Network: Bytes

AN INITIATIVE to develop a new secure method of distributing music over the Internet was announced last week in New York by the Recording Industry Association of America (RIAA); chief executives of the major US record firms, and representatives of technology firms such as AOL (which now owns CompuServe), Diamond Multimedia, Microsoft, RealNetworks, IBM and AT&T.

Work on the "Secure Digital Music Initiative" is set to get under way next year and will address the lack of compatibility between current competing technologies such as Liquid Audio and a2b, as well as the potential piracy problems and lack of copyright control associated with the de facto standard MP3 that is established among Net users.

The new standard will aim at developing a means of digital distribution to protect copyrighted material and allow labels and artists to engage in online commerce.

Record company executives said they did not envisage the new format bringing about lower prices.

However, some companies said that the industry response to MP3 is too little and too late. "MP3 is unstoppable. Any initiative now is like launching Betamax two years after VHS has become the standard," said Robert Kohn, the chairman of the independent music company, Goodnoise. "The real solution to piracy is to make music cheaper to buy than it is to steal."

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THE JUDGE presiding over the Microsoft anti-trust trial in Washington said last week that AOL's proposed $4.2bn buy-out of Netscape Communications and its co-operative deal with Sun Microsystems may have an "immediate effect" on the case. Microsoft's lawyers requested that, in light of the proposed merger, the judge re-open the evidence-gathering phase of the trial. Judge Thomas Penfield Jackson said he was reluctant to allow this, but suggested instead that Microsoft be given a look at any documents gathered by the government in a review of the merger.

"It seems the Department of Justice would be in possession of the operative documents [for the merger] and that Microsoft may have a right to review the terms," Jackson said. "It could have an immediate affect on the definition of the market as we are contemplating it here."

In a separate court case, Microsoft said it will appeal against a preliminary injunction requiring it to modify or withdraw some software products while it fights the lawsuit brought against it by Sun over its use of the Java programming language.

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TALKS IN London between US Commerce Department and State Department officials and members of Privacy International (PI), a civil rights group based in the United Kingdom and Washington, about an EU privacy directive, ended in stalemate last week. The directive, set to become law in all EU states, will give individuals control over their personal data and stop database-marketers, websites, credit card companies and others from exchanging personal data with countries that do not provide "adequate" protection of the data.

To prevent US companies' data transfers from being halted by the EU, the Clinton administration has proposed "safe harbours", based on self- regulation privacy guidelines used by commercial sites, such as notifying people about policies on collecting data; providing "opt out" facilities, and disclosing to whom the firm passes on the data. PI said the plans were not satisfactory and that Europe should not bend the rules to accommodate the US.

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3Dfx INTERACTIVE, the games chip manufacturer, announced that it will buy the graphics-card maker STB for $141m. The deal is expected to be finalised in March. STB's operations will remain based in Richardson, Texas, with the combined company headquarters at 3Dfx's office in San Jose, California.

3Dfx said that William Ogle, the president and chief executive of STB, would join its board. Gordon Campbell will remain as chairman of 3Dfx.

Following the purchase, the company will manufacture entire 3D accelerator cards, rather than just the graphics chips. A new board based on its Voodoo3 chip will be produced. 3Dfx said the deal would provide its customers with a single source for its 3D graphics technology.

Although it intends to carry on supplying chips to Quantum 3D, which makes cards for arcade machines, it will probably stop supplying other PC card producers such as Creative and Diamond.