‘‘legit.’’

Since the Grokster decision, there have been other positive impacts on campuses 

around the country, for example, the University of California and California State 

University announced a deal with Cdigix Inc. which provides administrators at all 

13 UC and 23 Cal State campuses the option of offering online music and movie 

sales to students. Of course, providing students with legitimate alternatives to the 

Kazaas and Groksters is a key part to any solution to the piracy problem. 

But as the report released yesterday by the Joint Committee of Higher Education 

and Entertainment Communities indicates, there are miles to go before we sleep. 

Free is still an option and while the Grokster decision may have stemmed the wave 

64

of piracy, many continue to ride the wave and persist in illegally downloading 

music, movies, and software. 

We must confront the piracy which takes place on the school’s local area networks 

(LANs) and the increased use of unauthorized hacks of the legitimate online services. We cannot afford to become complacent about ensuring that the creators receive just compensation for the works that students enjoy. 

Just this Monday the movie industry announced a concerted effort dedicated to 

mitigating the effects of piracy. The goal of the new non-profit research and development company, Motion Picture Laboratories, Inc. (Movielabs), will be to create new 

technologies to protect the distribution of films and other works as well as to protect 

against electronic theft, particularly on the Internet. Just last week RIAA and 

MPAA joined Internet 2 as corporate members with the objective of working together on new technologies for secure digital distribution. We must continue to work 

together to help address the piracy problem. 

It is the combination of the many methods and not just one silver bullet that will 

address the campus peer to peer issue. Perhaps, as more simply put by Aristotle, 

‘‘in educating the young we use pleasure and pain as rudders to steer their course’’

(Nichomachean Ethics, Book X.) The Universities and content providers must educate well, as it is this future generation which will educate the next. 

I am looking forward to hearing from the witnesses and learning about some of 

the remaining pitfalls to curbing piracy on campuses. 

I yield back. 

PREPARED STATEMENT OF THE HONORABLE JOHN CONYERS, JR., A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF MICHIGAN, AND MEMBER, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

According to a March 2005 PEW Internet & American Life Project survey, young 

adults continue to be the largest group of Internet users who share files with others 

online. File sharing among students can provide many beneficial uses in education, 

research, and professional development. Unfortunately, college students have exploited the intended use of the peer-to-peer network by trafficking in music, movies, 

software, video games, and other copyrighted material without permission. While 

the Supreme Court unanimously held this past summer in the Grokster case that 

the file trading companies can be liable for their misconduct, we cannot turn a blind 

eye to the users of such software. 

Aside from the issue of copyright infringement, this illegal use of peer-to-peer networks can lead to invasions of student privacy, viruses, and other potential security 

threats to the university’s network. 

The content industry is stepping up its battle against digital copyright piracy on 

college campuses, encouraging higher education leaders to monitor their students 

and impose restrictions on violators. On the other hand, monitoring raises privacy 

concerns and could chill the use of peer-to-peer technology that can otherwise have 

valuable academic rewards. I also would be concerned that monitoring could turn 

university officials into spies, thus creating an atmosphere in which the First 

Amendment and privacy rights of students are significantly devalued. 

Because piracy has proven to be a lethal threat to the content industries, we must 

address the legitimate concerns of creators. One approach to reducing peer-to-peer 

piracy on university campuses that does not require monitoring seems to be working: providing a legal alternative for students to access music, films, and other 

media while educating students about the importance of copyright issues. Two major 

universities in my home state, the University of Michigan and Michigan State University, have taken the lead in this approach. 

After the University of Michigan inked an agreement with Cdigix, students were 

able to choose from a wide variety of media and entertainment services for only a 

nominal monthly fee. Because of the University’s agreement with Cdigix, its acceptable use policy, and its education campaigns on copyright infringement, the Recording Industry Association of America cited the University as a model for how universities should combat illegal file sharing. 

At Michigan State University, the University has implemented the multi-tiered 

approach of information campaigns, an acceptable use policy, and technical measures to prevent illegal file sharing. These measures have led to a 75% reduction in 

the monthly rate of Digital Millennium Copyright Act violations on campus. In addition, MSU is conducting advanced discussions with venders such as Cdigix to provide a legal avenue for students to access digital entertainment. MSU’s strategy 

strikes the appropriate balance between preventing illegal sharing of copyrighted 

65

files and respecting the privacy of personal communications over the University network. 

By providing legal alternatives to file sharing and through education, universities 

can and will continue to teach students to make good decisions regarding online entertainment. Furthermore, by becoming familiar with services like Cdigix, students 

will develop the habit of paying for music that will extend beyond the university 

setting. 

