Digital Anarchy: Analysis of Software Piracy   by Independent (IND)

Article taken from "The adrenaline vault" (http://www.avault.com/) Digital Anarchy: Part One of an Analysis of Software Piracy Written by: David Laprad Hundreds of people are in attendance, feverishly maneuvering to score that elusive, coveted file. The time and date are irrelevant -- this fury of activity takes places 24 hours a day, seven days a week. The place, however, is highly significant, given the task at hand. I am exploring the world of software piracy, and my first stop is the free market economy of an IRC warez channel. The trip was remarkably brief and uncomplicated, and now I sit hunkered in my seat, certain that any moment, my front door will be hammered down by government officials intent on prosecuting this reluctant deviant. Colorful ASCII text screams across my monitor, demanding my attention and any software I may be generously offering. "Does anyone have the full version of IPAS for 3DStudio R4?" queries one user. "I am willing to trade for the Unreal beta," submits another. Then there is the strangely charitable, "Join #warez911 for free t3 sites and help." It is like a demented digital stock exchange, and the market is in full swing. I nervously type a preliminary question in hopes of gaining insight into this Cimmerian realm. My immediate purpose is to obtain feedback on how people anticipate they will be affected by the No Electronic Theft (NET) Act, a new law aimed at imposing criminal penalties on copyright violators.The reply, which precedes my abrupt disbandment from the channel, is succinct: "Go away. We do not want any publicity." The participants are, for all intents and purposes, stealing, yet there is no moral quandary. They are simply trading ones and zeros that, to them, have no more intrinsic value than a broken download. Few of them would walk out of a CompUSA with a game stuffed under their shirt, but the relatively benign environment of the Internet offers a presumably safer outlet. The notion that dozens of people have deposited untold resources into developing the software is not a concern; to them, piracy is nothing more than a mild, socially acceptable transgression. At worst, they consider it a victimless crime. To the publishers, developers, and distributors of the software, however, who often spend years creating programs, it is like having the meat fly out of their mouths. Their livelihood depends on compensation for their hard work, and they consider themselves tangible victims of a distressing phenomenon, one that is continually worsened by the ever expanding, unfettered passages of cyberspace. When people take immoderate advantage of unchecked freedoms, one thing is certain -- the government will take notice. The situation is so urgent, in fact, that the United States federal government is becoming increasingly involved in administering a solution. While it is doubtful they will be able to legislate a comprehensive resolution, stern laws are being passed that could have serious consequences for people who are accustomed to obtaining software through non-traditional channels. Still, for every solution, there is a clever workaround, and despite current efforts to curb software piracy, opponents should expect a long, arduous battle. Nothing so completely enmeshed in a culture can be extracted without leaving remnants from which new factions emerge. Perhaps the government would benefit from a more complete understanding of the enemy. The stereotypical profile of a software pirate is, at best, laughable. Yes, many of them are young males who spend considerable time in front of their computers, and despite what their parents think, they were not crafted by the gods, nor do they spend their time innocuously munching on peanut butter sandwiches and playing wimpish CD-ROM games. They are after digital gold, and no matter how mild-mannered they may seem in real life, their online personas are significantly more delinquent, and the social structure of which they are a part is comparable to the rugged back alleys of a steaming urban jungle. Without a doubt, the culture, in its unrefined form, is juvenile. However, the warez community is more complex than any mere surface inspection will reveal, and the motivations and constitution of its inhabitants are often misjudged. Like any pressing social issue, software piracy yields no absolute definitions, and the boundaries of black and white, right and wrong, are often blurred by fleeting shades of gray. Any effective solutions to the problem of software piracy must address the repeatedly misunderstood motivations of otherwise law abiding citizens, who, for one reason or another, choose to obtain software through illegal channels. I Can Make a Copy, Right? All those nifty file copy functions supported by Windows 95 and other computer operating systems are there to facilitate unhindered duplication of software, right? Wrong. Software piracy is, quite simply, the unauthorized reproduction or distribution of copyrighted material in violation of copyright law. The legal history of copyright protection actually dates as far back as 1557 in England, long before anyone ever thought of developing a game or writing a word processor, and was finally scribbled into law in 1710 in the Statute of Anne. Interestingly, traces of that antiquated code can be found in the U.S. Constitution. In 1964, the United States Copyright Office began to register software as a form of literary expression. The