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Wrap

Text File | 1997-05-07 | 31.9 KB | 577 lines

(From Wired Magazine 4/97) ¬†¬†F E A T U R E S¬†| ¬†Issue 5.04 - April 1997 ¬†Warez Wars For the Inner Circle, cracking software is a challenge. For the wannabe underground, collecting it is an obsession. For the software industry, it's a billion-dollar nightmare. By David McCandless Sunday morning, 7 a.m., somewhere in US Eastern Standard Time: Mad Hatter gets up, has a glass of Seagram's Ginger Ale and a cigarette, and checks his machine, which has been running automated scripts all night. He looks for errors and then reads his email. He has 30 messages from all over the world: some fan mail, a couple of flames, a few snippets of interesting information, three or four requests - some clear, some PGP-encoded. After a quick espresso and another cigarette, he surveys the contents of a few private FTP sites, filters through a bunch of new files, and then reroutes the good stuff to his newsreader. After breakfast with the family, another wave of automated scripts kicks in. The ISDN connection hums to life. A steady stream of bytes departs his machine 128 Kbps and vanishes into the ether. By the end of the day Mad Hatter, a ringleader of the software piracy group called the Inner Circle, will have poured 300 Mbytes of illegal "warez" onto the Internet. Monday morning, 9 a.m., Greenwich Mean Time: Phil arrives for work in Bracknell, England, in a suit and tie, just back from a few days in Switzerland. Inside Novell UK's glossy five-story headquarters, he lets himself into his office. It looks like a mad, bad bedroom - shiny desktops and derelict ones, disemboweled minitowers and battered servers, every last expansion slot distended with DAT machines, CD-ROM burners, extra hard drives. A metal shelf unit contains a rack of monitors, some video equipment, spare keyboards. Everything is wired insanely to a single ISDN line. After a coffee, Phil boots up and skims his email. Twenty minutes later he has ceased to be Phil. For the next week, he will pretend to be a trader, a courier, a cracker, a newbie, a lamer, a lurker, a leecher. He is an undercover Internet detective, a "technical investigator." He spends his days roving the Net, finding people like Mad Hatter - and busting them. This is a story about a universe with two parallel, overlapping worlds. One is the familiar, dull world of the software industry, with its development costs, marketing teams, profit, and loss. Phil's world, at least part of the day. And then there is warez world, the Mad Hatter's world, a strange place of IRC channels and Usenet groups, of thrills, prestige, and fear. A world of expert crackers who strip the protection from expensive new software and upload copies onto the Net within days of its release. A world of wannabes and collectors, whose hard drives are stuffed like stamp albums, with programs they'll never use. And a world of profit pirates, who do exactly what the software makers say: rip off other people's stuff and sell it for their own benefit. In Phil's world, software is a valuable tool that commands high prices - programs like QuarkXPress, Windows NT, and AutoCAD, costing thousands of dollars a shot. But in Mad Hatter's world, those sticker prices means nothing - except inasmuch as more expensive programs are harder to crack, and that makes them the most desirable, spectacular trophies of all. In Phil's world, warez are a menace. In warez world, Phil is. Filthy lucre Phil's world is full of nasty numbers. Antipiracy organizations like the Software Publishers Association and Business Software Alliance estimate that more than US$5 million worth of software is cracked and uploaded daily to the Net, where anyone can download it free of charge. A running scoreboard on the BSA Web site charts the industry's losses to piracy: $482 a second, $28,900 a minute, $1.7 million an hour, $41.6 million a day, $291.5 million a week. A lot of that is garden-variety unlicensed copying and Far East-style counterfeiting. But an estimated one-third leaks out through warez world, which can be anywhere there's a computer, a phone, and a modem. This is bad news for the business. Think of the lost revenue! The lost customers! "It's a frightening scenario out there," says Martin Smith, Novell's product-licensing manager for Europe, the Middle East, and Africa. "We are seeing a very, very rapid development of crime on the Internet." He's not being paranoid: look at the thousands of messages that pour through alt.binaries.warez.ibm-pc and the other Usenet sites that are the warez world's pulsing heart. In a typical week, you'll see Microsoft Office Pro and Visual C++, Autodesk 3D Studio MAX, SoftImage 3D, SoundForge, Cakewalk Pro Audio, WordPerfect, Adobe Photoshop 4.0 - virtually every high-end package in existence. All this plus impossibly early betas and alphas. Add a smattering of mundane Web tools, Net apps, registered shareware, games, and utilities, and you have