[Federal Register Volume 69, Number 203 (Thursday, October 21, 2004)]
[Notices]
[Pages 61842-61845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23574]


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FEDERAL TRADE COMMISSION


Public Workshop: Peer-to-Peer File-Sharing Technology: Consumer 
Protection and Competition Issues

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Notice announcing public workshop and requesting public comment 
and participation.

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SUMMARY: The FTC is planning to host a public workshop, ``Peer-to-Peer 
File-Sharing Technology: Consumer Protection and Competition Issues,'' 
to explore consumer protection and competition issues associated with 
the distribution and use of peer-to-peer file-sharing technology.

DATES: The workshop will be held on December 15 and 16, 2004, at the 
Federal Trade Commission's Satellite Building located at 601 New Jersey 
Avenue, NW., Washington, DC. The event is open to the public and there 
is no fee for attendance. Pre-registration is not required. Additional 
information about the workshop will be posted on the FTC's Web site at 
http://www.ftc.gov/bcp/workshops/filesharing/index.htm.
    Requests to Participate as a Panelist: As discussed below, written 
requests to participate as a panelist in the workshop must be received 
on or before Monday, November 15, 2004. Persons filing requests to 
participate as a panelist will be notified on or before Monday, 
November 29, 2004, if they have been selected. For further 
instructions, please see the ``Requests to Participate as a Panelist in 
the Workshop'' section below.
    Written an Electronic Comments: Regardless of whether they are 
selected to participate, persons may submit written or electronic 
comments on the topics to be discussed by the panelists. Such comments 
must be received on or before Monday, November 15, 2004. For further 
instructions on submitting comments, please see the ADDRESSES and the 
``Form and Availability of Comments'' sections below. To read our 
policy on how we handle the information you submit, please visit http://www.ftc.gov/ftc/privacy.htm.

ADDRESSES: Comments and requests to participate as a panelist in the 
workshop filed in paper form should be mailed or delivered, as 
prescribed in the ``Form and Availability of Comments'' sections below, 
to the following address: Federal Trade Commission/Office of the 
Secretary, Room 159-H (Annex B), 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Because paper mail in the Washington area and at 
the Agency is subject to delay, please consider submitting your 
comments via electronic mail. Comments and requests to participate 
filed in electronic form (except comments and requests containing any 
confidential material) should be sent, as prescribed in the ``Form and 
Availability of Comments'' section below.

FOR FURTHER INFORMATION CONTACT: Elizabeth Delaney, (202) 326-2903, 
Bureau of Consumer Protection; Theodore Gebhard, (202) 326-3699, Bureau 
of Competition; or Hajime Hadeishi, (202) 326-2320, Bureau of 
Economics. The above staff can be reached by mail at: Federal Trade 
Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580. A 
detailed agenda and additional information on the workshop will be 
posted on the FTC's Web site at http://www.ftc.gov/bcp/workshops/filesharing/index.htm by Monday, November 15, 2004.

SUPPLEMENTARY INFORMATION:

Background and Workshop Goals

    The FTC's workshop, ``Peer-to-Peer File-Sharing Technology: 
Consumer Protection and Competition Issues,'' will continue the 
Commission's long-standing efforts to assess the impact on consumers 
and businesses of new and significant technologies, such as peer-to-
peer (P2P) file-sharing technology. P2P file-sharing technology 
provides individuals with the ability to share files, including music, 
video, or software files, with other users. The files do not reside in 
a central location, but rather are stored on the hard drives of the 
users of the software.\1\ Users download particular file-sharing 
software that gives the user access to selected files on the computer 
hard drives of other users on the same P2P file-sharing network. Users 
may also place files that they have labeled into a shared folder on 
their hard drive, thereby making these files available for sharing with 
users of the same network. By eliminating the need for a central 
storage point for files, P2P file-sharing technology allows for faster 
file transfers and conservation of bandwidth.
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    \1\ See ``File-Sharing Programs: Peer-to-Peer Networks Provide 
Ready Access to Child Pornography,'' General Accounting Office 
Report to the Chariman and Ranking Minority Member, Committee on 
Government Reform, U.S. House of Representatives, Feb. 2003, at 21-
24; and ``P2P Fear and Loathing: Operational Hazards of File Trading 
Networks,'' John Hale, Nicholas Davis, James Arrowood, and Gavin 
Manes, Center for Information Security, University of Tulsa, Sept. 
2002, at 2.
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    There appear to be many current and potential business and consumer 
applications for P2P file-sharing technology. However, some 
commentators have pointed out that perhaps the most common use has been 
the exchange of copyrighted materials, including music, movies, video 
games and software.
    Downloading and using current P2P file-sharing software programs 
can create risks for users.\2\ When users download P2P file-sharing 
software programs, they may download other, unwanted, software, such as 
``spyware'' or ``adware,'' with the P2P file-sharing software 
program.\3\ Some users may not understand how to configure properly the 
P2P file-sharing software's ``shared folder'' and may inadvertently 
share sensitive personal files residing on their hard drives.\4\ Users 
also may receive files with viruses and other programs when sharing 
files using P2P programs, and these viruses could impair the operation 
of their personal computers.\5\ Individuals may receive or redistribute 
files that may subject them to civil or criminal liability under laws 
governing copyright infringement and pornography. Finally, because of 
the way some files are labeled, users,

