“I am happy and grateful that we do not have to turn away our 20 million users and that we can continue to help artists,” said Shawn Fanning, the 19-year-old creator of Napster. “We’ll keep working and hoping for the best.”

Naspter CEO Hank Barry, who earlier had suggested employees would likely be laid off if the injunction took effect, said on Friday he was “gratified and appreciative” of the appeals court reprieve. “I believe the Napster technology can help everyone involved in music — including artists, consumers and the industry. New technologies can be a win-win situation if we work together on building new models — and we at Napster are eager to do so,” said Barry.

But Hilary Rosen, CEO of the Recording Industry Association of America, called the temporary stay “a disappointment.” She downplayed the significance of the appeals court action, saying that the court “apparently regards this case as the first of its kind, and wants to consider it before any injunction takes effect.” And she expressed confidence that the music industry would be the ultimate victors in the digital download battle.

“It is frustrating, of course, that the tens of millions of daily infringements occurring on Napster will be able to continue, at least temporarily,” said Rosen. “In fact, since the district court issued its order, the illegal downloading of copyrighted music openly encouraged by Napster has probably exceeded all previous records. We look forward to the day when the infringements finally cease.”

Earlier Friday, with the midnight deadline looming for Napster to comply with the injunction that would shut it down, the company called for a “buy-cott” to prove that Napster can sell CDs, not just swap songs for free. Fanning said: “We believe that file-sharing among music fans helps to create a larger community of passionate music lovers, which allows the industry to sell even more music to fans. To prove just how much our users love music — and to show the buying power of such a large group of music fans — we are asking all of our users to join us this weekend for a ‘Napster Buy-cott Weekend.’”

Naturally, the company recommends the work of those artists and bands who have been vocally supportive of Napster, like Chuck D, Marianne Faithful and Limp Bizkit. And it sure wouldn’t make a bad impression on Warner Bros., Sony, Virgin and the dozen-plus other recording companies suing the music start-up for copyright infringement, if Napster’s 20 million users scooped up cartloads of CDs by artists on their labels — even though a mammoth sales blowout would hardly cause the music industry to back out of the suit.

And who knows what fans will do — especially given the confusion about strategy in the pro-Napster camp. Even as Napster is calling for a “buy-cott,” numerous Napster fan Web sites are declaring a boycott.

Meanwhile, Ian Clarke, the creator of Freenet, lashed out against the Recording Industry Association of America’s (RIAA) fight against Napster, declaring it all but futile:

“I think it is ridiculous, and merely delays the inevitable. The RIAA is indeed fighting a losing battle, because they are fighting their own customers. Perhaps next they will attempt to sue the creators of the Internet because it too can be used to ‘pirate’ their music?” he said via e-mail.

“Any legal action against me would be completely pointless since I have no power to ‘shut down’ Freenet. Further, in a fair court, any legal action against me would fail just as legal action against the manufacturer of women’s stockings used in a bank robbery would be thrown-out. I think this sets the stage for a battle between technology and the small-minded people in industry like the RIAA, and technology — as always — will win.”

Ian Clarke, founder of Freenet, a decentralized file-swapping system

I think it is sad that issues of free speech are being ignored in this case; to me it is a free speech issue. All Napster is doing is telling people where they can download MP3s; they are not actually helping in the information transfer itself.

Still, this does demonstrate why it is important for information sharing systems to be decentralized like Freenet to prevent this kind of attack.

Howard A. King, attorney for Metallica, which successfully sued Napster, thereby forcing Napster to block from its service anyone swapping the band’s heavy metal tunes

What this does is clarify what we always thought the law was, so any investment banker or other financial type is not going to invest in a site or technology that does something similar to Napster. I realize that doesn’t encompass what Gnutella is doing, but it certainly gives owners of copyright the ability to bring actions for damages against users and developers — actions that will stop them in their tracks.

But really, I tried using Gnutella and I couldn’t make it work, so I’m not as worried about it as I was about Napster. I spoke to about 20 people who agreed. Of course, anybody who wants to steal music will do it; the diligent pirate will always succeed, but that doesn’t mean we should allow it to become mainstream.