Copyright Act of 1976, which initially protected works such as literature, film, and music, was amended in 1980 to include computer programs, and today, Title 17 of the United States Code makes it illegal to make or distribute copies of copyrighted material without legal authorization from the copyright holder. Essentially, this means when you purchase a copy of the latest, greatest game, the government wants you to keep your bits and bytes to yourself. No matter what your parents taught you while you were growing up, sharing is very, very bad. Still, for reasons I will explore in part two of this article, countless digital philanthropists generously apportion their binary wealth to friends, co-workers, and complete strangers. The question begging to be asked is, "How large is the software piracy industry?" The answer is both simple and complex. A quick search for the term "warez," the word that denotes illegally available software, on AltaVista yields in excess of 24,000 links. In fact, the popular World Wide Web search engine is so eager to please, it automatically searches for alternate terms, including "gamez," "appz," "cracks," and several more. A person with relatively limited Internet experience can be downloading illegal software in a matter of minutes with a few easy clicks of their mouse. Although the AltaVista search result seems daunting, it does little more than indicate there is a significant amount of illegal activity taking place. It does not disclose the real impact piracy is having on the software industry. This impact cannot be measured in web links or the number of people trading commercial programs on an IRC channel, it must be gauged in economic terms, in dollars and cents. The only substantial indicator of how wide-spread the practice of piracy has become is the loss of profit from people illegally uploading, downloading, and trading programs. According to Joshua Bauchner, Internet and Litigation Coordinator for the Software Publishers Association, a private organization that actively pursues solutions to the problem of illicit software use, the business software industry suffered a worldwide revenue loss of $11.3 billion in 1996. Since the industry generated approximately $24 billion, nearly 33 percent of all potential revenue was lost to piracy. In the realm of computers, numbers are factual and absolute. To the central processing unit, which thinks in binary terms, a one is a one and a zero is a zero. Things are either on or off, true of false, black or white. Yet in the real world, numbers can lie. They can be misleading, misrepresented, and generally twisted to model a questionable reality. Therefore, the methodology of any study is open to examination. The annual piracy study conducted by the SPA compares two sets of data, the demand for new software applications and the legal supply of new applications. The ratio between applications installed (the demand) and legally shipped (the supply) equals the amount of software pirated. The methodology appears solid, save a few minor perforations. For one, the study involves only member companies, and does not provide comprehensive representation. Additionally, the process involves a number of estimations, such as the process for calculating the number of new computers shipped during the target year (part of the equation for determining demand). Finally, 1996 revenue loss figures do not include entertainment programs, educational titles, or consumer productivity applications, which would actually push the overall numbers significantly higher. It should be noted, however, that corporate piracy -- companies installing a single piece of software on multiple computers -- impacts bank accounts most severely because it directly reflects lost sales. Not everyone who downloads a copy of a game represents lost revenue, since there is no way the user could possibly purchase (or play, for that matter) the amount of software pirated. Additionally, it is impossible to determine the number of copies of illegally distributed software. Bauchner himself admits that, with the advent of the Internet, software piracy is growing at an exponential, though non-quantifiable, rate. Nevertheless, the numbers remain substantial, and a similar rate of theft would effectively cripple many other industries. What would happen to your favorite local restaurant or video rental outlet if they lost nearly a third of their earnings? Yet like the recording and film industries, which suffer similar losses to piracy, the software industry continues to thrive and expand. Bauchner says this is due in part to the cost being passed on to the legitimate end-user who obtains software through legal channels. "Piracy has always been a factor because of the rewriteable nature of software," he explains. "The cost of theft has been factored into the revenue generating model since day one." Another factor enabling the survival of the software industry against seemingly devastating losses is the extraordinary progress of technology, which has increased the intrinsic and entertainment value of computers, and expanded the market. Ironically, the same advancements in technology that have generated this unprecedented growth have also nourished unparalleled opportunities for piracy. As Bauchner mentioned, digital media can be perfectly copied, without degradation, ad infinitum. In other words, a single piece of software can spawn an exhaustive lineage, and each successive copy is as precisely intact as the original. The ease