everything for the forward-looking computer user. Warez world's volumes are impressive, too - a good 65 Mbytes a day of freshly cracked, quality new releases, chopped into disk-sized portions (to make it from one hop to the next without clogging the servers), compressed, and uploaded. Postings can vary from a few bytes (for a crack) to hundreds of megabytes. The nine main warez sites alone account for 30 to 40 percent of the traffic on Usenet, an average of more than 500 Mbytes in downloads every 24 hours, according to OpNet. Bad news indeed for Phil and his friends, gazing at those endless dollar signs. But warez world's leading citizens say that filthy lucre is beside the point - at least for them and the hungry collectors they supply. "No money ever exchanges hands in our forum," says California Red, one of a half dozen of the Mad Hatter's Inner Circle colleagues gathered for an IRC chat. "We're on the nonprofit side of the warez feeding chain," insists another, TAG (The Analog Guy). "It's a trade. You give what you have, get something you need. No money needed," adds Clickety. "We're not in it for the money. I would never sell something I got from warez," California Red reiterates. "Never made a dime," says Mad Hatter. Even Phil admits these are not the people responsible - not directly, anyhow - for the 500-Mbyte, $50 bundled software CD-ROMs from Asia that are the industry's most prominent nightmare. Warez crackers, traders, and collectors don't pirate software to make a living: they pirate software because they can. The more the manufacturers harden a product, with tricky serial numbers and anticopy systems, the more fun it becomes to break. Theft? No: it's a game, a pissing contest; a bunch of dicks and a ruler. It's a hobby, an act of bloodless terrorism. It's "Fuck you, Microsoft." It's about having something the other guy doesn't. It's about telling him that you have something he doesn't and forcing him to trade something he has for something you don't. In other words, it's an addiction. Listen to a typical dialog on an IRC warez trading channel: "What you got?" "Cubase three." "What's that?" "A music program." "I got it. What else?" "No, but it's Cubase three-oh-three - the latest bugfix." "Shit. Gimme." "It's not a patch. It's another seven meg download." "Don't care. I want it." Warez traders scour the newsgroups every night, planting requests, downloading file parts they don't need. Warezheads feel unfulfilled unless they've swelled their coffers by at least one application a day. They don't need this Java Development Kit tool, or that Photoshop plug-in - the thrill is in creating the new subdirectory and placing the tightly packed and zipped file cleanly, reverently, into the collection. They may even install it. Then toy absentmindedly with its toolbars and palettes before tucking it away and never running it again. Look at Michael, an 18-year-old warez junkie who's also into weight lifting. In the evenings, while his friends pursue women, he's either at the gym or home at his machine, combing the planet for the latest dot releases of 3D Studio MAX. "I bought a Zip drive so I could store it all. The SoftImage rip is 20 disks. It took me three months to get the entire set." A directory called WAREZ on his D:/ drive has $50,000 worth of cracked software, more than any one person could ever use, ludicrous amounts of applications. The more high-end and toolbar-tastic the app, the better. Without technical support or manuals, he hasn't a clue how to use most of it. But it's there and will stay there. "Warez give you a weird kind of feeling," he says. "You end up collecting programs you don't need and never use. Just so you can say, 'I've got this or I've got that.' Or 'My version of Photoshop is higher than yours.'" Mad Hatter knows the feeling. "It's an obsessive game. We see it every day - people begging for something to 'finish their collection.'" He's not much better himself. "When I was out of work on disability, I was totally motivated by the thrill of massive uploads, uploading at least 40 Mbytes a day for four months straight." Fellow Inner Circle member Clickety used to spend 12 hours a day online until college got "awful heavy." Another, Abraxas, spends 6 to 10 hours online on weekdays, 12 to 16 on weekends. But Mad Hatter - who runs the semi-tongue-in-cheek, semi-poker-faced discussion group alt.support.warez.recovery - is making progress: he's down to 30 Mbytes a day. "My computer is online 24 hours a day," he says. "A warez pirate is always online." As gods For Joe Warez Addict at the end of the cracked software food chain, membership in a group like the Inner Circle is the ultimate collectible. A way to legitimize their addiction, work for the common good, and, of course, get a nice fresh supply of warez. The drug addict becomes dealer. A sizable chunk of Mad Hatter's daily mail is begging letters. "I hope that if I ask this question, you will not be offended in any way. But can I join the Inner Circle? I