Software piracy, the Grokster file-sharing case and big changes in telecom will make news next year. The stage is set for major debates over intellectual property and access to technology.
Goodbye, Napster. Hello, Grokster.
Next year, technology will continue breaking out of its molds, but not without a struggle over who controls intellectual property — at home and abroad.
As technology watchers look to 2005, they see more technologies unleashed from their shackles, with the promise of greater competition between phone companies, cable companies and wireless service providers. And the lines are blurring.
Telephone connections through the Internet and Internet connections through a television could become more common. Phone companies will offer television, and wireless carriers are rolling out high-speed Internet that could replace DSL or cable lines.
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Working or playing wirelessly is likely to get even easier.
“Call it the continuing saga of untethering America,” said Richard Nespola, chief executive of telecom consultancy Management Network Group.
“Not only is the consumer market more mobile, you’re now seeing the enterprise market become more wireless-oriented,” he said.
Yet the stage is set for a few major debates next year over intellectual property and access to technology.
“2005 is a year where more attention worldwide is focused on the state of market openness and intellectual-property protection,” said Brad Smith, senior vice president and general counsel at Microsoft.
The Supreme Court has agreed to hear two cases that will have far-reaching consequences for the industry and consumers.
In the Brand X case, the court will consider whether cable companies should be forced to open their lines to Internet competition. Broadband Internet service typically relies on cables to the home owned by cable-TV stations, lines that so far they have not had to share.
Lack of competition in that market is to blame for the United States falling to 15th in the world in broadband adoption, argues Mark Cooper of the Consumer Federation of America. U.S. consumers pay 30 times as much as Japanese and 10 times as much as Koreans for high-speed Internet service.
The Federal Communications Commission and the 9th U.S. Circuit Court of Appeals in San Francisco have clashed over the issue. The FCC repealed part of the Telecommunications Act of 1996, deciding not to regulate cable companies the same way it does telephone companies.
The Telecom Act is slated for revision next year, a process that might loosen restrictions further. The FCC already stepped in to prevent states from regulating Internet-based phone services.
Liability in file-sharing
Another key case the Supreme Court will hear involves the Grokster file-sharing service, which allows people to share any kind of digital file over the Internet, including music and video. At issue is whether Grokster can be liable for illegal file-sharing of copyright works by its users.
The entertainment industry claims companies that offer peer-to-peer file-sharing services, such Grokster, Morpheus and Kazaa, should be responsible for any abuse of the technology.
But so far, courts have relied on the 20-year-old Sony Betamax standard, in which the Supreme Court ruled that using a new technology to infringe copyrights did not justify a ban on that technology, since it could also be used legally.
Whatever the outcome of the Grokster case, “The Supreme Court is going to define the rules of the road that impact how the Internet continues to evolve over the next 10 to 20 years,” Smith said.
Free wireless access
In cities, another debate is emerging between free wireless Internet access or paid wireless access. That debate could get a lot louder next year.
More cities are considering the path taken by Philadelphia this year to provide free or nearly free wireless Internet access as a kind of public utility.
Telecom companies have fought such projects as an unfair use of tax dollars to compete with their commercial services.
Such free services could erode the commercial model of companies like Bellevue-based T-Mobile USA to offer paid access at Starbucks cafes.
China’s growing clout
As the debate goes on over wireless access here, tech watchers expect another kind of pressure from abroad: the growing influence of China.
The huge problem of intellectual-property piracy in China continues to take a toll on tech companies, and some predict the issue could become a bigger thorn in relations between the U.S. and China.
At the same time, Chinese tech-policy leaders increasingly demand a role in setting global standards for everything from wireless encryption to radio frequency identification (RFID).
More Chinese companies like Lenovo, which recently acquired IBM’s PC business, are asserting themselves in the global marketplace. In 2005, U.S. technology firms that might not have paid much attention to China will have to decide how to compete or how to cooperate.
Kristi Heim: 206-464-2718 or email@example.com