of distribution is another facilitating factor. Anyone with a computer, a modem, and a telephone line has potential access to a king's ransom in software. Imagine a less-than-virtuous beta tester who decides the game-in-progress he is testing will be eagerly devoured by the warez community. He breaks the game down into manageable chunks and uploads the files to a Bulletin Board System, making it available to hundreds of users. A number of people download the program, distribute it through other channels, including the Internet, and before you can say "reboot," the game developer is privileged to a large, unofficial, world-wide beta-testing team. Zero Tolerance There are potentially severe legal consequences for people actively involved in the illegal distribution of copyrighted software. In late 1992, Congress passed an amendment to Title 18 that instituted criminal penalties for copyright infringement of software. The criminal penalties include imprisonment for up to six years, fines up to $250,000, or both, for the unauthorized reproduction or distribution of 10 or more copies of software with a total retail value of $2500. Interestingly, civil action can also be instituted for injunction, lost profits, and statutory damages, and the evidence required to take action is less than that required for a criminal case. Reads cut and dry, does it not? Copy software illegally and suffer the consequences. Period, amen. Once again, the reality of the situation is slightly different. Unlike other crimes, software piracy is problematic because it is difficult for copyright holders to determine who to pursue for infringement, and to even harder to nail down the standard of liability to which they should they be held. Furthermore, until recently, there have been a number of loopholes through which software pirates have executed impressive legal acrobatics. There are three basic types of software pirates: professional pirates who profit from the illegal distribution of software, corporate pirates who install a single program on multiple company computers in direct violation of the software agreement, and hobbyists who copy software for their own use without paying. Historically, only corporate pirates and those who profited from their actions were in danger of litigation. One infamous case, U.S. v. LaMaccia, saw a BBS operator escape prosecution because there was no money involved in the exchange of copyrighted software. In another case, copyright charges against a Massachusetts of Institute of Technology student who posted free copies of popular software programs on the Internet were dismissed because there was no profit motivation. Courts were simply reluctant to impose penalties beyond the strict boundaries of the law. However, lawmakers are trying to end the salad days of piracy with a new act that removes financial motivation from the equation and broadens the focus of litigation. Under the NET Act, signed into law Dec. 16, 1997, a person who willfully infringes on copyrighted material worth at least $1,000 could be subject to criminal prosecution, even if he does not profit from the activity. The bill was strongly supported by the software and entertainment industries, who claim the change is essential to protecting software, music recordings and other creative products easily pirated over the Internet. Interestingly, the scientific community opposed the bill, saying it might inadvertently criminalize scientific publications available over the Internet, and limit the "fair use" doctrine. There are those who contend the First Amendment to the U.S. Constitution, which in part reads, "Congress shall make no law... abridging the freedom of speech," invites more expansive intellectual property rights than that afforded by current copyright protection laws. According to the Constitution, copyright monopolies are meant to protect the interests of the public by promoting science and the arts; therefore, copyright monopolies fulfill their constitutional obligations by promoting creativity. However, some people argue it is against the public interest and contradictory to intellectual property law to keep software out of the hands of the public by making them proprietary commodities. According to the SPA, however, the First Amendment is not a defense for committing copyright infringement. Copyright laws are not restrictions on free speech, but instead provide protection to speech and expression, and promote creativity and the wide dissemination of ideas. Naysayers who argued the NET law would prove as ineffective in combating piracy as previous codes received a shocking wake-up call in late-February when the SPA reached a settlement in a civil copyright infringement lawsuit involving Internet-based piracy. According to the SPA, the defendant made available on his web site cracks (small programs that leapfrog copyright protection schemes), serial numbers, and a number of commercial programs. No matter that everything was available for free, the suit was filed after an exhaustive seven month investigation. For those of you convinced the entire process involved trivialities, consider this: The plaintiffs consisted of the SPA and several well-established software companies, including Adobe Systems, Claris, Corel, Intuit, and Macromedia. Additionally, the defendant, who agreed to refrain from further infringements, must pay damages totaling $180,000. To assume the software industry is not serious about battling piracy would be like comparing the Declaration