mean, I respect the Inner Circle ... but never got a chance to join it. I was just wondering, can I? Please mail me back ASAP." Needless to say, this lone obsessive didn't get his chance. Joining the Inner Circle is nigh on impossible. Reaching its members, though, is easy enough. They keep a high profile, both in posting files on Usenet and flaming lamers. When I first tried to contact them I thought that they weren't so good at answering email, but it turned out their provider had just been taken offline for illegal spamming. They relocated en masse, and my mail had been lost in transit. So I posted a message to one of their newsgroups, made sure it was correctly labeled, politely worded, and not crossposted (a cardinal sin anywhere on Usenet). A reply arrived within eight hours. Mad Hatter was more than happy to talk, but not on the phone, not in person, and not on conventional IRC. "It has a bit of a habit of advertising my IP address," he said. He and six other Inner Circle members set up their own IRC server, configured a secret channel, and arranged a mutually convenient time for a live interview. We met and talked for nine hours, in the bizarre overlapping conversational style of IRC. They were frank and open, friendly and articulate - and, like any new start-up, flattered by the attention. A 17-strong force, the Inner Circle has its own iconography and its own ideals. Its members are warez gods. They preach, police, advise, flame. Their commandments? Good manners, good use of bandwidth, and good warez. Give unto others as you would have them give unto you. When the Inner Circle is not sourcing warez from secret sites, its members are hunting and gathering from more conventional sources. Clickety borrows fresh stuff from his clients. A few have attended Microsoft Solution seminars. "Some of us are actual beta testers, too," says Mad Hatter. "That's got to be scary for the developers." One way or another, they help maintain the steady flow of warez onto Usenet. From there, various wannabes, lamers, and aspirants copy their work to countless BBSes, FTP sites, and Web pages. These are not pimply teenagers devoid of social life and graces, little ferrets who talk in bIFF text and make napalm out of soap and lightbulbs; they're not downloading porn or being careful not to wake their parents or spelling "cool" as "kewl." According to the interviews I conducted, not one member is younger than 20; Clickety-Clack is the youngest at 23. Most are 30-plus. Champion uploader Digital has been happily married for 22 of his 46 years. Most are well-adjusted white males with day jobs and thoroughly nuclear families. Founding member Abraxas has three kids, one over 18. Mad Hatter runs a small business from home. Technical guru TAG is a computer animator. Irrelevant maintains commercial real estate. They're spread all over the United States. A few are concentrated around Orlando, Florida. Two or three others are California-based. For obvious reasons, that's as precise as they like to get. The Inner Circle was born of a sense of outrage that their beloved pirate-wares newsgroups were going to pot. Warez had been around for more than a decade, but the growth of the Internet was bringing clueless newbies onto the boards. Warez needed a code of ethics and a group of leaders to set some examples. The leaders would be the best crackers - some of whom became the Inner Circle. "We took over alt.binaries.pictures.leek in early '96," explains Abraxas, "and then leaked the first Nashville [Windows 97] beta. The groups were being overrun by clueless people. They needed help. They were wasting Internet resources. Perhaps if we could encourage responsible use of the available bandwidth, the whole Usenet warez 'scene' might last a while longer. Warez was around before we were, and will be after, but we wanted to help people and preserve resources using common sense." As enforcers of the warez code, the Inner Circle can be swift and sure. In April 1996, a pirate gang called Nomad, convinced that posts to warez groups were being suppressed, decided to get themselves some unsupervised elbow room. They selected an antiwork newsgroup - alt.binaries.slack, relatively empty and off the beaten track - where software could be slipped past news providers who had firewalled the usual warez forums. Within 24 hours, the forum was flooded with the latest releases. The slackers bestirred themselves from their apathy and fought back, posting files that told the pirates politely to push off. The warez kept coming. Then the Inner Circle waded in on the slackers' side and castigated the invaders for their poor manners. The pirates left meekly - though as a parting gift, one of them posted Microsoft NT, Beta 3, all 48 Mbytes of it, in 5,734 parts. The slackers' newsfeed was clogged for days. A slightly disturbing revelation came out of the slacker invasion. "After the first attempted takeover, we discovered just how scary search engines like Deja News and AltaVista were," explains