By Larry Lange

WASHINGTON --(EETimes) A little-known extension of an audio-compression technique, MPEG-2 Audio Layer-3 (MP3), has opened the door to sending large volumes of CD-quality music over the Internet or packing the equivalent of several commercial compact disks onto a single CD platter. It has also opened the gate on a flood of pirating activity by an underground community of students and hackers. Hundreds of MP3 Internet sites have sprung up on which digital music--everything from Mozart to Marilyn Manson--is being illegally reproduced and distributed free.

The impressive 12:1 compression ratio of MP3 has made the scheme a hot button on the Internet, where MP3 players, encoders and "rippers"--programs for snatching a digital audio stream from a PC-based CD audio player--are readily available. But the rampant pirating has also put the technology squarely in the sights of the recording industry.

In recent weeks, the Recording Industry Association of America has turned up the heat on the pirates, pressing for civil actions that seek temporary restraining orders and preliminary injunctions against three top Internet MP3 sites.

"The educational steps we were taking with universities and the people posting these sites was only doing so much," said Frank Creighton, who heads the RIAA's anti-piracy unit. "Even the cease-and-desist letters we were sending were only so effective. So we had to go to litigation. We needed to send a stronger message to say, 'We mean business.'"

The RIAA unit has also stepped up its collaborative policing efforts with the FBI, U.S. Customs, the U.S. Postal Service and the Secret Service. The intense activity seems to be paying off in the short term; a number of sites have shut down, ostensibly out of fear of becoming litigation targets. But some in the underground think the legal nettling will only exacerbate the problem.

Even as it takes on the pirates, the music industry sees compelling implications in MP3 activity for the future distribution and product manufacturing of legitimate recordings. After all, the many-to-many design of the Internet holds potential for a paradigm changeover from atoms to bits.

"The fact that people can now download in reasonable time and listen to audio that cannot be distinguished from a CD may revolutionize the media-distribution process," said David Weekly, founder of the MP3 Audio Consortium and of a startup that hopes to leverage the scheme into a legitimate Internet. "It changes people's notions of what a computer can do and presents a whole new field to the market."

The consortium looks to establish the compression scheme as the predominant format for music exchange and related commerce over the Internet. Weekly said the intent of his startup, called Universal Digital Media Inc., is to "obsolete the CD."

"We're going to try to obtain the world's largest collection of music by going to record companies and asking them for rights, and then go and digitally distribute them," he said.

But the RIAA's Creighton sees "no incentive for legitimate business to get into it. Why would a record company go on the Net and offer a song for 5 or 10 cents, when you can go to another [illegal] site and get the same thing free?"

That question is the pirates' raison d'�tre.

"We're in the middle of the new piracy revolution," said a multimedia engineer at a large software corporation who goes by the moniker Dead Addict and who claims to have written hundreds of illegal files onto a personal collection of MP3 CDs.

"Most MP3 sites are run by college students who live in dorms on campus," said Kris Henderson, a software-engineering student at the University of Washington who runs a Web site called MP3.Net. The site has no MP3 files of its own, but it does offer pointers to the top 100 sites that do.

Since most colleges offer free 10-Mbit/s Internet connections, it's relatively easy for a student to set up a server on a computer. "If each college in the United States has just two or three students running a server from their computer," said Henderson, "it's clear that there are possibly 1,000 or more sites offering music for download."

Similar activity outside the United States, of course, adds thousands more sites to that figure. Stemming the tide here is difficult enough: How, Henderson wondered, can domestic law enforcement and the domestic entertainment industry "stop international sites from offering copyrighted music?"

According to the RIAA, music pirates account for almost $300 million in lost record sales annually in the United States and $2 billion worldwide. The group has not been able to quantify how much of those losses are coming specifically from MP3 piracy, although it's working to determine that figure.