of Independence to a Get Out of Jail free card. Although the SPA targets all forms of piracy and has filed lawsuits for each type on behalf of their members, Bauchner says the organization is still more interested in pursuing online distributors than end-users who download software, cracks and serial numbers. The theory behind holding operators responsible is they are the ones who determine what is available and the manner in which it is distributed. Hobbyists are simply too numerous to pursue on a case by case basis, and their activities are too subtle to police. Where is the less-than-ubiquitous federal government when one friend passes a copy of a new game to another? In Washington, D.C., of course. To combat this level of activity, the SPA is relying on a comprehensive educational program that includes web-based instruction and on-site training seminars. "We have a program which balances education and enforcement," Bauchner explains. "Although we won over $2 million in settlements last year, there is always room for improvement. Our educational efforts span the globe, and the Certified Software Manager course is taught world-wide." The purpose of all this preliminary legal and statistical explication is not to hasten through it so I can sermonize about the sins of piracy; rather, I want to firmly establish how consequential this issue has become. The next article in this series will offer an in-depth analysis of the warez culture. Who pirates software, and why? What is their response to the maneuvering taking place to eliminate their favorite pastime? You may surprised at what they have to say. =============== Digital Anarchy: Part Two of an Analysis of Software Piracy Written by: David Laprad The mass media in this country want us to think in two dimensions. While many forums for intelligent, and often entertaining, social discourse exist, the primary thrust of the mainstream media is to present issues, and the corresponding schools of thought, as inherently polarized. According to this elementary manner of thinking, you are either a racist or open to ethnic diversity; you are either sexist or supportive of fundamental rights, regardless of gender; and you are either a software pirate or a Bible-thumping, halo-toting, law abiding citizen. Americans have been unwittingly subjected to a dumbing down of content because things are supposedly easier to digest when they have been refined and processed, and all opportunity for personal critique removed. Well, I have been studying software piracy and the warez culture for nearly two months, and I feel like throwing up. My gullet has been crammed full of laws, statistics, and moralizations, mostly by well-intentioned people who either have a financial stake in the software industry or have chosen to take a strong moral stance against piracy. Do not get me wrong. I understand the motivations of people who work within the industry and earn a living from their craft. I am employed by a large video rental outlet, and would not want potential customers telling me that, if they like the film they are taking, they will pay for it upon return. If this became standard practice, I would be out of a job tomorrow. Additionally, I applaud people for taking a public stand regarding an issue for which they hold unwavering convictions. The only problem is, their point of view has never lacked for representation within the mainstream media. If you have ever read an article on software piracy, you should clearly understand it is illegal. On the surface, their views seem to be all about mom, baseball, and apple pie because they adhere to the law, but they are actually quite radical. True, the government has placed strict legal boundaries on software use, and with good reason. Who would pay for a program that is freely available, and how many people would devote their considerable skills to a profession from which they would receive no remuneration? Yet imagine a continuum of opinion defined by two extremes. At one end are the legal precepts under which the software industry operates, and at the other are software pirates, who welcome any and all faultfinders to kiss their collective ass. Under the imposing weight of intellectual property and copyright laws, public opinion is understandably tilted in favor of the software industry. Although the mainstream press generally presents this image as absolute, there is more to software piracy than meets the casual eye. Yes, two warring factions are established at fundamentally opposed fronts, yet other points of interest exist along the continuum. In part one of this series, I explored the empirical impact of software piracy and the legal restrictions against the warez community. While I will not execute a complete 180 degree turn and condone software piracy, there are a number of interesting -- and valid -- arguments that dispute the perceived negative impact certain types of piracy have on the industry. Why Does the Sun Rise in the East? Allow me to ask a question that, on the surface, has an obvious answer. Why do people pirate software? The simple response is free programs, and that is a strong motivating factor. Another oft quoted incentive is the relatively high price of software, which places many titles out of the financial reach of many users, and the risk of purchasing a title from a store with a less-than-forgiving return policy. However, there are other, less obvious reasons. Free games are great, but what about other human motivating factors such as