The little white boxes popping out of students’ messenger bags and backpacks, keeping them company between classes and at the gym, prove that the iPod has revolutionized music as we know it. But the fight over digital music is far from over.

On Jan. 2, a lawsuit was filed accusing Apple of creating a monopoly by making files purchased on iTunes playable only on iPods, a claim which comes on the heels of similar lawsuits recently filed against Apple in Europe.

An earlier blow came in November 2006 when Jon Johanson, an infamous computer hacker known by the alias “DVDJon,” broke the code on iTunes that enforced a five-person limit on sharing music.

Lurking underneath these issues is a troubling question: If consumers cannot do with legally purchased digital files what they can with a purchased CD, such as make copies or transfer them to other devices, to what extent do they really own those digital files?

“Anytime a company bundles hardware and software, their public aim is to create a better product,” said Adam Farrell, head of new media at the Beggars Group, a record label collective that includes indie powerhouses Matador and 4AD. “In the case of Apple, their stuff works great. It’s really a seamless experience between hardware and software. The problem with it is the lack of portability (of the files) and the fact that you never truly own the music. ... I think DRM is a relatively stifling thing for selling music online.”

Apple uses a form of DRM, or Digital Rights Management, which are the technologies used to control copyrighted material, to impose these restrictions of ownership.

But the code was originally designed to appease major record labels such as Universal and Sony BMG, who in nearly all cases refuse to sell their music to online retailers who do not ensure such protection built into the files.

In response to these limits, consumers still download files illegally to escape such restrictions and acquire a level of control over their music that is missing from legal downloads.

“I think any restrictions on listening to music are stupid,” said Claire Douglas, a third-year women’s studies student. “In general, I think it’s a great technological revolution that we can have so much music at our fingers. ... Stealing music has done a lot for me.”

A way Matador Records has attempted to get back those customers has been by extensively promoting live performances of its artists and using online music blogs in its marketing strategies – and, to an extent, supporting digital ownership.

“We were having issues with bloggers posting tracks (that were) not official promos or posting full albums,” Farrell said. “(But) we are willing to see the good an MP3 blog can do for us and then help support them and treat them like they’re part of a PR machine of ours.”

Matador has also invested in enhancing certain CD packages and including extras such as a vinyl accompaniment or recordings of live shows.

Without an extensive effort put forth to enhance the CD package, however, Farrell predicts that the CD will become a “dead medium,” leaving only vinyl and digital forms of music in its wake.

The shift to digital music has proven fortuitous for Janis Ian, a Grammy award-winning singer-songwriter who made MP3s of select songs available for free on her Web site in the mid-’90s.

Also a freelance journalist, Ian published the incendiary “The Internet Debacle” for Performing Songwriter Magazine in 2002.

The article outlines the problems plaguing the music industry, which despite label claims to the contrary, go well beyond illegal downloading.

“Free exposure is practically a thing of the past for entertainers,” Ian wrote. “Free downloading gives a chance to every do-it-yourselfer out there. Every act that can’t get signed to a major, for whatever reason, can reach literally millions of new listeners, enticing them to buy the CD and come to the concerts.”

Within a month of its publication, the article had been posted on 1,000 other Web sites, translated into nine different languages, and featured in various international press outlets including the BBC and USA Today.

More importantly, Ian’s merchandise sales increased 25 percent after posting the article and 300 percent after making her music available for download, severely challenging the belief that free, non-DRM music is harmful to the music industry.

“A really good friend of mine gave me (a Soul Wise) song and we listened to it over and over again,” Douglas said. “I got into their other music and then we went to their show at the House of Blues.”

Douglas’ situation reflects a long-held tradition in finding new music: hearing about it from friends and then supporting the band yourself.

The Internet has taken this to a new level. So-called “blog bands” have exploded in recent years, with acts ranging from Clap Your Hands Say Yeah to Lily Allen winning fans by spreading their songs through MySpace and their own sites and interacting directly with fans.

U.K. sensation Arctic Monkeys made headlines by putting its demos on file-sharing networks, where listeners passed them around and built word-of-mouth.

Upon its release, the band’s album “Whatever People Say I Am, That’s What I’m Not” became the fastest-selling debut in U.K. chart history.

Despite the success of both Ian and a new generation of independent musicians in using DRM-free digital files to gain exposure and boost sales, the major labels’ anxiety about giving consumers more liberal digital ownership has not been quelled.

UCLA has responded to illegal downloading with the Get Legal program, which encourages students to use iTunes, Cdigix and Mindawn, all programs which have agreed to channel a portion of the profits gained from Get Legal subscribers to UCLA organizations. Thus far, however, the program’s results have been disheartening.

“I’m a little bit disappointed from the standpoint that we haven’t generated much more traffic for iTunes sales from our Web site,” said Jon Curtiss, the manager of technological development for UCLA student and campus affairs. “(But) we are encouraged about the Ctrax traffic.”

While Get Legal has slightly curtailed the number of UCLA students downloading media unlawfully, it has yet to change some students’ mentality regarding digital theft.

“A lot of students don’t seem to be making the rational physical connection between stealing something in the real world and then in the online world and thinking there are few consequences in doing so,” Curtiss said. “They just don’t seem to be equating the two – going to the student store and stealing a book and then stealing a movie online.”

This breach in logic hearkens back to the original question of whether consumers have enough of an incentive to purchase their digital files, considering their proprietary rights are so limited.

In November 2006, Microsoft entered the digital field with the Zune, its answer to the iPod.

However, its sales didn’t even come close to Apple’s player, peaking on Amazon’s Top 100 sales list at No. 8 for electronics and then disappearing from it completely within weeks.

Part of the Zune’s troubles can be attributed to its system of sharing and purchasing music, which is even more closed than the iPod.

The Zune’s marketing slogans heavily publicize the ability users have to digitally share songs between one another by wirelessly transmitting files between the devices.

What the ads fail to mention, however, is that once files are transferred, they can only be listened to three times or are deleted after three days – whichever comes first.

Beyond that, songs purchased from the popular iTunes music store aren’t compatible with the Microsoft device.

The Zune’s failure to find an audience would appear to serve as a testament to consumers’ demands for flexibility in digital media.

But even with these ownership problems unresolved, another challenge has arisen.

Analysts responded to a recent Nielson SoundScan report last week, which documented the industry’s sales for 2006, predicting that the digital music industry’s success has plateaued due

to the lack of novelty surrounding the iPod, as well as the indus-

try’s inadequate response to piracy.

Farrell thinks the industry will react by experimenting with licensing its MP3s to an array of sources, not just iTunes or sites with similarly constrained DRM codes, which could possibly expand consumers’ rights over their music.

“There are other business models afoot that a record label can use to take advantage of this age of information that we live in,” Farrell said. “But the music industry is pretty slow to adopt (them).”