PREPARED STATEMENT OF THE HONORABLE ADAM B. SCHIFF, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA, AND MEMBER, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

I’d like to thank Chairman Smith and Ranking Member Berman for convening 

this important hearing. The testimony we will receive today demonstrates that peerto-peer piracy is still out of control, posing a serious threat to the livelihood of copyright creators, many of whom live in my district. 

According to some estimates, over 60 percent of all Internet traffic in the U.S. can 

be attributed to peer-to-peer usage. Over ninety percent of all content on peer-topeer networks consisting of unauthorized copyrighted files, and an estimated 

400,000 films are illegally downloaded every day. Given the prevalence of high 

speed Internet connections at universities across the country, peer-to-peer piracy of 

music, television shows, and movies has reached epidemic levels at many institutions. 

A few months ago, Ranking Member Berman, Rep. Linda Sa ́nchez, and I hosted 

a panel discussion for House interns regarding piracy on campus and the availability of legitimate online entertainment choices that are available. At the event, 

many students acknowledged the continued prevalence of illegally downloading 

music and movies via peer-to-peer networks on campus. 

A number of universities have taken important steps to address this problem. In 

particular, the University of Florida, with its innovative program targeting unapproved peer-to-peer applications and prohibiting transmission. It is encouraging to 

hear that this program has reportedly kept the network free from illegal copyright 

sharing, while faculty and students remain able to share and distribute academic 

material through secure websites, FTP, and e-mail. This model should serve as an 

example for other institutions to follow. 

Universities in my home state of California have exhibited mixed results. Some 

campuses in the California system have already worked diligently to address the 

problem of piracy on campus. I’m pleased to hear that the University of California 

in collaboration with the California State University system has recently contracted 

with a number of online entertainment providers to offer discounted subscriptions 

for music, movies, and other digital entertainment to students. I strongly encourage 

each of the individual campuses within the system to review the details of the various offerings and work to make one or more of the services available as soon as 

possible. 

In closing, I’m pleased to learn that this will not be the last hearing on this topic 

and that the Subcommittee will continue to monitor progress in this area. With the 

proliferation of new peer-to-peer systems such as i2Hub and ‘‘local area networks’’

(or ‘‘LANs’’), we must continue our vigilant oversight in this area and determine 

whether a greater degree of congressional intervention is necessary. 

PREPARED STATEMENT OF FREDERIC HIRSCH, SENIOR VICE PRESIDENT, INTELLECTUAL

PROPERTY ENFORCEMENT, ENTERTAINMENT SOFTWARE ASSOCIATION (ESA) 

On behalf of the Entertainment Software Association (ESA) and our member companies, I thank you for this opportunity to add a statement to the record to update 

you on the impact peer-to-peer (P2P) piracy on university networks is having on the 

entertainment software industry. In the three years since our President, Douglas 

Lowenstein, appeared on Chairman Smith’s University P2P Piracy Panel at the 

University of Texas at Austin, our industry has taken a number of significant steps 

to combat the piracy problem on American college campuses. Nevertheless, campus 

P2P piracy remains a threat to the economic contributions the computer and video 

game industry makes to the United States economy. 

As ESA’s Senior Anti-Piracy Executive, I would like to update you on the progress 

we have made in addressing college-level P2P piracy over the past few years on the 

educational and enforcement fronts. In addition, I would like to review the growing 

challenges we face, including the rapidly increasing use of BitTorrent for infringing 

66

activities, as well as to highlight what universities need to continue to do to help 

reduce the P2P piracy threat on the nation’s campuses. 

As you may know, the ESA is the trade association serving the public affairs 

needs of the world’s leading publishers of video and computer games, including 

games for video game consoles, personal computers, handheld devices, and the 

Internet. ESA members produced more than 90 percent of the $7.3 billion in entertainment software sold in the U.S. in 2004. In addition, ESA’s member companies 

produce billions more in exports of American-made entertainment software, driving 

the $25 billion global game software market. Entertainment Software is a vibrant 

and growing segment of the American economy, providing highly skilled jobs and 

ever-increasing exports. 

Entertainment software companies invest significant amounts of capital in each 

of their games and the intellectual property that these represent. Developing and 

launching a top game often requires a team of more than 100 professionals working 

for more than three yearst, with development and marketing costs often running at 

least $5 million and often $10 million and higher. As with any hit-based industry, 

only a small percentage of these titles actually achieve profitability. Nonetheless, 

the demands of the game-playing market compel ESA members to continue to work 

even harder to develop faster and more exciting games, requiring larger investments 

in the programming and technology that will produce the effects and challenges that 

game players seek. The new generation of game consoles that will be launched over 

the next six to nine months will require game publishers to make even more significant levels of investment as the processing power of these new machines will permit 

more complex and realistic game design, further enhancing the game-playing experience for consumers. 

