Wireless P2P: Coming Soon?

Bill Gates’ suggestion last week that the mobile phone will render the iPod extinct was so March.  After all, BusinessWeek ran an April cover story on mobile phone digital music convergence called:  “iPod Killers".

The 463 is less interested in what the ultimate device will be. Indeed, Apple could add phone functions to the next generation iPod. We’re interested in how the convergence of wireless, IP and entertainment inside this device is going to create the next generation of tech policy (see our bits about the “pPod” and the coming battles between the content creators and distributors).

Let’s consider wireless P2P.  In March, a Billboard analysis written by a mobile industry expert said:

An … area of profound investor interest is wireless peer-to-peer services. The popularity of wired P2P networks grew largely by providing free and mostly illegitimate access to music. But many believe legitimate P2P services will thrive in a wireless environment.

… wireless network providers enact more control over the use of their networks, and wireless subscribers are more accustomed to paying for the services they receive.

"The ability to distribute full-length tracks and ringtones from one subscriber to another is huge, and the ability to monetize that is huger," (said an executive from the company Melodeo). "In wireless, the networks are much more secure. So it's much more valuable to create a monetized P2P model in the wireless space."

But, will the P2P services really be secure enough for the content holders?  Especially when considering IP network/WiFi convergence?  KaZaA is a bad word in Hollywood, and Skype isn’t whispered lovingly among telecom providers.  So the fact that the KaZaA/Skype founders are also working to extend P2P functions to mobile devices has to worrying to some in the distributor and content holder camps.  From a forward-looking article by EContent:

KaZaA founders Swedish Niklas Zennstrom and Janus Friis are also responsible for the phenomenally successful Skype, which brought free voice-over-the-Internet to the masses. Not surprisingly, the duo sees room to extend the reach of P2P into the mobile market, as demonstrated by its recent deal with Germany's global electronics giant Siemens to build its technology into cordless phones and VOIP phones. Extending P2P functionality to mobile phones, game consoles, and other portable consumer electronics devices is only a matter of time. File-sharing already figures into Skype's roadmap; its latest software includes a file transfer capability of up to 2GB.

Digital rights management is the great technical hope.  And, the bet is that while DRM is tough to apply in the more open IP world, it can be used on closed wireless networks more effectively.  Continuing the EContent piece:

It seems inevitable that P2P will show up on a slew of wired and wireless devices…. But rather than resist the onslaught, media companies would be well-advised to rethink business models in order to leverage P2P, observes James Enck, a telecoms and IP analyst at Daiwa Securities SMBC Europe Ltd. in London. "If big media can get comfortable enough with the DRM aspects, the very large, kind of hip user base that Skype is providing with large data transfer functionality represents a potentially interesting marketing channel for content, either as promotion or as sales," Enck says.

Still, wireless P2P interaction between devices doesn’t necessarily have to run through controlled networks.  Already:

A tiny European software company has done what the giants of the consumer electronics industry daren't do - and put a potential Napster in every pocket. Simeda, based in Bucharest, has ported Rendezvous to the Pocket PC platform and bundled it with a web server. The software automatically discovers other devices on a WiFi network and allows people to stream or share music with just a couple of clicks.  (The Register, June 2004)

As far as we can tell, Simeda may be in legal trouble now, but the point stands.  If two kids in Bucharest can create a tool to make iPods and similar devices share with each other through local wireless networks, others can do the same.

On the device side, there also isn’t much reason to ponder to deeply in the future.  The technology is already at the point that storage, memory and design are collectively advanced enough to fit music, camera, messaging and voice technology into a single device.  In late April, Nokia unveiled its N91 multimedia phone – an iPod competitor, which will have a 4-gigabyte hard drive that can store thousands of music files. The phone, which will also run on high-speed 3G and wireless LAN networks, is due out by the end of the year.

The only hang-up to launching the phone?  DRM.  More on this later, but here’s a teaser from Reuters:

“Nokia is also confident there will be an open standard for digital music protection, which it intends to use in its phones. Nokia does not want to use a proprietary format from Microsoft, despite an ongoing argument between the mobile phone industry and a handful of patent holders of key anti-piracy technology.”

All of these relatively new technological developments will need to be factored into the coming legislative deliberations that will presumably emerge after the Supreme Court Grokster decision.  The distributors will want to minimize broad technological restrictions that would impair creating revenue from future wireless P2P services  -- yet, they want to use technological solutions to ensure that the increased usage doens't bypass their own networks.  And, content creators, hope that future legislation can help ensure that they can collect revenues from as many points of distribution of their work as possible.

 

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