popularity, belonging, and power? They play an important role as well. At this time, I would like to introduce Matt. He is a real person, though his name has been changed for this article. Matt has been dipping into the warez scene for nearly ten years, and was once a part of a large hacking and cracking group. He started out by trading games on the Commodore 64, back in the days when a 300 baud modem was cutting-edge technology, and now downloads anywhere from five to ten programs a week via the Internet. Considering his extensive involvement with the warez community, Matt is in a unique position to comment on the motivations of its citizens. He openly admits the number one reason for getting into piracy is free games ("You can't beat that!"), but suggests power, popularity, and the sheer challenge and thrill of cracking someone else's code are additional enticements. "People get into warez for many reasons," he explains. "For some, it is the feeling of power and the quest for fame. They enjoy logging onto IRC and bragging about having all the newest software before it is released, without having paid for it. This is important to teenagers, who make up a large part of the warez population. Another reason is that software piracy is forbidden. Being part of an underground organization plays to the rebellious nature of teenagers. Once they are involved, it is hard to turn back." It may sound like a cheesy, ripped-off line from Star Wars ("Once tempted by the Dark Side, it will forever rule your destiny!"), but there is truth in what Matt is saying. Social belonging, being an integral part of something larger than yourself, is a basic, human need. Of course, the activity involved is clearly illegal. One would be hard pressed to extol the advantages of being part of an inner city drug gang simply because it imparts a sense of reception. Then there is the challenge and thrill of hacking and cracking code, which Matt says attracts aspiring programmers to the scene. Crackers are talented programmers in their own right. They can rip a game right off the CD and make it work, slaying elusive code references to CD calls, forcing a title to work without its cutscenes, and paring it down to something distributable over the Internet. Just to give you an idea of what they have access to and how fast they work, LucasArts' yet-to-be-released strategy title Rebellion was cracked early Sunday morning, March 8; it had gone gold Saturday, March 7. Although they should understand the inherent value in programming and the need for compensation, there is no moral predicament. They are releasing bits and bytes, and believe if someone cannot afford the game they are cracking, no one is getting hurt. There is no profit, other than prestige, in what they do, so they operate purely on reputation. Cracking groups offer an interesting glimpse at the social dynamics of the warez community. For instance, they engage in fierce competition that is comparable to being in a gang, or taking part in any other activity where competition is involved. The goal is to defeat opposing groups by cracking a game and getting it distributed before anyone else. In fact, groups are officially ranked, not entirely unlike the formal competition standards used by a professional sports organization. They are scored based on the quality of their releases, the number of releases, the amount of fixes required to get their cracks working, and more. Groups even have official names, such as RAZOR 1911, Paradigm, and Divine. They include an .NFO file, which is essentially group-gang propaganda that includes the aliases of each member and bashes everyone else on the scene, with each release. The antagonism is all about prestige and power. Juice. There is another motivational factor that, surprisingly, most pirates abhor -- money. While conducting research for this series, I spoke with a number of people heavily engaged in warez, and each and every one expressed intense dislike for people who pirate software for profit. Apparently, it cuts away at the foundation of their community, which is freedom of exchange. Matt surprised me by saying, "I think it is wrong to copy and sell pirated copies of software. This is something I have never done, and of which I firmly disapprove. "True pirates are not driven by money," he continued. "It is simply the thrill of the game most people are after. Just being a part of something is enough. Plus, you are getting software for free, so there is no point trying to make money. We are not trying to put programmers and retailers out of business; most of us are just here to have fun. We do not see ourselves as doing anything wrong." The warez community is weird that way. A Thief by any Other Name The popular opinion regarding piracy is that it is theft. Hence, when someone downloads a crack, a serial number, or a commercial software program, they are stealing. Their actions directly translate into lost profits for the developer, who must then raise prices at the sell-through point to amend the difference. In other words, when Joe Warez downloads a copy of the latest zero-day delicacy to hit the warez channels, someone gets cheated out of money. It is true there are people who download software they would otherwise have purchased. When the shareware version of Apogee Software's Death Rally was released, a college friend and I wasted plenty of computer lab network CPU cycles playing the game. We each promised to purchase a copy of the full game so we could continue our