TAG. "You could dig up real email addresses pretty easy on about 75 percent of people posting warez." A worried TAG hacked into the code of Forte Agent, an industry standard newsreader already cracked to bypass the shareware cripples, and stripped away the X-newsreader header, giving posters far greater anonymity. As a side effect, the patch also reduced email spams by two-thirds. "The hack went over so well with even nonwarez people that Forte eventually incorporated it into Agent as a feature," TAG says proudly, "although I don't think they'll be giving us credit." By mid-'96, Mad Hatter decided that police work was getting to be too much of a chore. The newsfeed was being clogged by lamers, requesters, and partials posters with "room-temperature IQs." Those genuinely into warez were seeing less and less complete software uploaded; in its place were hundreds of stray disks and clammy begging posts. In a rare fit of pique, Mad Hatter took his revenge. "If I continue to see the 'here's what I have' threads," he wrote, "I will stop uploading here. I will not help and will laugh my ass off that everyone is suffering. If for some reason you doubt that I make a difference, it's your loss, as I personally have uploaded 85 percent of all the shit that's getting posted now when it was zero day or still fresh. Keep fighting over stale shit - I like to watch; keep posting partials, and I'll stop upping my 100 to 300 Mbytes a week. In fact, I think I'll stop now." And stop the Inner Circle did. "We became burnt out on educating the masses," Mad Hatter says. Instead, a range of guaranteed lamer-free encrypted newsgroups was created for posting PGP-encoded warez, for Inner Circle-approved members only. Those on the select interested-parties list are given the codes to unlock the software, and anyone can apply to join. Requirement: a reasonable knowledge of PGP. "Hopefully this is a sign you won't be totally incompetent if you choose to post," says TAG. At the last count, the IPL had 500 subscribers, happily trading warez under the protection of the latest in antilamer technology. New economy Warez on Usenet are basically gifts - testimony to the power and stature of the giver. Files are posted for all to download, free. Just fire up your newsreader, point it at an appropriate forum, and a list like a home-shopping catalog of the latest software spills down your screen. There is no pressure, but if you download and you like the vibe, you are expected to join the community and contribute uploads whenever possible. On the freewheeling IRC chat forums, warez are no longer gifts - they're trade goods. The rewards are greater, but you've got to work for them. The IRC channels are 24-hour stock exchanges cum street markets: FreeWarez, Warez96, Warez4Free, WarezSitez, WarezAppz, and WarezGamez. There are private channels, hidden areas, and invite-only piracy parties. And there are no free lunches - every piece of software has to be paid for, in software. The more recent the application, the higher its value. The ultimate bartering tools are zero-day warez - software released by a commercial house in the last 24 hours, cracked if necessary and uploaded. The prizes for good zero-day warez vary; you may get instant download status on a particular server, logins and passwords for exclusive FTP sites, or admission to the ranks of a powerful cartel like the Inner Circle. "Zero-day sites are very √©lite stuff," explains paid-up √©litist TAG. "People can get access only if they can move a few hundred Mbytes a day. Most are invite only. The average IRC warez trader doesn't get that kind of access unless he puts a lot of effort into it." Zero-day warez trading is a fraught business; competition between groups often leads to malpractice. "You get a lot of first releases with bad cracks," says TAG, "just so someone can say they released first. Then two days later, you get a working crack. We get most of our freshest stuff from private FTP and courier drop sites." If your software collection is more mundane, you can trade one piece directly for another. But with so many unpoliced egos in one place, this can be risky. People will often welsh on deals, allowing you to pass them a file and then disappearing into the ether. Cunning traders will barter with "trojans" - zipped-up files of gunk, realistic enough to carry out half the transaction. In extreme cases, someone may feed you a virus. A step down from zero-day warez are drop sites, where fresh cracks can be found for the cost of a download. Some drop sites run on the trader's own machine; others piggyback on government or corporate mainframes, shareware mirrors, and university networks. Often they're only in existence for 24 hours, or on weekends when the sysops are at home. Wherever you end up, you'll be struck by the extreme politesse and measured courtesy, united by a common language. "Greets m8. Have appz, gamez and crackz on 129.102.1.3. Looking for Pshop 4.0 beta. L8ter." "Have 1.5 gigs of warez on