[[Page 61843]]

including children, may be exposed to unwanted and disturbing 
pornographic images.\6\
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    \2\ The FTC has developed on online brochure to provide 
consumers with information about the risks associated with P2P file-
sharing software. See Federal Trade Commission, Consumer Alert: 
``File-Sharing: A Fair Share? Maybe Not,'' July 2003, available at: 
http://www.ftc.gov/bcp/conline/pubs/alerts/sharealrt.htm.
    \3\ See ``File Sharing Programs and Peer-to-Peer Networks 
Privacy and Security Risks,'' Staff Report Prepared for Rep. Tom 
Davis and Rep. Henry A. Waxman, United States House of 
Representatives Committee on Government Reform, May 2003, at 9-10; 
and ``P2P Fear and Loathing: operational Hazards of File Trading 
Networks,'' supra note 1, at 2.
    \4\ See ``File Sharing Programs and Peer-to-Peer Networks 
Privacy and Security Risks,'' supra note 3, at 5-9; and ``Usability 
and Privacy: A Study of Kazaa P2P File-Sharing,'' by Nathaniel S. 
Good (HP Laboratories) and Aaron Krekelberg (University of 
Minnesota), June 2002.
    \5\ See ``File Sharing Programs and Peer-to-Peer Networks 
Privacy and Security Risks,'' supra note 3, at 11-12; and ``P2P Fear 
and Loathing: Operational Hazards of File Trading Networks,'' supra 
note 1, at 2.
    \6\ See ``Children's Exposure to Pornography on Peer-to-Peer 
Networks,'' Staff Report Prepared for Rep. Tom Davis and Rep. Henry 
A. Waxman, United States House of Representatives Committee on 
Government Reform, Mar. 2003, at 7-11; and ``File-Sharing Programs: 
Peer-to-Peer Networks Provide Ready Access to Child Pornography,'' 
supra note 1, at 14-15.
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    The FTC's workshop is intended to provide an opportunity to learn 
how P2P file-sharing works and to discuss current and future 
applications of the technology. It will discuss the risks to consumers 
related to file-sharing activities. The workshop also will address 
self-regulatory initiatives, technological efforts, and legislative 
proposals. It will discuss competition issues such as the models for 
distributing music and the impact of file-sharing on copyright holders.
    Questions to be addressed at the workshop may include:

A. Use of P2P File-Sharing Technology

    1. What are the differences between P2P file-sharing technologies 
and technologies that use central server or other models?
    2. What are the different models of P2P file-sharing technology? 
Please describe the differences between the models and the applications 
that use each model.
    3. Who uses P2P file-sharing technology or programs? What 
proportion of users are children, teenagers or college students? Are 
these proportions likely to change with the development of future uses 
of P2P file-sharing technology?
    4. What must consumers do to uninstall P2P file-sharing software 
programs? Are there P2P file-sharing programs that are more difficult 
to uninstall than others?

B. The Role of P2P File-Sharing Technology in the Economy

    1. What are the current commercial, scientific, and/or industrial 
uses for P2P file-sharing technology?
    2. Can current P2P file-sharing technology enhance business and 
industrial efficiency? If so, how? How are the benefits different from 
those available under a central server model?
    3. What are the future commercial, scientific, and/or industrial 
uses for P2P file-sharing technology?
    4. How will these future uses of P2P file-sharing technology 
enhance business and industrial efficiency? How are these benefits 
different from those that would be available under a central server 
model?
    5. If P2P file-sharing technology will enhance business and 
industrial efficiency, what effect will that have on the nature and 
extent of competition in the economy?
    6. What are the current business models for P2P file-sharing 
software companies? What are the anticipated business models for the 
future?
    7. What is the likely future competitive and/or economic impact of 
P2P file-sharing technology across the economy as the technology 
improves (speed, amount of data that can be cost-effectively 
transmitted, etc.) and as the number and variety of P2P file-sharing 
applications expand over time? Which industries will be most likely 
affected? How will they be affected? How will P2P file-sharing 
technology change competition in affected industries in the future?
    8. To what extent does P2P file-sharing technology have the promise 
to impact the manufacture, inventorying, and delivery of goods and 
services?