obsession. A few days after placing my order, my friend proudly announced he had downloaded the full version off the Internet, and would not be "forced to waste [his] money on the CD." I remember being angry, and actually sent the publisher an anonymous registration. Yet is it true that a one-to-one correlation between pirated software and lost sales exists? Even the most ardent opponents of software piracy would argue no. True, a systems administrator for a large business who installs a single copy of Microsoft Word on multiple computers creates a very tangible set of lost sales; as I stated in part one, illicit business software practices hit bank accounts harder than any other form of piracy. But what about the student, who under no circumstances would be able to afford a copy of the program? When he installs the word processor on his computer, what has the developer lost? Enter Michael, a 21-year-old graphics student who claims he would not have acquired the skills he has today were it not for the pirated software he used to learn his craft. He is also a real person whose name has been changed. "I am doing very well in life," he says, "but there is no way in hell I would be able to do the graphic work I do now if I had not pirated Photoshop or Lightwave. Those programs cost more than I could have dreamed of paying until a year ago, yet I knew how to use them three years ago." Michael admits piracy is wrong because it is illegal, but suggests it may have a contingent purpose. "It gets the tools in the hands of people who cannot afford them," he clarifies. "Eventually, I will purchase a licensed copy of both programs, because I have gained skills through practice. I pay for what I find worthy of money. There are many people, like myself, who want their careers to be legitimate." That said, you will not find any grateful concessions from software developers, who claim a thief by any other other name is still a thief. Todd Hollenshead, CEO of id Software, agrees that while revenue loss for a title is less than 100 percent of all pirated copies, the fact is only relevant in estimating the economic impact of piracy. According to him, there are no public policy implications whatsoever. "Software piracy is an unacceptable practice," he maintains. "There is never a reason or excuse for doing it. The intention of buying it later is not a persuasive argument. If you robbed a bank with the intention of repaying the money with interest, should you not be arrested?" Michael, who has an extensive network of contacts within the warez community, also admits to pirating games, including id Software's Quake 2. Yet he claims he will purchase a title if he finds it has personal value. "Games are almost becoming film-like in terms of the talent and work that goes into creating them," he says. "There are people who spend two to three years creating a title. They deserve my money, so when I can afford it, I pay for games I like." Matt echoes the remarkable assertion that many pirates actually purchase the software they find useful. He claims some people use warez as a kind of full-version demo to determine if the game would be a worthy addition to their permanent collection, an important consideration when one is on a limited budget. Additionally, he says many people purchase the legitimate versions to view the cut scenes and listen to the music. "After downloading a few games and applications for free, shopping at retail stores becomes an entirely new experience, knowing you could download the same programs for free," he explains. "Nevertheless, many pirates, if they like a game or application enough, will scrape together the money to purchase it." Warez Your Software? Perhaps you have been reading this article and wondering what all the fuss is about. You have curiously tested the World Wide Web search engines and come up with squat in the way of free software. Sure, you found plenty of links screaming about gamez, appz, serial numbers and more, and perhaps even tried downloading one of the meager offerings, only to scoff at the hopelessly slow download speeds. Do not believe the hype about the web; to quote Matt, "The web for piracy sucks." He claims the only sites that flourish are those that provide daily listings of pirate FTP sites; there is even a Warez Top 50 page that allows pirates to vote on which sites carry the finest and most up-to-date content. Why is there so little downloadable content on the web? It is too public. Too traceable. The real Mafia deals within a complex, far-reaching underground network that would have the good people on Capitol Hill rending their carefully fashioned piracy decrees in frustration. A typical evening for Joe Average Warezboy, age 15, might go like this: He logs onto Undernet IRC and joins a channel called #freewarez. With no concern for privacy, he quite flagrantly broadcasts a message requesting Eudora Pro and advertising that he has information on where other software can be found. After what may seem like an eternity, someone responds. They trade addresses for the software they are looking for, then rush off to download the programs before they disappear. Disappear from where? Company FTP sites, for one, T1 and T3 sites where people with access have made a default directory with upload and download access. Typically, neither trader owns the site from which they are downloading. They are little people, yet they serve a purpose in the overall scheme. After months of being courteous to the people he trades