Ultimately, I think people will do what’s right. It’s hard in the face of free brownies to do the right thing, but if you have to find the recipe and cook them, you might just do what’s right, which is pay for them.

For now though, at least we’ve locked a ruling in place. I’m hoping this really does encourage record companies [and] technologists — or 19-year-old geniuses — to develop technologies that will allow the digital distribution of music in a way that compensates the owners. That’s the real goal.

Chuck D, founder of Rapstation.com and frontman for legendary rap group Public Enemy (from the Rapstation site)

“If Patel was the key judge at the last turn of the century, we’d still be relying on horses and buggies and trains to get around. Stopping the process of file sharing is like trying to control the rain.”

Erwin Drake, former president of the Songwriters Guild of America

I am a career songwriter since 1942. The songs that I have either created alone or in collaboration with others are: “It Was a Very Good Year,” “I Believe (For Every Drop Of Rain That Falls),” “Good Morning Heartache,” “Perdido,” “Tico Tico,” “Al Di La,” “A Room Without Windows,” and others. The fact that these songs still survive is my only provider of income. I was president of the Songwriters Guild of America in 1976 when we won a new copyright law in Washington that extended the term of copyright protection and raised the royalty rates on recordings of our songs.

What Napster is doing is in defiance of that law which carries a fine and, in some cases, a jail sentence. Napster is supplying burglar tools to a public that is not aware of the circumstances. That same public, if it can not afford a car or a home, knows it can not have them. They can not download that car or home. That would be theft if it were technically feasible. Intellectual property is entitled by law to the same measure of protection.

Glenn Reynolds, lead singer of techno band Mobius Dick and a law professor at the University of Tennessee:

Historically there’s nothing new about this. When printing first appeared on the scene, there were a lot of efforts to control it, and, in fact, our current system of intellectual property law is built on a reaction to the abuses that went on in the British printing industry. When the British kings licensed printers in the early 17th century, they granted a monopoly. Unlicensed printers were prosecuted in the Star Chamber, a special court with extraordinary powers, and without the protection of trial by jury. This was a way for the crown to protect itself from people publishing things they didn’t like, but also a way to extort political graft, which is a phenomenon you see today with the Motion Picture Association of America (MPAA) and Congress.

But one of the big results of prosecuting printers in Britain was that a lot of them moved to the Netherlands. They decamped in large numbers and their descendants are still there. There are huge publishers still there directly because of the British licensing of printers.

So basically they built themselves a competitor. And now, there’s a risk that this could happen again. The record industry is so hot to shut down Napster and the MPAA is so hot to shut down new technologies, but they’re just going to create a bigger problem. These technologies are going to be replaced by new technologies that are much more difficult to draw revenue from. What you’re going to find is new technologies designed explicitly to transfer files without paying anybody.

Intellectual property was not a given right. It’s not in the Constitution. It’s just a tool of social policy — not to make people rich, but rather to promote innovation in the science and the arts. When the system is designed not to further this purpose — just to keep people rich — it will lose legitimacy. If copyright law itself comes to be seen as a tool for fat cats to oppress the masses (and you’d be surprised at the kinds of people I hear saying exactly that these days) then there may be a backlash that will harm the record companies even if they somehow manage to deal with the Napster phenomenon. And, frankly, that’s fine with me.

Jack Valenti, president of the Motion Picture Association of America

I think it’s a great triumph for copyright. The judge in clear and unambiguous language made it very clear that Napster wantonly violated copyright law. I don’t think this is the end but it sends a message that copyright will not be ignored. It shows that the basic principle of copyright protection — as made clear in the Constitution — is very important.

Does it mean everyone lights a bonfire and goes home? Well, for our industry, we still have a window of time before piracy becomes rampant. Now, our companies are preparing business models to go online with movies to make them available at a fair and reasonable price.

We think the technological advancement that’s going on is fantastic. It opens up a whole new global marketplace, but you cannot operate in an atmosphere where everything is free. If that happens, why would anyone bother to create? You just can’t sit inert and let everyone take for free.

