In a recent article at TechCrunch.com, it was reported that the Japanese government is considering a move to crack down on file sharing (read: Torrent or Kazaa). In Japan, the most popular peer-to-peer (P2P) network for the distribution of computer files is Winny. In simple terms, “P2P” is defined as the combined connectivity and bandwidth of Internet-enabled PCs that do not depend on a server to propagate. Such a network has a number of functions, but it was only natural that Netizens have become its largest user base.

When P2P networks exploded in the late 90s after the much-ballyhooed Napster, the first to feel the brunt was the music industry. When techies began circulating songs in mp3 format through the Internet, it didn’t take long for music enthusiasts to catch on and embrace the technology.

True, this activity is nominally illegal. But in this the Age of Information, the line between what’s illegal and what’s not has irreparably blurred. In fact—barring government intervention—we seem to be headed for a new world order, with knowledge as the globally accepted currency. The Internet is what’s making this possible, and it’s the burgeoning number of users that’s keeping it alive and kicking. The interjection “What a small world!” has never been more true than today.

So, is Japan’s move to crack down on file sharers a wise move? In the blink of an eye, red flags seem to be coming up all around. In the plan, “special detection software” would be employed (red flag #1), presumably by copyright owners. Violators would be reported to their ISPs for sanctions (red flag #2). Repeat violators will eventually be disconnected by their ISPs and consequently banned from the Internet permanently, by all ISPs (red flag #3).

Red flag #1 is akin to intrusion by a computer virus — most undesirable. Red flag #2 is tantamount to invasion of privacy. And red flag #3? Well, some might say this could constitute a cartelization by Japan’s ISPs.

Internet users nowadays are characterized as voracious consumers of information, with little or no regard for copyright. We (yes, we) demand knowledge, and we tend to always want it yesterday. We know we can obtain it via the World Wide Web, among others, so we browse, search and download. And most times we are not aware of the origin or ownership of what we gain.

Let’s turn the table around. What if you were the owner of copyrighted material? Let’s say you composed a song and performed it on stage, perhaps even digitized it using your Mac book. If you were a businessman as well as an artist, you’d not appreciate your work being pirated at all, would you?

At this point you might be asking yourself, “What’s the issue here then? The Copyright Law or the Privacy Act?”

Well, they’re intertwined. If the Japanese ISPs’ scheme were ever to happen, copyright owners (the music and film industries especially) would be ecstatic, because they would reap the benefits. But at what cost? Is anyone in Japan truly willing to risk incursions into privacy violations on a nationwide scale? This is a very sticky situation, and the concerned government agencies of Japan would do well to examine this move before allowing it to be enforced.

All of this boils down to business, to opportunity costs, hence the gnashing of teeth by the entertainment industry (as well as by the software publishing industry). When people don’t buy CDs anymore because they can download the desired content from the Internet, producers lose profit. But, the age-old practice of doing business is… well, old.

For brick-and-mortar businesses that produce tangible goods, the traditional way of getting to market is still the norm, of course. On the other hand, the concept of information as a product seems to be headed for obsolescence.

It is highly possible that a new way of doing business, of revenue generation, will happen soon. Wait. It’s not going to be anything new. In fact, it’s already been rolled out, just not widespread yet. I’m talking about advertising. Google Inc., in another report by TechCrunch, made US$2.6 billion more in 2007, from ads and ad-related business. Content and services delivered by Google is completely free of charge.

Why is the world’s largest media company thriving financially? To put it in layman’s terms: Google delivers content that is sought after by many, and it provides Web-based applications that inspire high acceptability. Ergo, advertisers consider its ad space inventory as premium.

The inevitably complicated mechanism to sustain such a business model on a global scale may not yet be in place, but at least the hypothesis has already been proven. Perhaps it just takes for the entrenched older generation, who are still holding fast to the reins of industries, to adapt and upgrade to the next level.