C. Identification of P2P File-Sharing Software Program Risks

    1. What are the risks to consumers caused by the downloading and 
use of P2P file-sharing software?
    2. Does the use of P2P file-sharing software pose a security risk 
to the personal information of consumers? If so, what is the nature and 
extent of this risk? Can consumers avoid this risk? Is this risk 
different from the risk that a central server model or other models 
pose? If so, how?
    3. Does the use of P2P file-sharing software inadvertently expose 
consumers, particularly children, to pornographic or other 
inappropriate materials? If so, what is the nature and extent of this 
risk? Can consumers avoid this risk? Is this risk different from the 
risk that a central server model or other models pose? If so, how?
    4. Does the distribution and use of P2P file-sharing software pose 
a risk to consumers for installing spyware? If so, what is the nature 
and extent of the risk? Can consumers avoid this risk? Is this risk 
different from the risk that a central server model or other models 
pose? If so, how?
    5. Does the distribution and use of P2P file-sharing software cause 
consumers to install adware? Does adware pose a risk to consumers? If 
so, what is the nature and extent of the risk? Can consumers avoid this 
risk? Is this risk different from the risk that a central server model 
or other models pose? If so, how?
    6. Does the use of P2P file-sharing software expose consumers to 
viruses or other malicious code? If so, what is the nature and extent 
of this risk? Can consumers avoid this risk? Is this risk different 
from the risk that a central server model or other models pose? If so, 
how?
    7. Does the installation and use of P2P file-sharing software 
impair computer functionality, such as processing speed? If so, what is 
the nature and extent of this risk? Can consumers avoid this risk? Is 
this risk different from the risk that a central server model or other 
models pose? If so, how?

D. Disclosure of P2P File-Sharing Software Program Risks

    1. What do studies, surveys, or other empirical research reveal 
about the extent to which users of P2P file-sharing software programs 
are aware of the risks associated with these programs? Are there 
differences in awareness between children and adults? Are there 
differences in awareness between teenagers and parents?
    2. To the extent that users are unaware of the risks associated 
with P2P file-sharing software programs, would disclosure requirements 
be an effective method of educating consumers about these risks? If 
disclosures would not be effective, is there a more effective means of 
communicating such information? To whom (e.g., parents, children, all 
users) should the disclosure of risk information be made?
    3. Do P2P file-sharing software programs currently disclose risks 
adequately to users? If not, how could these disclosures be modified to 
make them more effective? What are the costs associated with making 
disclosures more frequent or prominent?
    4. What methods, other than risk disclosures, can be used to 
educate consumers about potential risks associated with P2P file-
sharing software?

E. Technological Solutions To Protect Consumers From Risks Associated 
With P2P File-Sharing Software Programs

    1. What types of blocking and filtering technology exist to protect 
users from the risks associated with P2P file-sharing software 
programs? How do they compare with blocking and filtering available 
with a central server model?
    2. Are existing blocking and filtering programs effective? If not, 
what steps can the P2P file-sharing software industry take to improve 
blocking and filtering technology included with its programs?
    3. What future changes to blocking and filtering technologies might 
enhance the protection of users from the

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risks associated with P2P file-sharing software programs?
    4. What changes to the architecture of P2P file-sharing software 
programs (e.g., the configuration of shared folders or the addition of 
anti-virus software) might reduce the risks associated with P2P file-
sharing software programs for users?

F. P2P File-Sharing and Music Distribution

    1. What are the economic models of music distribution that use P2P 
file-sharing technology? How is music likely to be distributed in the 
future using P2P file-sharing technology?
    2. How is P2P file-sharing technology different from single server 
downloading sources such as Walmart.com?
    3. To what extent do P2P file-sharing software programs currently 
compete with pay-per-download services such as iTunes? Would existing 
or future technology enable copyright holders to be compensated when 
users of P2P file-sharing software programs transfer copyrighted files? 
If so, what would be the effect on competition?
    4. Does P2P file-sharing technology lower the cost of music 
dissemination? If so, how much? What do the data show?
    5. Are record labels willing to distribute music through P2P file-
sharing? Why or why not?
    6. Is there empricial support for P2P file-sharing technology 
increasing music sales through sampling or greater awareness of 
artists? What do the data show?
    7. Are music files on P2P file-sharing networks being intentionally 
``polluted'' or ``corrupted''? What effect does the intentional 
pollution or corruption of files have on P2P file-sharing software as 
an evolving technology?