Of course, technology is going to go forward whether Napster exists or not. No law case is going to stymie technology, but we want to use that technology. That’s why we’re working with some of the smartest people in the technology world. There are a lot of people out there who are ready to help, willing to help legitimate technology defeat illegitimate. In the end, technology will defeat technology. There will be technology that can interrupt how things should be, but there will also be people on our side who will create technology that will baffle that illegitimate kind of innovation.

Dan Rodrigues, president of Scour, a Napster-like multimedia search engine that was sued last week by both the music and film industries

I’m disappointed. Although it’s still a little unclear to us how that affects Scour or if it does, [Judge Patel's ruling] is a loss for music fans — on the conceptual level, and even more broadly than just in terms of music; file-sharing and user-to-user exchanges should not be deemed illegal. And ultimately they won’t be seen as that. I’m disappointed for consumers, but I think this is just a short-term setback. This is all par for the course. In the name of technological progress, there will always obviously be challenges along the way. But consumers have shown that there’s a massive demand for this kind of activity. I don’t think it’s going away. Eventually, the music industry will catch on. The proposition of having a massive number of users connected in one big community provides a pretty compelling platform for their product. They will embrace it because it works for consumers.

Shawn C. Reimerdes, a former defendant in the DeCSS case, and lead developer of Yo!NK, a distributed file sharing application that borrows from both Napster and Gnutella technology

This is a total surprise. I was just on IRC when the announcement was made. Everybody is asking “What can I use to replace Napster on Friday?”

This changes a lot of things now. I assume the RIAA will not sue the second-generation file share apps for the moment, [and] Napster will be a nice buffer.

I think there will be a backlash as we see Napster develop into a real company, they want to be a puppet to the RIAA and this will hurt their image. People will turn to other services and technologies to get what they need. Who needs the politics? I just want to access some information. The Gnutella-style systems are the only way to avoid censorship in the end, and they will evolve with encryption and FreeNet-style file storing. The file sharing systems will grow openly with no control. Napster’s architecture is very rudimentary but has opened a lot of people’s minds about copyright and intellectual property. People want music for free and they will always be able to just download it. This weekend, millions of people will be downloading new file sharing tools; I wonder where they end up.

Paul Richards, guitarist with the California Guitar Trio

It is obviously very unpopular to be against Napster … As a full time musician with the California Guitar Trio, which is currently at the point where we about break even financially, I can understand the idea that Napster could help unknown musicians become known. But it is obvious that the public majority misunderstands what it is like to be a musician who has worked very hard at making their recordings something of value and then have Napster provide a way for people to access it for free without the artist’s permission.

Many of the arguments on an AOL “post your thoughts” page on Wednesday suggested that Metallica already has enough money, and asked why are they being so greedy and wanting to stop Napster. I would suggest that this is not necessarily an issue of money, but one of principle. The principle that it is not right for someone to give away something that is not theirs to give. The members of Metallica may or may not be financially wealthy individuals, but they represent only a handful of musicians that have a high level of continued financial success, while many of the rest of us scrape for every penny. If the California Guitar Trio’s main aim was one of making lots of money, we would have chosen a different line of work a long time ago.

I was recently e-mailed by a friend who said that there is a fair amount of California Guitar Trio stuff available via Napster. I can see how this might help people become familiar with our music that had previously been unaware of us, but the problem is that it is all done without our permission. Limp Bizkit is currently doing a free Napster tour and has openly embraced the Napster music trading, so this is fine for them. They have openly given their consent and agree to have their music freely traded, so their position is clear. But what about all the artists who haven’t given their consent? If Napster is supposed to be about giving unknown artists a helping hand, then why is 85 percent of the stuff available on Napster copyrighted material traded without the consent of the artist?

Michael Robertson, CEO of digital music warehouse MP3.com

I think it buys a small reprieve for the record labels. I say that because Napster was created because there was a void of digital music on the Net. Now that they’ve shut down Napster, consumers are going to have to look elsewhere. They’re either going to look to commercially responsible alternatives, or the Net in all its collective wisdom and inevitable evolution will create litigation-proof Napsters.

