The multi-industry group, which is defining a secure framework for the digital distribution of music, issued the challenge in the form of an open letter that offers up to $10,000 to any hacker who can "remove the watermark or defeat the other technology" in an SDMI-proposed copyright protection system.

SDMI posted the letter on a special Web site, at www.hacksdmi.org, the same site where a hacker agreement and instructions for the challenge will be posted beginning Sept. 15. Interested hackers must sign a challenge agreement and finish their work by Oct. 7.

SDMI executive director Leonardo Chiariglione said the group's aim is "to try to simulate the real world before the real world happens."

He explained the public challenge as a way for SDMI to collect information about the technologies under consideration before it commits to a scheme that may not be robust enough to withstand attack.

As part of the challenge, hackers will have access to music that has been compressed with and without a watermark, as well as music that is protected and not protected by proposed Phase II screening technologies.

Tough technology search

Results of the hacking challenge will be used to decide on a technology for the Phase II screen, Chiariglione said. He declined to say when SDMI will make its decision.

It's not clear what will happen if all the proposed technologies are successfully hacked, but SDMI is expected to have a plenary vote on the Phase II screen technology sometime before January.

The hacker challenge comes as SDMI continues its testing for the Phase II screen. SDMI has determined that the technology chosen must protect digital audio content with either an inaudible watermark or some other technique that prevents unauthorized copying, sharing and use of digital music.

According to sources within SDMI, more than half of the original 14 technologies submitted to the organization in May for consideration have been eliminated. Still in the running are technologies from Blue Spike Inc. (Miami Beach, Fla.), CRL Ltd. (Middlesex, England), M. Ken of Japan, Samsung, Sealtronics Technology Inc. and Verance Corp. (San Diego).

Some of the companies that proposed technology, like Blue Spike, said they will also hire their own hackers to try and crack the proposed Phase II technology.

Scott Moskowitz, Blue Spike's chief executive officer, said he thinks the challenge will show the "limitations" of the proposed watermarks and "dispel the spin" companies have put on their technologies.

He referred to a dispute within SDMI about what type of technology will actually provide the best security: a robust watermark that survives many compressions and can be read by a device, or one that is designed to remain hidden in the audio — a so-called forensic or transactional watermark linked to copies of audio files.

Some experts believe the robust watermark may be easier for hackers to find and remove, while a forensic watermark that's not designed to be robust may be harder for crooks to remove and crack.

Sources within SDMI suggest the public hacking challenge will help educate the group's members about the right type of technology to protect digital music.