with, JAW finds someone who appreciates his crisp, professional attitude after dealing with a ton of freaks and back stabbers. He begins to develop a group of friends, and establishes trust. They work well together, stockpiling the latest material and exchanging it with other groups. JAW starts trading with a higher breed, the T1 and T3 owners, white-suited tycoons who somehow have access to ungodly bandwidth. These aristocrats, who might have administration access at a college or a technology job at a clueless corporation, no longer have to work for their software. In exchange for access to their site, loyal users upload all the latest narcotics. Michael, who can be considered an aristocrat, likens the warez community to the streets, with two bit junkies screwing each other over for chump change. After several interim levels, there are the crime lords, who go dancing, drink very old wine, and bask in the sun while street scum scramble about doing the dirty work. Obviously, there is more interaction taking place than accessing Yahoo!, typing "warez," and clicking the mouse a few times. There are substantial social dynamics at work, including ideological differences. For example, some pirates subscribe to a very idealistic, almost moral philosophy that warez should be free, and establish channels that openly broadcast the addresses of sites containing covetous material. Of course, there are other mediums of exchange, including CD-ROMs that are pressed and sold at considerable discounts through anonymous hotmail accounts. Recently, pirates have been employing an innovative and publicly available program called ICQ, an Internet communications program that allows for frighteningly efficient communication between pirates. People in the loop can learn about new sites instantly. One reader told me that pirates who deal on the web are clueless, while people who use IRC are "simply rookies." Invasion of Piracy Software piracy will not end soon. Pirates, lawmakers, and software developers have been in contention since day one, and no amount of legislation is going to resolve the conflict. While lawmakers can certainly make a few, token examples of prominent pirates, the problem is too widespread to be effectively policed. Even with the Software Publishers Association winning over $2 million in settlements last year, and despite the fact that piracy rates are slowly decreasing due to increased pressure on foreign governments, piracy remains widespread. Matt claims the warez community is not overly concerned with the NET Act, a new law aimed at imposing criminal penalties on copyright violators. "It will not change many things," he says. "Some people, mostly veteran traders, are going to be more cautious, while the occasional novice will screw up and get caught. The act will probably be targeted at large scale operations, like FTP courier sites, as opposed to the small, everyday hacker. The government is not going to spend the money needed to track down every kid who has copied something off the Internet. "Plus, people will find loopholes around things if they are caught," he continues. "Just like always, there is a question or two that will have to be resolved. For example, the act states you must 'willfully' possess or make and distribute illegal copies. This term can be twisted around since it is used in such a vague manner. Someone who is busted for downloading the complete version of Quake 2 might say, 'When I downloaded it, the site said it was the demo, so I did not realize I had the entire game.' Anyway, the act makes software companies sleep better at night, so who is complaining?" Success may result from technological innovation, or a rethinking of the revenue generation model. Electronic software distribution, in which programs reside on a remote server and are used on a pay-per-use arrangement, is currently being developed, and advertising and sponsorships may be a viable alternative to the high cost of software. Finally, software pirates should closely analyze their reasons for participating in an illegal activity, and pursue alternatives when applicable. When confronted with an ethical decision, the mind will rationalize its response. People who regularly download illicit software accept it as normal, and can easily justify their actions. There are only two alternatives available to people who download games and applications in lieu of a purchase; if you intend to permanently retain a program, shell out the money. Otherwise, cease and desist. However, could there be legal alternatives for people like Michael, who is nurturing skills he would otherwise be unable to develop? To quote a reader, "Educational discounts do not cut it." Dare we suggest a compromise between the developer and the end-user who is unable to afford the software, yet would benefit from its application? The third and final installment of this series will explore pressing international issues. Recently, the Supreme Court of Argentina set a precedent that essentially makes software piracy legal in that country. While it seems incredulous, the decision is an outgrowth of complex local and international dynamics. After all, not everyone is concerned with the intellectual property and copyright laws of the United States, and a server located in Europe is hardly under the jurisdiction of American law or the SPA. Join me as I tiptoe around a cumbersome analysis of international laws and treaties by discussing the issues with Karthik Bala, president of Vicarious Visions.