G. P2P File-Sharing and Its Impact on Copyright Holders

    1. What is the impact of P2P file-sharing on copyright holders?
    2. Is it possible to measure downloading of copyrighted materials 
by users of P2P file-sharing programs? If so, how would such a study be 
designed?
    3. Can P2P file-sharing program providers effectively protect 
against copying in violation of copyright laws? Can P2P file-sharing 
program providers protect against content degradation? What effect 
would such protective measures have on consumers and competition?
    4. Is there technological capability for the P2P file-sharing 
technology industry to implement a system that either prevents the 
unauthorized sharing of content or only permits the sharing of content 
when there is compensation to the copyright holder?
    5. Will technological changes allow content providers to protect 
their copyrighted materials from infringement by P2P file-sharing 
software program users? If so, what effects would these changes have on 
competition and consumers?
    6. Would consumers and competition benefit from or be harmed by 
industry-wide standards for the protection of copyrighted materials, 
e.g., encryption or other digital rights management? What, if any, 
information should consumers be given about the effect of these 
standards on their use of copyrighted materials?
    7. Are licensing proposals available that would address the impact 
of P2P file-sharing on copyright holders?

Requests To Participate as a Panelist in the Workshop

    Parties seeking to participate as panelists in the workshop must 
notify the FTC in writing of their interest in participating on or 
before Monday, November 15, 2004. Request to participate as a panelist 
should be submitted electronically by e-mail to 
[email protected] or if mailed, should be submitted in the 
manner detailed in the ``Form and Availability of Comments'' section 
below, and should be captioned ``P2P File-Sharing Workshop--Request to 
Participate, PO34517.'' Parties are asked to include in their requests 
a statement setting forth their expertise in or knowledge of the issues 
on which the workshop will focus and their contact information, 
including a telephone number, facsimile number, and e-mail address (if 
available), to enable the FTC to notify them if they are selected. For 
requests filed in paper form, an original and two copies of each 
document should be submitted. Panelists will be notified on or before 
Monday, November 29, 2004, if they have been selected.
    Using the following criteria, FTC staff will select a limited 
number of panelists to participate in the workshop:
    1. The party has expertise in or knowledge of the issues that are 
the focus of the workshop.
    2. The party's participation would promote a balance of interests 
being represented at the workshop.
    3. The party has been designated by one or more interested parties 
(who timely file requests to participate) as a party who shares group 
interests with the designator(s).
    In addition, there will be time during the workshop for those not 
serving as panelists to ask questions.

Form and Availability of Comments

    The FTC requests that interested parties submit written comments on 
the above questions and other related issues to foster greater 
understanding of these topics. Especially useful are any studies, 
surveys, research, and empirical data. Comments should be captioned 
``P2P File-Sharing Workshop--Comment, PO34517''; must be received on or 
before Monday, November 15, 2004; and may be filed with the Commission 
in either paper or electronic form.
    1. A public comment filed in paper form should be mailed or 
delivered, with two complete copies, to the following address: Federal 
Trade Commission/Office of the Secretary, Room 159-H (Annex B), 600 
Pennsylvania Avenue, NW., Washington, DC 20580. Both the comment itself 
and its envelope should be captioned ``P2P File-Sharing Workshop--
Comment, PO34517.'' If the comment contains any material for which 
confidential treatment is requested, it must be filed in paper (rather 
than electronic) form, and the first page of the document must be 
clearly labeled ``Confidential.'' \7\
    2. A public comment that does not contain any material for which 
confidential treatment is requested may instead be filed in electronic 
form by clicking on the following weblink: https://secure.commentworks.com/ftc-p2pfilesharing/ and following the 
instructions on the web-based form. To ensure that the Commission 
considers an electronic comment, you must file it on the web-based form 
at the https://secure.commentworks.com/ftc-p2pfilesharing/ weblink.
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    \7\ Commission Rule 4.2(d) 16 CFR 4.2(d). The comment must also 
be accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(C).
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    3. The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. Regardless of the form in which they are filed, all timely 
and responsive public comments will be considered by the Commission, 
and will be available to the public on the FTC Web site, to the extent 
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for

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individuals from the public comments it receives, before placing those 
comments on the FTC Web site. More information, including routine uses 
permitted by the Privacy Act, may be found in the FTC's privacy policy, 
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at http://www.ftc.gov/ftc/privacy.htm.

    By direction of the Commission, Commissioner Leibowitz not 
participating.
Donald S. Clark,
Secretary.
[FR Doc. 04-23574 Filed 10-20-04; 8:45 am]
BILLING CODE 6750-01-M