You haven’t seen a groundswell of movement toward Gnutella and all the other alternatives because they’re impossible to use, they’re not well supported. But with Napster shut down, all those engineers with time on their hands are going to start building litigation-proof versions of Napster that are easy to use. Before that happens, the industry has a window of opportunity, a chance to get behind some new solution that protects their copyrights.

Metallica (from a written statement)

We are delighted that the court has upheld the rights of all artists to protect and control their creative efforts. In what we feel is a heroic and historic decision, Judge Patel confirmed that musicians, songwriters, filmmakers, authors, visual artists and other members of the creative community are entitled to the same copyright protections online that they have traditionally been afforded offline.

Hank Barry, David Boies and the rest of Napster’s legal team left no stone unturned in this battle, and we respect that. However, a society that does not value intellectual property is a poorer society, both economically and esthetically. In her decision, Judge Patel uncompromisingly endorsed this country’s long tradition of encouragement of works of the mind. We thank and applaud her for that.

We also want to thank our fans for standing behind us in this fight. We believe that they and in fact most people in this country are as uncomfortable as we are with the idea that stealing, by whatever means, is OK. The court’s decision is a welcome affirmation of that belief system.

Entertainment and copyright attorney Neil Rossini, of the New York firm Franklin Weinrib Rudell & Vassal

I don’t see how any judge can look at Napster’s traffic of millions of copyrighted works being exchanged and say it’s legal. It really sends a message that businesses cannot be built on the wholesale taking of copyrighted works.

I think of MP3.com and Napster as two of the “Three Little Pigs,” with Diamond Rio being the third. Its case was built of stone and law. MP3.com and Napster built theirs from straw and technicalities.

I heard [attorney for Napster David] Boies talking on the radio this morning and he said Napster couldn’t separate authorized works from unauthorized works. That’s like saying I’m going to build my house on your land because I can’t tell where my little piece ends and yours begins. Well, you’re just going to have to try a little harder.

Rob Reid, CEO of Listen.com, an online music directory

Act II of this needs to be the labels, the artists and the online music communities working together to give consumers what they’ve made it clear they need: broad access to online entertainment. We’re really looking to push to get a legal and legitimate solution out. Napster pointed to downloadable music being important to the mass market; it is really, really part of the mainstream and that’s something that no one had certitude about until now. I think a subscription model is what makes sense; and maybe a streamed model makes more sense right now, as downloads are still fraught with security issues and the [Secure Digital Music Initiative] process is not moving ahead as fast as anybody had hoped.

“These registrations are a window into Microsoft’s corporate soul. You see the hopes, fears, desires and the business directions they’re going in,” says Alex Frankel, the president of Quiddity, a brand strategy and naming company, who tipped us off to the domain names.

Lemonade is always appealing, but surely, Redmond can do better than Rock Rat. We asked what advice you have for Microsoft if it faces a post-antitrust re-christening. Here are a few of your suggestions:

The Unportable App Company and the Irresistible OS Company
— Jim Flynn

Reboot (for Windows) and Reinstall (for applications)
— Alex Martin

Jolly Office Business Systems (JOBS) and Windows Operating Systems (WOS)
— Greg Kaiser

Mono (in charge of one thing: the Win OS) and Poly (in charge of many things: apps, browsers, games, etc.)
— Najz Ventura Medina

Bill’s Operating System Company (BOSCO) and Steve’s Applications Company (SAPCO)
— Felix Finch

Scyllacon and Charybdisk
— John E. Hellmuth

Microsoft Operating Systems Redmond Inc. (MSOSRI) and Microsoft Applications (MSAPP), pronounced: Misery and Mis-apps
— Peter Richard

Thing 1 and Thing 2
— Andrew Amster

Solulent and Execrent
— David S. Zink

“Microsoft is asking the district court to dismiss the government’s breakup proposal immediately,” said Bill Neukom, Microsoft’s executive vice president for law and corporate affairs. “Breaking up the company would be a punitive proposal that would fundamentally harm consumers, the industry and the American economy.”