anonymous T1. Upload for leech access. /msg me for more info. No lamers." Real money Back in Phil's world, they can't quite cope with the idea of this ferocious brag-driven barter economy cloaked in courtesy. The SPA and the BSA just don't believe it. "Considering the amount of time they dedicate, they must be making a return to justify it," says Phil. Casual observers of the BSA's Web site may well be convinced, if only because they're stunned by the money that's involved - or seems to be. Fifteen point five billion dollars a year! But those figures are based on the assumption that if piracy were stopped, someone would be willing to pay for every pirated copy in circulation. "Billions of dollars?" scoffs East London BBS operator Time Bandit. "I know guys who have thousands and thousands of pounds worth of software, but the values are meaningless. Win95 may cost, like, ¬£75 in the shops, but in warez, it's worthless. It's just another file that you might swap for another program, which might cost four grand. How much it costs in real money is meaningless." How do you ram home sales figures and quarterly losses to a bunch of teenagers who see warez trading as their passport to acceptance on the scurrilous side of a brave new world? How do you convince middle-aged men who see incandescently expensive software as monopoly money in a vast, global boardgame that what they're doing is "harmful"? In the software industry's latest campaign, you scare them - or try. The BSA's mandate used to be "not to capture pirates, but to eradicate piracy." Now exemplary punishment is the big thing. To do that, the BSA and the SPA are willing to push the law to its limits. Prosecuting clear offenders - warez-vending BBS operators and FTP-site pirates, for instance - is one thing; suing ISPs for carrying Web pages containing pirate links and cracks is another. A typical case was against C2Net, a Buffalo, New York-based ISP that the SPA sued for doing just that. In what smacked of a token prosecution - or, in the words of C2Net's president, Sameer Parekh, "legal terrorism" - the action by Adobe, Claris, and Traveling Software, under the aegis of the SPA, held the provider responsible as "publishers" for the contents of its server, and for the activities of individual account holders. The SPA eventually backed off but threatens to revive the suit if C2Net and other ISPs don't agree to monitor their users for copyright infringement. C2Net says it will not give in to litigious "bullying." And then there are straightforward busts. On January 12, 1996, Microsoft and Novell jointly announced a settlement with Scott W. Morris, who was "doing business as the Assassin's Guild BBS ... billed ... as the worldwide headquarters for two large pirate groups, Pirates With Attitude (PWA) and Razor 1911." According to the statement, "marshals seized 13 computers, 11 modems, a satellite dish, 9 gigabytes of online data, and over 40 gigabytes of offline data storage dating back to 1992.... Mr. Morris agrees to assist Microsoft and Novell in their continuing BBS investigations." Phil, our undercover Internet detective, wasn't responsible for that particular drama, but he's been integral to others. His latest victory was in Z√ºrich - "a landmark case against individuals and organizations distributing unlicensed software on the Internet," he calls it. A 27-year-old computer technician who helpfully called himself "The Pirate" was running an FTP site filled to the brim with warez, including US$60,000 worth of unlicensed Novell software. Phil, impersonating a trader, infiltrated the site (admittedly no great feat), collected evidence, then handed it over to the Swiss police. He accompanied them on the raid to ensure no evidence was damaged. "He was one of a new breed who advertise on the Internet," says Phil. "He made his files available via email requests and telnet." Swiss police also raided the home of a BBS called M-E-M-O, run by "The Shadow," a friend of The Pirate. Unfortunately, The Shadow was on holiday with his parents. The family returned two weeks later to find their front door broken down; the son was arrested. If convicted, the young pirates face up to three years in jail and possible $80,000 fines. The Pirate's mistake - aside from his suicidal choice of nickname - was to plant himself geographically. Phil, a former corporate network manager, was able to trace him through his FTP site's IP address. Phil knows his networks; this makes him the perfect undercover agent - and one of Novell UK's most envied employees. "I play on the Net all day," he says, "and get paid for it." There's a bit more to it than that. Phil and his counterparts in Asia and the US are deployed to infiltrate pirate groups; to study IRC; to get under the skin of the lamers, the dabblers, and the professionals; to chat, seduce, charm, and interact with the denizens of this bizarre over-underworld. Phil talks to traders in their own language, understands the tricks and traps. After busting The