Over the past few years, illegal and unauthorized uses of game software have proliferated rapidly, as the popularity of playing interactive games has commanded an 

increasing share of Americans’ leisure-time activity. Among certain segments of the 

population, notably college students, the playing of games represents a dominant 

form of recreation and entertainment, increasingly displacing other forms of diversion such as watching television. The current generations of college students have 

been playing computer and video games for more than a decade. A Pew study in 

2003 revealed that over 65% of college students play interactive games on a regular 

or occasional basis. Most of them bring to their college campuses the game-playing 

habits cultivated over many years at home. Thus, it is easy to understand why college campuses continue to be areas of major concern for ESA members, particularly 

as college students, open and eager to learn and try new things, often fall prey to 

the temptations of easy access to hundreds of free interactive games over the Internet. 

A digital file containing an interactive game consists of, on average, over 650 

megabytes of information, a large digital file over 150 times the size of the standard 

music mp3 file. Downloading such a file over a dial-up connection where the speed 

of the connection is 56 kilobits per second is a daunting proposition at best and, at 

more than 24 hours, practically unfeasible for all but the most determined of 

downloaders. Despite the dramatic increase in broadband access to the Internet 

among American households, most American homes access the Internet through 

dial-up connections. Thus, most students, when they first arrive at college, have not 

had any experience downloading interactive games. However, the broadband systems that exist on most American college campuses offer a dramatically different 

technological context for the average student, who becomes quickly informed about 

the many wonderful ‘‘facilities’’ of high-capacity access to the Internet. Indeed, in 

such a broadband environment, the download time for a full game file can be cut 

to 3–4 hours and sometimes faster, a much more enticing opportunity than what 

these students might have found on their home computers. ESA’s tracking of online 

pirate activity confirms that almost all illegal game downloads occur over broadband 

connections. 

The high-speed access offered by such campus broadband systems become problematic when combined with other personal and lifestyle elements found among 

many student communities: substantial amounts of free time, high levels of technical knowledge and attraction to interactive games, and a close community with 

a generally high percentage of active game players. On many campuses, this congruence of factors produces environments marked by high rates of illegal copying and 

distribution of game software. Moreover, the efficiency of peer-to-peer software and 

networks offering a wide variety of illegal versions of games makes downloads of 

game software all the more accessible to the average college student. Indeed, ESA’s 

monitoring of Internet piracy of its members’ leading games shows that the overwhelming majority of illegal downloads (89%) of such games on college systems are 

executed through P2P protocols. 

67

ESA plays a significant enforcement role on behalf of its members by pursuing 

efforts to reduce the illegal uses of its members’ game software. Needless to say, 

much of ESA’s anti-piracy work has been focused on addressing pirate activity on 

the Internet. The online enforcement program begins with our automated monitoring of the Internet, which detects and identifies infringing activity and sites involving game product. Such detection is followed by ESA’s manual verification of the 

infringing activity and transmittal of notices advising ISPs and MIS managers of 

the illegal activity detected among users of their systems and requesting their intervention in procuring the termination of such activity. Over the past year, ESA has 

sent over 173,000 such notices. The ISPs responses to these notices run the gamut 

of no response, to an automated acknowledgement of receipt of the notice, to an email response, to a phone call or letter describing the action to be taken in response 

to the notice. Unfortunately, the vast majority of responses sent to ISPs regarding 

P2P activity fall into the no-response category. 

The good news is that college and university MIS administrators have distinguished themselves from the large group of non-responsive ISPs with a high level 

of response and cooperation in response to our notices. Their responses are generally 

very informative and go beyond what we normally receive from commercial ISPs in 

terms of describing their efforts after receiving the notice of infringing activity. 

Some colleges, notably the University of Oklahoma and Webster University, routinely describe to us in detail the steps they have taken to address the instance of 

piracy identified in each of the notices we send them. Such steps can range from 

warning letters to suspension of access to the university network. We have been 

very encouraged by this level of response and have used the opportunity of our contacts with university administrators to offer them additional support and information that we encounter with respect to game piracy. 