Such statements hardly come as a surprise, given Microsoft’s vehement disagreement with both the Justice Department’s case and the verdict of Judge Thomas Penfield Jackson. The company delivered a stack of documents to the court on Wednesday, including its argument against a breakup and a request for the judge to rule immediately on its proposals, so that it could put this nasty business behind it.

But for all its arguing that things should be otherwise, Microsoft still found itself in the awkward position of having to propose remedies for antitrust violations it maintains it never committed. Perhaps that explains why the “remedies” the company has proposed lack much punch.

Among the company’s brave suggestions: Microsoft would let computer manufacturers ship Windows machines without an Internet Explorer icon; the PC makers could actually display icons for other software makers’ products on the desktop and not have Windows taken away.

In a nod to Netscape, and the hard-hitting business tactics that set off the Justice Department’s investigation of Microsoft, the software giant also suggests that it would allow PC makers to ship Windows machines that had been configured to make a non-Microsoft browser the default browser. Although, with Netscape now a minor division of America Online and its browser development sagging in comparison to Microsoft’s, it’s not at all clear which non-Microsoft browser PC makers would want to include. Microsoft’s proposal would also enjoin the company to license Windows to PC makers without imposing limits on their ability to distribute Microsoft competitors’ software.

The company’s decision to propose some rather limited conduct remedies — many of which relate to actions that the company has already denied that it engages in — is a direct rebuff to the Justice Department, which has argued that it would be too time-consuming and expensive to police the software behemoth’s day-to-day business practices.

“The remedy that they proposed is really a very minor conduct remedy,” says Luke Froeb, an economist at the Owen Graduate School of Management at Vanderbilt University, who previously worked at the Justice Department’s antitrust division. “They are just saying that they won’t do anything that’s already illegal.”

Indeed, the proposed remedies suggest that the best course of action is to maintain the status quo. Take Microsoft’s relationships with independent software developers. The company has long maintained that it reveals all the code that other software makers need to build programs that work with Windows. Yet, Microsoft’s proposed remedies include a specific proposal to require the company to provide the same technical information about its products to all developers, regardless of whether they also support non-Microsoft platforms. Is Microsoft agreeing to change its behavior — and therefore admitting it withheld key information in the past? Or is it suggesting that its punishment for breaking antitrust laws is no punishment at all, but just a continuation of its upstanding business as usual?

Both the court documents filed and the statements made by Microsoft executives point to one thing: Microsoft appears to be shocked that it might be punished at all, after having been ruled an unlawful monopoly just months ago.

“The government’s proposals would take away Microsoft’s property by forcing us to disclose the source code for our products, even though Microsoft spent hundreds of millions of dollars to develop these products,” said an incredulous chairman Bill Gates. “The government also seeks to interfere with the design of Microsoft’s products.”

His thoughts were echoed by company executives who object to the idea that, under the terms of the government’s proposal, “archrivals” would be allowed to have access to the company’s “intellectual property.” As Bill Neukom put it: “What that would mean in practical terms is that companies like IBM and Sun would receive billions of dollars worth of Microsoft’s proprietary intellectual property and enjoy a competitive advantage against us. We would effectively be competing against ourselves, against our own intellectual property.”

It’s as if it never occurred to Microsoft that there should be a penalty to be paid once you’re found guilty of breaking the law. And the company is determined to convince the judge that he should disregard the government’s proposed remedies, or risk harming the entire computer-using population. “The government’s proposals would regulate how Microsoft could design its products for consumers and restrict how Microsoft could work with other companies to develop new products or ensure that products work well together,” said Microsoft CEO Steve Ballmer.

Of course, it’s not surprising that Microsoft is offering a the-sky-is-falling prognosis if the government’s remedy is implemented. “Every defendant says this,” says William E. Kovacic, a law professor at George Washington University — but the Chicken Little song won’t necessarily do the company any good. “Because it’s said so often with equal intensity, I think there’s some measure of distrust.”

Still, Kovacic adds, “Microsoft has some valid concerns. I would say that from the perspective of contemplating what it means to undertake the reorganization of the world’s most significant commercial enterprise, they present good arguments about why Jackson might want to be careful with that.”