Pirate, he says, "we were talking and he was moaning about the sluggishness of his network. I pointed out that, aside from using LANtastic, he was using a 75-ohm terminator on the back of his file server, slowing the whole thing down." Now that he's back from Z√ºrich, Phil will be getting some new toys: the spoils of war. In many jurisdictions, any hardware deemed to be part of an illegal setup can be taken by investigators and - if part of a civil prosecution - can be worked in as part of the settlement. Once sucked dry of evidence and incriminating data, the cannibalized machines are moved to Bracknell and hooked up to the network. But despite the resources at his disposal and his status as a network ninja, Phil doesn't always get his man. "If there's a person out there who has a decent level of technological awareness of the ways he can be located, it's quite true to say he could successfully hide himself, or use a system where it would be impossible to track him. It's technically possible for them to bounce their messages all around the world and have us running around like blue-arsed flies." It's a reluctant admission, but then Phil is one person pitted against thousands. Successful prosecutions aren't always that easy either. Take David LaMacchia, an MIT engineering student who turned two of the school's servers into drop sites and downloaded an estimated $1 million worth of pirated software. LaMacchia was arrested in 1995, only to have the case thrown out by a judge who ruled that no "commercial motive" was involved. Prosecutors tried charging him with wire fraud, but this was ruled an unacceptable stretching of the law. LaMacchia walked free. "Bringing Internet cases through the judicial system is a nightmare," says Novell's Martin Smith. "Try talking to a judge about 'dynamically allocated IP addresses.' We don't have a chance." Tell that to the former warez traders of America Online, which had a meteoric history as a pirate mecca. For years, instructions on how to crack AOL's security and obtain free accounts were a Usenet staple. Online, "freewarez" chat rooms were packed with traders, 24 hours a day. Megabytes of warez were kept in permanent circulation. Then came the crackdown of 1996, a dark period in warez history. Goaded by software-industry watchdogs, AOL introduced countermeasures to disinfect its system; alt.binaries.warez was removed from the Internet newsfeed. CATwatch automated sentinels were placed on AOL's warez chat channels, logging off anyone who entered. "Free" accounts were traced and nuked. Michael, the weight-lifting trader and also an AOL veteran, says everyone thought that "the FBI had infiltrated the warez groups, and we were all going to get busted." On the cusp of the big time - a top pirate outfit named Hybrid had a position open - Michael had been hoping to prove himself by doing a CD rip of the soccer game Euro 96. "I was halfway through removing the FMV and CD audio. I reckon I could've got it down from 58 disks to 9. But then everything went haywire." Profit-driven crackers are actually the easiest to catch: they have links to the real world, starting with the money trail from credit cards. And the easiest prey of all are BBSes, with their telltale telephone connections. In January, FBIagents led by the bureau's San Francisco-based International Computer Crime Squad raided homes and businesses in California and half a dozen other states. They seized computers, hard drives, and modems, though no arrests were made. Along with Adobe, Autodesk, and other BSA stalwarts, the list of software companies involved included Sega and Sony - a hint that the targets included gold-disk dupers who counterfeit mass-market videogames. Mad Hatter was not impressed. "Wow, I'm in hiding," he cracked the day after the raids. But "Cyber Strike" was, as BSAvice president Bob Kruger said later in a statement, "the most ambitious law enforcement action to date against Internet piracy" - specifically, the first UScase in which the FBI, rather than local police, took the lead. And that can't help but augment the BSA's number-one antipiracy tactic for 1997: creating the "perception of threat." And even warez gods don't necessarily want the FBI on their case. But bluster aside, people like Mad Hatter are intrinsically - and deliberately - much harder to catch. The most prestigious pirate groups - Razor 1911, DOD, Pirates With Attitude, the Inner Circle - are tightly knit clubs whose members have known each other for years and call each other "good friends" - though they rarely, if ever, meet. Joining is no easy task. Positions become vacant only when members quit or are busted, or a vote is taken to expand operations. Kudos and reputation are everything. Unofficial homepages can be found here and there, constructed by acolytes who celebrate the groups' best releases and victories. These are often padded out with cryptic biographies and obituaries for those busted by the cops ("We feel for ya!"). Despite the boasting, and