Fortunately, universities and colleges across the United States have done more 

than merely respond to our notices regarding pirate files appearing on their systems. Many of them have taken a pro-active approach to educate their students, faculty and employees about online piracy and have adopted policies governing the use 

of their systems and networks aimed at establishing clear lines regarding the consequences of students, faculty or employees engaging in illegal copying or transmissions of IP-protected content. We think that these educational efforts are among 

the most important areas of activity for university administrations. Such educational initiatives over time will do much to dissipate the ‘‘anything goes’’ attitude 

that permeates many college campuses with respect to Internet usage. Addressing 

the ethical and legal aspects of infringing activity and abuse of intellectual property 

is an important function that we think college administrations are ideally suited to 

perform. We also think that a continuing dialogue between IP industries and college 

administrations regarding the way these issues are raised and presented to students 

could serve to further enhance colleges’ efforts to educate students about intellectual 

property abuse and piracy. 

We are also aware that many universities have instituted technological measures 

to reduce the illegal activity resident on their networks. Whether it is the ICARUS 

system implemented by the University of Florida, the Quarantine Approach initiated by UCLA, or Audible Magic’s CopySense, or bandwidth-shaping technologies 

that limit the amount of data that can be sent over networks, many colleges have 

availed themselves of technological solutions that serve to either preempt or deter 

the use of their systems for illegal transmissions of infringing files. In addition, the 

University of Nevada has installed technology that automatically deletes files saved 

to communal computers when switched off making it impossible to store illegal files 

there. We applaud such efforts and believe that wider application of such technologies will ultimately help preserve the college networks for the educational uses 

which should be their paramount purposes. 

Enforcement, education and technology are all critical elements in the effort to reduce piracy on university systems. We think that many universities have stepped 

up to take on the challenges that this Subcommittee set forth for them last year 

by taking a pro-active and engaged approach to this problem. While the ESA and 

its members are gratified by the level of response and communication that we have 

seen from universities with respect to instances of game piracy found on their systems, we must also point out and caution that Internet piracy is a dynamic and rapidly evolving phenomenon, raising new concerns and issues for those trying to confront it effectively. P2P technologies are changing quickly, and some, such as 

BitTorrent, have set new benchmarks for the speed and efficiency with which they 

permit the copying and distribution of digital content. The constant change we see 

in the pirate Internet environment requires continuing dialogue between the IP industries and university administrators to coordinate and collaborate on the best way 

to respond to these new challenges. 

68

In addition to the problem of P2P piracy, ESA members remain equally concerned 

about another form of illegal activity occurring on some university systems, beyond 

the knowledge and awareness of their administrators. Federal investigations and 

enforcement actions against members of Internet piracy rings known as ‘‘warez 

groups’’ over the past few years have revealed that many members of these groups 

have surreptitiously used university systems to store their illegal ‘‘warez’’ files, consisting of illegal digital copies of games, movies, software and music. Some of these 

were cases of intrusion, where one or more members of these groups successfully 

hacked into a university system and then undertook to quietly hide several thousand files beyond the purview of system administrators. Other cases were ‘‘inside 

jobs’’, in which a member of the university MIS staff was also a member of one of 

these groups or was co-opted into permitting the groups’ use of university servers 

and bandwidth capacity for their illegal purposes. 

While we understand that such activities were in no way sanctioned by the universities involved and, in fact, consider them also to be victims of such groups, we 

would like to underscore that such unauthorized uses of university systems remain 

a major concern for the game software industry and its efforts to curtail the activities of these warez groups. We believe that the college MIS systems that were targeted by these groups in the past must institute technical measures, procedures and 

internal audits which will serve to prevent any recurrence of such intrusions in the 

future. We also think that other colleges not yet similarly victimized should take 

proactive steps to prevent such unauthorized high-jacking of their bandwidth. In 

short, this Subcommittee should stress to universities that they must maintain a 

high degree of vigilance with respect to their IT equipment and networks, as the 

members of these warez groups are constantly on the prowl for the storage and 

bandwidth facilities that university systems offer. 

We applaud the work of this Subcommittee and the outstanding efforts it has 

made to focus attention on the important issue of P2P piracy and illegal uses of university systems. As noted earlier, the entertainment software industry has a particularly large stake in seeing that college environments are free from the illegal 

copying and distribution of their game products. We earnestly believe that the interest of this Subcommittee in this area has made a material contribution to the great 

progress that the university community has made in that direction. For this, we are 

most grateful.

69

SUPPLEMENTARY STATEMENT OF DANIEL A. UPDEGROVE, VICE PRESIDENT FOR

INFORMATION TECHNOLOGY, UNIVERSITY OF TEXAS AT AUSTIN

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