How is Judge Jackson likely to react to Microsoft’s remedies? Robert Litan, vice president and director of economic studies at the Brookings Institution, thinks that how Jackson views Microsoft’s proposals will depend on how they compare to the confidential ones that the company offered during the settlement talks with the government, which ultimately broke down.

“He’ll probably compare the two, and will probably not be happy if this list is shorter than the original … The receptivity of Judge Jackson to these proposals depends on how severe he views the violation,” says Litan, who formerly worked in the Justice Department’s antitrust division. “If you read the words of the opinion, his opinion is very harsh. But I think it’s hard to read his mind …”

Of course, the plaintiffs in the case found Microsoft’s proposals too lenient. Iowa Attorney General Tom Miller, the head of the Microsoft working group of 19 states and the District of Columbia, rejects Microsoft’s remedies out of hand: “The remedies proposed are inadequate. The measures would not have prevented the serious violations of law found by Judge Jackson, and they are no adequate remedies to assure the law is not broken in the future.”

The massive “denial of service” (DoS) attacks began on Monday,
causing a three-hour outage at Yahoo, and have continued on
Tuesday and Wednesday — knocking out such Net heavyweights as
Amazon, Buy.com, eBay, CNN, E-Trade, Datek and ZDNet for a few
hours each. None of the sites has experienced anything more
severe than some downtime — a dull fact that hasn’t prevented
raucous headlines like “Hacker
Havoc on the Web” — but both the government and the media
are treating the onslaught as a serious crime.

The FBI stormed Silicon Valley to talk with afflicted sites and
Clinton said he has “asked people who know more about
it than I do whether there is anything we can do about it.”
Attorney General Janet Reno told a news conference, “We are
committed in every way possible to tracking down those who are
responsible,” and News.com reported that the culprit could face
up to 10 years
of jail time and a $250,000 fine. In a nice display of
ironic recursion, ZDNet, a victim of the attack on Wednesday,
ran a story headlined Deconstructing
denial of service attacks,” explaining how the attack is
achieved and how to guard against it.

So who did it? According to the New York Times, officials
“have not ruled out foreign governments or individuals as the
culprits.” Despite the dearth of hard data, Wired News, in a
story headlined “Smells Like Teen Malcontent,” suggested the “packet
monkeys” wreaking havoc on big-name sites are probably
adolescents. A separate story, hyperbolically describing the
attack as a “World
War Internet,” cast unsubstantiated suspicion on university
students: “The reason: Campuses have fast connections to the
Internet — necessary to overwhelm sites as large as Yahoo and
Amazon — and dorm and faculty computers have notoriously poor
security.”

Meanwhile, the programmers hanging out on Slashdot engaged in some
head-scratching about who did what and why, and entertained a few
good government conspiracy stories. One post pointed to a
theory apparently screwed together by Internet gadfly Jim
Warren, speculating on Clinton administration involvement in
the hack. Warren noted the suspicious proximity of last week’s
Clinton’s budget proposal — which earmarked $240 million for
electronic wiretapping systems — to several concurrent security
breaches, including the string of Net attacks this week. “What
better way to ‘prove’ the need for massively expanded government
surveillance,” suggested Warren, “and create a frenzy of support
for it?!”

In a similar display of conspiracy-mongering, Web designer Ron
Knox posted a message to the NoEnd mailing list, which caters to
Bay Area designers, linking the attack to the outlawed DVD
encryption descrambling program DeCSS. Knox pointed out that on
Jan. 20, after a district court judge prohibited any U.S. Web
site from posting the DeCSS code, hacker groups like 2600 pledged
to protest; less than three weeks later the attacks began.
“Connection?” wrote Knox. “I wonder. Although I would imagine
taking down anything connected with the Motion Picture [Association]
of America (like movie studio sites) would have been more to the
point (and more obvious). But maybe no one would have noticed.”

No cynical souls have yet accused the blue-chip Net sites
themselves of conspiring to fake the attacks and generate scads
of publicity — but give ‘em time. You know they’re out there.