Several agents from the RIAA's anti-piracy unit now spend their days scouring the Net tracking down MP3 pirates. The RIAA's Creighton said the MP3 phenomenon could do massive damage to the industry in a short time. "It's just been a chain reaction: Five people had it, then a hundred, then thousands. It's exponential."

And Dead Addict warned that the growth "is not going to stop. Legal actions taken by anybody will drive the movement even further underground. It's too easy: All you do is a search on one of the MP3 search engines out there to find whatever you want, and then you grab it."

Henderson, believes it's simple economics that drives the underground. "MP3 appeals to teenagers and college students, and basically it's a matter of money. We don't have much; and if we can get the music we like free, then we're going to do it."

It's easy to see why the MP3 phenomenon has proliferated so quickly. Literally all of the music files, as well as the encoders and players, are free off the Net.

MP3 files are compressed at a 12:1 ratio for CD-quality sound. That means the 60 or so Mbytes required for the typical song are converted into a single 5-Mbyte file. Henderson explained that for a typical .wav file at 44 kHz, CD quality is approximately 10 Mbytes/minute, so a 5-minute song would consume 50 Mbytes. But with an MP3 file at 44 kHz, CD quality is just under 1 Mbyte/minute, making a 5-minute MP3 file a little under 5 Mbytes. "The advantages are obvious," Henderson said: "CD-quality sound in a small package."

MP3 audio works by using "psycho-acoustic" compression, which removes extraneous information from the signal that human ears can't pick up. According to Harold Papp of the Fraunhofer Institute for Integrated Circuits, where Layer-3 was developed, the extension falls under the MPEG audio-coding standard defined by the International Standards Organization and International Electrotechnical Commission (ISO/IEC).

MPEG audio comprises three coding techniques (codecs): Layer-1, Layer-2 and Layer-3. "These layers provide increasingly better audio quality at equal compression ratios," said Papp. "With the advent of the MPEG-2 Layer-3 audio coding standard, the range of possible compression ratios was extended."

He explained that besides the 1:12 ratio for CD quality, there is a 1:24 ratio, similar to FM-stereo quality; 1:48, yielding better than shortwave quality; and 1:96, for very low-bit-rate connections. "Because of these high compression ratios, Layer-3 is the supreme choice for all Internet audio transmissions," said Papp.

Even the RIAA's Creighton conceded that "the quality on MP3 files is the best we've ever heard on the Internet. And what used to take an hour and a half to download on a 28.8 [-kbit/s] modem now takes about 5 minutes. You can make your own greatest-hits package in the course of an hour. You burn that to a CD-R [CD replication], and you're off and running."

MP3 may be the most compelling compression scheme, but it's not the only technique in town. Other approaches for audio over the Internet--whether streaming or for downloading--have been available for some time, vying for the attention of the legitimate recording industry.

Macromedia offers CD-quality streaming audio capability via its Shockwave plug-in for browsers; Progressive Networks has added a stereo upgrade of its RealAudio Player; and Liquid Audio, a newcomer formed by music-industry professionals, provides software for high-quality online audio.

Both Progressive and Liquid Audio use Dolby-based AC-3 compression (audio coding). Weekly said that Liquid Audio is looking to incorporate the next MPEG file extension--Advanced Audio Coding (AAC), which could technically be called Layer-4, or MP4. AAC is set to go into standardization in six months. Weekly said that all Internet studio players can be expected to adhere to the extension.

But none of those techniques has caused anywhere near the stir surrounding MP3-based pirating. Long-term, one approach that may prove effective in slowing the illegal activity is the RIAA's notion of a marking system call a digital watermark. The idea is to take data that's written into a CD subchannel of CDs (the information about who owns the rights to the material) and embed it into the audio.

But for now, the RIAA seems overwhelmed in dealing with the tsunami of illegal activity.

Creighton of the RIAA went so far as to appeal to the pirates' sense of decency. "All we ask is that people get proper authorization to put MP3 files on the Net.

"In some cases there may be some promotional value to this kind of thing, and the record company may not decide to charge you. Just pick up the phone."